NOTE PURCHASE AGREEMENT
THIS NOTE PURCHASE AGREEMENT (the "Agreement") is dated as of May 22, 2001
(the "Effective Date") by and between EXELIXIS, INC., a Delaware corporation
having its principal place of business at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (the "Company") and PROTEIN DESIGN LABS,
INC., a Delaware corporation having its principal place of business at ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (the "Holder").
RECITALS
A. Pursuant to the terms of the Convertible Note (the "Note"), dated as of
even date herewith between the Company and the Holder, the Holder has loaned to
the Company the principal sum of Thirty Million Dollars ($30,000,000) (the
"Principal Amount").
B. The Company has agreed to issue the Note pursuant to the terms set forth
in this Agreement.
NOW, THEREFORE, in consideration of the premises and promises herein
contained and in order to induce the Holder to loan to the Company the Principal
Amount, the Company agrees with the Holder as follows:
1. AUTHORIZATION AND SALE OF NOTES
1.1 AUTHORIZATION OF NOTES. On or before the date hereof the Company shall
authorize the issuance of the Note in the form attached to this Agreement as
Exhibit A in the Principal Amount.
1.2 SALE OF NOTE. Subject to the terms and conditions hereof, the Company
will issue and sell to the Holder, and the Holder will purchase from the Company
for the Principal Amount, the Note. The Note and the shares of common stock of
the Company (the "Shares") issued upon conversion of the Note are sometimes
collectively referred to herein as the "Securities."
2. CLOSING DATE; DELIVERY
2.2 CLOSING DATE. Subject to the terms and conditions of this
Agreement, the purchase and sale of the Note hereunder shall take place at 3:00
p.m. local time at the offices of the Company, on the date hereof or at such
other time and place as the Company and the Holder may agree (the "Closing").
The date of the Closing is hereinafter referred to as the "Closing Date."
2.3 DELIVERY. At the Closing, the Company will deliver to the Holder the
Note against payment of the Principal Amount therefor by wire transfer in
immediately available funds:
Bank: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇
ABA Routing: ▇▇▇-▇▇▇-▇▇▇
Acct Number: 33001-60643
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Holder as follows:
3.1 ORGANIZATION AND STANDING. The Company:
(a) is a corporation duly organized, validly existing, authorized to
exercise all its corporate powers, rights, and privileges, and in good standing
under the laws of the State of Delaware; and
(b) has the corporate power and corporate authority to own and operate its
properties and to carry on its business as now conducted and as proposed to be
conducted.
3.2 AUTHORIZATION AND VALIDITY. All corporate action on the part of the
Company, its officers, directors, and stockholders necessary for the
authorization, execution, delivery, and performance of all of the Company's
obligations under this Agreement, the Note and all documents, instruments and
agreements executed in connection therewith (the "Loan Documents") and for the
authorization, issuance, and delivery of the Note has been taken and the Loan
Documents constitute legally valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms.
3.3 CORPORATE POWER. The Company has all requisite legal and corporate
power and authority to execute and deliver the Loan Documents, to sell and issue
the Note hereunder, and to carry out and perform its obligations under the Loan
Documents.
3.4 VALIDITY OF SECURITIES. The Securities, when issued, sold, and
delivered in compliance with the terms and for the consideration expressed in
this Agreement, will be duly authorized and validly issued (including without
limitation, but subject to the accuracy of the representations of Holder herein,
issued in compliance with all applicable federal and state securities laws),
fully paid and nonassessable. The Securities will be free and clear of all liens
and encumbrances other than any liens or encumbrances created by or imposed
thereon by the Holder; provided, however, that the Securities shall be subject
to restrictions on transfer under state and/or federal securities laws. The
Securities are not subject to any preemptive rights or rights of first refusal.
The Shares have been duly authorized and reserved for issuance upon conversion
of the Note. The certificate evidencing the Shares will be in due and proper
form.
3.5 SECURITIES LAW COMPLIANCE. Subject to the accuracy of the
representations and warranties of the Holder set forth in Section 4, the offer,
issue, and sale of the Securities are exempt from the registration requirements
of Section 5 of the Securities Act of 1933, as amended, (the "Securities Act")
and the qualification requirements, if any, of applicable state securities laws.
3.6 NO CONFLICT. The execution, delivery, and performance of the Loan
Documents, the sale and issuance of the Note and the consummation of the
transactions contemplated hereby and thereby will not (a) result in any
violation of, be in conflict with, or constitute a default under, with or
without the passage of time or the giving of notice: (i) any provision of the
Company's Certificate of Incorporation or Bylaws; (ii) any provision of any
judgment, decree, or order to which the Company is a party or by which it is
bound; (iii) any material contract, obligation, or commitment to which the
Company is a party or by which it is bound; or (iv) any material statute, rule,
or governmental regulation applicable to the Company, (b) (i) require any
consent, approval, authorization or other order of, or qualification with, any
court or governmental body or agency (except such as may be required under
applicable securities laws), or (ii) result in the imposition or creation of (or
the obligation to create or impose) a lien under, any agreement or instrument to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries or their respective property is bound.
3.7 PROPERTIES. The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to all
personal property owned by them that is material to the business of the Company
and its subsidiaries, in each case free and clear of all liens and defects,
except as do not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries; and any real property and buildings held under
lease by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries.
3.8 SEC FILINGS, FINANCIAL STATEMENTS. The Company has filed with the
Securities and Exchange Commission (the "SEC") all required quarterly reports on
Form 10-Q and annual reports on Form 10-K, registration statements, documents,
and reports required to be filed by it with the SEC or, if not required to be
filed, such other reports and documents as have otherwise been filed by the
Company (collectively, the "SEC Reports"). To the knowledge of the Company, all
of the SEC Reports complied as to form, when filed, in all material respects
with the applicable provisions of the Securities Act, and the Securities
Exchange Act of 1934, as amended. As of their respective dates, the SEC Reports
did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Each of the consolidated financial statements (including notes
thereto) contained in the SEC Reports (a) was prepared in accordance with
generally accepted accounting principals applied on a consistent basis
throughout the periods involved (except as indicated in the notes thereto) and
(b) fairly presented the financial position of the Company as at the respective
dates thereof.
3.9 NO MATERIAL ADVERSE CHANGES. Since the filing of the Company's
Registration Statement on Form S-4, other than as set forth in the Company's SEC
Reports, (a) there has not occurred any material adverse change: (i) in the
financial condition or operations of the Company and its subsidiaries, taken as
a whole, or (ii) in the capital stock or long-term debt of the Company or any of
its subsidiaries, taken as a whole, except as contemplated under this Agreement
or development, that would reasonably be expected to involve a material adverse
change in the financial condition or operations of the Company and its
subsidiaries, taken as a whole; (b) the Company and its subsidiaries, taken as a
whole, have not sustained any material loss or interference with its assets,
businesses or properties (whether owned or leased) from fire, explosion,
earthquake, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or any court or legislative or other governmental action,
order or decree; and (c) since the date of the latest consolidated balance sheet
included in the SEC Reports, except as reflected therein, the Company has not
(A) issued any securities other than the issuance of securities pursuant to the
grant of or the exercise of options granted under stock option plans or
agreements existing prior to the date of the latest consolidated balance sheet
included in the SEC Reports, or (B) declared or paid any dividend or made any
distribution on any shares of its capital stock or redeemed, purchased or
otherwise acquired or agreed to redeem, purchase or otherwise acquire any shares
of capital stock, except to the extent provided under any stock option plans or
agreements existing prior to the latest date of the consolidated balance sheet
included in the SEC Reports.
4. REPRESENTATIONS AND WARRANTIES OF THE HOLDER
Holder hereby represents and warrants to the Company as follows:
4.1 AUTHORIZATION. When executed and delivered by the Holder, and assuming
execution and delivery by the Company, the Agreement will constitute a valid
obligation of such Holder, enforceable in accordance with its terms.
4.2 BROKERS AND FINDERS. Holder has not retained any investment banker,
broker, or finder in connection with the transactions contemplated by this
Agreement.
4.3 INVESTMENT. This Agreement is made with the Holder in reliance upon its
representations to the Company, which by the Holder's execution of this
Agreement Holder hereby confirms, that the Securities to be received by the
Holder will be acquired for investment for the Holder's own account, not as a
nominee or agent, and not with a view to the sale or distribution of any part
thereof, and that the Holder has no present intention of selling, granting any
participation in, or otherwise distributing the same. By executing this
Agreement, the Holder further represents that it has no contract, undertaking,
agreement, or arrangement with any person to sell, transfer, or grant
participation to such person or to any third person, with respect to any of the
Securities.
4.4 NO REGISTRATION. Holder understands and acknowledges that the offering
of the Securities pursuant to this Agreement will not be registered under the
Securities Act on the grounds that the offering and sale of securities
contemplated by this Agreement are exempt from registration pursuant to Section
4(2) of the Securities Act, and that the Company's reliance upon such exemption
is predicated upon Holder's representations set forth in this Agreement
4.5 LIMITATIONS ON TRANSFERABILITY. Holder covenants that in no event will
it dispose of any of the Securities (other than pursuant to Rule 144 promulgated
by the SEC under the Securities Act ("Rule 144") or any similar or analogous
rule) unless and until (i) Holder shall have notified the Company of the
proposed disposition, and (ii) if requested by the Company, Holder shall have
furnished the Company with an opinion of counsel satisfactory in form and
substance to the Company and the Company's counsel, in the reasonable exercise
of their judgment, to the effect that (x) such disposition will not require
registration under the Securities Act and (y) appropriate action necessary for
compliance with the Securities Act and any applicable state, local, or foreign
law has been taken. Notwithstanding the limitations set forth in the foregoing
sentence, if Holder is a limited liability company or a partnership it may
transfer Securities to its members or constituent partners or a retired partner
of such partnership who retires after the date hereof, or to the estate of any
such member or partner or retired partner or transfer by gift, will, or
intestate succession to any such member's or partner's spouse or lineal
descendants or ancestors without the necessity of registration or opinion of
counsel if the transferee agrees in writing to be subject to the terms of this
Agreement to the same extent if such transferee were a Holder; provided,
however, that Holder hereby covenants not to effect such transfer if such
transfer either would invalidate the securities laws exemptions pursuant to
which the Securities were originally offered and sold or would itself require
registration under the Securities Act or applicable state securities laws. Each
certificate evidencing the Securities transferred as above provided shall bear
the appropriate restrictive legends set forth in Sections 7.6 and 7.7(a) below,
except that such certificate shall not bear such legend if the transfer was made
in compliance with Rule 144 or if the opinion of counsel referred to above is to
the further effect that such legend is not required in order to establish
compliance with any provisions of the Securities Act.
4.6 EXPERIENCE. Holder represents that: (i) it has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of its prospective investment in the Securities; (ii) it has
received all the information it has requested from the Company and considers
necessary or appropriate for deciding whether to purchase the Securities; (iii)
it has had the opportunity to discuss the Company's business management, and
financial affairs with its management, (iv) it has the ability to bear the
economic risks of its prospective investment; and (v) it is able, without
materially impairing its financial condition, to hold the Securities for an
indefinite period of time and to suffer a complete loss on its investment.
4.7 ACCREDITED HOLDER. Holder presently qualifies, and will as of the
Closing Date qualify, as an "accredited investor" within the meaning of
Regulation D of the rules and regulations promulgated under the Securities Act.
5. CONDITIONS OF THE HOLDER'S OBLIGATIONS AT CLOSING
The obligations of the Holder under Section 1 of this Agreement are subject to
the fulfillment at or before the Closing of the following conditions, any of
which may be waived by the Holder:
5.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties of
the Company contained in Section 3 shall be true on and as of the Closing with
the same effect as if made on and as of the Closing.
5.2 PERFORMANCE. The Company shall have performed or fulfilled all
agreements, obligations, and conditions contained in the Loan Documents and
required to be performed or fulfilled by the Company before the Closing.
6. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING
The obligations of the Company under Section 1 of this Agreement are
subject to the fulfillment at or before the Closing of the following condition,
which may be waived in writing by the Company:
6.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties of
the Holder contained in Section 4 shall be true on and as of the Closing with
the same effect as if made on and as of the Closing.
7. MISCELLANEOUS
7.1 GOVERNING LAW. This Agreement shall be governed by, and be construed in
accordance with, the laws of the State of California, excluding those laws that
direct the application of the laws of another jurisdiction.
7.2 SURVIVAL; TERMINATION. The warranties and representations of the
parties contained in or made pursuant to this Agreement shall survive the
execution and delivery of this Agreement and the Closing for until the earlier
of: (a) the payment in full of all outstanding principal and interest under the
Note, or (b) the conversion of the Note into Shares, provided, however, that
such representations and warranties need only be accurate as of the date of such
execution and delivery and as of the Closing. This Agreement shall be
terminated and of no further force and effect upon earlier of: (a) the payment
in full of all outstanding principal and interest under the Note, or (b) the
conversion of the Note into Shares.
7.3 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of and be binding upon the
successors, assigns, heirs, executors and administrators of the parties hereto.
7.4 ENTIRE AGREEMENT; INDEMNITY; WAIVER.
(A) ENTIRE AGREEMENT. This Agreement and the exhibits hereto
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and thereof, and supersede any and all prior
and contemporaneous agreements, understandings, discussions and correspondence.
(B) WAIVER. Holder's failure, at any time or times hereafter, to
requirestrict performance by the Company of any provision of this Agreement
shall not waive, affect or diminish any right of the Holder thereafter to demand
strict compliance and performance therewith. Any suspension or waiver by the
Holder of a default under the Agreement or a default under any of the other Loan
Documents shall not suspend, waive or affect any other default under this
Agreement or any other default under any of the other Loan Documents, whether
the same is prior or subsequent thereto and whether of the same or of a
different kind or character. None of the undertakings, agreements, warranties,
covenants and representations of the Company contained in this Agreement or any
of the other Loan Documents and no default under this Agreement or default under
any of the other Loan Documents shall be deemed to have been suspended or waived
by the Holder unless such suspension or waiver is in writing signed by an
officer of the Company, and directed to the Holder.
7.5 NOTICES. All notices and other communications required or permitted
hereunder shall be in writing and shall be mailed by registered or certified
mail, postage prepaid, sent by Federal Express or other national overnight
delivery service or otherwise delivered by hand or by messenger, addressed (a)
if to the Holder, at Holder's address set forth below or at such other address
as the Holder shall have furnished to the Company in writing or (b) if to any
other holder of any Note, at such address as such holder shall have furnished
the Company in writing or, until any such holder so furnishes an address to the
Company, then to and at the address of the last holder of such Note who has so
furnished an address to the Company, or (c) if to the Company, at its address
set forth below, or at such other address as the Company shall have furnished to
the Holder.
Holder: Company:
Protein Design Labs, Inc. Exelixis, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ P. O. Box 511
Attn: General Counsel ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: General Counsel
7.6 CALIFORNIA CORPORATE SECURITIES LAW. THE SALE OF THE SECURITIES WHICH
ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER
OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES
OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO
SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM THE
QUALIFICATION BY SECTION 25100, 25102, OR 25105 OF THE CALIFORNIA CORPORATIONS
CODE.
7.7 LEGENDS.
(A) All certificates for the Securities shall bear a legend
substantially similar to the following:
"The securities represented hereby have not been registered under the
Securities Act of 1933, as amended ("Securities Act"). Such securities may
not be transferred unless a Registration Statement under the Act is in
effect as to such transfer or, in the opinion of counsel for the Company,
registration under the Act is unnecessary in order for such transfer to
comply with the Act or unless sold pursuant to Rule 144 of the Act."
(B) The certificates evidencing the Securities shall also bear any
legend required pursuant to any state, local, or foreign law governing such
securities.
7.8 COUNTERPARTS. This Agreement may be executed in two counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. IN WITNESS WHEREOF, the parties have
executed this Agreement as of the day and year first above written.
COMPANY:
EXELIXIS, INC.,
a Delaware corporation
_________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chief Executive Officer
HOLDER:
PROTEIN DESIGN LABS, INC.,
a Delaware corporation
_________________________________
▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
Chairperson and Chief Executive
Officer