RIGEL PHARMACEUTICALS, INC.
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
April 29, 2003
TABLE OF CONTENTS
PAGE
1. Authorization of Shares and Warrants..................................1
2. Agreement to Sell and Purchase Shares and Warrants....................1
3. Closing; Delivery of Shares and Warrants..............................2
4. Conditions to Company's Obligations...................................3
4.1 Payment......................................................3
4.2 Representations and Warranties True and Correct..............3
4.3 No Injunction or Regulatory Restraints; Illegality...........3
4.4 Filing of Certificate........................................3
4.5 Required Stockholder Approval................................3
5. Conditions to Investors' Obligations..................................4
5.1 Representations and Warranties True and Correct..............4
5.2 Compliance with Laws.........................................4
5.3 No Injunction or Regulatory Constraints; Illegality..........4
5.4 Filing of Certificate........................................4
5.5 Opinion of Company's Counsel.................................4
5.6 Required Stockholder Approval................................4
5.7 Board of Directors Designees.................................4
5.8 Committee Appointment........................................5
5.9 Investor Rights Agreement....................................5
5.10 Waiver of Registration Rights................................5
5.11 No Material Adverse Effect...................................5
5.12 Executive Search.............................................5
5.13 Covenants....................................................5
5.14 Nasdaq Listing...............................................6
5.15 Closing Proceeds.............................................6
5.16 Officers' Certificates.......................................6
6. Representations and Warranties of the Company.........................6
6.1 Organization.................................................6
6.2 Subsidiaries.................................................6
6.3 Due Authorization............................................6
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6.4 Vote Required................................................7
6.5 Non-Contravention............................................7
6.6 Capitalization...............................................8
6.7 Legal Proceedings............................................8
6.8 No Violations................................................9
6.9 Governmental Permits, Etc....................................9
6.10 Intellectual Property........................................9
6.11 Financial Statements........................................10
6.12 Absence of Changes..........................................10
6.13 Nasdaq Compliance...........................................11
6.14 Reporting Status............................................11
6.15 Listing.....................................................11
6.16 No Manipulation of Stock....................................11
6.17 Accountants.................................................11
6.18 Contracts...................................................11
6.19 Taxes.......................................................12
6.20 Transfer Taxes..............................................12
6.21 Investment Company..........................................12
6.22 Insurance...................................................13
6.23 DGCL 203....................................................13
6.24 Brokers or Finders..........................................13
6.25 Offering Materials..........................................13
6.26 Registration Rights.........................................14
6.27 Books and Records...........................................14
6.28 Employee Benefit Plans; Employee Matters....................14
6.29 Environmental Laws..........................................14
6.30 Regulatory Compliance.......................................14
6.31 Title to Property and Assets................................15
6.32 Insider Interests; Related Party Transactions...............15
6.33 Real Property Holding Corporation...........................15
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7. Representations, Warranties and Covenants of the Investors...........15
7.1 Investment Experience and Interest..............................15
7.2 Registration or Exemption Requirements......................16
7.3 Foreign Jurisdictions.......................................16
7.4 Due Authorization...........................................16
7.5 No Legal, Tax or Investment Advice..........................17
8. Covenants............................................................17
8.1 Stockholders' Meeting.......................................17
8.2 Filing of Proxy Statement; Amendment of Form 10-K...........17
8.3 Election of Directors.......................................18
8.4 Nasdaq Listing..............................................18
8.5 Delivery of Warrant Shares..................................18
8.6 Rights Offering and Option Plan Matters.....................18
8.7 No Solicitation.............................................18
8.8 Third Party Offer...........................................20
8.9 Operation of Business.......................................21
8.10 Reasonable Efforts; Notification; Representations...........21
8.11 Indemnification Agreements; Charter Documents...............21
8.12 HSR Compliance..............................................21
8.13 Executive Recruiting Firm...................................21
9. Termination..........................................................22
9.1 Termination Events..........................................22
9.2 Effect of Termination.......................................23
10. Miscellaneous........................................................23
10.1 Notices.....................................................23
10.2 Amendment and Waiver........................................24
10.3 Survival of Representations, Warranties and Agreements......24
10.4 Expenses....................................................24
10.5 Attorneys' Fees.............................................24
10.6 Public Announcements........................................25
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10.7 Headings....................................................25
10.8 Pronouns....................................................25
10.9 Severability................................................25
10.10 Governing Law...............................................25
10.11 Entire Agreement............................................25
10.12 Counterparts................................................25
10.13 Confidential Disclosure Agreement...........................26
10.14 Tax Disclosure..............................................26
Schedule A - Schedule of Investors
Schedule B - Proposed Incentive Plan Amendments
Exhibit A - Form of Warrant
Exhibit B - Stock Certificate and Warrant Questionnaire
Exhibit C - Amended and Restated Certificate of Incorporation
Exhibit D - Form of Legal Opinion
Exhibit E - Form of Second Investor Rights Agreement
Exhibit F - Officer's Certificate
Exhibit G - Secretary's Certificate
Exhibit H - Form of Voting Agreement
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RIGEL PHARMACEUTICALS, INC.
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
This Common Stock and Warrant Purchase Agreement (the "Agreement") is made
as of April 29, 2003 by and among RIGEL PHARMACEUTICALS, INC., a Delaware
corporation (the "Company"), and each of the parties set forth on Schedule A
attached hereto (each, an "Investor" and, collectively, the "Investors").
RECITALS
A. The Company desires to sell, and the Investors desire to purchase, the
Shares and the Warrants (each as defined below) pursuant to the terms set forth
in this Agreement.
B. In order to induce the Investors to enter into this Agreement, certain
stockholders of the Company are executing voting agreements in favor of the
Investors.
AGREEMENT
1. Authorization of Shares and Warrants. Subject to the terms and
conditions of this Agreement, the Company, as of the Closing Date (as defined in
Section 3.1), will have authorized (a) the sale and issuance of 71,874,999
shares (the "Shares") of the Company's common stock, par value $0.001 per share
(the "Common Stock"), and the Warrants (as defined in Section 2.1(b)) (the
"Offering") and (b) the reservation of the shares of Common Stock into which the
Warrants are exercisable (the "Warrant Shares").
2. Agreement to Sell and Purchase Shares and Warrants.
2.1 Subject to the terms and conditions of this Agreement, each
Investor agrees, severally and not jointly, to purchase at the Closing (as
defined in Section 3.1), and the Company agrees to sell and issue to each
Investor, severally and not jointly, at the Closing:
(a) that number of Shares determined by dividing (i) the
dollar amount set forth opposite such Investor's name on Schedule A hereto (the
"Aggregate Purchase Price") by (ii) the per share purchase price of $0.64 (the
"Purchase Price"), rounded down to the nearest whole number of Shares; and
(b) a warrant, in the form attached hereto as Exhibit A,
exercisable for that number of Warrant Shares equal to twenty percent (20%) of
the Shares purchased by such Investor pursuant to Section 2.1(a) above, at a
price per share exercise price equal to the Purchase Price, as set forth
opposite such Investor's name on Schedule A hereto (each, a "Warrant" and,
collectively, the "Warrants").
2.2 The number of Shares to be purchased by the Investors at the
Closing pursuant to Section 2.1(a), the Purchase Price applicable to such Shares
and the per
share exercise price and number of underlying shares of Common Stock
attributable to the Warrants shall be proportionately adjusted for any
subdivision or combination of Common Stock (by stock split, reverse stock split,
dividend, reorganization, recapitalization or otherwise, including, but not
limited to, the Reverse Stock Split (as defined in Section 4.4)).
3. Closing; Delivery of Shares and Warrants.
3.1 The closing of the purchase and sale of the Shares and the
Warrants pursuant to this Agreement (the "Closing") shall take place at 10:00
a.m. at the offices of ▇▇▇▇▇▇ Godward LLP, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ on the second (2nd) business day (the "Closing Date") after
satisfaction in full of the closing conditions set forth in Sections 4 and 5
herein that by their terms are not to occur at the Closing, or waiver of any
such closing conditions pursuant to the terms therein, or at such other time and
place as may be agreed to by the Company and the Investors representing a
majority of the total Aggregate Purchase Prices paid by all Investors (a
"Majority in Interest of the Investors"). At the Closing, each Investor shall
deliver, in immediately available funds, the Aggregate Purchase Price by wire
transfer to an account designated by the Company. As soon as reasonably
practicable, but in no event later than five (5) business days after the
Closing, the Company shall deliver to each Investor, against payment therefor,
one or more stock certificates representing the number of Shares set forth on
Schedule A hereto and one or more Warrants to purchase the number of Warrant
Shares set forth on Schedule A hereto, each such certificate and Warrant to be
dated as of the Closing Date and to be registered in the name of the Investor
or, if so indicated on the Stock Certificate and Warrant Questionnaire attached
hereto as Exhibit B, in the name of a nominee designated by such Investor.
3.2 All certificates representing the Shares and the Warrant Shares
shall bear the following legends:
(a) "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"). SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF REGISTRATION OR AN EXEMPTION THEREFROM. RIGEL PHARMACEUTICALS, INC.
MAY REQUIRE AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT THAT A PROPOSED
TRANSFER OR SALE IS IN COMPLIANCE WITH THE ACT."
(b) "THE SALE, TRANSFER OR VOTING OF THE SHARES REPRESENTED BY
THIS CERTIFICATE IS RESTRICTED BY THE TERMS OF A SECOND INVESTOR RIGHTS
AGREEMENT BY AND AMONG RIGEL PHARMACEUTICALS, INC. AND THE INVESTORS NAMED
THEREIN. COPIES OF THE AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST
MADE BY THE HOLDERS OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF RIGEL
PHARMACEUTICALS, INC. AT THE PRINCIPAL EXECUTIVE OFFICES OF RIGEL
PHARMACEUTICALS, INC."
2.
(c) The certificates representing the Shares and Warrant
Shares will be subject to a stop transfer order with the Company's transfer
agent that restricts the transfer of such shares except in compliance with this
Agreement.
(d) The Company acknowledges and agrees that an opinion of
counsel shall not be required upon the transfer by an Investor of any securities
to an "Affiliate" (as defined in Rule 12b-2 of the rules and regulations
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) of such Investor, including, but not limited to, a member, retired
member, partner, retired partner or affiliated venture capital fund of such
Investor.
4. Conditions to Company's Obligations. The Company's obligation to issue
Shares and Warrants to each Investor at the Closing shall be subject to the
fulfillment on or prior to the Closing of the following conditions, any one or
more of which may be waived in whole or in part by the written consent of the
Company:
4.1 Payment. The Company shall have received the Aggregate Purchase
Price.
4.2 Representations and Warranties True and Correct. The
representations and warranties made by such Investor in Section 7 hereof shall
be true and correct in all material respects as of the date hereof and the
Closing Date with the same force and effect as if they had been made as of the
Closing Date.
4.3 No Injunction or Regulatory Restraints; Illegality. No temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or governmental entity or other legal or
regulatory restraint or prohibition preventing the consummation of the
transactions contemplated hereby shall be in effect; nor shall there be any
action taken by any court of competent jurisdiction or governmental entity, or
any law or order enacted, entered, enforced or deemed applicable to the
transactions contemplated hereby by any court of competent jurisdiction or
governmental entity, that would prohibit their consummation.
4.4 Filing of Certificate. The Company shall have filed with the
Secretary of State of the State of Delaware the Amended and Restated Certificate
of Incorporation, in substantially the form attached hereto as Exhibit C (the
"Certificate"), to (a) effect a reverse stock split of the outstanding Common
Stock within the range of 1-for-5 to 1-for-15 as mutually agreed upon by the
board of directors of the Company (the "Board of Directors") and a Majority in
Interest of the Investors (the "Reverse Stock Split") and (b) to effect any
other changes to the Company's certificate of incorporation as are necessary to
complete the transactions contemplated hereby, including, but not limited to,
potentially increasing the number of authorized shares of Common Stock of the
Company.
4.5 Required Stockholder Approval. The Company shall have obtained
the Required Stockholder Approval (as defined in Section 6.4).
3.
5. Conditions to Investors' Obligations. Each Investor's obligation to
purchase Shares and Warrants at the Closing shall be subject to the fulfillment
on or prior to the Closing of the following conditions, any one or more of which
may be waived in whole or in part, subject to Section 10.2, by the written
consent of a Majority in Interest of the Investors:
5.1 Representations and Warranties True and Correct. The
representations and warranties made by the Company in Section 6 hereof shall be
true and correct as of the date hereof and the Closing Date with the same force
and effect as if they had been made as of the Closing Date, except as otherwise
contemplated by this Agreement and except (a) in each case, or in the aggregate,
as does not constitute a Material Adverse Effect on the Company (as defined in
Section 5.11) and (b) for those representations and warranties that address
matters only as of a particular date, which shall be true and correct (subject
to the qualification set forth in the preceding clause (a)) as of such date.
5.2 Compliance with Laws. The purchase of the Shares and Warrants by
each Investor hereunder shall be legally permitted by all laws and regulations
to which the Company is subject (including all applicable federal, state and
foreign securities laws).
5.3 No Injunction or Regulatory Constraints; Illegality. No
temporary restraining order, preliminary or permanent injunction or other order
issued by any court of competent jurisdiction or governmental entity or other
legal or regulatory restraint or prohibition preventing the consummation of the
transactions contemplated hereby shall be in effect; nor shall there be any
action taken by any court of competent jurisdiction or governmental entity, or
any law or order enacted, entered, enforced or deemed applicable to the
transactions contemplated hereby by any court of competent jurisdiction or
governmental entity, that would prohibit their consummation.
5.4 Filing of Certificate. The Company shall have filed with the
Secretary of State of the State of Delaware the Certificate to (a) effect the
Reverse Stock Split and (b) effect any other changes to the Company's
certificate of incorporation as are necessary to complete the transactions
contemplated hereby, including, but not limited to, potentially increasing the
number of authorized shares of Common Stock of the Company.
5.5 Opinion of Company's Counsel. The Investors shall have received
a legal opinion of Cooley Godward LLP, counsel for the Company, in substantially
the form attached hereto as Exhibit D.
5.6 Required Stockholder Approval. The Company shall have obtained
the Required Stockholder Approval.
5.7 Board of Directors Designees. The Board of Directors (which
shall have nine (9) members as of the Closing) shall have appointed, effective
as of the Closing, ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇ (the "MPM Representatives") as
designees of MPM BioVentures III, L.P. or its affiliates ("MPM Capital") to
serve on the Board of Directors as Class II and Class III directors (as defined
in the Company's Certificate). In addition, the Board of Directors shall have
appointed, effective as of the Closing, one (1) MPM Representative as a member
of the compensation committee of the Board of Directors and one (1) MPM
4.
Representative as a member of the nominating committee of the Board of
Directors, and all such appointments shall be in full force and effect.
5.8 Committee Appointment. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Ph.D., representing MPM
Capital, shall have been appointed to the Company's drug development committee
(or similar committee as appropriate) to serve until a senior executive officer
in the area of drug development, which individual shall have extensive small
molecule experience and expertise, has been appointed by the Board of Directors.
5.9 Investor Rights Agreement. The parties hereto shall have entered
into that certain Second Investor Rights Agreement in substantially the form
attached hereto as Exhibit E (the "Investor Rights Agreement," and together with
this Agreement, the "Agreements").
5.10 Waiver of Registration Rights. The Prior Rights Holders (as
defined in the Investor Rights Agreement) shall have waived any applicable
registration rights held by them in connection with the filing of any
registration statement on behalf of the Investors pursuant to Sections 2.1 and
2.4 of the Investor Rights Agreement.
5.11 No Material Adverse Effect. There shall have been no Material
Adverse Effect on the Company between the date of the execution of this
Agreement and the Closing Date. For the purposes of this Agreement, a "Material
Adverse Effect" on the Company shall mean an event, change or occurrence that
individually, or together with any other event, change or occurrence, has had a
material adverse impact on the Company's financial position, business,
properties, assets, liabilities (absolute, accrued or contingent), prospects or
results of operations; provided, however, that none of the direct effects of any
of the following (individually or in combination) shall be deemed to constitute,
or shall be taken into account in determining whether there has been, a Material
Adverse Effect on the Company: (a) changes in generally accepted accounting
practices, (b) historically experienced seasonal fluctuations in the Company's
performance, (c) changes in worldwide general business or economic conditions
affecting the industries in which the Company participates, (d) changes in
conditions generally affecting the biotechnology industry, (e) the announcement
or pendency of any of the transactions contemplated by this Agreement, (f) the
taking of any action required by this Agreement and (g) expenditures by the
Company in the ordinary course of business consistent with past practices and
reasonable expenditures by the Company in connection with the transactions
contemplated by this Agreement.
5.12 Executive Search. The Company shall have initiated a search for
and shall have diligently pursued the hiring of a senior executive officer in
the area of drug development, which individual shall have extensive small
molecule development experience and expertise and be acceptable to the Board of
Directors.
5.13 Covenants. Each covenant and agreement contained in this
Agreement to be performed by the Company on or prior to the Closing shall have
been performed or complied with in all material respects.
5.
5.14 Nasdaq Listing. The Company shall (a) have filed a listing
application with the Nasdaq National Market ("Nasdaq") for the Shares and the
Warrant Shares, (b) continue to have its shares of Common Stock listed for
trading on Nasdaq and (c) have not been notified by Nasdaq of any action or
potential action by Nasdaq or of any violation of any Nasdaq rule that could
result in the delisting of the Company's Common Stock from Nasdaq, except as
otherwise described in Section 6.13 of the Company's Disclosure Schedule.
5.15 Closing Proceeds. The Company shall have raised at least
$40,000,000 from the Investors pursuant to this Agreement; provided, however,
that, notwithstanding Section 10.2, this condition may be waived solely by MPM
Capital.
5.16 Officers' Certificates. The Company shall have delivered to the
Investors a certificate, dated as of the Closing Date and executed by the chief
executive officer of the Company, and a certificate, dated as of the Closing
Date and executed by the secretary of the Company, in the forms attached hereto
as Exhibits F and G, respectively.
6. Representations and Warranties of the Company. Except as otherwise
described in the Company's Disclosure Schedule, and except as expressly
contemplated herein or thereby, the Company hereby represents and warrants to
each Investor as follows:
6.1 Organization. The Company is duly incorporated and validly
existing in good standing under the laws of the State of Delaware. The Company
has full power and authority to own, operate and occupy its properties and to
conduct its business as presently conducted and is registered or qualified to do
business and is in good standing in each jurisdiction in which it owns or leases
property or transacts business and where the failure to be so qualified would
have a Material Adverse Effect on the Company, and, to the Company's knowledge
(as defined below), no proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing, or seeking to revoke, limit or curtail, such
power and authority or qualification. For purposes of this Agreement, the term
"knowledge" (including any derivation thereof such as "know" or "knowing" and
regardless of whether such word starts with an initial capital) in reference to
the Company shall mean the actual knowledge of the Company's executive officers.
6.2 Subsidiaries. The Company does not own or control any equity
security or other interest of any other corporation, partnership or other
business entity. Since its inception, the Company has not consolidated or merged
with, acquired all or substantially all of the assets of, or acquired the stock
of or any interest in any corporation, partnership or other business entity.
6.3 Due Authorization. The Company has all requisite corporate power
and authority to execute, deliver and perform its obligations under the
Agreements and Warrants, and the Agreements and Warrants have been duly
authorized and validly executed and delivered by the Company and, except for
obtaining Stockholder Approval, no other corporate action on the part of the
Company or its stockholders is necessary to authorize the execution and delivery
by the Company of the Agreements or the Warrants or the consummation by it of
the Offering. The Agreements and Warrants, assuming due and valid authorization,
execution and delivery hereof and thereof by the Investors, constitute legal,
valid and binding agreements of the
6.
Company, enforceable against the Company in accordance with their terms, except
as rights to indemnity and contribution may be limited by state or federal
securities laws or the public policy underlying such laws, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and contracting
parties' rights generally, and except as enforceability may be subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
6.4 Vote Required. The only votes of the holders of any class or
series of the Company's capital stock necessary to approve the Offering and the
other transactions contemplated by this Agreement (the "Stockholder Approval")
are (a) the affirmative vote of the majority of shares of Common Stock present
in person or represented by proxy at the Stockholders' Meeting (as defined in
Section 8.1) and entitled to vote to approve the Offering (the "Required Nasdaq
Approval"), (b) the affirmative vote of at least sixty-six and two-thirds
percent (66 2/3%) of the outstanding shares of Common Stock entitled to vote to
approve the Certificate and resulting Reverse Stock Split and, if necessary to
complete the transactions contemplated hereby, an increase in the number of
authorized shares of Common Stock (the "Reverse Split Stockholder Approval" and,
together with the Required Nasdaq Approval, the "Required Stockholder
Approval"), (c) the affirmative vote of the majority of the shares of Common
Stock present in person or represented by proxy at the Stockholders' Meeting and
entitled to vote to approve the amendments to the Company's 2000 Equity
Incentive Plan, 2000 Non-Employee Directors' Stock Option Plan and 2000 Employee
Stock Purchase Plan to, among other things, increase the number of shares
reserved for issuance under each such plan, as set forth on Schedule B attached
hereto (the "Plan Amendments") and (d) the affirmative vote of the majority of
the outstanding shares of Common Stock entitled to vote to approve the
repricing, in the discretion of the Board of Directors and the reasonable
discretion of a Majority in Interest of the Investors, of all options to
purchase Common Stock issued pursuant to the Company's 2000 Equity Incentive
Plan, 2001 Non-Officer Equity Incentive Plan and 2000 Non-Employee Directors'
Stock Option Plan outstanding as of the Closing (the "Repricing").
6.5 Non-Contravention. The execution and delivery of the Agreements,
the issuance and sale of the Shares and the Warrants, the issuance of the
Warrant Shares and the consummation of the transactions contemplated thereby
will not (a) conflict with or constitute a violation of or default (with the
passage of time or otherwise) or give rise to any right of termination, material
amendment, cancellation or acceleration or loss of any material rights under (i)
any material contracts to which the Company is a party and that are filed as
exhibits to the Company's annual report on Form 10-K for the year ended December
31, 2002 and any Current Reports on Form 8-K or Quarterly Reports on Form 10-Q
filed subsequent thereto with the Securities and Exchange Commission (the "SEC")
by the Company (the "SEC Documents") (such contracts, the "Material Contracts"),
(ii) the certificate of incorporation or the bylaws of the Company or any
similar organizational document of the Company or (iii) any law, administrative
regulation ordinance, writ, injunction, decree or order of any court or
governmental agency, arbitration panel or authority binding upon the Company or
its property, where such conflict, violation or default would result in a
Material Adverse Effect on the Company or (b) result in the creation or
imposition (or the obligation to create or impose) of any material lien,
encumbrance, claim, security interest, pledge, charge or restriction of any kind
7.
upon any of the properties or assets of the Company or an acceleration of
indebtedness pursuant to any obligation, agreement or condition contained in any
Material Contract. No consent, approval, authorization or other order of, or
registration, qualification or filing with, any regulatory body, administrative
agency or other governmental body in the United States is required for the
execution and delivery of the Agreements and the Warrants and the valid issuance
and sale of the Shares and the Warrants to be sold pursuant to this Agreement,
other than such as have been made or obtained or will be made or obtained
pursuant to the Nasdaq Marketplace Rules (the "Nasdaq Rules") prior to the
Closing and except for any securities filings required to be made under state
securities laws.
6.6 Capitalization. As of the date of this Agreement, the authorized
capital stock of the Company consists of 100,000,000 shares of Common Stock and
10,000,000 shares of preferred stock, par value $0.001 per share. As of the date
of this Agreement, (a) 46,376,004 shares of Common Stock are issued and
outstanding, (b) 45,731 shares of Common Stock are issued and held in the
treasury of the Company, (c) no shares of preferred stock are designated as
Preferred Stock, (d) 10,327,905 shares of Common Stock are reserved for issuance
upon exercise of options to purchase the Common Stock under the Company's stock
option plans and employee stock purchase plan and (e) 1,149,615 shares of Common
Stock have been reserved for issuance upon the exercise of warrants to purchase
Common Stock. The Shares and the Warrants to be sold pursuant to this Agreement
and the Warrant Shares have been duly authorized, and when issued and paid for
in accordance with the terms of this Agreement and the Warrants, will be duly
and validly issued, fully paid and nonassessable. The outstanding shares of
capital stock of the Company have been duly and validly issued and are fully
paid and nonassessable, have been issued in compliance with all federal, state
and foreign securities laws and were not issued in violation of any preemptive
rights or similar rights to subscribe for or purchase securities. Except as set
forth in or contemplated by the Agreements and the Warrants, there are no
outstanding rights (including, without limitation, preemptive rights), warrants
or options to acquire, or instruments convertible into or exchangeable for, any
unissued shares of capital stock or other equity interest in the Company, or any
contract, commitment, agreement, understanding or arrangement of any kind to
which the Company is a party and relating to the issuance or sale of any capital
stock of the Company, any such convertible or exchangeable securities or any
such rights, warrants or options. Without limiting the foregoing, no preemptive
right, co-sale right, right of first refusal or other similar right exists with
respect to the issuance and sale of the Shares and the Warrants or the issuance
of the Warrant Shares. Other than Voting Agreements substantially in the form
attached hereto as Exhibit H, there are no stockholder agreements, voting
agreements or other similar agreements with respect to the Common Stock to which
the Company is a party.
6.7 Legal Proceedings. There is no material action, suit or
governmental proceeding pending or, to the knowledge of the Company, threatened
against or involving the Company or any of its properties or other assets or
which questions the validity of this Agreement or any action taken or to be
taken by the Company pursuant to the Agreements or in connection with the
transactions contemplated hereby. There is no fact or circumstance known to the
Company that would reasonably be expected to give rise to any material action,
suit, proceeding, inquiry or investigation against, relating to or affecting the
Company or any of its properties or other assets. The Company is not subject to
any judgment, order or decree that
8.
materially restricts its business practices or its ability to acquire any
property or conduct its business in any area.
6.8 No Violations. The Company is not in violation of its
certificate of incorporation or its bylaws or, to the knowledge of the Company,
in material violation of any law, administrative regulation, ordinance or order
of any court or governmental agency, arbitration panel or authority applicable
to the Company, and is not in default (and there exists no condition which, with
the passage of time or otherwise, would constitute a default) in the performance
of any Material Contract. No notice, charge, claim, action or assertion has been
received by the Company alleging such a violation or default.
6.9 Governmental Permits, Etc. The Company has all necessary
franchises, licenses, certificates and other authorizations from any foreign,
federal, state or local government or governmental agency, department or body
that are currently necessary for the operation of the business of the Company as
currently conducted, except where the failure to currently possess such items
would not have a Material Adverse Effect on the Company. The Company has not
received any notice of proceedings relating to the revocation or modification
of, or non-compliance with, any such certificate, authorization or permit.
6.10 Intellectual Property. The Company owns or possesses and holds
valid and sufficient rights to use all patents, patent rights or licenses,
inventions, collaborative research agreements, trade secrets, know-how,
trademarks, service marks, trade names and copyrights that are necessary to
conduct its business as currently conducted and as proposed to be conducted in
all material respects. The expiration of any patents, patent rights, trade
secrets, trademarks, service marks, trade names or copyrights, or termination or
expiration of any exclusive licenses thereto, would not, individually or in the
aggregate, result in a Material Adverse Effect on the Company. The Company has
not received any notice of, and has no knowledge of, any infringement of or
conflict with rights of the Company by others with respect to any patent, patent
rights, inventions, trade secrets, know-how, trademarks, service marks, trade
names or copyrights; and the Company has not received any notice of, and has no
knowledge of, any infringement of or conflict with rights of others with respect
to any patent, patent rights, inventions, trade secrets, know-how, trademarks,
service marks, trade names or copyrights of or exclusively licensed to the
Company. There is no claim being made against the Company regarding patents,
patent rights or licenses, inventions, collaborative research, trade secrets,
know-how, trademarks, service marks, trade names or copyrights. The Company does
not, in the conduct of its business, infringe or conflict with any right or
patent of any third party, or any discovery, invention, product or process that
is the subject of a patent application filed by any third party, known to the
Company. The Company has taken reasonable steps to protect the material
intellectual property of the Company. The execution, delivery and performance by
the Company of this Agreement, and the consummation of the transactions
contemplated hereby, will not result in the loss or impairment of, or give rise
to any right of any third party to terminate or materially alter, any of the
Company's material rights to own any of its intellectual property or its
material rights under any agreements relating to such intellectual property, nor
require the consent of any governmental authority or third party in respect of
any such intellectual property.
9.
6.11 Financial Statements. The financial statements of the Company
and the related notes contained in the Company's SEC Documents have been
prepared from and are in accordance with the books and records of the Company
and present fairly, in accordance with United States generally accepted
accounting principles ("GAAP"), the financial position of the Company as of the
dates indicated, and the results of its operations and cash flows for the
periods therein specified. Such financial statements (including the related
notes) have been prepared in accordance with GAAP applied on a consistent basis
throughout the periods therein specified and have complied, as of their
respective dates, in all material respects with the applicable accounting
requirements and rules and regulations of the SEC. The Company has not created
any entities or entered into any transactions or created any liabilities or
obligations of any nature, whether or not accrued, contingent or otherwise, for
the purpose of avoiding disclosure required by GAAP.
6.12 Absence of Changes. Since December 31, 2002, there has not been
(a) any Material Adverse Effect on the Company, (b) any material obligation,
direct or contingent, incurred by the Company, except obligations incurred in
the ordinary course of business, (c) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company, (d) any loss or
damage (whether or not insured) to the physical property of the Company which
has had a Material Adverse Effect on the Company, (e) any change in any method
of tax or GAAP or accounting practice that would or would reasonably be expected
to result in any material change in the financial statements, (f) any payment,
loan or advance of any amount to, or sale, transfer or lease of any material
properties or assets (real, personal or mixed, tangible or intangible) to, or
any agreement or arrangement with, any executive officer or directors or
employees of the Company, except such amounts or such agreements made in the
ordinary course of business, (g) any amendment to the Company's certificate of
incorporation, bylaws or similar organizational documents, (h) any issuance,
sale, transfer, pledge, disposal of or encumbrance of any shares of any class or
series of the Company's capital stock, or securities convertible into or
exchangeable for, or options, warrants, calls, commitments or rights of any kind
to acquire, any shares of any class or series of its capital stock, other than
shares of Common Stock reserved for issuance on the date of this Agreement
pursuant to the Company's stock option plans and employee stock purchase plan,
the exercise of any options or warrants to purchase Common Stock outstanding on
the date of this Agreement or existing agreements that require the Company to
issue shares of Common Stock, (i) any redemption, purchase or other acquisition
directly or indirectly of any shares of any class or series of the Company's
capital stock, or any instrument or security which consists of or includes a
right to acquire such shares (other than repurchases of restricted stock at the
original purchase price pursuant to agreements outstanding on the date of this
Agreement or entered into after the date of this Agreement in compliance with
the provisions hereof), (j) except in the ordinary course of business and
consistent with past practice or pursuant to the terms of its Material Contracts
as in effect on the date hereof, any termination, modification or amendment to
any of its Material Contracts or any waiver, release or assignment of any
material rights under any Material Contract or material claims, (k) any
revaluation in any material respect any of its assets, including any writing
down of the value of inventory or writing-off of notes or accounts receivable,
other than in the ordinary course of business consistent with past practice or
as required by GAAP, (l) any settlement or compromise of any pending or
threatened suit, action or claim that relates to the transactions contemplated
hereby or is material to the Company, (m) any adoption of a plan of complete or
10.
partial liquidation, dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization of the Company or (n) any agreement,
whether in writing or otherwise, to take any action described in this Section
6.12.
6.13 Nasdaq Compliance. The Company's Common Stock is registered
pursuant to Section 12(g) of the Exchange Act and is listed on Nasdaq, and the
Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act or
delisting the Common Stock from Nasdaq. The Company has not been notified by
Nasdaq of any action or potential action by Nasdaq or of any violation of any
Nasdaq Rules that could result in the delisting of the Company's Common Stock
from Nasdaq.
6.14 Reporting Status. The Company has filed in a timely manner all
documents that the Company was required to file under the Exchange Act and the
Nasdaq Rules during the twelve (12) months preceding the date of this Agreement.
The Company has delivered to the Investors a copy of all SEC Documents filed
within the ten (10) days preceding the date hereof. The SEC Documents complied
in all material respects with the requirements of the Securities Act of 1933, as
amended (the "Securities Act"), and the Exchange Act and the rules and
regulations of the SEC promulgated thereunder as of their respective filing
dates, and none of the SEC Documents, including any financial statements or
schedules included or incorporated by reference therein, 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 Chief Executive Officer and the Chief Financial Officer of the
Company have signed, and the Company has furnished to the SEC, all
certifications required by Sections 302 and 906 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of
2002 (the "Certifications"). Such Certifications contain no qualifications or
exceptions to the matters certified therein and have not been modified or
withdrawn, and neither the Company nor any of it officers has received notice
from any governmental entity questioning or challenging the accuracy,
completeness, content, form or manner of filing or submission of such
Certifications.
6.15 Listing. The Company shall comply with all requirements of the
National Association of Securities Dealers, Inc. with respect to the issuance of
the Shares and the Warrants and the listing of the underlying Common Stock on
Nasdaq.
6.16 No Manipulation of Stock. The Company has not taken and will
not take any action outside the ordinary course of business designed to or that
might reasonably be expected to cause or result in unlawful manipulation of the
price of the Common Stock to facilitate the sale or resale of the Shares and the
Warrants.
6.17 Accountants. Ernst & Young LLP, which expressed its opinion
with respect to the financial statements included in the Company's Annual Report
on Form 10-K for the year ended December 31, 2002, are independent accountants
as required by the Securities Act and the rules and regulations promulgated
thereunder.
6.18 Contracts.
11.
(a) Except for the Material Contracts, the Company does not
have any agreements, contracts and commitments not made in the ordinary course
of business that are material to the Company.
(b) The Company does not have any employment agreements, or
any other similar agreements that contain any severance or termination pay
liabilities or obligations, that are not filed as exhibits to the SEC Documents.
(c) No purchase contract or commitment of the Company
continues for a period of more than twelve (12) months or is in excess of the
normal, ordinary and usual requirements of business.
(d) The Company is not in default under or in material
violation of, nor to the Company's knowledge, is there any valid basis for any
claim of default, under or material violation of, any Material Contract.
(e) The Company does not have any debt obligations for
borrowed money, including any guarantee of or agreement to acquire any such debt
obligation of others, or any power of attorney outstanding or any obligation or
liability (whether absolute, accrued, contingent or otherwise) as guarantor,
surety, co-signer, endorser, co-maker, indemnitor or otherwise with respect to
the obligation of any corporation, partnership, joint venture, association,
organization or other entity.
(f) All agreements, contracts and commitments required to be
filed by the Company under the Exchange Act or the Securities Act have been
filed in a timely manner with the SEC.
(g) The Company is not materially restricted by agreement from
carrying on its business anywhere in the world.
6.19 Taxes. The Company has duly and timely filed all necessary
federal, state and foreign income and franchise tax returns and has paid or
accrued all taxes shown as due thereon, and the Company has no knowledge of a
tax deficiency which has been or might be asserted or threatened against it
which would have a Material Adverse Effect on the Company.
6.20 Transfer Taxes. On the Closing Date, all stock transfer or
other taxes (other than income taxes) which are required to be paid in
connection with the sale and transfer of the Shares and the Warrants to be sold
to the Investors hereunder will be, or will have been, fully paid or provided
for by the Company and all laws imposing such taxes will be or will have been
fully complied with.
6.21 Investment Company. The Company is not an "investment company"
or an "affiliated person" of, or "promoter" or "principal underwriter" for, an
investment company, within the meaning of the Investment Company Act of 1940, as
amended.
12.
6.22 Insurance. The Company maintains and will continue to maintain
insurance of the types and in the amounts that the Company reasonably believes
is adequate for its business, including, but not limited to, insurance against
theft, damage, destruction, acts of vandalism and all other risks customarily
insured against by similarly situated companies, all of which insurance is in
full force and effect.
6.23 DGCL 203. Prior to the date of this Agreement, the Board of
Directors, at a meeting duly called and held, has (a) determined that the
Agreement and the Offering are fair to, advisable and in the best interests of
the Company and the stockholders of the Company, (b) approved the Offering and
(c) resolved to recommend that the stockholders of the Company approve the
Offering. The action taken by the Board of Directors constitutes approval of the
Offering under the provisions of Section 203 of the Delaware General Corporation
Law ("DGCL") such that Section 203 of the DGCL does not apply to this Agreement
or the Offering, and such approval has not been amended, rescinded or modified.
No other state takeover, antitakeover, moratorium, fair price, interested
stockholder, business combination or similar statute or rule is applicable to
the Offering. If any state takeover statute other than Section 203 of the DGCL
becomes or is deemed to become applicable to this Agreement or the Offering, the
Company shall take all reasonable action necessary to render such statute
inapplicable to all of the foregoing.
6.24 Brokers or Finders. No agent, broker, investment banker,
financial advisor or other firm or entity is or will be entitled to any broker's
or finder's fee or any other commission or similar fee payable by the Company in
connection with the Offering, except for amounts paid or payable to ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ (the "Financial Advisor"). The Company has no liabilities
or obligations (absolute, accrued, contingent or otherwise) to the Financial
Advisor except as set forth in the engagement letter between the Company and the
Financial Advisor, which letter has been provided to the Investors.
6.25 Offering Materials. The Company has not distributed and will
not distribute prior to the Closing Date any offering material in connection
with the offering and sale of the Shares and the Warrants. The Company has not
issued, offered or sold any shares of Common Stock (including for this purpose
any securities of the same or a similar class as the Shares or the Warrant
Shares or any securities convertible into or exchangeable or exercisable for the
Shares or the Warrant Shares) within the six (6) month period preceding the date
hereof or taken any other action, or failed to take any action, that, in any
such case, would (i) eliminate the availability of the exemption from
registration under Regulation D under the Securities Act in connection with the
offer and sale of the Shares and the Warrants as contemplated hereby or (ii)
cause the offering of the Shares and the Warrants pursuant to this Agreement to
be integrated with prior offerings by the Company for purposes of the Securities
Act. The Company shall not directly or indirectly take, and shall not permit any
of its directors, or officers indirectly to take, any action (including any
offering or sale to any person or entity of the Shares, the Warrants or any
Common Stock) that will make unavailable the exemption from registration under
the Securities Act being relied upon by the Company for the offer and sale to
the Investors of the Shares and the Warrants as contemplated by this Agreement,
including the filing of a registration statement under the Securities Act. No
form of general solicitation or advertising within the meaning of Rule 502(c)
under the Securities Act has been used or authorized by the Company or
13.
any of its officers or directors in connection with the offer or sale of the
Shares or the Warrants as contemplated by this Agreement or any other agreement
to which the Company is a party.
6.26 Registration Rights. There are no registration or other similar
rights to have any securities registered under any registration statement to be
filed on behalf of the Investors pursuant to Sections 2.1 and 2.4 of the
Investor Rights Agreement and no other registration rights exist with respect to
the issuance or registration of the Shares and the Warrant Shares by the Company
under the Securities Act that have not been satisfied or waived.
6.27 Books and Records. The books of account, minute books, stock
record books and other records of the Company are complete and correct in all
material respects and have been maintained in accordance with sound business
practices and the requirements of Section 13(b)(2) of the Exchange Act,
including an adequate system of internal controls. The minute books of the
Company contain accurate and complete records of all meetings held of, and
corporate action taken by, the stockholders, the Board of Directors and
committees of the Board of Directors, and no meeting of any of such
stockholders, the Board of Directors or such committees has been held for which
minutes have not been prepared and are not contained in such minute books.
6.28 Employee Benefit Plans; Employee Matters. The consummation of
the transactions contemplated by this Agreement will not, alone or in
conjunction with any other possible event (including termination of employment)
(i) entitle any current or former employee or other service provider of the
Company to severance benefits or any other payment, compensation or benefit
(including forgiveness of indebtedness), except as expressly provided by this
Agreement or (ii) accelerate the time of payment or vesting, or increase the
amount of compensation or benefit due any such employee or service provider,
alone or in conjunction with any other possible event (including termination of
employment). The Company is in compliance in all material respects with all
currently applicable laws and regulations respecting employment, discrimination
in employment, terms and conditions of employment, wages, hours and occupational
safety and health and employment practices, and is not engaged in any unfair
labor practice. To the Company's knowledge, no employees of the Company are in
violation of any term of any material employment contract, patent disclosure
agreement, noncompetition agreement or any restrictive covenant to a former
employer relating to the right of any such employee to be employed by the
Company because of the nature of the business conducted or presently proposed to
be conducted by the Company or to the use of trade secrets or proprietary
information of others. No key employee of the Company has given written notice
to the Company and, to the Company's knowledge, no key employee intends to
terminate his or her employment with the Company.
6.29 Environmental Laws. The Company is not in violation of any
applicable statute, law or regulation relating to the environment or
occupational health and safety, and no material expenditures are or will be
required in order to comply with any such existing statute, law or regulation,
which could reasonably be expected to result in a Material Adverse Effect on the
Company.
6.30 Regulatory Compliance. As to each of the product candidates of
the Company, including, without limitation, product candidates or compounds
currently under
14.
research and/or development by the Company, subject to the jurisdiction of the
United States Food and Drug Administration ("FDA") under the Federal Food, Drug
and Cosmetic Act and the regulations thereunder ("FDCA") (each such product, a
"Life Science Product"), such Life Science Product is being researched,
developed, manufactured, tested and studied in compliance in all material
respects with all applicable requirements under the FDCA and similar laws and
regulations applicable to such Life Science Product, including those relating to
investigational use, premarket approval, good manufacturing practices, labeling,
advertising, record keeping, filing of reports and security. The Company has not
received any notice or other communication from the FDA or any other federal,
state or foreign governmental entity (i) contesting the premarket approval of,
the uses of or the labeling and promotion of any Life Science Product or (ii)
otherwise alleging any violation by the Company of any law, regulation or other
legal provision applicable to a Life Science Product. Neither the Company, nor
any officer, employee or agent of the Company has made an untrue statement of a
material fact or fraudulent statement to the FDA or other federal, state or
foreign governmental entity performing similar functions or failed to disclose a
material fact required to be disclosed to the FDA or such other federal, state
or foreign governmental entity.
6.31 Title to Property and Assets. The Company owns its property and
tangible assets free and clear of all mortgages, liens, loans and encumbrances,
except such encumbrances and liens that arise in the ordinary course of business
and do not materially impair the Company's ownership or use of such property or
tangible assets. With respect to the property and tangible assets it leases, the
Company is in compliance with such leases and, to the knowledge, holds a valid
leasehold interest free of any liens, claims or encumbrances.
6.32 Insider Interests; Related Party Transactions. Except for
inventors who have assigned their patent rights to the Company and which
assignments have been filed with the United States Patent and Trademark Office,
to the Company's knowledge no executive officer or director of the Company has
any material interest in any material property, real or personal, tangible or
intangible, including any invention, patent, trademark or trade name, used in or
pertaining to the business of the Company.
6.33 Real Property Holding Corporation. The Company is not a real
property holding corporation within the meaning of Section 897(c)(2) of the
Internal Revenue Code of 1986, as amended, and any regulations promulgated
thereunder.
7. Representations, Warranties and Covenants of the Investors.
Each Investor, severally and not jointly, hereby represents and warrants
to the Company as follows:
7.1 Investment Experience and Interest. Such Investor represents and
warrants to, and covenants with, the Company that: (a) the Investor is an
"accredited investor" as defined in Regulation D under the Securities Act and
the Investor is knowledgeable, sophisticated and experienced in making, and is
qualified to make decisions with respect to, investments in shares presenting an
investment decision like that involved in the purchase of the Shares and the
Warrants, including investments in securities issued by the Company and
investments in comparable companies, and has requested, received, reviewed and
considered all
15.
information it deemed relevant in making an informed decision to purchase the
Shares and the Warrants, (b) the Investor is acquiring the number of Shares set
forth on Schedule A hereto and the Warrants to purchase the number of shares of
Common Stock set forth on Schedule A hereto in the ordinary course of its
business and for its own account and with no present intention of distributing
any of such Shares or Warrants or any arrangement or understanding with any
other persons regarding the distribution of such Shares or Warrants, (c) the
Investor will not, directly or indirectly, offer, sell, pledge, transfer or
otherwise dispose of (or solicit any offers to buy, purchase or otherwise
acquire or take a pledge of) any of the Shares or the Warrants except in
compliance with the Securities Act, applicable state securities laws and the
respective rules and regulations promulgated thereunder and (d) the Investor
has, in connection with its decision to purchase the number of Shares set forth
on Schedule A hereto and the Warrants to purchase the number of shares of Common
Stock set forth on Schedule A hereto, relied only upon the SEC Documents and the
information incorporated by reference therein and the representations and
warranties of the Company contained herein.
7.2 Registration or Exemption Requirements. Such Investor
acknowledges and understands that the Shares and the Warrants may not be resold
or otherwise transferred except in a transaction registered under the Securities
Act, or unless an exemption from such registration is available. Such Investor
understands that the Warrants and the certificates evidencing the Shares will be
imprinted with a legend that prohibits the transfer of such securities unless
(a) they are registered or such registration is not required and (b) if the
transfer is pursuant to an exemption from registration under the Securities Act
and, if the Company shall so request in writing, an opinion of counsel
reasonably satisfactory to the Company is obtained to the effect that the
transaction is so exempt; provided, however, that notwithstanding the foregoing,
Section 3.2(d) hereof shall also apply to such transfers.
7.3 Foreign Jurisdictions. Such Investor acknowledges, represents
and agrees that no action has been or will be taken in any jurisdiction outside
the United States by the Company, or any agents acting on behalf of the Company,
that would permit an offering of the Shares or the Warrants, or possession or
distribution of offering materials in connection with the issue of the Shares
and the Warrants, in any jurisdiction outside the United States where action for
that purpose is required. Each Investor outside the United States will comply
with all applicable laws and regulations in each foreign jurisdiction in which
it purchases, offers, sells or delivers the Shares or the Warrants or has in its
possession or distributes any offering material, in all cases at its own
expense.
7.4 Due Authorization. Such Investor has all requisite corporate
power and authority to execute, deliver and perform its obligations under the
Agreements and Warrants, and the Agreements and Warrants have been duly
authorized and validly executed and delivered by the Investor and no other
corporate action on the part of the Investor is necessary to authorize the
execution and delivery by the Investor of the Agreements or the Warrants. The
Agreements and Warrants constitute legal, valid and binding agreements of the
Investor, enforceable against the Investor in accordance with their terms,
except as rights to indemnity and contribution may be limited by state or
federal securities laws or the public policy underlying such laws, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and contracting
parties' rights
16.
generally, and except as enforceability may be subject to general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).
7.5 No Legal, Tax or Investment Advice. Such Investor understands
that nothing in the Agreements or any other materials presented to the Investor
in connection with the purchase and sale of the Shares and Warrants constitutes
legal, tax or investment advice. The Investor has consulted such legal, tax and
investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with its purchase of the Shares and the Warrants. The
Investor has not, and will not, rely on the fairness opinion, if any, that the
Financial Advisor may deliver to the Board of Directors with respect to the
Offering.
8. Covenants.
8.1 Stockholders' Meeting. The Company shall, in accordance with the
laws of the State of Delaware, its certificate of incorporation and its bylaws,
as each may be amended, use its commercially reasonable best efforts to convene
a meeting of holders of the Common Stock (the "Stockholders' Meeting") within
thirty (30) days (or such other time period that is mutually agreed to by the
Company and a Majority in Interest of Investors) after the date of the Proxy
Statement (as defined in Section 8.2), to consider and vote upon giving
Stockholder Approval. The Board of Directors shall recommend such approval by
the stockholders (the "Company Recommendation") and shall not (i) withdraw,
modify or qualify (or propose to withdraw, modify or qualify) in any manner
adverse to Investors such recommendation in favor of the Required Stockholder
Approval or (ii) take any action or make any statement in connection with the
Stockholders' Meeting inconsistent with such recommendation in favor of the
Required Stockholder Approval (collectively, a "Change in the Company
Recommendation"); provided, however, that the Board of Directors may make a
Change in the Company Recommendation pursuant to Section 8.7 hereof and to
effect any action permitted by Section 9 hereof. Notwithstanding any Change in
the Company Recommendation, the Company shall nonetheless cause the
Stockholders' Meeting to be convened and a vote to be taken, and nothing
contained herein shall be deemed to relieve the Company of such obligation
unless this Agreement is terminated pursuant to Section 9.
8.2 Filing of Proxy Statement; Amendment of Form 10-K. Not later
than May 9, 2003, the Company shall prepare and file with the SEC a proxy
statement meeting the requirements of Section 14 of the Exchange Act and the
related rules and regulations thereunder promulgated by the SEC (the "Proxy
Statement") to solicit Stockholder Approval. The Company shall use its
commercially reasonable best efforts to cause the Proxy Statement to be cleared
by the SEC as promptly as reasonably practicable after such filing, and shall
promptly mail the Proxy Statement to the stockholders of the Company. The
Company shall keep the Investors apprised of the status of matters relating to
the Proxy Statement and the Stockholders' Meeting, including promptly furnishing
the Investors and their counsel with copies of notices or other communications
related to the Proxy Statement, the Stockholders' Meeting or the transactions
contemplated hereby received by the Company from the SEC or Nasdaq. The Company
shall use its commercially reasonable best efforts to prepare and file with the
SEC prior to the filing of the Proxy Statement an amendment of its Annual Report
on Form 10-K for the year ended December 31, 2002 in order to file certain
agreements as identified in Section 6.14 of the Company's Disclosure Schedule.
17.
8.3 Election of Directors. The Company will use its commercially
reasonable best efforts to cause, at the Closing, (i) the MPM Representatives to
be appointed as members of the Board of Directors, (ii) one (1) of the MPM
Representatives to be designated as a member of the compensation committee of
the Board of Directors and (iii) one (1) of the MPM Representatives to be
designated as a member of the nominating committee of the Board of Directors.
8.4 Nasdaq Listing. The Company shall file a listing application
with Nasdaq for the Shares and the Warrant Shares.
8.5 Delivery of Warrant Shares. The Company covenants to each
Investor that, upon exercise of the Warrant(s) held by such Investor, it shall
use its commercially reasonable efforts to cause the Warrant Shares to be issued
and promptly delivered to such Investor in accordance with the Certificate;
provided, however, that such issuance and delivery shall occur no later than ten
(10) business days after the Company's receipt of the Investor's surrender of
the Warrant(s) that such Investor desires to exercise.
8.6 Rights Offering and Option Plan Matters.
(a) The Company and the Investors acknowledge and agree that,
promptly after the Closing, the Company intends to offer to its stockholders
(excluding the Investors) non-transferable rights to purchase 15,625,000 shares
of Common Stock at the Purchase Price, and each Investor hereby agrees to waive
any right to participate in such rights offering.
(b) The Company and the Investors acknowledge and agree that
the Company shall solicit the approval of its stockholders of, and, if such
stockholder approval is obtained, shall effect (i) at the Closing, the Plan
Amendments and (ii) after the Closing, the Repricing.
8.7 No Solicitation.
(a) The Company and each of its officers, directors and agents
shall not take, cause or permit (and the Company shall use its commercially
reasonable efforts to ensure that none of its representatives takes, causes or
permits) any person to take, directly or indirectly, any of the following
actions with any third party: (i) solicit, knowingly encourage, initiate or
participate in any negotiations, inquiries or discussions with respect to any
offer or proposal to acquire the business, assets or capital shares of the
Company (excluding non-exclusive licenses entered into in the ordinary course of
business), whether by merger, consolidation, other business combination,
purchase of capital stock, purchase of assets, license, lease, tender or
exchange offer or otherwise (each of the foregoing, an "Alternative Proposal"),
(ii) disclose, in connection with an Alternative Proposal, any nonpublic
information concerning Company's business or properties or afford to any third
party access to its properties, books or records, except in the ordinary course
of business and as required by law or pursuant to a governmental request for
information, (iii) enter into or execute any agreement providing for an
Alternative Proposal or (iv) make or authorize any public statement,
recommendation or solicitation in support of any Alternative Proposal or any
offer or proposal relating to an
18.
Alternative Proposal, other than with respect to the Offering; provided,
however, that, in each case, (A) if and to the extent that (1) the Stockholders'
Meeting has not yet occurred, (2) the Board of Directors believes in good faith,
after consultation with the Company's legal counsel (and, in order for the
Company to withhold, withdraw, modify or change in a manner adverse to the
Investors or effect a Change in the Company Recommendation, the Company's
Financial Advisor), that such Alternative Proposal is, or could reasonably be
expected to lead to, a Superior Proposal (as defined hereafter) and (3) the
Board of Directors believes in good faith, considering the advice of the
Company's counsel, that the failure to participate in such negotiations or
discussions, disclose such nonpublic information or provide such access to its
properties, books or records would be inconsistent with the fiduciary duties of
the Board of Directors under applicable law, then the Company may participate in
discussions or negotiations regarding such Alternative Proposal, provide
non-public information with respect to the Company (but only to the extent that
such information was previously provided to the Investors prior to the execution
of this Agreement or is provided to the Investors concurrently therewith) or
afford access to the properties, books or records of the Company, as applicable,
for no more than five (5) business days from the date of receipt of such
Alternative Proposal and (B) if and to the extent that (1) the Stockholders'
Meeting has not yet occurred, (2) the Board of Directors believes in good faith,
after consultation with the Company's legal counsel (and, in order for the
Company to withhold, withdraw, modify or change in a manner adverse to the
Investors or effect a Change in the Company Recommendation, the Company's
Financial Advisor), that such Alternative Proposal is a Superior Proposal and
(3) the Board of Directors believes in good faith, considering the advice of the
Company's counsel, that the failure to participate in such negotiations or
discussions, disclose such nonpublic information, provide such access to its
properties, books or records, enter into any agreement providing for such
Superior Proposal or make or authorize any public statement, recommendation or
solicitation in support of such Superior Proposal or any offer or proposal
relating to such Superior Proposal would be inconsistent with the fiduciary
duties of the Board of Directors under applicable law, then the Company may
participate in discussions or negotiations regarding such Superior Proposal,
provide non-public information with respect to the Company (but only to the
extent that such information was previously provided to the Investors prior to
the execution of this Agreement or is provided to the Investors concurrently
therewith), afford access to the properties, books or records of the Company,
enter into any agreement relating to such Superior Proposal (subject to full
compliance with Section 8.8 hereof) or make or authorize any public statement,
recommendation or solicitation in support of such Superior Proposal or any offer
or proposal relating to an Superior Proposal, as applicable (subject to full
compliance with Section 8.8 hereof).
(b) In the event that the Company is contacted by any third
party expressing an interest in discussing an Alternative Proposal, the Company
will promptly, but in no event later than twenty-four (24) hours following the
Company's knowledge of such contact, notify the Investors in writing of such
contact and the identity of the third party so contacting the Company and shall
promptly, but in no event later than twenty-four (24) hours, advise the
Investors of any material modification or proposed modification thereto.
(c) Nothing contained in this Agreement shall prohibit the
Company or the Board of Directors from taking and disclosing to the Company's
stockholders a
19.
position with respect to an unsolicited bona fide tender or exchange offer by a
third party pursuant to Rule 14e-2(a) of the Exchange Act or from making any
disclosure required by applicable law.
(d) For purposes of this Agreement, a "Superior Proposal"
means any unsolicited written bona fide offer or proposal from any party other
than the parties hereto and any of their affiliates to acquire all or thirty
percent (30%) or more of the business, assets or capital shares of the Company
(excluding non-exclusive licenses entered into in the ordinary course of
business), whether by merger, consolidation, other business combination,
purchase of capital stock, purchase of assets, license, lease, tender or
exchange offer or otherwise, (i) on terms (including conditions to consummation
of the contemplated transaction) which the Board of Directors in its reasonable
good faith judgment (after consultation with and based on the written advice of
its Financial Advisor) believes to be more favorable to its stockholders from a
financial point of view than the Offering and the transactions contemplated by
this Agreement and (ii) that is not attributable to a material breach by the
Company of Section 8.7(a) hereof.
(e) Notwithstanding Section 8.7 hereof, the Company may
negotiate with respect to the transaction identified in Section 8.7 of the
Company's Disclosure Schedule on the conditions identified therein; provided,
however, that any such material terms as disclosed in Section 8.7 of the
Company's Disclosure Schedule shall not change. The negotiation or consummation
of such transaction (i) shall not affect the obligations of the Company pursuant
to the Agreements, including, but not limited to, the obligation of the Company
to complete the transactions contemplated hereby, and (ii) shall not be
construed as a Superior Proposal.
8.8 Third Party Offer. During the period from the date of this
Agreement until the Closing or the effective date of termination of this
Agreement pursuant to the termination provisions of Sections 9.1(a), 9.1(b),
9.1(c), 9.1(d), 9.1(f) or 9.1(g), if the Board of Directors determines in good
faith to accept a Superior Proposal, prior to accepting such Superior Proposal,
the Company shall first (a) disclose to the Investors the terms and conditions
of such Superior Proposal and (b) offer the Investors the opportunity to enter
into a transaction with the Company on terms no less favorable to the Company
and its stockholders from a financial point of view (including conditions to
consummation of the contemplated transactions) than those contained in the
Superior Proposal (the "Offer"). A Majority in Interest of the Investors shall
be entitled to notify the Company within five (5) business days of the terms of
a transaction with the Company in response to the Offer (a "Counter Proposal").
If the terms of the Counter Proposal are determined by the Board of Directors
(after consultation with its legal and financial advisors) in good faith to be
no less favorable to the Company and its stockholders from a financial point of
view (including conditions to consummation of the contemplated transaction) than
those contained in the Superior Proposal, then the Company shall accept the
Counter Proposal. If the Company does not receive a Counter Proposal from a
Majority in Interest of the Investors within such five (5) business day period,
the Company may accept the Superior Proposal, provided there are no subsequent
material changes to the terms of such Superior Proposal. If the terms of such
Superior Proposal are materially changed, such Superior Proposal shall be deemed
a new proposal and shall be subject to each of the terms of this Section
20.
8.8. This Section 8.8 shall apply to any Superior Proposal made by any person or
entity at any time prior to the termination of the Investors' rights under this
Section 8.8.
8.9 Operation of Business. Except as contemplated by this Agreement,
the Company shall carry on its business in the ordinary course in substantially
the same manner as heretofore conducted and, to the extent consistent with such
business, use its commercially reasonable efforts consistent with past practice
and policies to preserve intact its present business organizations, keep
available the services of its present officers, consultants and employees and
preserve its relationships with customers, suppliers and others having business
dealings with it. The Company shall promptly notify the Investors of any event
or occurrence or emergency, which is not in the ordinary course of business of
the Company. The Company shall not amend or modify the charter of any committee
of the Board of Directors without the consent of a Majority in Interest of the
Investors, which consent shall not be unreasonably withheld.
8.10 Reasonable Efforts; Notification; Representations. Subject to
the other terms and conditions of this Agreement, each of the parties to this
Agreement shall use its commercially reasonable efforts to take promptly, or
cause to be taken, all actions, and to do promptly, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the Offering contemplated by this Agreement. Each
party to this Agreement shall give prompt notice to each other party to this
Agreement upon becoming aware that any representation or warranty made by such
party in this Agreement has become untrue or inaccurate or that such party has
failed to comply with or satisfy in any material respect any covenant, condition
or agreement to be complied with or satisfied by such party under this
Agreement, in each case such that the conditions set forth in Section 4 or
Section 5, as the case may be, would not be satisfied. No party to this
Agreement shall take any action that would cause any representation or warranty
made by such party in this Agreement to be untrue if made at the Closing.
8.11 Indemnification Agreements; Charter Documents. Promptly
following the date hereof and prior to the time that the MPM Representatives
become members of the Board of Directors, the Company shall execute
indemnification agreements with each director appointed or elected to the Board
of Directors pursuant to Section 8.3.
8.12 HSR Compliance. The Company and each of the Investors shall at
all times use commercially reasonable efforts to comply with the provisions of
the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended.
8.13 Executive Recruiting Firm. The Company shall retain an
executive recruiting firm, reasonably acceptable to a Majority in Interest of
the Investors, to conduct a search for and diligently pursue the hire of a
senior executive officer in the area of drug development (which individual shall
have extensive small molecule development experience and expertise and be
acceptable to the Board of Directors) until such time as such senior executive
officer in the area of drug development is appointed by the Board of Directors.
21.
9. Termination.
9.1 Termination Events. Without prejudice to other remedies that may
be available to the parties by law or this Agreement, this Agreement may be
terminated and the transactions contemplated hereby may be abandoned at any time
prior to the Closing:
(a) mutually, by the written consent of the Company and a
Majority in Interest of the Investors;
(b) by either the Company or a Majority in Interest of the
Investors by giving written notice to the other party or parties if the Closing
shall not have occurred prior to August 31, 2003, unless extended by written
agreement of such parties; provided, however, that the party seeking termination
pursuant to this subsection (b) is not in default or material breach hereunder
and provided, further, that the right to terminate this Agreement under this
subsection (b) shall not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of, or resulted in, the
failure of the Closing to occur on or before such date;
(c) by either the Company or a Majority in Interest of the
Investors by giving written notice to the other party or parties if any
governmental entity shall have issued an injunction or other ruling prohibiting
the consummation of any of the transactions contemplated by this Agreement and
such injunction or other ruling shall not be subject to appeal or shall have
become final and unappealable;
(d) by either the Company or a Majority in Interest of the
Investors in the event that the Required Stockholder Approval is not obtained at
the Stockholders' Meeting;
(e) by either the Company or a Majority in Interest of the
Investors, if (i) the Company shall have entered into an agreement to consummate
a Superior Proposal, (ii) the Board of Directors shall have recommended to the
stockholders of the Company a Superior Proposal or (iii) the Board of Directors
shall have withdrawn, modified or qualified in any manner adverse to the
Investors or made any public statement inconsistent with the Company
Recommendation; provided, however, that, in order for the termination of this
Agreement by the Company pursuant to this clause (e) to be deemed effective, the
Company shall have complied with all provisions of Sections 8.7 and 8.8;
(f) by a Majority in Interest of the Investors, if (i) the
Company shall have materially breached any covenant or obligation in this
Agreement and such breach is not cured within ten (10) business days of the date
of the delivery to the Company by an Investor of a written notice of such breach
or (ii) any of the Company's representations and warranties contained in this
Agreement shall have become inaccurate as of a date subsequent to the date of
this Agreement (as if made on such subsequent date), such that the condition set
forth in Section 5.1 would not be satisfied as of such date and such breach is
not cured within thirty (30) days of the date of the delivery to the Company by
an Investor of a written notice of such breach; or
22.
(g) by a Majority in Interest of the Investors, if there shall
have occurred an event or events which, individually or in the aggregate,
constitute a Material Adverse Effect on the Company and such Material Adverse
Effect on the Company continues for at least thirty (30) days after the date of
delivery to the Company by an Investor of a written notice of such Material
Adverse Effect on the Company.
9.2 Effect of Termination. In the event of any termination of this
Agreement pursuant to Section 9.1, all rights and obligations of the parties
hereunder shall terminate without any liability on the part of any party or its
Affiliates in respect thereof; provided, however, that such termination shall
not relieve the Company or any Investor of any liability for any willful breach
of this Agreement. If this Agreement is terminated pursuant to Section 9.1(d) or
Section 9.1(f)(i), the Company shall promptly reimburse the Investors for their
reasonable and documented legal, financial, due diligence and advisory
out-of-pocket fees and expenses incurred directly in connection with this
Agreement and the transactions contemplated hereby (subject to the limit on
legal expenses set forth in Section 10.4). If this Agreement is terminated
pursuant to Section 9.1(e), the Company shall (a) promptly reimburse the
Investors for their reasonable and documented legal, financial, due diligence
and advisory out-of-pocket fees and expenses incurred directly in connection
with this Agreement and the transactions contemplated hereby (subject to the
limit on legal expenses set forth in Section 10.4) and (b) upon the consummation
of a transaction resulting from the Superior Proposal, shall pay to the
Investors an aggregate amount of $1.5 million. Each Investor's pro rata share of
such $1.5 million payment shall be determined in relation to the proportion that
such Investor's Aggregate Purchase Price bears to the total Aggregate Purchase
Price committed by all Investors.
10. Miscellaneous.
10.1 Notices. All notices, requests, consents and other
communications hereunder shall be in writing; shall be mailed (a) if within the
domestic United States, by first-class registered or certified airmail, by
nationally recognized overnight express courier, postage prepaid, or by
facsimile or (b) if delivered to or from outside the United States, by
International Federal Express or facsimile; shall be deemed given: (i) if
delivered by first-class registered or certified mail domestic, three business
days after so mailed, (ii) if delivered by nationally recognized overnight
carrier, one business day after so mailed, (iii) if delivered by International
Federal Express, two business days after so mailed or (iv) if delivered by
facsimile, upon electric confirmation of receipt; and shall be delivered as
addressed as follows:
(a) if to the Company, to:
Rigel Pharmaceuticals, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman and Chief Executive Officer
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
23.
(b) with a copy mailed to:
▇▇▇▇▇▇ Godward LLP
Five Palo Alto Square
▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to the Investors, at the addresses on the Schedule A
hereto, or at such other address or addresses as may have been furnished to the
Company in writing.
10.2 Amendment and Waiver. Any provision of this Agreement may be
amended, waived or modified only upon the written consent of the Company and a
Majority in Interest of the Investors; provided, however, that no amendment,
waiver or modification of this Section 10.2, the form of Warrant attached hereto
as Exhibit A or any of the conditions to the Investors' obligations set forth in
Section 5, and no amendment, waiver or modification of any provision of this
Agreement which is detrimental to any Investor in a manner materially different
from any other Investor, shall be made without the consent of each affected
Investor. Subject to the foregoing, any amendment or waiver effected in
accordance with this Section 10.2 shall be binding upon each Investor and the
Company.
10.3 Survival of Representations, Warranties and Agreements.
Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
the Investors herein shall survive the execution of this Agreement until the
third (3rd) anniversary of the Closing.
10.4 Expenses. The Company shall pay all costs and expenses that it
incurs with respect to the negotiation, execution, delivery and performance of
the Agreement and the transactions contemplated thereby. The Company shall, at
the Closing, reimburse the reasonable and documented fees and expenses of
counsel for MPM Capital incurred directly in connection with this Agreement and
the transactions contemplated hereby, up to a maximum of $100,000.00 (the "MPM
Fees"); provided, however, that if the SEC informs the Company that the Proxy
Statement will be subject to a full review by, and comments from, the SEC, then
the Company and MPM Capital shall negotiate in good faith to reach mutual
agreement regarding a necessary increase in the maximum amount of the MPM Fees,
if any.
24.
10.5 Attorneys' Fees. In the event that any suit or action is
instituted under or in relation to this Agreement, including without limitation
to enforce any provision in this Agreement, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.
10.6 Public Announcements. Except as may be required by law or
regulation, the Company shall not use the name of, or make reference to, any
Investor or any of its affiliates in any press release or in any public manner
(including any reports or filings made by the Company under the Exchange Act)
without such Investor's prior written consent, which consent shall not be
unreasonably withheld. The initial press release with respect to the execution
of this Agreement shall be approved by the Company and MPM Capital on behalf of
the Investors. Thereafter, so long as this Agreement is in effect, the Company
and the Investors shall consult with each other before issuing any press release
or otherwise making any public statements with respect to this Agreement or the
transactions contemplated hereby without the prior consent of the other party,
which consent shall not be unreasonably withheld; provided, however, that the
Company, on the one hand, and the Investors, on the other hand, may, without the
prior consent of the other party, issue a press release or make such public
statement as may, upon the advice of counsel, be required by law if it has used
all reasonable efforts to consult with the other party.
10.7 Headings. The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Agreement.
10.8 Pronouns. All pronouns contained herein, and any variations
thereof, shall be deemed to refer to the masculine, feminine or neutral,
singular or plural, as to the identity of the parties hereto may require.
10.9 Severability. In case any provision contained in this Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
10.10 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of California,
without giving effect to the principles of conflicts of law. The parties agree
that any action brought by either party under or in relation to this Agreement,
including without limitation to interpret or enforce any provision of this
Agreement, shall be brought in, and each party agrees to and does hereby submit
to the jurisdiction and venue of, any state or federal court located in the
County of San Francisco, California.
10.11 Entire Agreement. This Agreement, including the Exhibits
hereto, constitutes the full and entire understanding and agreement between the
parties with regard to the subjects hereof, and no party shall be liable or
bound to any other in any manner by any oral or written representations,
warranties, covenants and agreements except as specifically set forth herein.
Each party expressly represents and warrants that it is not relying on any oral
or written representations, warranties, covenants or agreements outside of this
Agreement.
10.12 Counterparts. This Agreement may be executed in two (2) or
more counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute but one (1) instrument, and shall become
effective when one (1) or more counterparts have been signed by each party
hereto and delivered to the other parties.
25.
10.13 Confidential Disclosure Agreement. Notwithstanding any
provision of this Agreement to the contrary, any confidential disclosure
agreement previously executed by the Company and the Investors in connection
with the transactions contemplated by this Agreement shall remain in full force
and effect in accordance with its terms following the execution of this
Agreement and the consummation of the transactions contemplated hereby.
10.14 Tax Disclosure. Notwithstanding any provision of this
Agreement to the contrary, any party to this Agreement (and any employee,
representative, shareholder or other agent of any party to this Agreement) may
disclose to any and all persons, without limitation of any kind, the tax
treatment and tax structure of the transactions contemplated by this Agreement
and all materials of any kind (including opinions or other tax analyses) that
are provided to it relating to such tax treatment and tax structure; provided
however, that such disclosure may not be made to the extent reasonably necessary
to comply with any applicable federal or state securities laws; and provided
further, that for this purpose, (a) the "tax treatment" of a transaction means
the purported or claimed federal income tax treatment of the transaction and (b)
the "tax structure" of a transaction means any fact that may be relevant to
understanding the purported or claimed federal income tax treatment of the
transaction.
26.
IN WITNESS WHEREOF, the parties hereto have executed this
COMMON STOCK AND WARRANT PURCHASE AGREEMENT as of the date set forth in the
first paragraph hereof.
COMPANY: INVESTORS:
RIGEL PHARMACEUTICALS, INC. MPM BIOVENTURES III, L.P.
By: By: MPM BioVentures III GP, L.P.,
--------------------------------- its General Partner
Name: By: MPM BioVentures III LLC,
--------------------------------- its General Partner
Title: By:
------------------------------ ------------------------------------
Name:
----------------------------------
Title: Series A Member
MPM BIOVENTURES III-QP, L.P.
By: MPM BioVentures III GP, L.P.,
its General Partner
By: MPM BioVentures III LLC,
its General Partner
By:
----------------------------------
Name:
----------------------------------
Title: Series A Member
SIGNATURE PAGE TO
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
MPM BIOVENTURES III GMBH & CO.
PARALLEL-BETEILIGUNGS KG
By: MPM BioVentures III GP, L.P.,
in its capacity as the Managing
Limited Partner
By: MPM BioVentures III LLC,
its General Partner
By:
----------------------------------
Name:
----------------------------------
Title: Series A Member
MPM BIOVENTURES III PARALLEL
FUND, L.P.
By: MPM BioVentures III GP, L.P.,
its General Partner
By: MPM BioVentures III LLC,
its General Partner
By:
----------------------------------
Name:
----------------------------------
Title: Series A Member
SIGNATURE PAGE TO
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
MPM ASSET MANAGEMENT
INVESTORS 2003 BVIII LLC
By:
----------------------------------
Name:
----------------------------------
Title: Manager
MPM BIOEQUITIES MASTER FUND,
By: MPM BioEquities GP, L.P.,
its General Partner
By: MPM BioEquities GP LLC,
its General Partner
By:
----------------------------------
Name:
----------------------------------
Title: General Partner
SIGNATURE PAGE TO
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
ALTA BIOPHARMA PARTNERS II, L.P.
By: Alta BioPharma Management Partners
II, LLC
By:
----------------------------------
Managing Director
ALTA EMBARCADERO BIOPHARMA
PARTNERS II, LLC
By:
----------------------------------
V.P. of Finance & Admin.
SIGNATURE PAGE TO
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
▇▇▇▇▇▇▇ HEALTHCARE IV, L.P.
By: FHM IV, LP, its General Partner
By: FHM IV, LLC, its General Partner
By:
----------------------------------
▇▇▇▇▇▇ Every,
Authorized Representative
▇▇▇▇▇▇▇ AFFILIATES IV, L.P.
By: FHM IV, LP, its General Partner
By: FHM IV, LLC, its General Partner
By:
----------------------------------
▇▇▇▇▇▇ Every,
Authorized Representative
SIGNATURE PAGE TO
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
HBM BIOVENTURES (CAYMAN) LTD.
By:
----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman and Managing Director
SIGNATURE PAGE TO
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
SCHEDULE A
SCHEDULE OF INVESTORS
Aggregate Purchase Shares Purchased Warrant Shares
Investor Price
----------------------------------------------------- ---------------------- ---------------------- ------------------
MPM BioVentures III, L.P. $1,399,249.92 2,186,328 437,265
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (T) (▇▇▇) ▇▇▇-▇▇▇▇ (F)
MPM BioVentures III-QP, L.P. $20,810,575.36 32,516,524 6,503,304
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (T) (▇▇▇) ▇▇▇-▇▇▇▇ (F)
MPM BioVentures III GmbH & Co.
Parallel-Beteiligungs KG $1,758,750.08 2,748,047 549,609
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (T) (▇▇▇) ▇▇▇-▇▇▇▇ (F)
MPM BioVentures III Parallel Fund, L.P. $628,499.84 982,031 196,406
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (T) (▇▇▇) ▇▇▇-▇▇▇▇ (F)
MPM Asset Management Investors 2003 BVIII LLC
$402,924.80 629,570 125,914
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (T) (▇▇▇) ▇▇▇-▇▇▇▇ (F)
MPM BioEquities Master Fund, L.P. $1,000,000.00 1,562,500 312,500
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (T) (▇▇▇) ▇▇▇-▇▇▇▇ (F)
Alta BioPharma Partners II, L.P. $7,233,884.80 11,302,945 2,260,589
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (T) (▇▇▇) ▇▇▇-▇▇▇▇ (F)
Alta Embarcadero BioPharma Partners II, LLC
$266,115.20 415,805 83,161
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (T) (▇▇▇) ▇▇▇-▇▇▇▇ (F)
▇▇▇▇▇▇▇ Healthcare IV, L.P. $7,462,120.35 11,659,563 2,331,912
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (T) (▇▇▇) ▇▇▇-▇▇▇▇ (F)
▇▇▇▇▇▇▇ Affiliates IV, L.P. $37,879.65 59,186 11,837
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (T) (▇▇▇) ▇▇▇-▇▇▇▇ (F)
HBM BioVentures (Cayman) Ltd. $5,000,000.00 7,812,500 1,562,500
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (T) (▇▇▇) ▇▇▇-▇▇▇▇ (F)
TOTALS $46,000,000.00 71,874,999 14,374,997
SCHEDULE B
PROPOSED INCENTIVE PLAN AMENDMENTS (1)
--------------------- --------------------------- --------------------------------- ---------------------
2000 Equity Incentive 2000 Non-Employee 2000 Employee Stock
Plan Director Plan Purchase Plan
--------------------- --------------------------- --------------------------------- ---------------------
Proposed Increase of 14,400,000 Increase of 600,000 Increase of 600,000
Amendments reserved shares and reserved shares and 200% reserved shares.
addition of "evergreen" increase in option grants.
features.(2)
--------------------- --------------------------- --------------------------------- ---------------------
--------------------
(1) All numbers reflected are pre-Reverse Stock Split.
(2) The Company shall not determine the size of the evergreen increase
without the consent of a Majority in Interest of the Investors, which
consent shall not be unreasonably withheld.
EXHIBIT A
FORM OF WARRANT
Exhibit B
RIGEL PHARMACEUTICALS, INC.
STOCK CERTIFICATE AND WARRANT QUESTIONNAIRE
Pursuant to Section 3.1 of the Agreement, please provide us
with the following information:
1. The exact name in which your Shares and Warrants
are to be registered (i.e., the name that will ------------------
appear on your stock certificate(s)). You may use
a nominee name if appropriate:
2. The relationship between the Investor and the
registered holder listed in response to item 1 ------------------
above:
3. The mailing address of the registered holder ------------------
listed in response to item 1 above:
4. The Social Security Number or Tax Identification
Number of the registered holder listed in the ------------------
response to item 1 above:
EXHIBIT C
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
EXHIBIT D
FORM OF LEGAL OPINION OF COMPANY'S COUNSEL
EXHIBIT E
FORM OF SECOND INVESTOR RIGHTS AGREEMENT
EXHIBIT F
OFFICER'S CERTIFICATE
EXHIBIT G
SECRETARY'S CERTIFICATE
EXHIBIT H
VOTING AGREEMENT
I-1.
