<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 26, 2000.
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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ALLOS THERAPEUTICS, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 2834 54-1655029
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
</TABLE>
7000 NORTH BROADWAY, SUITE 400
DENVER, COLORADO 80221
(303) 426-6262
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
---------------------------
STEPHEN J. HOFFMAN, PH.D., M.D.
PRESIDENT AND CHIEF EXECUTIVE OFFICER
ALLOS THERAPEUTICS, INC.
7000 NORTH BROADWAY, SUITE 400
DENVER, COLORADO 80221
(303) 426-6262
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------------------
Copies to:
<TABLE>
<S> <C>
STEVEN E. SEGAL, ESQ. ALAN L. JAKIMO, ESQ.
MARC H. GRABOYES, ESQ. BROWN & WOOD LLP
MATTHEW T. O'LEARY, ESQ. ONE WORLD TRADE CENTER, 58TH FLOOR
PERKINS COIE LLP NEW YORK, NEW YORK 10048
1675 BROADWAY, SUITE 2800 (212) 839-5300
DENVER, COLORADO 80202
(303) 571-6100
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
---------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED OFFERING PRICE(2) REGISTRATION FEE
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<S> <C> <C>
common stock, $0.001 par value................... $69,000,000 $18,216.00
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</TABLE>
(1) Includes shares that the Underwriters have the option to purchase to
cover over-allotments, if any.
(2) Estimated solely for the purpose of computing the amount of the registration
fee pursuant to Rule 457(o) under the Securities Act of 1933.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SUCH SECTION 8(a), MAY DETERMINE.
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<PAGE> 2
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS
NOT AN OFFER TO SELL SECURITIES, AND WE ARE NOT SOLICITING OFFERS TO BUY
THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED JANUARY 26, 2000
PROSPECTUS
SHARES
[LOGO]
COMMON STOCK
This is an initial public offering of shares of common stock of Allos
Therapeutics, Inc. Allos expects that the initial public offering price will be
between $ and $ per share.
We have applied for approval for trading and quotation of our common stock
on the Nasdaq National Market under the symbol "ALTH."
OUR BUSINESS INVOLVES SIGNIFICANT RISKS. THESE RISKS ARE DESCRIBED UNDER
THE CAPTION "RISK FACTORS" BEGINNING ON PAGE 9.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
---------------------------
<TABLE>
<CAPTION>
PER SHARE TOTAL
<S> <C> <C>
Public offering price....................................... $ $
Underwriting discounts and commissions...................... $ $
Proceeds, before expenses, to Allos......................... $ $
</TABLE>
The underwriters may also purchase up to an additional shares of
common stock at the public offering price, less the underwriting discounts and
commissions, to cover over-allotments.
The underwriters expect to deliver the shares against payment in New York,
New York on , 2000.
SG COWEN
PRUDENTIAL VECTOR HEALTHCARE
A UNIT OF PRUDENTIAL SECURITIES
U.S. BANCORP PIPER JAFFRAY
, 2000
<PAGE> 3
[The top half of this inside cover contains a color illustration depicting
oxygen delivered to tissues from the lungs by
red blood cells, and enhanced release by RSR13.]
RSR13 increases the amount of oxygen released from blood into tissues.
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[The bottom half of this inside cover contains a color illustration depicting
RSR13 increasing the tumor tissue oxygen levels which
increase the effects of radiation therapy.]
RSR13 increases the cytotoxic effects of radiation therapy by decreasing
the number of hypoxic regions within a tumor.
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Prospectus Summary.................... 5
Risk Factors.......................... 9
Use of Proceeds....................... 19
Dividend Policy....................... 19
Capitalization........................ 20
Dilution.............................. 21
Selected Financial Data............... 22
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 23
Business.............................. 27
</TABLE>
<TABLE>
<CAPTION>
PAGE
<S> <C>
Management............................ 40
Certain Transactions.................. 47
Principal Stockholders................ 49
Description of Capital Stock.......... 51
Shares Eligible for Future Sale....... 54
Underwriting.......................... 56
Legal Matters......................... 58
Experts............................... 58
Where You Can Find Additional
Information......................... 58
Financial Statements.................. F-1
</TABLE>
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YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE HAVE
NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT. WE ARE
OFFERING TO SELL AND SEEKING OFFERS TO BUY SHARES OF OUR COMMON STOCK ONLY IN
JURISDICTIONS WHERE OFFERS AND SALES ARE PERMITTED. THE INFORMATION CONTAINED IN
THIS PROSPECTUS IS ACCURATE ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS
OF THE TIME OF DELIVERY OF THIS PROSPECTUS OR OF ANY SALE OF OUR COMMON STOCK.
IN THIS PROSPECTUS, REFERENCES TO "ALLOS THERAPEUTICS," "ALLOS," "WE," "US" AND
"OUR" REFER TO ALLOS THERAPEUTICS, INC., A DELAWARE CORPORATION.
---------------------
UNTIL , 2000, ALL DEALERS THAT EFFECT TRANSACTIONS IN THESE
SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO
DELIVER A PROSPECTUS. THIS REQUIREMENT IS IN ADDITION TO THE DEALERS' OBLIGATION
TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
3
<PAGE> 5
4
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PROSPECTUS SUMMARY
The following is only a summary. You should carefully read the more
detailed information contained in this prospectus, including our financial
statements and related notes included in this prospectus. Our business involves
significant risks. You should carefully consider the information under the
heading "Risk Factors" beginning on page 9. Unless otherwise noted, all
information in this prospectus has not been adjusted to reflect a
-for- reverse stock split which will be effected prior to consummation
of this offering and assumes (1) the conversion of all outstanding shares of our
preferred stock into shares of common stock upon the closing of this
offering and (2) no exercise by the underwriters of the over-allotment option.
THE COMPANY
Allos Therapeutics is a pharmaceutical company focused on developing and
commercializing innovative small molecule drugs, initially for improving cancer
treatments. Our lead product candidate is RSR13. RSR13 is a synthetic small
molecule that increases the release of oxygen from hemoglobin, the
oxygen-carrying protein contained within red blood cells. We expect to commence
a pivotal Phase III trial of RSR13 in combination with radiation therapy for the
treatment of brain metastases, or tumors which have spread to the brain, during
the first half of 2000. We believe that this trial, if positive, will serve as
the basis for seeking marketing approval for RSR13 from the U.S. Food and Drug
Administration, or FDA, for this indication. In addition to improving existing
treatments for cancer, we believe RSR13 can be used to treat many other diseases
and clinical conditions attributed to or aggravated by oxygen deprivation in the
body, known as hypoxia. We currently retain worldwide commercialization rights
for all of our product candidates for all target indications.
The presence of oxygen in tumors is an essential element for the
effectiveness of radiation therapy in the treatment of cancer. Our studies
indicate that RSR13 effectively increases tumor oxygenation, thereby reducing
the percentage of hypoxic cells within malignant tumors and enhancing the
cytotoxic effects of radiation therapy. The fact that RSR13 does not have to
actually enter the cancer cell to increase radiosensitivity is an important
difference between RSR13 and other pharmacological attempts to improve the
efficacy of radiation therapy. The beneficial effects of RSR13 are the result of
causing increased amounts of oxygen release from blood flowing through the
tumor. It is the oxygen, and not the drug, which diffuses across the cancer cell
membranes to oxygenate the tumors. This is particularly important in the case of
primary or metastatic brain tumors, where the blood brain barrier acts to
exclude or impede the entry of most chemical agents into the brain tissue.
Each year in the United States, approximately 50% of all newly diagnosed
cancer patients, or 600,000 patients, receive radiation therapy as part of their
primary treatment, in addition to 150,000 patients who receive radiation therapy
for persistent or recurrent cancer. The 750,000 cancer patients who receive
radiation therapy annually is approximately twice the number of cancer patients
who are treated with chemotherapy. Although radiation therapy can be effective
in treating certain types of cancer, an unmet medical need exists for products
to increase the effectiveness of radiation therapy.
RSR13 has been administered safely to more than 360 patients, over 250 of
whom were cancer patients receiving concurrent radiation therapy. We have 14
completed or ongoing clinical trials of RSR13, five of which have been completed
in patients receiving radiation therapy.
We have demonstrated in Phase II clinical trials that RSR13 significantly
improves the efficacy of radiation therapy for treating brain metastases and
glioblastoma multiforme, a highly aggressive form of primary brain cancer. In
our Phase II brain metastases trial, the primary efficacy endpoint was survival
compared to historical data using the Brain Metastases Database maintained by
the Radiation Therapy Oncology Group of the American College of Radiology. In
this trial, RSR13-treated patients, when compared to the historical database,
demonstrated:
- overall median survival time of 6.9 months compared to 4.1 months, or a
68% improvement in median survival time;
- one-year survival rates of 32% compared to 15%, or an approximate
doubling of survival rates; and
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<PAGE> 7
- death due to tumor progression in the brain of 9% compared to 37%.
When case-match analysis was performed using patient information from the
historical database that most closely paralleled RSR13 patients, overall median
survival time showed a 92% improvement over the historical database and one-year
survival rates were nearly tripled to 25%, compared to 9%. Our Phase II
glioblastoma multiforme trial results showed that RSR13-treated patients, when
compared to a different, applicable historical database, demonstrated overall
survival of 12.1 months compared to 9.2 months. We are also currently conducting
a Phase II clinical trial of RSR13 in combination with radiation therapy in
patients with locally advanced, inoperable non-small cell lung cancer, and plan
to develop RSR13 for improving the efficacy of radiation therapy in treating
other forms of cancer.
In addition to improving the treatment of cancer, we believe RSR13 can be
used to treat many other diseases and clinical conditions. We intend to seek
corporate partners to jointly develop RSR13 for treating the hypoxic effects of
acute blood loss and decreased blood flow encountered in surgical procedures and
also for improving the effectiveness of treatments for cardiovascular disease
and stroke. Moreover, we plan to extend our expertise in developing drugs to
other compounds and technology platforms to which we have access through our
research collaborations or that we may acquire or in-license from third parties.
Our strategy includes the following key elements:
- focus on commercializing RSR13 in oncology markets;
- establish collaborations to commercialize RSR13 in additional therapeutic
applications; and
- expand our product candidate portfolio.
We intend to market RSR13 directly to the approximately 3,700 radiation
therapists in the United States through a specialty sales force. We expect to
begin hiring this sales force around the time we submit a New Drug Application
to the FDA for the use of RSR13. To penetrate the non-oncology market in the
United States and all markets outside the United States, we will seek to develop
relationships with one or more pharmaceutical companies with established
distribution systems and direct sales forces.
We were incorporated in the Commonwealth of Virginia in September 1992, and
reincorporated in Delaware in July 1996. Our executive office is located at 7000
North Broadway, Suite 400, Denver, Colorado 80221. Our telephone number at that
location is (303) 426-6262 and our Internet address is www.allos.com.
Information contained on our web site does not constitute part of this
prospectus.
6
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THE OFFERING
Common stock we are offering............ shares
Common stock to be outstanding after the
offering................................ shares
Underwriters' over-allotment option..... shares
Use of proceeds......................... We intend to use the net proceeds
for research and development
activities, including clinical
trials, process development and
manufacturing support, and for
general corporate purposes,
including working capital. See "Use
of Proceeds."
Proposed Nasdaq National Market
symbol.................................. ALTH
The number of shares of our common stock to be outstanding immediately
after this offering is based on the number of shares outstanding on January 24,
2000. This number does not take into account:
- 2,890,002 shares of our common stock issuable upon exercise of options
outstanding under our stock option plan at January 24, 2000, with a
weighted average exercise price of $.76 per share;
- 1,305,985 shares of our common stock available for future grant or
issuance under our stock option plan; and
- 23,024 shares of our common stock issuable upon conversion of preferred
stock issuable upon exercise of outstanding warrants at January 24, 2000,
excluding warrants which will expire without exercise prior to
consummation of this offering, with a weighted average exercise price of
$1.65 per share.
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SUMMARY FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
The following table contains a summary of our statement of operations data.
The pro forma net loss per share data below gives effect to (1) the conversion
of each outstanding share of preferred stock into one share of common stock upon
the closing of this offering and (2) the pro forma basis of presentation
described in "Selected Financial Data" on page 22. See Note 2 to Financial
Statements.
<TABLE>
<CAPTION>
CUMULATIVE
PERIOD FROM
SEPTEMBER 1,
1992 (DATE OF
INCEPTION)
YEARS ENDED DECEMBER 31, THROUGH
-------------------------------------------------------------- DECEMBER 31,
1995 1996 1997 1998 1999 1999
--------- ---------- ---------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Operating expenses...........
Research and development... $ 1,807 $ 2,842 $ 3,865 $ 5,941 $ 6,144 $ 21,254
Clinical manufacturing..... 113 269 1,564 1,768 1,382 5,164
General and
administrative.......... 542 1,262 1,262 1,486 1,703 6,494
Stock-based compensation... -- -- -- -- 1,554 1,554
--------- ---------- ---------- ---------- ----------- -----------
Total operating
expenses......... 2,462 4,373 6,691 9,195 10,783 34,466
Loss from operations......... (2,462) (4,373) (6,691) (9,195) (10,783) (34,466)
Interest and other income,
net........................ 78 320 178 621 310 1,546
--------- ---------- ---------- ---------- ----------- -----------
Net loss..................... (2,384) (4,053) (6,513) (8,574) (10,473) (32,920)
Dividend related to
beneficial conversion
feature of preferred
stock...................... -- -- -- -- (9,613) (9,613)
Net loss attributable to
common stockholders........ $ (2,384) $ (4,053) $ (6,513) $ (8,574) $ (20,086) $ (42,533)
========= ========== ========== ========== =========== ===========
Weighted-average basic and
diluted net loss per
share...................... $ (1.19) $ (1.53) $ (2.18) $ (2.71) $ (6.24)
Weighted-average shares used
in computing basic and
diluted net loss per
share...................... 2,000 2,654 2,981 3,160 3,217
Pro forma basic and diluted
net loss per share......... $ (.82)
Shares used in computing pro
forma basic and diluted net
loss per share............. 24,490
</TABLE>
The following table contains a summary of our balance sheet at December 31,
1999:
- on an actual basis; and
- on an as adjusted basis to reflect the conversion of all outstanding
shares of preferred stock into 25,288,286 shares of common stock
effective upon the closing of this offering and the sale of
shares of common stock offered hereby at an assumed initial public
offering price per share of $ .
<TABLE>
<CAPTION>
DECEMBER 31, 1999
----------------------
PRO FORMA
ACTUAL AS ADJUSTED
------- -----------
(UNAUDITED)
<S> <C> <C>
BALANCE SHEET DATA:
Cash, cash equivalents and short-term investments........... $ 9,475 $
Working capital............................................. 8,784
Total assets................................................ 10,206
Long-term obligations, less current portion................. 69
Convertible preferred stock................................. 49,899
Accumulated deficit......................................... (42,533)
Total stockholders' equity.................................. 8,991
</TABLE>
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RISK FACTORS
You should carefully consider the risks described below before making an
investment decision. You should also refer to the other information in this
prospectus, including our financial statements and the related notes. The risks
and uncertainties described below are those that we currently believe may
materially affect our company. Additional risks and uncertainties that we are
unaware of or that we currently deem immaterial also may become important
factors that affect our company.
RISKS RELATED TO OUR COMPANY AND BUSINESS
WE HAVE A HISTORY OF LOSSES AND ANTICIPATE CONTINUED LOSSES.
We have experienced operating losses since we began operations in 1994. As
of December 31, 1999, we had an accumulated deficit of approximately $42.5
million. We expect to incur additional operating losses over the next several
years and expect cumulative losses to increase substantially as our research and
development, preclinical, clinical and manufacturing efforts expand. We have had
no revenue to date. Our ability to achieve revenue and profitability is
dependent on our ability, alone or with partners, to successfully complete the
development of our product candidates, conduct clinical trials, obtain the
necessary regulatory approvals, and manufacture and market our product
candidates. We cannot assure you that we will achieve revenue or profitability.
OUR PRODUCT CANDIDATES HAVE A HIGH RISK OF FAILURE BECAUSE THEY ARE IN THE EARLY
STAGES OF DEVELOPMENT.
We have no products that have received regulatory approval for commercial
sale. All of our product candidates are in early stages of development, and we
face the risks of failure inherent in developing drug products based on new
technologies. None of our product candidates, including RSR13, is expected to be
commercially available until at least 2002. Substantially all of our efforts and
expenditures over the next few years will be devoted to RSR13. Accordingly, our
future prospects are substantially dependent on favorable results from clinical
trials utilizing RSR13.
WE WILL NOT BE ABLE TO COMMERCIALIZE OUR PRODUCT CANDIDATES IF WE FAIL TO
ADEQUATELY DEMONSTRATE THEIR SAFETY AND EFFICACY.
We will need to conduct significant additional research, animal testing,
referred to as preclinical testing, and human testing, referred to as clinical
trials, before we can file product approval applications with the FDA and
similar regulatory authorities in other countries. Preclinical testing and
clinical trials are long, expensive and uncertain processes. It may take us
several years to complete our testing, and failure can occur at any stage. The
objective of preclinical testing and clinical trials is to demonstrate product
safety and efficacy. We have limited experience in conducting and managing
clinical trials. We cannot assure you that any product candidate developed by
us, alone or with others, will prove to be safe and efficacious in clinical
trials and will meet all of the applicable regulatory requirements needed to
receive marketing clearance.
Clinical trials must be conducted in accordance with the FDA's Good
Clinical Practices and are subject to oversight by the FDA and institutional
review boards at the medical institutions where the clinical trials are
conducted. In addition, clinical trials must be conducted with product
candidates produced under the FDA's Good Manufacturing Requirements, and may
require large numbers of test subjects. Clinical trials may be suspended by us
or the FDA at any time if it is believed that the subjects participating in
these trials are being exposed to unacceptable health risks or if the FDA finds
deficiencies in the conduct of these trials.
Even if we achieve positive interim results in clinical trials, these
results do not necessarily predict final results, and acceptable results in
early trials may not be repeated in later trials. A number of companies in the
pharmaceutical industry have suffered significant setbacks in advanced clinical
trials, even after promising results in earlier trials. Negative or inconclusive
results or adverse medical events during a clinical trial could cause a clinical
trial to be repeated or terminated. In addition, failure to construct clinical
trial protocols to screen patients for risk profile factors relevant to the
trial for purposes of segregating patients into the patient
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<PAGE> 11
populations treated with the drug being tested and the control group could
result in either group experiencing a disproportionate number of adverse events
and could cause a clinical trial to be repeated or terminated.
WE MAY EXPERIENCE DELAYS IN OUR CLINICAL TRIALS THAT COULD ADVERSELY AFFECT OUR
FINANCIAL RESULTS AND OUR COMMERCIAL PROSPECTS.
We do not know whether planned clinical trials will begin on time or
whether any of our clinical trials will be completed on schedule or at all. Our
product development costs will increase if we have delays in testing or
approvals or if we need to perform more or larger clinical trials than planned.
If the delays are significant, our financial results and the commercial
prospects for our products will be harmed, and our ability to become profitable
will be delayed. We typically rely on third party clinical investigators at
medical institutions to conduct our clinical trials and we occasionally rely on
other third party organizations to perform data collection and analysis. As a
result, we may face additional delaying factors outside our control.
BECAUSE WE MUST OBTAIN REGULATORY APPROVAL, WE CANNOT PREDICT WHETHER OR WHEN WE
WILL BE PERMITTED TO COMMERCIALIZE OUR PRODUCT CANDIDATES.
A pharmaceutical product cannot be marketed in the United States or most
other countries until it has completed a rigorous and extensive regulatory
approval process. Satisfaction of regulatory requirements typically takes many
years, is dependent upon the type, complexity and novelty of the product and
requires the expenditure of substantial resources. Of particular significance
are the requirements covering research and development, testing, manufacturing,
quality control, labeling and promotion of drugs for human use. Regulatory
approval processes outside the United States include all of the risks associated
with the FDA approval process described below. We cannot assure you that
regulatory review will be conducted in a timely manner or that regulatory
approval will be obtained for any product candidates developed by us, including
RSR13.
Before receiving FDA clearance to market a product, we must demonstrate in
adequate and well-controlled clinical trials that the product candidate is safe
and effective for the proposed patient population. Although the FDA may be
consulted in developing protocols for clinical trials, we cannot assure that the
FDA will accept the clinical trials as adequate or well-controlled or accept the
results of those trials. Data obtained from preclinical and clinical activities
are susceptible to varying interpretations that could delay, limit or prevent
regulatory clearances, and the FDA can request that we conduct additional
trials. For example, we are currently planning to perform only one Phase III
trial prior to seeking FDA approval for our first product candidate. We believe
that if the results of this Phase III trial are consistent with our prior Phase
II results, this Phase III trial can serve as the basis for obtaining FDA
approval. Although the FDA has indicated its agreement with this if the results
are sufficiently positive, it has recommended that we conduct two Phase III
trials concurrently to protect against the risk that the results of one trial
may be inconclusive as to necessary efficacy and safety for approval. If we have
to conduct further clinical trials, whether for RSR13 or other product
candidates we develop in the future, it would significantly increase our
expenses and delay marketing of our product candidates.
We intend to seek "Fast Track" approval for the use of RSR13 in combination
with radiation therapy for treating brain metastases. If this approval is
granted, the time required for the FDA to review any NDA that we submit for this
use of RSR13 would be shorter than would otherwise be the case. We cannot assure
you that the FDA will grant "Fast Track" status to any NDA that we may submit or
that, if granted, such status will result in faster approval or any approval at
all.
If regulatory approval for a product candidate is granted, the approval is
generally limited to those disease states and conditions for which the product
candidate is demonstrated through clinical trials to be safe and efficacious.
Further, after regulatory approval is obtained, a marketed drug product, its
bulk chemical supplier, its manufacturer and its manufacturing facilities are
subject to continual review and periodic inspections, and discovery of
previously unknown problems with a product, supplier, manufacturer or facility
may result in restrictions on the sale of our products, including a withdrawal
of such products from the market.
Failure to comply with applicable FDA or other applicable regulatory
requirements may result in criminal prosecution, civil penalties, recall or
seizure of products, total or partial suspension of production or injunction, as
well as other regulatory action against our potential products or us. In
addition, delays or rejections may be
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<PAGE> 12
encountered based upon additional government regulation from future legislation
or administrative action or changes in FDA policy during the period of product
development, clinical trials and FDA regulatory review.
ACCEPTANCE OF OUR PRODUCTS IN THE MARKETPLACE IS UNCERTAIN, AND FAILURE TO
ACHIEVE MARKET ACCEPTANCE WILL HARM OUR BUSINESS.
Even if approved for marketing, our products may not achieve market
acceptance. The degree of market acceptance will depend upon a number of
factors, including:
- the receipt of regulatory approval for the uses that we are studying;
- the establishment and demonstration in the medical community of the
safety and efficacy of our products and their potential advantages over
existing and newly developed therapeutic products;
- ease of use of our products;
- pricing and reimbursement policies of government and third party payors
such as insurance companies, health maintenance organizations and other
plan administrators; and
- the effectiveness of our sales and marketing efforts.
Physicians, patients, payors or the medical community in general may be
unwilling to accept, utilize or recommend any of our products.
IF WE FAIL TO OBTAIN THE CAPITAL NECESSARY TO FUND OUR OPERATIONS, WE WILL BE
UNABLE TO SUCCESSFULLY DEVELOP PRODUCTS.
We expect that significant additional financing will be required in the
future to fund operations. We do not know whether additional financing will be
available when needed, or that, if available, we will obtain financing on terms
favorable to our stockholders or us. We have consumed substantial amounts of
cash to date and expect capital outlays and operating expenditures to increase
over the next several years as we expand our infrastructure and preclinical and
clinical trial activities. We may raise this financing through public or private
equity offerings, debt financings or additional corporate collaboration and
licensing arrangements.
We believe that the net proceeds from this offering and existing cash and
investment securities will be sufficient to support our current operating plan
through at least the end of 2002. We have based this estimate on assumptions
that may prove to be wrong. Our future capital requirements depend on many
factors that affect our research, development, collaboration and sales and
marketing activities. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
To the extent we raise additional capital by issuing equity securities, our
stockholders may experience substantial dilution. To the extent that we raise
additional funds through collaboration and licensing arrangements, we may be
required to relinquish some rights to our technologies or product candidates, or
grant licenses on terms that are not favorable to us. If adequate funds are not
available, we will be required to delay, reduce the scope of or eliminate one or
more of our development programs.
WE MAY FAIL TO ADEQUATELY PROTECT OR ENFORCE OUR INTELLECTUAL PROPERTY RIGHTS OR
SECURE RIGHTS TO THIRD PARTY PATENTS.
Our success will depend in part on our ability to obtain and enforce patent
protection for our products in the U.S. and in other countries. We currently
license 24 patents and patent applications, in addition to owning one patent
ourselves. Any patents issued to or licensed by us could be challenged,
invalidated, infringed, circumvented or held unenforceable. In addition, it is
possible that no patents will issue on any of our licensed patent applications.
It is possible that the claims allowed will not be sufficiently broad to protect
our technology, or that the patents will not provide protection against
competitive products or otherwise be commercially valuable.
11
<PAGE> 13
Our commercial success will also depend in part on our ability to
commercialize our product candidates without infringing patents or other
proprietary rights of others or breaching the licenses granted to us. We may not
be able to obtain a license to third party technology that we may require to
conduct our business or, if obtainable, we may not be able to license such
technology at a reasonable cost. If we fail to obtain a license to any
technology that we may require to commercialize our technologies or product
candidates, we would be materially adversely affected.
In addition to patent protection, we also rely upon trade secrets,
proprietary know-how and technological advances which we seek to protect through
confidentiality agreements with our collaborators, employees and consultants.
Our employees and consultants are required to enter into agreements providing
for confidentiality and the assignment of rights to inventions made by them
while affiliated with us. We also have entered into non-disclosure agreements
which are intended to protect our confidential information delivered to third
parties for research and other purposes. However, these agreements could be
breached and we may not have adequate remedies for any breach, or our trade
secrets and proprietary know-how could otherwise become known or be
independently discovered by others.
Furthermore, as with any pharmaceutical company, our patent and other
proprietary rights are subject to uncertainty. Our patent rights related to our
product candidates might conflict with current or future patents and other
proprietary rights of others. For the same reasons, the products of others could
infringe our patents or other proprietary rights. Litigation or patent
interference proceedings, either of which could result in substantial costs to
us, may be necessary to enforce any of our patents or other proprietary rights,
or to determine the scope and validity or enforceability of other parties'
proprietary rights. The defense and prosecution of patent and intellectual
property claims are both costly and time consuming, even if the outcome is
favorable to us. Any adverse outcome could subject us to significant liabilities
to third parties, require disputed rights to be licensed from third parties, or
require us to cease selling our future products.
IF OUR COMPETITORS DEVELOP AND MARKET PRODUCTS THAT ARE MORE EFFECTIVE THAN
OURS, OUR COMMERCIAL OPPORTUNITY WILL BE REDUCED OR ELIMINATED.
Even if we obtain the necessary governmental approvals to market RSR13 or
other product candidates, our commercial opportunity will be reduced or
eliminated if our competitors develop and market products that are more
effective, have fewer side effects or are less expensive than our product
candidates. Our potential competitors include large fully-integrated
pharmaceutical companies and more established biotechnology companies, both of
which have significant resources and expertise in research and development,
manufacturing, testing, obtaining regulatory approvals and marketing. Academic
institutions, government agencies, and other public and private research
organizations conduct research, seek patent protection and establish
collaborative arrangements for research, development, manufacturing and
marketing. It is possible that competitors will succeed in developing
technologies that are more effective than those being developed by us or that
would render our technology obsolete or noncompetitive. We are not aware of any
products in research or development by any potential competitors which address
allosteric regulation of proteins in the way being targeted by us. There are,
however, other companies addressing the same indications as we are.
WE RELY ON THIRD PARTY COLLABORATORS TO CONDUCT OUR RESEARCH AND DEVELOPMENT.
We do not have our own research facilities and currently do not plan to
establish such facilities. Instead, we depend upon academic, research and
non-profit institutions and commercial service organizations for chemical
synthesis and analysis, product formulation, assays, and preclinical and
clinical testing of our product candidates. We have funded and will, from time
to time in the future, fund research programs in collaboration with academic and
other institutions, primarily those with which we have or will have established
license agreements. For the period from our inception in September 1992 to
December 31, 1999, we expended $21.3 million on research and development
activities. Currently, we are supporting research with respect to allosteric
modification of proteins at Virginia Commonwealth University in the laboratories
of Dr. Donald Abraham, a founder, stockholder and director.
12
<PAGE> 14
If conflicts arise between us and our academic collaborators, scientific
advisors or other suppliers, including Dr. Abraham, the other party may act in
its self-interest and not in the interest of our stockholders. Some of our
academic collaborators are also conducting research on other product candidates
that may compete with our product candidates. Competing products, either
developed by the collaborators or to which the collaborators have rights, may
result in their withdrawal of support for our product candidates.
IF WE ARE UNABLE TO MAINTAIN EXISTING CONTRACTS OR ENTER INTO NEW CONTRACTS WITH
THIRD PARTIES TO MANUFACTURE OUR PRODUCTS IN SUFFICIENT COMMERCIAL QUANTITIES
AND AT AN ACCEPTABLE COST, WE MAY BE UNABLE TO MEET DEMAND FOR OUR PRODUCTS AND
LOSE POTENTIAL REVENUES.
We currently have no manufacturing facilities for clinical or commercial
production of RSR13 or any other product candidates, nor do we intend to develop
such capabilities in the near future. Therefore, we must contract with third
parties to manufacture our product candidates for preclinical, clinical, and
commercial purposes in compliance with regulatory requirements and at an
acceptable cost.
We have contracts with two third party manufacturers. One is with our sole
source supplier of RSR13 bulk drug substance, and the other is with our sole
source supplier of formulated drug product. Any failure by our two third party
manufacturers to supply our requirements for clinical trial materials would
jeopardize the completion of such trials and could have a material adverse
effect on us. Our current supply of finished product of RSR13 is limited and is
not sufficient for completion of all phases of clinical development.
In addition, our continued dependence upon these third parties for the
ultimate manufacture of commercial quantities of RSR13 may adversely affect our
future profit margin and our ability to commercialize products on a timely and
competitive basis. Prior to regulatory approval of RSR13, we may seek to
establish supply agreements with alternative sources of supply for bulk drug
substance and formulated drug product. However, only a limited number of
contract manufacturers are both capable of manufacturing our product candidates
and complying with current federal and state good manufacturing practice
regulations. Accordingly, we cannot be certain that we will be able to enter
into supply agreements on commercially acceptable terms or that any
manufacturers will be able to deliver supplies in appropriate quantity. If we do
not establish relationships with qualified alternative sources of supply prior
to FDA approval to market RSR13, and our current manufacturers are unable to
fulfill our requirements, our ability to market and sell RSR13 will be
diminished and our revenue will suffer until we can identify and have qualified
alternative manufacturers.
IF WE ARE UNABLE TO CREATE SALES, MARKETING AND DISTRIBUTION CAPABILITIES OR
ENTER INTO AGREEMENTS WITH THIRD PARTIES TO PERFORM THESE FUNCTIONS, WE WILL NOT
BE ABLE TO COMMERCIALIZE OUR PRODUCT CANDIDATES.
We currently have no sales, marketing or distribution capabilities.
Therefore, in order to commercialize our product candidates, we must internally
develop sales, marketing and distribution capabilities or make arrangements with
a third party to perform these services. We currently intend to market RSR13
directly into certain markets and develop relationships with one or more
pharmaceutical companies with established distribution systems and direct sales
forces to market RSR13 elsewhere. If we do not enter into one or more alliances
with pharmaceutical companies to market and distribute our products, we may not
be successful in entering into alternative arrangements, whether engaging
independent distributors or recruiting, training and retaining a marketing staff
and sales force of our own.
To market any of our products directly, we must develop a marketing and
sales force with technical expertise and with supporting distribution
capabilities. We have no experience in developing, training or managing a sales
force and will incur substantial additional expenses in doing so. We may not be
able to build such a sales force, the cost of maintaining and establishing such
a sales force may exceed its cost effectiveness, or our direct marketing and
sales efforts may be unsuccessful. In addition, we will compete with many other
companies that currently have extensive and well-funded marketing and sales
operations. Our marketing and sales efforts may be unable to compete
successfully against such other companies.
13
<PAGE> 15
To the extent we seek alliances with one or more pharmaceutical companies,
our product revenues are likely to be lower than if we directly marketed and
sold our products. In addition:
- we may not be able to find collaborative partners, enter into alliances
on favorable terms or enter into alliances that will be successful;
- any collaborative partner to an alliance might, at its discretion, limit
the amount and timing of resources it devotes to marketing RSR13; and
- any collaborative partner or licensee may terminate its agreement with us
and abandon our products at any time for any reason without significant
payments, regardless of the terms of the agreement.
OUR ABILITY TO GENERATE REVENUES WILL BE DIMINISHED IF WE FAIL TO OBTAIN
ACCEPTABLE PRICES OR AN ADEQUATE LEVEL OF REIMBURSEMENT FOR OUR PRODUCTS FROM
THIRD PARTY PAYORS.
Our ability to commercialize pharmaceutical products, alone or with
collaborators, may depend in part on the extent to which reimbursement for the
products will be available from:
- government and health administration authorities;
- private health insurers; and
- other third party payors.
The continuing efforts of government and third party payors to contain or
reduce the costs of health care through various means may limit our commercial
opportunity. For example, in some countries other than the United States,
pricing and profitability of prescription pharmaceuticals are subject to
government control. In the United States, we expect that there will continue to
be a number of federal and state proposals to implement similar government
control. In addition, increasing emphasis on managed care in the United States
will continue to put pressure on the pricing of pharmaceutical products. Cost
control initiatives could decrease the price that any potential collaborators or
we could receive for any of our products in the future and could adversely
affect our profitability.
Significant uncertainty exists as to the reimbursement status of newly
approved health care products. Third party payors are challenging the prices
charged for medical products and services. Government and other third party
payors increasingly are attempting to contain health care costs by limiting both
coverage and the level of reimbursement for new drugs and by refusing, in some
cases, to provide coverage for uses of approved products for disease indications
for which the FDA has not granted labeling approval. Third party insurance
coverage may not be available to patients for any products we discover and
develop, alone or with collaborators. If government and other third party payors
do not provide adequate coverage and reimbursement levels for our products, the
market acceptance of these products may be reduced.
IF PRODUCT LIABILITY LAWSUITS ARE SUCCESSFULLY BROUGHT AGAINST US, WE MAY INCUR
SUBSTANTIAL LIABILITIES AND MAY BE REQUIRED TO LIMIT COMMERCIALIZATION OF OUR
PRODUCT CANDIDATES.
The testing and marketing of medical products entail an inherent risk of
product liability. Product liability claims might be brought against us by
consumers, health care providers or by pharmaceutical companies or others
selling our future products. If we cannot successfully defend ourselves against
such claims, we may incur substantial liabilities or be required to limit the
commercialization of our product candidates. We have obtained limited product
liability insurance coverage for our human clinical trials. However, insurance
coverage is becoming increasingly expensive, and no assurance can be given that
we will be able to maintain insurance coverage at a reasonable cost or in
sufficient amounts to protect us against losses due to liability. A successful
product liability claim in excess of our insurance coverage could have a
material adverse effect on our business, financial condition and results of
operations. We may not be able to obtain commercially reasonable product
liability insurance for any products approved for marketing.
14
<PAGE> 16
OUR QUARTERLY OPERATING RESULTS MAY FLUCTUATE.
Our product candidates are now in research and various stages of
development or clinical studies. Accordingly, we do not sell or receive any
revenues from sales of these product candidates. Our results of operations
historically have fluctuated on a quarterly basis and can be expected to
continue to be subject to quarterly fluctuations. Our results of operations at
any given time will be based primarily on the following factors:
- the status of development of our various product candidates;
- the time at which we enter into research and license agreements with
corporate partners, if any, that provide for payments to us, and the
timing and accounting treatment of payments to us under those agreements;
- whether or not we achieve specified research or commercialization
milestones;
- timely payment by our corporate partners, if any, of amounts payable to
us;
- the addition or termination of research programs or funding support; and
- variations in the level of expenses related to our proprietary product
candidates during any given period.
We believe that quarterly comparisons of our financial results are not
necessarily meaningful and should not be relied upon as an indication of future
performance. These fluctuations may cause the price of our stock to fluctuate,
perhaps substantially.
FAILURE TO ATTRACT, RETAIN AND MOTIVATE SKILLED PERSONNEL AND CULTIVATE KEY
ACADEMIC COLLABORATIONS WILL DELAY OUR PRODUCT DEVELOPMENT PROGRAMS AND OUR
RESEARCH AND DEVELOPMENT EFFORTS.
We are a small company with only 27 employees, and our success depends on
our continued ability to attract, retain and motivate highly qualified
management and scientific personnel and on our ability to develop and maintain
important relationships with leading academic institutions and scientists.
Competition for personnel and academic collaborations is intense. In particular,
our product development programs depend on our ability to attract and retain
highly skilled chemists and clinical development personnel. If we lose the
services of any of these personnel, in particular, Dr. Stephen J. Hoffman, our
President and Chief Executive Officer, or Dr. Michael J. Gerber, our Senior Vice
President, Clinical Development and Regulatory Affairs, the loss could
significantly impede the achievement of our research and development objectives.
We do not have employment agreements with either of the foregoing individuals or
with any of our other employees. In addition, we will need to hire additional
personnel and develop additional academic collaborations as we continue to
expand our research and development activities. We do not know if we will be
able to attract, retain or motivate personnel or maintain relationships. If we
fail to negotiate additional acceptable collaborations with academic
institutions and scientists, or if our existing academic collaborations were to
be unsuccessful, our product development programs may be delayed.
RISKS RELATED TO THIS OFFERING
OUR STOCK PRICE MAY BE VOLATILE, AND YOUR INVESTMENT IN OUR STOCK COULD DECLINE
IN VALUE.
Prior to this offering, there has been no public market for our common
stock and an active public market for our common stock may not develop or be
sustained after the offering. The initial public offering price will be
determined by negotiations between the representatives of the underwriters and
us and may not be indicative of future market prices. Among the factors to be
considered in determining the initial public offering price of the common stock,
in addition to prevailing market conditions, will be:
- estimates of our business potential and earnings prospects;
- an assessment of our management; and
- the consideration of the above factors in relation to market valuations
of companies in related businesses.
15
<PAGE> 17
The market prices for securities of pharmaceutical companies in general
have been highly volatile and may continue to be highly volatile in the future.
The following factors, in addition to other risk factors described in this
section, may have a significant impact on the market price of our common stock:
- announcements of technological innovations or new commercial products by
our competitors or us;
- developments concerning proprietary rights, including patents;
- developments concerning any research and development, manufacturing, and
marketing collaborations;
- publicity regarding actual or potential medical results relating to
products under development by our competitors or us;
- regulatory developments in the United States and other countries;
- litigation;
- economic and other external factors, including disasters or crises; or
- period-to-period fluctuations in financial results.
CERTAIN EXISTING STOCKHOLDERS OWN A LARGE PERCENTAGE OF OUR VOTING STOCK AND
THUS YOU WILL HAVE MINIMAL INFLUENCE ON STOCKHOLDER DECISIONS.
Upon completion of this offering, we anticipate that our executive
officers, directors and greater than five percent stockholders, along with their
affiliates, will, in the aggregate, own approximately % of our outstanding
common stock. As a result, such persons, acting together, will have the ability
to substantially influence all matters submitted to the stockholders for
approval, including the election and removal of directors and any merger,
consolidation or sale of all or substantially all of our assets. These persons
will also have the ability to control our management and affairs. Accordingly,
such concentration of ownership may have the effect of delaying, deferring or
preventing a change in control, impeding a merger, consolidation, takeover or
other business combination involving us or discouraging a potential acquirer
from making a tender offer or otherwise attempting to obtain control of our
business, even if such a transaction would be beneficial to other stockholders.
FUTURE SALES OF OUR COMMON STOCK MAY CAUSE OUR STOCK PRICE TO DECLINE.
The market price for our common stock could fall substantially if our
stockholders sell large amounts of our common stock in the public market
following this offering. These sales, or the possibility that these sales may
occur, could also make it more difficult for us to sell equity or equity related
securities if we need to do so in the future to address then-existing financing
needs. The number of shares of common stock available for sale in the public
market is limited by restrictions under federal securities law requiring the
registration or exemption from registration in connection with the sale of
securities. In addition, sales of our common stock are restricted by lock-up
agreements that we, our directors and officers and substantially all of our
existing stockholders have entered into with the underwriters. The lock-up
agreements restrict us, our directors and officers and substantially all of our
existing stockholders, from selling or otherwise disposing of any shares for a
period of 180 days after the date of this prospectus without the prior written
consent of SG Cowen Securities Corporation. SG Cowen Securities Corporation may,
however, in its sole discretion and without notice, release all or any portion
of the shares from the restrictions in the lock-up agreements.
After this offering, we will have outstanding shares of common
stock. These shares will become eligible for sale in the public market as
follows:
<TABLE>
<CAPTION>
NUMBER OF SHARES DATE ELIGIBLE FOR PUBLIC RESALE
- ---------------- -------------------------------
<S> <C>
Date of this prospectus (includes the shares sold in
this offering)
180 days after the date of this prospectus
At various times thereafter, subject to applicable holding
period requirements
</TABLE>
16
<PAGE> 18
We intend to file one or more registration statements to register shares of
common stock subject to outstanding stock options and common stock reserved for
issuance under our stock option plan not before 30 days after the closing of
this offering. We expect these additional registration statements to become
effective immediately upon filing. In addition, upon completion of this offering
and the conversion of our outstanding preferred stock into common stock, which
will happen upon the completion of this offering, the holders of 25,288,286
shares of our common stock will have the right to require us to register their
shares for sale to the public. Substantially all of these shares are subject to
the 180-day lock-up, described above. If these holders cause a large number of
shares to be registered and sold in the public market, our stock price could
fall. See "Shares Eligible for Future Sale."
ANTI-TAKEOVER PROVISIONS IN OUR CHARTER DOCUMENTS AND UNDER DELAWARE LAW MAY
MAKE AN ACQUISITION OF US, WHICH MAY BE BENEFICIAL TO OUR STOCKHOLDERS, MORE
DIFFICULT.
Provisions of our amended and restated certificate of incorporation and
bylaws, as well as provisions of Delaware law, could make it more difficult for
a third party to acquire us, even if doing so would benefit our stockholders.
These provisions:
- authorize the issuance of "blank check" preferred stock that could be
issued by our Board of Directors to increase the number of outstanding
shares and thwart a takeover attempt;
- limit who may call a special meeting of stockholders;
- prohibit stockholder action by written consent, thereby requiring all
stockholder actions to be taken at a meeting of our stockholders;
- establish advance notice requirements for nominations for election to the
Board of Directors or for proposing matters that can be acted upon at
stockholder meetings; and
- require approval by the holders of at least 66 2/3% of the outstanding
common stock to amend any of the foregoing provisions.
In addition, Section 203 of the Delaware General Corporation Law may
discourage, delay or prevent a third party from acquiring us.
YOU WILL INCUR IMMEDIATE AND SUBSTANTIAL DILUTION AS A RESULT OF THIS OFFERING.
The initial public offering price is substantially higher than the net
tangible book value per share of our outstanding common stock immediately after
this offering. Accordingly, at the initial public offering price of $ per
share, if you purchase common stock in this offering, you will incur immediate
and substantial dilution of approximately $ in the net tangible book value
per share of our common stock from the price you pay for our common stock. In
addition, we have issued options to acquire common stock at prices significantly
below the initial public offering price. To the extent these outstanding options
are ultimately exercised, there will be further dilution to investors in this
offering.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
We have made statements under the captions "Prospectus Summary," "Risk
Factors," "Use of Proceeds," "Management's Discussion and Analysis of Financial
Condition and Results of Operations," "Business" and in other sections of this
prospectus that are forward-looking statements. You can identify these
statements by forward-looking words such as "may," "will," "expect," "intend,"
"anticipate," "believe," "estimate," "plan," "could," "should" and "continue" or
similar words. These forward-looking statements may also use different phrases.
We have based these forward-looking statements on our current expectations and
projections about future events. These forward-looking statements, which are
subject to risks, uncertainties, and assumptions about us, may include, among
other things, projections of our future results of operations or of our
financial condition, our anticipated product commercialization strategies, and
anticipated trends in our business.
17
<PAGE> 19
We believe it is important to communicate our expectations to our
investors. However, there may be events in the future that we are not able to
accurately predict or which we do not fully control that could cause actual
results to differ materially from those expressed or implied in our
forward-looking statements. Because these forward-looking statements involve
risks and uncertainties, there are important factors that could cause actual
results to differ materially from those expressed or implied by these
forward-looking statements, including the following:
- competitive factors;
- general economic conditions;
- the ability to develop safe and efficacious drugs;
- ability to enter into future collaborative agreements;
- variability of royalty, license and other revenue;
- failure to achieve positive results in clinical trials;
- failure to achieve regulatory approval to market our product candidates;
- uncertainty regarding our owned and our licensed patents and patent
rights, including the risk that we may be forced to engage in costly
litigation to protect such patent rights and the material harm to us if
there were an unfavorable outcome of any such litigation;
- governmental regulation and suspension;
- technological change;
- changes in industry practices; and
- one-time events.
You should also consider carefully the statements under "Risk Factors" and
other sections of this prospectus, which address additional factors that could
cause our results to differ from those set forth in the forward-looking
statements.
18
<PAGE> 20
USE OF PROCEEDS
We estimate that the net proceeds from the sale of the shares of
common stock offered by us at an assumed initial public offering price of $
per share will be approximately $ million, after deducting the underwriting
discounts and estimated offering expenses. If the underwriters exercise in full
their option to purchase an additional shares of common stock, we estimate
that such net proceeds will be approximately $ million. We expect to use the
net proceeds from this offering for research and development activities,
including clinical trials, process development and manufacturing support and for
general corporate purposes, including working capital. We may use a portion of
the proceeds to acquire or invest in complementary businesses, products or
technologies, although we are not currently in negotiations concerning any such
acquisitions or investments. Based upon the current status of our product
development and commercialization plans, we believe that the net proceeds of
this offering, together with our cash, cash equivalents and investments, will be
adequate to satisfy our capital needs through at least the calendar year 2002.
Pending such uses, we intend to invest the net proceeds of this offering in
interest bearing, investment grade securities.
DIVIDEND POLICY
We have never declared or paid any dividends on our capital stock. We
currently intend to retain all of our future earnings, if any, to finance our
operations and do not anticipate paying any cash dividends on our capital stock
in the foreseeable future.
19
<PAGE> 21
CAPITALIZATION
The following table sets forth our capitalization at December 31, 1999:
- on an actual basis; and
- on a pro forma as adjusted basis to reflect the conversion of all
outstanding shares of preferred stock into 25,288,286 shares of common
stock effective upon the closing of this offering, and the sale of
shares of common stock offered hereby at an assumed initial
offering price of $ per share, and our receipt of the estimated net
proceeds after deducting underwriting discounts and commissions and
estimated offering expenses.
You should read the following table in conjunction with our financial
statements and related notes included in this prospectus.
<TABLE>
<CAPTION>
DECEMBER 31, 1999
-----------------------
PRO FORMA
ACTUAL AS ADJUSTED
-------- -----------
(IN THOUSANDS,
EXCEPT SHARE DATA)
<S> <C> <C>
Long-term debt, net of current portion...................... $ 69 $
Stockholders' equity
Convertible preferred stock, Series A: $0.001 par value,
5,000,000 shares authorized, issued and outstanding.... 5
Convertible preferred stock, Series B: $0.001 par value,
5,050,000 shares authorized; 5,032,500 shares issued
and outstanding........................................ 5
Convertible preferred stock, Series C: $0.001 par value,
16,610,000 shares authorized; 15,255,786 shares issued
and outstanding........................................ 15
Common stock: $0.001 par value, 50,000,000 shares
authorized; 3,261,513 shares issued and outstanding.... 3
Additional paid-in capital preferred stock................ 49,874
Additional paid-in capital common stock................... 6,204
Notes receivable -- related parties....................... (140)
Accumulated deficit....................................... (42,533)
Deferred compensation..................................... (4,442)
-------- --------
Total stockholders' equity........................... 8,991
-------- --------
Total capitalization.............................. $ 9,060 $
======== ========
</TABLE>
The information in the table above does not include:
- shares of our common stock issuable upon exercise of options outstanding
under our stock option plan, of which 2,890,002 were outstanding at
January 24, 2000, with a weighted average exercise price of $.76 per
share;
- shares of our common stock available for future grant or issuance under
our stock option plan, of which 1,305,985 were available at January 24,
2000; and
- shares of our common stock issuable upon conversion of preferred stock
issuable upon exercise of outstanding warrants, of which 23,024 were
outstanding at January 24, 2000, excluding warrants which will expire
without exercise prior to consummation of this offering, with a weighted
average exercise price of $1.65 per share.
20
<PAGE> 22
DILUTION
Our pro forma net tangible book value as of December 31, 1999 was
approximately $ , or $ per share of common stock. Our pro
forma net tangible book value per share represents the amount of total tangible
assets less total liabilities, divided by the shares of common stock outstanding
as of December 31, 1999, assuming the conversion of all outstanding shares of
preferred stock.
After giving effect to the sale of shares of common stock we are
offering hereby at an assumed initial public offering price of $ per share
and after deducting estimated underwriting discounts and commissions and
offering expenses, our pro forma net tangible book value as of December 31, 1999
would have been approximately $ million, or $ per share. This represents
an immediate increase in pro forma net tangible book value of $ per share to
existing stockholders and an immediate and substantial dilution of $ per
share to new investors purchasing shares of common stock in this offering. The
following table illustrates this dilution:
<TABLE>
<S> <C> <C>
Assumed initial public offering price per share............. $
Pro forma net tangible book value per share at December 31,
1999...................................................... $
Increase attributable to this offering......................
------
Pro forma net tangible book value per share after
offering..................................................
------
Dilution per share to new investors......................... $
======
</TABLE>
The following table summarizes, as of December 31, 1999, on the pro forma
basis described above, the number of shares of common stock purchased in this
offering, the aggregate cash consideration paid and the average price per share
paid by existing stockholders for common stock and by new investors purchasing
shares of common stock in this offering:
<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
----------------- -------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
------- ------- --------- -------- -------------
<S> <C> <C> <C> <C> <C>
Existing Stockholders....................... % $ % $
New Investors...............................
------- ----- -------- ----- --------
Total............................. % $ % $
======= ===== ======== ===== ========
</TABLE>
This discussion and tables above assume no exercise of options outstanding
under our stock option plan. As of January 24, 2000, there were options
outstanding to purchase a total of 2,890,002 shares of common stock at a
weighted average exercise price of $.76 per share and 1,305,985 shares available
for future grant or issuance under our stock option plan. The discussion and
tables above also assume no exercise of any outstanding warrants. As of January
24, 2000, there were outstanding warrants to purchase 23,024 shares of our
common stock, excluding warrants which will expire without exercise prior to
consummation of this offering, with a weighted average exercise price of $1.65
per share. To the extent that any of these options or warrants are exercised,
there will be further dilution to new investors.
21
<PAGE> 23
SELECTED FINANCIAL DATA
The selected financial data set forth below should be read in conjunction
with our financial statements and the related notes and "Management's Discussion
and Analysis of Financial Condition and Results of Operations," included in this
prospectus. The statement of operations data for the years ended December 31,
1997, 1998 and 1999 and the balance sheet data as of December 31, 1998 and 1999,
are derived from, and qualified by reference to, our audited financial
statements included elsewhere in this prospectus. The statement of operations
data for the years ended December 31, 1995 and 1996, and the balance sheet data
as of December 31, 1995, 1996 and 1997 are derived from our audited financial
statements that do not appear in this prospectus. The historical results are not
necessarily indicative of the operating results to be expected in the future.
Unaudited pro forma basic and diluted net loss per share have been
calculated assuming the conversion of all outstanding preferred stock into
common stock, as if the shares had converted immediately upon their issuance.
<TABLE>
<CAPTION>
CUMULATIVE
PERIOD FROM
SEPTEMBER 1,
1992 (DATE OF
INCEPTION)
YEARS ENDED DECEMBER 31, THROUGH
-------------------------------------------------------------- DECEMBER 31,
1995 1996 1997 1998 1999 1999
--------- ---------- ---------- ---------- ----------- -------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Operating expenses....................
Research and development............ $ 1,807 $ 2,842 $ 3,865 $ 5,941 $ 6,144 $ 21,254
Clinical manufacturing.............. 113 269 1,564 1,768 1,382 5,164
General and administrative.......... 542 1,262 1,262 1,486 1,703 6,494
Stock-based compensation............ -- -- -- -- 1,554 1,554
--------- ---------- ---------- ---------- ----------- -----------
Total operating expenses..... 2,462 4,373 6,691 9,195 10,783 34,466
Loss from operations.................. (2,462) (4,373) (6,691) (9,195) (10,783) (34,466)
Interest and other income, net........ 78 320 178 621 310 1,546
--------- ---------- ---------- ---------- ----------- -----------
Net loss.............................. (2,384) (4,053) (6,513) (8,574) (10,473) (32,920)
Dividend related to beneficial
conversion feature of preferred
stock............................... -- -- -- -- (9,613) (9,613)
Net loss attributable to common
stockholders........................ $ (2,384) $ (4,053) $ (6,513) $ (8,574) $ (20,086) $ (42,533)
========= ========== ========== ========== =========== ===========
Weighted-average basic and diluted net
loss per share...................... $ (1.19) $ (1.53) $ (2.18) $ (2.71) $ (6.24)
Weighted-average shares used in
computing basic and diluted net loss
per share........................... 2,000 2,654 2,981 3,160 3,217
Pro forma basic and diluted net loss
per share........................... $ (.82)
Shares used in computing pro forma
basic and diluted net loss per
share............................... 24,490
</TABLE>
The following table contains a summary of our balance sheet on an actual
basis at December 31, 1995, 1996, 1997, 1998 and 1999.
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
--------------------------------------------------
1995 1996 1997 1998 1999
------- ------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash, cash equivalents and short-term investments..... $ 1,864 $ 6,043 $ 479 $ 9,581 $ 9,475
Working capital (deficiency).......................... 1,476 5,411 (1,149) 8,146 8,784
Total assets.......................................... 1,953 6,357 830 10,480 10,206
Long-term obligations, less current portion........... -- 102 89 147 69
Convertible preferred stock........................... 5,095 12,804 12,804 30,751 49,899
Accumulated deficit................................... (3,597) (7,361) (13,874) (22,447) (42,533)
Total stockholders' equity (deficit).................. 1,538 5,487 (1,005) 8,371 8,991
</TABLE>
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<PAGE> 24
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with our financial
statements and related notes included in this prospectus. The following
discussion contains forward-looking statements that involve risks and
uncertainties. Our actual results could differ materially from those anticipated
in these forward-looking statements as a result of certain factors, including
those discussed below and elsewhere in this prospectus, particularly under the
heading "Risk Factors."
OVERVIEW
We are a pharmaceutical company focused on developing and commercializing
innovative small molecule drugs initially for improving cancer treatments. Our
lead product candidate is RSR13. RSR13 is a synthetic small molecule that
increases the release of oxygen from hemoglobin, the oxygen carrying protein
contained within red blood cells. We believe RSR13 can be used to improve
existing treatments for cancer and treat many diseases attributed to or
aggravated by tissue oxygen deprivation.
To date, we have devoted substantially all of our resources to research and
clinical development. We have not derived any commercial revenues from product
sales, and we do not expect to receive product revenues for at least the next
several years. We have incurred significant operating losses since our inception
in 1992 and, as of December 31, 1999, had an accumulated deficit of $42,533,000.
There can be no assurance if or when we will become profitable. We expect to
continue to incur significant operating losses over the next several years as we
continue to incur increasing research and development costs, in addition to
costs related to clinical trials and manufacturing activities. We expect that
losses will fluctuate from quarter to quarter and that such fluctuations may be
substantial. Our achieving profitability depends upon our ability, alone or with
others, to successfully complete the development of our product candidates, and
obtain required regulatory clearances and successfully manufacture and market
our future products.
RESULTS OF OPERATIONS
COMPARISON OF YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
Expenses
Research and Development. Research and development expenses were $6,144,000
for the year ended December 31, 1999, compared to $5,942,000 for the year ended
December 31, 1998 and $3,865,000 for the year ended December 31, 1997. The
$202,000, or 3%, increase from 1998 to 1999 was due primarily to increased
clinical trial costs, offset by the completion of one Phase II clinical trial.
We expect research and development expenses to increase in 2000 as we begin our
first pivotal Phase III clinical trial of RSR13. The $2,077,000, or 54%,
increase in research and development spending from 1997 to 1998 was due
primarily to supporting multiple Phase II clinical trials for RSR13 in oncology
and cardiovascular indications. These increased costs included clinical trial
costs and personnel expenses.
Clinical Manufacturing. Clinical manufacturing expenses include the cost of
manufacturing RSR13 for use in clinical trials and costs associated with the
scale-up of manufacturing to support commercial requirements. Clinical
manufacturing expenses for the years ended December 31, 1999, 1998 and 1997 were
$1,382,000, $1,768,000 and $1,564,000, respectively. The $386,000, or 22%,
decrease in 1999 compared to 1998 primarily resulted from needing less RSR13 to
meet clinical trial requirements. The $204,000, or 13%, increase in expenses in
1998 over 1997 was primarily related to costs incurred in evaluating alternative
containers for commercial use.
General and Administrative. General and administrative expenses for the
years ended December 31, 1999, 1998 and 1997 were $1,703,000, $1,486,000 and
$1,262,000, respectively. The $217,000, or 15%, increase for 1999 compared to
1998 primarily resulted from increases in personnel and related expenses, and
costs associated with hiring new employees. General and administrative expenses
increased $224,000, or 18%, for 1998 compared to 1997. The increase in fiscal
1998 expense was primarily related to personnel and related expenses.
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<PAGE> 25
Amortization of Deferred Stock Compensation. Amortization of deferred stock
compensation was $1,554,000 in 1999. There was no amortization of deferred stock
compensation in 1998 and 1997. In 1999 we recorded deferred stock compensation
of $5,996,000 for options awarded to employees with exercise prices below the
deemed fair value for financial reporting purposes of our common stock on their
respective grant dates.
Interest and Other Income, Net
Interest income, net of interest expense, was $310,000, $621,000 and
$178,000 for the years ended December 31, 1999, 1998 and 1997, respectively. The
$311,000, or 50%, decrease in 1999 as compared to 1998 was attributable to a
decrease in the amount of cash available for investing. The $443,000, or 249%,
increase in 1998 as compared to 1997 was primarily the result of interest earned
on higher average cash balances from a private offering of Series C Convertible
preferred stock.
Income Taxes
As of December 31, 1999, we had net operating loss carryforwards and
research and development credit carryforwards of $30,174,000 and $2,120,000,
respectively, available to offset future regular and alternative taxable income.
These net operating loss carryforwards expire between 2009 and 2013. The
research and development credit carryforwards will expire between 2009 and 2013.
The utilization of the loss carryforwards to reduce future income taxes will
depend on our ability to generate sufficient taxable income prior to the
expiration of the net operating loss carryforwards and research and development
credit carryforwards. In addition, the maximum annual use of the net operating
loss carryforwards is limited in certain situations where changes occur in our
stock ownership.
LIQUIDITY AND CAPITAL RESOURCES
Since inception, we have financed our operations primarily through private
placements of preferred stock, which have resulted in net proceeds to us of
$40,286,000 through December 31, 1999. Since inception, we have used $30,490,000
of cash for operating activities. We had cash, cash equivalents and short-term
investments of $9,475,000 at December 31, 1999, compared with $9,582,000 at
December 31, 1998 and $479,000 at December 31, 1997. Working capital at December
31, 1999 was $8,784,000, as compared to $8,146,000 at December 31, 1998, and a
deficit of $1,149,000 at December 31, 1997. Long-term debt was $69,000,
$147,000, and $89,000 for the years ending December 31, 1999, 1998 and 1997,
respectively. Long-term debt consists primarily of capital equipment lease
obligations.
Net cash used in operating activities was $9,502,000, $8,803,000, and
$5,488,000 for the years ended December 31, 1999, 1998 and 1997, respectively.
The increases resulted from increases in net losses from operations.
Net cash provided by investing activities was $1,024,000 for the year ended
December 31, 1999 and consisted primarily of proceeds from the sale of
short-term investments, partially offset by the purchase of short-term
investments and property and equipment. Net cash used in investing activities
was $7,929,000 for the year ended December 31, 1998 and consisted primarily of
net purchases of investments. Net cash provided by investing activities was
$4,880,000 for the year ended December 31, 1997 and consisted primarily of net
sales of investments.
Net cash provided by financing activities was $9,420,000 and $17,910,000
for the years ended December 31, 1999 and 1998, respectively, and consisted
primarily of proceeds from the sale of preferred stock. Net cash used in
financing activities for the year ended December 31, 1997 was $33,000 and was
primarily due to principal payments under capital leases.
Based upon the current status of our product development and
commercialization plans, we believe that the net proceeds of this offering,
together with our existing cash, cash equivalents and investments, will be
adequate to satisfy our capital needs through at least the calendar year 2002.
However, our actual capital requirements will depend on many factors, including
the status of product development; the time and cost involved in conducting
clinical trials and obtaining regulatory approvals; filing, prosecuting and
enforcing patent claims;
24
<PAGE> 26
competing technological and market developments; and our ability to market and
distribute our future products and establish new collaborative and licensing
arrangements.
IMPACT OF YEAR 2000
Many currently installed computer systems and software products were unable
to distinguish between twentieth century dates and twenty-first century dates.
As a result, many companies' software and computer systems needed to be upgraded
or replaced to comply with Year 2000 requirements or risk system failure or
miscalculations causing disruptions of normal business activities.
State of Readiness
The majority of the computer programs and hardware we currently use in our
own internal operations did not require replacement or modification as a result
of the Year 2000 issue. We believe that our significant vendors and service
providers are Year 2000 compliant and have not, to date, been made aware that
any of our significant vendors or service providers have suffered Year 2000
disruptions in their systems.
Costs
To date, we have not incurred any material costs in identifying or
evaluating Year 2000 compliance issues, although consideration of the Year 2000
question is an integral part of our ongoing developmental and operational
reviews. We have incurred some expenses related to the operating costs
associated with time spent by employees in the evaluation process and Year 2000
compliance testing generally. We presently do not anticipate that future
expenditures will be material.
Risks
We completed internal assessments of our Year 2000 readiness prior to
December 31, 1999, with emphasis on our operating and administrative systems and
are not aware of any Year 2000 problems that could reasonably be expected to
have a material adverse effect on our business. Our assessment plans consisted
of internal testing of our systems, contacting third party vendors of hardware,
software and services, assessing and implementing repairs or replacements as
required and developing contingency plans if Year 2000 problems still arise. We
contacted our major vendors for software, hardware and related services. These
vendors indicated that they are Year 2000 compliant. However, we can not
guarantee that we have identified or will identify all Year 2000 compliance
problems in our infrastructure that may require substantial revisions and
repairs. Also, despite our testing and reviews, we may experience Year 2000
problems related to the third party software, hardware or other systems on which
we are reliant, and any of these problems may be time consuming or expensive to
fix.
Contingency Plan
We have been engaged in an ongoing assessment of our readiness and have
developed contingency plans to address Year 2000 problems that may arise. The
results of our analyses and the responses received from third party vendors and
service providers were taken into account in developing these plans.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ON MARKET RISK
The primary objective of our investment activities is to preserve principal
while at the same time maximizing the income we receive from our investments
without significantly increasing risk. Some of the securities that we invest in
may have market risk. This means that a change in prevailing interest rates may
cause the fair value of the principal amount of the investment to fluctuate. For
example, if we hold a security that was issued with a fixed interest rate at the
then-prevailing rate and the prevailing interest rate later rises, the fair
value of the principal amount of our investment will probably decline. To
minimize this risk in the future, we intend to maintain our portfolio of cash
equivalents and short-term investments in a variety of securities, including
commercial paper, money market funds, government and non-government debt
securities. The average duration of all of our investments has generally been
less than one year. Due to the short-term nature of these investments, we
believe we have no material exposure to interest rate risk arising from our
investments.
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<PAGE> 27
Recent Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." This statement
changes the previous accounting definition of derivative, which focused on
freestanding contracts such as options and forwards, including futures and
swaps, expanding it to include embedded derivatives and many commodity
contracts. Under the statement, every derivative is recorded in the balance
sheet as either an asset or liability measured at its fair value. The statement
requires that changes in the derivatives' fair value be recognized currently in
earnings unless specific hedge accounting criteria are met. SFAS No. 133 is
effective for fiscal years beginning after June 15, 2000. We do not anticipate
that the adoption of SFAS No. 133 will have a material impact on our financial
position or results of operations.
26
<PAGE> 28
BUSINESS
OVERVIEW
We are a pharmaceutical company focused on developing and commercializing
innovative small molecule drugs, initially for improving cancer treatments. Our
lead product candidate is RSR13. RSR13 is a synthetic small molecule that
increases the release of oxygen from hemoglobin, the oxygen-carrying protein
contained within red blood cells. We believe RSR13 can be used to improve
existing cancer treatments and treat many diseases and clinical conditions
attributed to or aggravated by oxygen deprivation. Deprivation of oxygen in the
body is called hypoxia.
The presence of oxygen in tumors is an essential element for the
effectiveness of radiation therapy in the treatment of cancer. We have
demonstrated in Phase II clinical trials that RSR13 significantly improves the
efficacy of radiation therapy for treating brain metastases, or tumors which
have spread to the brain, and glioblastoma multiforme, a highly aggressive form
of primary brain cancer. We expect to commence a pivotal Phase III trial of
RSR13 in combination with radiation therapy for the treatment of brain
metastases during the first half of 2000. We believe that this trial, if
positive, will serve as the basis for seeking marketing approval for RSR13 from
the FDA for this indication. In addition, we are currently conducting a Phase II
clinical trial of RSR13 in combination with radiation therapy in patients with
locally advanced, inoperable non-small cell lung cancer, and are developing
RSR13 for improving the efficacy of radiation therapy in treating other forms of
cancer.
We believe RSR13 can be used to treat many other diseases and clinical
conditions. We intend to seek corporate partners to jointly develop RSR13 for
treating the hypoxic effects of acute blood loss and decreased blood flow
encountered in surgical procedures and also for improving the effectiveness of
treatments for cardiovascular disease and stroke. In addition, we plan to extend
our expertise in developing drugs to other compounds and technology platforms to
which we have access through our research collaborations or that we may acquire
or in-license from third parties.
SCIENTIFIC BACKGROUND
Oxygen is indispensable to all human tissues. It is transported through the
body by hemoglobin, a protein contained within red blood cells, and is consumed
in the production of energy for sustaining life. Each hemoglobin protein can
bind up to four molecules of oxygen. After picking up oxygen in the lungs and
circulating to various tissues in the body, each hemoglobin protein, on average,
releases one of its four oxygen molecules and retains the other three in
reserve. Thus, approximately 75% of the oxygen carried by hemoglobin represents
an untapped reservoir of oxygen potentially available to the body. When
hemoglobin returns to the lungs, it replenishes its store of oxygen for its next
round trip through the body.
Although oxygen is ordinarily vital for life, in some instances, energized
forms of oxygen, called oxygen radicals, can be toxic to cells. For example,
during radiation therapy for a cancerous tumor, radiation-induced oxygen
radicals contribute to the death of cells in the tumor. Therapies that increase
oxygen levels in tumors at the time of radiation can therefore enhance the
cytotoxicity of radiation therapy.
Malignant tumors often have a poorly regulated blood supply caused by the
disorganized growth of new blood vessels into the tumor. This, in addition to
the rapid cell growth of malignant tumors, leads to the formation of hypoxic
regions within the tumor, a phenomenon known as tumor hypoxia. Research shows
that hypoxic regions within malignant tumors are substantially more resistant to
cell damage from radiation than oxygenated regions. Even small hypoxic regions
in a tumor may affect the overall response to radiation therapy and increase the
number of surviving tumor cells. Tumor cells that survive radiation therapy can
become resistant to therapy, and can cause the tumor to recur in the same
location and metastasize to distant sites, causing continued illness and death.
Tissue hypoxia is also a factor in many other diseases and clinical
conditions. For example, during cardiac and other types of surgery, tissue
hypoxia can occur from decreased oxygen carrying capacity caused by acute blood
loss or decreased blood flow to major organs, such as the brain, heart, liver
and kidneys. In addition,
27
<PAGE> 29
hypoxia caused by the acute blockage of a major blood vessel can lead to
conditions that cause significant morbidity and mortality, such as acute angina,
or chest pain caused by decreased blood flow to the heart, myocardial
infarction, or heart attack, and stroke.
The body has developed certain natural responses to mitigate or reverse the
damage of some forms of hypoxia. For example, when the body is suddenly
subjected to acute hypoxia, such as during acute blood loss, several highly
predictable responses occur. Initially, the body increases the rate of breathing
to more fully oxygenate the blood as it passes through the lungs. The body also
attempts to improve blood flow by increasing the rate and force of cardiac
contractions. Subsequently, the red blood cells produce increased amounts of
2,3-diphosphoglycerate (2,3-DPG), a naturally occurring small molecule that
chemically decreases the oxygen binding affinity of hemoglobin. 2,3-DPG
essentially taps into hemoglobin's oxygen reservoir, and increases the average
unloading of oxygen from hemoglobin from 25% to approximately 35%. Finally, over
the next several weeks to months, the body produces a natural hormone known as
erythropoetin to stimulate production of new red blood cells.
Although production of 2,3-DPG is effective as a natural response
mechanism, it is not a viable candidate for therapeutic applications. 2,3-DPG is
produced inside the red blood cells and cannot by itself penetrate the red blood
cell membrane if medically administered to a patient. As a result, therapeutic
administration of 2,3-DPG cannot be used to oxygenate cancerous tumors to
enhance the effectiveness of radiation therapy. In addition, the natural
increase of 2,3-DPG levels during acute hypoxic episodes takes several hours to
days to reach a peak effect. 2,3-DPG, therefore, is not effective in treating or
preventing acute hypoxic conditions associated with surgical blood loss or
cardiovascular disease, conditions that require an immediate response.
THE ALLOS SOLUTION
In traditional approaches to drug development, a small molecule drug is
used to bind to the active site of a protein to modify the protein's function.
In some cases, the drug activates, and in others it inhibits, the protein's
function.
In contrast to traditional approaches, our core technology is based on
using small molecules to modify a protein's function by altering the protein's
three-dimensional structure. This is called allosteric modification. In
allosteric modification, a small molecule drug alters a protein's three
dimensional structure by binding to the protein at a site different from the
protein's active site. This change in conformational structure affects the
binding affinity of the protein for the molecules that normally bind to its
active site. The ability of a drug to increase or decrease this affinity can
have important clinical implications. For example, an allosteric modifier that
decreases the oxygen-binding affinity of hemoglobin, and thereby stimulates the
release of oxygen into tissues, can be used to mitigate the adverse effects of
many forms of tissue hypoxia.
RSR13
Our lead product candidate, RSR13, is designed to mitigate the effects of
tissue hypoxia. RSR13 has been administered safely to more than 360 patients,
over 250 of whom were cancer patients receiving concurrent radiation therapy.
Our clinical studies have indicated that RSR13 is generally well tolerated and
has an acceptable safety profile.
RSR13 has a well-defined mechanism of action and is the first synthetic
drug to emulate and amplify the action of 2,3-DPG, the naturally occurring
allosteric modifier of hemoglobin. Like 2,3-DPG, RSR13 binds to hemoglobin away
from the hemoglobin's oxygen-binding site and increases the unloading of oxygen
from hemoglobin, thus increasing the amount of oxygen deliverable to hypoxic
tissues. RSR13 has several distinguishing characteristics from 2,3-DPG that make
it particularly well suited for therapeutic applications:
- RSR13 is able to cross the red blood cell membrane when medically
administered to a patient;
- RSR13 has an immediate onset of action; and
- on average, RSR13 increases the normal 25% unloading of oxygen from
hemoglobin to an estimated 50% by increasing oxygen release from the
large reservoir of unused hemoglobin-bound oxygen in the blood.
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<PAGE> 30
By emulating and amplifying the body's natural response to acute hypoxia,
RSR13 has the potential for treating a wide variety of diseases and clinical
conditions caused by tissue hypoxia. We believe that increasing oxygen levels in
hypoxic tumors can enhance the effects of radiation therapy. In addition, RSR13
could also be used to prevent complications associated with tissue hypoxia that
frequently occur during or after surgery. In the cardiovascular area, we believe
RSR13 can be used to help treat acute angina, myocardial infarction and stroke,
among other conditions.
BUSINESS STRATEGY
Our objective is to become a leading pharmaceutical company focused on
developing and commercializing innovative drugs. The key elements of our
strategy to achieve this objective are described below:
- Focus on commercializing RSR13 in oncology markets. Initially, we intend
to seek FDA approval for the use of RSR13 in combination with radiation
therapy for the treatment of patients with brain metastases. Thereafter,
we intend to seek approval for the use of RSR13 in combination with
radiation therapy for treating other types of cancerous tumors. In the
United States, we plan to develop a focused sales force of between 10 and
20 sales representatives to market RSR13 directly to radiation
oncologists. We will seek to identify one or more corporate partners to
accelerate product commercialization in Europe and possibly Asia.
- Establish collaborations to commercialize RSR13 in additional therapeutic
applications. We believe RSR13 has the potential for treating a wide
variety of other diseases and clinical conditions caused by tissue
hypoxia. These indications include, among others, surgical hypoxia, acute
angina, myocardial infarction and stroke. We intend to pursue
commercialization of RSR13 in these other indications with one or more
corporate partners. We expect that these collaborations will enable us to
develop RSR13 for treating more indications than would otherwise be
possible by us alone, and provide us with domestic and international
marketing and sales expertise for our partnered product indications.
- Expand our product candidate portfolio. We intend to acquire rights to
other product candidates that complement our existing programs and that
enable us to capitalize on our clinical development expertise through
acquisitions and in-licensing. We will continue our drug discovery
collaborations which have yielded several development candidates.
29
<PAGE> 31
PRODUCTS UNDER DEVELOPMENT
We currently retain exclusive, worldwide commercial rights for all of our
product candidates for all target indications. The table below summarizes our
current product candidates, their target indications, and clinical program
status.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
PRODUCT CANDIDATE TARGET INDICATION CLINICAL PROGRAM STATUS
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
RSR13
Radiation Enhancer Brain metastases Phase III to commence
Non-small cell lung cancer Phase II
Glioblastoma multiforme Phase II complete
Other cancer types Phase II's planned
Chemotherapy Enhancer Recurrent glioblastoma multiforme Phase I/II planned
Surgical Hypoxia Cardiopulmonary bypass surgery Phase II
Cardiovascular Disease Angina Phase II
Myocardial infarction Preclinical
Stroke Preclinical
- ------------------------------------------------------------------------------------------------------
RSR46 Acute hypoxia Preclinical
- ------------------------------------------------------------------------------------------------------
JP7 Acute hypoxia Preclinical
- ------------------------------------------------------------------------------------------------------
PYRUVATE KINASE INHIBITORS Chronic hypoxia Research
-----------------------------------------------------------------------------------------------------
</TABLE>
RSR13 for Treating Cancer
The worldwide oncology drug market was estimated at $16 billion in 1998,
representing 15% growth from 1997. Despite the enormous effort undertaken by the
pharmaceutical industry to develop oncology products, cancer remains the
second-leading cause of death in the United States and remains a largely unmet
medical need. Over 1.2 million new cases of cancer are diagnosed each year in
the United States, and approximately 565,000 patients die each year of cancer.
The appropriate cancer therapy for each patient depends on the cancer type
and careful assessment of the size, location and extent to which the tumor has
spread. Therapy typically includes some combination of surgery, radiation
therapy or chemotherapy. Radiation therapy is used to cure certain cancers, to
control local tumor invasion and thus prolong life, and to treat symptomatic
problems in patients who are expected to die of their cancer. Chemotherapy is
used to cure certain cancers or prolong life in some patients with malignant
tumors.
RSR13 as a Radiation Enhancer. Radiation therapy is the principal
non-surgical means of treating malignant tumors in patients with cancer. Each
year in the United States, approximately 50% of all newly diagnosed cancer
patients, or 600,000 patients, receive radiation therapy as part of their
primary treatment, in addition to 150,000 patients who receive radiation therapy
for persistent or recurrent cancer. The 750,000 cancer patients who receive
radiation therapy annually is approximately twice the number of cancer patients
who are treated with chemotherapy. A course of radiation therapy can cost
between $10,000 and $25,000 depending on the complexity and duration of
treatment. Although radiation therapy can be effective in treating certain types
of cancer, an unmet medical need exists for products to increase the
effectiveness of radiation therapy.
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<PAGE> 32
RSR13 is administered by a 30-minute intravenous infusion through a central
venous catheter commencing approximately one hour before scheduled radiation
therapy. Patients are also given supplemental oxygen, like that commonly
administered to individuals with chronic lung disease, to fully saturate
hemoglobin and increase the therapeutic potential of RSR13. RSR13 has an
immediate onset of action after administration and has a duration of action of
several hours.
Unlike existing drugs and other attempts to enhance the effects of
radiation therapy, the radioenhancement effect of RSR13 is not dependent on its
direct diffusion into the cancerous tumor. Instead, the beneficial effects of
RSR13 are the result of causing increased amounts of oxygen release from blood
flowing through the tumor. It is the oxygen, and not the drug, which diffuses
across the cancer cell membranes to oxygenate the tumors. This is particularly
important in the case of primary or metastatic brain tumors, where the blood
brain barrier acts to exclude or impede the entry of most chemical agents into
the brain tissue. The fact that RSR13 does not have to actually enter the cancer
cell to increase radiosensitivity is an important difference between RSR13 and
other pharmacologic attempts to improve the efficacy of radiation therapy.
We have completed five clinical trials of RSR13 in patients receiving
radiation therapy and have shown that RSR13 is generally well tolerated and has
an acceptable safety profile for use in cancer patients. The most common side
effects of RSR13 in cancer patients are dose and frequency related. These side
effects include low hemoglobin oxygen saturation (which is readily treated with
supplemental oxygen like that used in patients with chronic lung disease),
reversible kidney dysfunction (typically in patients who are also taking blood
pressure medications or common anti-inflammatory drugs), allergic rash and other
symptoms often seen in cancer patients receiving radiation therapy, such as
headache, nausea and vomiting.
RSR13 in the Treatment of Brain Metastases
We intend to seek FDA approval of RSR13 first for treatment of patients who
are receiving radiation therapy for brain metastases. This condition occurs in
approximately one out of five cancer patients, most often in patients with lung
or breast cancer. Radiation therapy for treatment of brain metastases is
administered to approximately 170,000 patients per year in the United States and
is intended to prevent or reduce complications and increase survival. The median
survival of all patients with brain metastases is about four months and can vary
depending on various clinical factors such as age, general health, whether the
primary cancer is controlled, and the extent of cancer metastases to other
regions in the body. Approximately 30% to 50% of patients with brain metastases
will die from disease progression in the brain, and the remainder will die from
disease progression in other regions in the body.
We previously completed a 20-patient Phase Ib safety study in patients
receiving RSR13 in combination with radiation therapy that suggested a potential
role for RSR13 in treating patients with brain metastases. Based on this study,
we completed a 69-patient, multi-center, open-label, Phase II clinical trial to
evaluate the efficacy and safety of RSR13 in cancer patients receiving standard
radiation therapy for treatment of brain metastases. The primary efficacy
endpoint of this study was survival compared to historical data using the Brain
Metastases Database, or BMD, maintained by the Radiation Therapy Oncology Group,
or RTOG, of the American College of Radiology. The study results showed that
RSR13-treated patients demonstrated overall median survival time of 6.9 months
compared to 4.1 months for the BMD control group, representing a statistically
significant improvement in median survival of 68%. In addition, the
RSR13-treated group had one-year survival rates of 32%, more than double the
one-year survival rate of 15% for the BMD control group. In patients where the
cause of death was determined, death due to tumor progression in the brain was
seen in only 9% of the RSR13-treated patients compared to 37% of the BMD control
group. When case-match analysis was performed using patients in the BMD that
most closely paralleled the RSR13-treated patients, the median survival time of
RSR13 treated patients was increased by 92% and one-year survival rates were
nearly tripled to 25%, compared to 9% for the BMD control group.
Based on this positive Phase II trial, we have received concurrence from
the FDA to proceed with a pivotal Phase III trial of RSR13 in patients with
brain metastases. This study is expected to begin in the first half of 2000. We
plan to enroll up to 408 adult patients at approximately 45 to 60 investigative
sites in North America. Patients will be randomly assigned to treatment with
either standard whole brain radiation therapy or treatment
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<PAGE> 33
with standard whole brain radiation therapy plus RSR13. The primary efficacy
endpoint is survival. The secondary endpoints are time to tumor progression in
the brain, response rate in the brain, cause of death and quality of life. Under
the trial protocol, a 35% improvement in median survival will be considered as
satisfying the primary end point of the trial, and may provide the basis for
marketing approval of RSR13. If the Phase III trial is positive, we will file a
new drug application with the FDA to obtain marketing approval for RSR13 for the
treatment of patients who are receiving radiation therapy for brain metastases.
RSR13 in the Treatment of Non-Small Cell Lung Cancer
Non-small cell lung cancer, or NSCLC, is a type of cancer that occurs in
approximately 130,000 patients per year in the United States. We are currently
evaluating RSR13 as a radiation enhancer for the treatment of patients with
locally advanced, inoperable NSCLC, also known as Stage III NSCLC. Radiation
therapy for treatment of Stage III NSCLC is administered to approximately 60,000
patients per year in the United States and is intended to prevent or reduce
complications and control local tumor growth in the chest. The median survival
time of patients with Stage III NSCLC is approximately nine to twelve months. In
addition to patients with Stage III NSCLC, we believe RSR13 could also be used
to treat approximately 70,000 patients with other Stages of NSCLC who are
treated with radiation therapy each year in the United States.
We are currently conducting a 40-patient, multi-center Phase II clinical
trial of RSR13 in patients receiving chemotherapy followed by radiation therapy
for the treatment of Stage III NSCLC. This trial, which will measure response
rates as the primary efficacy endpoint, is enrolling patients. If the results
are positive, we will proceed toward conducting a Phase III clinical trial.
RSR13 in the Treatment of Glioblastoma Multiforme
Glioblastoma multiforme, or GBM, is a deadly form of primary brain cancer.
This condition occurs in approximately 20% of all brain cancer patients in the
United States, or approximately 3,400 people per year. The median survival time
of patients with GBM is approximately nine to ten months. Radiation therapy is
administered to most patients with GBM and is intended to prevent or reduce
complications and improve survival time.
We have collaborated with the National Cancer Institute, or NCI, sponsored
New Approaches to Brain Tumor Therapy, or NABTT, Consortium to complete Phase Ib
and Phase II clinical trials of RSR13 in patients with GBM. Based on a
19-patient Phase Ib study which showed RSR13 was safe and well-tolerated, the
NABTT consortium conducted a 50-patient, multi-center, Phase II efficacy and
safety study of RSR13 combined with a standard six-week course of cranial
radiation therapy in newly diagnosed GBM patients. The primary efficacy endpoint
of the study was survival time. The Phase II study showed that RSR13-treated
patients demonstrated overall survival time of 12.1 months compared to 9.2
months for the NABTT historical control group. Based on these positive survival
results, the NABTT consortium has recommended that a pivotal Phase III trial be
conducted with RSR13 in patients with newly diagnosed GBM.
We have also completed enrollment in a 67-patient, multi-center, Phase II
companion trial of RSR13 in newly diagnosed GBM patients. This trial is
comparable in design and methods to the NABTT Phase II trial. Once patient
follow-up is completed, we will conduct the efficacy analyses in conjunction
with the RTOG statistics group.
We have also received concurrence from the FDA to proceed with a pivotal
Phase III trial of RSR13 in patients receiving radiation therapy for the
treatment of GBM. We will decide whether to proceed with a Phase III GBM trial
or a Phase III NSCLC trial after analyzing the final results of the respective
Phase II clinical trials.
RSR13 in the Treatment of Other Cancers
We believe that RSR13 eventually could be used in many other tumor types
and clinical situations requiring radiation therapy, such as pediatric brain,
head and neck, uterine cervix, prostate, rectal and breast cancers. We have been
asked by NCI-sponsored consortia to consider collaborating on Phase I/II
clinical trials in pediatric brain cancer. Similarly, various United States and
Canadian consortia have proposed conducting Phase II trials in
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head and neck and uterine cervix cancers. We anticipate conducting one or more
of these Phase II trials in the future.
We are currently conducting a 12-patient, randomized, double-blinded
placebo-controlled, Phase II trial evaluating tumor oxygen level before and
immediately after a single administration of RSR13. This physiology study is
intended to determine if the instrument being used can accurately and
reproducibly measure tumor oxygen levels, and whether RSR13 can change the level
in a fashion similar to that shown in animal studies. This study is ongoing and
it is not certain, considering the techniques used, if the data will produce
reliable results for analysis.
RSR13 as a Chemotherapy Enhancer. Chemotherapy is administered to more than
350,000 cancer patients each year in the United States. Depending on the
complexity and duration of treatment, a course of chemotherapy can cost between
$6,000 and $10,000. As with radiation therapy, certain types of chemotherapy
drugs require the presence of oxygen for optimal cytotoxic effects on cancer
cells. Thus, stimulating oxygen release from hemoglobin to hypoxic tumor tissue,
by the administration of RSR13, may also enhance the beneficial effects of
certain types of chemotherapy.
We have conducted preclinical studies with RSR13 as a chemotherapy enhancer
for use in conjunction with certain chemotherapy agents. Our preclinical studies
suggest that RSR13 increases the activity of certain chemotherapy agents in
animal tumor models and enhances tumor response. We believe this effect may be
related to increasing the oxygen level in the tumors and enhancing the effect of
specific chemotherapy agents.
An NCI-sponsored consortium is interested in conducting a Phase I/II
clinical study of RSR13 as a chemotherapy enhancer in patients with recurrent
GBM receiving treatment with a standard chemotherapy drug. The protocol for the
study has been submitted to the NCI for its approval. Contingent upon approval
of the study protocol, we have agreed to provide RSR13 to the consortium, which
will conduct and fund the trial.
RSR13 for Treating Surgical Hypoxia
Each year in the United States, approximately 600,000 people undergo
cardiopulmonary bypass surgery, or CPB, and approximately eight million patients
who have significant cardiovascular risk factors undergo non-cardiac surgery.
Over one million of these patients experience cardiovascular complications which
frequently result in death or permanent disability. In patients undergoing
non-cardiac surgery who have chronic medical conditions, such as coronary artery
disease, diabetes and hypertension, complications resulting from tissue hypoxia
can be as high as 20%. By inducing hemoglobin to release a greater amount of
oxygen during surgery, RSR13 can help mitigate tissue hypoxia resulting from
decreased oxygen carrying capacity, decreased blood flow, and, in the case of
CPB, decreased body temperature.
Based on preclinical studies of RSR13 in CPB and a successful Phase Ib
study in elective surgery patients, we conducted a randomized 30-patient Phase
II clinical trial of RSR13 in patients undergoing CPB for first time coronary
artery bypass grafting. This study demonstrated that RSR13 can be safely given
during CPB and provided preliminary evidence of a protective effect on heart
function. Although the patients undergoing this surgery were generally healthy
beyond having coronary artery disease, myocardial protective effects from RSR13
were still observed. There was also a trend toward a lower blood transfusion
requirement in the RSR13-treated group.
Based on the results of the Phase Ib general surgery study and the Phase II
CPB study, an additional randomized 164-patient Phase II study was initiated.
The purpose of this trial was to assess the ability of RSR13 treatment to
decrease the morbidity and mortality associated with heart and brain hypoxia in
patients with moderate to high risk factors undergoing CPB. This study was
terminated when it was determined in an interim safety analysis of 62 patients,
32 of whom received RSR13 and 30 of whom received placebo, that there was a
significant imbalance of patients with high risk factors in the RSR13-treated
group compared to the placebo group. Based on these findings, we are considering
conducting a new Phase II trial designed to better account for stratification of
risk factors in the treatment groups.
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RSR13 for Treating Cardiovascular Disease and Stroke
There are over one million hospitalizations per year in the United States
for acute coronary syndrome, which includes unstable angina and myocardial
infarction. We believe that RSR13 could play a major role in the treatment of
patients with acute coronary syndrome. We currently anticipate clinical
development for this indication would be in cooperation with a corporate
partner, although we are not in discussions with any parties in this regard.
We have demonstrated that increasing oxygen release from hemoglobin with
RSR13 results in a significant decrease in myocardial hypoxia experienced in
animals during reduced coronary artery blood flow. We have also shown that
treatment with RSR13 results in a decrease in the release of a biochemical
marker associated with heart damage in animal models of myocardial infarction.
Based on these findings, an initial Phase Ib safety study was performed in 24
patients with chronic angina taking multiple medications for treatment of their
heart disease. This study demonstrated that RSR13 was safe and well tolerated in
this patient population. In addition, a 10-patient Phase II clinical trial is
being performed to determine if RSR13 can improve the exercise tolerance of
patients with coronary artery disease.
Additionally, our preclinical studies have demonstrated that RSR13 may play
a beneficial role in the treatment of stroke.
Other Synthetic Allosteric Modifiers
We have evaluated over 250 other synthetic allosteric modifiers of
hemoglobin which are analogues of RSR13. Two of these analogues, RSR46 and JP7,
are second-generation molecules to RSR13, and, based on preliminary animal
studies, are potential candidates for clinical development. In addition, through
our research collaborations, we have expanded our drug discovery efforts on the
development of synthetic allosteric modifiers for targets of therapeutic
interest other than hemoglobin. One such target is red blood cell pyruvate
kinase, an enzyme central to the control of red blood cell 2,3-DPG metabolism.
Red blood cell pyruvate kinase is an allosteric protein that is structurally
very similar to hemoglobin. Increasing red blood cell 2,3-DPG levels by
inhibiting red blood cell pyruvate kinase may lead to the development of orally
administered products for chronic hypoxic indications, such as peripheral
vascular disease, chronic angina and congestive heart failure.
MANUFACTURING
We have entered into arrangements with two third party manufacturers for
the supply of RSR13 bulk drug substance and formulated drug product,
respectively. This enables us to focus on our clinical development strengths,
minimize fixed costs and capital expenditures, and gain access to advanced
manufacturing process capabilities and expertise.
Our supplier of RSR13 sodium salt, the bulk drug substance, operates under
current Good Manufacturing Practices using cost-effective and readily available
materials and reliable processes. Under the terms of our contract, this
manufacturing partner is committed to manufacture sufficient quantities to
support commercial scale manufacturing for the foreseeable future. This partner
is currently manufacturing RSR13 sodium salt in commercial-scale batches.
After manufacture, RSR13 sodium salt is formulated under contract for us
into the drug product under current Good Manufacturing Practice guidelines by a
third party that specializes in the manufacture of sterile injectable products.
We anticipate that this manufacturing partner will be able to provide sufficient
drug product to complete our ongoing and currently planned clinical trials and
early commercial needs.
We may establish manufacturing agreements with other parties for additional
commercial scale manufacturing of RSR13 bulk drug substance and formulated drug
product.
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SALES AND MARKETING
We intend to market RSR13 directly to the approximately 3,700 radiation
therapists in the United States through a specialty sales force of 10 to 20
sales representatives. We expect to begin hiring this sales force around the
time we submit a New Drug Application to the FDA for the use of RSR13 in an
oncology indication.
To penetrate the non-oncology markets in the United States, and all markets
outside the United States, we will seek to develop relationships with one or
more pharmaceutical companies with established distribution systems and direct
sales forces. We expect these relationships will help us achieve our sales
objectives for RSR13 in these markets while allowing us to focus on the oncology
market in the United States.
GOVERNMENT REGULATION
FDA Regulation and Product Approval
The FDA and comparable regulatory agencies in state and local jurisdictions
and in foreign countries impose substantial requirements upon the clinical
development, manufacture and marketing of pharmaceutical products. These
agencies and other federal, state and local entities regulate research and
development activities and the testing, manufacture, quality control, safety,
effectiveness, labeling, storage, record keeping, approval, advertising and
promotion of our product candidates.
The process required by the FDA before our product candidates may be
marketed in the United States generally involves the following:
- preclinical laboratory and animal tests;
- submission to the FDA of an Investigational New Drug, or IND, application
which must become effective before clinical trials may begin;
- adequate and well-controlled human clinical trials to establish the
safety and efficacy of the proposed pharmaceutical in our intended use;
and
- submission to the FDA of a New Drug Application that must be approved.
The testing and approval process requires substantial time, effort, and
financial resources and we cannot be certain that any approval will be granted
on a timely basis, if at all.
Preclinical tests include laboratory evaluation of the product candidate,
its chemistry, formulation and stability, as well as animal studies to assess
its potential safety and efficacy. We then submit the results of the preclinical
tests, together with manufacturing information and analytical data, to the FDA
as part of an IND application, which must become effective before we may begin
human clinical trials. The IND automatically becomes effective 30 days after the
FDA acknowledges that the filing is complete, unless the FDA, within the 30-day
time period, raises concerns or questions about the conduct of the trials as
outlined in the IND. In such a case, the IND sponsor and the FDA must resolve
any outstanding concerns before clinical trials can begin. Further, an
independent Institutional Review Board at each medical center proposing to
conduct the clinical trials must review and approve any clinical study.
Human clinical trials are typically conducted in three sequential phases
which may overlap:
- PHASE I: The drug is initially administered into healthy human subjects
or patients and tested for safety, dosage tolerance, absorption,
metabolism, distribution and excretion.
- PHASE II: The drug is administered to a limited patient population to
identify possible adverse effects and safety risks, to determine the
efficacy of the product for specific targeted diseases and to determine
dosage tolerance and optimal dosage.
- PHASE III: When Phase II evaluations demonstrate that a dosage range of
the drug is effective and has an acceptable safety profile, Phase III
trials are undertaken to further evaluate dosage, clinical efficacy and
to further test for safety in an expanded patient population at
geographically dispersed clinical study sites.
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In the case of product candidates for severe or life-threatening diseases
such as cancer, the initial human testing is often conducted in patients rather
than in healthy volunteers. Since these patients already have the target
disease, these studies may provide initial evidence of efficacy traditionally
obtained in Phase II trials and thus these trials are frequently referred to as
Phase Ib trials.
We cannot be certain that we will successfully complete Phase I, Phase II
or Phase III testing of our product candidates within any specific time period,
if at all. Furthermore, the FDA or the Institutional Review Boards or the
sponsor may suspend clinical trials at any time on various grounds, including a
finding that the subjects or patients are being exposed to an unacceptable
health risk.
The results of product development, preclinical studies and clinical
studies are submitted to the FDA as part of a new drug application for approval
of the marketing and commercial shipment of the product candidate. The FDA may
deny a new drug application if the applicable regulatory criteria are not
satisfied or may require additional clinical data. Even if such data is
submitted, the FDA may ultimately decide that the new drug application does not
satisfy the criteria for approval. Once issued, the FDA may withdraw product
approval if compliance with regulatory standards is not maintained or if
problems occur after the product reaches the market. In addition, the FDA may
require testing and surveillance programs to monitor the effect of approved
products which have been commercialized, and the agency has the power to prevent
or limit further marketing of a product based on the results of these
post-marketing programs.
On November 21, 1997, President Clinton signed into law the Food and Drug
Administration Modernization Act. That act codified the FDA's policy of granting
"Fast Track" approval for cancer therapies and other therapies intended to treat
severe or life-threatening diseases. Previously, the FDA approved cancer
therapies primarily based on patient survival rates and/or data on improved
quality of life. This new policy is intended to facilitate the study of cancer
therapies and shorten the total time for marketing approvals; however, it is too
early to tell what effect, if any, these provisions may actually have on product
approvals. We intend to apply to the FDA for "Fast Track" approval for the use
of RSR13 in combination with radiation therapy for treating brain metastases.
Satisfaction of the above FDA requirements or similar requirements of
state, local and foreign regulatory agencies typically takes several years and
the actual time required may vary substantially, based upon the type, complexity
and novelty of the pharmaceutical product candidate. Government regulation may
delay or prevent marketing of potential products for a considerable period of
time and to impose costly procedures upon our activities. We cannot be certain
that the FDA or any other regulatory agency will grant approval for any of our
product candidates on a timely basis, if at all. Success in preclinical or early
stage clinical trials does not assure success in later stage clinical trials.
Data obtained from preclinical and clinical activities is not always conclusive
and may be susceptible to varying interpretations which could delay, limit or
prevent regulatory approval. Even if a product candidate receives regulatory
approval, the approval may be significantly limited to specific indications.
Further, even after regulatory approval is obtained, later discovery of
previously unknown problems with a product may result in restrictions on the
product or even complete withdrawal of the product from the market. Delays in
obtaining, or failures to obtain regulatory approvals would have a material
adverse effect on our business. Marketing our product candidates abroad will
require similar regulatory approvals and is subject to similar risks. In
addition, we cannot predict what adverse governmental regulations may arise from
future United States or foreign governmental action.
Any products manufactured or distributed by us pursuant to FDA clearances
or approvals are subject to pervasive and continuing regulation by the FDA,
including record-keeping requirements and reporting of adverse experiences with
the drug. Drug manufacturers and their subcontractors are required to register
their establishments with the FDA and certain state agencies, and are subject to
periodic unannounced inspections by the FDA and certain state agencies for
compliance with current Good Manufacturing Practices, which impose certain
procedural and documentation requirements upon us and our third party
manufacturers. We cannot be certain that we or our present or future suppliers
will be able to comply with the current Good Manufacturing Practices and other
FDA regulatory requirements.
The FDA regulates drug labeling and promotion activities. The FDA has
actively enforced regulations prohibiting the marketing of products for
unapproved uses. Under the Modernization Act of 1997, the FDA will
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permit the promotion of a drug for an unapproved use in certain circumstances,
but subject to very stringent requirements.
We and our product candidates are also subject to a variety of state laws
and regulations in those states or localities where they are or will be
marketed. Any applicable state or local regulations may hinder our ability to
market our product candidates in those states or localities.
The FDA's policies may change and additional government regulations may be
enacted which could prevent or delay regulatory approval of our potential
products. Moreover, increased attention to the containment of health care costs
in the United States and in foreign markets could result in new government
regulations which could have a material adverse effect on our business. We
cannot predict the likelihood, nature or extent of adverse governmental
regulation which might arise from future legislative or administrative action,
either in the United States or abroad.
Foreign Regulation and Product Approval
Outside the United States, our ability to market a product candidate is
contingent upon receiving a marketing authorization from the appropriate
regulatory authorities. The requirements governing the conduct of clinical
trials, marketing authorization, pricing and reimbursement vary widely from
country to country. At present, foreign marketing authorizations are applied for
at a national level, although within the European Community, or EC, registration
procedures are available to companies wishing to market a product in more than
one EC member state. If the regulatory authority is satisfied that adequate
evidence of safety, quality and efficiency has been presented, a marketing
authorization will be granted. This foreign regulatory approval process involves
all of the risks associated with FDA clearance discussed above.
Other Regulations
We are also subject to numerous federal, state and local laws relating to
such matters as safe working conditions, manufacturing practices, environmental
protection, fire hazard control, and disposal of hazardous or potentially
hazardous substances. We may incur significant costs to comply with such laws
and regulations now or in the future.
INTELLECTUAL PROPERTY
We believe that patent protection and trade secret protection are important
to our business and that our future success will depend, in part, on our ability
to maintain our technology licenses, maintain trade secret protection, obtain
patents and operate without infringing the proprietary rights of others both in
the United States and abroad. We believe that obtaining patents in countries
other than the United States may, in some cases, be more difficult than
obtaining United States patents because of differences in patent laws. In
addition, the protection provided by non-U.S. patents may be weaker than that
provided by United States patents.
Under an agreement with the Virginia Commonwealth University Intellectual
Property Foundation, or VCUIPF, we have exclusive worldwide rights to 15 United
States patents, a European patent which has been validated in the United
Kingdom, France, Italy, and Germany, two pending patent applications which have
been approved in Canada, two pending patent applications which have been
approved in Japan, and one pending patent application in Europe. This agreement
terminates on the date the last United States patent license to us under the
agreement expires, which is October 2016. Also, under the agreement, we are
required to pay VCUIPF a running royalty on our worldwide net revenue arising
from commercialization of the allosteric hemoglobin modifier compounds. The
licensed patents, which expire at various times between February 2010 and
October 2016, contain claims covering methods of allosterically modifying
hemoglobin with RSR13 and other compounds, the site within hemoglobin where
RSR13 binds, and certain clinical applications of RSR13 and other allosteric
hemoglobin modifier compounds, including, among others:
- treating cancerous tumors;
- treating ischemia or oxygen deprivation;
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- treating stroke or cerebro ischemia;
- treating surgical blood loss;
- performing cardiopulmonary bypass surgery; and
- treating hypoxia.
Under a separate agreement with VCUIPF, we have rights to acquire an
exclusive worldwide license to any technology which is developed using research
funding provided by us to Virginia Commonwealth University under a Sponsored
Research Agreement. This agreement allows us to access a drug discovery presence
without having to develop in-house research and development capabilities. All
that is required to exercise our option is to provide notification to VCUIPF,
and to assume responsibility for all legal expenses for securing intellectual
property protection for technology developed under the Sponsored Research
Agreement. We are required to pay VCUIPF a running royalty on our worldwide net
revenue arising from commercialization of the technology developed. We have
exercised our option on one technology under this agreement which pertains to
allosteric inhibitors and activators of pyruvate kinase.
In order to protect the confidentiality of our technology, including trade
secrets and know-how and other proprietary technical and business information,
we require all of our employees, consultants, advisors and collaborators to
enter into confidentiality agreements that prohibit the use or disclosure of
confidential information. The agreements also oblige our employees, consultants,
advisors and collaborators to assign to us ideas, developments, discoveries and
inventions made by such persons in connection with their work with us. We cannot
be sure that these agreements will maintain confidentiality, will prevent
disclosure, or will protect our proprietary information or intellectual
property, or that others will not independently develop substantially equivalent
proprietary information or intellectual property.
The pharmaceutical industry is highly competitive and patents have been
applied for by, and issued to, other parties relating to products competitive
with those being developed by us. Therefore, our product candidates may give
rise to claims that they infringe the patents or proprietary rights of other
parties now and in the future. Furthermore, to the extent that we, or our
consultants or research collaborators, use intellectual property owned by others
in work performed for us, disputes may also arise as to the rights in such
intellectual property or in related or resulting know-how and inventions. An
adverse claim could subject us to significant liabilities to such other parties
and/or require disputed rights to be licensed from such other parties. A license
required under any such patents or proprietary rights may not be available to
us, or may not be available on acceptable terms. If we do not obtain such
licenses, we may encounter delays in product market introductions, or may find
that we are prevented from the development, manufacture or sale of products
requiring such licenses. In addition, we could incur substantial costs in
defending ourselves in legal proceedings instituted before the United States
Patent and Trademark Office or in a suit brought against us by a private party
based on such patents or proprietary rights, or in a suit by us asserting our
patent or proprietary rights against another party, even if the outcome is not
adverse to us.
COMPETITION
The pharmaceutical industry is characterized by rapidly evolving technology
and intense competition. Many companies of all sizes, including a number of
large pharmaceutical companies as well as several specialized biotechnology
companies, are developing cancer drugs similar to ours. There are products on
the market that will compete directly with the products that we are developing.
In addition, colleges, universities, governmental agencies and other public and
private research institutions will continue to conduct research and are becoming
more active in seeking patent protection and licensing arrangements to collect
license fees, milestone payments and royalties in exchange for license rights to
technologies that they have developed, some of which may directly compete with
our technologies. These companies and institutions also compete with us in
recruiting qualified scientific personnel. Many of our competitors have
substantially greater financial, research and development, human and other
resources than do we. Furthermore, large pharmaceutical companies have
significantly more experience than we do in preclinical testing, human clinical
trials and regulatory approval procedures.
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Our competitors may:
- develop safer and more effective products;
- obtain patent protection or intellectual property rights that limit our
ability to commercialize products; or
- commercialize products earlier than we.
We expect technology developments in our industry to continue to occur at a
rapid pace. Commercial developments by our competitors may render some or all of
our potential products obsolete or non-competitive, which would materially harm
our business and financial condition.
EMPLOYEES
As of December 31, 1999, we had a total of 23 full-time employees and four
part-time employees. Of those, 21 are in research and development and six are in
general and administrative. We believe that we have good relationships with our
employees. We have never had a work stoppage, and none of our employees is
represented under a collective bargaining agreement.
FACILITIES
Our corporate headquarters facility consists of approximately 11,700 square
feet in Denver, Colorado. We lease our corporate headquarters facility pursuant
to a lease agreement that expires in July 2002. We believe that our leased
facilities are adequate to meet our needs for the next 18 months and that
additional facilities in the area are available for lease to meet our future
needs. We also lease approximately 1,800 square feet of office and laboratory
space in Richmond, Virginia. We lease this space under a renewable operating
lease, which expires in October 2004.
LEGAL PROCEEDINGS
We are not currently a party to any legal proceedings.
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MANAGEMENT
EXECUTIVE OFFICERS, KEY EMPLOYEES AND DIRECTORS
The following table sets forth certain information regarding our executive
officers, key employees and directors as of January 24, 2000:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Stephen J. Hoffman, Ph.D., M.D. ..................... 45 President, Chief Executive Officer and
Director
Michael E. Hart...................................... 47 Chief Financial Officer and Senior Vice
President, Operations
Michael J. Gerber, M.D. ............................. 47 Senior Vice President, Clinical
Development and Regulatory Affairs
John O. Hackman...................................... 46 Director of Biometrics and Statistics
Douglas G. Johnson, Ph.D. ........................... 43 Director of Manufacturing
Jean-Francois Liard, M.D. ........................... 56 Senior Director, Research and Clinical
Development
Robert P. Steffen, Ph.D. ............................ 49 Director, Pharmacology and Toxicology
Donald J. Abraham, Ph.D. ............................ 63 Director
Stephen K. Carter, M.D. ............................. 62 Director
Robert E. Curry, Ph.D. .............................. 53 Director
Mark G. Edwards(1)................................... 42 Director
John Freund, M.D.(2)................................. 46 Director
Hingge Hsu, M.D.(2).................................. 42 Director
Marvin E. Jaffe, M.D.(1)............................. 63 Director
</TABLE>
- ---------------
(1) Member of Audit Committee
(2) Member of Compensation Committee
STEPHEN J. HOFFMAN, PH.D., M.D. has served as a member of our Board of
Directors and our President and Chief Executive Officer since 1994. Prior to
that, from inception to 1994, Dr. Hoffman served as a consultant to our investor
group. From 1990 to 1994, he completed a fellowship in clinical oncology and a
residency/ fellowship in dermatology, both at the University of Colorado. Dr.
Hoffman was the scientific founder of Somatogen Inc., where he held the position
of Director of Corporate Research and Vice President of Science and Technology
from 1987 until 1990. Dr. Hoffman received his Ph.D. in bio-organic chemistry
from Northwestern University and his M.D. from the University of Colorado School
of Medicine, where he is currently Clinical Assistant Professor.
MICHAEL E. HART has served as our Chief Financial Officer and Senior Vice
President, Operations since 1999. From 1995 to 1999, Mr. Hart was Vice President
and Chief Financial Officer of NeXstar Pharmaceuticals, Inc., where he also
served as Chairman of the Management Committee from 1998 to 1999. From 1990 to
1995 Mr. Hart was Executive Vice President and Chief Financial Officer of
Vestar, Inc. and served as Chairman, Office of the President from 1994 to 1995.
From 1982 to 1990, Mr. Hart was Treasurer and Director of Finance for Avantek,
Inc. and prior to that held various financial positions with high technology
companies. Mr. Hart received his M.B.A from California State University, Fresno,
and his undergraduate degrees in business economics and geography from the
University of California, Santa Barbara.
MICHAEL J. GERBER, M.D. has served as our Senior Vice President, Clinical
Development and Regulatory Affairs since 1999, and served as our Vice President,
Medical Affairs from 1994 until 1999. From 1991 to 1994, Dr. Gerber was
Executive Director, Clinical Sciences and Medical Affairs at Somatogen Inc.,
where he directed nonclinical and clinical development. Prior to joining
Somatogen, Dr. Gerber had been in private practice since
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1987 and directed the Pulmonary Drug Evaluation Program subsidiary of Pulmonary
Consultants, Inc. Dr. Gerber is board certified in internal, pulmonary and
critical care medicine, and is Clinical Assistant Professor of Medicine at the
University of Colorado Health Sciences Center. Dr. Gerber received his M.D. from
the University of Colorado School of Medicine.
JOHN O. HACKMAN has served as our Director of Biometrics and Statistics
since December 1997. Prior to joining us, Mr. Hackman was Associate Director
Biometrics at Pfizer Central Research where he directed the statistical analysis
and reporting group from 1996 to 1997. He has held various positions in his 17
years experience in the pharmaceutical industry, including positions with Pfizer
Inc., Miles Inc., a division of Bayer Diagnostics, Rhone-Poulenc and CytRx
Corporation. Mr. Hackman received his M.S. from North Carolina State University.
DOUGLAS G. JOHNSON, PH.D. has served as our Director of Manufacturing since
1997. Prior to joining us, Dr. Johnson was with Baxter Healthcare, a unit of
Baxter International, Inc. for over eight years. At Baxter, he was most recently
manager of the Global Solutions Development Group for the Renal Division. He
also worked in the I.V. Systems Division for several years developing
formulations of pre-mixed drugs. Dr. Johnson received his Ph.D. in organic
chemistry from the University of Minnesota. He did postdoctoral work at the
University of Chicago. He worked for three years at Argonne National Laboratory
prior to joining Baxter Healthcare.
JEAN-FRANCOIS LIARD, M.D. has served as our Senior Director, Research and
Clinical Development since 1997. Prior to joining us, Dr. Liard was Director,
Clinical Development at Otsuka America Pharmaceutical from 1993 to 1997. Prior
to that, he was Professor of Physiology at the Medical College of Wisconsin from
1983 to 1993. Dr. Liard received his M.D. from the University of Lausanne School
of Medicine. He subsequently worked in several clinical and basic sciences
departments, including stays at the Cleveland Clinic and the Nephrology Clinic
of Necker Hospital in Paris.
ROBERT P. STEFFEN, PH.D. has served as our Director, Pharmacology and
Toxicology since 1996. From 1995 to 1996, Dr. Steffen was Director, Product
Development at EpiGenesis Pharmaceuticals, Inc. From 1987 to 1995, he served as
Senior Research Pharmacologist and Group Leader at Burroughs Wellcome, Co. From
1982 to 1987, he held various preclinical research positions at Parke-Davis, a
division of Warner-Lambert Company. Dr. Steffen received his Ph.D. in physiology
from the University of South Dakota.
DONALD J. ABRAHAM, PH.D. is a founder of Allos and has served as a member
of our Board of Directors since our inception in 1992. He has been a Professor
and Chairman of the Department of Medicinal Chemistry at Virginia Commonwealth
University since 1988. From 1972 to 1988, he was a Professor and Chairman of the
Department of Medicinal Chemistry at the University of Pittsburgh. Dr. Abraham
received his Ph.D. in organic chemistry from Purdue University. He currently is
Director of the Institute for Structural Biology and Drug Discovery at the
Virginia Commonwealth University.
STEPHEN K. CARTER, M.D. has served as a member of our Board of Directors
and as a drug development consultant to us since 1998. Since 1997, Dr. Carter
has served as Senior Vice President of Sugen Inc., a pharmaceutical company.
From 1995 to 1996, he served as Senior Vice President of Research and
Development at Boehringer Ingelheim Pharmaceuticals, Inc. From 1982 to 1995, Dr.
Carter served as Senior Vice President of Worldwide Clinical Research and
Development for Bristol-Myers Squibb Co. Dr. Carter is a member of the Board of
Directors of Cytogen Corporation. Dr. Carter received his M.D. from the New York
Medical College.
ROBERT E. CURRY, PH.D. has served as a member of our Board of Directors
since 1999. Since 1991, he has served as a General Partner and Vice President of
The Sprout Group, a venture capital affiliate of Donaldson, Lufkin & Jenrette.
From 1984 to 1991, Dr. Curry served in various capacities with Merrill Lynch R&D
Management Inc. and Merrill Lynch Venture Capital Inc., including serving as
President of both organizations from 1990 to 1991. From 1980 to 1984, Dr. Curry
was a Vice President of Becton Dickinson & Co. and from 1976 to 1980 he was
General Manager of Bio-Rad Laboratories, Inc.'s Diagnostics Systems Division.
From 1974 to 1976, he was a professor in the chemistry department at the
University of Delaware and was a consultant for Du Pont Instrument Products. Dr.
Curry is a member of the Board of Directors of numerous organizations, including
Adeza Biomedical Corp., Tripath Imaging, Inc., Instrumentation Metrics, Inc.,
Mycotech, Pathology
41
<PAGE> 43
Partners, Prometheus, Inc. and UroSurge, Inc. Dr. Curry received an M.S. and
Ph.D. in Chemistry from Purdue University.
MARK G. EDWARDS has served as a member of our Board of Directors since
1999. He is Managing Director of Recombinant Capital, Inc., a pharmaceutical and
biotechnology consulting firm he founded in 1988. Since 1999, he has also served
as a General Partner of International Biomedicine Management Partners A.G., a
venture capital fund based in Switzerland. Mr. Edwards received his B.A. and
M.B.A. from Stanford University.
JOHN FREUND, M.D. has served as one of our directors since 1996. Dr. Freund
is Managing Director of Skyline Ventures, which he founded in October 1997.
Through its affiliates, Skyline manages several venture capital limited
partnerships which specialize in early stage health care investments. He was a
Managing Director in the Alternative Assets Group of Chancellor Capital
Management, Inc. (later Chancellor LGT Asset Management, Inc.) from August 1995
to September 1997. From July 1988 through December 1994, Dr. Freund was employed
at Acuson Corporation, where he was Vice President, Corporate Development and
later Executive Vice President. Previously, he was a partner in Morgan Stanley
Venture Partners, a venture capital firm, and also co-founded the healthcare
group in the corporate finance department of Morgan Stanley & Co. Incorporated.
Dr. Freund currently serves as a director of LJL Biosystems, Inc. and several
private companies. Dr. Freund received an M.D. from the Harvard Medical School
and an M.B.A. from Harvard Business School.
HINGGE HSU, M.D. has served as one of our directors since 1999. He has been
a partner with Schroder Venture Life Sciences Advisors, Inc. since 1998. Dr. Hsu
was Principal at Robertson, Stephens & Company from 1996 to 1998. Prior to his
position at Robertson, Stephens & Company, he held various positions in
strategic planning and business development with Chiron Corp. and Gensia, Inc.,
and was affiliated with Lehman Brothers and Montgomery Securities. He obtained
his M.D. from the Yale University School of Medicine and his M.B.A from Harvard
Business School.
MARVIN E. JAFFE, M.D. has served as a member of our Board of Directors and
as a drug development consultant to us since 1994. Since 1994, Dr. Jaffe has
been a self-employed research and development consultant for the pharmaceutical
industry. From 1988 to 1994, Dr. Jaffe was President of the R.W. Johnson
Pharmaceutical Research Institute, a unit of Johnson & Johnson. From 1970 to
1988, Dr. Jaffe was with Merck Sharp & Dohme Research Laboratories, most
recently as Senior Vice President, Medical Affairs. He is a director of several
biopharmaceutical companies including Matrix Pharmaceutical, Inc., Titan
Pharmaceutical, Inc., Immunomedics, Inc., Vanguard Medica Group, plc., and
Celltech Chiroscience, plc. Dr. Jaffe received his M.D. from Jefferson Medical
College.
BOARD COMPOSITION
Our Board of Directors currently has eight members. Under our Amended and
Restated Certificate of Incorporation and Bylaws, which will become effective
upon the closing of this offering, the number of authorized directors will be
determined by resolution of the Board of Directors. After completion of this
offering, our directors will be elected by the stockholders at each annual
meeting of stockholders to serve until the next annual meeting of stockholders
or until their successors are duly elected and qualified. Executive officers are
chosen by, and serve at the discretion of, the Board of Directors.
BOARD COMMITTEES
We have established an audit committee and a compensation committee.
Audit Committee
The audit committee reports to the Board of Directors with regard to the
selection of our independent auditors, the scope of our annual audits, fees to
be paid to the auditors, the performance of our independent auditors, compliance
with our accounting and financial policies, and management's procedures and
policies relative to the adequacy of our internal accounting controls. The
members of the audit committee are Dr. Jaffe and Mr. Edwards.
42
<PAGE> 44
Compensation Committee
The compensation committee reviews and makes recommendations to the Board
of Directors regarding our executive compensation policies and programs and all
forms of compensation to be provided to our senior management. The compensation
committee also administers our stock option plan. The members of the
compensation committee are Dr. Hsu and Dr. Freund.
DIRECTOR COMPENSATION
We do not provide cash compensation to members of our Board of Directors
for serving on our Board of Directors and for attendance at committee meetings.
Members of our Board of Directors are reimbursed for some expenses in connection
with attendance at board and committee meetings.
In January 2000, our Board of Directors adopted a stock option grant
program for our nonemployee directors. This program will be administered under
our 1995 Stock Option Plan. Under this program, each nonemployee director will
automatically receive a nonqualified stock option to purchase shares of
common stock upon initial election or appointment to the Board of Directors
following this offering. One-third of this option will vest on each of the
first, second and third anniversaries of the grant date. Thereafter, beginning
with the annual meeting of stockholders in 2001, each nonemployee director who
continues to serve on the Board of Directors will receive an additional option
to purchase shares of common stock upon reelection or reappointment to
the Board of Directors, which will fully vest on the first anniversary of the
date of grant, assuming continued service as a director during the year after
the grant date. The exercise price for all options granted under the program
will be the fair market value of the common stock on the grant date.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of our executive officers serves as a member of the Board of Directors
or compensation committee of any entity that has one or more of its executive
officers serving as a member of our Board of Directors or compensation
committee.
LIMITATION OF LIABILITY AND INDEMNIFICATION
Our Amended and Restated Certificate of Incorporation, which will be
effective upon the closing of this offering, limits the liability of directors
to the maximum extent permitted by Delaware law. Delaware law provides that
directors of a corporation will not be personally liable for monetary damages
for breach of their fiduciary duties as directors except liability for breach of
their duty of loyalty to the corporation or its stockholders, acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law, unlawful payments of dividends or unlawful stock repurchases or
redemptions, or any transaction from which the director derived an improper
personal benefit. Such limitation of liability does not apply to liabilities
arising under the federal or state securities laws and does not affect the
availability of equitable remedies such as injunctive relief or rescission.
Our Bylaws provide that we shall indemnify our directors, officers,
employees and other agents to the fullest extent permitted by law. We believe
that indemnification under our Bylaws covers at least negligence and gross
negligence on the part of indemnified parties. Our Bylaws also permit us to
secure insurance on behalf of any officer, director, employee or other agent for
any liability arising out of his or her actions in such capacity, regardless of
whether the Bylaws permit such indemnification.
Prior to the closing of this offering, we will have entered into agreements
to indemnify our directors and executive officers, in addition to the
indemnification provided for in our Bylaws. These agreements, among other
things, indemnify our directors and executive officers for certain expenses
including attorneys' fees, judgments, fines and settlement amounts incurred by
any such person in any action or proceeding, services as a director, officer,
employee, agent or fiduciary of us, any subsidiary of us or any other company or
enterprise to which the person provides services at our request. We believe that
these provisions and agreements are necessary to attract and retain qualified
persons as directors and executive officers.
At present, there is no pending litigation or proceeding involving any of
our directors or officers in which indemnification is required or permitted, and
we are not aware of any threatened litigation or proceeding that may result in a
claim for such indemnification.
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<PAGE> 45
EXECUTIVE COMPENSATION
The following table summarizes the compensation paid to or earned during
the year ending December 31, 1999 by our Chief Executive Officer and two other
most highly compensated executive officers whose total salary and bonus exceeded
$100,000 for services rendered to us in all capacities during 1999. The
executive officers listed in the table below are referred to as the Named
Executive Officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
------------------------------
ANNUAL COMPENSATION SECURITIES ALL OTHER
----------------------- UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION SALARY ($) BONUS ($) OPTIONS (#) ($)(2)
- --------------------------- ---------- --------- ----------- ---------------
<S> <C> <C> <C> <C>
Stephen J. Hoffman, Ph.D., M.D. .............. 225,000 37,500 -- 8,400
President and Chief Executive Officer
Michael J. Gerber, M.D. ...................... 238,000 35,000 496,779 7,200
Senior Vice President, Clinical Development
and Regulatory Affairs
Philip Petersen(1)............................ 163,800 26,000 45,000 5,600
Vice President, Commercial Development
</TABLE>
- ---------------
(1) Mr. Petersen resigned as our Vice President, Commercial Development
effective as of December 31, 1999.
(2) Includes for each Named Executive Officer a 401(k) Plan matching
contribution by us of $2,000 and short-term disability insurance premiums
paid by us on behalf of the Named Executive Officers as follows: Dr.
Hoffman: $6,400; Dr. Gerber: $5,200; and Mr. Petersen: $3,600.
OPTION GRANTS IN YEAR ENDED DECEMBER 31, 1999
The following table sets forth information concerning the individual grants
of stock options to each of the Named Executive Officers during the fiscal year
ended December 31, 1999. All options were granted under our stock option plan.
<TABLE>
<CAPTION>
INDIVIDUAL GRANT POTENTIAL REALIZABLE
--------------------------- VALUE AT ASSUMED
PERCENT OF ANNUAL
NUMBER OF TOTAL OPTIONS RATES OF STOCK PRICE
SECURITIES GRANTED TO APPRECIATION FOR
UNDERLYING EMPLOYEES EXERCISE OPTION TERM(2)
OPTIONS IN FISCAL PRICE EXPIRATION ---------------------
NAME GRANTED (#) YEAR(%)(1) ($/SH) DATE 5%($) 10%($)
- ---- ----------- ------------- ----------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Stephen J. Hoffman, Ph.D.,
M.D. ............................ -- -- -- -- -- --
Michael J. Gerber, M.D. ......... 100,000 10.6 .35 3/4/09
50,000 5.3 .35 5/12/09
246,779 26.2 .35 7/1/09
100,000 10.6 .35 8/3/09
Philip Petersen(3)............... 45,000 4.8 .35 8/3/09
</TABLE>
- ---------------
(1) In 1999, we granted options to employees to purchase an aggregate of 943,279
shares of common stock.
(2) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These gains
are based on assumed rates of stock price appreciation of 5% and 10%
compounded annually from the date the respective options were granted to
their expiration date. These assumptions are not intended to forecast future
appreciation of our stock price. The potential realizable value computation
does not take into account federal or state income tax consequences of
option exercises or sales of appreciated stock. The actual gains, if any, on
the stock option exercises will depend on the future performance of the
common stock, the optionee's continued employment through applicable vesting
periods and the date on which the options are exercised and the underlying
shares are sold.
(3) In connection with Mr. Petersen's resignation, 41,725 of these options
expired unvested as of December 31, 1999. The remaining 3,125 options were
exercised by Mr. Petersen on January 11, 2000.
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<PAGE> 46
AGGREGATE OPTION EXERCISES IN 1999
AND 1999 YEAR-END OPTION VALUES
The following table provides certain summary information concerning stock
options held as of December 31, 1999, by each of the Named Executive Officers.
None of the Named Executive Officers exercised stock options in 1999.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
DECEMBER 31, 1999(#) AT DECEMBER 31, 1999($)(1)
--------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Stephen J. Hoffman, Ph.D., M.D. ................. 200,000 200,000
Michael J. Gerber, M.D. ......................... 180,847 315,932
Philip Petersen.................................. 102,500 --
</TABLE>
- ---------------
(1) There was no public trading market for our common stock as of December 31,
1999. Accordingly, the value of unexercised in-the-money options as of that
date was calculated on the basis of an assumed initial public offering price
of $ per share, less the aggregate exercise price of the options.
EMPLOYEE BENEFIT PLANS
1995 Stock Option Plan
Our stock option plan was adopted by the Board of Directors and approved by
the stockholders in 1995. The plan was amended and restated in its
entirety effective May 1997, and amended in January 2000 to increase the number
of shares for which options can be granted under the plan and to permit the
grant of options to non-employee directors. Our stock option plan provides for
the grant of "incentive stock options" intended to qualify under Section 422 of
the Internal Revenue Code and stock options that do not so qualify. The granting
of incentive stock options is subject to the limitations set forth in the stock
option plan. The purpose of the stock option plan is to promote the interests of
us and our stockholders by encouraging and enabling eligible employees and other
persons affiliated with us to acquire our stock. We believe that the granting of
options will stimulate the efforts of these persons, strengthen their desire to
remain with us, provide them with more aligned interests in our success and
assure a closer identification between them and us.
Our stock option plan is administered by the compensation committee of our
Board of Directors, which, subject to the limitations on incentive stock options
discussed above, has authority to determine the optionees, the number of shares
covered by an option, the option exercise price, the term of the option, the
vesting schedule and other terms and conditions. As amended, our stock option
plan provides for the grant of options covering up to 5,650,000 shares of common
stock. If an option expires, terminates, becomes unexercisable or is forfeited
during the term of our stock option plan without having been exercised in full
for any reason, the shares subject to the unexercised portion of such option
will again be available for grant pursuant to our stock option plan.
As of January 24, 2000, options for a total of 2,890,002 shares of common
stock are outstanding under our stock option plan. In addition, 1,454,013 shares
of common stock have been purchased under our stock option plan pursuant to
exercises of options. A total of 1,305,985 shares remain available for issuance
under our stock option plan.
401(k) Plan
We have established a tax qualified employee savings and retirement plan,
or 401(k) Plan. Under the 401(k) Plan, employees may defer up to 15% of their
pre-tax earnings, subject to the Internal Revenue Service's annual contribution
limit. We match contributions equal to 50% of the employee's deferral up to a
maximum of $2,000 per year. The 401(k) Plan permits additional discretionary
matching contributions by us on behalf of all participants in the 401(k) Plan in
such percentage amount as may be determined annually by the Board of Directors
up to a maximum of 10% of each participant's compensation. The 401(k) Plan is
intended to qualify under Section 401 of the Internal Revenue Code so that
contributions by employees or by us to the 401(k) Plan,
45
<PAGE> 47
and income earned on plan contributions, are not taxable to employees until
withdrawn from the 401(k) Plan, and so that our contributions will be deductible
by us when made. The trustee under the 401(k) Plan, at the direction of each
participant, invests the assets of the 401(k) Plan in any number of investment
options.
EMPLOYMENT AGREEMENTS
We do not have employment agreements with any of our executive officers or
employees.
46
<PAGE> 48
CERTAIN TRANSACTIONS
We have issued, in private placement transactions, shares of our preferred
stock as follows: an aggregate of 5,000,000 shares of Series A preferred stock
in 1994 and 1995 at a purchase price of $1.00 per share; 5,032,500 shares of
Series B preferred stock in 1996 at a purchase price of $1.60 per share, and
warrants to purchase an aggregate of 17,500 shares of Series B preferred stock
at an exercise price of $1.60 per share; 15,255,786 shares of Series C preferred
stock in 1998 and 1999 at a purchase price of $1.81 per share, and warrants to
purchase an aggregate of 33,149 shares of Series C preferred stock at an
exercise price of $1.81 per share. Each share of preferred stock is convertible,
without payment of any additional consideration, into one share of common stock,
and all such shares of preferred stock shall be converted into shares of common
stock upon closing of this offering.
The following table summarizes the shares of preferred stock purchased by
our Named Executive Officers, directors and 5% stockholders, and entities
associated with them, in private placement transactions:
<TABLE>
<CAPTION>
SERIES A SERIES B SERIES C
INVESTOR(1) PREFERRED STOCK PREFERRED STOCK PREFERRED STOCK
- ----------- --------------- --------------- ---------------
<S> <C> <C> <C>
Directors and Executive Officers
Stephen J. Hoffman, Ph.D., M.D. ................. -- 3,125 --
Michael J. Gerber, M.D. ......................... -- 3,125 --
Entities Affiliated with Directors
Sprout Capital(2)................................ -- -- 3,812,156
International BM Biomedicine Holdings, Inc.(3)... -- -- 2,762,430
Schroder Ventures International Life Sciences
Fund(4)....................................... -- -- 2,529,604
5% Stockholders
Oak Investment Partners(5)....................... 1,666,668 833,333 1,343,733
Johnson & Johnson Development Corporation........ 1,666,666 833,333 1,045,787
Marquette Venture Partners(6).................... 1,666,666 833,334 414,364
Chancellor Capital Management(7)................. -- 1,562,500 625,001
</TABLE>
- ---------------
(1) See "Principal Stockholders" for more detail on shares held by these
purchasers.
(2) Affiliates of Sprout Capital include DLJ Capital Corp., DLJ ESC II, L.P.,
Sprout Capital VIII, L.P., Sprout Venture Capital, L.P., Sprout Capital VII,
L.P., Sprout CEO Fund, L.P. Robert Curry, one of our directors, is a partner
of The Sprout Group, an affiliate of Sprout Capital.
(3) International Biomedicine Management Partners AG has a management contract
with International BM Biomedicine Holdings, Inc. Mark Edwards, one of our
directors, is a partner of International Biomedicine Management Partners AG.
(4) Affiliates of Schroder Ventures International Life Sciences Fund include
Schroder Ventures International Life Sciences Fund L.P. 1, Schroder Ventures
International Life Sciences Fund L.P. 2, Schroder Ventures International
Life Sciences Fund Trust, and Schroder Ventures International Life Sciences
Fund Co-Investment Scheme. Hingge Hsu, one of our directors, is a partner of
Schroder Ventures Life Sciences Advisors, Inc., an affiliate of Schroder
Ventures International Life Sciences Fund.
(5) Affiliates of Oak Investment Partners include Oak Investment Partners V,
Limited Partnership and Oak V Affiliates Fund, Limited Partnership. Oak
Associates V, L.L.C. is the general partner of Oak Investment of Oak
Investment Partners V, Limited Partnership. Oak V Affiliates is the general
partner of Oak V Affiliates Fund, Limited Partnership.
(6) Affiliates of Marquette Venture Partners include Marquette Venture Partners
II, L.P. and MVP II Affiliates Fund, L.P.
(7) Affiliates of Chancellor Capital Management, now known as INVESCO Private
Capital, Inc., include Citiventure Private Participations III Ltd. and KME
Venture III, L.P.
We have entered into a stockholders agreement with each of the purchasers
of preferred stock shown above. This agreement provides that these and other
stockholders will have registration rights with respect to their shares of
common stock issuable upon conversion of their preferred stock following the
offerings.
Dr. Donald Abraham and Mr. James Farinholt, our founders, purchased
1,440,000 and 160,000 shares, respectively, of our common stock for nominal
consideration on January 14, 1994. Also in January 1994, we entered into a
license agreement with the Center for Innovative Technology, or CIT, under which
CIT granted to us an exclusive, worldwide license to practice, develop and use
the technology and licensed patent rights to develop and market our products. In
exchange for the license agreement, we paid CIT $50,000 in cash and issued
47
<PAGE> 49
400,000 shares of our common stock. Under the license agreement with CIT, we
will be required to pay a quarterly royalty based on percentages, as defined in
the agreement, of either net revenues arising from sales of products produced in
Virginia or net revenues from products produced outside of Virginia. The license
agreement with CIT will remain in effect until the last United States patent
expires, which is currently October 2016.
In 1996, we entered into several sponsored research agreements with
Virginia Commonwealth University, or VCU, pursuant to which we fund certain
research activities in Dr. Abraham's laboratories. A portion of this funding is
also used to pay part of Dr. Abraham's salary. These agreements are for one-year
terms, and are renewable each year at our option for subsequent one-year terms.
In 1999, we paid VCU $498,335 under these agreements. Since 1996, we have paid
VCU an aggregate of $1,840,202 under all of these agreements. We intend to
continue renewing these agreements with VCU for the foreseeable future.
In March 1996, we received recourse notes from two of our officers, Dr.
Hoffman, our President and Chief Executive Officer, and Dr. Gerber, our Senior
Vice President for Clinical Development and Regulatory Affairs. Dr. Hoffman
issued us a note in the aggregate principal amount of $64,000 upon exercise of
options to acquire 640,000 shares of common stock. Dr. Gerber issued us a note
in the aggregate principal amount of $26,000 upon exercise of options to acquire
260,000 shares of common stock. The notes bear interest at 8% annually with
interest and principal originally due on March 8, 1998. In January 1998, these
notes were extended two years. In December 1998, we received additional notes
from each of Dr. Hoffman and Dr. Gerber in the principal amounts of $9,687 and
$40,000, respectively, upon exercise of options to acquire 38,750 shares of
common stock and 160,000 shares of common stock, respectively. These notes bear
interest at 6% annually with interest and principal due December 31, 1999.
We believe that the foregoing transactions were in our best interests. As a
matter of policy, these transactions were, and all future transactions between
us and any of our officers, directors or principal stockholders will be,
approved by a majority of the independent and disinterested members of the Board
of Directors (or committee thereof), will be on terms no less favorable to us
than could be obtained from unaffiliated third parties and will be in connection
with bona fide business purposes of ours.
48
<PAGE> 50
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of our common stock as of December 31, 1999, and as adjusted to
reflect the sale of common stock offered hereby for:
- each person who is known by us to beneficially own more than 5% of our
common stock;
- our Chief Executive Officer and each of our Named Executive Officers;
- each of our directors; and
- all of our directors and executive officers as a group.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and includes voting and investment power with
respect to the securities. Except as indicated by footnote, and subject to
applicable community property laws, the persons and entities named in the table
below have sole voting and sole investment power with respect to the shares set
forth opposite such person's or entity's name.
Subject to a reverse split of the stock to be effected prior to the closing
of this offering, the percentage of beneficial ownership before the offering is
based on 28,549,799 shares, consisting of 3,261,513 shares of common stock
outstanding as of December 31, 1999, and 25,288,286 shares issuable upon the
conversion of the preferred stock. The percentage of beneficial ownership after
the offering is based on shares, including the shares to be sold in
this offering. Shares of common stock subject to options or warrants currently
exercisable or exercisable within 60 days of December 31, 1999 are deemed
outstanding for purposes of computing the percentage ownership of the person
holding such options or warrants, but are not deemed outstanding for purposes of
computing the percentage ownership of any other person. The post-offering
ownership percentages in the table below do not take into account any exercise
of the underwriters' over-allotment option. Unless otherwise indicated, the
address for each of the individuals listed in the table is c/o Allos
Therapeutics, Inc., 7000 North Broadway, Suite 400, Denver, CO 80221.
<TABLE>
<CAPTION>
PERCENT BENEFICIALLY
OWNED
SHARES -----------------------
BENEFICIALLY BEFORE THE AFTER THE
BENEFICIAL OWNER OWNED OFFERING OFFERING
- ---------------- ------------ ---------- ---------
<S> <C> <C> <C>
Entities affiliated with Oak Investment Partners(1)....... 3,843,734 13.5%
One Gorham Island
Westport, CT 06880
Entities affiliated with Sprout Capital(2)................ 3,812,156 13.4%
3000 Sand Hill Road
Building 3, Suite 170
Menlo Park, CA 94025
Robert Curry(3)........................................... 3,812,156 13.4%
Johnson & Johnson Development Corporation................. 3,545,786 12.4%
One Johnson & Johnson Plaza
New Brunswick, NJ 08933
Entities affiliated with Marquette Venture Partners(4).... 2,914,364 10.2%
520 Lake Cook Road, Suite 450
Deerfield, IL 60015
International BM Biomedicine Holdings, Inc. .............. 2,762,430 9.7%
Aeschenplatz 7, P.O. Box 1336
Basel, CH-4010 Switzerland
Mark Edwards(5)........................................... 2,762,430 9.7%
Entities affiliated with Schroder Ventures International
Life Sciences Fund(6)................................... 2,529,604 8.9%
22 Church Street
Hamilton HM 11 Bermuda
Hingge Hsu(7)............................................. 2,529,604 8.9%
</TABLE>
49
<PAGE> 51
<TABLE>
<CAPTION>
PERCENT BENEFICIALLY
OWNED
SHARES -----------------------
BENEFICIALLY BEFORE THE AFTER THE
BENEFICIAL OWNER OWNED OFFERING OFFERING
- ---------------- ------------ ---------- ---------
<S> <C> <C> <C>
Entities affiliated with INVESCO Private Capital,
Inc.(8)................................................. 2,187,501 7.7%
1166 Avenue of the Americas, 27th Floor
New York, NY 10036
Donald H. Abraham(9)...................................... 1,510,000 5.3%
Stephen J. Hoffman(10).................................... 919,367 3.2%
Michael J. Gerber(11)..................................... 603,972 2.1%
Philip Peterson(12)....................................... 102,500 *
Marvin E. Jaffe(13)....................................... 60,000 *
Stephen K. Carter(14)..................................... 26,667 *
John Freund(15)........................................... 20,834 *
All directors and executive officers as a group (10
persons) (16)........................................... 12,245,028 42.9%
</TABLE>
- ---------------
* Less than one percent (1%) outstanding shares.
(1) Includes 3,759,174 shares held by Oak Investment Partners V, L.P. and
84,560 shares held by Oak V Affiliates Fund, L.P. Oak Associates V, L.L.C.
is the general partner of Oak Investment Partners V, L.P. Oak V Affiliates
is the general partner of Oak V Affiliates Fund, L.P.
(2) Includes 50,812 shares held by DLJ Capital Corp., 294,576 shares held DLJ
ESC II, L.P., 1,894,532 shares held by Sprout Capital VIII, L.P., 113,672
shares held by Sprout Venture Capital, L.P., 1,438,944 shares held by
Sprout Capital VII, L.P., and 19,620 shares held by Sprout CEO Fund, L.P.
(3) Includes 50,812 shares held by DLJ Capital Corp., 294,576 shares held DLJ
ESC II, L.P., 1,894,532 shares held by Sprout Capital VIII, L.P., 113,672
shares held by Sprout Venture Capital, L.P., 1,438,944 shares held by
Sprout Capital VII, L.P., and 19,620 shares held by Sprout CEO Fund, L.P.
Robert Curry disclaims beneficial ownership of these shares.
(4) Includes 2,833,409 shares held by Marquette Venture Partners II, L.P. and
80,955 shares held by MVP II Affiliates Fund, L.P.
(5) Includes 2,762,430 shares held by International BM Biomedicine Holdings,
Inc. International Biomedicine Management Partners AG has a management
contract with International BM Biomedicine Holdings, Inc. Mark Edwards is a
partner of International Biomedicine Management Partners AG. Mr. Edwards
disclaims beneficial ownership of these shares.
(6) Includes 1,598,857 shares held by Schroder Ventures International Life
Sciences Fund L.P. 1, 355,301 shares held by Schroder Ventures
International Life Sciences Fund L.P. 2, 562,799 shares held by Schroder
Ventures International Life Sciences Fund Trust, and 12,647 shares held by
Schroder Ventures International Life Sciences Fund Co-Investment Scheme.
Hingge Hsu is a partner of Schroder Ventures International Life Sciences
Advisors, Inc., an affiliate of Schroder Ventures International Life
Sciences Fund.
(7) Includes 1,598,857 shares held by Schroder Ventures International Life
Sciences Fund L.P. 1, 355,301 shares held by Schroder Ventures
International Life Sciences Fund L.P. 2, 562,799 shares held by Schroder
Ventures International Life Sciences Fund Trust, and 12,647 shares held by
Schroder Ventures International Life Sciences Fund Co-Investment Scheme.
Hingge Hsu is a partner of Schroder Venture Life Sciences Advisors, Inc.,
an affiliate of Schroder Ventures International Life Sciences Fund. Dr. Hsu
disclaims beneficial ownership of these shares.
(8) Includes 2,078,162 shares held by Citiventure Private Participations III
Limited and 109,339 held by KME Venture III, L.P. INVESCO Private Capital,
Inc. is the investment manager for Citiventure Private Participations III
Limited and KME Venture III, L.P. INVESCO Private Capital, Inc. disclaims
beneficial ownership of these shares.
(9) Includes 300,000 shares held by Nancy W. Abraham, Trustee U/A 12-14-94. Ms.
Abraham is the spouse of Donald Abraham. Mr. Abraham is not a trustee and
disclaims beneficial ownership of the shares.
(10) Includes 200,000 shares of common stock issuable upon exercise of options.
(11) Includes 196,271 shares of common stock issuable upon exercise of options.
(12) Includes 102,500 shares of common stock issuable upon exercise of options.
(13) Includes 60,000 shares of common stock issuable upon exercise of options.
(14) Includes 26,667 shares of common stock issuable upon exercise of options.
(15) Includes 20,834 shares of common stock issuable upon exercise of options.
(16) Includes shares described in the notes above, as applicable to our
directors and current executive officers.
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<PAGE> 52
DESCRIPTION OF CAPITAL STOCK
GENERAL
Our Amended and Restated Certificate of Incorporation, which will become
effective upon the closing of this offering, authorizes the issuance of up to
million shares of common stock, par value $0.001 per share, and
million shares of preferred stock, par value $0.001 per share, the rights and
preferences of which may be established from time to time by our Board of
Directors. As of January 24, 2000, 3,217,362 shares of common stock were issued
and outstanding and 25,288,286 shares of preferred stock convertible into
25,288,286 shares of common stock upon the completion of this offering were
issued and outstanding. As of January 24, 2000, we had 23 common stockholders of
record.
Immediately after the closing of this offering, we will have
shares of common stock outstanding, assuming no exercise of options to acquire
additional shares of common stock or warrants to purchase
additional shares of common stock that are outstanding as of the date of this
prospectus.
The description set forth below gives effect to the filing of the Amended
and Restated Certificate of Incorporation and the adoption of the Amended and
Restated Bylaws. The following summary is qualified in its entirety by reference
to our Amended and Restated Certificate of Incorporation and Bylaws, copies of
which are filed as exhibits to the registration statement of which this
prospectus is a part.
COMMON STOCK
Each holder of common stock is entitled to one vote for each share on all
matters to be voted upon by the stockholders and there are no cumulative voting
rights. Subject to preferences to which holders of preferred stock issued after
the sale of the common stock offered hereby may be entitled, holders of common
stock are entitled to receive ratably such dividends, if any, as may be declared
from time to time by the Board of Directors out of funds legally available
therefor. See "Dividend Policy." In the event of a liquidation, dissolution or
winding up of us, holders of common stock would be entitled to share in our
assets remaining after the payment of liabilities and the satisfaction of any
liquidation preference granted the holders of any outstanding shares of
preferred stock. Holders of common stock have no preemptive or conversion rights
or other subscription rights and there are no redemption or sinking fund
provisions applicable to the common stock. All outstanding shares of common
stock are, and the shares of common stock offered by us in this offering, when
issued and paid for, will be, fully paid and nonassessable. The rights,
preferences and privileges of the holders of common stock are subject to, and
may be adversely affected by, the rights of the holders of shares of any series
of preferred stock, which we may designate in the future.
PREFERRED STOCK
Upon the closing of this offering, our Board of Directors will be
authorized, subject to any limitations prescribed by law, without stockholder
approval, to issue from time to time up to an aggregate of million shares
of preferred stock, in one or more series, each of such series to have such
rights and preferences, including voting rights, dividend rights, conversion
rights, redemption privileges and liquidation preferences as shall be determined
by the Board of Directors. The rights of the holders of common stock will be
subject to, and may be adversely affected by, the rights of holders of any
preferred stock that may be issued in the future. Issuance of preferred stock,
while providing desirable flexibility in connection with possible acquisitions
and other corporate purposes, could have the effect of making it more difficult
for a third party to acquire, or of discouraging a third party from attempting
to acquire, a majority of the outstanding voting stock of us. We have no present
plans to issue any shares of preferred stock.
WARRANTS
We have issued and outstanding warrants to purchase an aggregate of 23,024
shares of our capital stock, excluding warrants which will expire without
exercise prior to consummation of this offering. In April 1996, we issued to
Comdisco, Inc. a warrant to purchase 17,500 shares of Series B preferred stock
at an exercise price of $1.60 per share, which is exercisable until the later of
April 15, 2006, or five years from the effective date of an
51
<PAGE> 53
initial public offering. In May 1998, we issued to Comdisco, Inc. a warrant to
purchase 5,524 shares of Series C preferred stock at an exercise price of $1.81
per share, which is exercisable until the later of May 5, 2008, or five years
from the effective date of an initial public offering.
REGISTRATION RIGHTS
Demand Registration
According to the terms of a stockholders rights agreement dated as of
October 4, 1999, beginning 180 days after the closing of this offering, the
holders of 25,288,286 shares of common stock will have the right to require us
to register their shares with the Securities and Exchange Commission so that
those shares may be resold to the public. To demand such registration, holders
who together hold an aggregate of at least 40% of the shares having such
registration rights must request that the registration statement register shares
for an aggregate offering price of at least $5,000,000, net of underwriting
discounts and commissions. We are not required to effect more than two demand
registrations. We may defer the filing of a demand registration for a period of
up to 120 days once in any twelve-month period.
Piggyback Registration
In addition, if we register in an underwritten offering any securities for
public sale, other than a registration relating solely to employee benefit
plans, a registration relating solely to a Rule 145 transaction, or any
registration on any registration form that does not permit secondary sales,
holders of demand registration rights will have the right to include their
shares in the registration statement.
Form S-3 Registration
At any time after we become eligible to file a registration statement on
Form S-3 or any comparable or successor form, holders of shares of common stock
having demand and piggyback registration rights may require us to file up to
four Form S-3 registrations. We only have to file one Form S-3 registration
statement in any six-month period, and the aggregate offering proceeds, net of
underwriting discounts and commissions, must be at least $1,000,000. We may
defer one request in any twelve-month period for a period of up to 120 days.
The registration rights are subject to conditions and limitations,
including the right of the underwriters of an offering to limit the number of
shares of common stock to be included in the registration. We are generally
required to bear the expenses of all registrations, except underwriting
discounts and commissions. However, we will not pay for any expenses of any
demand registration if the request is subsequently withdrawn by the holders
requesting such registration. The stockholders rights agreement also contains
our commitment to indemnify the holders of registration rights for losses
attributable to statements or omissions by us incurred in connection with
registrations under the agreement. The registration rights terminate five years
from the closing of this offering.
EFFECT OF CERTAIN PROVISIONS OF OUR CERTIFICATE OF INCORPORATION AND BYLAWS,
AND THE DELAWARE ANTI-TAKEOVER LAW
Certain provisions of our Amended and Restated Certificate of Incorporation
and Bylaws, which will become effective upon the closing of this offering, may
have the effect of making it more difficult for a third party to acquire, or of
discouraging a third party from attempting to acquire, control of us. Such
provisions could limit the price that certain investors might be willing to pay
in the future for shares of our common stock. Our Bylaws eliminate the right of
stockholders to call special meetings of stockholders or to act by written
consent without a meeting and require advance notice for stockholder proposals
and director nominations, which may preclude stockholders from bringing matters
before an annual meeting of stockholders or from making nominations for
directors at an annual meeting of stockholders. The authorization of
undesignated preferred stock makes it possible for the Board of Directors to
issue preferred stock with voting or other rights or preferences that could
impede the success of any attempt to change control of us. These and other
provisions may have the effect of deferring hostile takeovers or delaying
changes in control or management of us. The amendment of any of these provisions
would require approval by holders of at least 66 2/3% of the outstanding common
stock. In addition, we are subject to Section 203 of the Delaware General
Corporation Law which, subject to certain exceptions,
52
<PAGE> 54
prohibits a Delaware corporation from engaging in any business combination with
any interested stockholder, unless:
- prior to such date, the Board of Directors of the corporation approved
either the business combination or the transaction which resulted in the
stockholder becoming an interested stockholder;
- upon consummation of the transaction which resulted in the stockholder
becoming an interested stockholder, the interested stockholder owned at
least 85% of the voting stock of the corporation outstanding at the time
the transaction commenced, excluding for purposes of determining the
number of shares outstanding (a) shares owned by persons who are
directors and also officers, and (b) shares owned by employee stock plans
in which employee participants do not have the right to determine
confidentially whether shares held subject to the plan will be tendered
in a tender or exchange offer; or
- on or subsequent to such date, the business combination is approved by
the Board of Directors and authorized at an annual or special meeting of
stockholders, and not by written consent, by the affirmative vote of at
least 66 2/3% of the outstanding voting stock which is not owned by the
interested stockholder.
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for our common stock is ChaseMellon
Shareholder Services LLC.
53
<PAGE> 55
SHARES ELIGIBLE FOR FUTURE SALE
Prior to this offering, there has been no market for our common stock, and
we cannot assure you that a significant public market for the common stock will
develop or be sustained after this offering. Future sales of substantial amounts
of common stock, including shares issued upon exercise of outstanding options
and warrants, in the public market following this offering could adversely
affect market prices prevailing from time to time and could impair our ability
to raise capital through the sale of our equity securities. As described below,
shares currently outstanding will be available for sale immediately
after this offering.
SALES OF RESTRICTED SECURITIES
Upon completion of this offering, we will have outstanding shares of
common stock, based upon shares outstanding as of December 31, 1999, assuming no
exercise of the underwriters' over-allotment option and no exercise of
outstanding options or warrants that do not expire prior to completion of this
offering. Of these shares, the shares sold in this offering will be freely
tradable without restriction under the Securities Act, except for any shares
purchased by our "affiliates" as defined in Rule 144 under the Securities Act.
The remaining shares of common stock held by existing stockholders are
"restricted shares" as defined in Rule 144. All of these restricted shares are
subject to lock-up agreements providing that the stockholder will not offer to
sell, contract to sell or otherwise sell, dispose of, loan, pledge or grant any
rights with respect to any shares of common stock owned as of the date of this
prospectus or acquired directly from us by the stockholder or with respect to
which they have or may acquire the power of disposition for a period of 180 days
after the date of this prospectus without the prior written consent of SG Cowen
Securities Corporation. As a result of these lock-up agreements, notwithstanding
possible earlier eligibility for sale under the provisions of Rules 144, 144(k)
and 701, none of these shares will be resellable until 181 days after the date
of this prospectus. SG Cowen Securities Corporation may, in its sole discretion,
and at any time without notice, release all or any portion of the restricted
shares subject to lock-up agreements.
Beginning 181 days after the date of this prospectus, approximately
restricted shares will be eligible for sale in the public market. All
of these shares are subject to volume limitations under Rule 144, except
shares eligible for sale under Rule 144(k) and shares eligible for sale
under Rule 701, subject in some cases to repurchase rights of us.
In addition, as of January 24, 2000, there were outstanding warrants to
purchase 23,024 shares of preferred stock convertible into a like number of
shares of common stock, excluding warrants which will expire without exercise
prior to consummation of this offering.
Rule 144
In general, under Rule 144, as currently in effect, beginning 90 days after
the date of this prospectus, a person who has beneficially owned restricted
shares for at least one year, including the holding period of any prior owner
except an affiliate, would be entitled to sell within any three-month period a
number of shares that does not exceed the greater of:
- 1.0% of the number of shares of common stock then outstanding, which will
equal approximately shares immediately after this offering; or
- the average weekly trading volume of the common stock during the four
calendar weeks preceding the filing of a Form 144 with respect to such
sale.
Sales under Rule 144 are also subject to certain manner of sale provisions
and notice requirements and to the availability of current public information
about us. Under Rule 144(k), a person who is not deemed to have been an
affiliate of us at any time during the three months preceding a sale, and who
has beneficially owned the shares proposed to be sold for at least two years,
including the holding period of any prior owner except an affiliate, is entitled
to sell those shares without complying with the manner of sale, public
information, volume limitation or notice provisions of Rule 144.
54
<PAGE> 56
Rule 701
Rule 701, as currently in effect, permits resales of shares in reliance
upon Rule 144 but without compliance with certain restrictions of Rule 144. Any
employee, officer or director of or consultant to us who purchased shares
pursuant to a written compensatory plan or contract may be entitled to rely on
the resale provisions of Rule 701. Rule 701 permits affiliates to sell their
Rule 701 shares under Rule 144 without complying with the holding period
requirements of Rule 144. Rule 701 further provides that non-affiliates may sell
their Rule 701 shares in reliance on Rule 144 without having to comply with the
holding period, public information, volume limitation or notice provisions of
Rule 144. All holders of Rule 701 shares are required to wait until 90 days
after the date of this prospectus before selling their Rule 701 shares. However,
certain Rule 701 shares are subject to lock-up agreements and will only become
eligible for sale at the earlier of the expiration of the 180-day lock-up
agreements or the receipt of the written consent of SG Cowen Securities
Corporation more than 90 days after the date of this prospectus.
After this offering, we intend to file a registration statement on Form S-8
registering shares of common stock subject to outstanding options or reserved
for future issuance under our stock option plan. As of January 24, 2000, options
to purchase a total of 2,890,002 shares were outstanding and 1,305,985 shares
were reserved for future issuance under our stock plans. Any shares of common
stock issued upon exercise of outstanding vested options or issued pursuant to
our employee stock purchase plan, other than common stock issued to our
affiliates or subject to lock-up agreements, will be available for immediate
resale in the open market following the effectiveness of such registration
statement.
LOCK-UP AGREEMENTS
We, all of our executive officers and directors, all principal stockholders
and other existing stockholders who, upon the closing of this offering, will
beneficially own an aggregate of outstanding shares of common stock,
together with holders of options to purchase shares of common stock and
holders of warrants to purchase shares of common stock, have agreed that
for a period of 180 days following the date of this prospectus, without the
prior written consent of SG Cowen Securities Corporation, they will not:
- directly or indirectly, offer, sell, assign, transfer, encumber, pledge,
contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to
purchase, lend or otherwise dispose of, other than by operation of law,
any shares of common stock or any securities convertible into or
exercisable or exchangeable for common stock (including, without
limitation, common stock which may be deemed to be beneficially owned in
accordance with the rules and regulations promulgated under the
Securities Act); or
- enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of common
stock whether any such transaction described above is to be settled by
delivery of common stock or such other securities, in cash or otherwise.
55
<PAGE> 57
UNDERWRITING
Subject to the terms and conditions of the underwriting agreement dated
, 2000, the underwriters named below, through their representatives
SG Cowen Securities Corporation, Prudential Securities Incorporated and U.S.
Bancorp Piper Jaffray Inc., have severally agreed to purchase from us the number
of shares of common stock set forth opposite their names at the public offering
price less the underwriting discounts and commissions set forth on the cover
page of this prospectus.
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
- ------------ ---------
<S> <C>
SG Cowen Securities Corporation.............................
Prudential Securities Incorporated..........................
U.S. Bancorp Piper Jaffray Inc..............................
--------
Total.............................................
========
</TABLE>
The underwriting agreement provides that the obligations of the
underwriters are conditional and may be terminated at their discretion based on
their assessment of the state of the financial markets. The obligations of the
underwriters may also be terminated upon the occurrence of other events
specified in the underwriting agreement. The underwriters are severally
committed to purchase all of the common stock offered by us if any shares are
purchased, other than those covered by the over-allotment option described
below.
At our request, the underwriters have reserved up to 5% of the shares of
common stock for sale at the initial public offering price to our employees,
friends and family members of our employees and employees of companies with
which we do business. The number of shares available for sale to the general
public will be reduced to the extent that any reserved shares are purchased. Any
reserved shares which are not so purchased will be offered by the underwriters
to the general public on the same basis as the shares sold hereby.
The underwriters propose to offer the common stock directly to the public
at the public offering price set forth on the cover page of this prospectus. The
underwriters may offer the common stock to securities dealers at that price less
a concession not in excess of $ per share. Securities dealers may reallow a
concession not in excess of $ per share to other dealers. After the shares
of the common stock are released for sale to the public, the underwriters may
vary the offering price and other selling terms from time to time.
We have granted to the underwriters an option to purchase up to an
aggregate of additional shares of common stock at the public offering
price set forth on the cover of this prospectus to cover over-allotments, if
any. The option is exercisable for a period of 30 days. If the underwriters
exercise the over-allotment option, the underwriters have severally agreed to
purchase shares in approximately the same proportion as shown in the tables
above.
The following table shows the per share and total public offering price,
the underwriting discount to be paid by us to the underwriters and the proceeds
from the sale of shares to the underwriters before our expenses. This
information is presented assuming either no exercise or full exercise by the
underwriters of their over-allotment option.
<TABLE>
<CAPTION>
WITHOUT WITH
PER SHARE OPTION OPTION
--------- -------- --------
<S> <C> <C> <C>
Public offering price...............................
Underwriting discount...............................
Proceeds, before expenses, to Allos.................
</TABLE>
We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act, and to contribute to payments
that the underwriters may be required to make in respect of those liabilities.
We, our directors and executive officers, all principal stockholders and
other existing stockholders who hold an aggregate of shares, together with
holders of options to purchase shares of common stock and
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<PAGE> 58
holders of warrants to purchase shares of common stock, have agreed that
for a period of 180 days following the date of this prospectus, without the
prior written consent of SG Cowen Securities Corporation, not to directly or
indirectly, offer, sell, assign, transfer, pledge, contract to sell, or
otherwise dispose of, other than by operation of law, any shares of common stock
or any securities convertible into or exercisable or exchangeable for common
stock, including, without limitation, common stock which may be deemed to be
beneficially owned in accordance with rules and regulations promulgated under
the Securities Act.
The representatives may engage in over-allotment, stabilizing transactions,
syndicate covering transactions and penalty bids in accordance with Regulation M
under the Securities Exchange Act of 1934. Over-allotment involves syndicate
sales in excess of the offering size, which creates a syndicate short position.
Stabilizing transactions permit bids to purchase the underlying security so long
as the stabilizing bids do not exceed a specified maximum. Syndicate covering
transactions involve purchases of the common stock in the open market after the
distribution has been completed in order to cover syndicate short positions.
Penalty bids permit the representatives to reclaim a selling concession from a
syndicate member when the common stock originally sold by such syndicate member
is purchased in a syndicate covering transaction to cover syndicate short
positions. These stabilizing transactions, syndicate covering transactions and
penalty bids may cause the price of the common stock to be higher than it would
otherwise be in the absence of these transactions. These transactions may be
effected on the Nasdaq National Market or otherwise and, if commenced, may be
discontinued at any time.
The underwriters have advised us that they do not intend to confirm sales
in excess of 5% of the common stock offered hereby to any account over which
they exercise discretionary authority.
Prior to this offering, there has been no public market for the common
stock. Consequently, the initial public offering price range will be determined
by negotiations between us and the underwriters. Among the factors considered in
these negotiations will be prevailing market conditions, the market
capitalizations and the stages of development of other companies that we and the
underwriters believe to be comparable to us, estimates of our business
potential, our results of operation in recent periods, the present state of our
development and other factors deemed relevant.
One of the underwriters, Prudential Securities, also markets securities
online through its PrudentialSecurities.com division. Clients of Prudential
Advisor(SM), a full service brokerage firm program, may view offering terms and
a prospectus online and place orders through their financial advisors. Other
than the prospectus in electronic format, the information on this Web site is
not part of this prospectus or the registration statement of which this
prospectus forms a part and has not been approved and/or endorsed by us or any
underwriter in such capacity and should not be relied on by prospective
investors.
We estimate that our out-of-pocket expenses for this offering, not
including the underwriting discount, will be approximately $ .
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<PAGE> 59
LEGAL MATTERS
The validity of the shares of common stock offered hereby will be passed
upon for us by Perkins Coie LLP, Denver, Colorado. Certain legal matters in
connection with this offering will be passed upon for the underwriters by Brown
& Wood LLP, New York, New York.
EXPERTS
The financial statements of Allos Therapeutics, Inc. as of December 31,
1998 and 1999, and for each of the three years in the period ended December 31,
1999, and the cumulative period from September 1, 1992 (date of inception)
through December 31, 1999, included in this prospectus and elsewhere in this
registration statement have been so included in reliance upon the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
such firm as experts in auditing and accounting.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the SEC a registration statement on Form S-1 under the
Securities Act, and the rules and regulations promulgated thereunder, with
respect to the shares of common stock offered buy this prospectus. This
prospectus, which constitutes part of the registration statement, does not
contain all of the information set forth in the registration statement and the
exhibits thereto. Statements contained in this prospectus as to the contents of
any contract or other document that is filed as an exhibit to the registration
statement are not necessarily complete and each such statement is qualified in
all respects by reference to the full text of such contract or document.
You may read and copy all or any portion of the registration statement and
the exhibits at the SEC's public reference room at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the regional offices of the SEC located at Seven
World Trade Center, Suite 1300, New York, New York 10048 and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. You can request
copies of these documents, upon payment of a duplication fee, by writing to the
SEC. Please call the SEC at 1-800-SEC-0330 for further information on the
operation of the SEC's public reference rooms. Also, the SEC maintains a World
Wide Web site on the Internet at http://www.sec.gov that contains reports, proxy
and information statements and other information regarding registrants that file
electronically with the SEC.
As a result of this offering, we will become subject to the information and
periodic reporting requirements of the Securities Exchange Act of 1934 and, in
accordance therewith, will file periodic reports, proxy and information
statements and other information with the SEC. These periodic reports, proxy and
information statements and other information will be available for inspection
and copying at the public reference facilities, regional offices and SEC's Web
site referred to above.
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<PAGE> 60
ALLOS THERAPEUTICS, INC.
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Accountants........................... F-2
Balance Sheet as of December 31, 1998 and 1999.............. F-3
Statement of Operations..................................... F-4
Statement of Changes in Stockholders' Equity (Deficit)...... F-5
Statement of Cash Flows..................................... F-6
Notes to Financial Statements............................... F-7
</TABLE>
F-1
<PAGE> 61
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and
Stockholders of Allos Therapeutics, Inc.
In our opinion, the accompanying balance sheets and the related statements
of operations, of stockholders' equity (deficit) and of cash flows present
fairly, in all material respects, the financial position of Allos Therapeutics,
Inc. (a company in the development stage) at December 31, 1998 and 1999, and the
results of its operations and its cash flows for each of the three years in the
period ended December 31, 1999, and the cumulative period from September 1, 1992
(date of inception) through December 31, 1999, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards in the United States which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Denver, Colorado
January 26, 2000
F-2
<PAGE> 62
ALLOS THERAPEUTICS, INC.
BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
PRO FORMA
STOCKHOLDERS'
DECEMBER 31, EQUITY AT
--------------------------- DECEMBER 31,
1998 1999 1999
------------ ------------ -------------
(UNAUDITED)
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents................................. $ 1,656,546 $ 2,597,884
Short-term investments.................................... 7,924,988 6,877,303
Prepaid expenses -- research.............................. 462,483 401,117
Prepaid expenses -- other................................. 58,801 45,311
Other assets.............................................. 5,018 7,898
------------ ------------ ------------
Total current assets............................... 10,107,836 9,929,513
------------ ------------ ------------
Property and equipment (net of accumulated depreciation of
$175,814 and $322,227, respectively)...................... 336,767 230,360
Other assets................................................ 35,459 45,641
------------ ------------ ------------
Total assets....................................... $ 10,480,062 $ 10,205,514
============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable -- related parties....................... $ 117,016 $ 8,087
Accounts payable -- trade................................. 110,646 65,123
Accrued expenses -- research.............................. 1,505,610 768,592
Accrued compensation and employee benefits................ 110,715 224,379
Current portion of capital lease obligations.............. 117,946 79,042
------------ ------------ ------------
Total current liabilities.......................... 1,961,933 1,145,223
Long-term portion of capital lease obligations.............. 146,717 69,320
------------ ------------ ------------
Total liabilities.................................. 2,108,650 1,214,543
Commitments (Notes 6 and 7)
Stockholders' equity:
Convertible preferred stock, Series A: $0.001 par value,
5,000,000 shares authorized, issued and outstanding at
December 31, 1998 and 1999 (liquidation value:
$6,368,107 and $6,718,107 at December 31, 1998 and 1999,
respectively)........................................... 5,000 5,000 --
Convertible preferred stock, Series B: $0.001 par value,
5,050,000 shares authorized; 5,032,500 shares issued and
outstanding at December 31, 1998 and 1999 (liquidation
value: $9,627,621 and $10,191,261 at December 31, 1998
and 1999, respectively)................................. 5,033 5,033 --
Convertible preferred stock, Series C: $0.001 par value,
16,610,000 shares authorized; 9,944,750 and 15,255,786
shares issued and outstanding at December 31, 1998 and
1999 (liquidation value: $19,124,792 and $30,161,846 at
December 31, 1998 and 1999, respectively)............... 9,945 15,256 --
Common stock: $0.001 par value, 50,000,000 shares
authorized; 3,245,096 and 3,261,513 shares issued and
outstanding at December 31, 1998 and 1999,
respectively............................................ 3,245 3,261 28,550
Additional paid-in capital preferred stock.................. 30,730,988 49,873,495 --
Additional paid-in capital common stock..................... 204,318 6,204,052 56,077,547
Notes receivable -- related parties......................... (139,687) (139,687) (139,687)
Accumulated deficit......................................... (22,447,430) (42,533,145) (42,533,145)
Deferred compensation....................................... -- (4,442,294) (4,442,294)
------------ ------------ ------------
Total stockholders' equity......................... 8,371,412 8,990,971 8,990,971
------------ ------------ ------------
Total liabilities and stockholders' equity......... $ 10,480,062 $ 10,205,514
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE> 63
ALLOS THERAPEUTICS, INC.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
CUMULATIVE
PERIOD FROM
SEPTEMBER 1,
1992
(DATE OF INCEPTION)
YEARS ENDED DECEMBER 31, THROUGH
---------------------------------------- DECEMBER 31,
1997 1998 1999 1999
----------- ----------- ------------ -------------------
<S> <C> <C> <C> <C>
Operating expenses:
Research and development............... $ 3,864,790 $ 5,941,523 $ 6,144,400 $ 21,254,006
Clinical manufacturing................. 1,563,778 1,767,707 1,381,722 5,164,833
General and administrative............. 1,262,226 1,485,735 1,702,555 6,493,853
Stock-based compensation............... -- -- 1,553,761 1,553,761
----------- ----------- ------------ ------------
Total operating expenses....... 6,690,794 9,194,965 10,782,438 34,466,453
Loss from operations..................... (6,690,794) (9,194,965) (10,782,438) (34,466,453)
Interest and other income, net........... 178,203 621,042 309,698 1,546,283
----------- ----------- ------------ ------------
Net loss....................... (6,512,591) (8,573,923) (10,472,740) (32,920,170)
Dividend related to beneficial conversion
feature of preferred stock............. -- -- (9,612,975) (9,612,975)
----------- ----------- ------------ ------------
Net loss attributable to common
stockholders........................... $(6,512,591) $(8,573,923) $(20,085,715) $(42,533,145)
=========== =========== ============ ============
Net loss per share:
Basic and diluted...................... $ (2.18) $ (2.71) $ (6.24)
=========== =========== ============
Weighted average shares -- basic and
diluted............................. 2,980,982 3,159,792 3,217,362
=========== =========== ============
Pro forma net loss per share (unaudited):
Basic and diluted...................... $ (.82)
============
Shares used in pro forma net loss per
share --
basic and diluted...................... 24,489,632
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE> 64
ALLOS THERAPEUTICS, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
CONVERTIBLE NOTES
COMMON STOCK PREFERRED STOCK ADDITIONAL RECEIVABLE
------------------ -------------------- PAID-IN FROM ACCUMULATED
SHARES AMOUNT SHARES AMOUNT CAPITAL STOCKHOLDERS DEFICIT
--------- ------ ---------- ------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Subscription receivable for common stock
at $1 per share.......................... -- $ 90 -- $ -- $ -- $ -- $ --
--------- ------ ---------- ------- ----------- --------- ------------
BALANCE AT DECEMBER 31, 1992............. -- 90 -- -- -- -- --
Subscription receivable for common stock
at $1 per share....................... -- 10 -- -- -- -- --
Issuance of common stock for
subscription receivable............... 1,600,000 1,500 -- -- (1,500) -- --
Net loss................................ -- -- -- -- -- -- (24,784)
--------- ------ ---------- ------- ----------- --------- ------------
BALANCE AT DECEMBER 31, 1993............. 1,600,000 1,600 -- -- (1,500) -- (24,784)
Issuance of $.001 par value common stock
in exchange for license agreement..... 400,000 400 -- -- 39,600 -- --
Issuance of Series A convertible
preferred stock ($.001 par value)
together with Series A and Series B
stock warrants at $1 per share........ -- -- 700,000 704 529,023 -- --
Issuance of Series A convertible
preferred stock upon exercise of
Series A warrants at $1 per share..... -- -- 1,300,000 1,300 1,298,700 -- --
Accretion to redemption value of
preferred stock....................... -- -- -- -- 58,839 -- (58,839)
Net loss................................ -- -- -- -- -- -- (898,929)
--------- ------ ---------- ------- ----------- --------- ------------
BALANCE AT DECEMBER 31, 1994............. 2,000,000 2,000 2,000,000 2,004 1,924,662 -- (982,552)
Issuance of Series A convertible
preferred stock at $1 per share....... -- -- 3,000,000 3,000 2,973,454 -- --
Accretion to redemption value of
preferred stock....................... -- -- -- -- 229,837 -- (229,837)
Net loss................................ -- -- -- -- -- -- (2,384,176)
--------- ------ ---------- ------- ----------- --------- ------------
BALANCE AT DECEMBER 31, 1995............. 2,000,000 2,000 5,000,000 5,004 5,127,953 -- (3,596,565)
Issuance of Series B convertible
preferred stock at $1.60 per share,
net of issuance costs................. -- -- 5,032,500 5,033 7,992,705 -- --
Cancellation of Series B warrants
previously issued with Series A....... -- -- -- (4) 4 -- --
Cancellation of Series A redemption
rights................................ -- -- -- -- (288,676) -- 288,676
Issuance of common stock upon exercise
of stock options for cash of $4,024
and notes receivable of $90,000 at
$0.10 per share....................... 940,242 940 -- -- 93,084 (90,000) --
Net loss................................ -- -- -- -- -- -- (4,053,027)
--------- ------ ---------- ------- ----------- --------- ------------
BALANCE AT DECEMBER 31, 1996............. 2,940,242 2,940 10,032,500 10,033 12,925,070 (90,000) (7,360,916)
Issuance of common stock upon exercise
of stock options for cash of $20,288
and notes receivable of $49,687 at
$0.10-$0.25 per share................. 283,500 284 -- -- 69,691 (49,687) --
Net loss................................ -- -- -- -- -- -- (6,512,591)
--------- ------ ---------- ------- ----------- --------- ------------
BALANCE AT DECEMBER 31, 1997............. 3,223,742 3,224 10,032,500 10,033 12,994,761 (139,687) (13,873,507)
Issuance of Series C convertible
preferred stock at $1.81 per share,
net of issuance costs................. -- -- 9,944,750 9,945 17,937,102 -- --
Issuance of common stock upon exercise
of stock options for cash of $3,464 at
$0.10-$0.25 per share................. 21,354 21 -- -- 3,443 -- --
Net loss................................ -- -- -- -- -- -- (8,573,923)
--------- ------ ---------- ------- ----------- --------- ------------
BALANCE AT DECEMBER 31, 1998............. 3,245,096 3,245 19,977,250 19,978 30,935,306 (139,687) (22,447,430)
Issuance of Series C convertible
preferred stock at $1.81 per share,
net of issuance costs................. -- -- 5,311,036 5,311 9,529,532 -- --
Issuance of common stock upon exercise
of stock options for cash of $3,695 at
$0.10-$0.35 per share................. 16,417 16 -- -- 3,679 -- --
Deferred compensation related to grant
of options............................ -- -- -- -- 5,996,055 -- --
Beneficial conversion feature related to
issuance of preferred stock........... -- -- -- -- 9,612,975 -- (9,612,975)
Net loss................................ -- -- -- -- -- -- (10,472,740)
--------- ------ ---------- ------- ----------- --------- ------------
BALANCE AT DECEMBER 31, 1999............. 3,261,513 $3,261 25,288,286 $25,289 $56,077,547 $(139,687) $(42,533,145)
========= ====== ========== ======= =========== ========= ============
<CAPTION>
TOTAL
STOCKHOLDERS'
DEFERRED EQUITY
COMPENSATION (DEFICIT)
------------ -------------
<S> <C> <C>
Subscription receivable for common stock
at $1 per share.......................... $ -- $ 90
------------ ------------
BALANCE AT DECEMBER 31, 1992............. -- 90
Subscription receivable for common stock
at $1 per share....................... -- 10
Issuance of common stock for
subscription receivable............... -- --
Net loss................................ -- (24,784)
------------ ------------
BALANCE AT DECEMBER 31, 1993............. -- (24,684)
Issuance of $.001 par value common stock
in exchange for license agreement..... -- 40,000
Issuance of Series A convertible
preferred stock ($.001 par value)
together with Series A and Series B
stock warrants at $1 per share........ -- 529,727
Issuance of Series A convertible
preferred stock upon exercise of
Series A warrants at $1 per share..... -- 1,300,000
Accretion to redemption value of
preferred stock....................... -- --
Net loss................................ -- (898,929)
------------ ------------
BALANCE AT DECEMBER 31, 1994............. -- 946,114
Issuance of Series A convertible
preferred stock at $1 per share....... -- 2,976,454
Accretion to redemption value of
preferred stock....................... -- --
Net loss................................ -- (2,384,176)
------------ ------------
BALANCE AT DECEMBER 31, 1995............. -- 1,538,392
Issuance of Series B convertible
preferred stock at $1.60 per share,
net of issuance costs................. -- 7,997,738
Cancellation of Series B warrants
previously issued with Series A....... -- --
Cancellation of Series A redemption
rights................................ -- --
Issuance of common stock upon exercise
of stock options for cash of $4,024
and notes receivable of $90,000 at
$0.10 per share....................... -- 4,024
Net loss................................ -- (4,053,027)
------------ ------------
BALANCE AT DECEMBER 31, 1996............. -- 5,487,127
Issuance of common stock upon exercise
of stock options for cash of $20,288
and notes receivable of $49,687 at
$0.10-$0.25 per share................. -- 20,288
Net loss................................ -- (6,512,591)
------------ ------------
BALANCE AT DECEMBER 31, 1997............. -- (1,005,176)
Issuance of Series C convertible
preferred stock at $1.81 per share,
net of issuance costs................. -- 17,947,047
Issuance of common stock upon exercise
of stock options for cash of $3,464 at
$0.10-$0.25 per share................. -- 3,464
Net loss................................ -- (8,573,923)
------------ ------------
BALANCE AT DECEMBER 31, 1998............. -- 8,371,412
Issuance of Series C convertible
preferred stock at $1.81 per share,
net of issuance costs................. -- 9,534,843
Issuance of common stock upon exercise
of stock options for cash of $3,695 at
$0.10-$0.35 per share................. -- 3,695
Deferred compensation related to grant
of options............................ (4,442,294) 1,553,761
Beneficial conversion feature related to
issuance of preferred stock........... -- --
Net loss................................ -- (10,472,740)
------------ ------------
BALANCE AT DECEMBER 31, 1999............. $ (4,442,294) $ 8,990,971
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE> 65
ALLOS THERAPEUTICS, INC.
STATEMENT OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<TABLE>
<CAPTION>
CUMULATIVE
PERIOD FROM
SEPTEMBER 1,
1992 (DATE OF
INCEPTION)
YEARS ENDED DECEMBER 31, THROUGH
----------------------------------------- DECEMBER 31,
1997 1998 1999 1999
----------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Cash Flows From Operating Activities
Net loss.......................................... $(6,512,591) $ (8,573,923) $(10,472,740) $(32,920,170)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization................... 65,423 101,118 146,413 352,022
Stock-based compensation amortization........... -- -- 1,553,761 1,553,761
Other........................................... -- (2,823) -- 52,406
Changes in operating assets and liabilities:
Decrease (increase) in prepaids and other
assets..................................... (1,639) (407,177) 61,794 (499,967)
(Increase) decrease in interest receivable on
short-term investments..................... -- (80,682) (13,810) (94,492)
Increase (decrease) in accounts
payable -- research........................ 713,793 303,390 (737,018) 768,592
Increase (decrease) in accounts
payable -- related parties................. 123,429 (51,865) (108,929) 8,087
Increase (decrease) in accounts
payable -- trade........................... (716) (15,320) (45,523) 65,123
Increase (decrease) in accrued compensation
and employee benefits...................... 124,012 (75,994) 113,664 224,379
----------- ------------ ------------ ------------
Net cash used in operating activities...... (5,488,289) (8,803,276) (9,502,388) (30,490,259)
----------- ------------ ------------ ------------
Cash Flows From Investing Activities
Acquisition of property and equipment............. (42,494) (85,029) (37,901) (293,192)
Purchases of short-term investments............... (2,957,296) (21,450,298) (11,713,177) (47,937,178)
Proceeds from sales of short-term investments..... 7,880,061 13,605,992 12,774,672 41,154,367
----------- ------------ ------------ ------------
Net cash provided by (used in) investing
activities............................... 4,880,271 (7,929,335) 1,023,594 (7,076,003)
----------- ------------ ------------ ------------
Cash Flows From Financing Activities
Principal payments under capital leases........... (53,654) (84,524) (118,406) (273,726)
Proceeds from sale leaseback...................... -- 43,908 -- 120,492
Proceeds from stockholder loan.................... -- -- -- 12,000
Repayment of stockholder loan..................... -- -- -- (12,000)
Proceeds from issuance of convertible preferred
stock, net of issuance costs.................... -- 17,947,047 9,534,843 40,285,809
Proceeds from issuance of common stock............ 20,288 3,464 3,695 31,571
----------- ------------ ------------ ------------
Net cash provided by (used in) financing
activities............................... (33,366) 17,909,895 9,420,132 40,164,146
----------- ------------ ------------ ------------
Net increase (decrease) in cash..................... (641,384) 1,177,284 941,338 2,597,884
Cash and cash equivalents, beginning of period...... 1,120,646 479,262 1,656,546 --
----------- ------------ ------------ ------------
Cash and cash equivalents, end of period............ $ 479,262 $ 1,656,546 $ 2,597,884 $ 2,597,884
=========== ============ ============ ============
Supplemental Schedule of Noncash Operating And
Financing Activities
Cash paid for interest............................ 8,339 -- -- 10,000
Issuance of stock in exchange for license
agreement....................................... -- -- -- 40,000
Capital lease obligations incurred for purchase of
property and equipment.......................... 59,330 197,334 2,105 422,088
Issuance of stock in exchange for notes
receivable...................................... 49,687 -- -- 139,687
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE> 66
ALLOS THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS
1. FORMATION AND BUSINESS OF THE COMPANY
Allos Therapeutics, Inc. (the "Company") is a pharmaceutical company
focused on developing and commercializing innovative small molecule drugs,
initially for improving cancer treatments.
The Company was incorporated in the Commonwealth of Virginia on September
1, 1992 as HemoTech Sciences, Inc. and filed amended Articles of Incorporation
to change its name to Allos Therapeutics, Inc. on October 19, 1994. The Company
reincorporated in Delaware on October 28, 1996.
The Company's lead product candidate (RSR13) is a synthetic small molecule
that increases the release of oxygen from hemoglobin, the oxygen carrying
protein contained within red blood cells. The Company is currently conducting
clinical trials for RSR13. Prior to commercial sales of the product, the Company
must complete the clinical trials and receive the necessary Food and Drug
Administration ("FDA") approval. Should the Company be unable to obtain the
necessary FDA approvals, there could be a materially adverse effect on the
Company's financial condition, operating results and cash flows.
To date, the Company has devoted substantially all of its resources to
research and clinical development. The Company has not derived any commercial
revenues from product sales, and does not expect to receive product revenues for
at least the next several years. The Company has incurred significant operating
losses since its inception in 1992. The Company expects to continue to incur
significant operating losses over the next several years as it continues to
incur increasing research and development costs, in addition to costs related to
clinical trials and manufacturing activities. There can be no assurance if or
when the Company will become profitable. The Company's achieving profitability
depends upon its ability, alone or with others, to successfully complete the
development of its products under development, and obtain required regulatory
clearances and successfully manufacture and market its products.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The Company has not generated any revenue to date and its activities have
consisted primarily of developing products, raising capital and recruiting
personnel. Accordingly, the Company is considered to be in the development stage
at December 31, 1999 as defined in Statement of Financial Accounting Standards
("SFAS") No. 7, Accounting and Reporting by Development Stage Enterprises.
Certain amounts in the prior years have been reclassified to be consistent
with current year presentation. These changes had no impact on previously
reported results of operations or stockholders' equity.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amount of expenses during the reporting period.
Actual results could differ materially from these estimates.
Cash and Cash Equivalents and Short-term Investments
All highly liquid investments with a maturity of three months or less are
considered to be cash equivalents. The carrying values of the Company's cash
equivalents and short-term investments approximate their market values based on
quoted market prices. Short-term investments are classified as held to maturity
and are carried at cost plus accrued interest and consist of commercial paper
and government obligations, having original maturities of longer than three
months, but less than one year, held at financial institutions.
F-7
<PAGE> 67
ALLOS THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
Prepaid Expenses -- Research
In accordance with various research and development contracts, the Company
is obligated to pay a portion of the fee upon execution. The asset balance is
expensed as milestones within the contract are reached.
Property and Equipment
The components of property and equipment are as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------- ESTIMATED
1998 1999 LIVES
--------- --------- ---------
<S> <C> <C> <C>
Office furniture and equipment...................... $ 10,429 $ 15,598 5 years
Office furniture and equipment under capital
leases............................................ 197,379 197,379 3.5 years
Computer hardware and software...................... 31,444 58,208 3 years
Computer hardware under capital leases.............. 203,483 205,588 3.5 years
Lab equipment owned................................. 25,703 31,670 5 years
Lab equipment under capital leases.................. 23,216 23,217 3.5 years
Leasehold improvements.............................. 20,927 20,927 3-5 years
--------- ---------
512,581 552,587
Less accumulated depreciation and amortization...... (175,814) (322,227)
--------- ---------
$ 336,767 $ 230,360
========= =========
</TABLE>
Property and equipment is recorded at cost and is depreciated using the
straight-line method over estimated useful lives. Property and equipment
acquired under capital lease agreements are amortized using the straight-line
method over the shorter of the estimated useful life or the related lease term.
Accumulated amortization for leased equipment was $155,572 and $277,000 at
December 31, 1998 and 1999, respectively. Upon disposition of property and
equipment all cost and accumulated depreciation or amortization are removed from
the accounts and any gain or loss is reflected in operations.
Long-lived Assets
The Company evaluates whether events and circumstances have occurred that
indicate revision to the remaining useful life or impairment of remaining
balances of long-lived assets may be appropriate. Such events and circumstances
include, but are not limited to, change in business strategy or change in
current and long-term projected operating performance. When factors indicate
that the carrying amount of an asset may not be recoverable, the Company
recognizes impairment losses based on the difference between the carrying value
and the fair value.
Stock-Based Compensation
The Company accounts for grants of stock options and common stock purchase
rights according to Accounting Principles Board Opinion ("APB") No. 25,
Accounting for Stock Issued to Employees and related Interpretations. Proforma
net loss information, as required by SFAS No. 123, Accounting for Stock-Based
Compensation ("SFAS 123"), is included in Note 3. Any deferred stock
compensation calculated according to APB No. 25 is amortized over the vesting
period of the individual options, generally four years, in accordance with FASB
Interpretation No. 28, Accounting for Stock Appreciation Rights and Other
Variable Stock Option and Award Plans.
Research and Development
Research and development expenditures are charged to operations as
incurred.
F-8
<PAGE> 68
ALLOS THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
Income Taxes
As of January 1, 1994, the Company changed its tax status from an
S-Corporation to a C-Corporation. Accordingly, income taxes are accounted for
under SFAS No. 109, Accounting for Income Taxes. Deferred income tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities at each year end and their respective tax bases using enacted
tax rates in effect for the year in which the differences are expected to affect
taxable income. Valuation allowances are established when necessary to reduce
deferred tax assets to the amount more likely than not to be realized.
Concentration of Credit
The Company's cash and cash equivalents and short-term investments at
December 31, 1998 and 1999 are maintained in two financial institutions in
amounts which at times may exceed federally insured limits. The Company has not
experienced any losses in such accounts and believes it is not exposed to any
significant credit risk in this area. It is the Company's practice to place its
investments in high-quality securities.
Net Loss Per Share
Net loss per share is calculated in accordance with SFAS No. 128, Earnings
Per Share. Under the provisions of SFAS 128, basic net loss per common share is
computed by dividing the net loss for the period by the weighted average number
of vested common shares outstanding during the period. Diluted net loss per
common share is computed giving effect to all dilutive potential common stock,
including options, non-vested common stock, convertible preferred stock and
convertible preferred stock warrants. Diluted net loss per share for the years
ended December 31, 1997, 1998, and 1999 is the same as basic net loss per share
because potential common shares are anti-dilutive.
Anti-dilutive securities as of December 31, 1997, 1998 and 1999 not
included in the diluted net loss per share calculations, are as follows:
<TABLE>
<CAPTION>
1997 1998 1999
---------- ---------- ----------
<S> <C> <C> <C>
Non-vested common stock.......................... 96,833 52,569 14,000
Common stock options............................. 747,000 723,000 1,326,000
Convertible preferred stock...................... 10,032,500 19,977,250 25,288,286
Convertible preferred stock warrants............. 17,500 23,024 50,649
---------- ---------- ----------
10,893,833 20,775,843 26,678,935
========== ========== ==========
</TABLE>
Pro Forma Net Loss Per Share (Unaudited)
Pro forma net loss per share for the year ended December 31, 1999 is
computed using the weighted average number of common stock outstanding,
including the pro forma effects of the automatic conversion of the Company's
Series A, Series B and Series C convertible preferred stock into shares of the
Company's common stock upon the closing of the Company's initial public offering
as if such conversion occurred on January 1, 1999, or at the date of original
issuance, if later. Pro forma common equivalent shares, composed of unvested
restricted common stock and incremental common shares issuable upon the exercise
of stock options and warrants are not included in pro forma diluted net loss per
share because they would be anti-dilutive.
Pro Forma Stockholders' Equity (Unaudited)
Upon the closing of the Company's initial public offering the outstanding
shares of Series A, Series B and Series C convertible preferred stock will
convert into 25,288,286 shares of common stock. The pro forma effects
F-9
<PAGE> 69
ALLOS THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
of such conversion has been reflected in the accompanying pro forma
stockholders' equity at December 31, 1999.
Comprehensive Income
Effective January 1, 1998, the Company adopted the provisions of SFAS No.
130, Reporting Comprehensive Income. SFAS No. 130 establishes standards for
reporting comprehensive income and its components in financial statements.
Comprehensive income includes all charges in equity during a period from
non-owner sources. During each of the three years ended December 31, 1999 and
for the cumulative period from inception, the Company has not had any
significant transactions that are required to be reported as adjustments to
determine comprehensive income.
Fair Value of Financial Instruments
The Company's financial instruments include cash and cash equivalents,
short-term investments, prepaid expenses, accounts payable and accrued
liabilities. The carrying amounts of financial instruments approximate their
fair value due to their short maturities. Additionally, based upon the borrowing
rates available to the Company for debt agreements with similar terms and
average maturities, management believes the carrying amount of capital lease
obligations approximates their fair value.
3. STOCKHOLDERS' EQUITY
Common Stock
In January 1994, the Board of Directors approved an amendment to the
Articles of Incorporation authorizing the Company to issue up to 8,500,000
shares of common stock. In June 1995, March 1996, May 1998, and October 1999,
the Board of Directors approved additional amendments to the Articles of
Incorporation authorizing the Company to issue up to 15,000,000, 20,000,000,
30,000,000 and 50,000,000 shares of common stock, respectively.
At December 31, 1999, 3,261,513 shares of common stock are issued and
outstanding and 14,000 shares of outstanding common stock are subject to vesting
requirements ranging from three to four years.
Convertible Preferred Stock
The Company is authorized to issue 26,660,000 shares of convertible
preferred stock ($0.001 par value) in one or more series. At December 31, 1999,
the designated series and shares issued were as follows:
<TABLE>
<CAPTION>
SHARES ISSUED AND
NUMBER OF OUTSTANDING
SHARES -------------------------
AUTHORIZED NUMBER NET PROCEEDS
---------- ---------- ------------
<S> <C> <C> <C>
Series A........................................ 5,000,000 5,000,000 $ 4,806,181
Series B........................................ 5,050,000 5,032,500 7,997,738
Series C........................................ 16,610,000 15,255,786 27,481,890
---------- ---------- -----------
26,660,000 25,288,286 $40,285,809
========== ========== ===========
</TABLE>
In March 1996, the Articles of Incorporation were amended and restated to:
remove the redemption requirement on the Series A and B preferred stock; change
the annual dividend rate on the Series B from $.14 to $.112 per share; change
the conversion price on the Series B from $2.00 to $1.60 per share; and add the
annual cumulative dividend on the Series A and Series B preferred stock to be
payable upon liquidation, consolidation, merger, reorganization, sale of all or
substantially all of the assets or winding up of the Company.
F-10
<PAGE> 70
ALLOS THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
In January and October 1994, the Company issued 700,000 and 1,300,000
shares, respectively, of Series A convertible preferred stock ($0.001 par value)
at $1.00 per share in a private placement offering to accredited investors. In
June 1995, the Company issued an additional 3,000,000 shares of Series A
convertible preferred stock at $1.00 per share.
During 1996, the Company issued 5,032,500 shares of Series B convertible
preferred stock ($0.001 par value) at $1.60 per share in a private placement
offering to accredited investors for $7,997,738, net of transaction costs of
$54,262.
During 1998, the Company issued 9,944,750 shares of Series C convertible
preferred stock ($0.001 par value) at $1.81 per share in three private placement
offerings to accredited investors for proceeds of $17,947,047, net of
transaction costs of $52,950. As part of these transactions, certain amendments
to the Articles of Incorporation were made to Series A and Series B shares.
These amendments include: increasing the authorized preferred shares to
20,250,000, of which 10,200,000 are designated as Series C; changing the
automatic conversion price upon the closing of an initial public offering from
not less than $4.00 per share to not less than $5.43 per share, and increasing
the number of shares reserved for issuance under the 1995 Stock Option Plan to
2,650,000.
During 1999, the Company issued 5,311,036 shares of Series C convertible
preferred stock ($0.001 par value) at $1.81 per share in a private placement
offering to accredited investors for proceeds of $9,534,843, net of transaction
costs of $78,132. As part of this transaction, the Articles of Incorporation
were amended to increase the authorized preferred shares to 26,660,000, of which
16,610,000 are designated as Series C and to increase the number of shares
reserved for issuance under the 1995 Stock Option Plan to 3,650,000. The
issuance resulted in a beneficial conversion feature of $9,612,975, calculated
in accordance with Emerging Issues Task Force No. 98-5, Accounting for
Convertible Securities with Beneficial Conversion Features. The beneficial
conversion feature is reflected as a preferred dividend in the Statement of
Operations for 1999.
Each share of Series A, Series B and Series C preferred stock is
convertible, at the option of the holder at any time after the date of issuance,
into a number of common shares as determined by dividing the initial conversion
price by the conversion price in effect at the time of conversion. The initial
conversion price for each series of convertible preferred stock is: $1.00 per
share for Series A, $1.60 per share for Series B and $1.81 per share for Series
C. Conversion is automatic upon the closing of an initial public offering of the
Company's common stock where the aggregate proceeds are not less than
$15,000,000 and at a price of not less than $5.43 per share.
Series A, Series B and Series C preferred shareholders are entitled to
cumulative cash dividends at the annual rate of $.07, $.112 and $.1267 per
share, respectively, when and as declared by the Board of Directors, quarterly
on January 1, April 1, July 1, and October 1 of each year commencing on the
original issue date. Dividends shall accumulate on each share from the date of
issuance, and shall accumulate whether or not earned or declared for purposes of
increasing the liquidation preference in each share of preferred stock. As of
December 31, 1999, no dividends have been declared or are payable since
undeclared dividends are not payable until conversion, liquidation,
consolidation, merger, reorganization, sale of all or substantially all of the
assets or winding up of the Company. Accumulated dividends amounted to
$4,068,522 and $6,406,241 at December 31, 1998 and 1999, respectively.
The Series A, Series B and Series C convertible preferred stocks have
voting rights equal to the number of shares of common stock into which the
preferred stocks will convert and a liquidation preference to the extent of
$1.00, $1.60 and $1.81 per share, respectively, plus any accumulated but unpaid
dividends. In the event liquidation or dissolution of the assets of the Company
are insufficient to permit payment of the full Series A, B and C preferences,
then the available assets shall be distributed ratably among the holders of all
preferred shares in proportion to their liquidating preferences. After such
payment to the holders of all convertible preferred
F-11
<PAGE> 71
ALLOS THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
stock, any remaining assets of the Company shall be distributed among the common
shareholders on a pro rata basis.
The Company has reserved 5,000,000 shares of common stock for the
conversion of Series A preferred stock, 5,050,000 shares of common stock for the
conversion of the Series B convertible preferred stock and for the exercise of
the Series B convertible preferred stock warrants and 16,610,000 shares of
common stock for the conversion of the Series C convertible preferred stock and
the exercise of the Series C convertible preferred stock warrants.
Warrants
In connection with the issuance of the 700,000 shares of the Company's
Series A convertible preferred stock in January 1994, the Company issued
warrants to purchase 1,300,000 shares of the Company's Series A convertible
preferred stock at an exercise price of $1.00 per share that were exercised in
October 1994. In January 1994, the Company also issued warrants to purchase
700,000 shares of the Company's Series B convertible preferred stock at an
exercise price of $2.00 per share which were canceled during 1996 in connection
with the issuance of 5,032,500 shares of the Company's Series B convertible
preferred stock. Upon the exercise of the warrants to purchase 1,300,000 shares
of the Company's Series A convertible preferred stock, additional warrants to
purchase 1,300,000 shares of the Company's Series B convertible preferred stock
at $2.00 per share were issued and also canceled with the 1996 issuance of the
Series B convertible preferred stock.
In April 1996, the Company issued warrants to purchase 17,500 shares of the
Company's Series B convertible preferred stock in conjunction with an equipment
lease line at an exercise price of $1.60 per share that expire at the later of
April 15, 2006, or five years from the effective date of an initial public
offering.
In December 1997, the Company entered into an agreement with Sosei Co.,
Ltd. ("Sosei"), which became effective February 8, 1998. Under the agreement,
Sosei was to locate a Japanese partner for the Company with respect to the
Company's product RSR13. The agreement was amended in February 1999. Pursuant
thereto, the Company issued a warrant to Sosei to purchase 27,625 shares of the
Company's Series C preferred stock at a price of $1.81 per share that vests and
becomes exercisable upon the Company's acceptance and closing of a transaction
with a Japanese partner. The agreement expired in June 1999. The warrant will
expire pursuant to its terms, prior to vesting and becoming exercisable, upon
the first to occur of certain events, including the day prior to the
consummation of a public offering and June 30, 2000.
In May 1998, the Company issued warrants to purchase 5,524 shares of the
Company's Series C convertible preferred stock in conjunction with an equipment
lease with an exercise price of $1.81 per share that expire at the later of May
5, 2008, or five years from the effective date of an initial public offering.
Stock Options
During 1995, the Board of Directors terminated the 1992 Stock Plan (the
"1992 Plan") and adopted the 1995 Stock Option Plan (the "1995 Plan"). The 1995
Plan was amended and restated in 1997. Termination of the 1992 Plan had no
affect on the options outstanding under that plan, as they were assumed under
the 1995 Plan. Under the 1995 Plan the Company may grant fixed and
performance-based stock options and stock appreciation rights to officers,
employees, consultants and directors. The stock options are intended to qualify
as "incentive stock options" under Section 422 of the Internal Revenue Code,
unless specifically designated as non-qualifying stock options or unless
exceeding the applicable statutory limit.
At December 31, 1999, the Company had reserved an aggregate of 3,650,000
shares of common stock for issuance under the 1995 Plan. As of December 31,
1999, the Company has 412,408 shares of common stock available for grant under
the 1995 Plan. The 1995 Plan provides for appropriate adjustments in the number
of shares reserved and optioned in the event of certain changes to the Company's
outstanding common stock by reason of merger, recapitalization, stock split or
other similar events. Options granted under the Plan may be
F-12
<PAGE> 72
ALLOS THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
exercised for a period of not more than ten years from the date of grant or any
shorter period as determined by the Board of Directors. Options vest as
determined by the Board of Directors, generally over a period of two to four
years, subject to acceleration under certain events. The exercise price of any
incentive stock option shall equal or exceed the fair market value per share on
the date of grant, or 110% of the fair market value per share in the case of a
10% or greater stockholder.
The Company has granted to selected officers and other key employees stock
option awards whose vesting is contingent upon achieving specific criteria. The
options will vest based upon meeting certain clinical milestones, finalizing a
corporate partnership and/or co-licensing of an additional compound for
development, and the earlier of the Company's stock trading at or above a
certain level for a certain number of consecutive trading days prior to June 30,
2001. If such criteria are not met, these options will become fully vested after
7 years from the date of grant.
During the year ended December 31, 1999, in connection with the grant of
certain stock options to employees, the Company recorded deferred stock-based
compensation of $5,996,055, representing the difference between the exercise
price and the deemed fair value of the Company's common stock on the date these
stock options were granted. Deferred compensation is included as a reduction of
stockholders' equity and is being amortized in accordance with FASB
Interpretation No. 28 over the vesting periods of the related options, which is
generally four years. During the year ended December 31, 1999, the Company
recorded amortization of deferred stock compensation expense of $1,553,761. At
December 31, 1999, the Company had $4,442,294 of deferred compensation remaining
to be amortized.
Pro forma net loss and net loss per share information is required by SFAS
No. 123, which also requires that the information be determined as if the
Company had accounted for its employee stock options and rights granted
subsequent to December 31, 1994 under the fair value method. The fair value for
these options and the purchase rights was estimated at the date of grant using
the minimum value method with the following weighted-average assumptions for
1997, 1998, and 1999, respectively: risk free interest rates of between 4.25%
and 10.37%; no dividend yield; and a weighted-average expected life of the
options of 7 years. Pro forma information follows:
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------------------------------
1997 1998 1999
----------- ----------- ------------
<S> <C> <C> <C>
Net loss attributable to common stockholders:
As reported................................. $(6,512,591) $(8,573,923) $(20,085,715)
=========== =========== ============
Pro forma................................... $(6,521,051) $(8,583,501) $(20,103,604)
=========== =========== ============
Net loss per share:
As reported................................. $ (2.18) $ (2.71) $ (6.24)
=========== =========== ============
Pro forma................................... $ (2.19) $ (2.72) $ (6.25)
=========== =========== ============
</TABLE>
F-13
<PAGE> 73
ALLOS THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
A summary of the Company's stock option activity, and related information
follows:
<TABLE>
<CAPTION>
INCENTIVE AND
NON-INCENTIVE STOCK INCENTIVE STOCK OPTIONS
OPTIONS -- FIXED PERFORMANCE-BASED
------------------------- -------------------------
WEIGHTED WEIGHTED
AVERAGE AVERAGE
EXERCISE EXERCISE
SHARES PRICE SHARES PRICE
-------------- -------- -------------- --------
(IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C> <C> <C>
OUTSTANDING AT DECEMBER 31, 1996........ 855 $.19 150 $.25
Granted............................... 184 .25 -- --
Exercised............................. (284) .25 -- --
Canceled.............................. (8) .23 (20) .25
----- ---- --- ----
OUTSTANDING AT DECEMBER 31, 1997........ 747 .19 130 .25
Granted............................... 122 .35 300 .35
Exercised............................. (21) .16 -- --
Canceled.............................. (125) .25 (10) .25
----- ---- --- ----
OUTSTANDING AT DECEMBER 31, 1998........ 723 .20 420 .32
Granted............................... 673 .35 270 .35
Exercised............................. (16) .23 -- --
Canceled.............................. (54) .21 (40) .30
----- ---- --- ----
OUTSTANDING AT DECEMBER 31, 1999........ 1,326 $.27 650 $.33
===== ==== === ====
VESTED OPTIONS AT DECEMBER 31, 1999..... 605 $.19 350 $.32
===== ==== === ====
</TABLE>
An analysis of options outstanding at December 31, 1999 as follows:
<TABLE>
<CAPTION>
WEIGHTED
OPTIONS AVERAGE
OUTSTANDING AT REMAINING WEIGHTED OPTIONS VESTED AT WEIGHTED
DECEMBER 31, CONTRACTUAL AVERAGE DECEMBER 31, AVERAGE EXERCISE
EXERCISE PRICE 1999 LIFE EXERCISE PRICE 1999 PRICE
- -------------- -------------- ----------- -------------- ----------------- ----------------
<S> <C> <C> <C> <C> <C>
$0.10................ 300,000 5.5 $.10 300,000 $.10
$0.25................ 365,375 6.9 .25 312,484 .25
$0.35................ 1,310,704 9.4 .35 342,687 .35
--------- --- ---- ------- ----
1,976,079 7.2 $.29 955,171 $.24
========= === ==== ======= ====
</TABLE>
4. INCOME TAXES
As stated in Note 2, the Company changed its tax status from an
S-Corporation to a C-Corporation as of January 1, 1994. Since that time, no
income tax provision or benefit has been recognized due to the Company incurring
net operating losses and other tax benefits which have been fully offset by a
valuation allowance.
F-14
<PAGE> 74
ALLOS THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
Income taxes computed using the federal statutory income tax rate differs
from the Company's effective tax primarily due to the following:
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
---------------------------
1997 1998 1999
------- ------- -------
<S> <C> <C> <C>
Federal income tax benefit at 34%........................ $(2,214) $(2,915) $(3,561)
State income tax, net of federal benefit................. (261) (343) (419)
Stock-based compensation amortization expense............ -- -- 606
Change in valuation allowance............................ 2,610 3,406 3,645
Other.................................................... (135) (148) (271)
------- ------- -------
Benefit for income taxes....................... $ -- $ -- $ --
======= ======= =======
</TABLE>
The components of the Company's deferred tax assets under SFAS 109 are as
follows:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1998 1999
----------- ------------
<S> <C> <C>
Deferred tax assets:
Temporary differences................................... $ 49,400 $ 64,100
Research and development credit carryforwards........... 1,353,900 2,120,300
Net operating loss carryforwards........................ 7,395,500 10,259,300
----------- ------------
Total deferred tax assets............. 8,798,800 12,443,700
Valuation allowance..................................... (8,798,800) (12,443,700)
----------- ------------
Net deferred tax assets................................. $ -- $ --
=========== ============
</TABLE>
The Company's deferred tax assets represent unrecognized future tax
benefit. A valuation allowance has been established for the entire tax benefit
as the Company believes that it is more likely than not that such assets will
not be realized.
At December 31, 1999, the Company has approximately $30 million of net
operating loss ("NOL") carryforwards and approximately $2 million of research
and development ("R&D") credit carryforwards. These carryforwards will expire
beginning 2009. The Internal Revenue Code of 1986, as amended, contains
provisions that may limit the NOL and R&D credit carryforwards available for use
in any given year upon the occurrence of certain events, including significant
changes in ownership interest. A greater than 50% change in ownership of a
company within a three-year period results in an annual limitation on the
Company's ability to utilize its NOL and R&D credit carryforwards from tax
periods prior to the ownership change. The Company's NOL and R&D credit
carryforwards as of December 31, 1999 are subject to annual limitation due to
changes in ownership. Future ownership changes could further limit the
utilization of the Company's NOL and R&D credit carryforwards.
5. EMPLOYEE BENEFIT PLAN
The Company maintains a defined contribution plan covering substantially
all employees under Section 401(k) of the Internal Revenue Code. The Company did
not provide for a match in 1998, but amended the Plan documents on January 1,
1999 to provide a 50% match of employees' contributions up to $2,000 per
employee per year. During 1999, the Company made a contribution of $43,171.
F-15
<PAGE> 75
ALLOS THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
6. COMMITMENTS
The Company leases office and research and development facilities as well
as certain office and lab equipment under agreements that expire at various
dates through 2002. Total rent expense in 1997, 1998 and 1999 and the cumulative
period from inception was $89,649, $140,192 and $179,792 and $512,072,
respectively.
The Company entered into an equipment lease line in 1996 which provided for
additional draws through September 30, 1997. The original lease line was
$350,000, and the Company utilized $222,650 of the line before the funding
period expired. In May 1998, the Company entered into another equipment lease
line with a term of 42 months. This lease line provided for draws through
September 30, 1999. The original lease line was $250,000 of which $199,439 had
been utilized before the financing period expired. Under the terms of both
master lease agreements, the Company has the option to purchase the leased
equipment at its fair market value at the end of the lease term.
The aggregate future minimum rental commitments as of December 31, 1999,
for capital and noncancelable operating leases with initial or remaining terms
in excess of one year are as follows:
<TABLE>
<CAPTION>
OPERATING CAPITAL
LEASES LEASES
--------- --------
<S> <C> <C>
Year Ending December 31
2000...................................................... $262,337 $ 87,825
2001...................................................... 212,940 64,745
2002...................................................... 126,782 7,901
2003...................................................... 56,649 --
2004...................................................... 58,349 --
-------- --------
Minimum lease payments...................................... $717,057 160,471
========
Less amount representing interest........................... (12,109)
--------
Present value of future minimum lease payments.............. 148,362
Less portion due within one year............................ (79,042)
--------
$ 69,320
========
</TABLE>
7. ROYALTY AND LICENSE FEE COMMITMENTS
On January 14, 1994, the Company entered into a license agreement with the
Center for Innovative Technology ("CIT"), under which CIT grants to the Company
an exclusive, worldwide license to practice, develop and use its technology and
licensed patent rights to develop and market the Company's products. In exchange
for the license agreement, the Company paid CIT $50,000 in cash and issued
400,000 shares of its common stock valued at $0.10 per share. The license
agreement will remain in effect until the last U.S. patent expires or, if no
U.S. patent is granted, the license will expire on December 31, 2009. Under the
license agreement, the Company will be required to pay a royalty based on
percentages, as defined in the agreement, of either net revenues arising from
sales of products produced in and outside of Virginia. Quarterly royalty
payments are due within 30 days from the end of each calendar quarter. The terms
of the agreement also require the Company to reimburse CIT for all costs related
to obtaining and maintaining patents on the technology. As of December 31, 1999,
no royalty payments have been incurred.
In addition, the CIT license agreement requires the Company to sponsor
research at Virginia Commonwealth University ("VCU"). As of December 31, 1999,
the Company entered into sponsored research agreements with VCU which extend
through June 30, 2000. The Company has an aggregate commitment under the
agreement to pay VCU $390,207.
F-16
<PAGE> 76
ALLOS THERAPEUTICS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
In September 1998, the Company entered into an option and license agreement
with the University of Virginia Patent Foundation whereby Allos has an exclusive
option to receive a worldwide, exclusive license and patent rights to develop
and market products pertaining to trans-sodium crocetinate ("TSC"). TSC is
believed to be a compound which improves the diffusion of oxygen through blood.
The option period is for nine months at which time the Company has the right to
exercise the option. In exchange for the option, Allos paid $15,000. Upon
exercising the option, the Company will be granted a license to TSC in exchange
for milestone payments totaling $205,000 and will be obligated to sponsor
research at the founder's lab at the University of Virginia for $110,000 in the
first year, renewable annually. As of March 1999, the option and license
agreement with the University of Virginia Patent Foundation was canceled. The
option was not exercised and no further monies were paid by the Company.
8. RELATED PARTY TRANSACTIONS
In December 1994, the Company renegotiated a consulting agreement for
scientific advisory services with Dr. Marvin Jaffe, a director of the Company.
Under the agreement, which is renewable annually upon mutual consent, the
Company will pay Dr. Jaffe consulting fees at $2,000 per month. For 1997, 1998
and 1999 and the cumulative period from inception, the Company paid Dr. Jaffe
consulting fees of $24,000, $24,000, $24,000 and $161,017, respectively. Of
these amounts, $2,000 was included in accounts payable at December 31, 1998 and
1999. In addition, the Company granted Dr. Jaffe stock options to purchase a
total of 60,000 shares of the Company's common stock at $.10 to $.25 per share
under its Stock Option Plan in 1994, 1995 and 1997.
In July 1997, the Company entered into a consulting agreement for
scientific advisory services with Dr. Stephen K. Carter, a director of the
Company. Under the three-year agreement, which is renewable annually upon mutual
consent, the Company will pay Dr. Carter consulting fees at $2,000 per month.
For 1998, 1999 and the cumulative period, the Company paid Dr. Carter consulting
fees of $18,000, $24,000 and $50,000, respectively. Of these amounts, $2,000 was
included in accounts payable at December 31, 1998 and 1999. In addition, the
Company granted Dr. Carter stock options to purchase a total of 40,000 shares of
the Company's common stock at $.25 per share under its Stock Option Plan in
1997.
The Company entered into several research and development contracts during
1996. Under these contracts, Donald J. Abraham, Ph.D., director, and Beverly A.
Teicher, Ph.D., former member of the Company's disbanded Scientific Advisory
Board, acted as Principal Investigators for the contracts with VCU and the
Dana-Farber Cancer Institute, Inc., respectively. During 1997 and 1998, services
provided under these contracts totaled $621,076 and $642,705, respectively, of
which $160,923 and $112,923 was included in accounts payable at December 31,
1997 and 1998, respectively. During 1999, services provided under these
contracts totaled $498,335, none of which was included in accounts payable at
December 31, 1999.
In March 1996, the Company obtained recourse notes receivable from two
officers in the amount of $90,000 upon the officers' exercise of 900,000 stock
options. The notes bear interest at 8% annually with interest and principal due
March 8, 2001. In December 1997, the Company obtained additional notes
receivable from these officers in the amount of $49,687 upon exercise of options
to acquire 198,750 shares. These notes bear interest at 6% annually with
interest and principal due December 31, 2000. The notes are classified as an
offset to stockholders' equity.
9. SUBSEQUENT EVENT
During January, 2000, the Company granted options to purchase 1,109,298
shares of common stock to employees and directors at an exercise price of $1.50
per share. In connection with the stock option grants, the Company will
recognize compensation expense over the related vesting periods for the
difference between the exercise price and the deemed fair market value.
F-17
<PAGE> 77
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHARES
[LOGO]
COMMON STOCK
---------------------------
PROSPECTUS
---------------------------
SG COWEN
PRUDENTIAL VECTOR HEALTHCARE
A UNIT OF PRUDENTIAL SECURITIES
U.S. BANCORP PIPER JAFFRAY
, 2000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 78
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses to be paid by the Registrant in connection with this offering
areas follows. All amounts are estimates other than the SEC registration fee and
the NASD filing fees.
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee......... $18,216
National Association of Securities Dealers, Inc. filing
fee....................................................... 7,400
Nasdaq National Market listing fee.......................... *
Printing fees............................................... *
Legal fees and expenses..................................... *
Accounting fees and expenses................................ *
Blue sky fees and expenses.................................. *
Transfer agent and registrar fees........................... *
Miscellaneous fees.......................................... *
-------
Total............................................. $ *
=======
</TABLE>
- ---------------
* To be completed by amendment.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's Board of Directors to grant, indemnity to directors
and officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities including reimbursement for expenses
incurred arising under the Securities Act of 1933. Article VII of our Amended
and Restated Certificate of Incorporation, which will be effective upon the
closing of this offering, and Article XI of our Bylaws permit indemnification of
our directors, officers, employees and other agents to the maximum extent
permitted by Delaware law. In addition, we have entered into Indemnification
Agreements with our officers and directors. The Underwriting Agreement (Exhibit
1.01) also provides for cross-indemnification among us and the Underwriters with
respect to certain matters, including matters arising under the Securities Act.
At present, there is no pending litigation or proceeding involving any of
our directors or officers as to which indemnification is being sought nor is the
Company aware of any threatened litigation that may result in claims for
indemnification by any director or officer.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
In the three years preceding the filing of this registration statement, we
have sold and issued the following securities:
1. In January, March and May 1998, we issued 9,944,750 shares of Series
C preferred stock, which are convertible into 9,944,750 shares of common
stock, to 22 investors for a consideration of $1.81 per share, or an
aggregate of $17,999,997.
2. In October 1999, we issued 5,311,036 shares of Series C preferred
stock, which are convertible into 5,311,036 shares of common stock, to 20
investors for a consideration of $1.81 per share, or an aggregate of
$9,612,975.
3. From January 24, 1997 through January 24, 2000, we granted incentive
stock options and nonstatutory stock options to purchase an aggregate of
2,661,577 shares of our common stock at exercise prices ranging from $0.10
to $0.35 per share to employees and directors under our 1995 Stock Option
Plan, and issued an aggregate of 513,771 shares upon the exercise of these
and previously granted options. Of these options granted, options to
purchase 117,658 shares of common stock have been canceled.
II-1
<PAGE> 79
4. In May 1998, we issued a warrant to purchase 5,524 shares of Series C
preferred stock to Comdisco, Inc. at an exercise price of $1.81 per share.
No underwriters were involved in the foregoing sales of securities. The
issuance of the above securities were deemed to be exempt from registration
under the Securities Act in reliance on Section 4(2) of such Securities Act as
transactions by an issuer not involving any public offering, or, in the case of
options to purchase common stock, Rule 701 of the Securities Act. The recipients
of securities in each such transaction represented their intentions to acquire
the securities for investment only and not with a view to or for sale in
connection with any distribution thereof and appropriate legends were affixed to
the share certificates and warrants issued in such transactions. All recipients
had adequate access, through their relationships with us, to information about
us.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following exhibits are filed herewith:
<TABLE>
<CAPTION>
EXHIBIT NO DESCRIPTION
---------- -----------
<C> <S>
1.01 -- Preliminary Form of Underwriting Agreement.
1.02 -- Form of Lock-Up Agreement.
3.01 -- Certificate of Incorporation, as amended to date.
3.02 -- Form of Amended and Restated Certificate of Incorporation
to be filed upon the closing of the offering.
3.03 -- Bylaws, as amended to date.
3.04 -- Form of Bylaws to be adopted upon the closing of the
offering.
4.01* -- Form of Common Stock Certificate.
5.01* -- Opinion of Perkins Coie LLP regarding legality of
securities being issued.
10.01 -- Form of Indemnification Agreement between the Registrant
and each of its directors and officers.
10.02 -- Hemotech and CIT Amended and Restated Allosteric
Modifiers of Hemoglobin Agreement with Center for
Innovative Technology dated January 12, 1994.
10.03 -- Amendment to Allos Therapeutics, Inc. and CIT Amended and
Restated Allosteric Modifiers of Hemoglobin Agreement
with Center for Innovative Technology dated January 17,
1995.
10.04 -- Amendment to Allos Therapeutics, Inc. and CIT Amended and
Restated Allosteric Modifiers of Hemoglobin Agreement
with Center for Innovative Technology dated March 12,
1996.
10.05 -- Assignment and Assumption Agreement with Amendment with
Center for Innovative Technology and Virginia
Commonwealth University Intellectual Property Foundation
dated July 28, 1997.
10.06 -- Exercise of Option to Nonheme Protein License Agreement
with VCU-Intellectual Property Foundation dated March 23,
1998.
10.07 -- Warrant Agreement to purchase shares of Series B
Preferred Stock with Comdisco, Inc. dated April 15, 1996.
10.08 -- Warrant Agreement to purchase shares of Series C
Preferred Stock with Comdisco, Inc. dated May 5, 1998.
10.09 -- Allos Therapeutics, Inc. Series C Convertible Preferred
Stock Purchase Agreement dated October 4, 1999.
10.10 -- Allos Therapeutics, Inc. Fourth Amended and Restated
Stockholder Rights Agreement dated October 4, 1999.
10.11 -- Allos Therapeutics, Inc. 1995 Stock Option Plan, as
amended to date.
</TABLE>
II-2
<PAGE> 80
<TABLE>
<CAPTION>
EXHIBIT NO DESCRIPTION
---------- -----------
<C> <S>
10.12 -- Office Lease with Denver Jack Limited Partnership dated
October 30, 1995.
10.13 -- First Amendment to 7000 Broadway Building Office Lease
with Denver Jack Limited Partnership dated October 30,
1995.
10.14 -- Second Amendment to 7000 Broadway Building Office Lease
with Denver Jack Limited Partnership dated June 7, 1996.
10.15 -- Third Amendment to 7000 Broadway Building Office Lease
with Denver Jack Limited Partnership dated March 26,
1998.
10.16 -- Fourth Amendment to 7000 Broadway Building Office Lease
with Denver Jack Limited Partnership dated June 29, 1998.
10.17 -- Lease Agreement with Virginia Biotechnology Research Park
Authority dated July 28, 1999.
10.18 -- Term Sheet for Contract API Supply between Allos and
Hovione dated March 25, 1999.
10.19 -- Confirmatory letter agreement with Hovione Inter Limited
dated January 13, 2000.
10.20 -- Development and Investigational Supply Proposal between
Taylor Pharmaceuticals and Allos Therapeutics, Inc. dated
December 30, 1998.
23.01 -- Consent of PricewaterhouseCoopers LLP Independent
Accountants.
23.02 -- Consent of Perkins Coie LLP (included in Exhibit 5.01).
24.01 -- Power of Attorney (see page II-5 of the Registration
Statement).
27.01 -- Financial Data Schedule
</TABLE>
- ---------------
* To be filed by amendment
(b) Financial Statement Schedules
No financial statement schedules are provided, because the information
called for is not required or is shown either in the financial statements or the
notes thereto.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Underwriting Agreement, certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the Delaware General Corporation Law, the Certificate of
Incorporation or the Bylaws of the Registrant, the Underwriting Agreement, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act, and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer,
or controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered hereunder, the Registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question of whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
The Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and
II-3
<PAGE> 81
contained in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this Registration Statement as of the time it was declared
effective; and
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE> 82
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-1 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Denver, State of Colorado, on this 26th day of
January, 2000.
ALLOS THERAPEUTICS, INC.
By: /s/ STEPHEN J. HOFFMAN
----------------------------------
Stephen J. Hoffman
President and Chief Executive
Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Stephen J. Hoffman and Michael E. Hart,
and each of them, his true and lawful attorneys-in-fact and agents with full
power of substitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to sign any registration statement for the
same offering covered by this Registration Statement that is to be effective
upon filing pursuant to Rule 462(b) promulgated under the Securities Act of
1933, and all post-effective amendments thereto, and to file the same, with all
exhibits thereto and all documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or his or
their substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED:
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<C> <S> <C>
PRINCIPAL EXECUTIVE OFFICER:
/s/ STEPHEN J. HOFFMAN President and Chief Executive January 26, 2000
- ----------------------------------------------------- Officer, Director
Stephen J. Hoffman
PRINCIPAL FINANCIAL AND PRINCIPAL ACCOUNTING OFFICER:
/s/ MICHAEL E. HART Chief Financial Officer and Senior January 26, 2000
- ----------------------------------------------------- Vice President, Operations
Michael E. Hart
ADDITIONAL DIRECTORS:
/s/ DONALD J. ABRAHAM Director January 26, 2000
- -----------------------------------------------------
Donald J. Abraham
/s/ STEPHEN K. CARTER Director January 26, 2000
- -----------------------------------------------------
Stephen K. Carter
</TABLE>
II-5
<PAGE> 83
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<C> <S> <C>
/s/ ROBERT CURRY Director January 26, 2000
- -----------------------------------------------------
Robert Curry
/s/ MARK EDWARDS Director January 26, 2000
- -----------------------------------------------------
Mark Edwards
/s/ JOHN FREUND Director January 26, 2000
- -----------------------------------------------------
John Freund
/s/ HINGGE HSU Director January 26, 2000
- -----------------------------------------------------
Hingge Hsu
/s/ MARVIN E. JAFFE Director January 26, 2000
- -----------------------------------------------------
Marvin E. Jaffe
</TABLE>
II-6
<PAGE> 84
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO DESCRIPTION
---------- -----------
<C> <S>
1.01 -- Preliminary Form of Underwriting Agreement.
1.02 -- Form of Lock-Up Agreement.
3.01 -- Certificate of Incorporation, as amended to date.
3.02 -- Form of Amended and Restated Certificate of Incorporation
to be filed upon the closing of the offering.
3.03 -- Bylaws, as amended to date.
3.04 -- Form of Bylaws to be adopted upon the closing of the
offering.
4.01* -- Form of Common Stock Certificate.
5.01* -- Opinion of Perkins Coie LLP regarding legality of
securities being issued.
10.01 -- Form of Indemnification Agreement between the Registrant
and each of its directors and officers.
10.02 -- Hemotech and CIT Amended and Restated Allosteric
Modifiers of Hemoglobin Agreement with Center for
Innovative Technology dated January 12, 1994.
10.03 -- Amendment to Allos Therapeutics, Inc. and CIT Amended and
Restated Allosteric Modifiers of Hemoglobin Agreement
with Center for Innovative Technology dated January 17,
1995.
10.04 -- Amendment to Allos Therapeutics, Inc. and CIT Amended and
Restated Allosteric Modifiers of Hemoglobin Agreement
with Center for Innovative Technology dated March 12,
1996.
10.05 -- Assignment and Assumption Agreement with Amendment with
Center for Innovative Technology and Virginia
Commonwealth University Intellectual Property Foundation
dated July 28, 1997.
10.06 -- Exercise of Option to Nonheme Protein License Agreement
with VCU-Intellectual Property Foundation dated March 23,
1998.
10.07 -- Warrant Agreement to purchase shares of Series B
Preferred Stock with Comdisco, Inc. dated April 15, 1996.
10.08 -- Warrant Agreement to purchase shares of Series C
Preferred Stock with Comdisco, Inc. dated May 5, 1998.
10.09 -- Allos Therapeutics, Inc. Series C Convertible Preferred
Stock Purchase Agreement dated October 4, 1999.
10.10 -- Allos Therapeutics, Inc. Fourth Amended and Restated
Stockholder Rights Agreement dated October 4, 1999.
10.11 -- Allos Therapeutics, Inc. 1995 Stock Option Plan, as
amended to date.
10.12 -- Office Lease with Denver Jack Limited Partnership dated
October 30, 1995.
10.13 -- First Amendment to 7000 Broadway Building Office Lease
with Denver Jack Limited Partnership dated October 30,
1995.
10.14 -- Second Amendment to 7000 Broadway Building Office Lease
with Denver Jack Limited Partnership dated June 7, 1996.
10.15 -- Third Amendment to 7000 Broadway Building Office Lease
with Denver Jack Limited Partnership dated March 26,
1998.
10.16 -- Fourth Amendment to 7000 Broadway Building Office Lease
with Denver Jack Limited Partnership dated June 29, 1998.
10.17 -- Lease Agreement with Virginia Biotechnology Research Park
Authority dated July 28, 1999.
10.18 -- Term Sheet for Contract API Supply between Allos and
Hovione dated March 25, 1999.
10.19 -- Confirmatory letter agreement with Hovione Inter Limited
dated January 13, 2000.
</TABLE>
<PAGE> 85
<TABLE>
<CAPTION>
EXHIBIT NO DESCRIPTION
---------- -----------
<C> <S>
10.20 -- Development and Investigational Supply Proposal between
Taylor Pharmaceuticals and Allos Therapeutics, Inc. dated
December 30, 1998.
23.01 -- Consent of PricewaterhouseCoopers LLP Independent
Accountants.
23.02 -- Consent of Perkins Coie LLP (included in Exhibit 5.01).
24.01 -- Power of Attorney (see page II-5 of the Registration
Statement).
27.01 -- Financial Data Schedule
</TABLE>
- ---------------
* To be filed by amendment
<PAGE> 1
EXHIBIT 1.1
_________ Shares
ALLOS THERAPEUTICS, INC.
Common Stock
UNDERWRITING AGREEMENT
__________, 2000
SG COWEN SECURITIES CORPORATION
PRUDENTIAL VECTOR HEALTHCARE
U.S. BANCORP PIPER JAFFRAY, INC.
As Representatives of the several Underwriters
c/o SG Cowen Securities Corporation
Financial Square
New York,
New York 10005
Dear Sirs:
1. Introductory. Allos Therapeutics, Inc., a Delaware corporation (the
"Company"), proposes to sell, pursuant to the terms of this Agreement, to
the several underwriters named in Schedule A hereto (the "Underwriters,"
or, each, an "Underwriter"), an aggregate of o shares of Common Stock,
$0.001 par value (the "Common Stock") of the Company. The aggregate of o
shares so proposed to be sold is hereinafter referred to as the "Firm
Stock". The Company also proposes to sell to the Underwriters, upon the
terms and conditions set forth in Section 3 hereof, up to an additional o
shares of Common Stock (the "Optional Stock"). The Firm Stock and the
Optional Stock are hereinafter collectively referred to as the "Stock". SG
Cowen Securities Corporation ("SG Cowen"), Prudential Vector Healthcare and
U.S. Bancorp Piper Jaffray, Inc. are acting as representatives of the
several Underwriters and in such capacity are hereinafter referred to as
the "Representatives".
2. Representations and Warranties of the Company. The Company represents and
warrants to, and agrees with, the several Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-o) in the form
in which it became or becomes effective and also in such form as it may
be when any post-effective amendment thereto shall become effective
with respect to the Stock, including any preeffective prospectuses
included as part of the registration statement as originally filed or
as part of any amendment or supplement thereto, or filed pursuant to
Rule 424 under the Securities Act of 1933, as amended (the "Securities
Act"), and the rules and regulations (the "Rules and Regulations") of
the Securities and Exchange Commission (the "Commission") thereunder,
copies of which have heretofore been delivered to you, has been
carefully prepared by the Company in conformity with the requirements
of the Securities Act and has been filed with the Commission under the
Securities Act; one or more amendments to such registration statement,
including in each case an amended preeffective prospectus, copies of
which amendments have heretofore been delivered to you, have been so
prepared and filed. If it is contemplated, at the time this Agreement
is executed, that a post-effective amendment to the registration
statement will be filed and must be declared effective before the
offering of the Stock may commence, the term "Registration Statement"
as used in this Agreement means the registration statement as amended
1
<PAGE> 2
by said post-effective amendment. The term "Registration Statement" as
used in this Agreement shall also include any registration statement
relating to the Stock that is filed and declared effective pursuant to
Rule 462(b) under the Securities Act. The term "Prospectus" as used in
this Agreement means the prospectus in the form included in the
Registration Statement, or, (A) if the prospectus included in the
Registration Statement omits information in reliance on Rule 430A under
the Securities Act and such information is included in a prospectus
filed with the Commission pursuant to Rule 424(b) under the Securities
Act, the term "Prospectus" as used in this Agreement means the
prospectus in the form included in the Registration Statement as
supplemented by the addition of the Rule 430A information contained in
the prospectus filed with the Commission pursuant to Rule 424(b) and
(B) if prospectuses that meet the requirements of Section 10(a) of the
Securities Act are delivered pursuant to Rule 434 under the Securities
Act, then (i) the term "Prospectus" as used in this Agreement means the
"prospectus subject to completion" (as such term is defined in Rule
434(g) under the Securities Act) as supplemented by (a) the addition of
Rule 430A information or other information contained in the form of
prospectus delivered pursuant to Rule 434(b)(2) under the Securities
Act or (b) the information contained in the term sheets described in
Rule 434(b)(3) under the Securities Act, and (ii) the date of such
prospectuses shall be deemed to be the date of the term sheets. The
term "Preeffective Prospectus" as used in this Agreement means the
prospectus subject to completion in the form included in the
Registration Statement at the time of the initial filing of the
Registration Statement with the Commission, and as such prospectus
shall have been amended from time to time prior to the date of the
Prospectus.
(b) The Commission has not issued or threatened to issue any order
preventing or suspending the use of any Preeffective Prospectus, and,
at its date of issue, each Preeffective Prospectus conformed in all
material respects with the requirements of the Securities Act and did
not include 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; and, when the Registration Statement becomes
effective and at all times subsequent thereto up to and including each
of the Closing Dates (as hereinafter defined), the Registration
Statement and the Prospectus and any amendments or supplements thereto
contained and will contain all material statements and information
required to be included therein by the Securities Act and conformed and
will conform in all material respects to the requirements of the
Securities Act and neither the Registration Statement nor the
Prospectus, nor any amendment or supplement thereto, included or will
include any untrue statement of a material fact or omit to state any
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; provided, however, that the foregoing
representations, warranties and agreements shall not apply to
information contained in or omitted from any Preeffective Prospectus or
the Registration Statement or the Prospectus or any such amendment or
supplement thereto in reliance upon, and in conformity with, written
information furnished to the Company by or on behalf of any
Underwriter, directly or through you, specifically for use in the
preparation thereof; there is no franchise, lease, contract, agreement
or document required to be described in the Registration Statement or
Prospectus or to be filed as an exhibit to the Registration Statement
which is not described or filed therein as required; and all
descriptions of any such franchises, leases, contracts, agreements or
documents contained in the Registration Statement are accurate and
complete descriptions of such documents in all material respects.
(c) Subsequent to the respective dates as of which information is given
in the Registration Statement and Prospectus, and except as set forth
or contemplated in the Prospectus, the Company has not incurred any
liabilities or obligations, direct or contingent, nor entered into any
2
<PAGE> 3
transactions not in the ordinary course of business, and there has not
been any material adverse change in the condition (financial or
otherwise), properties, business, management, prospects, net worth or
results of operations of the Company or any change in the capital
stock, short-term or long-term debt of the Company.
(d) The financial statements, together with the related notes, set
forth in the Prospectus and elsewhere in the Registration Statement
fairly present, on the basis stated in the Registration Statement, the
financial position and the results of operations and changes in
financial position of the Company at the respective dates or for the
respective periods therein specified. Such statements and related notes
have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis except as may be set forth in
the Prospectus. The selected financial and statistical data set forth
in the Prospectus fairly present, on the basis stated in Registration
Statement, the information set forth therein.
(e) PricewaterhouseCoopers LLP, who have expressed their opinions on
the audited financial statements included in the Registration Statement
and the Prospectus are independent public accountants as required by
the Securities Act and the Rules and Regulations.
(f) The Company has been duly organized and is validly existing and in
good standing as a corporation under the laws of its jurisdiction of
organization, with power and authority (corporate and other) to own or
lease its properties and to conduct its business as described in the
Prospectus; the Company is in possession of and operating in compliance
with all franchises, grants, authorizations, licenses, permits,
easements, consents, certificates and orders required for the conduct
of its business, all of which are valid and in full force and effect;
and the Company is duly qualified to do business and in good standing
as a foreign corporation in all other jurisdictions where its ownership
or leasing of properties or the conduct of its business requires such
qualification. The Company has all requisite power and authority, and
all necessary consents, approvals, authorizations, orders,
registrations, qualifications, licenses and permits of and from all
public regulatory or governmental agencies and bodies to own, lease and
operate its properties and conduct its business as now being conducted
and as described in the Registration Statement and the Prospectus, and
no such consent, approval, authorization, order, registration,
qualification, license or permit contains a materially burdensome
restriction not adequately disclosed in the Registration Statement and
the Prospectus.
(g) The Company's authorized and outstanding capital stock is on the
date hereof, and will be on the Closing Dates, as set forth under the
heading "Capitalization" in the Prospectus; the outstanding shares of
common stock of the Company conform to the description thereof in the
Prospectus and have been duly authorized and validly issued and are
fully paid and nonassessable and have been issued in compliance with
all federal and state securities laws and were not issued in violation
of or subject to any preemptive rights or similar rights to subscribe
for or purchase securities and conform to the description thereof
contained in the Prospectus. Except as disclosed in and or contemplated
by the Prospectus and the financial statements of the Company and
related notes thereto included in the Prospectus, the Company does not
have outstanding any options or warrants to purchase, or any preemptive
rights or other rights to subscribe for or to purchase any securities
or obligations convertible into, or any contracts or commitments to
issue or sell, shares of its capital stock or any such options, rights,
convertible securities or obligations, except for options granted
subsequent to the date of information provided in the Prospectus
pursuant to the Company's employee and stock option plans as disclosed
in the Prospectus. The description of the Company's stock option and
other stock plans or arrangements, and the options or other rights
3
<PAGE> 4
granted or exercised thereunder, as set forth in the Prospectus,
accurately and fairly presents the information required to be shown
with respect to such plans, arrangements, options and rights.
(h) The Stock to be issued and sold by the Company to the Underwriters
hereunder has been duly and validly authorized and, when issued and
delivered against payment therefor as provided herein, will be duly and
validly issued, fully paid and nonassessable and free of any preemptive
or similar rights and will conform to the description thereof in the
Prospectus.
(i) Except as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company is a party or of
which any property of the Company is subject, which, if determined
adversely to the Company, might individually or in the aggregate (i)
prevent or adversely affect the transactions contemplated by this
Agreement, (ii) suspend the effectiveness of the Registration
Statement, (iii) prevent or suspend the use of the Preeffective
Prospectus in any jurisdiction or (iv) result in a material adverse
change in the condition (financial or otherwise), properties, business,
management, prospects, net worth or results of operations of the
Company and there is no valid basis for any such legal or governmental
proceeding; and to the best of the Company's knowledge no such
proceedings are threatened or contemplated against the Company by
governmental authorities or others. The Company is not a party nor
subject to the provisions of any material injunction, judgment, decree
or order of any court, regulatory body or other governmental agency or
body. The description of the Company's litigation under the heading
"Legal Proceedings" in the Prospectus is true and correct and complies
with the Rules and Regulations.
(j) The execution, delivery and performance of this Agreement and the
consummation of the transactions herein contemplated (A) will not
result in any violation of the provisions of the certificate of
incorporation, by-laws or other organizational documents of the
Company, or any law, order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any
of its properties or assets, (B) will not conflict with or result in a
breach or violation of any of the terms or provisions of or constitute
a default under any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company is a party or by
which it or any of its properties is or may be bound, the Certificate
of Incorporation, By-laws or other organizational documents of the
Company, or any law, order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any
of its properties or will result in the creation of a lien.
(k) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement by the Company and the consummation of
the transactions contemplated hereby, except such as may be required by
the National Association of Securities Dealers, Inc. (the "NASD") or
under the Securities Act or the Securities Exchange Act of 1934, as
amended (the "Exchange Act") or the securities or "Blue Sky" laws of
any jurisdiction in connection with the purchase and distribution of
the Stock by the Underwriters.
(l) The Company has the full corporate power and authority to enter
into this Agreement and to perform its obligations hereunder (including
to issue, sell and deliver the Stock), and this Agreement has been duly
and validly authorized, executed and delivered by the Company and is a
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except to the extent that rights
to indemnity and contribution hereunder may be limited by federal or
state securities laws or the public policy underlying such laws.
4
<PAGE> 5
(m) The Company is in all material respects in compliance with, and
conducts its business in conformity with, all applicable federal,
state, local and foreign laws, rules and regulations or any court or
governmental agency or body; to the knowledge of the Company, otherwise
than as set forth in the Registration Statement and the Prospectus, no
prospective change in any of such federal or state laws, rules or
regulations has been adopted which, when made effective, would have a
material adverse effect on the operations of the Company.
(n) The Company has filed all necessary federal, state, local and
foreign income, payroll, franchise and other tax returns and has paid
all taxes shown as due thereon or with respect to any of its
properties, and there is no tax deficiency that has been, or to the
knowledge of the Company is likely to be, asserted against the Company
or any of its properties or assets that would adversely affect the
financial position, business or operations of the Company.
(o) No person or entity has the right to require registration of shares
of Common Stock or other securities of the Company because of the
filing or effectiveness of the Registration Statement or otherwise,
except for persons and entities who have expressly waived such right or
who have been given proper notice and have failed to exercise such
right within the time or times required under the terms and conditions
of such right.
(p) Neither the Company nor any of its officers, directors or
affiliates has taken or will take, directly or indirectly, any action
designed or intended to stabilize or manipulate the price of any
security of the Company, or which caused or resulted in, or which might
in the future reasonably be expected to cause or result in,
stabilization or manipulation of the price of any security of the
Company.
(q) The Company has provided the Representatives with all financial
statements since o, 199o to the date hereof that are available to the
officers of the Company, including financial statements for the months
of o and o of 199o.
(r) The Company owns or possesses the right to use all patents,
trademarks, trademark registrations, service marks, service mark
registrations, trade names, copyrights, licenses, inventions, trade
secrets and rights described in the Prospectus as being owned or
licensed by it or necessary for the conduct of its business, and the
Company is not aware of any claim to the contrary or any challenge by
any other person to the rights of the Company with respect to the
foregoing. The Company's business as now conducted and as proposed to
be conducted does not and will not infringe or conflict with in any
material respect patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses or other intellectual property or
franchise right of any person. Except as described in the Prospectus,
no claim has been made against the Company alleging the infringement by
the Company of any patent, trademark, service mark, trade name,
copyright, trade secret, license in or other intellectual property
right or franchise right of any person.
(s) The Company has performed all material obligations required to be
performed by it under all contracts required by Item 601(b)(10) of
Regulation S-K under the Securities Act to be filed as exhibits to the
Registration Statement, and neither the Company nor any other party to
such contract is in default under or in breach of any such obligations.
The Company has not received any notice of such default or breach.
(t) The Company is not involved in any labor dispute nor is any such
dispute threatened. The Company is not aware that (A) any executive,
key employee or significant group of employees of the Company plans to
terminate employment with the Company or (B) any such executive or key
5
<PAGE> 6
employee is subject to any noncompete, nondisclosure, confidentiality,
employment, consulting or similar agreement that would be violated by
the present or proposed business activities of the Company. The Company
does not have or expect to have any liability for any prohibited
transaction or funding deficiency or any complete or partial withdrawal
liability with respect to any pension, profit sharing or other plan
which is subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), to which the Company makes or ever has made
a contribution and in which any employee of the Company is or has ever
been a participant. With respect to such plans, the Company is in
compliance in all material respects with all applicable provisions of
ERISA.
(u) The Company has obtained the written agreement described in Section
8(l) of this Agreement from each of its officers, directors and holders
of Common Stock listed on Schedule C hereto.
(v) The Company has, and as of the Closing Dates will have, good and
marketable title in fee simple to all real property and good and
marketable title to all personal property owned or proposed to be owned
by it which is material to the business of the Company, in each case
free and clear of all liens, encumbrances and defects except such as
are described the Prospectus or such as would not have a material
adverse effect on the Company; and any real property and buildings held
under lease by the Company or proposed to be held after giving effect
to the transactions described in the Prospectus are, or will be as of
each of the Closing Dates, held by it under valid, subsisting and
enforceable leases with such exceptions as would not have a material
adverse effect on the Company, in each case except as described in or
contemplated by the Prospectus.
(w) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are
customary in the business in which it is engaged or proposes to engage
after giving effect to the transactions described in the Prospectus;
and the Company does not have any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not materially
and adversely affect the condition, financial or otherwise, or the
earnings, business or operations of the Company, except as described in
or contemplated by the Prospectus.
(x) Other than as contemplated by this Agreement, there is no broker,
finder or other party that is entitled to receive from the Company any
brokerage or finder's fee or other fee or commission as a result of any
of the transactions contemplated by this Agreement.
(y) The Company has no subsidiaries.
(z) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(aa) To the Company's knowledge, neither the Company nor any employee
or agent of the Company has made any payment of funds of the Company or
received or retained any funds in violation of any law, rule or
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<PAGE> 7
regulation, which payment, receipt or retention of funds is of a
character required to be disclosed in the Prospectus.
(bb) The Company is not and, after application of the net proceeds of
this offering as described under the caption "Use of Proceeds" in the
Prospectus, will not become an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended.
Each certificate signed by any officer of the Company and delivered to
the Underwriters or counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company as to the matters covered thereby.
3. Purchase by, and Sale and Delivery to, Underwriters--Closing Dates. The
Company agrees to sell to the Underwriters the Firm Stock, and on the basis
of the representations, warranties, covenants and agreements herein
contained, but subject to the terms and conditions herein set forth, the
Underwriters agree, severally and not jointly, to purchase the Firm Stock
from the Company, the number of shares of Firm Stock to be purchased by
each Underwriter being set opposite its name in Schedule A, subject to
adjustment in accordance with Section 12 hereof, at U.S.$ _per share (the
"Purchase Price").
The Company will deliver the Firm Stock to the Representatives for the
respective accounts of the several Underwriters (in the form of definitive
certificates, issued in such names and in such denominations as the
Representatives may direct by notice in writing to the Company given at or
prior to 12:00 Noon, New York Time, on the second full business day
preceding the First Closing Date (as defined below) or, if no such
direction is received, in the names of the respective Underwriters or in
such other names as SG Cowen may designate (solely for the purpose of
administrative convenience) and in such denominations as SG Cowen may
determine, against payment of the aggregate Purchase Price therefor by
certified or official bank check or checks in immediately available funds
(same day funds), payable to the order of the Company, all at the offices
of Brown & Wood LLP, One World Trade Center, New York, New York 10048. The
time and date of the delivery and closing shall be at 10:00 A.M., New York
Time, on February , 2000, in accordance with Rule 15c6-1 of the Exchange
Act. The time and date of such payment and delivery are herein referred to
as the "First Closing Date". The First Closing Date and the location of
delivery of, and the form of payment for, the Firm Stock may be varied by
agreement between the Company and SG Cowen. The First Closing Date may be
postponed pursuant to the provisions of Section 12.
The Company shall make the certificates for the Stock available to the
Representatives for examination on behalf of the Underwriters not later
than 10:00 A.M., New York Time, on the business day preceding the First
Closing Date at the offices of SG Cowen Securities Corporation, Financial
Square, New York, New York 10005.
It is understood that SG Cowen, individually and not as a Representative of
the several Underwriters, may (but shall not be obligated to) make payment
to the Company on behalf of any Underwriter or Underwriters, for the Stock
to be purchased by such Underwriter or Underwriters. Any such payment by SG
Cowen shall not relieve such Underwriter or Underwriters from any of its or
their other obligations hereunder.
The several Underwriters agree to make an initial public offering of the
Firm Stock at the initial public offering price as soon after the
effectiveness of the Registration Statement as in their judgment is
advisable. The Representatives shall promptly advise the Company of the
making of the initial public offering. The Company is advised by you that
the Firm Stock is to be offered to the public initially at U.S. $________ a
share (the "Public Offering Price") and to certain dealers selected by you
at a price that represents a concession not in excess of U.S. $_________ a
share under the Public Offering Price, and that any Underwriter may allow,
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<PAGE> 8
and such dealers may reallow, a concession, not in excess of U.S.$_________
a share, to any Underwriter or to certain other dealers.
For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Stock as contemplated by the Prospectus,
the Company hereby grants to the Underwriters an option to purchase,
severally and not jointly, up to the aggregate number of shares of Optional
Stock set forth opposite the Company's name on Schedule B hereto, for an
aggregate of up to o shares. The price per share to be paid for the
Optional Stock shall be the Purchase Price. The option granted hereby may
be exercised as to all or any part of the Optional Stock at any time, and
from time to time, not more than thirty (30) days subsequent to the
effective date of this Agreement. No Optional Stock shall be sold and
delivered unless the Firm Stock previously has been, or simultaneously is,
sold and delivered. The right to purchase the Optional Stock or any portion
thereof may be surrendered and terminated at any time upon notice by the
Underwriters to the Company.
The option granted hereby may be exercised by the Underwriters by giving
written notice from SG Cowen to the Company setting forth the number of
shares of the Optional Stock to be purchased by them and the date and time
for delivery of and payment for the Optional Stock. Each date and time for
delivery of and payment for the Optional Stock (which may be the First
Closing Date, but not earlier) is herein called the "Option Closing Date"
and shall in no event be earlier than two (2) business days nor later than
ten (10) business days after written notice is given. (The Option Closing
Date and the First Closing Date are herein called the "Closing Dates".) All
purchases of Optional Stock from the Company shall be made on a pro rata
basis. Optional Stock shall be purchased for the account of each
Underwriter in the same proportion as the number of shares of Firm Stock
set forth opposite such Underwriter's name in Schedule B hereto bears to
the total number of shares of Firm Stock (subject to adjustment by the
Underwriters to eliminate odd lots). Upon exercise of the option by the
Underwriters, the Company agrees to sell to the Underwriters the number of
shares of Optional Stock set forth in the written notice of exercise and
the Underwriters agree, severally and not jointly and subject to the terms
and conditions herein set forth, to purchase the number of such shares
determined as aforesaid.
The Company will deliver the Optional Stock to the Underwriters (in the
form of definitive certificates, issued in such names and in such
denominations as the Representatives may direct by notice in writing to the
Company given at or prior to 12:00 Noon, New York Time, on the second full
business day preceding the Option Closing Date or, if no such direction is
received, in the names of the respective Underwriters or in such other
names as SG Cowen may designate (solely for the purpose of administrative
convenience) and in such denominations as SG Cowen may determine, against
payment of the aggregate Purchase Price therefor by certified or official
bank check or checks in Clearing House funds (next day funds), payable to
the order of the Company all at the offices of Brown & Wood LLP, One World
Trade Center, New York, New York 10048. The Company shall make the
certificates for the Optional Stock available to the Underwriters for
examination not later than 10:00 A.M., New York Time, on the business day
preceding the Option Closing Date at the offices of SG Cowen Securities
Corporation, Financial Square, New York, New York 10005. The Option Closing
Date and the location of delivery of, and the form of payment for, the
Option Stock may be varied by agreement between the Company and SG Cowen.
The Option Closing Date may be postponed pursuant to the provisions of
Section 12.
4. Covenants and Agreements of the Company. The Company covenants and agrees
with the several Underwriters that:
(a) The Company will (i) if the Company and the Representatives have
determined not to proceed pursuant to Rule 430A of the of the Rules and
Regulations, use its best efforts to cause the Registration Statement
to become effective, (ii) if the Company and the Representatives have
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<PAGE> 9
determined to proceed pursuant to Rule 430A of the Rules and
Regulations, use its best efforts to comply with the provisions of and
make all requisite filings with the Commission pursuant to Rule 430A
and Rule 424 of the Rules and Regulations and (iii) if the Company and
the Representatives have determined to deliver Prospectuses pursuant to
Rule 434 of the Rules and Regulations, to use its best efforts to
comply with all the applicable provisions thereof. The Company will
advise the Representatives promptly as to the time at which the
Registration Statement becomes effective, will advise the
Representatives promptly of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of
the institution of any proceedings for that purpose, and will use its
best efforts to prevent the issuance of any such stop order and to
obtain as soon as possible the lifting thereof, if issued. The Company
will advise the Representatives promptly of the receipt of any comments
of the Commission or any request by the Commission for any amendment of
or supplement to the Registration Statement or the Prospectus or for
additional information and will not at any time file any amendment to
the Registration Statement or supplement to the Prospectus which shall
not previously have been submitted to the Representatives a reasonable
time prior to the proposed filing thereof or to which the
Representatives shall reasonably object in writing or which is not in
compliance with the Securities Act and the Rules and Regulations.
(b) The Company will prepare and file with the Commission, promptly
upon the request of the Representatives, any amendments or supplements
to the Registration Statement or the Prospectus which in the opinion of
the Representatives may be necessary to enable the several Underwriters
to continue the distribution of the Stock and will use its best efforts
to cause the same to become effective as promptly as possible.
(c) If at any time after the effective date of the Registration
Statement when a prospectus relating to the Stock is required to be
delivered under the Securities Act any event relating to or affecting
the Company occurs as a result of which the Prospectus or any other
prospectus as then in effect would include an untrue statement of a
material fact, or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the
Prospectus to comply with the Securities Act, the Company will promptly
notify the Representatives thereof and will prepare an amended or
supplemented prospectus which will correct such statement or omission;
and in case any Underwriter is required to deliver a prospectus
relating to the Stock nine (9) months or more after the effective date
of the Registration Statement, the Company upon the request of the
Representatives and at the expense of such Underwriter will prepare
promptly such prospectus or prospectuses as may be necessary to permit
compliance with the requirements of Section 10(a)(3) of the Securities
Act.
(d) The Company will deliver to the Representatives, at or before the
Closing Dates, signed copies of the Registration Statement, as
originally filed with the Commission, and all amendments thereto
including all financial statements and exhibits thereto, and will
deliver to the Representatives such number of copies of the
Registration Statement, including such financial statements but without
exhibits, and all amendments thereto, as the Representatives may
reasonably request. The Company will deliver or mail to or upon the
order of the Representatives, from time to time until the effective
date of the Registration Statement, as many copies of the Preeffective
Prospectus as the Representatives may reasonably request. The Company
will deliver or mail to or upon the order of the Representatives on the
date of the initial public offering, and thereafter from time to time
during the period when delivery of a prospectus relating to the Stock
is required under the Securities Act, as many copies of the Prospectus,
in final form or as thereafter amended or supplemented as the
Representatives may reasonably request; provided, however, that the
expense of the preparation and delivery of any prospectus required for
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<PAGE> 10
use nine (9) months or more after the effective date of the
Registration Statement shall be borne by the Underwriters required to
deliver such prospectus.
(e) The Company will make generally available to its shareholders as
soon as practicable, but not later than fifteen (15) months after the
effective date of the Registration Statement, an earning statement
which will be in reasonable detail (but which need not be audited) and
which will comply with Section 11(a) of the Securities Act, covering a
period of at least twelve (12) months beginning after the "effective
date" (as defined in Rule 158 under the Securities Act) of the
Registration Statement.
(f) The Company will cooperate with the Representatives to enable the
Stock to be registered or qualified for offering and sale by the
Underwriters and by dealers under the securities laws of such
jurisdictions as the Representatives may designate and at the request
of the Representatives will make such applications and furnish such
consents to service of process or other documents as may be required of
it as the issuer of the Stock for that purpose; provided, however, that
the Company shall not be required to qualify to do business or to file
a general consent (other than that arising out of the offering or sale
of the Stock) to service of process in any such jurisdiction where it
is not now so subject. The Company will, from time to time, prepare and
file such statements and reports as are or may be required of it as the
issuer of the Stock to continue such qualifications in effect for so
long a period as the Representatives may reasonably request for the
distribution of the Stock. The Company will advise the Representatives
promptly after the Company becomes aware of the suspension of the
qualifications or registration of (or any such exception relating to)
the Common Stock of the Company for offering, sale or trading in any
jurisdiction or of any initiation or threat of any proceeding for any
such purpose, and in the event of the issuance of any orders suspending
such qualifications, registration or exception, the Company will, with
the cooperation of the Representatives use its best efforts to obtain
the withdrawal thereof.
(g) The Company will furnish to its shareholders as soon as practicable
after the end of each fiscal year an annual report containing financial
statements certified by independent public accountants, will furnish to
its shareholders as soon as practicable after the end of each of the
first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the effective date of the Registration Statement)
summary financial information of the Company for such quarter in
reasonable detail.. During the period of five (5) years from the date
hereof, the Company will deliver to the Representatives and, upon
request, to each of the other Underwriters, as soon as they are
available, copies of each annual report of the Company and each other
report furnished by the Company to its shareholders and will deliver to
the Representatives, (i) as soon as they are available, copies of any
other reports (financial or other) which the Company shall publish or
otherwise make available to any of its shareholders as such, (ii) as
soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national
securities exchange and (iii) from time to time such other information
concerning the Company as you may request.
(h) The Company will use its best efforts to list the Stock, subject to
official notice of issuance, on the Nasdaq National Market concurrently
with the effectiveness of the Registration Statement.
(i) The Company will maintain a transfer agent and registrar for its
Common Stock.
(j) Prior to filing its quarterly statements on Form 10-Q, the Company
will have its independent auditors perform a limited quarterly review
of its quarterly numbers.
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<PAGE> 11
(k) The Company will not, for a period of 180 days following the date
of the Prospectus filed by the Company with the Securities and Exchange
Commission in connection with such public offering without the prior
written consent of SG Cowen, on behalf of the several Underwriters, (1)
directly or indirectly, offer, sell, assign, transfer, encumber,
pledge, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or
warrant to purchase, lend, or otherwise dispose of, other than by
operation of law, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock
(including, without limitation, Common Stock which may be deemed to be
beneficially owned by the undersigned in accordance with the rules and
regulations promulgated under the Securities Act) or (2) enter into any
swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of Common Stock
whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Stock or such other securities, in
cash or otherwise, other than the Company's sale of Common Stock
hereunder, the Company's issuance of stock options under the Company's
1995 Stock Option Plan, and the Company's issuance of Common Stock upon
the exercise of warrants and stock options which are presently
outstanding and described in the Prospectus.
(l) Prior to filing with the Commission any reports on Form SR pursuant
to Rule 463 of Rules and Regulations, the Company will furnish a copy
thereof to the counsel for the Underwriters and receive and consider
its comments thereon, and will deliver promptly to the Representatives
a signed copy of each report on Form SR filed by it with the
Commission.
(m) The Company will apply the net proceeds from the sale of the Stock
as set forth in the description under "Use of Proceeds" in the
Prospectus, which description complies in all respects with the
requirements of Item 504 of Regulation S-K.
(n) The Company will supply the Representatives with copies of all
correspondence to and from, and all documents issued to and by, the
Commission in connection with the registration of the Stock under the
Securities Act.
(o) Prior to each of the Closing Dates the Company will furnish to the
Representatives, as soon as they have been prepared, copies of any
unaudited interim financial statements of the Company for any periods
subsequent to the periods covered by the financial statements appearing
in the Registration Statement and the Prospectus.
(p) Prior to each of the Closing Dates the Company will issue no press
release or other communications directly or indirectly and hold no
press conference with respect to the Company, the financial condition,
results of operations, business, prospects, assets or liabilities of
the Company, or the offering of the Stock, without the Representatives
prior written consent. For a period of twelve (12) months following the
first Closing Date, the Company will use its best efforts to provide to
the Representatives copies of each press release or other public
communications with respect to the financial condition, results of
operations, business, prospects, assets or liabilities of the Company
at least twenty-four (24) hours prior to the public issuance thereof or
such longer advance period as may reasonably be practicable.
(q) During the period of five (5) years hereafter, the Company will
furnish to the Representatives, and upon request of the
Representatives, to each of the Underwriters: (i) as soon as
practicable after the end of each fiscal year, copies of the Annual
Report of the Company containing the balance sheet of the Company as of
the close of such fiscal year and statements of income, stockholders'
equity and cash flows for the year then ended and the opinion thereon
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<PAGE> 12
of the Company's independent public accountants; (ii) as soon as
practicable after the filing thereof, copies of each proxy statement,
Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Report on
Form 8-K or other report filed by the Company with the Commission, or
the NASD or any securities exchange; and (iii) as soon as available,
copies of any report or communication of the Company mailed generally
to holders of its Common Stock.
5. Payment of Expenses. (a) The Company will pay (directly or by
reimbursement) all costs, fees and expenses incurred in connection with
expenses incident to the performance of its obligations under this
Agreement and in connection with the transactions contemplated hereby,
including but not limited to (i) all expenses and taxes incident to the
issuance and delivery of the Stock to the Representatives; (ii) all
expenses incident to the registration of the Stock under the Securities
Act; (iii) the costs of preparing stock certificates (including printing
and engraving costs); (iv) all fees and expenses of the registrar and
transfer agent of the Stock; (v) all necessary issue, transfer and other
stamp taxes in connection with the issuance and sale of the Stock to the
Underwriters; (vi) fees and expenses of the Company's counsel and the
Company's independent accountants; (vii) all costs and expenses incurred in
connection with the preparation, printing filing, shipping and distribution
of the Registration Statement, each Preeffective Prospectus and the
Prospectus (including all exhibits and financial statements) and all
amendments and supplements provided for herein, the "Agreement Among
Underwriters" between the Representatives and the Underwriters, the Master
Selected Dealers' Agreement, the Underwriters' Questionnaire and the Blue
Sky memoranda (including related fees and expenses of counsel to the
Underwriters) and this Agreement; (viii) all filing fees, attorneys' fees
and expenses incurred by the Company or the Underwriters in connection with
exemptions from the qualifying or registering (or obtaining qualification
or registration of) all or any part of the Stock for offer and sale under
the Blue Sky or other securities laws of such jurisdictions as the
Representatives may designate; (ix) fees and expenses of counsel to the
Underwriters; (x) all fees and expenses paid or incurred in connection with
filings made with the NASD; and (xi) all other costs and expenses incident
to the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section.
(b) In addition to its other obligations under Section 6(a) hereof, the
Company agrees that, as an interim measure during the pendency of any
claim, action, investigation, inquiry or other proceeding arising out of or
based upon (i) any statement or omission or any alleged statement or
omission, (ii) any act or failure to act or any alleged act or failure to
act or (iii) any breach or inaccuracy in its representations and
warranties, it will reimburse each Underwriter on a quarterly basis for all
reasonable legal or other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry
or other proceeding, notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the Company's
obligation to reimburse each Underwriter for such expenses and the
possibility that such payments might later be held to have been improper by
a court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, each Underwriter
shall promptly return it to the Company together with interest, compounded
daily, determined on the basis of the prime rate (or other commercial
lending rate for borrowers of the highest credit standing) announced from
time to timed by o , New York, New York (the "Prime Rate"). The request for
reimbursement will be sent to the Company. Any such interim reimbursement
payments which are not made to an Underwriter within thirty (30) days of a
request for reimbursement shall bear interest at the Prime Rate from the
due date for such reimbursement. This expense reimbursement agreement will
be in addition to any other liability which the Company may otherwise have.
(c) In addition to its other obligations under Section 6(b) hereof, each
Underwriter severally agrees that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other proceeding
arising out of or based upon any statement or omission, or any alleged
statement or omission, described in Section 6(b) hereof which relates to
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<PAGE> 13
information furnished to the Company pursuant to Section 6(b) hereof, it
will reimburse the Company (and, to the extent applicable, each officer,
director or controlling person) on a quarterly basis for all reasonable
legal or other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other
proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of the Underwriters' obligation to
reimburse the Company (and, to the extent applicable, each officer,
director or controlling person) for such expenses and the possibility that
such payments might later be held to have been improper by a court of
competent jurisdiction. To the extent that any such interim reimbursement
payment is so held to have been improper, the Company (and, to the extent
applicable, each officer, director or controlling person) shall promptly
return it to the Underwriters together with interest, compounded daily,
determined on the basis of the Prime Rate. Any such interim reimbursement
payments which are not made to the Company within thirty (30) days of a
request for reimbursement shall bear interest at the Prime Rate from the
date of such request. This indemnity agreement will be in addition to any
liability which such Underwriter may otherwise have.
(d) It is agreed that any controversy arising out of the operation of the
interim reimbursement arrangements set forth in paragraph (b) or (c) of
this Section 5, including the amounts of any requested reimbursement
payments and the method of determining such amounts, shall be settled by
arbitration conducted under the provisions of the Constitution and Rules of
the Board of Governors of the New York Stock Exchange, Inc. or pursuant to
the Code of Arbitration Procedure of the NASD. Any such arbitration must be
commenced by service of a written demand for arbitration or written notice
of intention to arbitrate, therein electing the arbitration tribunal. In
the event the party demanding arbitration does not make such designation of
an arbitration tribunal in such demand or notice, then the party responding
to said demand or notice is authorized to do so. Such an arbitration would
be limited to the operation of the interim reimbursement provisions
contained in paragraph (b) or (c) of this Section 5 and would not resolve
the ultimate propriety or enforceability of the obligation to reimburse
expenses which is created by the provisions of Section 6.
6. Indemnification and Contribution. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls such
Underwriter within the meaning of the Securities Act and the respective
officers, directors, partners, employees, representatives and agents of
each of such Underwriter (collectively, the "Underwriter Indemnified
Parties" and, each, an "Underwriter Indemnified Party"), against any
losses, claims, damages, liabilities or expenses (including the reasonable
cost of investigating and defending against any claims therefor and counsel
fees incurred in connection therewith), joint or several, which may be
based upon the Securities Act, or any other statute or at common law, (i)
on the ground or alleged ground that any Preeffective Prospectus, the
Registration Statement or the Prospectus (or any Preeffective Prospectus,
the Registration Statement or the Prospectus as from time to time amended
or supplemented) includes or allegedly includes an untrue statement of a
material fact or omits 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, unless such
statement or omission was made in reliance upon, and in conformity with,
written information furnished to the Company by any Underwriter, directly
or through the Representatives, specifically for use in the preparation
thereof or (ii) for any act or failure to act or any alleged act or failure
to act by any Underwriter in connection with, or relating in any manner to,
the Stock or the offering contemplated hereby, and which is included as
part of or referred to in any loss, claim, damage, liability or expense
arising out of or based upon matters covered by clause (i) above (provided
that the Company shall not be liable under this clause (ii) to the extent
that it is determined in a final judgment by a court of competent
jurisdiction that such loss, claim, damage, or liability or expense
resulted directly from any such acts or failures to act undertaken or
omitted to be taken by such Underwriter through its gross negligence or
willful misconduct). The Company will be entitled to participate at its own
expense in the defense or, if it so elects, to assume the defense of any
suit brought to enforce any such liability, but if the Company elects to
assume the defense, such defense shall be conducted by counsel chosen by it
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<PAGE> 14
and reasonably acceptable to the Underwriters. In the event the Company
elects to assume the defense of any such suit and retain such counsel, any
Underwriter Indemnified Parties, defendant or defendants in the suit, may
retain additional counsel but shall bear the fees and expenses of such
counsel unless (i) the Company shall have specifically authorized the
retaining of such counsel or (ii) the parties to such suit include any such
Underwriter Indemnified Parties, and the Company and such Underwriter
Indemnified Parties at law or in equity have been advised by counsel to the
Underwriters that one or more legal defenses may be available to it or them
which may not be available to the Company, in which case the Company shall
not be entitled to assume the defense of such suit notwithstanding its
obligation to bear the fees and expenses of such counsel. This indemnity
agreement is not exclusive and will be in addition to any liability which
the Company might otherwise have and shall not limit any rights or remedies
which may otherwise be available at law or in equity to each Underwriter
Indemnified Party.
(b) Each Underwriter severally and not jointly agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who have
signed the Registration Statement and each person, if any, who controls the
Company within the meaning of the Securities Act (collectively, the
"Company Indemnified Parties") against any losses, claims, damages,
liabilities or expenses (including, unless the Underwriter or Underwriters
elect to assume the defense, the reasonable cost of investigating and
defending against any claims therefor and counsel fees incurred in
connection therewith), joint or several, which arise out of or are based in
whole or in part upon the Securities Act, the Exchange Act or any other
federal, state, local or foreign statute or regulation, or at common law,
on the ground or alleged ground that any Preeffective Prospectus, the
Registration Statement or the Prospectus (or any Preeffective Prospectus,
the Registration Statement or the Prospectus, as from time to time amended
and supplemented) includes an untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances in
which they were made, not misleading, but only insofar as any such
statement or omission was made in reliance upon, and in conformity with,
written information furnished to the Company by such Underwriter, directly
or through the Representatives, specifically for use in the preparation
thereof; provided, however, that in no case is such Underwriter to be
liable with respect to any claims made against any Company Indemnified
Party against whom the action is brought unless such Company Indemnified
Party shall have notified such Underwriter in writing within a reasonable
time after the summons or other first legal process giving information of
the nature of the claim shall have been served upon the Company Indemnified
Party, but failure to notify such Underwriter of such claim shall not
relieve it from any liability which it may have to any Company Indemnified
Party otherwise than on account of its indemnity agreement contained in
this paragraph. Such Underwriter shall be entitled to participate at its
own expense in the defense, or, if it so elects, to assume the defense of
any suit brought to enforce any such liability, but, if such Underwriter
elects to assume the defense, such defense shall be conducted by counsel
chosen by it. In the event that any Underwriter elects to assume the
defense of any such suit and retain such counsel, the Company Indemnified
Parties and any other Underwriter or Underwriters or controlling person or
persons, defendant or defendants in the suit, shall bear the fees and
expenses of any additional counsel retained by them, respectively. The
Underwriter against whom indemnity may be sought shall not be liable to
indemnify any person for any settlement of any such claim effected without
such Underwriter's consent. This indemnity agreement is not exclusive and
will be in addition to any liability which such Underwriter might otherwise
have and shall not limit any rights or remedies which may otherwise be
available at law or in equity to any Company Indemnified Party.
(c) If the indemnification provided for in this Section 6 is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages, liabilities or
expenses (or actions in respect thereof) referred to herein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the
14
<PAGE> 15
one hand and the Underwriters on the other from the offering of the Stock.
If, however, the allocation provided by the immediately preceding sentence
is not permitted by applicable law, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company on the one hand and the Underwriters
on the other in connection with the statements or omissions which resulted
in such losses, claims, damages, liabilities or expenses (or actions in
respect thereof), as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses)
received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement
or omission. The Company and the Underwriters agree that it would not be
just and equitable if contribution were determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or
by any other method of allocation which does not take account of the
equitable considerations referred to above. The amount paid or payable by
an indemnified party as a result of the losses, claims, damages,
liabilities or expenses (or actions in respect thereof) referred to above
shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating, defending,
settling or compromising any such claim. Notwithstanding the provisions of
this subsection (c), no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the shares
of the Stock underwritten by it and distributed to the public were offered
to the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. The Underwriters' obligations to
contribute are several in proportion to their respective underwriting
obligations and not joint. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
7. Survival of Indemnities, Representations, Warranties, etc. The respective
indemnities, covenants, agreements, representations, warranties and other
statements of the Company and the several Underwriters, as set forth in
this Agreement or made by them respectively, pursuant to this Agreement,
shall remain in full force and effect, regardless of any investigation made
by or on behalf of any Underwriter, the Company or any of its officers or
directors or any controlling person, and shall survive delivery of and
payment for the Stock.
8. Conditions of Underwriters' Obligations. The respective obligations of the
several Underwriters hereunder shall be subject to the accuracy, at and
(except as otherwise stated herein) as of the date hereof and at and as of
each of the Closing Dates, of the representations and warranties made
herein by the Company, to compliance at and as of each of the Closing Dates
by the Company with its covenants and agreements herein contained and other
provisions hereof to be satisfied at or prior to each of the Closing Dates,
and to the following additional conditions:
(a) The Registration Statement shall have become effective and no stop
order suspending the effectiveness thereof shall have been issued and no
proceedings for that purpose shall have been initiated or, to the knowledge
of the Company or the Representatives, shall be threatened by the
Commission, and any request for additional information on the part of the
Commission (to be included in the Registration Statement or the Prospectus
or otherwise) shall have been complied with to the reasonable satisfaction
of the Representatives. Any filings of the Prospectus, or any supplement
thereto, required pursuant to Rule 424(b) or Rule 434 of the Rules and
15
<PAGE> 16
Regulations, shall have been made in the manner and within the time period
required by Rule 424(b) and Rule 434 of the Rules and Regulations, as the
case may be.
(b) The Representatives shall have been satisfied that there shall not have
occurred any change prior to each of the Closing Dates in the condition
(financial or otherwise), properties, business, management, prospects, net
worth or results of operations of the Company, or any change in the capital
stock, short-term or long-term debt of the Company, such that (i) the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, contains an untrue statement of fact which, in the opinion of the
Representatives, is material, or omits to state a fact which, in the
opinion of the Representatives, is required to be stated therein or is
necessary to make the statements therein not misleading, or (ii) it is
unpracticable in the reasonable judgment of the Representatives to proceed
with the public offering or purchase the Stock as contemplated hereby.
(c) The Representatives shall be satisfied that no legal or governmental
action, suit or proceeding affecting the Company which is material and
adverse to the Company or which affects or may affect the Company's ability
to perform its obligations under this Agreement shall have been instituted
or threatened and there shall have occurred no material adverse development
in any existing such action, suit or proceeding.
(d) At the time of execution of this Agreement, the Representatives shall
have received from PricewaterhouseCoopers LLP, independent certified public
accountants, a letter, dated the date hereof, in form and substance
satisfactory to the Underwriters.
(e) The Representatives shall have received from PricewaterhouseCoopers
LLP, independent certified public accountants, letters, dated each of the
Closing Dates, to the effect that such accountants reaffirm, as of each of
the Closing Dates, and as though made on each of the Closing Dates, the
statements made in the letter furnished by such accountants pursuant to
paragraph (d) of this Section 8.
(f) The Representatives shall have received from Perkins Coie LLP, counsel
for the Company, opinions, dated each of the Closing Dates, to the effect
set forth in Exhibit I hereto.
[(g) The Representatives shall have received from ______, special patent
counsel of the Company, an opinion dated each of the Closing Dates to the
effect set forth in Exhibit __ hereto.]
[(h) The Representatives shall have received from _________, special
regulatory counsel of the Company, an opinion dated each of the Closing
Dates to the effect set forth in Exhibit __ hereto.]
(i) The Representatives shall have received from Brown & Wood LLP, counsel
for the Underwriters, their opinions dated each of the Closing Dates with
respect to the incorporation of the Company, the validity of the Stock, the
Registration Statement and the Prospectus and such other related matters as
it may reasonably request, and the Company shall have furnished to such
counsel such documents as they may request for the purpose of enabling them
to pass upon such matters.
(j) The Representatives shall have received a certificates, dated each of
the Closing Dates, of the chief executive officer or the president and the
chief financial or accounting officer of the Company to the effect that:
(i) No stop order suspending the effectiveness of the Registration
Statement has been issued, and, to the best of the knowledge of
the signers, no proceedings for that purpose have been instituted
or are pending or contemplated under the Securities Act;
16
<PAGE> 17
(ii) Neither any Preeffective Prospectus, as of its date, nor the
Registration Statement nor the Prospectus, nor any amendment or
supplement thereto, as of the time when the Registration Statement
became effective and at all times subsequent thereto up to the
delivery of such certificate, included any untrue statement of a
material fact or omitted to state any 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;
(iii) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except
as set forth or contemplated in the Prospectus, the Company has
not incurred any material liabilities or obligations, direct or
contingent, nor entered into any material transactions not in the
ordinary course of business and there has not been any material
adverse change in the condition (financial or otherwise),
properties, business, management, prospects, net worth or results
of operations of the Company, or any change in the capital stock,
short-term or long-term debt of the Company;
(iv) The representations and warranties of the Company in this
Agreement are true and correct at and as of each of the Closing
Dates, and the Company has complied with all the agreements and
performed or satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Dates; and
(v) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, and except as disclosed
in or contemplated by the Prospectus, (i) there has not been any
material adverse change or a development involving a material
adverse change in the condition (financial or otherwise),
properties, business, management, prospects, net worth or results
of operations of the Company; (ii) the business and operations
conducted by the Company have not sustained a loss by strike,
fire, flood, accident or other calamity (whether or not insured)
of such a character as to interfere materially with the conduct of
the business and operations of the Company; (iii) no legal or
governmental action, suit or proceeding is pending or threatened
against the Company which is material to the Company, whether or
not arising from transactions in the ordinary course of business,
or which may materially and adversely affect the transactions
contemplated by this Agreement; (iv) since such dates and except
as so disclosed, the Company has not incurred any material
liability or obligation, direct, contingent or indirect, made any
change in its capital stock (except pursuant to its stock plans),
made any material change in its short-term or funded debt or
repurchased or otherwise acquired any of the Company's capital
stock; and (v) the Company has not declared or paid any dividend,
or made any other distribution, upon its outstanding capital stock
payable to stockholders of record on a date prior to the Closing
Date.
(k) The Company shall have furnished to the Representatives such additional
certificates as the Representatives may have reasonably requested as to the
accuracy, at and as of each of the Closing Dates, of the representations
and warranties made herein by it and as to compliance at and as of each of
the Closing Dates by it with its covenants and agreements herein contained
and other provisions hereof to be satisfied at or prior to each of the
Closing Dates, and as to satisfaction of the other conditions to the
obligations of the Underwriters hereunder.
17
<PAGE> 18
(l) SG Cowen shall have received the written agreements, substantially in
the form of Exhibit II hereto, of the officers, directors and holders of
Common Stock listed in Schedule C that each will not offer, sell, assign,
transfer, encumber, contract to sell, grant an option to purchase or
otherwise dispose of, any shares of Common Stock (including, without
limitation, Common Stock which may be deemed to be beneficially owned by
such officer, director or holder in accordance with the Rules and
Regulations) during the 180 days following the date of the final
Prospectus.
(m) The Nasdaq National Market shall have approved the stock for listing,
subject only to official notice of issuance.
All opinions, certificates, letters and other documents will be in
compliance with the provisions hereunder only if they are satisfactory in
form and substance to the Representatives. The Company will furnish to the
Representatives conformed copies of such opinions, certificates, letters
and other documents as the Representatives shall reasonably request. If any
of the conditions hereinabove provided for in this Section shall not have
been satisfied when and as required by this Agreement, this Agreement may
be terminated by the Representatives by notifying the Company of such
termination in writing or by telegram at or prior to each of the Closing
Dates, but SG Cowen, on behalf of the Representatives, shall be entitled to
waive any of such conditions.
9. Effective Date. This Agreement shall become effective immediately as to
Sections 5, 6, 7, 9, 10, 11, 13, 14, 15, 16 and 17 and, as to all other
provisions, at 11:00 a.m. New York City time on the first full business day
following the effectiveness of the Registration Statement or at such
earlier time after the Registration Statement becomes effective as the
Representatives may determine on and by notice to the Company or by release
of any of the Stock for sale to the public. For the purposes of this
Section 9, the Stock shall be deemed to have been so released upon the
release for publication of any newspaper advertisement relating to the
Stock or upon the release by you of telegrams (i) advising Underwriters
that the shares of Stock are released for public offering or (ii) offering
the Stock for sale to securities dealers, whichever may occur first.
10. Termination. This Agreement (except for the provisions of Section 5) may be
terminated by the Company at any time before it becomes effective in
accordance with Section 9 by notice to the Representatives and may be
terminated by the Representatives at any time before it becomes effective
in accordance with Section 9 by notice to the Company. In the event of any
termination of this Agreement under this or any other provision of this
Agreement, there shall be no liability of any party to this Agreement to
any other party, other than as provided in Sections 5, 6 and 11 and other
than as provided in Section 12 as to the liability of defaulting
Underwriters.
This Agreement may be terminated after it becomes effective by the
Representatives by notice to the Company (i) if at or prior to the First
Closing Date trading in securities on any of the New York Stock Exchange,
American Stock Exchange or Nasdaq National Market System shall have been
suspended or minimum or maximum prices shall have been established on any
such exchange or market, or a banking moratorium shall have been declared
by New York or United States authorities; (ii) trading of any securities of
the Company shall have been suspended on any exchange or in any
over-the-counter market; (iii) if at or prior to the First Closing Date
there shall have been (A) an outbreak or escalation of hostilities between
the United States and any foreign power or of any other insurrection or
armed conflict involving the United States or (B) any change in financial
markets or any calamity or crisis which, in the judgment of the
Representatives, makes it impractical or inadvisable to offer or sell the
Stock on the terms contemplated by the Prospectus; (iv) if there shall have
been any development or prospective development involving particularly the
business or properties or securities of the Company or the transactions
contemplated by this Agreement, which, in the judgment of the
Representatives, makes it impracticable or inadvisable to offer or deliver
the Stock on the terms contemplated by the Prospectus; (v) if there shall
be any litigation or proceeding, pending or threatened, which, in the
18
<PAGE> 19
judgment of the Representatives, makes it impracticable or inadvisable to
offer or deliver the on the terms contemplated by the Prospectus; or (vi)
if there shall have occurred any of the events specified in the immediately
preceding clauses (i) - (v) together with any other such event that makes
it, in the judgment of the Representatives, impractical or inadvisable to
offer or deliver the Stock on the terms contemplated by the Prospectus.
11. Reimbursement of Underwriters. Notwithstanding any other provisions hereof,
if this Agreement shall not become effective by reason of any election of
the Company pursuant to the first paragraph of Section 10 or shall be
terminated by the Representatives under Section 8 or Section 10, the
Company will bear and pay the expenses specified in Section 5 hereof and,
in addition to its obligations pursuant to Section 6 hereof, the Company
will reimburse the reasonable out-of-pocket expenses of the several
Underwriters (including reasonable fees and disbursements of counsel for
the Underwriters) incurred in connection with this Agreement and the
proposed purchase of the Stock, and promptly upon demand the Company will
pay such amounts to the Representatives.
12. Substitution of Underwriters. If any Underwriter or Underwriters shall
default in its or their obligations to purchase shares of Stock hereunder
and the aggregate number of shares which such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed ten percent
(10%) of the total number of shares underwritten, the other Underwriters
shall be obligated severally, in proportion to their respective commitments
hereunder, to purchase the shares which such defaulting Underwriter or
Underwriters agreed but failed to purchase. If any Underwriter or
Underwriters shall so default and the aggregate number of shares with
respect to which such default or defaults occur is more than ten percent
(10%) of the total number of shares underwritten and arrangements
satisfactory to the Representatives and the Company for the purchase of
such shares by other persons are not made within forty-eight (48) hours
after such default, this Agreement shall terminate.
If the remaining Underwriters or substituted Underwriters are required
hereby or agree to take up all or part of the shares of Stock of a
defaulting Underwriter or Underwriters as provided in this Section 12, (i)
the Company shall have the right to postpone the Closing Dates for a period
of not more than five (5) full business days in order that the Company may
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus, or in any other documents or arrangements, and
the Company agrees promptly to file any amendments to the Registration
Statement or supplements to the Prospectus which may thereby be made
necessary, and (ii) the respective numbers of shares to be purchased by the
remaining Underwriters or substituted Underwriters shall be taken as the
basis of their underwriting obligation for all purposes of this Agreement.
Nothing herein contained shall relieve any defaulting Underwriter of its
liability to the Company or the other Underwriters for damages occasioned
by its default hereunder. Any termination of this Agreement pursuant to
this Section 12 shall be without liability on the part of any
non-defaulting Underwriter or the Company, except for expenses to be paid
or reimbursed pursuant to Section 5 and except for the provisions of
Section 6.
13. Notices. All communications hereunder shall be in writing and, if sent to
the Underwriters shall be mailed, delivered or telegraphed and confirmed to
you, as their Representatives c/o SG Cowen Securities Corporation at
Financial Square, New York, New York 10005 except that notices given to an
Underwriter pursuant to Section 6 hereof shall be sent to such Underwriter
at the address furnished by the Representatives or, if sent to the Company,
shall be mailed, delivered or telegraphed and confirmed c/o Allos
Therapeutics, Inc. _______ Denver, Colorado _______.
14. Successors. This Agreement shall inure to the benefit of and be binding
upon the several Underwriters, the Company and their respective successors
and legal representatives. Nothing expressed or mentioned in this Agreement
is intended or shall be construed to give any person other than the persons
mentioned in the preceding sentence any legal or equitable right, remedy or
claim under or in respect of this Agreement, or any provisions herein
19
<PAGE> 20
contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons
and for the benefit of no other person; except that the representations,
warranties, covenants, agreements and indemnities of the Company contained
in this Agreement shall also be for the benefit of the person or persons,
if any, who control any Underwriter or Underwriters within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, and the
indemnities of the several Underwriters shall also be for the benefit of
each director of the Company, each of its officers who has signed the
Registration Statement and the person or persons, if any, who control the
Company within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act.
15. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
16. Authority of the Representatives. In connection with this Agreement, you
will act for and on behalf of the several Underwriters, and any action
taken under this Agreement by SG Cowen, Prudential Vector Healthcare and
U.S. Bancorp Piper Jaffray, Inc. as Representatives, will be binding on all
the Underwriters.
17. Partial Unenforceability. The invalidity or unenforceability of any
Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision
hereof. If any Section, paragraph or provision of this Agreement is for any
reason determined to be invalid or unenforceable, there shall be deemed to
be made such minor changes (and only such minor changes) as are necessary
to make it valid and enforceable.
18. General. This Agreement constitutes the entire agreement of the parties to
this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with
respect to the subject matter hereof.
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect
the construction or interpretation of this Agreement. This Agreement may be
amended or modified, and the observance of any term of this Agreement may
be waived, only by a writing signed by the Company and the Representatives.
19. Counterparts. This Agreement may be signed in two (2) or more counterparts,
each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
20
<PAGE> 21
If the foregoing correctly sets forth our understanding, please indicate your
acceptance thereof in the space provided below for that purpose, whereupon this
letter and your acceptance shall constitute a binding agreement between us.
Very truly yours,
ALLOS THERAPEUTICS, INC.
By:
----------------------------------
Name:
Title:
Accepted and delivered in
New York as of the date
first above written.
SG COWEN SECURITIES CORPORATION
PRUDENTIAL VECTOR HEALTHCARE
U.S. BANCORP PIPER JAFFRAY, INC.
Acting on their own behalf
and as Representatives of several
Underwriters referred to in the
foregoing Agreement.
By: SG COWEN SECURITIES CORPORATION
By:
--------------------------------
John P. Dunphy
Managing Director - Syndicate
21
<PAGE> 22
SCHEDULE A
<TABLE>
<CAPTION>
=================================================================================================
Number Number of
of Firm Optional
Shares Shares
to be to be
Name Purchased Purchased
=================================================================================================
<S> <C> <C>
SG Cowen Securities Corporation
Prudential Vector Healthcare
U.S. Bancorp Piper Jaffray, Inc.
----------- ------------
Total
=========== ============
=================================================================================================
</TABLE>
22
<PAGE> 23
SCHEDULE B
<TABLE>
<CAPTION>
Number Number of
of Firm Optional
Shares Shares
to be to be
Sold Sold
<S> <C> <C>
Allos Therapeutics, Inc.
----------- ------------
Total
=========== ============
</TABLE>
23
<PAGE> 24
SCHEDULE C
[Persons subject to Lock-up Agreement]
24
<PAGE> 25
Exhibit II
[Form of Lock-Up Agreement]
____________, 2000
SG Cowen Securities Corporation
Financial Square, 27th Floor
New York, NY 10005
As representative of the
several Underwriters
Re: Allos Therapeutics, Inc.
Dear Sirs:
In order to induce SG Cowen Securities Corporation ("SG Cowen"),
Prudential Securities Incorporated and U.S. Bancorp Piper Jaffray Inc. as
representatives of the several underwriters (collectively, the "Underwriters")
to enter into a certain underwriting agreement with Allos Therapeutics, Inc., a
Delaware corporation (the "Company") with respect to the public offering of
shares of the Company's Common Stock, par value $0.001 per share ("Common
Stock"), the undersigned hereby agrees that for a period of 180 days following
the date of the final prospectus filed by the Company with the Securities and
Exchange Commission in connection with such public offering, the undersigned
will not, without the prior written consent of SG Cowen, on behalf of the
several Underwriters, (1) directly or indirectly, offer, sell, assign, transfer,
encumber, pledge, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise dispose of, other than by operation of law, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock (including, without limitation, Common Stock which
may be deemed to be beneficially owned by the undersigned in accordance with the
rules and regulations promulgated under the Securities Act of 1933, as the same
may be amended or supplemented from time to time (such shares, the "Beneficially
Owned Shares")) or (2) enter into any swap or other arrangement that transfers
to another, in whole or in part, any of the economic consequences of ownership
of Common Stock whether any such transaction described in clause (1) or (2)
above is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise.
Anything contained herein to the contrary notwithstanding, any person
to whom shares of Common Stock or Beneficially Owned Shares are transferred from
the undersigned shall be bound by the terms of this Agreement.
In addition, the undersigned hereby waives, from the date hereof until
the expiration of the 180 day period following the date of the Company's final
Prospectus, any and all rights, if any, to request or demand registration
pursuant to the Securities Act of any shares of Common Stock that are registered
in the name of the undersigned or that are Beneficially Owned Shares.
In order to enable the aforesaid covenants to be enforced, the
undersigned hereby consents to the placing of legends and/or stop-transfer
orders with the transfer agent of the Common Stock with respect to any shares of
Common Stock or Beneficially Owned Shares.
Whether or not the public offering actually occurs depends on a number
of factors, including market conditions. Any public offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
-------------------------------------
(Name)
-------------------------------------
(Address)
28
<PAGE> 1
EXHIBIT 1.02
____________, 2000
SG Cowen Securities Corporation
Financial Square, 27th Floor
New York, NY 10005
As representative of the
several Underwriters
Re: Allos Therapeutics, Inc.
Dear Sirs:
In order to induce SG Cowen Securities Corporation ("SG Cowen"),
Prudential Securities Incorporated and U.S. Bancorp Piper Jaffray Inc. as
representatives of the several underwriters (collectively, the "Underwriters")
to enter into a certain underwriting agreement with Allos Therapeutics, Inc., a
Delaware corporation (the "Company") with respect to the public offering of
shares of the Company's Common Stock, par value $0.001 per share ("Common
Stock"), the undersigned hereby agrees that for a period of 180 days following
the date of the final prospectus filed by the Company with the Securities and
Exchange Commission in connection with such public offering, the undersigned
will not, without the prior written consent of SG Cowen, on behalf of the
several Underwriters, (1) directly or indirectly, offer, sell, assign, transfer,
encumber, pledge, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise dispose of, other than by operation of law, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock (including, without limitation, Common Stock which
may be deemed to be beneficially owned by the undersigned in accordance with the
rules and regulations promulgated under the Securities Act of 1933, as the same
may be amended or supplemented from time to time (such shares, the "Beneficially
Owned Shares")) or (2) enter into any swap or other arrangement that transfers
to another, in whole or in part, any of the economic consequences of ownership
of Common Stock whether any such transaction described in clause (1) or (2)
above is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise.
Anything contained herein to the contrary notwithstanding, any person
to whom shares of Common Stock or Beneficially Owned Shares are transferred from
the undersigned shall be bound by the terms of this Agreement.
<PAGE> 2
In addition, the undersigned hereby waives, from the date hereof until
the expiration of the 180 day period following the date of the Company's final
Prospectus, any and all rights, if any, to request or demand registration
pursuant to the Securities Act of any shares of Common Stock that are registered
in the name of the undersigned or that are Beneficially Owned Shares.
In order to enable the aforesaid covenants to be enforced, the
undersigned hereby consents to the placing of legends and/or stop-transfer
orders with the transfer agent of the Common Stock with respect to any shares of
Common Stock or Beneficially Owned Shares.
Whether or not the public offering actually occurs depends on a number
of factors, including market conditions. Any public offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
-------------------------------------------
(Name)
-------------------------------------------
(Address)
2
<PAGE> 1
EXHIBIT 3.01
State of Delaware PAGE 1
Office of the Secretary of State
----------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE RESTATED CERTIFICATE OF
"ALLOS THERAPEUTICS, INC.", FILED IN THIS OFFICE ON THE FIRST DAY OF OCTOBER,
A.D. 1999, AT 11:30 O'CLOCK A.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS.
/s/ EDWARD J. FREEL
[SEAL] -----------------------------------------
Edward J. Freel, Secretary of State
2644310 8100
AUTHENTICATION: 0004259
991415069
DATE: 10-01-99
<PAGE> 2
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
ALLOS THERAPEUTICS, INC.
Allos Therapeutics, Inc., a corporation organized and existing under the
laws of the State of Delaware, hereby certifies as follows:
A. The name of the corporation is Allos Therapeutics, Inc. The corporation
was originally incorporated under the same name and the original Certificate of
Incorporation of the corporation was filed with the Delaware Secretary of State
on July 17, 1996.
B. Pursuant to Sections 242 and 245 of the General Corporation Law of the
State of Delaware, this Amended and Restated Certificate of Incorporation amends
and restates the provisions of the Certificate of Incorporation of the
corporation.
C. The text of the Certificate of Incorporation is hereby amended and
restated in its entirety to read as follows:
ARTICLE I.
The name of this corporation is Allos Therapeutics, Inc.
ARTICLE II.
The address of the corporation's registered office in the State of Delaware
is 1209 Orange Street, City of Wilmington, County of New Castle, Delaware 19801.
The name of its registered agent at such address is The Corporation Trust
Company.
ARTICLE III.
The purpose of the corporation is to engage in any lawful act or activity
for which a corporation may be organized under the General Corporation Law of
Delaware.
<PAGE> 3
ARTICLE IV.
The corporation is authorized to issue two classes of stock to be
designated, respectively, "Common Stock" and "Preferred Stock." The total number
of shares which the corporation is authorized to issue is 76,660,000 shares.
50,000,000 shares shall be Common Stock with a par value of $0.001 per share and
26,660,000 shares shall be Preferred Stock with a par value of $0.001 per share.
Five million (5,000,000) shares of Preferred Stock are designated Series A
Preferred Stock, five million fifty thousand (5,050,000) shares of Preferred
Stock are designated Series B Preferred Stock, and sixteen million six hundred
ten thousand (16,610,000) shares of Preferred Stock are designated Series C
Preferred Stock.
The authority of the Board of Directors with respect to each series shall
include, but not be limited to, determination of the following:
(a) The number of shares constituting that series and the distinctive
designation of that series;
(b) The dividend rate on the share of that series, whether dividends
shall be cumulative, and if so, from which date or dates, and the relative
rights of priority, if any, of payment of dividends on shares of that series;
(c) Whether that series shall have voting rights, in addition to the
voting rights provided by law, and, if so, the terms of such voting rights;
(d) Whether that series shall have conversion privileges, and, if so,
the terms and conditions of such conversion, including provision for adjustment
of the conversion rate in such events as the Board of Directors shall determine;
(e) Whether the shares of that series shall be redeemable, and, if so,
the terms and conditions of such redemption, including the date or dates upon or
after which they shall be redeemable, and the amount per share payable in case
of redemption, which amount may vary under different conditions and at different
redemption dates;
(f) Whether that series shall have a sinking fund for the redemption or
purchase of shares of that series, and, if so, the terms and amount of such
sinking fund;
(g) The rights of the shares of that series in the event of voluntary
or involuntary liquidation, dissolution or winding up of the corporation, and
the relative rights of priority, if any, of payment of shares of that series;
and
(h) Any other relative rights, preferences and limitations of that
series.
Dividends on outstanding shares of Preferred Stock shall be paid or
declared and set apart for payment before any dividends shall be paid or
declared and set apart for payment on the Common Stock with respect to the same
dividend period.
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ARTICLE V.
The rights, preferences, privileges and restrictions granted to or imposed
upon the Common Stock and the Preferred Stock are as follows:
1. Dividends.
(a) The holders of shares of the Series A Preferred Stock, the Series B
Preferred Stock and the Series C Preferred Stock shall be entitled to receive
dividends, out of any assets legally available therefor, prior and in preference
to any declaration or payment of any dividend (other than a dividend payable in
Common Stock) on the Common Stock or other equity securities of the corporation,
at the annual rate of seven cents ($0.07), eleven and two-tenths cents ($0.112)
and twelve and sixty-seven hundredths cents ($0.1267) per share (as adjusted
for any combinations, consolidations or stock distributions or dividends with
respect to such shares), respectively, payable in cash if, as and when declared
by the Board of Directors quarterly on January 1, April 1, July 1 and October 1
of each year. Such dividends shall accrue on each share from the date of
issuance of such share, and shall accrue from day to day, whether or not earned
or declared. Such dividends shall be cumulative so that if such dividends in
respect of any previous or current quarterly period, at the annual rates
specified above, shall not have been paid or declared and a sum sufficient for
payment thereof set apart, the deficiency shall first be fully paid before any
dividend or other distribution shall be paid on or set apart for the Common
Stock or any other equity securities of the corporation. Any accumulation of
dividends on the Series A Preferred Stock, Series B Preferred Stock or Series C
Preferred Stock shall not bear interest.
(b) No dividend shall be paid or declared, and no distribution shall be
made on the shares of any series of Preferred Stock unless at the same time a
proportionate dividend, which shall be ratable in proportion to the respective
annual dividend rates fixed therefor, shall be paid or declared and set apart
for the shares of every other series of Preferred Stock. Unless full cumulative
dividends (as provided in Section 1(a) hereof) on the Series A Preferred Stock,
the Series B Preferred Stock and the Series C Preferred Stock for all past
dividend periods and the then current dividend period shall have been paid or
declared and a sum sufficient for the payment hereof set apart: (i) no dividend
whatsoever (other than a dividend payable in Common Stock) shall be paid or
declared, and no distribution shall be made, on any Common Stock or other equity
security of the corporation, and (ii) no shares of Common Stock or other equity
security shall be purchased, redeemed or acquired by the corporation and no
funds shall be paid into or set aside or made available for a sinking fund for
the purchase, redemption, or acquisition thereof, except from employees or
consultants of the corporation upon termination of employment or services,
pursuant to the terms of restricted stock agreements entered into with such
employees or consultants providing for the repurchase of such shares of Common
Stock at cost.
(c) After full cumulative dividends (provided in Section 1(a) hereof) on
the Series A Preferred Stock, the Series B Preferred Stock and the Series C
Preferred Stock for all past dividend periods and the then current dividend
period have been paid or declared and a sum sufficient for the payment thereof
set apart, dividends or distributions (other than a dividend payable in Common
Stock) may be declared and paid upon shares of Common Stock in any fiscal year
of the corporation, but only if the holders of Series A Preferred Stock, Series
B Preferred Stock and Series
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<PAGE> 5
C Preferred Stock shall be entitled to receive dividends, at the same time as
such dividends are paid on Common Stock, in an amount equal to the dividends
that would be payable on such number of shares of Common Stock into which such
shares of Series A Preferred Stock, Series B Preferred Stock or Series C
Preferred Stock are convertible on the record date for such dividends.
2. Liquidation Preference.
(a) In the event of any liquidation, dissolution, or winding up of the
corporation, either voluntary or involuntary, distributions to the stockholders
of the corporation shall be made in the following manner: The holders of the
Series A Preferred Stock, the Series B Preferred Stock and the Series C
Preferred Stock shall be entitled to receive the greater of:
(i) prior and in preference to any distribution of any of the assets
or surplus funds of the corporation to the holders of the Common Stock, by
reason of their ownership of such stock, the amount of $1.00 per share for each
share of Series A Preferred Stock, $1.60 per share for each share of Series B
Preferred Stock and $1.81 per share for each share of Series C Preferred Stock,
as the case may be, then held by them, in each case, adjusted for any
combinations, consolidations, or stock distributions or dividends with respect
to such shares and, in addition, an amount equal to all accrued but unpaid
dividends on such shares of Series A Preferred Stock, Series B Preferred Stock
and Series C Preferred Stock, respectively (the "Liquidation Value" for the
Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock,
respectively); provided, however, that if the assets and funds thus distributed
among the holders of the Series A Preferred Stock, Series B Preferred Stock and
Series C Preferred Stock shall be insufficient to permit the payment to such
holders of the full aforesaid preferential amount, then the entire assets and
funds of the corporation legally available for distribution shall be distributed
among the holders of the Series A Preferred Stock, Series B Preferred Stock and
Series C Preferred Stock in proportion to the full Liquidation Value each such
holder is otherwise entitled to receive in accordance with the preceding
sentence; and
(ii) concurrently with any distribution of any of the assets or
surplus funds of the corporation to the holders of the Common Stock, the amount
such holders of the Series A Preferred Stock, the Series B Preferred Stock and
the Series C Preferred Stock would have been entitled to receive, by reason of
their ownership of Common Stock, if such holders had converted their shares of
Series A Preferred Stock, Series B Preferred Stock or Series C Preferred Stock
into shares of Common Stock immediately prior to such liquidation, dissolution,
or winding up of the corporation.
(b) For purposes of this Section 2, a merger, reorganization or
consolidation of the corporation in which the corporation's stockholders
immediately prior to such transaction possess less than 50% of the voting
securities of the surviving, continuing or purchasing entity (or parent, if any)
immediately after the transaction or the sale of all or substantially all of the
assets of the corporation, shall be treated as a liquidation, dissolution or
winding up of the corporation.
(c) The fair value of the assets or property to be distributed in such
event shall be determined in good faith by the Board of Directors of the
corporation.
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<PAGE> 6
(d) If, upon the completion of the distributions contemplated by
paragraphs (a) and (b) of this Section 2, assets remain in the corporation, the
remaining assets legally available for distribution, if any, shall be divided
ratably among the holders of the corporation's Common Stock.
3. Voting Rights.
(a) General Voting Rights. Except as otherwise provided herein and in
Section 5 hereof, and except as otherwise required by law, the holder of each
share of Common Stock issued and outstanding shall have one vote per share and
the holder of each share of Series A Preferred Stock, Series B Preferred Stock
or Series C Preferred Stock, as the case may be, shall be entitled to the number
of votes equal to the number of shares of Common Stock into which such holder's
shares of Series A Preferred Stock, Series B Preferred Stock or Series C
Preferred Stock, respectively, could be converted at the record date for
determination of the stockholders entitled to vote on such matters, or, if no
such record date is established, at the date such vote is taken or any written
consent of stockholders is solicited, and shall have voting rights and powers
equal to the voting rights and powers of the Common Stock (except as otherwise
expressly provided herein or required by law), such votes to be counted together
with all other shares of stock of the corporation having general voting power
and not separately as a class. Holders of Common Stock, Series A Preferred
Stock, Series B Preferred Stock and Series C Preferred Stock shall be entitled
to notice of any stockholders' meeting in accordance with the Bylaws of the
corporation. Fractional votes by the holders of Series A Preferred Stock, Series
B Preferred Stock or Series C Preferred Stock, as the case may be, shall not,
however, be permitted and any fractional voting rights resulting from the above
formula (after aggregating all shares into which shares of Series A Preferred
Stock, Series B Preferred Stock or Series C Preferred Stock, respectively, held
by each holder could be converted) shall be rounded to the nearest lower whole
number.
(b) The Board of Directors shall consist of nine (9) members. The
holders of the Series A Preferred Stock and the Series B Preferred Stock, voting
together as a single class, shall be entitled to elect two (2) members of the
Board of Directors. The holders of the Series C Preferred Stock, voting as a
class, shall be entitled to elect three (3) members of the Board of Directors.
The holders of Common Stock, voting as a class, shall be entitled to elect one
(1) member of the Board of Directors. The holders of Preferred Stock and Common
Stock, voting together as a class, shall be entitled to elect three (3)
directors.
(c) In the case of any vacancy in the office of a director occurring
among the directors elected by the holders of preferred stock or Common Stock
pursuant to the second, third and fourth sentences in Section 3(b) hereof, the
remaining director or directors so elected by the holders of the Preferred Stock
or Common Stock may, by affirmative vote of a majority thereof (or the remaining
director so elected if there is but one, or if there is no such director
remaining, by the affirmative vote of the holders of a majority of the shares of
that class) elect a successor or successors to hold the office for the unexpired
term of the director or directors whose place or places shall be vacant. Any
director who shall have been elected by the holders of the Preferred Stock or
Common Stock or any director so elected as provided in the preceding sentence
hereof, may be removed during the aforesaid term of office, whether with or
without cause, only by the affirmative vote of the holders of a majority of the
Preferred Stock or Common Stock that elected such director, as the case may be.
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<PAGE> 7
4. Conversion. The holders of the Preferred Stock have conversion rights as
follows the ("Conversion Rights"):
(a) Right to Convert. Each share of Preferred Stock shall be
convertible, at the option of the holder thereof, at any time after the date of
issuance of such share at the office of the corporation or any transfer agent
for the Preferred Stock, into such number of fully paid and nonassessable shares
of Common Stock as determined by dividing the initial Conversion Price of such
series of Preferred Stock by the Conversion Price of such series of Preferred
Stock then in effect. The initial Conversion Price for the Series A Preferred
Stock, the Series B Preferred Stock and the Series C Preferred Stock shall be
$1.00, $1.60 and $1.81, respectively. The Conversion Price of each series of
Preferred Stock shall be subject to adjustment as hereinafter provided. No
amount shall be payable by a stockholder in respect of the conversion of any
share of Preferred Stock. Hereinafter, the term "Conversion Price" shall refer
to the Series A Conversion Price and/or the Series B Conversion Price and/or the
Series C Conversion Price, as the case may be.
(b) Automatic Conversion. Each share of Preferred Stock shall
automatically be converted into one or more share(s) of Common Stock at the
then-effective Conversion Price for such share of Preferred Stock in the event
of the closing of a firm commitment underwritten public offering pursuant to an
effective registration statement under the Securities Act of 1933, as amended,
covering the offer and sale of shares of Common Stock for the account of the
corporation and/or selling stockholders to the public at a price per share of
not less than $5.43 per share (appropriately adjusted for any recapitalization,
stock split, stock dividend or the like) and resulting in aggregate proceeds to
the corporation and/or the selling stockholders of not less than $15,000,000.
(c) Mechanics of Conversion. No fractional shares of Common Stock shall
be issued upon conversion of Preferred Stock. All shares of Common Stock
(including fractions thereof) issuable upon conversion of more than one share of
Preferred Stock by a holder thereof shall be aggregated for purposes of
determining whether the conversion would result in the issuance of any
fractional share. If, after the aforementioned aggregation, the conversion would
result in the issuance of a fraction of a share of Common Stock, the corporation
shall, in lieu of issuing any fractional shares to which the holder would be
otherwise entitled, pay cash equal to the fair market value of such fraction on
the date of conversion, as determined in good faith by the Board of Directors.
Before any holder of Preferred Stock shall be entitled to convert the same
into full shares of Common Stock and to receive certificates therefor, such
holder shall surrender the certificate or certificates therefor, duly endorsed,
at the office of the corporation or of any transfer agent for the Preferred
Stock, and shall give written notice to the corporation at such office that such
holder elects to convert the same. The corporation shall, as soon as practicable
thereafter, issue and deliver at such office to such holder of Preferred Stock,
(i) a certificate or certificates for the number of shares of Common Stock to
which such holder shall be entitled as aforesaid and (ii) cash or a check
payable to the holder in the amount of any cash amounts payable as the result of
a conversion into fractional shares of Common Stock. Such conversion shall be
deemed to have been made immediately prior to the close of business on the date
of such surrender of the Preferred Stock to be converted or upon the effective
date of any condition stated in the conversion notice, or, in the case of
conversion at the option of the corporation, on the date of closing of the
public offering described in Section 4(b), and
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<PAGE> 8
the person or persons entitled to receive the Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder or holders of
such Common Stock on such date. If the conversion is in connection with an
underwritten offer of securities registered pursuant to the Securities Act of
1933, as amended, the conversion shall be conditioned upon the closing with the
underwriter of the sale of securities pursuant to such offering, in which
event the person(s) entitled to receive the Common Stock issuable upon such
conversion of the Preferred Stock shall not be deemed to have converted such
Preferred Stock until immediately upon the closing of such sale of securities.
Upon conversion of any shares of Preferred Stock under this Section 4, the
corporation shall not pay any dividends accrued under Section 1(a) but
remaining unpaid at the time of conversion.
(d) Adjustments to Conversion Price for Diluting Issues.
(i) Special Definitions. For purposes of this Article V, the
following definitions shall apply:
(1) "Options" shall mean rights, options or warrants to
subscribe for, purchase or otherwise acquire either Common Stock or Convertible
Securities.
(2) "Original Issue Date" shall mean the date a security of the
corporation is issued.
(3) "Convertible Securities" shall mean any evidence of
indebtedness, shares (other than the shares of Series A Preferred Stock, Series
B Preferred Stock and Series C Preferred Stock authorized herein) or other
securities convertible into or exchangeable for Common Stock.
(4) "Additional Common Shares" shall mean all Common Stock
issued (or, pursuant to Section 4(d)(iii), deemed to be issued) by the
corporation after this Certificate of Incorporation is filed with the State of
Delaware ("Filing Date"), other than Common Stock issued or issuable at any
time:
(A) upon conversion of the Series A Preferred Stock, Series
B Preferred Stock or Series C Preferred Stock authorized herein;
(B) to officers, directors and employees of, and
consultants to, the corporation to be designated and approved by the Board of
Directors, but not exceeding 3,650,000 shares of Common Stock (net of purchases
of such shares or cancellations or expirations of options), subject to
adjustment for all subdivisions and combinations;
(C) as a dividend or distribution on Series A Preferred
Stock, Series B Preferred Stock or Series C Preferred Stock;
(D) by way of dividend or other distribution on Common
Stock excluded from the definition of Additional Common Shares by the foregoing
clauses (A), (C) or this clause (D); or
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<PAGE> 9
(E) to providers of lease financing to the corporation who
hold Convertible Securities under any agreement or arrangement approved by the
disinterested members of the Board of Directors of the corporation.
(ii) No Adjustment of Conversion Price. No adjustment in the
Conversion Price of any share of Series A Preferred Stock, Series B Preferred
Stock or Series C Preferred Stock shall be made in respect of the issuance or
deemed issuance of Additional Common Shares unless the consideration per share
(determined in accordance with Section 4(d)(v)) for an Additional Common Share
issued or deemed to be issued by the corporation is less than the Conversion
Price in effect on the date of, and immediately prior to such issue or deemed
issue, for such share of Series A Preferred Stock, Series B Preferred Stock or
Series C Preferred Stock.
(iii) Deemed Issuance of Additional Common Shares.
(1) Options and Convertible Securities. In the event the
corporation, at any time or from time to time after the Filing Date, shall issue
any Options or Convertible Securities or shall fix a record date for the
determination of holders of any class of securities entitled to receive any such
Options or Convertible Securities, then the maximum number of shares of Common
Stock (as set forth in the instrument relating thereto without regard to any
provisions contained therein for a subsequent adjustment of such number)
issuable upon the exercise of such Options or, in the case of Convertible
Securities and Options therefor, the conversion or exchange of such Convertible
Securities, shall be deemed to be Additional Common Shares issued as of the time
of such issuance or, in case such a record date shall have been fixed, as of the
close of business on such record date, provided that in any such case in which
Additional Common Shares are deemed to be issued:
(A) no further adjustment in the Conversion Price of the
Series A Preferred Stock, Series B Preferred Stock or Series C Preferred Stock
shall be made upon the subsequent issuance of Convertible Securities or shares
of Common Stock upon the exercise of such Options or conversion or exchange of
such Convertible Securities;
(B) if such Options or Convertible Securities by their
terms provide, with the passage of time or otherwise, for any increase or
decrease in the consideration payable to the corporation, or in the number of
shares of Common Stock issuable upon the exercise, conversion or exchange
thereof, the Conversion Price of the Series A Preferred Stock, Series B
Preferred Stock or Series C Preferred Stock computed upon the original issue
thereof (or upon the occurrence of a record date with respect thereto), and any
subsequent adjustments based thereon, shall, upon any such increase or decrease
becoming effective, be recomputed to reflect such increase or decrease insofar
as it affects such Options or the rights of conversion or exchange under such
Convertible Securities;
(C) upon the expiration of any such Options or any rights
of conversion or exchange under such Convertible Securities which shall not have
been exercised, the Conversion Price of the Series A Preferred Stock, Series B
Preferred Stock and Series C Preferred Stock computed upon the original issue
thereof (or upon the occurrence of a record date with respect
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thereto), and any subsequent adjustments based thereon, shall, upon such
expiration be recomputed as if:
(I) in the case of Convertible Securities or Options
for Common Stock, the only Additional Common Shares issued were Common Stock, if
any, actually issued upon the exercise of such Options or the conversion or
exchange of such Convertible Securities and the consideration received therefor
was the consideration actually received by the corporation for the issuance of
all such Options, whether or not exercised, plus the consideration actually
received by the corporation upon such exercise, or for the issuance of all such
Convertible Securities which were actually converted or exchanged, plus the
additional consideration, if any, actually received by the corporation upon such
conversion or exchange; and
(II) in the case of Options for Convertible
Securities, the only Convertible Securities issued were Convertible Securities,
if any, actually issued upon the exercise of such Options, and the consideration
received by the corporation for the Additional Common Shares deemed to have been
issued was the consideration actually received by the corporation for the
issuance of all such Options, whether or not exercised, plus the consideration
actually received by the corporation upon the issuance of the Convertible
Securities with respect to which such Options were actually exercised;
(D) no readjustment pursuant to clause (B) or (C) above
shall have the effect of increasing the Conversion Price for the Series A
Preferred Stock, Series B Preferred Stock or Series C Preferred Stock to an
amount which exceeds the Conversion Price for the Series A Preferred Stock,
Series B Preferred Stock or Series C Preferred Stock immediately prior to the
original adjustment; and
(E) in the case of any Options which expire by their terms
not more than 60 days after the date of issuance thereof, no adjustment of the
Conversion Price for any series of Preferred Stock shall be made until the
expiration or exercise of all such Options.
(2) Stock Dividends. In the event the corporation, at any time
or from time to time after the Original Issue Date of a security, shall declare
or pay any dividend on the Additional Common Shares payable in shares of Common
Stock, then and in any such event, Additional Common Shares shall be deemed to
have been issued immediately after the close of business on the record date for
the determination of holders of any class of securities entitled to receive such
dividend for purposes of adjusting the Conversion Price for the Series A
Preferred Stock, Series B Preferred Stock and Series C Preferred Stock;
provided, however, that if such record date is fixed and such dividend is not
fully paid, the only Additional Common Shares deemed to have been issued shall
be the number of shares of Common Stock actually issued as of the close of
business on such record date, and such Conversion Price shall be recomputed
accordingly.
(iv) Adjustment of Conversion Price Upon Issuance of Additional
Common Shares. In the event the corporation, at any time after the Original
Issue Date of Preferred Stock, shall issue Additional Common Shares (including
Additional Common Shares deemed to be issued pursuant to Section 4(d)(iii))
without consideration or for a consideration per shares less than the Conversion
Price for the Series A Preferred Stock, Series B Preferred Stock or Series C
Preferred
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<PAGE> 11
Stock, as the case may be, in effect on the date of and immediately prior to
such issuance, then and in such event, the Conversion Price for such series of
Preferred Stock shall be reduced, concurrently with such issuance, to a
price (calculated to the nearest cent) determined by multiplying such Conversion
Price by a fraction, the numerator of which shall be the number of shares of
Common Stock outstanding immediately prior to such issuance plus the number of
shares of Common Stock which the aggregate consideration received by the
corporation for the total number of Additional Common Shares so issued would
purchase at such Conversion Price and the denominator of which shall be the
number of shares of Common Stock outstanding immediately prior to such issuance
plus the number of such Additional Common Shares so issued; provided that, for
the purposes of this Section 4(d)(iv), all shares of Common Stock issuable upon
exercise of outstanding Options, and on conversion of outstanding Convertible
Securities and Preferred Stock shall be deemed to be outstanding.
(v) For purposes of this Section 4(d), the consideration received
by the corporation for the issuance of any Additional Common Shares shall be
computed as follows:
(1) Cash and Property. Such consideration shall:
(A) insofar as it consists of cash be computed at the
aggregate amount of cash received by the corporation excluding amounts paid or
payable for accrued interest or accrued dividends;
(B) insofar as it consists of property other than cash, be
computed at the fair value thereof at the time of such issuance, as determined
in good faith by the Board of Directors; and
(C) in the event Additional Common Shares are issued
together with other shares or securities or other assets of the corporation for
consideration so received, computed as provided in clause (A) and (B) above, as
determined in good faith by the Board of Directors.
(2) Options and Convertible Securities. The consideration per
share received by the corporation for Additional Common Shares deemed to have
been issued pursuant to Section 4(d)(iii)(1), relating to Options and
Convertible Securities, shall be determined by dividing:
(x) the total amount, if any, received or receivable by the
corporation as consideration for the issue of such Options or Convertible
Securities, plus the minimum aggregate amount of additional consideration (as
set forth in the instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such consideration) payable to
the corporation upon the exercise of such Options or the conversion or exchange
of such Convertible Securities, or in the case of Options for Convertible
Securities, the exercise of such Options for Convertible Securities and the
conversion or exchange of such Convertible Securities; by
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(y) the maximum number of shares of Common Stock (as set
forth in the instruments relating thereto, without regard to any provision
contained therein or a subsequent adjustment of such number) issuable upon the
exercise of such Options or the conversion or exchange of such Convertible
Securities.
(3) Stock Dividends. Any Additional Common Shares deemed to
have been issued relating to stock dividends shall be deemed to have been issued
for no consideration.
(vi) Adjustments for Subdivisions, Combinations or Consolidation of
Common Stock. In the event the outstanding Common Stock shall be subdivided (by
split or otherwise), into a greater number of shares of Common Stock, the
Conversion Price then in effect for each series of Preferred Stock shall,
concurrently with the effectiveness of such subdivision, be proportionately
decreased. In the event the outstanding Common Stock shall be combined or
consolidated, by reclassification or otherwise, into a lesser number of shares
of Common Stock, the Conversion Price, then in effect for each series of
Preferred Stock shall, concurrently with the effectiveness of such combination
or consolidation, be proportionately increased.
(vii) Adjustments for Other Distributions. In the event the
corporation at any time or from time to time makes, or fixes a record date for
the determination of holders of Common Stock entitled to receive any
distribution payable in securities or other property of the corporation other
than Common Stock and other than as otherwise adjusted in this Section 4, then
and in each such event provision shall be made so that the holders of Series A
Preferred Stock, Series B Preferred Stock and Series C Preferred Stock shall
receive upon conversion thereof, in addition to the number of shares of Common
Stock receivable thereupon, the amount of securities and other property of the
corporation which they would have received had their shares of Series A
Preferred Stock, Series B Preferred Stock and Series C Preferred Stock been
converted into Common Stock on the date of such event and had they thereafter,
during the period from the date of such event to and including the date of
conversion, retained such securities and other property receivable by them as
aforesaid during such period, subject to all other adjustments called for during
such period under this Section 4 with respect to the rights of the holders of
the Series A Preferred Stock, Series B Preferred Stock and Series C Preferred
Stock.
(viii) Adjustments for Reclassification, Exchange and Substitution.
If the Common Stock issuable upon conversion of the Series A Preferred Stock,
Series B Preferred Stock and Series C Preferred Stock shall be changed into the
same or a different number of shares of any other class or classes of stock,
whether by capital reorganization, reclassification or otherwise (other than a
subdivision or combination of shares provided for above), the Conversion Price
then in effect for each of the Series A Preferred Stock, the Series B Preferred
Stock and the Series C Preferred Stock shall, concurrently with the
effectiveness of such reorganization or reclassification, be proportionately
adjusted such that the Series A Preferred Stock, Series B Preferred Stock and
Series C Preferred Stock shall be convertible into, in lieu of the number of
shares of Common Stock which the holders would otherwise have been entitled to
receive, that number of shares of such other class or classes of stock
equivalent to the number of shares of Common Stock that would have been subject
to receipt by the holders upon conversion of the Series A Preferred Stock,
Series B Preferred Stock and Series C Preferred Stock immediately before that
change.
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(e) No Impairment. The corporation shall not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the corporation but shall at
all times in good faith assist in the carrying out of all the provisions of this
Section 4 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of the
Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock
against impairment.
(f) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Price of the Series A Preferred
Stock, Series B Preferred Stock or Series C Preferred Stock pursuant to this
Section 4, the corporation at its expense shall promptly compute such adjustment
or readjustment in accordance with the terms hereof and furnish to each holder
of shares of Series A Preferred Stock, Series B Preferred Stock or Series C
Preferred Stock, as the case may be, a certificate setting forth such adjustment
or readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The corporation shall, upon the written request at any
time of any holder of Series A Preferred Stock, Series B Preferred Stock or
Series C Preferred Stock, furnish or cause to be furnished to such holder a like
certificate setting forth (i) such adjustments and readjustments, (ii) the
Conversion Price at the time in effect, and (iii) the number of shares of Common
Stock and the amount, if any, of other property which at the time would be
received upon the conversion of shares of Series A Preferred Stock, Series B
Preferred Stock or Series C Preferred Stock.
(g) Notices of Record Date. In the event that the corporation shall
propose at any time:
(i) to declare any dividend or distribution upon its Common Stock,
whether or not a regular cash dividend and whether or not out of earnings or
earned surplus;
(ii) to offer for subscription pro rata to the holders of any class
or series of its stock any additional shares of stock of any class or series or
other rights;
(iii) to effect any reclassification or recapitalization of its
Common Stock outstanding involving a change in the Common Stock; or
(iv) to merge or consolidate with or into any other corporation, or
sell, lease or convey all or substantially all its property or business, or to
liquidate, dissolve or wind up; then, in connection with each such event, the
corporation shall send to the holders of the Series A Preferred Stock, Series B
Preferred Stock and Series C Preferred Stock:
(1) at least 20 days' prior written notice of the date on
which a record shall be taken for such dividend, distribution or subscription
rights (and specifying the date on which the holders of Common Stock shall be
entitled thereto) or for determining rights to vote in respect of the matters
referred to in (iii) and (iv) above; and
(2) in the case of the matters referred to in (iii) and (iv)
above, in the event a record date is taken with respect to any such matter, at
least 20 days' prior written notice
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<PAGE> 14
of such record date or, if no such record date is taken, at least 25 days' prior
written notice of the date when such matters shall take place (and specifying
the date on which the holders of Common Stock shall be entitled to exchange
their shares of Common Stock for securities or other property deliverable upon
the occurrence of such event).
Each such written notice shall be delivered personally or given by first
class mail, postage prepaid, addressed to the holders of the Series A Preferred
Stock, Series B Preferred Stock and Series C Preferred Stock at the address for
each such holder as shown on the books of the corporation.
(h) Issue Taxes. The corporation shall pay any and all issue and other
taxes that may be payable in respect of any issuance or delivery of shares of
Common Stock on conversion of any Preferred Stock pursuant hereto; provided,
however, that the corporation shall not be obligated to pay any transfer taxes
resulting from any transfer requested by any holder in connection with any such
conversion.
(i) Reservation of Stock Issuable Upon Conversion. The corporation
shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the conversion of
the shares of the Preferred Stock, such number of its shares of Common Stock as
shall from time to time be sufficient to effect the conversion of all
outstanding shares of the Preferred Stock; and if at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to effect
the conversion of all then outstanding shares of the Preferred Stock, the
corporation shall take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purpose,
including, without limitation, engaging in best efforts to obtain the requisite
stockholder approval of any necessary amendment to this Certificate of
Incorporation.
5. Protective Provisions.
(a) Unless otherwise provided in this Section 5, in addition to any
other rights provided by law, so long as at least 500,000 shares of Preferred
Stock shall be outstanding, the corporation shall not, without first obtaining
the affirmative vote or written consent of both the holders of at least sixty
six and two-thirds percent (66 2/3%) of the outstanding shares of Series A
Preferred Stock and Series B Preferred Stock, voting together as a single class
and the holders of at least sixty six and two-thirds percent (66 2/3%) of the
outstanding shares of Series C Preferred Stock, voting as a class:
(i) amend or repeal any provision of, add any provision to, or
waive any provision of, the corporation's Certificate of Incorporation or
Bylaws;
(ii) alter or change the preferences, rights, privileges or powers
of or the restrictions provided for the benefit of the Preferred Stock;
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<PAGE> 15
(iii) authorize or issue shares of any class or series of stock
having any preference or priority as to dividends or assets superior to or on
parity with any such preference or priority of the Preferred Stock;
(iv) reclassify any shares of Common Stock or any other shares of
the corporation other than the Preferred Stock (such shares are hereinafter
referred to as "Junior Shares") into shares having any preference or priority as
to dividends or assets superior to or on parity with any such preference or
priority of the Preferred Stock;
(v) redeem, purchase or otherwise acquire for value (or pay into or
set aside for a sinking fund for such purpose) any share or shares of Preferred
Stock otherwise than by conversion in accordance with Section 4 hereof;
(vi) redeem, purchase or otherwise acquire for value (or pay into
or set aside for a sinking fund for such purpose) any share or shares of Common
Stock, except from employees or consultants of the corporation upon termination
of employment or services, pursuant to the terms of restricted stock agreements
entered into with such employees or consultants providing for the repurchase of
such shares of Common Stock at cost;
(vii) liquidate, dissolve, recapitalize or reorganize the
corporation;
(viii) authorize or approve any transaction or series of
transactions contemplated by Section 2(b) hereof; or
(ix) unless approved by a majority of the directors who are not
employees of the corporation, make any transaction or commitment, or enter into
any contract or agreement relating to its assets, properties or businesses
(including the acquisition, sale, disposition or abandonment of any assets,
properties or businesses) or relinquish any contract or other right, in either
case, material to the business of the corporation considered as a whole, other
than transactions and commitments in the ordinary course of business.
(b) So long as at least 500,000 shares of Preferred Stock shall be
outstanding, the corporation shall not, without first obtaining the affirmative
vote or written consent of the holders of at least sixty six and two-thirds
percent (66 2/3%) of the outstanding shares of Preferred Stock, pay or declare
any dividend on any Junior Shares (except dividends payable solely in shares of
Common Stock).
(c) So long as at least 500,000 shares of any series of Preferred Stock
shall be outstanding, the corporation shall not, without first obtaining the
affirmative vote or written consent of the holders of at least sixty percent
(60%) of the outstanding shares of such series of Preferred Stock, amend Article
V, Section 4(d)(i)(4)(B) of this Certificate of Incorporation to increase the
number of shares of Common Stock excluded thereby from the definition of
Additional Common Shares as it relates to the applicability to such series of
Preferred Stock of the provisions of Section 4(d)(iv) with respect to an
issuance of Additional Common Shares of the kind contemplated by Article V,
Section 4(d)(i)(4)(B) of this Certificate of Incorporation.
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<PAGE> 16
ARTICLE VI.
The Corporation reserves the right to amend, alter, change, or repeal any
provision contained in this Certificate of Incorporation, in the manner now or
hereafter prescribed by statute, and all rights conferred upon the stockholders
herein are granted subject to this right.
ARTICLE VII.
The corporation is to have perpetual existence.
ARTICLE VIII.
1. Limitation of Liability. To the fullest extent permitted by the General
Corporation Law of the State of Delaware as the same exists or as may hereafter
be amended, a director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director.
2. Indemnification. The corporation may indemnify to the fullest extent
permitted by law any person made or threatened to be made a party to an action
or proceeding, whether criminal, civil, administrative or investigative, by
reason of the fact that such person or his or her testator or intestate is or
was a director, officer or employee of the corporation, or any predecessor of
the corporation, or serves or served at any other enterprise as a director,
officer or employee at the request of the corporation or any predecessor to the
corporation.
3. Amendments. Neither any amendment nor repeal of this Article VIII, nor
the adoption of any provision of the corporation's Certificate of Incorporation
inconsistent with this Article VIII, shall eliminate or reduce the effect of
this Article VIII, in respect of any matter occurring, or any action or
proceeding accruing or arising or that, but for this Article VIII, would accrue
or arise, prior to such amendment, repeal, or adoption of an inconsistent
provision.
ARTICLE IX.
In the event any shares of Preferred Stock shall be redeemed or converted
pursuant to the terms hereof, the shares so converted or redeemed shall not
revert to the status of authorized but unissued shares, but instead shall be
canceled and shall not be re-issuable by the corporation.
ARTICLE X.
1. Number of Directors. The number of directors that constitutes the whole
Board of Directors of the corporation shall be designated in Article V, Section
3 of this Certificate of Incorporation or, if no such designation is made in
such Article V, Section 3, then as designated in the Bylaws of the corporation.
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<PAGE> 17
2. Election of Directors. Elections of directors shall be in accordance
with Article V, Section 3 of this Certificate of Incorporation and with the
Bylaws of the corporation.
ARTICLE XI.
In furtherance and not in limitation of the powers conferred by statute,
the Board of Directors is expressly authorized to make, alter, amend or repeal
the Bylaws of the corporation.
ARTICLE XII.
Immediately upon the closing of a public offering pursuant to an effective
registration statement under the Securities Act of 1933, as amended, covering
any of the corporation's securities (as that term is defined under the
Securities Act of 1933, as then in effect), no action shall be taken by the
stockholders of the corporation except at an annual or special meeting of the
stockholders called in accordance with the Bylaws of the corporation and no
action shall be taken by the stockholders by written consent.
ARTICLE XIII.
Meetings of stockholders may be held within or without the State of
Delaware, as the Bylaws may provide. The books of the corporation may be kept
(subject to any provision contained in the statutes) outside of the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the Bylaws of the corporation.
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<PAGE> 18
IN WITNESS WHEREOF, the corporation has caused this Amended and Restated
Certificate of Incorporation to be signed by Stephen J. Hoffman, its President,
and attested by J. Casey McGlynn, its Assistant Secretary, this 30th day of
September 1999.
ALLOS THERAPEUTICS, INC.
By: /s/ STEPHEN J. HOFFMAN
-------------------------------------
Stephen J. Hoffman, President
ATTEST:
/s/ J. CASEY MCGLYNN
- -------------------------------------
J. Casey McGlynn, Assistant Secretary
<PAGE> 1
EXHIBIT 3.02
FORM OF AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION OF
ALLOS THERAPEUTICS, INC.
The undersigned, Stephen J. Hoffman, certifies that:
1. They are the duly elected President and Secretary, respectively, of
Allos Therapeutics, Inc., a Delaware corporation.
2. The Amended and Restated Certificate of Incorporation was filed with
the Secretary of State of Delaware on October 1, 1999, and the original
certificate of incorporation was originally filed with the Secretary of State of
Delaware on July 17, 1996.
3. Pursuant to Sections 228, 242 and 245 of the Delaware General
Corporation Law, this Amended and Restated Certificate of Incorporation restates
and amends the provisions of the Original Certificate.
4. The Certificate of Incorporation of this corporation is hereby
amended and restated to read in full as follows:
ARTICLE I
The name of this corporation is "Allos Therapeutics, Inc." (the
"Corporation").
ARTICLE II
The address of the corporation's registered office in the State of
Delaware is 1209 Orange Street, Wilmington, County of New Castle, 19901. The
name of its registered agent at such address is The Corporation Trust Company.
ARTICLE III
The purpose of the Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the Delaware General
Corporation Law.
<PAGE> 2
ARTICLE IV
A. CLASSES OF STOCK
The Corporation is authorized to issue two classes of stock, to be
designated as "Preferred Stock," $0.001 par value, and "Common Stock," $0.001
par value, respectively. The total number of shares that the corporation is
authorized to issue is ____________ shares. The number of shares of Preferred
Stock authorized is ______________ shares, and the number of shares of Common
Stock authorized is ______________ shares.
Upon filing this Amended and Restated Certificate of Incorporation,
every _____ (___) shares of this corporation's outstanding Common Stock shall be
automatically combined into one share of this Corporation's Common Stock,
without any action by the holder thereof.
B. RIGHTS AND RESTRICTIONS OF COMMON STOCK
The holder of each share of Common Stock shall have the right to one
vote and shall be entitled to notice of any stockholders' meeting in accordance
with the Amended and Restated Bylaws of the corporation, and shall be entitled
to vote upon such matters and in such manner as provided by law.
C. RIGHTS, PREFERENCES AND RESTRICTIONS OF PREFERRED STOCK
The Preferred Stock may be issued from time to time in one or more
series pursuant to a resolution or resolutions providing for such issue duly
adopted by the Board of Directors (authority to do so being hereby expressly
vested in the Board of Directors). The Board of Directors is further authorized
to determine or alter the rights, preferences, privileges and restrictions
granted to or imposed upon any wholly unissued series of Preferred Stock and the
designation of any such series of Preferred Stock. The Board of Directors,
within the limits and restrictions stated in any resolution or resolutions of
the Board of Directors originally fixing the number of shares constituting any
series, may increase or decrease (but not below the number of shares in any such
series then outstanding) the number of shares of any series subsequent to the
issue of shares of that series.
D. AUTHORITY OF BOARD OF DIRECTORS WITH RESPECT TO STOCK MATTERS
The authority of the Board of Directors with respect to each class or
series of stock shall include, without limitation of the foregoing, the right to
determine and fix:
(a) the distinctive designation of such class or series and the number
of shares to constitute such class or series;
(b) the rate at which dividends on the shares of such class or series
shall be declared and paid, or set aside for payment, whether dividends at the
rate so determined shall
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<PAGE> 3
be cumulative or accruing, and whether the shares of such class or series shall
be entitled to any participating or other dividends in addition to dividends at
the rate so determined, and if so, on what terms;
(c) the right or obligation, if any, of the corporation to redeem
shares of the particular class or series of Preferred Stock and, if redeemable,
the price, terms and manner of such redemption;
(d) the special and relative rights and preferences, if any, and the
amount or amounts per share, which the shares of any such class or series of
Preferred Stock shall be entitled to receive upon any voluntary or involuntary
liquidation, dissolution or winding up of the corporation;
(e) the terms and conditions, if any, upon which shares of such class
or series shall be convertible or not, or exchangeable for, shares of capital
stock of any other class or series, including the price or prices or the rate or
rates of conversion or exchange and the terms of adjustment, if any;
(f) the obligation, if any, of the corporation to retire, redeem or
purchase shares of such class or series pursuant to a sinking fund or fund of a
similar nature or otherwise, and the terms and conditions of such obligation;
(g) voting rights, if any, on the issuance of additional shares of such
class or series or any shares of any other class or series of Preferred Stock;
(h) limitations, if any, on the issuance of additional shares of such
class or series or any shares of any other class or series of Preferred Stock;
and
(i) such other preferences, powers, qualifications, special or relative
rights and privileges thereof as the Board of Directors of the corporation,
acting in accordance with this Amended and Restated Certificate of
Incorporation, may deem advisable and are not inconsistent with law and the
provisions of this Restated Certificate of Incorporation.
ARTICLE V
The corporation reserves the right to amend, alter, change or repeal
any provision contained in this Amended and Restated Certificate of
Incorporation, in the manner now or hereafter prescribed by statute, and all
rights conferred upon the stockholders herein are granted subject to this right.
ARTICLE VI
In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to make, alter, amend or
repeal the Amended and Restated Bylaws of the Corporation.
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<PAGE> 4
ARTICLE VII
1. Limitation on Directors' Liability. To the fullest extent permitted
by the Delaware General Corporation Law as the same exists or as may hereafter
be amended, a director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director.
2. Indemnification. The corporation may indemnify to the fullest extent
permitted by law any person made or threatened to be made a party to an action
or proceeding, whether criminal, civil, administrative or investigative, by
reason of the fact that such person or his or her testator or intestate is or
was a director, officer or employee of the corporation, or any predecessor of
the corporation, or serves or served at any other enterprise as a director,
officer or employee at the request of the corporation or any predecessor to the
corporation.
3. Amendments. Neither any amendment nor repeal of this Article VII,
nor the adoption of any provision of the corporation's Amended and Restated
Certificate of Incorporation inconsistent with this Article VII, shall eliminate
or reduce the effect of this Article VII in respect of any matter occurring, or
any action or proceeding accruing or arising or that, but for this Article VII,
would accrue or arise, prior to such amendment, repeal, or adoption of an
inconsistent position.
ARTICLE VIII
The corporation is to have perpetual existence.
ARTICLE IX
In the event any shares of Preferred Stock shall be redeemed or
converted, the shares so converted or redeemed shall not revert to the status of
authorized but unissued shares, but instead shall be canceled and shall not be
re-issuable by the corporation.
ARTICLE X
1. Number of Directors. The number of directors which constitutes the
whole Board of Directors of the corporation shall be fixed from time to time in
the Amended and Restated Bylaws of the Corporation or an amendment thereof. Each
director shall serve until the next annual meeting of the stockholders or until
his successor is duly elected.
2. Election of Directors. Elections of directors need not be written
ballot unless the Amended and Restated Bylaws of the Corporation shall so
provide.
ARTICLE XI
No action shall be taken by the stockholders of the corporation except
at an annual or special meeting of the stockholders called in accordance with
the Amended and Restated Bylaws and no action shall be taken by the stockholders
by written consent. The affirmative vote of sixty-six and two-thirds percent (66
2/3%) of the then outstanding voting securities of
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<PAGE> 5
the corporation, voting together as a single class, shall be required for the
amendment, repeal or modification of the provisions of Article IV, Article X or
Article XI of this Amended and Restated Certificate of Incorporation or Sections
5(b) (Notice of Stockholders' Meeting), 6 (Special Meeting), 10 (Voting), 13
(Stockholder Action by Written Consent Without a Meeting), or 15 (Number of
Directors) of the corporation's Amended and Restated Bylaws.
ARTICLE XII
Any meeting of stockholders may be held within or without the State of
Delaware, as the Amended and Restated Bylaws may provide. The books of the
corporation may be kept (subject to any provision contained in the statutes)
outside of the State of Delaware at such place or places as may be designated
from time to time by the Board of Directors or in the Amended and Restated
Bylaws of the corporation.
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<PAGE> 6
We further declare under penalty of perjury under the laws of the State
of Delaware that the matters set forth in this certificate are true and correct
of our own knowledge.
Executed at Denver, Colorado this ______ day of __________, 2000.
------------------------------------
Stephen J. Hoffman
Chief Executive Officer
------------------------------------
-----------------------
Secretary
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<PAGE> 1
EXHIBIT 3.03
BYLAWS
OF
ALLOS THERAPEUTICS, INC.
(a Delaware corporation)
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I
CORPORATE OFFICES .................................................... 1
1.1 REGISTERED OFFICE .............................................. 1
1.2 OTHER OFFICES .................................................. 1
ARTICLE II
MEETINGS OF STOCKHOLDERS ............................................. 1
2.1 PLACE OF MEETINGS .............................................. 1
2.2 ANNUAL MEETING ................................................. 1
2.3 SPECIAL MEETING ................................................ 2
2.4 NOTICE OF STOCKHOLDERS' MEETINGS ............................... 2
2.5 ADVANCE NOTICE OF STOCKHOLDER NOMINEES AND
STOCKHOLDER BUSINESS ........................................... 2
2.6 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE ................... 3
2.7 QUORUM ......................................................... 4
2.8 ADJOURNED MEETING; NOTICE ...................................... 4
2.9 VOTING ......................................................... 4
2.10 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A
MEETING ........................................................ 5
2.11 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING ..................... 5
2.12 PROXIES ........................................................ 5
2.13 ORGANIZATION ................................................... 6
2.14 LIST OF STOCKHOLDERS ENTITLED TO VOTE .......................... 6
2.15 WAIVER OF NOTICE ............................................... 6
ARTICLE III
DIRECTORS ............................................................ 7
3.1 POWERS ......................................................... 7
3.2 NUMBER OF DIRECTORS ............................................ 7
3.3 ELECTION AND TERM OF OFFICE OF DIRECTORS ....................... 7
3.4 RESIGNATION AND VACANCIES ...................................... 7
3.5 REMOVAL OF DIRECTORS ........................................... 8
3.6 PLACE OF MEETINGS; MEETINGS BY TELEPHONE ....................... 8
</TABLE>
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<PAGE> 3
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
3.7 FIRST MEETINGS ................................................ 9
3.8 REGULAR MEETINGS .............................................. 9
3.9 SPECIAL MEETINGS; NOTICE ...................................... 9
3.10 QUORUM ........................................................ 9
3.11 WAIVER OF NOTICE .............................................. 10
3.12 ADJOURNMENT ................................................... 10
3.13 NOTICE OF ADJOURNMENT ......................................... 10
3.14 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING ............. 10
3.15 FEES AND COMPENSATION OF DIRECTORS ............................ 10
3.16 APPROVAL OF LOANS TO OFFICERS ................................. 11
3.17 SOLE DIRECTOR PROVIDED BY CERTIFICATE OF INCORPORATION ........ 11
ARTICLE IV
COMMITTEES .......................................................... 11
4.1 COMMITTEES OF DIRECTORS ....................................... 11
4.2 MEETINGS AND ACTION OF COMMITTEES ............................. 12
4.3 COMMITTEE MINUTES ............................................. 12
ARTICLE V
OFFICERS ............................................................ 12
5.1 OFFICERS ...................................................... 12
5.2 ELECTION OF OFFICERS .......................................... 13
5.3 SUBORDINATE OFFICERS .......................................... 13
5.4 REMOVAL AND RESIGNATION OF OFFICERS ........................... 13
5.5 VACANCIES IN OFFICES .......................................... 13
5.6 CHAIRMAN OF THE BOARD ......................................... 13
5.7 PRESIDENT ..................................................... 14
5.8 VICE PRESIDENTS ............................................... 14
5.9 SECRETARY ..................................................... 14
5.10 CHIEF FINANCIAL OFFICER ....................................... 15
5.11 ASSISTANT SECRETARY ........................................... 15
5.12 ADMINISTRATIVE OFFICERS ....................................... 15
5.13 AUTHORITY AND DUTIES OF OFFICERS .............................. 16
</TABLE>
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<PAGE> 4
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE VI
INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND OTHER
AGENTS ............................................................... 16
6.1 INDEMNIFICATION OF DIRECTORS AND OFFICERS ...................... 16
6.2 INDEMNIFICATION OF OTHERS ...................................... 17
6.3 INSURANCE ...................................................... 17
ARTICLE VII
RECORDS AND REPORTS .................................................. 17
7.1 MAINTENANCE AND INSPECTION OF RECORDS .......................... 17
7.2 INSPECTION BY DIRECTORS ........................................ 18
7.3 ANNUAL STATEMENT TO STOCKHOLDERS ............................... 18
7.4 REPRESENTATION OF SHARES OF OTHER CORPORATIONS ................. 18
7.5 CERTIFICATION AND INSPECTION OF BYLAWS ......................... 18
ARTICLE VIII
GENERAL MATTERS ...................................................... 18
8.1 RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING .......... 18
8.2 CHECKS; DRAFTS; EVIDENCES OF INDEBTEDNESS ...................... 19
8.3 CORPORATE CONTRACTS AND INSTRUMENTS: HOW EXECUTED .............. 19
8.4 STOCK CERTIFICATES; TRANSFER; PARTLY PAID SHARES ............... 19
8.5 SPECIAL DESIGNATION ON CERTIFICATES ............................ 20
8.6 LOST CERTIFICATES .............................................. 20
8.7 TRANSFER AGENTS AND REGISTRARS ................................. 21
8.8 CONSTRUCTION; DEFINITIONS ...................................... 21
ARTICLE IX
AMENDMENTS ........................................................... 21
</TABLE>
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<PAGE> 5
BYLAWS
OF
ALLOS THERAPEUTICS, INC.
(a Delaware corporation)
ARTICLE I
CORPORATE OFFICES
1.1 REGISTERED OFFICE
The registered office of the corporation shall be fixed in the
certificate of incorporation of the corporation.
1.2 OTHER OFFICES
The board of directors may at any time establish branch or subordinate
offices at any place or places where the corporation is qualified to do
business.
ARTICLE II
MEETINGS OF STOCKHOLDERS
2.1 PLACE OF MEETINGS
Meetings of stockholders shall be held at any place within or outside
the State of Delaware designated by the board of directors. In the absence of
any such designation, stockholders' meetings shall be held at the principal
executive office of the corporation.
2.2 ANNUAL MEETING
The annual meeting of stockholders shall be held each year on a date
and at a time designated by the board of directors. In the absence of such
designation, the annual meeting of stockholders shall be held on the second
Thursday in March in each year at 10:00 a.m. However, if such day falls on a
legal holiday, then the meeting shall be held at the same time and place on the
next succeeding full business day. At the meeting, directors shall be elected,
and any other proper business may be transacted.
<PAGE> 6
2.3 SPECIAL MEETING
A special meeting of the stockholders may be called at any time by the
board of directors, or by the chairman of the board, or by the president.
If a special meeting is called by any person or persons other than the
board of directors, then the request shall be in writing, specifying the time
of such meeting and the general nature of the business proposed to be
transacted, and shall be delivered personally or sent by registered mail or by
telegraphic or other facsimile transmission to the chairman of the board, the
president, or the secretary of the corporation. The officer receiving the
request shall cause notice to be promptly given to the stockholders entitled to
vote, in accordance with the provisions of Sections 2.4 and 2.6 of these
bylaws, that a meeting will be held at the time requested by the person or
persons calling the meeting, so long as that time is not less than ten (10) nor
more than sixty (60) days after the receipt of the request. If the notice is
not given within twenty (20) days after receipt of the request, then the person
or persons requesting the meeting may give the notice. Nothing contained in
this paragraph of this Section 2.3 shall be construed as limiting, fixing or
affecting the time when a meeting of stockholders called by action of the board
of directors may be held.
2.4 NOTICE OF STOCKHOLDERS' MEETINGS
All notices of meetings of stockholders shall be sent or otherwise
given in accordance with Section 2.6 of these bylaws not less than ten (10) nor
more than sixty (60) days before the date of the meeting. The notice shall
specify the place, date and hour of the meeting and (i) in the case of a
special meeting, the purpose or purposes for which the meeting is called (no
business other than that specified in the notice may be transacted) or (ii) in
the case of the annual meeting, those matters which the board of directors, at
the time of giving the notice, intends to present for action by the
stockholders (but any proper matter may be presented at the meeting for such
action). The notice of any meeting at which directors are to be elected shall
include the name of any nominee or nominees who, at the time of the notice, the
board intends to present for election.
2.5 ADVANCE NOTICE OF STOCKHOLDER NOMINEES AND STOCKHOLDER BUSINESS
Subject to the rights of holders of any class or series of stock
having a preference over the Common Stock as to dividends or upon liquidation,
(a) nominations for the election of directors, and
(b) business proposed to be brought before any stockholder meeting
may be made by the board of directors or proxy committee appointed by
the board of directors or by any stockholder entitled to vote in the election
of directors generally if such nomination or business proposed is otherwise
proper business before such meeting. However, any such stockholder may nominate
one or more persons for election as directors at a meeting or propose business
to be brought before a meeting, or both, only if such stockholder has given
timely notice in
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proper written form of their intent to make such nomination or nominations or
to propose such business. To be timely, such stockholder's notice must be
delivered to or mailed and received at the principal executive offices of the
corporation not less than one hundred twenty (120) calendar days in advance of
the date specified in the corporation's proxy statement released to
stockholders in connection with the previous year's annual meeting of
stockholders; provided, however, that in the event that no annual meeting was
held in the previous year or the date of the annual meeting has been changed
by more than thirty (30) days from the date contemplated at the time of the
previous year's proxy statement, notice by the stockholder to be timely must be
so received a reasonable time before the solicitation is made. To be in proper
form, a stockholder's notice to the secretary shall set forth:
(i) the name and address of the stockholder who intends to
make the nominations or propose the business and, as the case may be, of the
person or persons to be nominated or of the business to be proposed;
(ii) a representation that the stockholder is a holder of
record of stock of the corporation entitled to vote at such meeting and, if
applicable, intends to appear in person or by proxy at the meeting to nominate
the person or persons specified in the notice;
(iii) if applicable, a description of all arrangements or
understandings between the stockholder and each nominee and any other person or
persons (naming such person or persons) pursuant to which the nomination or
nominations are to be made by the stockholder;
(iv) such other information regarding each nominee or each
matter of business to be proposed by such stockholder as would be required to
be included in a proxy statement filed pursuant to the proxy rules of the
Securities and Exchange Commission had the nominee been nominated, or intended
to be nominated, or the matter been proposed, or intended to be proposed by the
board of directors; and
(v) if applicable, the consent of each nominee to serve as
director of the corporation if so elected.
The chairman of the meeting shall refuse to acknowledge the nomination
of any person or the proposal of any business not made in compliance with the
foregoing procedure.
2.6 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE
Written notice of any meeting of stockholders shall be given either
personally or by first-class mail or by telegraphic or other written
communication. Notices not personally delivered shall be sent charges prepaid
and shall be addressed to the stockholder at the address of that stockholder
appearing on the books of the corporation or given by the stockholder to the
corporation for the purpose of notice. Notice shall be deemed to have been
given at the time when delivered personally or deposited in the mail or sent by
telegram or other means of written communication.
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An affidavit of the mailing or other means of giving any notice of
any stockholders' meeting, executed by the secretary, assistant secretary or
any transfer agent of the corporation giving the notice, shall be prima facie
evidence of the giving of such notice.
2.7 QUORUM
The holders of a majority in voting power of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
certificate of incorporation. If, however, such quorum is not present or
represented at any meeting of the stockholders, then either (i) the chairman of
the meeting or (ii) the stockholders entitled to vote thereat, present in
person or represented by proxy, shall have power to adjourn the meeting in
accordance with Section 2.8 of these bylaws.
When a quorum is present at any meeting, the vote of the holders of a
majority of the stock having voting power present in person or represented by
proxy shall decide any question brought before such meeting, unless the
question is one upon which, by express provision of the laws of the State of
Delaware or of the certificate of incorporation or these bylaws, a different
vote is required, in which case such express provision shall govern and control
the decision of the question.
If a quorum be initially present, the stockholders may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum, if any action taken is approved by a
majority of the stockholders initially constituting the quorum.
2.8 ADJOURNED MEETING; NOTICE
When a meeting is adjourned to another time and place, unless these
bylaws otherwise require, notice need not be given of the adjourned meeting if
the time and place thereof are announced at the meeting at which the
adjournment is taken. At the adjourned meeting the corporation may transact any
business that might have been transacted at the original meeting. If the
adjournment is for more than thirty (30) days, or if after the adjournment a new
record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote at the
meeting.
2.9 VOTING
The stockholders entitled to vote at any meeting of stockholders shall
be determined in accordance with the provisions of Section 2.11 of these
bylaws, subject to the provisions of Sections 217 and 218 of the General
Corporation Law of Delaware (relating to voting rights of fiduciaries, pledgors
and joint owners, and to voting trusts and other voting agreements).
Except as may be otherwise provided in the certificate of
incorporation or these bylaws, each stockholder shall be entitled to one vote
for each share of capital stock held by such stockholder.
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2.10 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING
Unless otherwise provided in the certificate of incorporation, any
action required or permitted to be taken at any annual or special meeting of
stockholders may be taken without a meeting, without prior notice and without a
vote, if a consent or consents in writing, setting forth the action so taken,
shall be signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were present
and voted. Such consents shall be delivered to the corporation by delivery to
its registered office in the state of Delaware, its principal place of
business, or an officer or agent of the corporation having custody of the book
in which proceedings of meetings of stockholders are recorded. Delivery made to
the corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested.
2.11 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING
For purposes of determining the stockholders entitled to notice of any
meeting or to vote thereat, the board of directors may fix, in advance, a
record date, which shall not precede the date upon which the resolution fixing
the record date is adopted by the board of directors and which shall not be
more than sixty (60) days nor less than ten (10) days before the date of any
such meeting, and in such event only stockholders of record on the date so
fixed are entitled to notice and to vote, notwithstanding any transfer of any
shares on the books of the corporation after the record date.
If the board of directors does not so fix a record date, the record
date for determining stockholders entitled to notice of or to vote at a meeting
of stockholders shall be at the close of business on the business day next
preceding the day on which notice is given, or, if notice is waived, at the
close of business on the business day next preceding the day on which the
meeting is held.
A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting
unless the board of directors fixes a new record date for the adjourned
meeting, but the board of directors shall fix a new record date if the meeting
is adjourned for more than thirty (30) days from the date set for the original
meeting.
The record date for any other purpose shall be as provided in Section
8.1 of these bylaws.
2.12 PROXIES
Every person entitled to vote for directors, or on any other matter,
shall have the right to do so either in person or by one or more agents
authorized by a written proxy signed by the person and filed with the secretary
of the corporation, but no such proxy shall be voted or acted upon after three
(3) years from its date, unless the proxy provides for a longer period. A proxy
shall be deemed signed if the stockholder's name is placed on the proxy
(whether by manual signature, typewriting, telegraphic transmission, telecopy
or otherwise) by the stockholder or the stockholder's attorney-in-fact. The
revocability of a proxy that states on its face that it is irrevocable shall be
governed by the provisions of Section 212(e) of the General Corporation Law of
Delaware.
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2.13 ORGANIZATION
The president, or in the absence of the president, the chairman of the
board, or, in the absence of the president and the chairman of the board, one of
the corporation's vice presidents, shall call the meeting of the stockholders to
order, and shall act as chairman of the meeting. In the absence of the
president, the chairman of the board, and all of the vice presidents, the
stockholders shall appoint a chairman for such meeting. The chairman of any
meeting of stockholders shall determine the order of business and the procedures
at the meeting, including such matters as the regulation of the manner of voting
and the conduct of business. The secretary of the corporation shall act as
secretary of all meetings of the stockholders, but in the absence of the
secretary at any meeting of the stockholders, the chairman of the meeting may
appoint any person to act as secretary of the meeting.
2.14 LIST OF STOCKHOLDERS ENTITLED TO VOTE
The officer who has charge of the stock ledger of the corporation shall
prepare and make, at least ten (10) days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
2.15 WAIVER OF NOTICE
Whenever notice is required to be given under any provision of the
General Corporation Law of Delaware or of the certificate of incorporation or
these bylaws, a written waiver thereof, signed by the person entitled to notice,
whether before or after the time stated therein, shall be deemed equivalent to
notice. Attendance of a person at a meeting shall constitute a waiver of notice
of such meeting, except when the person attends a meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of, any regular or special meeting
of the stockholders need be specified in any written waiver of notice unless so
required by the certificate of incorporation or these bylaws.
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ARTICLE III
DIRECTORS
3.1 POWERS
Subject to the provisions of the General Corporation Law of Delaware
and to any limitations in the certificate of incorporation or these bylaws
relating to action required to be approved by the stockholders or by the
outstanding shares, the business and affairs of the corporation shall be
managed and all corporate powers shall be exercised by or under the direction
of the board of directors.
3.2 NUMBER OF DIRECTORS
The board of directors shall consist of nine (9) members. The number
of directors may be changed by an amendment to this bylaw, duly adopted by the
board of directors or by the stockholders, or by a duly adopted amendment to
the certificate of incorporation.
3.3 ELECTION AND TERM OF OFFICE OF DIRECTORS
Except as provided in Section 3.4 of these bylaws, directors shall be
elected at each annual meeting of stockholders to hold office until the next
annual meeting. Each director, including a director elected or appointed to
fill a vacancy, shall hold office until the expiration of the term for which
elected and until a successor has been elected and qualified.
3.4 RESIGNATION AND VACANCIES
Any director may resign effective on giving written notice to the
chairman of the board, the president, the secretary or the board of directors,
unless the notice specifies a later time for that resignation to become
effective. If the resignation of a director is effective at a future time, the
board of directors may elect a successor to take office when the resignation
becomes effective.
Vacancies in the board of directors may be filled by a majority of the
remaining directors, even if less than a quorum, or by a sole remaining
director. Each director so elected shall hold office until the next annual
meeting of the stockholders and until a successor has been elected and
qualified.
Unless otherwise provided in the certificate of incorporation or these
bylaws:
(i) Vacancies and newly created directorships resulting from
any increase in the authorized number of directors elected by all of the
stockholders having the right to vote as a single class may be filled by a
majority of the directors then in office, although less than a quorum, or by a
sole remaining director.
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(ii) Whenever the holders of any class or classes of stock or
series thereof are entitled to elect one or more directors by the provisions of
the certificate of incorporation, vacancies and newly created directorships of
such class or classes or series may be filled by a majority of the directors
elected by such class or classes or series thereof then in office, or by a sole
remaining director so elected.
If at any time, by reason of death or resignation or other cause, the
corporation should have no directors in office, then any officer or any
stockholder or an executor, administrator, trustee or guardian of a
stockholder, or other fiduciary entrusted with like responsibility for the
person or estate of a stockholder, may call a special meeting of stockholders
in accordance with the provisions of the certificate of incorporation or these
bylaws, or may apply to the Court of Chancery for a decree summarily ordering
an election as provided in Section 211 of the General Corporation Law of
Delaware.
If, at the time of filling any vacancy or any newly created
directorship, the directors then in office constitute less than a majority of
the whole board (as constituted immediately prior to any such increase),
then the Court of Chancery may, upon application of any stockholder or
stockholders holding at least ten (10) percent of the total number of the
shares at the time outstanding having the right to vote for such directors,
summarily order an election to be held to fill any such vacancies or newly
created directorships, or to replace the directors chosen by the directors then
in office as aforesaid, which election shall be governed by the provisions of
Section 211 of the General Corporation Law of Delaware as far as applicable.
3.5 REMOVAL OF DIRECTORS
Unless otherwise restricted by statute, by the certificate of
incorporation or by these bylaws, any director or the entire board of directors
may be removed, with or without cause, by the holders of a majority of the
shares then entitled to vote at an election of directors; provided, however,
that, if and so long as stockholders of the corporation are entitled to
cumulative voting, if less than the entire board is to be removed, no director
may be removed without cause if the votes cast against his removal would be
sufficient to elect him if then cumulatively voted at an election of the entire
board of directors.
3.6 PLACE OF MEETINGS: MEETINGS BY TELEPHONE
Regular meetings of the board of directors may be held at any place
within or outside the State of Delaware that has been designated from time to
time by resolution of the board. In the absence of such a designation, regular
meetings shall be held at the principal executive office of the corporation.
Special meetings of the board may be held at any place within or outside the
State of Delaware that has been designated in the notice of the meeting or, if
not stated in the notice or if there is no notice, at the principal executive
office of the corporation.
Any meeting of the board, regular or special, may be held by
conference telephone or similar communication equipment, so long as all
directors participating in the meeting can hear one another; and all such
participating directors shall be deemed to be present in person at the meeting.
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3.7 FIRST MEETINGS
The first meeting of each newly elected board of directors shall be
held at such time and place as shall be fixed by the vote of the stockholders
at the annual meeting. In the event of the failure of the stockholders to fix
the time or place of such first meeting of the newly elected board of
directors, or in the event such meeting is not held at the time and place so
fixed by the stockholders, the meeting may be held at such time and place as
shall be specified in a notice given as hereinafter provided for special
meetings of the board of directors, or as shall be specified in a written
waiver signed by all of the directors,
3.8 REGULAR MEETINGS
Regular meetings of the board of directors may be held without notice
at such time as shall from time to time be determined by the board of
directors. If any regular meeting day shall fall on a legal holiday, then the
meeting shall be held at the same time and place on the next succeeding full
business day.
3.9 SPECIAL MEETINGS; NOTICE
Special meetings of the board of directors for any purpose or purposes
may be called at any time by the chairman of the board, the president, any
vice president, the secretary or any two directors.
Notice of the time and place of special meetings shall be delivered
personally or by telephone to each director or sent by first-class mail,
telecopy or telegram, charges prepaid, addressed to each director at that
director's address as it is shown on the records of the corporation. If the
notice is mailed, it shall be deposited in the United States mail at least four
(4) days before the time of the holding of the meeting. If the notice is
delivered personally or by telephone, telecopy or telegram, it shall be
delivered personally or by telephone or to the telegraph company at least
forty-eight (48) hours before the time of the holding of the meeting. Any oral
notice given personally or by telephone may be communicated either to the
director or to a person at the office of the director who the person giving the
notice has reason to believe will promptly communicate it to the director. The
notice need not specify the purpose or the place of the meeting, if the meeting
is to be held at the principal executive office of the corporation.
3.10 QUORUM
A majority of the authorized number of directors shall constitute a
quorum for the transaction of business, except to adjourn as provided in
Section 3.12 of these bylaws. Every act or decision done or made by a majority
of the directors present at a duly held meeting at which a quorum is present
shall be regarded as the act of the board of directors, subject to the
provisions of the certificate of incorporation and applicable law.
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A meeting at which a quorum is initially present may continue to
transact business notwithstanding the withdrawal of directors, if any action
taken is approved by at least a majority of the quorum for that meeting.
3.11 WAIVER OF NOTICE
Notice of a meeting need not be given to any director (i) who signs a
waiver of notice, whether before or after the meeting, or (ii) who attends the
meeting other than for the express purpose of objecting at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully
called or convened. All such waivers shall be filed with the corporate records
or made part of the minutes of the meeting. A waiver of notice need not specify
the purpose of any regular or special meeting of the board of directors.
3.12 ADJOURNMENT
A majority of the directors present, whether or not constituting a
quorum, may adjourn any meeting of the board to another time and place.
3.13 NOTICE OF ADJOURNMENT
Notice of the time and place of holding an adjourned meeting of the
board need not be given unless the meeting is adjourned for more than
twenty-four (24) hours. If the meeting is adjourned for more than twenty-four
(24) hours, then notice of the time and place of the adjourned meeting shall be
given before the adjourned meeting takes place, in the manner specified in
Section 3.9 of these bylaws, to the directors who were not present at the time
of the adjournment.
3.14 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING
Any action required or permitted to be taken by the board of directors
may be taken without a meeting, provided that all members of the board
individually or collectively consent in writing to that action. Such action by
written consent shall have the same force and effect as a unanimous vote of the
board of directors. Such written consent and any counterparts thereof shall be
filed with the minutes of the proceedings of the board of directors.
3.15 FEES AND COMPENSATION OF DIRECTORS
Directors and members of committees may receive such compensation, if
any, for their services and such reimbursement of expenses as may be fixed or
determined by resolution of the board of directors. This Section 3.15 shall not
be construed to preclude any director from serving the corporation in any other
capacity as an officer, agent, employee or otherwise and receiving compensation
for those services.
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3.16 APPROVAL OF LOANS TO OFFICERS
The corporation may lend money to, or guarantee any obligation of, or
otherwise assist any officer or other employee of the corporation or any of its
subsidiaries, including any officer or employee who is a director of the
corporation or any of its subsidiaries, whenever, in the judgment of the
directors, such loan, guaranty or assistance may reasonably be expected to
benefit the corporation. The loan, guaranty or other assistance may be with or
without interest and may be unsecured, or secured in such manner as the board of
directors shall approve, including, without limitation, a pledge of shares of
stock of the corporation. Nothing contained in this section shall be deemed to
deny, limit or restrict the powers of guaranty or warranty of the corporation at
common law or under any statute.
3.17 SOLE DIRECTOR PROVIDED BY CERTIFICATE OF INCORPORATION
In the event only one director is required by these bylaws or the
certificate of incorporation, then any reference herein to notices, waivers,
consents, meetings or other actions by a majority or quorum of the directors
shall be deemed to refer to such notice, waiver, etc., by such sole director,
who shall have all the rights and duties and shall be entitled to exercise all
of the powers and shall assume all the responsibilities otherwise herein
described as given to the board of directors.
ARTICLE IV
COMMITTEES
4.1 COMMITTEES OF DIRECTORS
The board of directors may, by resolution adopted by a majority of the
authorized number of directors, designate one (1) or more committees, each
consisting of two or more directors, to serve at the pleasure of the board. The
board may designate one (1) or more directors as alternate members of any
committee, who may replace any absent or disqualified member at any meeting of
the committee. The appointment of members or alternate members of a committee
requires the vote of a majority of the authorized number of directors. Any
committee, to the extent provided in the resolution of the board, shall have and
may exercise all the powers and authority of the board, but no such committee
shall have the power or authority to: (i) amend the certificate of incorporation
(except that a committee may, to the extent authorized in the resolution or
resolutions providing for the issuance of shares of stock adopted by the board
of directors as provided in Section 151(a) of the General Corporation Law of
Delaware, fix the designations and any of the preferences or rights of such
shares relating to dividends, redemption, dissolution, any distribution of
assets of the corporation or the conversion into, or the exchange of such shares
for, shares of any other class or classes or any other series of the same or any
other class or classes of stock of the corporation); (ii) adopt an agreement of
merger or consolidation under Sections 251 or 252 of the General Corporation Law
of Delaware; (iii) recommend to the stockholders the sale, lease or exchange of
all or substantially all of the corporation's property and assets; (iv)
recommend to the stockholders a dissolution of the corporation or a revocation
of a dissolution; or (v) amend the bylaws of the corporation; and, unless
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the board resolution establishing the committee, the bylaws or the certificate
of incorporation expressly so provides, no such committee shall have the power
or authority to declare a dividend, to authorize the issuance of stock, or to
adopt a certificate of ownership and merger pursuant to Section 253 of the
General Corporation Law of Delaware.
4.2 MEETINGS AND ACTION OF COMMITTEES
Meetings and actions of committees shall be governed by, and held and
taken in accordance with, the following provisions of Article III of these
bylaws: Section 3.6 (place of meetings; meetings by telephone), Section 3.8
(regular meetings), Section 3.9 (special meetings; notice), Section 3.10
(quorum), Section 3.11 (waiver of notice), Section 3.12 (adjournment), Section
3.13 (notice of adjournment) and Section 3.14 (board action by written consent
without a meeting), with such changes in the context of those bylaws as are
necessary to substitute the committee and its members for the board of directors
and its members; provided, however, that the time of regular meetings of
committees may be determined either by resolution of the board of directors or
by resolution of the committee, that special meetings of committees may also be
called by resolution of the board of directors, and that notice of special
meetings of committees shall also be given to all alternate members, who shall
have the right to attend all meetings of the committee. The board of directors
may adopt rules for the government of any committee not inconsistent with the
provisions of these bylaws.
4.3 COMMITTEE MINUTES
Each committee shall keep regular minutes of its meetings and report
the same to the board of directors when required.
ARTICLE V
OFFICERS
5.1 OFFICERS
The Corporate Officers of the corporation shall be a president, a
secretary and a chief financial officer. The corporation may also have, at the
discretion of the board of directors, a chairman of the board, one or more vice
presidents (however denominated), one or more assistant secretaries, a treasurer
and one or more assistant treasurers, and such other officers as may be
appointed in accordance with the provisions of Section 5.3 of these bylaws. Any
number of offices may be held by the same person.
In addition to the Corporate Officers of the Company described above,
there may also be such Administrative Officers of the corporation as may be
designated and appointed from time to time by the president of the corporation
in accordance with the provisions of Section 5.12 of these bylaws.
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5.2 ELECTION OF OFFICERS
The Corporate Officers of the corporation, except such officers as may
be appointed in accordance with the provisions of Section 5.3 or Section 5.5 of
these bylaws, shall be chosen by the board of directors, subject to the rights,
if any, of an officer under any contract of employment, and shall hold their
respective offices for such terms as the board of directors may from time to
time determine.
5.3 SUBORDINATE OFFICERS
The board of directors may appoint, or may empower the president to
appoint, such other Corporate Officers as the business of the corporation may
require, each of whom shall hold office for such period, have such power
and authority, and perform such duties as are provided in these bylaws or as
the board of directors may from time to time determine.
The president may from time to time designate and appoint
Administrative Officers of the corporation in accordance with the provisions of
Section 5.12 of these bylaws.
5.4 REMOVAL AND RESIGNATION OF OFFICERS
Subject to the rights, if any, of a Corporate Officer under any
contract of employment, any Corporate Officer may be removed, either with or
without cause, by the board of directors at any regular or special meeting of
the board or, except in case of a Corporate Officer chosen by the board of
directors, by any Corporate Officer upon whom such power of removal may be
conferred by the board of directors.
Any Corporate Officer may resign at any time by giving written notice
to the corporation. Any resignation shall take effect at the date of the
receipt of that notice or at any later time specified in that notice; and,
unless otherwise specified in that notice, the acceptance of the resignation
shall not be necessary to make it effective. Any resignation is without
prejudice to the rights, if any, of the corporation under any contract to which
the Corporate Officer is a party.
Any Administrative Officer designated and appointed by the president
may be removed, either with or without cause, at any time by the president. Any
Administrative Officer may resign at any time by giving written notice to the
president or to the secretary of the corporation.
5.5 VACANCIES IN OFFICES
A vacancy in any office because of death, resignation, removal,
disqualification or any other cause shall be filled in the manner prescribed in
these bylaws for regular appointments to that office.
5.6 CHAIRMAN OF THE BOARD
The chairman of the board, if such an officer be elected, shall, if
present, preside at meetings of the board of directors and exercise such other
powers and perform such other duties as may from
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time to time be assigned to him by the board of directors or as may be
prescribed by these bylaws. If there is no president, then the chairman of the
board shall also be the chief executive officer of the corporation and shall
have the powers and duties prescribed in Section 5.7 of these bylaws.
5.7 PRESIDENT
Subject to such supervisory powers, if any, as may be given by the
board of directors to the chairman of the board, if there be such an officer,
the president shall be the chief executive officer of the corporation and
shall, subject to the control of the board of directors, have general
supervision, direction and control of the business and the officers of the
corporation. He or she shall preside at all meetings of the stockholders and,
in the absence or nonexistence of a chairman of the board, at all meetings of
the board of directors. He or she shall have the general powers and duties of
management usually vested in the office of president of a corporation, and
shall have such other powers and perform such other duties as may be prescribed
by the board of directors or these bylaws.
5.8 VICE PRESIDENTS
In the absence or disability of the president, and if there is no
chairman of the board, the vice presidents, if any, in order of their rank as
fixed by the board of directors or, if not ranked, a vice president designated
by the board of directors, shall perform all the duties of the president and
when so acting shall have all the powers of, and be subject to all the
restrictions upon, the president. The vice presidents shall have such other
powers and perform such other duties as from time to time may be prescribed for
them respectively by the board of directors, these bylaws, the president or the
chairman of the board.
5.9 SECRETARY
The secretary shall keep or cause to be kept, at the principal
executive office of the corporation or such other place as the board of
directors may direct, a book of minutes of all meetings and actions of the
board of directors, committees of directors and stockholders. The minutes shall
show the time and place of each meeting, whether regular or special (and, if
special, how authorized and the notice given), the names of those present at
directors' meetings or committee meetings, the number of shares present or
represented at stockholders' meetings and the proceedings thereof.
The secretary shall keep, or cause to be kept, at the principal
executive office of the corporation or at the office of the corporation's
transfer agent or registrar, as determined by resolution of the board of
directors, a share register or a duplicate share register, showing the names of
all stockholders and their addresses, the number and classes of shares held by
each, the number and date of certificates evidencing such shares and the number
and date of cancellation of every certificate surrendered for cancellation.
The secretary shall give, or cause to be given, notice of all meetings
of the stockholders and of the board of directors required to be given by law
or by these bylaws. He or she shall keep the
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seal of the corporation, if one be adopted, in safe custody and shall have
such other powers and perform such other duties as may be prescribed by the
board of directors or by these bylaws.
5.10 CHIEF FINANCIAL OFFICER
The chief financial officer shall keep and maintain, or cause to be
kept and maintained, adequate and correct books and records of accounts of the
properties and business transactions of the corporation, including accounts of
its assets, liabilities, receipts, disbursements, gains, losses, capital,
retained earnings and shares. The books of account shall at all reasonable
times be open to inspection by any director for a purpose reasonably related to
his position as a director.
The chief financial officer shall deposit all money and other
valuables in the name and to the credit of the corporation with such
depositaries as may be designated by the board of directors. He or she shall
disburse the funds of the corporation as may be ordered by the board of
directors, shall render to the president and directors, whenever they request
it, an account of all of his or her transactions as chief financial officer and
of the financial condition of the corporation, and shall have such other powers
and perform such other duties as may be prescribed by the board of directors
or these bylaws.
5.11 ASSISTANT SECRETARY
The assistant secretary, if any, or, if there is more than one, the
assistant secretaries in the order determined by the board of directors (or if
there be no such determination, then in the order of their election) shall, in
the absence of the secretary or in the event of his or her inability or refusal
to act, perform the duties and exercise the powers of the secretary and shall
perform such other duties and have such other powers as the board of directors
may from time to time prescribe.
5.12 ADMINISTRATIVE OFFICERS
In addition to the Corporate Officers of the corporation as provided
in Section 5.1 of these bylaws and such subordinate Corporate Officers as may
be appointed in accordance with Section 5.3 of these bylaws, there may also be
such Administrative Officers of the corporation as may be designated and
appointed from time to time by the president of the corporation. Administrative
Officers shall perform such duties and have such powers as from time to time
may be determined by the president or the board of directors in order to assist
the Corporate Officers in the furtherance of their duties. In the performance
of such duties and the exercise of such powers, however, such Administrative
Officers shall have limited authority to act on behalf of the corporation as
the board of directors shall establish, including but not limited to
limitations on the dollar amount and on the scope of agreements or commitments
that may be made by such Administrative Officers on behalf of the corporation,
which limitations may not be exceeded by such individuals or altered by the
president without further approval by the board of directors.
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5.13 AUTHORITY AND DUTIES OF OFFICERS
In addition to the foregoing powers, authority and duties, all
officers of the corporation shall respectively have such authority and powers
and perform such duties in the management of the business of the corporation as
may be designated from time to time by the board of directors.
ARTICLE VI
INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES
AND OTHER AGENTS
6.1 INDEMNIFICATION OF DIRECTORS AND OFFICERS
The corporation shall, to the maximum extent and in the manner
permitted by the General Corporation Law of Delaware as the same now exists or
may hereafter be amended, indemnify any person against expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement actually and
reasonably incurred in connection with any threatened, pending or completed
action, suit, or proceeding in which such person was or is a party or is
threatened to be made a party by reason of the fact that such person is or was a
director or officer of the corporation. For purposes of this Section 6.1, a
"director" or "officer" of the corporation shall mean any person (i) who is or
was a director or officer of the corporation, (ii) who is or was serving at the
request of the corporation as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise, or (iii) who was a
director or officer of a corporation which was a predecessor corporation of the
corporation or of another enterprise at the request of such predecessor
corporation.
The corporation shall be required to indemnify a director or officer
in connection with an action, suit, or proceeding (or part thereof) initiated
by such director or officer only if the initiation of such action, suit, or
proceeding (or part thereof) by the director or officer was authorized by the
board of directors of the corporation.
The corporation shall pay the expenses (including attorney's fees)
incurred by a director or officer of the corporation entitled to
indemnification hereunder in defending any action, suit or proceeding referred
to in this Section 6.1 in advance of its final disposition; provided, however,
that payment of expenses incurred by a director or officer of the corporation
in advance of the final disposition of such action, suit or proceeding shall be
made only upon receipt of an undertaking by the director or officer to repay
all amounts advanced if it should ultimately be determined that the director of
officer is not entitled to be indemnified under this Section 6.1 or otherwise.
The rights conferred on any person by this Article VI shall not be
exclusive of any other rights which such person may have or hereafter acquire
under any statute, provision of the corporation's certificate of incorporation,
these bylaws, agreement, vote of the stockholders or disinterested directors or
otherwise.
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Any repeal or modification of the foregoing provisions of this Article
VI shall not adversely affect any right or protection hereunder of any person
in respect of any act or omission occurring prior to the time of such repeal or
modification.
6.2 INDEMNIFICATION OF OTHERS
The corporation shall have the power, to the maximum extent and in the
manner permitted by the General Corporation Law of Delaware as the same now
exists or may hereafter be amended, to indemnify any person (other than
directors and officers) against expenses (including attorneys' fees),
judgments, fines, and amounts paid in settlement actually and reasonably
incurred in connection with any threatened, pending or completed action, suit,
or proceeding, in which such person was or is a party or is threatened to be
made a party by reason of the fact that such person is or was an employee or
agent of the corporation. For purposes of this Section 6.2, an "employee" or
"agent" of the corporation (other than a director or officer) shall mean any
person (i) who is or was an employee or agent of the corporation, (ii) who is
or was serving at the request of the corporation as an employee or agent of
another corporation, partnership, joint venture, trust or other enterprise, or
(iii) who was an employee or agent of a corporation which was a predecessor
corporation of the corporation or of another enterprise at the request of such
predecessor corporation.
6.3 INSURANCE
The corporation may purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the corporation,
or is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against him or her and incurred
by him or her in any such capacity, or arising out of his or her status as
such, whether or not the corporation would have the power to indemnify him or
her against such liability under the provisions of the General Corporation Law
of Delaware.
ARTICLE VII
RECORDS AND REPORTS
7.1 MAINTENANCE AND INSPECTION OF RECORDS
The corporation shall, either at its principal executive office or at
such place or places as designated by the board of directors, keep a record of
its stockholders listing their names and addresses and the number and class of
shares held by each stockholder, a copy of these bylaws as amended to date,
accounting books and other records of its business and properties.
Any stockholder of record, in person or by attorney or other agent,
shall, upon written demand under oath stating the purpose thereof, have the
right during the usual hours for business to inspect for any proper purpose the
corporation's stock ledger, a list of its stockholders, and its other books and
records and to make copies or extracts therefrom. A proper purpose shall mean a
purpose
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reasonably related to such person's interest as a stockholder. In every
instance where an attorney or other agent is the person who seeks the right to
inspection, the demand under oath shall be accompanied by a power of attorney
or such other writing that authorizes the attorney or other agent to so act on
behalf of the stockholder. The demand under oath shall be directed to the
corporation at its registered office in Delaware or at its principal place of
business.
7.2 INSPECTION BY DIRECTORS
Any director shall have the right to examine (and to make copies of)
the corporation's stock ledger, a list of its stockholders and its other books
and records for a purpose reasonably related to his or her position as a
director.
7.3 ANNUAL STATEMENT TO STOCKHOLDERS
The board of directors shall present at each annual meeting, and at
any special meeting of the stockholders when called for by vote of the
stockholders, a full and clear statement of the business and condition of the
corporation.
7.4 REPRESENTATION OF SHARES OF OTHER CORPORATIONS
The chairman of the board, if any, the president, any vice president,
the chief financial officer, the secretary or any assistant secretary of this
corporation, or any other person authorized by the board of directors or the
president or a vice president, is authorized to vote, represent and exercise on
behalf of this corporation all rights incident to any and all shares of the
stock of any other corporation or corporations standing in the name of this
corporation. The authority herein granted may be exercised either by such
person directly or by any other person authorized to do so by proxy or power of
attorney duly executed by such person having the authority.
7.5 CERTIFICATION AND INSPECTION OF BYLAWS
The original or a copy of these bylaws, as amended or otherwise
altered to date, certified by the secretary, shall be kept at the corporation's
principal executive office and shall be open to inspection by the stockholders
of the corporation, at all reasonable times during office hours.
ARTICLE VIII
GENERAL MATTERS
8.1 RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING
For purposes of determining the stockholders entitled to receive
payment of any dividend or other distribution or allotment of any rights or the
stockholders entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful action,
the board of directors may fix, in advance, a record date, which shall not
precede the date
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upon which the resolution fixing the record date is adopted and which shall
not be more than sixty (60) days before any such action. In that case, only
stockholders of record at the close of business on the date so fixed are
entitled to receive the dividend, distribution or allotment of rights, or to
exercise such rights, as the case may be, notwithstanding any transfer of any
shares on the books of the corporation after the record date so fixed, except
as otherwise provided by law.
If the board of directors does not so fix a record date, then the
record date for determining stockholders for any such purpose shall be at the
close of business on the day on which the board of directors adopts the
applicable resolution.
8.2 CHECKS; DRAFTS; EVIDENCES OF INDEBTEDNESS
From time to time, the board of directors shall determine by
resolution which person or persons may sign or endorse all checks, drafts,
other orders for payment of money, notes or other evidences of indebtedness
that are issued in the name of or payable to the corporation, and only the
persons so authorized shall sign or endorse those instruments.
8.3 CORPORATE CONTRACTS AND INSTRUMENTS: HOW EXECUTED
The board of directors, except as otherwise provided in these bylaws,
may authorize and empower any officer or officers, or agent or agents, to enter
into any contract or execute any instrument in the name of and on behalf of the
corporation; such power and authority may be general or confined to specific
instances. Unless so authorized or ratified by the board of directors or within
the agency power of an officer, no officer, agent or employee shall have any
power or authority to bind the corporation by any contract or engagement or to
pledge its credit or to render it liable for any purpose or for any amount.
8.4 STOCK CERTIFICATES; TRANSFER; PARTLY PAID SHARES
The shares of the corporation shall be represented by certificates,
provided that the board of directors of the corporation may provide by
resolution or resolutions that some or all of any or all classes or series of
its stock shall be uncertificated shares. Any such resolution shall not apply
to shares represented by a certificate until such certificate is surrendered to
the corporation. Notwithstanding the adoption of such a resolution by the board
of directors, every holder of stock represented by certificates and, upon
request, every holder of uncertificated shares, shall be entitled to have a
certificate signed by, or in the name of the corporation by, the chairman or
vice-chairman of the board of directors, or the president or vice-president,
and by the treasurer or an assistant treasurer, or the secretary or an
assistant secretary of such corporation representing the number of shares
registered in certificate form. Any or all of the signatures on the certificate
may be a facsimile. In case any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon a certificate has
ceased to be such officer, transfer agent or registrar before such certificate
is issued, it may be issued by the corporation with the same effect as if he or
she were such officer, transfer agent or registrar at the date of issue.
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Certificates for shares shall be of such form and device as the board
of directors may designate and shall state the name of the record holder of the
shares represented thereby; its number; date of issuance; the number of shares
for which it is issued; a summary statement or reference to the powers,
designations, preferences or other special rights of such stock and the
qualifications, limitations or restrictions of such preferences and/or rights,
if any; a statement or summary of liens, if any; a conspicuous notice of
restrictions upon transfer or registration of transfer, if any; a statement as
to any applicable voting trust agreement; if the shares be assessable, or, if
assessments are collectible by personal action, a plain statement of such
facts.
Upon surrender to the secretary or transfer agent of the corporation
of a certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, it shall be the duty of the
corporation to issue a new certificate to the person entitled thereto, cancel
the old certificate and record the transaction upon its books.
The corporation may issue the whole or any part of its shares as
partly paid and subject to call for the remainder of the consideration to be
paid therefor. Upon the face or back of each stock certificate issued to
represent any such partly paid shares, or upon the books and records of the
corporation in the case of uncertificated partly paid shares, the total amount
of the consideration to be paid therefor and the amount paid thereon shall be
stated. Upon the declaration of any dividend on fully paid shares, the
corporation shall declare a dividend upon partly paid shares of the same class,
but only upon the basis of the percentage of the consideration actually paid
thereon.
8.5 SPECIAL DESIGNATION ON CERTIFICATES
If the corporation is authorized to issue more than one class of stock
or more than one series of any class, then the powers, the designations, the
preferences and the relative, participating, optional or other special rights
of each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate that the corporation shall
issue to represent such class or series of stock; provided, however, that,
except as otherwise provided in Section 202 of the General Corporation Law of
Delaware, in lieu of the foregoing requirements there may be set forth on the
face or back of the certificate that the corporation shall issue to represent
such class or series of stock a statement that the corporation will furnish
without charge to each stockholder who so requests the powers, the
designations, the preferences and the relative, participating, optional or
other special rights of each class of stock or series thereof and the
qualifications, limitations or restrictions of such preferences and/or rights.
8.6 LOST CERTIFICATES
Except as provided in this Section 8.6, no new certificates for shares
shall be issued to replace a previously issued certificate unless the latter is
surrendered to the corporation and cancelled at the same time. The board of
directors may, in case any share certificate or certificate for any other
security is lost, stolen or destroyed, authorize the issuance of replacement
certificates on such terms and conditions as the board may require; the board
may require indemnification of the corporation secured by a bond or other
adequate security sufficient to protect the corporation against
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any claim that may be made against it, including any expense or liability, on
account of the alleged loss, theft or destruction of the certificate or the
issuance of the replacement certificate.
8.7 TRANSFER AGENTS AND REGISTRARS
The board of directors may appoint one or more transfer agents or
transfer clerks, and one or more registrars, each of which shall be an
incorporated bank or trust company, either domestic or foreign, who shall be
appointed at such times and places as the requirements of the corporation may
necessitate and the board of directors may designate.
8.8 CONSTRUCTION; DEFINITIONS
Unless the context requires otherwise, the general provisions, rules
of construction and definitions in the General Corporation Law of Delaware
shall govern the construction of these bylaws. Without limiting the generality
of this provision, as used in these bylaws, the singular number includes the
plural, the plural number includes the singular, and the term "person" includes
both an entity and a natural person.
ARTICLE IX
AMENDMENTS
The original or other bylaws of the corporation may be adopted,
amended or repealed by the stockholders entitled to vote or by the board of
directors of the corporation. The fact that such power has been so conferred
upon the directors shall not divest the stockholders of the power, nor limit
their power to adopt, amend or repeal bylaws.
Whenever an amendment or new bylaw is adopted, it shall be copied in
the book of bylaws with the original bylaws, in the appropriate place. If any
bylaw is repealed, the fact of repeal with the date of the meeting at which the
repeal was enacted or the filing of the operative written consent(s) shall be
stated in said book.
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EXHIBIT 3.04
FORM OF
BYLAWS
OF
ALLOS THERAPEUTICS, INC.
(A DELAWARE CORPORATION)
<PAGE> 2
BYLAWS
OF
ALLOS THERAPEUTICS, INC.
(A DELAWARE CORPORATION)
ARTICLE I
OFFICES
Section 1. REGISTERED OFFICE. The registered office of the corporation
in the State of Delaware shall be in the City of Wilmington, County of New
Castle.
Section 2. OTHER OFFICES. The corporation shall also have and maintain
an office or principal place of business at such place as may be fixed by the
Board of Directors, and may also have offices at such other places, both within
and without the State of Delaware as the Board of Directors may from time to
time determine or the business of the corporation may require.
ARTICLE II
CORPORATE SEAL
Section 3. CORPORATE SEAL. The corporate seal shall consist of a die
bearing the name of the corporation and the inscription, "Corporate
Seal-Delaware." Said seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
ARTICLE III
STOCKHOLDERS' MEETINGS
Section 4. PLACE OF MEETINGS. Meetings of the stockholders of the
corporation shall be held at such place, either within or without the State of
Delaware, as may be designated from time to time by the Board of Directors, or,
if not so designated, then at the office of the corporation required to be
maintained pursuant to Section 2 hereof.
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<PAGE> 3
Section 5. ANNUAL MEETING.
(a) The annual meeting of the stockholders of the corporation, for
the purpose of election of directors and for such other business as may lawfully
come before it, shall be held on such date and at such time as may be designated
from time to time by the Board of Directors.
(b) At an annual meeting of the stockholders, only such business
shall be conducted as shall have been properly brought before the meeting. To be
properly brought before an annual meeting, business must be: (A) specified in
the notice of meeting (or any supplement thereto) given by or at the direction
of the Board of Directors, (B) otherwise properly brought before the meeting by
or at the direction of the Board of Directors, or (C) otherwise properly brought
before the meeting by a stockholder. For business to be properly brought before
an annual meeting by a stockholder, the stockholder must have given timely
notice thereof in writing to the Secretary of the corporation. To be timely, a
stockholder's notice must be delivered to or mailed and received at the
principal executive offices of the corporation not later than the close of
business on the sixtieth (60th) day nor earlier than the close of business on
the ninetieth (90th) day prior to the first anniversary of the preceding year's
annual meeting; provided, however, that in the event that no annual meeting was
held in the previous year or the date of the annual meeting has been changed by
more than thirty (30) days from the date contemplated at the time of the
previous year's proxy statement, notice by the stockholder to be timely must be
so received not earlier than the close of business on the ninetieth (90th) day
prior to such annual meeting and not later than the close of business on the
later of the sixtieth (60th) day prior to such annual meeting or, in the event
public announcement of the date of such annual meeting is first made by the
corporation fewer than seventy (70) days prior to the date of such annual
meeting, the close of business on the tenth (10th) day following the day on
which public announcement of the date of such meeting is first made by the
corporation. A stockholder's notice to the Secretary shall set forth as to each
matter the stockholder proposes to bring before the annual meeting: (i) a brief
description of the business desired to be brought before the annual meeting and
the reasons for conducting such business at the annual meeting, (ii) the name
and address, as they appear on the corporation's books, of the stockholder
proposing such business, (iii) the class and number of shares of the corporation
which are beneficially owned by the stockholder, (iv) any material interest of
the stockholder in such business and (v) any other information that is required
to be provided by the stockholder pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), in his capacity as
a proponent to a stockholder proposal. Notwithstanding the foregoing, in order
to include information with respect to a stockholder proposal in the proxy
statement and form of proxy for a stockholder's meeting, stockholders must
provide notice as required by the regulations promulgated under the 1934 Act.
Notwithstanding anything in these Bylaws to the contrary, no business shall be
conducted at any annual meeting except in accordance with the procedures set
forth in this paragraph (b). The chairman of the annual meeting shall, if the
facts warrant, determine and declare at the meeting that business was not
properly brought before the meeting and in accordance with the provisions of
this paragraph (b), and, if he should so determine, he shall
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so declare at the meeting that any such business not properly brought before the
meeting shall not be transacted.
(c) Only persons who are nominated in accordance with the
procedures set forth in this paragraph (c) shall be eligible for election as
directors. Nominations of persons for, election to the Board of Directors of the
corporation may be made at a meeting of stockholders by or at the direction of
the Board of Directors or by any stockholder of the corporation entitled to vote
in the election of directors at the meeting who complies with the notice
procedures set forth in this paragraph (c). Such nominations, other than those
made by or at the direction of the Board of Directors, shall be made pursuant to
timely notice in writing to the Secretary of the corporation in accordance with
the provisions of paragraph (b) of this Section 5. Such stock-holder's notice
shall set forth (i) as to each person, if any, whom the stockholder proposes to
nominate for election or re-election as a director: (A) the name, age, business
address and residence address of such person, (B) the principal occupation or
employment of such person, (C) the class and number of shares of the corporation
which are beneficially owned by such person, (D) a description of all
arrangements or understandings between the stockholder and each nominee and any
other person or persons (naming such person or persons) pursuant to which the
nominations are to be made by the stockholder, and (E) any other information
relating to such person that is required to be disclosed in solicitations of
proxies for election of directors, or is otherwise required, in each case
pursuant to Regulation 14A under the 1934 Act (including without limitation such
person's written consent to being named in the proxy statement, if any, as a
nominee and to serving as a director if elected); and (ii) as to such
stockholder giving notice, the information required to be provided pursuant to
paragraph (b) of this Section 5. At the request of the Board of Directors, any
person nominated by a stockholder for election as a director shall furnish to
the Secretary of the corporation that information required to be set forth in
the stockholder's notice of nomination which pertains to the nominee. No person
shall be eligible for election as a director of the corporation unless nominated
in accordance with the procedures set forth in this paragraph (c). The chairman
of the meeting shall, if the facts warrant, determine and declare at the meeting
that a nomination was not made in accordance with the procedures prescribed by
these Bylaws, and if he should so determine he shall so declare at the meeting,
and the defective nomination shall be disregarded.
(d) For purposes of this Section 5, "public announcement" shall
mean disclosure in a press release reported by the Dow Jones News Service,
Associated Press or comparable national news service or in a document publicly
filed by the corporation with the Securities and Exchange Commission pursuant to
Section 13, 14 or 15(d) of the Exchange Act.
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Section 6. SPECIAL MEETINGS.
(a) Special meetings of the stockholders of the corporation may be
called, for any purpose or purposes, by (i) the Chairman of the Board of
Directors, (ii) the Chief Executive Officer, or (iii) the Board of Directors
pursuant to a resolution adopted by a majority of the total number of authorized
directors (whether or not there exist any vacancies in previously authorized
directorships at the time any such resolution is presented to the Board of
Directors for adoption), and shall be held at such place, on such date, and at
such time as the Board of Directors, shall fix.
(b) If a special meeting is called by any person or persons other
than the Board of Directors, the request shall be in writing, specifying the
general nature of the business proposed to be transacted, and shall be delivered
personally or sent by registered mail or by telegraphic or other facsimile
transmission to the Chairman of the Board of Directors, the Chief Executive
Officer, or the Secretary of the corporation. No business may be transacted at
such special meeting otherwise than specified in such notice. The Board of
Directors shall determine the time and place of such special meeting, which
shall be held not less than thirty-five (35) nor more than one hundred twenty
(120) days after the date of the receipt of the request. Upon determination of
the time and place of the meeting, the officer receiving the request shall cause
notice to be given to the stockholders entitled to vote, in accordance with the
provisions of Section 7 of these Bylaws. If the notice is not given within sixty
(60) days after the receipt of the request, the person or persons requesting the
meeting may set the time and place of the meeting and give the notice. Nothing
contained in this paragraph (b) shall be construed as limiting, fixing, or
affecting the time when a meeting of stockholders called by action of the Board
of Directors may be held.
Section 7. NOTICE OF MEETINGS. Except as otherwise provided by law or
the Certificate of Incorporation, written notice of each meeting of stockholders
shall be given not less than ten (10) nor more than sixty (60) days before the
date of the meeting to each stockholder entitled to vote at such meeting, such
notice to specify the place, date and hour and purpose or purposes of the
meeting. Notice of the time, place and purpose of any meeting of stockholders
may be waived in writing, signed by the person entitled to notice thereof,
either before or after such meeting, and will be waived by any stockholder by
his attendance thereat in person or by proxy, except when the stockholder
attends a meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened. Any stockholder so waiving notice of such meeting shall be
bound by the proceedings of any such meeting in all respects as if due notice
thereof had been given.
Section 8. QUORUM. At all meetings of stockholders, except where
otherwise provided by statute or by the Certificate of Incorporation, or by
these Bylaws, the presence, in person or by proxy duly authorized, of the
holders of a majority of' the outstanding shares of stock entitled to vote shall
constitute a quorum for the transaction of business. In the absence of a quorum,
any meeting of stockholders may be adjourned, from time to time, either by the
chairman of the meeting or by vote of the holders of a majority of the shares
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represented thereat, but no other business shall be transacted at such meeting.
The stockholders present at a duly called or convened meeting, at which a quorum
is present, may continue to transact business until adjournment, notwithstanding
'the withdrawal of enough stockholders to leave less than a quorum. Except as
otherwise provided by law, the Certificate of Incorporation or these Bylaws, all
action taken by the holders of a majority of the vote cast, excluding
abstentions, at any meeting at which a quorum is present shall be valid and
binding upon the corporation; provided, however, that directors shall be elected
by a plurality of the votes of the shares present in person or represented by
proxy at the meeting and entitled to vote on the election of directors. Where a
separate vote by a class or classes or series is required, except where
otherwise provided by the statute or by the Certificate of Incorporation or
these Bylaws, a majority of the outstanding shares of such class or classes or
series, present in person or represented by proxy, shall constitute a quorum
entitled to take action with respect to that vote on that matter and, except
where otherwise provided by the statute or by the Certificate of Incorporation
or these Bylaws, the affirmative vote of the majority (plurality, in the case of
the election of directors) of the votes cast, including abstentions, by the
holders of shares of such class or classes or series shall be the act of such
class or classes or series.
Section 9. ADJOURNMENT AND NOTICE OF ADJOURNED MEETINGS. Any meeting of
stockholders, whether annual or special, may be adjourned from time., to time
either by the chairman of the meeting or by the vote of a majority of the shares
casting votes, excluding abstentions. When a meeting is adjourned to another
time or place, notice need not be given of the adjourned meeting if the time and
place thereof are announced at the meeting at which the adjournment is taken. At
the adjourned meeting, the corporation may transact any business which might
have been transacted at the original meeting. If the adjournment is for more
than thirty (30) days or if after the adjournment a new record (late is fixed
for the adjourned meeting, a notice of the adjourned meeting shall be given to
each stockholder of record entitled to vote at the meeting.
Section 10. VOTING RIGHTS. For the purpose of determining those
stockholders entitled to vote at any meeting of the stockholders, except as
otherwise provided by law, only persons in whose names shares stand on the stock
records of the corporation on the record date, as provided in Section 12 of
these Bylaws, shall be entitled to vote at any meeting of stockholders. Every
person entitled to vote or execute consents shall have the right to do so either
in person or by an agent or agents authorized by a proxy granted in accordance
with Delaware law. An agent so appointed need not be a stockholder. No proxy
shall be voted after three (3) years from its date of creation unless the proxy
provides for a longer period.
Section 11. JOINT OWNERS OF STOCK. If shares or other securities having
voting power stand of record in the names of two (2) or more persons, whether
fiduciaries, members of a partnership, joint tenants, tenants in common, tenants
by the entirety, or otherwise, or if two (2) or more persons have the same
fiduciary relationship respecting the same shares, unless the Secretary is given
written notice to the contrary and is furnished with a copy of the instrument or
order appointing them or creating the relationship wherein it is so provided,
their acts with respect to voting shall have the following effect: (a) if only
one (1) votes, his
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act binds all; (b) if more than one (1) votes, the act of the majority so voting
binds all; (c) if more than one (1) votes, but the vote is evenly split on any
particular matter, each faction may vote the securities in question
proportionally, or may apply to the Delaware Court of Chancery for relief as
provided in the General Corporation Law of Delaware, Section 217(b). If the
instrument filed with the Secretary shows that any such tenancy is held in
unequal interests, a majority or even-split for the purpose of subsection (c)
shall be a majority or even-split in interest.
Section 12. LIST OF STOCKHOLDERS. The Secretary shall prepare and make,
at least ten (10) days before every meeting of stockholders, a complete list of
the stockholders entitled to vote at said meeting, arranged in alphabetical
order, showing the address of each stockholder and the number of shares
registered in the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten (10) days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not
specified, at the place where the meeting is to be held. The list shall be
produced and kept at the time and place of meeting during the whole time thereof
and may be inspected by any stockholder who is present.
Section 13. ACTION WITHOUT MEETING.
(a) Unless otherwise provided in the Certificate of Incorporation,
any action required by statute to be taken at any annual or special meeting of
the stockholders, or any action which may be taken at any annual or special
meeting of the stockholders, may be taken without a meeting, without prior
notice and without a vote, if a consent in writing, setting forth the action so
taken, shall be signed by the holders of outstanding stock having not less than
the minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were present
and voted.
(b) Every written consent shall bear the date of signature of each
stockholder who signs the consent, and no written consent shall be effective to
take the corporate action referred to therein unless, within sixty (60) days of
the earliest dated consent delivered to the corporation in the manner herein
required, written consents signed by a sufficient number of stockholders to take
action are delivered to the corporation by delivery to its registered office in
the State of Delaware, its principal place of business or an officer or agent of
the corporation having custody of the book in which proceedings of meetings of
stockholders are recorded. Delivery made to a corporation's registered office
shall be by hand or by certified or registered mail, return receipt requested.
(c) Prompt notice of the taking of the corporate action without a
meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing. If the action which is consented
to is such as would have required the filing of a certificate under any section
of the General Corporation Law of the State of Delaware if such action had been
voted on by stockholders at a meeting thereof, then the certificate filed under
such section shall state, in lieu of any statement required by such
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section concerning any vote of stockholders, that written notice and written
consent have been given as provided in Section 228 of the General Corporation
Law of Delaware.
(d) Notwithstanding the foregoing, no such action by written
consent may be taken following the closing of the initial public offering
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), covering the offer and sale of Common Stock
of the corporation (the "Initial Public Offering").
Section 14. ORGANIZATION.
(a) At every meeting of stockholders, the Chairman of the Board of
Directors, or, if a Chairman has not been appointed or is absent, the President,
or, if the President is absent, a chairman of the meeting chosen by a majority
in interest of the stockholders entitled to vote, present in person or by proxy,
shall act as chairman. The Secretary, or, in his absence, an Assistant Secretary
directed to do so by the President, shall act as secretary of the meeting.
(b) The Board of Directors of the corporation shall be entitled to
make such rules or regulations for the conduct of meetings of stockholders as it
shall deem necessary, appropriate or convenient. Subject to such rules and
regulations of the Board of Directors, if any, the chairman of the meeting shall
have the right and authority to prescribe such rules, regulations and procedures
and to do all such acts as, in the judgment of such chairman, are necessary,
appropriate or convenient for the proper conduct of the meeting, including,
without limitation, establishing an agenda or order of business for the meeting,
rules and procedures for maintaining order at the meeting and the safety of
those present, limitations on participation in such meeting to stockholders of
record of the corporation and their duly authorized and constituted proxies and
such other persons as the chairman shall permit, restrictions on entry to the
meeting after the time fixed for the commencement thereof, limitations on the
time allotted to questions or comments by participants and regulation of the
opening and closing of the polls for balloting on matters which are to be voted
on by ballot. Unless and to the extent determined by the Board of Directors or
the chairman of the meeting, meetings of stockholders shall not be required to
be held in accordance with rules of parliamentary procedure.
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ARTICLE IV
DIRECTORS
Section 15. NUMBER AND TERM OF OFFICE. The Board of Directors shall
consist of one or more members. The authorized number of directors of the
corporation shall be fixed from time to time by resolution of the Board of
Directors. Directors need not be stockholders. If for any cause, the directors
shall not have been elected at an annual meeting, they may be elected as soon
thereafter as convenient at a special meeting of the stockholders called for
that purpose in the manner provided in these Bylaws.
Section 16. POWERS. The powers of the corporation shall be exercised,
its business conducted and its property controlled by the Board of Directors,
except as may be otherwise provided by statute or by the Certificate of
Incorporation.
Section 17. VACANCIES. Unless otherwise provided in the Certificate of
Incorporation, any vacancies on the Board of Directors resulting from death,
resignation, disqualification, removal or other causes and any newly created
directorships resulting from any increase in the number of directors, shall
unless the Board of Directors determines by resolution that any such vacancies
or newly created directorships shall be filled by stockholders, be filled only
by the affirmative vote of a majority of the directors then in office, even
though less than a quorum of the Board of Directors. Any director elected in
accordance with the preceding sentence shall hold office for the remainder of
the full term of the director for which the vacancy was created or occurred and
until such director's successor shall have been elected and qualified. A vacancy
in the Board of Directors shall be deemed to exist under this Bylaw in the case
of the death, removal or resignation of any director.
Section 18. RESIGNATION. Any director may resign at any time by
delivering his written resignation to the Secretary, such resignation to specify
whether it will be effective at a particular time, upon receipt by the Secretary
or at the pleasure of the Board of Directors. If no such specification is made,
it shall be deemed effective at the pleasure of the Board of Directors. When one
or more directors shall resign from the Board of Directors, effective at a
future date, a majority of the directors then in office, including those who
have so resigned, shall have power to fill such vacancy or vacancies, the vote
thereon to take effect when such resignation or resignations shall become
effective, and each Director so chosen shall hold office for the unexpired
portion of the term of the Director whose place shall be vacated and until his
successor shall have been duly elected and qualified.
Section 19. REMOVAL. Subject to the rights of the holders of any series
of Preferred Stock, no director shall be removed without cause. Subject to any
limitations imposed by law, the Board of Directors or any individual director
may be removed from office at any time with cause by the affirmative vote of the
holders of a majority of the voting power of all the then-outstanding shares of
voting stock of the corporation, entitled to vote at an election of directors
(the "Voting Stock").
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Section 20. MEETINGS.
(a) ANNUAL MEETINGS. The annual meeting of the Board of Directors
shall be held immediately before or after the annual meeting of stockholders and
at the place where such meeting is held. No notice of an annual meeting of the
Board of Directors shall be necessary and such meeting shall be held for the
purpose of electing officers and transacting such other business as may lawfully
come before it.
(b) REGULAR MEETINGS. Except as hereinafter otherwise provided,
regular meetings of the Board of Directors shall be held in the office of the
corporation required to be maintained pursuant to Section 2 hereof. Unless
otherwise restricted by the Certificate of Incorporation, regular meetings of
the Board of Directors may also be held at any place within or without the State
of Delaware which has been designated by resolution of the Board of Directors or
the written consent of all directors.
(c) SPECIAL MEETINGS. Unless otherwise restricted by the
Certificate of Incorporation, special meetings of the Board of Directors may be
held at any time and place within or without the State of Delaware whenever
called by the Chairman of the Board, the President or any two of the directors.
(d) TELEPHONE MEETINGS. Any member of the Board of Directors, or
of any committee thereof, may participate in a meeting by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in a meeting
by such means shall constitute presence in person at such meeting.
(e) NOTICE OF MEETINGS. Notice of the time and place of all
special meetings of the Board of Directors shall be orally or in writing, by
telephone, facsimile, telegraph or telex, during normal business hours, at least
twenty-four (24) hours before the date and time of the meeting, or sent in
writing to each director by first class mail, charges prepaid, at least three
(3) days before the date of the meeting. Notice of any meeting may be waived in
writing at any time before or after the meeting and will be waived by any
director by attendance thereat, except when the director attends the meeting for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened.
(f) WAIVER OF NOTICE. The transaction of all business at any
meeting of the Board of Directors, or any committee thereof, however called or
noticed, or wherever held, shall be as valid as though had at a meeting duly
held after regular call and notice, if a quorum be present and if, either before
or after the meeting, each of the directors not present shall sign a written
waiver of notice. All such waivers shall be filed with the corporate records or
made a part of the minutes of the meeting.
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Section 21. QUORUM AND VOTING.
(a) Unless the Certificate of Incorporation requires a greater
number and except with respect to indemnification questions arising under
Section 42 hereof, for which a quorum shall be one-third of the exact number of
directors fixed from time to time in accordance with the Certificate of
Incorporation, a quorum of the Board of Directors shall consist of a majority of
the exact number of directors fixed from time to time by the Board of Directors
in accordance with the Certificate of Incorporation; provided, however, at any
meeting whether a quorum be present or otherwise, a majority of the directors
present may adjourn from time to time until the time fixed for the next regular
meeting of the Board of Directors, without notice other than by announcement at
the meeting.
(b) At each meeting of the Board of Directors at which a quorum is
present, all questions and business shall be determined by the affirmative vote
of a majority of the directors present, unless a different vote be required by
law, the Certificate of Incorporation or these Bylaws.
Section 22. ACTION WITHOUT MEETING. Unless otherwise restricted by the
Certificate of Incorporation or these Bylaws, any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting, if all members of the Board of Directors or
committee, as the case may be, consent thereto in writing, and such writing or
writings are filed with the minutes of proceedings of the Board of Directors or
committee.
Section 23. FEES AND COMPENSATION. Directors shall be entitled to such
compensation for their services as may be approved by the Board of Directors,
including, if so approved, by resolution of the Board of Directors, a fixed sum
and expenses of attendance, if any, for attendance at each regular or special
meeting of the Board of Directors and at any meeting of a committee of the Board
of Directors. Nothing herein contained shall be construed to preclude any
director from serving the corporation in any other capacity as an officer,
agent, employee, or otherwise and receiving compensation therefor.
Section 24. COMMITTEES.
(a) EXECUTIVE COMMITTEE. The Board of Directors may by resolution
passed by a majority of the whole Board of Directors appoint an Executive
Committee to consist of one (1) or more members of the Board of Directors. The
Executive Committee, to the extent permitted by law and provided in the
resolution of the Board of Directors shall have and may exercise all the powers
and authority of the Board of Directors in the management of the business and
affairs of the corporation, including without limitation the power or authority
to declare a dividend, to authorize the issuance of stock and to adopt a
certificate of ownership and merger, and may authorize the seal of the
corporation to be affixed to all papers which may require it; but no such
committee shall have the power or authority in reference to amending the
Certificate of Incorporation (except that a committee may, to the extent
authorized in the resolution or resolutions providing for the issuance of shares
of stock adopted by the Board of Directors fix the designations and any of the
preferences or rights of such shares relating to dividends, redemption,
dissolution, any
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distribution of assets of the corporation or the conversion into, or the
exchange of such shares for, shares of any other class or classes or any other
series of the same or any other class or classes of stock of the corporation or
fix the number of shares of any series of stock or authorize the increase or
decrease of the shares of any series), adopting an agreement of merger or
consolidation, recommending to the stockholders the sale, lease or exchange of
all or substantially all of the corporation's property and assets, recommending
to the stockholders a dissolution of the corporation or a revocation of a
dissolution, or amending the bylaws of the corporation.
(b) OTHER COMMITTEES. The Board of Directors may, by resolution
passed by a majority of the whole Board of Directors, from time to time appoint
such other committees as may be permitted by law. Such other committees
appointed by the Board of Directors shall consist of one (1) or more members of
the Board of Directors and shall have such powers and perform such duties as may
be prescribed by the resolution or resolutions creating such committees, but in
no event shall such committee have the powers denied to the Executive Committee
in these Bylaws.
(c) TERM. Each member of a committee of the Board of Directors
shall serve a term on the committee coexistent with such member's term on the
Board of Directors. The Board of Directors, subject to the provisions of
subsections (a) or (b) of this Bylaw may at any time increase or decrease the
number of members of a committee or terminate the existence of a committee. The
membership of a committee member shall terminate on the date of his death or
voluntary resignation from the committee or from the Board of Directors. The
Board of Directors may at any time for any reason remove any individual
committee member and the Board of Directors may fill any committee vacancy
created by death, resignation, removal or increase in the number of members of
the committee. The Board of Directors may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee, and, in addition, in the absence or
disqualification of any member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of any such absent or disqualified
member.
(d) MEETINGS. Unless the Board of Directors shall otherwise
provide, regular meetings of the Executive Committee or any other committee
appointed pursuant to this Section 24 shall be held at such times and places as
are determined by the Board of Directors, or by any such committee, and when
notice thereof has been given to each member of such committee, no further
notice of such regular meetings need be given thereafter. Special meetings of
any such committee may be held at any place which has been determined from time
to time by such committee, and may be called by any director who is a member of
such committee, upon written notice to the members of such committee of the time
and place of such special meeting given in the manner provided for the giving of
written notice to members of the Board of Directors of the time and place of
special meetings of the Board of Directors. Notice of any special meeting of any
committee may be waived in writing at any time before or after the meeting and
will be waived by any director by attendance thereat,
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except when the director attends such special meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. A majority of the
authorized number of members of any such committee shall constitute a quorum for
the transaction of business, and the act of a majority of those present at any
meeting at which a quorum is present shall be the act of such committee.
Section 25. ORGANIZATION. At every meeting of the directors, the
Chairman of the Board of Directors, or, if a Chairman has not been appointed or
is absent, the President, or if the President is absent, the most senior Vice
President, or, in the absence of any such officer, a chairman of the meeting
chosen by a majority of the directors present, shall preside over the meeting.
The Secretary, or in his absence, an Assistant Secretary directed to do so by
the President, shall act as secretary of the meeting.
ARTICLE V
OFFICERS
Section 26. OFFICERS DESIGNATED. The officers of the corporation shall
include, if and when designated by the Board of Directors, the Chairman of the
Board of Directors, the Chief Executive Officer, the President, one or more Vice
Presidents, the Secretary, the Chief Financial Officer, the Treasurer, the
Controller, all of whom shall be elected at the annual organizational meeting of
the Board of Directors. The Board of Directors may also appoint one or more
Assistant Secretaries, Assistant Treasurers, Assistant Controllers and such
other officers and agents with such powers and duties as it shall deem
necessary. The Board of Directors may assign such additional titles to one or
more of the officers as it shall deem appropriate. Any one person may hold any
number of offices of the corporation at any one time unless specifically
prohibited therefrom by law. The salaries and other compensation of the officers
of the corporation shall be fixed by or in the manner designated by the Board of
Directors.
Section 27. TENURE AND DUTIES OF OFFICERS.
(a) GENERAL. All officers shall hold office at the pleasure of the
Board of Directors and until their successors shall have been duly elected and
qualified, unless sooner removed. Any officer elected or appointed by the Board
of Directors may be removed at any time by the Board of Directors. If the office
of any officer becomes vacant for any reason, the vacancy may be filled by the
Board of Directors.
(b) DUTIES OF CHAIRMAN OF THE BOARD OF DIRECTORS. The Chairman of
the Board of Directors, when present, shall preside at all meetings of the
stockholders and the Board of Directors. The Chairman of the Board of Directors
shall perform other duties commonly incident to his office and shall also
perform such other duties and have such other powers as the Board of Directors
shall designate from time to time. If there is no President, then the Chairman
of the Board of Directors shall also serve as the Chief Executive Officer of
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the corporation and shall have the powers and duties prescribed in paragraph (c)
of this Section 27.
(c) DUTIES OF PRESIDENT. The President shall preside at all
meetings of the stockholders and at all meetings of the Board of Directors,
unless the Chairman of the Board of Directors has been appointed and is present.
Unless some other officer has been elected Chief Executive Officer of the
corporation, the President shall be the chief executive officer of the
corporation and shall, subject to the control of the Board of Directors, have
general supervision, direction and control of the business and officers of the
corporation. The President shall perform other duties commonly incident to his
office and shall also perform such other duties and have such other powers as
the Board of Directors shall designate from time to time.
(d) DUTIES OF VICE PRESIDENTS. The Vice Presidents may assume and
perform the duties of the President in the absence or disability of the
President or whenever the office of President is vacant. The Vice Presidents
shall perform other duties commonly incident to their office and shall also
perform such other duties and have such other powers as the Board of Directors
or the President shall designate from time to time.
(e) DUTIES OF SECRETARY. The Secretary shall attend all meetings
of the stockholders and of the Board of Directors and shall record all acts and
proceedings thereof in the minute book of the corporation. The Secretary shall
give notice in conformity with these Bylaws of all meetings of the stockholders
and of all meetings of the Board of Directors and any committee thereof
requiring notice. The Secretary shall perform all other duties given him in
these Bylaws and other duties commonly incident to his office and shall also
perform such other duties and have such other powers as the Board of Directors
shall designate from time to time. The President may direct any Assistant
Secretary to assume and perform the duties of the Secretary in the absence or
disability of the Secretary, and each Assistant Secretary shall perform other
duties commonly incident to his office and shall also perform such other duties
and have such other powers as the Board of Directors or the President shall
designate from time to time.
(f) DUTIES OF CHIEF FINANCIAL OFFICER. The Chief Financial Officer
shall keep or cause to be kept the books of account of the corporation in a
thorough and proper manner and shall render statements of the financial affairs
of the corporation in such form and as often as required by the Board of
Directors or the President. The Chief Financial Officer, subject to the order of
the Board of Directors, shall have the custody of all funds and securities of
the corporation. The Chief Financial Officer shall perform other duties commonly
incident to his office and shall also perform such other duties and have such
other powers as the Board of Directors or the President shall designate from
time to time. The President may direct the Treasurer or any Assistant Treasurer,
or the Controller or any Assistant Controller to assume and perform the duties
of the Chief Financial Officer in the absence or disability of the Chief
Financial Officer, and each Treasurer and Assistant Treasurer and each
Controller and Assistant Controller shall perform other duties commonly
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incident to his office and shall also perform such other duties and have such
other powers as the Board of Directors or the President shall designate from
time to time.
Section 28. DELEGATION OF AUTHORITY. The Board of Directors may from
time to time delegate the powers or duties of any officer to any other officer
or agent, notwithstanding any provision hereof.
Section 29. RESIGNATIONS. Any officer may resign at any time by giving
written notice to the Board of Directors or to the President or to the
Secretary. Any such resignation shall be effective when received by the person
or persons to whom such notice is given, unless a later time is specified
therein, in which event the resignation shall become effective at such later
time. Unless otherwise specified in such notice, the acceptance of any such
resignation shall not be necessary to make it effective. Any resignation shall
be without prejudice to the rights, if any, of the corporation under any
contract with the resigning officer.
Section 30. REMOVAL. Any officer may be removed from office at any
time, either with or without cause, by the affirmative vote of a majority of the
directors in office at the time, or by the unanimous written consent of the
directors in office at the time, or by any committee or superior officers upon
whom such power of removal may have been conferred by the Board of Directors.
ARTICLE VI
EXECUTION OF CORPORATE INSTRUMENTS AND VOTING OF SECURITIES
OWNED BY THE CORPORATION
Section 31. EXECUTION OF CORPORATE INSTRUMENTS. The Board of Directors
may, in its discretion, determine the method and designate the signatory officer
or officers, or other person or persons, to execute on behalf of the corporation
any corporate instrument or document, or to sign on behalf of the corporation
the corporate name without limitation, or to enter into contracts on behalf of
the corporation, except where otherwise provided by law or these Bylaws, and
such execution or signature shall be binding upon the corporation.
Unless otherwise specifically determined by the Board of Directors or
otherwise required by law, promissory notes, deeds of trust, mortgages and other
evidences of indebtedness of the corporation, and other corporate instruments or
documents requiring the corporate seal, and certificates of shares of stock
owned by the corporation, shall be executed, signed or endorsed by the Chairman
of the Board of Directors, or the President or any Vice President, and by the
Secretary or Treasurer or any Assistant Secretary or Assistant Treasurer. All
other instruments and documents requiring the corporate signature, but not
requiring the corporate seal, may be executed as aforesaid or in such other
manner as may be directed by the Board of Directors.
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All checks and drafts drawn on banks or other depositaries on funds to
the credit of the corporation or in special accounts of the corporation shall be
signed by such person or persons as the Board of Directors shall authorize so to
do.
Unless authorized or ratified by the Board of Directors or within the
agency power of an officer, no officer, agent or employee shall have any power
or authority to bind the corporation by any contract or engagement or to pledge
its credit or to render it liable for any purpose or for any amount.
Section 32. VOTING OF SECURITIES OWNED BY THE CORPORATION. All stock
and other securities of other corporations owned or held by the corporation for
itself, or for other parties in any capacity, shall be voted, and all proxies
with respect thereto shall be executed, by the person authorized so to do by
resolution of the Board of Directors, or, in the absence of such authorization,
by the Chairman of the Board of Directors, the Chief Executive Officer, the
President, or any Vice President.
ARTICLE VII
SHARES OF STOCK
Section 33. FORM AND EXECUTION OF CERTIFICATES. Certificates for the
shares of stock of the corporation shall be in such form as is consistent with
the Certificate of Incorporation and applicable law. Every holder of stock in
the corporation shall be entitled to have a certificate signed by or in the name
of the corporation by the Chairman of the Board of Directors, or the President
or any Vice President and by the Treasurer or Assistant Treasurer or the
Secretary or Assistant Secretary, certifying the number of shares owned by him
in the corporation. Any or all of the signatures on the certificate may be
facsimiles. In case any officer, transfer agent, or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent, -or registrar before such certificate is
issued, it may be issued with the same effect as if he were such officer,
transfer agent, or registrar at the date of issue. Each certificate shall state
upon the face or back thereof, in full or in summary, all of the powers,
designations, preferences, and rights, and the limitations or restrictions of
the shares authorized to be issued or shall, except as otherwise required by
law, set forth on the face or back a statement that the corporation will furnish
without charge to each stockholder who so requests the powers, designations,
preferences and relative, participating, optional, or other special rights of
each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights. Within a reasonable time after
the issuance or transfer of uncertificated stock, the corporation shall send to
the registered owner thereof a written notice containing the information
required to be set forth or stated on certificates pursuant to this section or
otherwise required by law or with respect to this section a statement that the
corporation will furnish without charge to each stockholder who so requests the
powers, designations, preferences and relative participating, optional or other
special rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or
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rights. Except as otherwise expressly provided by law, the rights and
obligations of the holders of certificates representing stock of the same class
and series shall be identical.
Section 34. LOST CERTIFICATES. A new certificate or certificates shall
be issued in place of any certificate or certificates theretofore issued by the
corporation alleged to have been lost, stolen, or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate of stock to be
lost, stolen, or destroyed. The corporation may require, as a condition
precedent to the issuance of a new certificate or certificates, the owner of
such lost, stolen, or destroyed certificate or certificates, or his legal
representative, to advertise the same in such manner as it shall require or to
give the corporation a surety bond in such form and amount as it may direct as
indemnity against any claim that may be made against the corporation with
respect to the certificate alleged to have been lost, stolen, or destroyed.
Section 35. TRANSFERS.
(a) Transfers of record of shares of stock of the corporation
shall be made only upon its books by the holders thereof, in person or by
attorney duly authorized, and upon the surrender of a properly endorsed
certificate or certificates for a like number of shares.
(b) The corporation shall have power to enter into and perform any
agreement with any number of stockholders of any one or more classes of stock of
the corporation to restrict the transfer of shares of stock of the corporation
of any one or more classes owned by such stockholders in any manner not
prohibited by the General Corporation Law of Delaware.
Section 36. FIXING RECORD DATES.
(a) In order that the corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, the Board of Directors may fix, in advance, a record date,
which record date shall not precede the date upon which the resolution fixing
the record date is adopted by the Board of Directors, and which record date
shall not be more than sixty (60) nor less than ten (10) days before the date of
such meeting. If no record date is fixed by the Board of Directors, the record
date for determining stockholders entitled to notice of or to vote at a meeting
of stockholders shall be at the close of business on the day next preceding the
day on which notice is given, or if notice is waived, at the close of business
on the day next preceding the day on which the meeting is held. A determination
of stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.
(b) Prior to the Initial Public Offering, in order that the
corporation may determine the stockholders entitled to consent to corporate
action in writing without a meeting, the Board of Directors may fix a record
date, which record date shall not precede the date upon which the resolution
fixing the record date is adopted by the Board of
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Directors, and which date shall not be more than 10 days after the date upon
which the resolution fixing the record date is adopted by the Board of
Directors. Any stockholder of record seeking to have the stockholders authorize
or take corporate action by written consent shall, by written notice to the
Secretary, request the Board of Directors to fix a record date. The Board of
Directors shall promptly, but in all events within 10 days after the date on
which such a request is received, adopt a resolution fixing the record date. If
no record date has been fixed by the Board of Directors within 10 days of the
date on which such a request is received, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting, when no prior action by the Board of Directors is required by
applicable law, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
corporation by delivery to its registered office in the State of Delaware, its
principal place of business or an officer or agent of the corporation having
custody of the book in which proceedings of meetings of stockholders are
recorded. Delivery made to the corporation's registered office shall be by hand
or by certified or registered mail, return receipt requested. If no record date
has been fixed by the Board of Directors and prior action by the Board of
Directors is required by law, the record date for determining stockholders
entitled to consent to corporate action in writing without a meeting shall be at
the close of business on the day on which the Board of Directors adopts the
resolution taking such prior action.
(c) In order that the corporation may determine the stockholders
entitled to receive payment of any dividend or other distribution or allotment
of any rights or the stockholders entitled to exercise any rights in respect of
any change, conversion or exchange of stock, or for the purpose of any other
lawful action, the Board of Directors may fix, in advance, a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted, and which record date shall be not more than sixty (60)
days prior to such action. If no record date is fixed, the record date for
determining stockholders for any such purpose shall be at the close of business
on the day on which the Board of Directors adopts the resolution relating
thereto.
Section 37. REGISTERED STOCKHOLDERS. The corporation shall be entitled
to recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends, and to vote as such owner, and shall not
be bound to recognize any equitable or other claim to or interest in such share
or shares on the part of any other person whether or not it shall have express
or other notice thereof, except as otherwise provided by the laws of Delaware.
ARTICLE VIII
OTHER SECURITIES OF THE CORPORATION
Section 38. EXECUTION OF OTHER SECURITIES. All bonds, debentures and
other corporate securities of the corporation, other than stock certificates
(covered in Section 33), may be signed by the Chairman of the Board of
Directors, the President or any Vice President, or such other person as may be
authorized by the Board of Directors, and the
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corporate seal impressed thereon or a facsimile of such seal imprinted thereon
and attested by the signature of the Secretary or an Assistant Secretary, or the
Chief Financial Officer or Treasurer or an Assistant Treasurer; provided,
however, that where any such bond, debenture or other corporate security shall
be authenticated by the manual signature, or where permissible facsimile
signature, of a trustee under an indenture pursuant to which such bond,
debenture or other corporate security shall be issued, the signatures of the
persons signing and attesting the corporate seal on such bond, debenture or
other corporate security may be the imprinted facsimile of the signatures of
such persons. Interest coupons appertaining to any such bond, debenture or other
corporate security, authenticated by a trustee as aforesaid, shall be signed by
the Treasurer or an Assistant Treasurer of the corporation or such other person
as may be authorized by the Board of Directors, or bear imprinted thereon the
facsimile signature of such person. In case any officer who shall have signed or
attested any bond, debenture or other corporate security, or whose facsimile
signature shall appear thereon or on any such interest coupon, shall have ceased
to be such officer before the bond, debenture or other corporate security so
signed or attested shall have been delivered, such bond, debenture or other
corporate security nevertheless may be adopted by the corporation and issued and
delivered as though the person who signed the same or whose facsimile signature
shall have been used thereon had not ceased to be such officer of the
corporation.
ARTICLE IX
DIVIDENDS
Section 39. DECLARATION OF DIVIDENDS. Dividends upon the capital stock
of the corporation, subject to the provisions of the Certificate of
Incorporation, if any, may be declared by the Board of Directors pursuant to law
at any regular or special meeting. Dividends may be paid in cash, in property,
or in shares of the capital stock, subject to the provisions of the Certificate
of Incorporation.
Section 40. DIVIDEND RESERVE. Before payment of any dividend, there may
be set aside out of any funds of the corporation available for dividends such
sum or sums as the Board of Directors from time to time, in their absolute
discretion, think proper as a reserve or reserves to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the
corporation, or for such other purpose as the Board of Directors shall think
conducive to the interests of the corporation, and the Board of Directors may
modify or abolish any such reserve in the manner in which it was created.
ARTICLE X
FISCAL YEAR
Section 41. FISCAL YEAR. The fiscal year of the corporation shall be
fixed by resolution of the Board of Directors.
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ARTICLE XI
INDEMNIFICATION
Section 42. INDEMNIFICATION OF DIRECTORS, EXECUTIVE OFFICERS, OTHER
OFFICERS, EMPLOYEES AND OTHER AGENTS.
(a) DIRECTORS AND EXECUTIVE OFFICERS. The corporation shall
indemnify its directors and executive officers (for the purposes of this Article
XI, executive officers shall have the meaning defined in Rule 3b-7 promulgated
under the 1934 Act) and officers to the fullest extent not prohibited by the
Delaware General Corporation Law; provided, however, that the corporation may
modify the extent of such indemnification by individual contracts with its
directors and executive officers and officers; and, provided, further, that the
corporation shall not be required to indemnify any director or executive officer
or officer in connection with any proceeding (or part thereof) initiated by such
person unless (i) such indemnification is expressly required to be made by law,
(ii) the proceeding was authorized by the Board of Directors of the corporation,
(iii) such indemnification is provided by the corporation, in its sole
discretion, pursuant to the powers vested in the corporation under the Delaware
General Corporation Law or (iv) such indemnification is required to be made
under subsection (d).
(b) OTHER OFFICERS, EMPLOYEES AND OTHER AGENTS. The corporation
shall have power to indemnify its other officers, employees and other agents as
set forth in the Delaware General Corporation Law.
(c) EXPENSES. The corporation shall advance to any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a director or executive
officer or officer, of the corporation, or is or was serving at the request of
the corporation as a director or executive officer of another corporation,
partnership, joint venture, trust or other enterprise, prior to the final
disposition of the proceeding, promptly following request therefor, all expenses
incurred by any director or executive officer or officer in connection with such
proceeding upon receipt of an undertaking by or on behalf of such person to
repay said amounts if it should be determined ultimately that such person is not
entitled to be indemnified under this Bylaw or otherwise.
Notwithstanding the foregoing, unless otherwise determined pursuant to paragraph
(e) of this Bylaw, no advance shall be made by the corporation to an executive
officer of the corporation (except by reason of the fact that such executive
officer is or was a director of the corporation in which event this paragraph
shall not apply) in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, if a determination is reasonably and promptly
made (i) by the Board of Directors by a majority vote of a quorum consisting of
directors who were not parties to the proceeding, or (ii) if such quorum is not
obtainable, or, even if obtainable, a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, that the facts known
to the decision-making party at the time such determination is made demonstrate
clearly and convincingly that such person acted in
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bad faith or in a manner that such person did not believe to be in or not
opposed to the best interests of the corporation.
(d) ENFORCEMENT. Without the necessity of entering into an express
contract, all rights to indemnification and advances to directors and executive
officers and officers under this Bylaw shall be deemed to be contractual rights
and be effective to the same extent and as if provided for in a contract between
the corporation and the director or executive officer or officer. Any right to
indemnification or advances granted by this Bylaw to a director or executive
officer or officer shall be enforceable by or on behalf of the person holding
such right in any court of competent jurisdiction if (i) the claim for
indemnification or advances is denied, in whole or in part, or (ii) no
disposition of such claim is made within ninety (90) days of request therefor.
The claimant in such enforcement action, if successful in whole or in part,
shall be entitled to be paid also the expense of prosecuting his claim. In
connection with any claim for indemnification, the corporation shall be entitled
to raise as a defense to any such action that the claimant has not met the
standards of conduct that make it permissible under the Delaware General
Corporation Law for the corporation to indemnify the claimant for the amount
claimed. Neither the failure of the corporation (including its Board of
Directors, independent legal counsel or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he has met the applicable
standard of conduct set forth in the Delaware General Corporation Law, nor an
actual determination by the corporation (including its Board of Directors,
independent legal counsel or its stockholders) that the claimant has not met
such applicable standard of conduct, shall be a defense to the action or create
a presumption that claimant has not met the applicable standard of conduct. In
any suit brought by a director or executive officer to enforce a right to
indemnification or to an advancement of expenses hereunder, the burden of
proving that the director or executive officer is not entitled to be
indemnified, or to such advancement of expenses, under this Article XI or
otherwise shall be on the corporation.
(e) NON-EXCLUSIVITY OF RIGHTS. The rights conferred on any person
by this Bylaw shall not be exclusive of any other right which such person may
have or hereafter acquire under any statute, provision of the Certificate of
Incorporation, Bylaws, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding office. The corporation is specifically
authorized to enter into individual contracts with any or all of its directors,
officers, employees or agents respecting indemnification and advances, to the
fullest extent not prohibited by the Delaware General Corporation Law.
(f) SURVIVAL OF RIGHTS. The rights conferred on any person by this
Bylaw shall continue as to a person who has ceased to be a director, officer,
employee or other agent and shall inure to the benefit of the heirs, executors
and administrators of such a person.
(g) INSURANCE. To the fullest extent permitted by the Delaware
General Corporation Law, the corporation, upon approval by the Board of
Directors, may purchase
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insurance on behalf of any person required or permitted to be indemnified
pursuant to this Bylaw.
(h) AMENDMENTS. Any repeal or modification of this Bylaw shall
only be prospective and shall not affect the rights under this Bylaw in effect
at the time of the alleged occurrence of any action or omission to act that is
the cause of any proceeding against any agent of the corporation.
(i) SAVING CLAUSE. If this Bylaw or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
corporation shall nevertheless indemnify each director and executive officer to
the full extent not prohibited by any applicable portion of this Bylaw that
shall not have been invalidated, or by any other applicable law.
(j) CERTAIN DEFINITIONS. For the purposes of this Bylaw, the
following definitions shall apply:
(i) The term "proceeding" shall be broadly construed and
shall include, without limitation, the investigation, preparation, prosecution,
defense, settlement, arbitration and appeal of, and the giving of testimony in,
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative.
(ii) The term "expenses" shall be broadly construed and shall
include, without limitation, court costs, attorneys' fees, witness fees, fines,
amounts paid in settlement or judgment and any other costs and expenses of any
nature or kind incurred in connection with any proceeding.
(iii) The term the "corporation" shall include, in addition
to the resulting corporation, any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger which, if
its separate existence had continued, would have had power and authority to
indemnify its directors, officers, and employees or agents, so that any person
who is or was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, shall stand in the same position under
the provisions of this Bylaw with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if its
separate existence had continued.
(iv) References to a "director," "executive officer,"
"officer, "employee," or "agent" of the corporation shall include, without
limitation, situations where such person is serving at the request of the
corporation as, respectively, a director, executive officer, officer, employee,
trustee or agent of another corporation, partnership, joint venture, trust or
other enterprise.
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(v) References to "other enterprises" shall include employee
benefit plans; references to "fines" shall include any excise taxes assessed on
a person with respect to an employee benefit plan; and references to "serving at
the request of the corporation" shall include any service as a director,
officer, employee or agent of the corporation which imposes duties on, or
involves services by, such director, officer, employee, or agent with respect to
an employee benefit plan, its participants, or beneficiaries; and a person who
acted in good faith and in a manner he reasonably believed to be in the interest
of the participants and beneficiaries of an employee benefit plan shall be
deemed to have acted in a manner "not opposed to the best interests of the
corporation" as referred to in this Bylaw.
ARTICLE XII
NOTICES
Section 43. NOTICES.
(a) NOTICE TO STOCKHOLDERS. Whenever, under any provisions of
these Bylaws, notice is required to be given to any stockholder, it shall be
given in writing, timely and duly deposited in the United States mail, postage
prepaid, and addressed to his last known post office address as shown by the
stock record of the corporation or its transfer agent.
(b) NOTICE TO DIRECTORS. Any notice required to be given to any
director may be given by the method stated in subsection (a), or by facsimile,
telex or telegram, except that such notice other than one which is delivered
personally shall be sent to such address as such director shall have filed in
writing with the Secretary, or, in the absence of such filing, to the last known
post office address of such director.
(c) AFFIDAVIT OF MAILING. An affidavit of mailing, executed by a
duly authorized and competent employee of the corporation or its transfer agent
appointed with respect to the class of stock affected, specifying the name and
address or the names and addresses of the stockholder or stockholders, or
director or directors, to whom any such notice or notices was or were given, and
the time and method of giving the same, shall in the absence of fraud, be prima
facie evidence of the facts therein contained.
(d) TIME NOTICES DEEMED GIVEN. All notices given by mail, as above
provided, shall be deemed to have been given as at the time of mailing, and all
notices given by facsimile, telex or telegram shall be deemed to have been given
as of the sending time recorded at time of transmission.
(e) METHODS OF NOTICE. It shall not be necessary that the same
method of giving notice be employed in respect of all directors, but one
permissible method may be employed in respect of any one or more, and any other
permissible method or methods may be employed in respect of any other or others.
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(f) FAILURE TO RECEIVE NOTICE. The period or limitation of time
within which any stockholder may exercise any option or right, or enjoy any
privilege or benefit, or be required to act, or within which any director may
exercise any power or right, or enjoy any privilege, pursuant to any notice sent
him in the manner above provided, shall not be affected or extended in any
manner by the failure of such stockholder or such director to receive such
notice.
(g) NOTICE TO PERSON WITH WHOM COMMUNICATION IS UNLAWFUL. Whenever
notice is required to be given, under any provision of law or of the Certificate
of Incorporation or Bylaws of the corporation, to any person with whom
communication is unlawful, the giving of such notice to such person shall not be
required and there shall be no duty to apply to any governmental authority or
agency for a license or permit to give such notice to such person. Any action or
meeting which shall be taken or held without notice to any such person with whom
communication is unlawful shall have the same force and effect as if such notice
had been duly given. In the event that the action taken by the corporation is
such as to require the filing of a certificate under any provision of the
Delaware General Corporation Law, the certificate shall state, if such is the
fact and if notice is required, that notice was given to all persons entitled to
receive notice except such persons with whom communication is unlawful.
(h) NOTICE TO PERSON WITH UNDELIVERABLE ADDRESS. Whenever notice
is required to be given, under any provision of law or the Certificate of
Incorporation or Bylaws of the corporation, to any stockholder to whom (i)
notice of two consecutive annual meetings, and all notices of meetings or of the
taking of action by written consent without a meeting to such person during the
period between such two consecutive annual meetings, or (ii) all, and at least
two, payments (if sent by first class mail) of dividends or interest on
securities during a twelve-month period, have been mailed addressed to such
person at his address as shown on the records of the corporation and have been
returned undeliverable, the giving of such notice to such person shall not be
required. Any action or meeting which shall be taken or held without notice to
such person shall have the same force and effect as if such notice had been duly
given. If any such person shall deliver to the corporation a written notice
setting forth his then current address, the requirement that notice be given to
such person shall be reinstated. In the event that the action taken by the
corporation is such as to require the filing of a certificate under any
provision of the Delaware General Corporation Law, the certificate need not
state that notice was not given to persons to whom notice was not required to be
given pursuant to this paragraph.
ARTICLE XIII
AMENDMENT
Section 44. AMENDMENTS. Subject to paragraph (h) of Section 43 of the
Bylaws, the Bylaws may be altered or amended or new Bylaws adopted by the
affirmative vote of at least sixty-six and two-thirds percent (66-2/3%) of the
voting power of all of the then-
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outstanding shares of the Voting Stock. The Board of Directors shall also have
the power to adopt, amend, or repeal Bylaws.
ARTICLE XIV
LOANS TO OFFICERS
Section 45. LOANS TO OFFICERS. The corporation may lend money to, or
guarantee any obligation of, or otherwise assist any officer or other employee
of the corporation or of its subsidiaries, including any officer or employee who
is a Director of the corporation or its subsidiaries, whenever, in the judgment
of the Board of Directors, such loan, guarantee or assistance may reasonably be
expected to benefit the corporation. The loan, guarantee or other assistance may
be with or without interest and may be unsecured, or secured in such manner as
the Board of Directors shall approve, including, without limitation, a pledge of
shares of stock of the corporation. Nothing in these Bylaws shall be deemed to
deny, limit or restrict the powers of guaranty or warranty of the corporation at
common law or under any statute.
ARTICLE XV
MISCELLANEOUS
Section 46. ANNUAL REPORT.
(a) Subject to the provisions of paragraph (b) of this Bylaw, the
Board of Directors shall cause an annual report to be sent to each stockholder
of the corporation not later than one hundred twenty (120) days after the close
of the corporation's fiscal year. Such report shall include a balance sheet as
of the end of such fiscal year and an income statement and statement of changes
in financial position for such fiscal year, accompanied by any report thereon of
independent accounts or, if there is no such report, the certificate of an
authorized officer of the corporation that such statements were prepared without
audit from the books and records of the corporation. Such report shall be sent
to stockholders at least fifteen (15) days prior to the next annual meeting of
stockholders after the end of the fiscal year to which it relates.
(b) If and so long as there are fewer than 100 holders of record
of the corporation's shares, the requirement of sending of an annual report to
the stockholders of the corporation is hereby expressly waived.
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EXHIBIT 10.01
ALLOS THERAPEUTICS, INC.
INDEMNIFICATION AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as of
___________, ____ between Allos Therapeutics, Inc., a Delaware corporation ("the
Company"), and _____________________ ("Indemnitee").
WITNESSETH THAT:
WHEREAS, the Board of Directors of the Company has adopted Bylaws (the
"Bylaws") providing for the indemnification of the officers and directors of the
Company to the maximum extent authorized by Section 145 of the Delaware General
Corporation Law, as amended ("Law"); and
WHEREAS, the Bylaws and the Law, by their nonexclusive nature, permit
contracts between the Company and the officers or directors of the Company with
respect to indemnification of such officers or directors; and
WHEREAS, in accordance with the authorization as provided by the Law,
the Company may purchase and maintain a policy or policies of directors' and
officers' liability insurance ("D & O Insurance"), covering certain liabilities
which may be incurred by its officers or directors in the performance of their
obligations to the Company; and
WHEREAS, in recognition of past services and in order to induce
Indemnitee to continue to serve as an officer or director of the Company, the
Company has determined and agreed to enter into this contract with Indemnitee;
NOW, THEREFORE, in consideration of Indemnitee's service as an officer
or director after the date hereof, the parties hereto agree as follows:
1. Indemnity of Indemnitee. The Company hereby agrees to hold harmless
and indemnify Indemnitee to the full extent authorized or permitted by the
provisions of the Law, as such may be amended from time to time, and Article
_____, Section _____ of the Bylaws, as such may be amended. In furtherance of
the foregoing indemnification, and without limiting the generality thereof:
(a) Proceedings Other Than Proceedings by or in the Right of the
Company. Indemnitee shall be entitled to the rights of indemnification provided
in this Section l(a) if, by reason of his Corporate Status (as hereinafter
defined), he is, or is threatened to be made, a party to or participant in any
Proceeding (as hereinafter defined) other than a Proceeding by or in the right
of the Company. Pursuant to this Section 1(a), Indemnitee shall be indemnified
against all Expenses (as hereinafter defined), judgments, penalties, fines and
amounts paid in settlement actually and reasonably incurred by him or on his
behalf in connection with such Proceeding or any claim, issue or matter therein,
if he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company and, with respect to any criminal
Proceeding, had no reasonable cause to believe his conduct was unlawful.
<PAGE> 2
(b) Proceedings by or in the Right of the Company. Indemnitee shall
be entitled to the rights of indemnification provided in this Section 1(b) if,
by reason of his Corporate Status, he is, or is threatened to be made, a party
to or participant in any Proceeding brought by or in the right of the Company.
Pursuant to this Section 1(b), Indemnitee shall be indemnified against all
Expenses actually and reasonably incurred by him or on his behalf in connection
with such Proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Company; provided,
however, that, if applicable law so provides, no indemnification against such
Expenses shall be made in respect of any claim, issue or matter in such
Proceeding as to which Indemnitee shall have been adjudged to be liable to the
Company unless and to the extent that the Court of Chancery of the State of
Delaware shall determine that such indemnification may be made.
(c) Indemnification for Expenses of a Party Who is Wholly or Partly
Successful. Notwithstanding any other provision of this Agreement, to the extent
that Indemnitee is, by reason of his Corporate Status, a party to and is
successful, on the merits or otherwise, in any Proceeding, he shall be
indemnified to the maximum extent permitted by law against all Expenses actually
and reasonably incurred by him or on his behalf in connection therewith. If
Indemnitee is not wholly successful in such Proceeding but is successful, on the
merits or otherwise, as to one or more but less than all claims, issues or
matters in such Proceeding, the Company shall indemnify Indemnitee against all
Expenses actually and reasonably incurred by him or on his behalf in connection
with each successfully resolved claim, issue or matter. For purposes of this
Section and without limitation, the termination of any claim, issue or matter in
such a Proceeding by dismissal, with or without prejudice, shall be deemed to be
a successful result as to such claim, issue or matter.
2. Additional Indemnity. In addition to, and without regard to any
limitations on, the indemnification provided for in Section 1, the Company shall
and hereby does indemnify and hold harmless Indemnitee against all Expenses,
judgments, penalties, fines and amounts paid in settlement actually and
reasonably incurred by him or on his behalf if, by reason of his Corporate
Status, he is, or is threatened to be made, a party to or participant in any
Proceeding (including a Proceeding by or in the right of the Company),
including, without limitation, all liability arising out of the negligence or
active or passive wrongdoing of Indemnitee. The only limitation that shall exist
upon the Company's obligations pursuant to this Agreement shall be that the
Company shall not be obligated to make any payment to Indemnitee that is finally
determined (under the procedures, and subject to the presumptions, set forth in
Sections 6 and 7 hereof) to be unlawful under Delaware law.
3. Contribution in the Event of Joint Liability.
(a) Whether or not the indemnification provided in Sections 1 and 2
hereof is available, in respect of any threatened, pending or completed action,
suit or proceeding in which Company is jointly liable with Indemnitee (or would
be if joined in such action, suit or proceeding), Company shall pay, in the
first instance, the entire amount of any judgment or settlement of such action,
suit or proceeding without requiring Indemnitee to contribute to such payment
and Company hereby waives and relinquishes any right of contribution it may have
against Indemnitee. Company shall not enter into any settlement of any action,
suit or proceeding in which Company is jointly liable with Indemnitee (or would
be if joined in such
2
<PAGE> 3
action, suit or proceeding) unless such settlement provides for a full and final
release of all claims asserted against Indemnitee.
(b) Without diminishing or impairing the obligations of the Company
set forth in the preceding subparagraph, if, for any reason, Indemnitee shall
elect or be required to pay all or any portion of any judgment or settlement in
any threatened, pending or completed action, suit or proceeding in which Company
is jointly liable with Indemnitee (or would be if joined in such action, suit or
proceeding), Company shall contribute to the amount of expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred and paid or payable by Indemnitee in proportion to the
relative benefits received by the Company and all officers, directors or
employees of the Company other than Indemnitee who are jointly liable with
Indemnitee (or would be if joined in such action, suit or proceeding), on the
one hand, and Indemnitee, on the other hand, from the transaction from which
such action, suit or proceeding arose; provided, however, that the proportion
determined on the basis of relative benefit may, to the extent necessary to
conform to law, be further adjusted by reference to the relative fault of
Company and all officers, directors or employees of the Company other than
Indemnitee who are jointly liable with Indemnitee (or would be if joined in such
action, suit or proceeding), on the one hand, and Indemnitee, on the other hand,
in connection with the events that resulted in such expenses, judgments, fines
or settlement amounts, as well as any other equitable considerations which the
law may require to be considered. The relative fault of Company and all
officers, directors or employees of the Company other than Indemnitee who are
jointly liable with Indemnitee (or would be if joined in such action, suit or
proceeding), on the one hand, and Indemnitee, on the other hand, shall be
determined by reference to, among other things, the degree to which their
actions were motivated by intent to gain personal profit or advantage, the
degree to which their liability is primary or secondary, and the degree to which
their conduct is active or passive.
(c) Company hereby agrees to fully indemnify and hold Indemnitee
harmless from any claims of contribution which may be brought by officers,
directors or employees of the Company other than Indemnitee who may be jointly
liable with Indemnitee.
4. Indemnification for Expenses of a Witness. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is, by reason of his
Corporate Status, a witness in any Proceeding to which Indemnitee is not a
party, he shall be indemnified against all Expenses actually and reasonably
incurred by him or on his behalf in connection therewith.
5. Advancement of Expenses. Notwithstanding any other provision of this
Agreement, the Company shall advance all Expenses incurred by or on behalf of
Indemnitee in connection with any Proceeding by reason of Indemnitee's Corporate
Status within ten (10) days after the receipt by the Company of a statement or
statements from Indemnitee requesting such advance or advances from time to
time, whether prior to or after final disposition of such Proceeding. Such
statement or statements shall reasonably evidence the Expenses incurred by
Indemnitee and shall include or be preceded or accompanied by an undertaking by
or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately
be determined that Indemnitee is not entitled to be indemnified against such
Expenses. Any advances and undertakings to repay pursuant to this Section 5
shall be unsecured and interest free. Notwithstanding the foregoing, the
obligation of the Company to advance Expenses pursuant to
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<PAGE> 4
this Section 5 shall be subject to the condition that, if, when and to the
extent that the Company determines that Indemnitee would not be permitted to be
indemnified under applicable law, the Company shall be entitled to be
reimbursed, within thirty (30) days of such determination, by Indemnitee (who
hereby agrees to reimburse the Company) for all such amounts theretofore paid;
provided, however, that if Indemnitee has commenced or thereafter commences
legal proceedings in a court of competent jurisdiction to secure a determination
that Indemnitee should be indemnified under applicable law, any determination
made by the Company that Indemnitee would not be permitted to be indemnified
under applicable law shall not be binding and Indemnitee shall not be required
to reimburse the Company for any advance of Expenses until a final judicial
determination is made with respect thereto (as to which all rights of appeal
therefrom have been exhausted or lapsed).
6. Procedures and Presumptions for Determination of Entitlement to
Indemnification. It is the intent of this Agreement to secure for Indemnitee
rights of indemnity that are as favorable as may be permitted under the law and
public policy of the State of Delaware. Accordingly, the parties agree that the
following procedures and presumptions shall apply in the event of any question
as to whether Indemnitee is entitled to indemnification under this Agreement:
(a) To obtain indemnification (including, but not limited to, the
advancement of Expenses and contribution by the Company) under this Agreement,
Indemnitee shall submit to the Company a written request, including therein or
therewith such documentation and information as is reasonably available to
Indemnitee and is reasonably necessary to determine whether and to what extent
Indemnitee is entitled to indemnification. The Secretary of the Company shall,
promptly upon receipt of such a request for indemnification, advise the Board of
Directors in writing that Indemnitee has requested indemnification.
(b) Upon written request by Indemnitee for indemnification pursuant
to the first sentence of Section 6(a) hereof, a determination, if required by
applicable law, with respect to Indemnitee's entitlement thereto shall be made
in the specific case by one of the following three methods, which shall be at
the election of Indemnitee: (1) by a majority vote of the disinterested
directors, even though less than a quorum, or (2) by independent legal counsel
in a written opinion, or (3) by the stockholders.
(c) If the determination of entitlement to indemnification is to be
made by Independent Counsel pursuant to Section 6(b) hereof, the Independent
Counsel shall be selected as provided in this Section 6(c). The Independent
Counsel shall be selected by Indemnitee (unless Indemnitee shall request that
such selection be made by the Board of Directors). Indemnitee or the Company, as
the case may be, may, within 10 days after such written notice of selection
shall have been given, deliver to the Company or to Indemnitee, as the case may
be, a written objection to such selection; provided, however, that such
objection may be asserted only on the ground that the Independent Counsel so
selected does not meet the requirements of "Independent Counsel" as defined in
Section 13 of this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion. Absent a proper and timely
objection, the person so selected shall act as Independent Counsel. If a written
objection is made and substantiated, the Independent Counsel selected may not
serve as Independent Counsel unless and until such objection is withdrawn or a
court has determined that
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<PAGE> 5
such objection is without merit. If, within 20 days after submission by
Indemnitee of a written request for indemnification pursuant to Section 6(a)
hereof, no Independent Counsel shall have been selected and not objected to,
either the Company or Indemnitee may petition the Court of Chancery of the State
of Delaware or other court of competent jurisdiction for resolution of any
objection which shall have been made by the Company or Indemnitee to the other's
selection of Independent Counsel and/or for the appointment as Independent
Counsel of a person selected by the court or by such other person as the court
shall designate, and the person with respect to whom all objections are so
resolved or the person so appointed shall act as Independent Counsel under
Section 6(b) hereof. The Company shall pay any and all reasonable fees and
expenses of Independent Counsel incurred by such Independent Counsel in
connection with acting pursuant to Section 6(b) hereof, and the Company shall
pay all reasonable fees and expenses incident to the procedures of this Section
6(c), regardless of the manner in which such Independent Counsel was selected or
appointed.
(d) In making a determination with respect to entitlement to
indemnification hereunder, the person or persons or entity making such
determination shall presume that Indemnitee is entitled to indemnification under
this Agreement if Indemnitee has submitted a request for indemnification in
accordance with Section 6(a) of this Agreement. Anyone seeking to overcome this
presumption shall have the burden of proof and the burden of persuasion, by
clear and convincing evidence.
(e) Indemnitee shall be deemed to have acted in good faith if
Indemnitee's action is based on the records or books of account of the
Enterprise, including financial statements, or on information supplied to
Indemnitee by the officers of the Enterprise in the course of their duties, or
on the advice of legal counsel for the Enterprise or on information or records
given or reports made to the Enterprise by an independent certified public
accountant or by an appraiser or other expert selected with reasonable care by
the Enterprise. In addition, the knowledge and/or actions, or failure to act, of
any director, officer, agent or employee of the Enterprise shall not be imputed
to Indemnitee for purposes of determining the right to indemnification under
this Agreement. Whether or not the foregoing provisions of this Section 6(e) are
satisfied, it shall in any event be presumed that Indemnitee has at all times
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company. Anyone seeking to overcome this
presumption shall have the burden of proof and the burden of persuasion, by
clear and convincing evidence.
(f) If the person, persons or entity empowered or selected under
Section 6 to determine whether Indemnitee is entitled to indemnification shall
not have made a determination within thirty (30) days after receipt by the
Company of the request therefor, the requisite determination of entitlement to
indemnification shall be deemed to have been made and Indemnitee shall be
entitled to such indemnification, absent (i) a misstatement by Indemnitee of a
material fact, or an omission of a material fact necessary to make Indemnitee's
statement not materially misleading, in connection with the request for
indemnification, or (ii) a prohibition of such indemnification under applicable
law; provided, however, that such 30 day period may be extended for a reasonable
time, not to exceed an additional fifteen (15) days, if the person, persons or
entity making the determination with respect to entitlement to indemnification
in good faith requires such additional time for the obtaining or evaluating
documentation and/or information relating thereto; and provided, further, that
the foregoing provisions of this
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<PAGE> 6
Section 6(g) shall not apply if the determination of entitlement to
indemnification is to be made by the stockholders pursuant to Section 6(b) of
this Agreement and if (A) within fifteen (15) days after receipt by the Company
of the request for such determination the Board of Directors or the
Disinterested Directors, if appropriate, resolve to submit such determination to
the stockholders for their consideration at an annual meeting thereof to be held
within seventy five (75) days after such receipt and such determination is made
thereat, or (B) a special meeting of stockholders is called within fifteen (15)
days after such receipt for the purpose of making such determination, such
meeting is held for such purpose within sixty (60) days after having been so
called and such determination is made thereat.
(g) Indemnitee shall cooperate with the person, persons or entity
making such determination with respect to Indemnitee's entitlement to
indemnification, including providing to such person, persons or entity upon
reasonable advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
Independent Counsel, member of the Board of Directors, or stockholder of the
Company shall act reasonably and in good faith in making a determination under
the Agreement of the Indemnitee's entitlement to indemnification. Any costs or
expenses (including attorneys' fees and disbursements) incurred by Indemnitee in
so cooperating with the person, persons or entity making such determination
shall be borne by the Company (irrespective of the determination as to
Indemnitee's entitlement to indemnification) and the Company hereby indemnifies
and agrees to hold Indemnitee harmless therefrom.
(h) The Company acknowledges that a settlement or other disposition
short of final judgment may be successful if it permits a party to avoid
expense, delay, distraction, disruption and uncertainty. In the event that any
action, claim or proceeding to which Indemnitee is a party is resolved in any
manner other than by adverse judgment against Indemnitee (including, without
limitation, settlement of such action, claim or proceeding with or without
payment of money or other consideration) it shall be presumed that Indemnitee
has been successful on the merits or otherwise in such action, suit or
proceeding. Anyone seeking to overcome this presumption shall have the burden of
proof and the burden of persuasion, by clear and convincing evidence.
7. Remedies of Indemnitee.
(a) In the event that (i) a determination is made pursuant to
Section 6 of this Agreement that Indemnitee is not entitled to indemnification
under this Agreement, (ii) advancement of Expenses is not timely made pursuant
to Section 5 of this Agreement, (iii) no determination of entitlement to
indemnification shall have been made pursuant to Section 6(b) of this Agreement
within 90 days after receipt by the Company of the request for indemnification,
(iv) payment of indemnification is not made pursuant to this Agreement within
ten (10) days after receipt by the Company of a written request therefor, or (v)
payment of indemnification is not made within ten (10) days after a
determination has been made that Indemnitee is entitled to indemnification or
such determination is deemed to have been made pursuant to Section 6 of this
Agreement, Indemnitee shall be entitled to an adjudication in an appropriate
court of the State of Delaware, or in any other court of competent jurisdiction,
of his entitlement to such indemnification. Indemnitee shall commence such
proceeding seeking an adjudication within
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<PAGE> 7
180 days following the date on which Indemnitee first has the right to commence
such proceeding pursuant to this Section 7(a). The Company shall not oppose
Indemnitee's right to seek any such adjudication.
(b) In the event that a determination shall have been made pursuant
to Section 6(b) of this Agreement that Indemnitee is not entitled to
indemnification, any judicial proceeding commenced pursuant to this Section 7
shall be conducted in all respects as a de novo trial, on the merits and
Indemnitee shall not be prejudiced by reason of that adverse determination under
Section 6(b).
(c) If a determination shall have been made pursuant to
Section 6(b) of this Agreement that Indemnitee is entitled to indemnification,
the Company shall be bound by such determination in any judicial proceeding
commenced pursuant to this Section 7, absent a prohibition of such
indemnification under applicable law.
(d) In the event that Indemnitee, pursuant to this Section 7, seeks
a judicial adjudication of his rights under, or to recover damages for breach
of, this Agreement, or to recover under any directors' and officers' liability
insurance policies maintained by the Company the Company shall pay on his
behalf, in advance, any and all expenses (of the types described in the
definition of Expenses in Section 13 of this Agreement) actually and reasonably
incurred by him in such judicial adjudication, regardless of whether Indemnitee
ultimately is determined to be entitled to such indemnification, advancement of
expenses or insurance recovery.
(e) The Company shall be precluded from asserting in any judicial
proceeding commenced pursuant to this Section 7 that the procedures and
presumptions of this Agreement are not valid, binding and enforceable and shall
stipulate in any such court that the Company is bound by all the provisions of
this Agreement.
8. Non-Exclusivity; Survival of Rights; Insurance; Subrogation.
(a) The rights of indemnification as provided by this Agreement
shall not be deemed exclusive of any other rights to which Indemnitee may at any
time be entitled under applicable law, the certificate of incorporation of the
Company, the Bylaws, any agreement, a vote of stockholders or a resolution of
directors, or otherwise. No amendment, alteration or repeal of this Agreement or
of any provision hereof shall limit or restrict any right of Indemnitee under
this Agreement in respect of any action taken or omitted by such Indemnitee in
his Corporate Status prior to such amendment, alteration or repeal. To the
extent that a change in the Law, whether by statute or judicial decision,
permits greater indemnification than would be afforded currently under the
Bylaws and this Agreement, it is the intent of the parties hereto that
Indemnitee shall enjoy by this Agreement the greater benefits so afforded by
such change. No right or remedy herein conferred is intended to be exclusive of
any other right or remedy, and every other right and remedy shall be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or employment
of any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other right or remedy.
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<PAGE> 8
(b) To the extent that the Company maintains an insurance policy or
policies providing liability insurance for directors, officers, employees, or
agents or fiduciaries of the Company or of any other corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise which such
person serves at the request of the Company, Indemnitee shall be covered by such
policy or policies in accordance with its or their terms to the maximum extent
of the coverage available for any such director, officer, employee or agent
under such policy or policies.
(c) In the event of any payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee, who shall execute all papers required and take all
action necessary to secure such rights, including execution of such documents as
are necessary to enable the Company to bring suit to enforce such rights.
(d) The Company shall not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable hereunder if and to the extent that
Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise.
9. Exception to Right of Indemnification. Notwithstanding any other
provision of this Agreement, Indemnitee shall not be entitled to indemnification
under this Agreement with respect to any Proceeding brought by Indemnitee, or
any claim therein, unless (a) the bringing of such Proceeding or making of such
claim shall have been approved by the Board of Directors of the Company or (b)
such Proceeding is being brought by the Indemnitee to assert, interpret or
enforce his rights under this Agreement.
10. Duration of Agreement. All agreements and obligations of the
Company contained herein shall continue during the period Indemnitee is an
officer or director of the Company (or is or was serving at the request of the
Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise) and shall continue
thereafter so long as Indemnitee shall be subject to any Proceeding (or any
proceeding commenced under Section 7 hereof) by reason of his Corporate Status,
whether or not he is acting or serving in any such capacity at the time any
liability or expense is incurred for which indemnification can be provided under
this Agreement. This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the parties hereto and their respective successors
(including any direct or indirect successor by purchase, merger, consolidation
or otherwise to all or substantially all of the business or assets of the
Company), assigns, spouses, heirs, executors and personal and legal
representatives. This Agreement shall continue in effect regardless of whether
Indemnitee continues to serve as an officer or director of the Company or any
other Enterprise at the Company's request.
11. Security. To the extent requested by the Indemnitee and approved by
the Board of Directors of the Company, the Company may at any time and from time
to time provide security to the Indemnitee for the Company's obligations
hereunder through an irrevocable bank line of credit, funded trust or other
collateral. Any such security, once provided to the Indemnitee, may not be
revoked or released without the prior written consent of the Indemnitee.
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<PAGE> 9
12. Enforcement.
(a) The Company expressly confirms and agrees that it has entered
into this Agreement and assumed the obligations imposed on it hereby in order to
induce Indemnitee to serve as an officer or director of the Company, and the
Company acknowledges that Indemnitee is relying upon this Agreement in serving
as an officer or director of the Company.
(b) This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral, written and implied, between the
parties hereto with respect to the subject matter hereof.
13. Definitions. For purposes of this Agreement:
(a) "Corporate Status" describes the status of a person who is or
was a director, officer, employee or agent or fiduciary of the Company or of any
other corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise which such person is or was serving at the express written
request of the Company.
(b) "Disinterested Director" means a director of the Company who is
not and was not a party to the Proceeding in respect of which indemnification is
sought by Indemnitee.
(c) "Enterprise" shall mean the Company and any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise of
which Indemnitee is or was serving at the express written request of the Company
as a director, officer, employee, agent or fiduciary.
(d) "Expenses" shall include all reasonable attorneys' fees,
retainers, court costs, transcript costs, fees of experts, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees, and all other disbursements or expenses of the
types customarily incurred in connection with prosecuting, defending, preparing
to prosecute or defend, investigating, participating, or being or preparing to
be a witness in a Proceeding.
(e) "Independent Counsel" means a law firm, or a member of a law
firm, that is experienced in matters of corporation law and neither presently
is, nor in the past five years has been, retained to represent: (i) the Company
or Indemnitee in any matter material to either such party (other than with
respect to matters concerning the Indemnitee under this Agreement, or of other
indemnitees under similar indemnification agreements), or (ii) any other party
to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the Company
or Indemnitee in an action to determine Indemnitee's rights under this
Agreement. The Company agrees to pay the reasonable fees of the Independent
Counsel referred to above and to fully indemnify such counsel against any and
all Expenses,
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<PAGE> 10
claims, liabilities and damages arising out of or relating to this Agreement or
its engagement pursuant hereto.
(f) "Proceeding" includes any threatened, pending or completed
action, suit, arbitration, alternate dispute resolution mechanism,
investigation, inquiry, administrative hearing or any other actual, threatened
or completed proceeding, whether brought by or in the right of the Company or
otherwise and whether civil, criminal, administrative or investigative, in which
Indemnitee was, is or will be involved as a party or otherwise, by reason of the
fact that Indemnitee is or was a director of the Company, by reason of any
action taken by him or of any inaction on his part while acting as an officer or
director of the Company, or by reason of the fact that he is or was serving at
the request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other Enterprise; in each case
whether or not he is acting or serving in any such capacity at the time any
liability or expense is incurred for which indemnification can be provided under
this Agreement; including one pending on or before the date of this Agreement;
and excluding one initiated by an Indemnitee pursuant to Section 7 of this
Agreement to enforce his rights under this Agreement.
14. Severability. If any provision or provisions of this Agreement
shall be held by a court of competent jurisdiction to be invalid, void, illegal
or otherwise unenforceable for any reason whatsoever: (a) the validity, legality
and enforceability of the remaining provisions of this Agreement (including
without limitation, each portion of any section of this Agreement containing any
such provision held to be invalid, illegal or unenforceable, that is not itself
invalid, illegal or unenforceable) shall not in any way be affected or impaired
thereby and shall remain enforceable to the fullest extent permitted by law; and
(b) to the fullest extent possible, the provisions of this Agreement (including,
without limitation, each portion of any section of this Agreement containing any
such provision held to be invalid, illegal or unenforceable, that is not itself
invalid, illegal or unenforceable) shall be construed so as to give effect to
the intent manifested thereby.
15. Modification and Waiver. No supplement, modification, termination
or amendment of this Agreement shall be binding unless executed in writing by
both of the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.
16. Notice By Indemnitee. Indemnitee agrees promptly to notify the
Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding
or matter which may be subject to indemnification covered hereunder. The failure
to so notify the Company shall not relieve the Company of any obligation which
it may have to the Indemnitee under this Agreement or otherwise unless and only
to the extent that such failure or delay materially prejudices the Company.
17. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if (i)
delivered by hand and receipted for by the party to whom said notice or other
communication shall have been directed, (ii) mailed by certified or registered
mail with postage prepaid, on the third business
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<PAGE> 11
day after the date on which it is so mailed, or (iii) sent by reputable
overnight courier for next day delivery, on the business day after which it is
so sent:
(a) If to Indemnitee, to the address set forth below Indemnitee
signature hereto.
(b) If to the Company, to:
Allos Therapeutics, Inc.
7000 North Broadway, Suite 400
Denver, Colorado 80221
Attention: Stephen Hoffman
or to such other address as may have been furnished to Indemnitee by the Company
or to the Company by Indemnitee, as the case may be.
18. Identical Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall for all purposes be deemed to be an
original but all of which together shall constitute one and the same Agreement.
Only one such counterpart signed by the party against whom enforceability is
sought needs to be produced to evidence the existence of this Agreement.
19. Headings. The headings of the paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.
20. Governing Law. The parties agree that this Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Delaware without application of the conflict of laws principles
thereof.
21. Gender. Use of the masculine pronoun shall be deemed to include
usage of the feminine pronoun where appropriate.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the day and year first above written.
ALLOS THERAPEUTICS, INC.
By:
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Name:
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Title:
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Print Name:
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Address:
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<PAGE> 1
EXHIBIT 10.02
HEMOTECH AND CIT
AMENDED AND RESTATED ALLOSTERIC MODIFIERS
OF
HEMOGLOBIN AGREEMENT
This Amended and Restated Agreement is made between HemoTech Sciences Inc.
(Hemotech), a corporation organized under the laws of Virginia, and the Center
for Innovative Technology (CIT), a corporation organized under the laws of the
Commonwealth of Virginia.
1. INTRODUCTION
1.1 CIT possesses a disclosure of technology developed by Donald J.
Abraham et al. and related to allosteric modifiers of hemoglobin (CIT Case Nos.
116, 169, 214A, and 214B). This technology is described more fully in U.S.
Patent 5,049,695, U.S. Patent 5,122,539, U.S. Patent 5,248,785, U.S. Patent
5,250,701 and U.S. Patent Application Nos. 08/101,501; 08/006,246; 07/623346;
and 07/722,382. Hereafter, this technology, together with any technology
developed pursuant to the research described in Sections 3 and 10.3 hereof, is
referred to as the "Technology". Hereafter, "Licensed Patent Rights" shall mean
the foregoing patents and patent applications, any other patent applications
relating to the Technology, all applications filed outside of the United States
and all issued patents resulting therefrom or relating thereto as well as all
substitutions, extensions, reissues, renewals, re-examinations, continuations
and continuations-in-part and their foreign counterparts. The inventors of the
Technology have assigned their interests in the Technology to the Virginia
Commonwealth University (VCU), which has assigned its interest to CIT. CIT has
applied for, or plans to apply for, patent protections on all or a portion of
the Technology.
1.2 CIT and VCU desire that the Technology be used in the public interest
and made available to the public quickly and efficiently.
1.3 HemoTech is able to develop and bring to market the Technology. It
desires to obtain license rights set forth in this agreement.
2. LICENSE
2.1 CIT grants to HemoTech an exclusive, worldwide license to practice,
develop and use the Technology and the Licensed Patent Rights and to make, have
made, use and sell products which incorporate the Technology and/or the
Licensed Patent Rights. Hereafter, the term "Licensed Products" means products
which (a) incorporate the Technology and/or the Licensed Patent Rights and (b)
would infringe a Valid Claim (as such term is hereinafter defined) of Licensed
Patent Rights in any country in which such products are made or sold if not for
the license contained herein. Hereafter, the term "Valid Claim" means, in a
particular country,
<PAGE> 2
-2-
a claim of CIT in an issued, unexpired patent within the Licensed Patent
Rights, which has not been held within such country to be unenforceable,
unpatentable or invalid by a final decision of a court or other governmental
body of competent jurisdiction, which is unappealable or unappealed within the
time allowed for appeal, which has not been rendered unenforceable through
disclaimer or otherwise, and which has not been lost within such country
through an interference proceeding.
2.2 In return for the license to Technology granted by CIT HemoTech shall
pay to CIT [ * ] by January 15, 1994, and [ * ] by September 30, 1994.
2.3 In return for the license granted by CIT HemoTech shall pay to CIT a
[ * ]. The term "produced in Virginia" has the meaning set forth in Section 8.
"Net Revenues" means HemoTech's gross revenues from sales of Licensed Products
less the sum of the following: A) sales, tariff duties and/or use taxes directly
imposed and with reference to particular sales; B) outbound transportation and
insurance; C) amounts representing uncollectible billings; and D) amounts
allowed or credited on returns. Revenues shall be determined on an accrual basis
in accordance with generally accepted accounting principles.
2.4 [ * ].
2.5 [ * ].
2.6 Within 30 days of execution of this agreement HemoTech shall issue to
CIT 400,000 shares of common stock, which shall represent twenty percent (20%)
of the aggregate of (a) shares of HemoTech's capital stock then outstanding,
(b) shares of HemoTech's capital stock then subject to securities exercisable
for or exchangeable for capital stock (other than securities issued in
<PAGE> 3
- 3 -
connection with the financing contemplated by Section 2.8 of this agreement)
and (c) shares of HemoTech's capital stock then subject to issuance pursuant to
written agreement (other than agreements entered into in connection with the
financing contemplated by Section 2.8 of this Agreement); provided, however,
that HemoTech shall not be obligated to issue such shares if CIT terminates
this agreement pursuant to section 2.8. Notwithstanding anything to the
contrary contained in this Section 2.6, (a) upon issuance of such common stock
and the consummation of the financing contemplated by Section 2.8 of this
agreement, CIT shall have no preemptive or preferential right to purchase or
subscribe for any shares of any class of capital stock of the Company whether
now or hereafter authorized; any warrants, rights, or options to purchase any
such shares; any securities or obligations convertible into such shares or into
warrants, rights or options to purchase any such shares; or any other securities
which are exercisable for or exchangeable for such shares (collectively, the
"Securities"); and (b) CIT's ownership interest in HemoTech will be diluted by
(i) the issuance of capital stock in connection with such financing; and (ii)
all issuances of capital stock occurring on or after the date of such financing.
2.7 HemoTech shall deliver to CIT a business plan within ten (10) days of
the execution of this agreement.
2.8 HemoTech shall by January 15, 1994, arrange financing for its
operation such that HemoTech has received at least $700,000 by that date for
conduct of its activities pursuant to a transaction in the form described in
the Terms and Conditions of Proposed Equity Investment by the Partners of
MedVest, Inc. dated November 1, 1993. Breach of this provision shall be
considered material breach of this agreement and entitle CIT to terminate this
license.
2.9 HemoTech shall, within thirty (30) days from the end of each
calendar quarter, deliver to CIT a report giving such particulars of the
business conducted by HemoTech during the preceding three month period under
this license as are pertinent to royalty accounting under this agreement.
Simultaneously with the delivery of each calendar quarterly report, HemoTech
shall pay to CIT royalties due and payable for the period covered by such
report under this agreement. If no royalties are due, it shall be so reported.
3. FUNDING OF RESEARCH
HemoTech shall sponsor research at VCU relating to the Technology. The
research shall be sponsored under one or more renewable agreements providing
for the payment by HemoTech of [ * ] by December 31, 1995. The terms of such
research agreement(s) shall be those contained in the standard research
agreement used by VCU,
<PAGE> 4
-4-
except that the research agreement shall provide that inventions made in the
course of the research which are included in any claim of a U.S. patent licensed
to HemoTech under this agreement will be licensed to HemoTech as part of the
Technology licensed under this agreement. If VCU declines to enter into
agreement(s) containing such terms, HemoTech shall not be obligated by this
agreement to sponsor such research.
4. SUBLICENSES
HemoTech shall have the right to grant sublicenses, all of which shall be
subordinate to this agreement. HemoTech shall pay to CIT royalties on products
produced by sublicensees as if HemoTech had produced the products itself.
HemoTech shall also provide to CIT reports on the activities of each sublicensee
which reports shall contain the name of the sublicensee and the same information
as is required of HemoTech under this agreement.
5. PATENT PROSECUTION
5.1 CIT shall file, prosecute, and maintain during the term of this
agreement intellectual property protection for the Technology in the United
States, Japan, Canada, and the countries of the European Community. The filing,
prosecution, and maintenance of intellectual property protection shall be the
primary responsibility of CIT. However, HemoTech shall have reasonable
opportunities to advise CIT and shall cooperate with CIT in such filing,
prosecution, and maintenance. Prior to taking any action for which the cost is
estimated to be in excess of $1,000, CIT shall seek the approval of HemoTech. If
HemoTech approves then it shall be liable for the costs incurred, whether such
costs are greater than or less than the estimate. If HemoTech does not approve
of the action then CIT may pursue the action at its own expense or may decide to
not pursue the action.
5.2 HemoTech shall reimburse CIT for all costs incurred by CIT after July
1, 1993 related to obtaining and maintaining intellectual property protection
for the Technology. Such costs include legal fees, fees of experts, such as
consulting engineers, travel costs, drafting and printing costs, and other
directly related costs. Such costs do not include any amounts for time devoted
by CIT employees or CIT's supervision of the patenting process. CIT shall
invoice HemoTech for costs incurred. HemoTech shall reimburse CIT for such costs
within thirty (30) days of receipt of the invoice.
6. SECURITY INTEREST
HemoTech grants to CIT a security interest in this agreement, in every
sublicense granted by HemoTech, and in all payments due under
<PAGE> 5
-5-
any such sublicense. This security interest secures HemoTech's performance of
its obligations under this agreement. HemoTech shall cooperate with CIT in
perfecting this security interest, including the execution of any necessary
financing statements.
7. TERMINATION
7.1 [ * ].
7.2 [ * ].
8. OPERATIONS TO BE IN VIRGINIA
HemoTech shall locate its headquarters in Virginia. All Licensed Products which
are sold in the United States shall be produced in Virginia. "Produced in
Virginia" means that at least 50% of the cost of physically making each
saleable unit of product shall arise from work performed in Virginia, except
that if 50% of the cost of physically making the products cannot occur in
Virginia due to the excessive cost of Virginia operations, then only those
operations which can be economically performed in Virginia shall be performed
in Virginia. A manufacturing operation shall be considered able to be
economically performed in Virginia if the cost of performing operation in
Virginia is no more than 120% of the cost of performing the operation elsewhere.
9. CONFIDENTIALITY
9.1 Except to the extent expressly authorized by this agreement, the
parties agree that, for the term of this agreement and for five years
thereafter, the receiving party shall keep completely confidential and shall
not, without the prior written consent of the disclosing party, publish or
otherwise disclose (other than to officers, directors or employees, agents or
consultants on a need-to-know basis and subject to an obligation of
confidentiality substantially similar to the obligation contained
herein) or use for any purpose except as provided in this
<PAGE> 6
-6-
agreement any information furnished to it by the other party pursuant to this
agreement (the "Confidential Information"), except to the extent that it can be
established by the receiving party by competent proof that such confidential
information:
(a) was already known to the receiving party, other than under an
obligation of confidentiality, at the time of disclosure by the
other party, as evidenced by written records;
(b) was generally available to the public or otherwise part of the
public domain at the time of its disclosure to the receiving
party;
(c) became generally available to the public or otherwise part of the
public domain after its disclosure and other than through any act
or omission of the receiving party in breach of this agreement;
(d) was subsequently lawfully disclosed to the receiving party by a
third party without to the receiving party; or
(e) was subsequently independently developed by the receiving party,
as evidenced by written records (provided that the Technology
shall not be deemed to fall within this exception).
9.2 Each party may disclose Confidential Information to the extent such
disclosure is reasonably necessary in prosecuting or defending litigation,
filing patent applications, complying with applicable governmental regulations,
conducting clinical trials or for any other purpose under this agreement;
provided that, if a party proposes to make any such disclosure it will give
reasonable advance notice to the other party of such disclosure and, save to
the extent inappropriate in the case of patent applications, will use all
reasonable efforts to secure confidential treatment of such information
required to be disclosed.
9.3 The parties acknowledge and agree that any breach by a party of the
covenants set forth herein, including without limitation those in Section 9.1,
will likely result in irreparable harm to the non-breaching party for which
monetary damages will be inadequate compensation. The parties therefore agree
that in the event of a breach or threatened breach of any provision of this
agreement, the non-breaching party shall be entitled to appropriate injunctive
relief, including without limitation temporary or permanent injunctions or
restraining orders. The foregoing remedies shall be in addition to and not to
the exclusion of any
<PAGE> 7
- 7 -
other remedies which the non-breaching party may have at law or in equity.
10. MISCELLANEOUS PROVISIONS
10.1 HemoTech shall keep records containing all particulars which may be
necessary for the purpose of showing the royalty payable to CIT. These
records shall be open at all reasonable times for three (3) years following the
end of the calendar year to which they pertain to the inspection of an
independent certified public accounting firm retained by CIT at its sole
expense for the purpose of verifying HemoTech's royalty reports.
10.2 This agreement shall be construed, governed, interpreted and applied
in accordance with the internal laws of the Commonwealth of Virginia, U.S.A.
except that questions affecting the validity, construction and effect of any
patent shall be determined by the laws of the country in which the patent was
granted.
10.3 Subject to Section 1.1 hereof, CIT and VCU retain the right to make
use of the Technology for the purpose of research and not for commercial
development.
10.4 HemoTech agrees to mark Licensed Products employing the Technology
with appropriate patent notices.
10.5 In the event that either party hereto learns of any alleged
infringement of the Technology and/or the Licensed Patent Rights, such party
shall promptly notify the other in writing of such alleged infringement and of
any available evidence thereof. HemoTech shall have the right, but not the
obligation, to prosecute any and all infringements of any Technology and/or
Licensed Patent Rights to which HemoTech obtains rights hereunder, and to defend
all charges of infringement arising as a result of said Technology and/or
Licensed Patent Rights and to enter all settlements, judgements or other
arrangements respecting the same all at its own expense. CIT shall permit any
action to be brought in its name, but only if required by law. HemoTech shall
hold CIT harmless from any cost, expense or liability respecting all charges of
infringement involving the Technology and/or Licensed Patent Rights brought by
HemoTech against third parties. Any damages or other recovery from such
infringement actions shall be retained by HemoTech and HemoTech shall have no
obligation to make any payments to CIT except as expressly provided herein.
HemoTech shall determine whether or not it will prosecute any such infringement
action within 90 days of learning of the infringement. In the event HemoTech
determines not to prosecute any such infringement, HemoTech shall so notify CIT
within such 90-day period and thereafter CIT shall have the right to prosecute
such infringement
<PAGE> 8
-8-
on its own behalf and its own expense and retain any damages or other recovery.
10.6 If the Technology was developed with funds provided by the United
States, this agreement is subject to all applicable laws, regulations, and the
terms of any agreement under which funds were provided. This includes any
rights of the United States to use the Technology for governmental purposes,
any limits on the place of manufacture of products using the Technology, and
any obligations to make products based on the Technology available within a
reasonable time. These government rights are set forth at 35 USC Section 203 and
Section 204 and other locations. These provisions are incorporated in this
agreement by reference and the exercise of these rights by the United States
shall not constitute breach of this agreement.
10.7 All payments shall be made in United States dollars. Any currency
conversion required shall be made at the exchange rate published in The Wall
Street Journal on the last day of the calendar quarter for which the payment is
made.
10.8 Any unpaid amounts due hereunder shall bear interest at 2.5% over the
prime rate as published in The Wall Street Journal, compounded daily until
paid. This provision does not excuse any failure to pay and does not limit any
remedies for breach. In the event of breach of this agreement the breaching
party shall pay to the non-breaching party all costs, including attorney's
fees, of enforcing this agreement.
10.9 Neither CIT, nor the investors, nor any Virginia university or other
agency of the Commonwealth of Virginia make any representations as to
patentability or protectability, validity, enforceability, freedom of the
Technology from infringement of the rights of others, likelihood of successfully
converting the Technology into commercial products or whether or not the
Technology is satisfactory for the purposes intended. CIT has no knowledge of
(a) any adversely held patent of any other person relating to the Technology or
(b) any basis for any such charge or claim. CIT has all right, title and
interest in the Licensed Patent Rights and the Technology. The inventors of the
Technology have assigned their interests in the Technology to VCU, which has
assigned its interest to CIT. Attached hereto as Exhibit A are copies of all
documents evidencing and relating to the assignment to VCU and CIT of the
Technology and/or the Licensed Patent Rights.
10.10 HemoTech warrants that every individual with a personal interest in
HemoTech, as that term is defined in the Virginia Conflict of Interest Act, has
complied with the terms of that act and that no violation of that act will
result from this agreement.
<PAGE> 9
-9-
10.11 For purposes of CIT's agreements with the university which has
assigned the Technology to CIT, the amounts received by CIT pursuant to this
agreement are designated as reimbursement for expenses of filing, prosecuting,
and maintaining the patent applications and patents related to the Technology.
10.12 The parties hereto acknowledge that this instrument sets forth the
entire agreement of the parties as to the subject matter hereof and shall not be
modified except by the execution a written instrument signed by the parties.
<PAGE> 10
-10-
ACCEPTED AND AGREED TO:
CENTER FOR INNOVATIVE TECHNOLOGY
By: /s/ LINWOOD HOLTON 1/12/94
------------------------------ -----------------------------
Name: LINWOOD HOLTON Date
Title: PRESIDENT
HEMOTECH SCIENCES INC.
By: /s/ DONALD J. ABRAHAM January 10, 1994
------------------------------ -----------------------------
Name: Donald J. Abraham Date
Title: President, HemoTech Sciences Inc.
<PAGE> 1
EXHIBIT 10.03
AMENDMENT TO ALLOS THERAPEUTICS, INC. AND CIT
AMENDED AND RESTATED ALLOSTERIC MODIFIERS OF HEMOGLOBIN AGREEMENT
This agreement of amendment (Amendment) is entered into as of January
17, 1995 by and between Allos Therapeutics, Inc. (Allos) and the
Center for Innovative Technology (CIT), both corporations organized
under the laws of the Commonwealth of Virginia.
1 Allos, formerly Hemotech Sciences, Inc., and CIT entered into an agreement on
or about January 10, 1994, entitled Hemotech and CIT - Amended and Restated
Allosteric Modifiers of Hemoglobin Agreement (hereinafter called the Agreement).
2 Allos and CIT wish to amend the agreement as set forth in this Amendment in
order to (1) modify Section 3, Funding of Research, of the Agreement related to
inventions made in the course of Allos funded research and (2) to include two
(2) new disclosures of technology developed by Donald J. Abraham et al. related
to Allosteric modifiers of Hemoglobin.
2.1 In the third sentence of Paragraph 3, Funding of Research, of the Agreement,
which begins, "The terms of such research agreement..." strike the words
"...which are included in any claim of a U.S. Patent..." and in place of these
words insert "...funded by Allos and related to Allosteric Modifiers of
Hemoglobin..." The revised Paragraph 3 as amended herein shall read: Allos shall
sponsor research at VCU relating to the Technology. The research shall be
sponsored under one or more renewable agreements providing for the payment by
Allos of [ * ] by December 31, 1995. The terms of such research agreement(s)
shall be those contained in the standard research agreement used by VCU, except
that the research agreement shall provide that inventions made in the course of
the research funded by Allos and related to Allosteric Modifiers of Hemoglobin
licensed to Allos under this agreement will be licensed to Allos as part of the
Technology licensed under this agreement. If VCU declines to enter into
agreement(s) containing such terms, Allos shall not be obligated by this
agreement to sponsor such research.
2.2 CIT possesses two (2) disclosures of technology developed by Donald J.
Abraham et al. related to Allosteric Modifiers of Hemoglobin, CIT Case #538 and
Addition of Hydrophobic Anesthetics and Hydrophobic Compounds to Allosteric
Effectors of Hemoglobin, CIT Case #569 (Appendices A and B attached).
Hereafter, these new disclosures are referred to as the New Technology (the New
Technology). The New Technology was developed pursuant to Section 3 of the
Agreement, Funding of Research. Although the New Technology may not be included
in any claim of a U.S. Patent licensed to Allos, CIT and Allos agree to include
this New Technology as part of the Technology.
3 Allos shall within sixty (60) days from the end of each Allos fiscal year,
deliver to CIT a report citing jobs in Allos created and/or retained, revenues
generated, costs saved, capital investment and capital obtained related to the
Technology.
4 All terms in this Amendment shall be as defined in the Agreement.
<PAGE> 2
5 The Agreement, as amended by this Amendment, represents the entire
understanding between the parties and supersedes all other agreements or
amendments, expressed or implied, between the parties concerning the Technology.
6 The Agreement or this Amendment may be altered only in writing signed by
both parties.
ALLOS THERAPEUTICS, INC.
/s/ STEPHEN J. HOFFMAN
- --------------------------------------
Title: President
Date: 4/23/95
CENTER FOR INNOVATIVE TECHNOLOGY
/s/ ROBERT G. TEMPLIN, JR.
- --------------------------------------
Robert G. Templin, Jr.
President
Date: 2-14-95
VIRGINIA COMMONWEALTH UNIVERSITY
/s/ ROBERT GARRISON
- --------------------------------------
Title: Director Tech Transfer
Date: 2/1/95
<PAGE> 1
EXHIBIT 10.04
AMENDMENT TO ALLOS THERAPEUTICS, INC. AND CIT
AMENDED AND RESTATED ALLOSTERIC MODIFIERS OF HEMOGLOBIN
AGREEMENT
This agreement of Amendment (Amendment) is entered into as of March 12, 1996 by
and between Allos Therapeutics, Inc. (Allos) and the Center for Innovative
Technology (CIT), both corporations organized under the laws of the Commonwealth
of Virginia.
1. Allos, formerly Hemotech Sciences, Inc., and CIT entered into an
agreement on or about January 10, 1994, entitled Hemotech and CIT -
Amended and Restated Allosteric Modifiers of Hemoglobin Agreement
(hereinafter called the Agreement).
2. Allos and CIT wish to amend the Agreement as set forth in this
Amendment in order to (1) modify Paragraph 8, Operations to be in
Virginia, of the Agreement related to the location of Allos'
headquarters and (2) the intent to negotiate a lease for space in the
Virginia Biotechnology Park.
2.1. The first sentence in Paragraph 8.0 of the Agreement, which
reads "Hemotech shall locate its headquarters in Virginia," is
hereby deleted and amended.
2.2. Allos (Hemotech) agrees to immediately pursue discussions with
the intent to negotiate a lease for space in the Virginia
Biotechnology Research Park, subject to reasonable lease terms
(eg., per square foot cost, amount of space, term of lease)
and the occupancy of laboratory space by Dr. Donald Abraham's
research group in the Biotechnology Park by December 31, 1996.
3. All terms in this Amendment shall be as defined in the Agreement.
4. The Agreement or this Amendment may be altered only in writing signed
by both parties.
ACCEPTED AND AGREED TO:
CENTER FOR INNOVATIVE TECHNOLOGY
By: /s/ ROBERT G. TEMPLIN, JR. 3-12-96
------------------------------------- ------------------------------
Robert G. Templin, Jr. Date
President
ALLOS THERAPEUTICS, INC.
By: /s/ STEPHEN J. HOFFMAN 3/12/96
--------------------------------- ------------------------------
Stephen J. Hoffman, Ph.D., M.D. Date
President
<PAGE> 1
EXHIBIT 10.05
ASSIGNMENT AND ASSUMPTION AGREEMENT WITH
AMENDMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT ("Agreement"), is entered into
this 28th day of July, 1997 ("Effective Date"), by and among The Center for
Innovative Technology, and Virginia Corporation located in Herndon Virginia
(hereinafter referred to as "C.I.T."), and Virginia Commonwealth University
Intellectual Property Foundation located in Richmond, Virginia (hereinafter
referred to as "VCUIPF"), and Allos Therapeutics, Inc., a Delaware Corporation
located in Denver, Colorado (hereinafter "Allos").
WHEREAS, C.I.T. is the owner of several patents and patent applications
related to the allosteric modification of hemoglobin which were developed at
Virginia Commonwealth University, and which are the subject of a license
agreement between C.I.T. and Allos, formerly Hemotech Sciences, Inc. identified
as "HEMOTECH AND C.I.T. AMENDED AND RESTATED ALLOSTERIC MODIFIERS OF HEMOGLOBIN
AGREEMENT" (hereinafter the "Allos License Agreement"),
WHEREAS, C.I.T. wishes to assign the entire right, title and interest
in the Allos License Agreement to VCUIPF, except for the stock provisions of
Article 2.6 of the Allos License Agreement, and VCUIPF wishes to assume all
rights and responsibilities of C.I.T. under the License Agreement;
NOW THEREFORE, for and in consideration of good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. Incorporation of Existing Agreement and Amendments
1.1 Attached to this Agreement is a copy of the Allos License Agreement
executed by C.I.T. on January 12, 1994, and by Hemotech on January 10, 1994; a
copy of first amendment to the License Agreement entitled "AMENDMENT TO ALLOS
THERAPEUTICS, INC. AND C.I.T. AMENDED AND RESTATED ALLOSTERIC MODIFIERS OF
HEMOGLOBIN AGREEMENT" (hereinafter "First Amendment") which was made effective
January 17, 1995; and a copy of the second amendment to the License Agreement
also entitled "AMENDMENT TO ALLOS THERAPEUTICS, INC. AND C.I.T. AMENDED AND
RESTATED ALLOSTERIC MODIFIERS OF HEMOGLOBIN AGREEMENT" (hereinafter "Second
Amendment") which was executed by both Allos and C.I.T. on March 12, 1996.
1.2 The Allos License Agreement, the first Amendment, and the Second
Amendment constitute the entire licensing arrangement between C.I.T. and Allos,
and are herein incorporated by reference.
1
<PAGE> 2
2. Assignment and Assumption
2.1 From the Effective Date of this Agreement, C.I.T. hereby assigns,
transfers, and sets over to VCUIPF, its successors and assigns, except for any
monetary obligation of Allos to C.I.T. accruing prior to the Effective Date of
this Agreement and except for the stock provided under Article 2.6 of the Allos
License Agreement, all of its right, title and interest in and to, and all of
C.I.T.'s obligations arising under the Allos License Agreement and its
amendments, and VCUIPF accepts the assignment from C.I.T. and agrees to be bound
by all of the terms and assumes any and all obligations of C.I.T. under the
Allos License Agreement and its amendments.
2.2 In consideration for the assignment, [ * ].
2.3 C.I.T. agrees to execute assignment documents assigning the patents
and patent applications to VCUIPF and to record the assignments, and C.I.T.'s
expense, in the U.S. Patent and Trademark Office.
3. Mutual Releases and Warranties and Indemnification
3.1 C.I.T. hereby releases VCUIPF from any and all claims and
liabilities, known or unknown, whether now existing or hereafter arising, that
C.I.T. may have against VCUIPF with respect to the Allos License Agreement and
its amendments, and VCUIPF hereby releases C.I.T. from any and all claims and
liabilities, known or unknown, whether now existing or hereafter arising that
VCUIPF may have against C.I.T. with respect to the Allos License Agreement and
its amendments.
3.2 C.I.T. makes no representations or warranties to VCUIPF concerning
the validity, originality, infringement, fitness for the particular purpose, or
any other aspect of the patents and patent applications.
3.3 VCUIPF hereby indemnifies and agrees to hold C.I.T. harmless from
any claim or claims made by any party against VCUIPF and/or C.I.T. arising out
of the Allos License Agreement and its amendments, the patents or patent
applications, or the manufacture, marketing, advertising or sale of any product
related to the allosteric modifier compounds described in the patents and patent
applications by any third party, whether a direct purchaser of such product or
otherwise. VCUIPF shall be responsible for all representations and warranties
made by it to licensees including by not limited to Allos and to purchasers of
products related to the allosteric modifier compounds described in the patents
and patent applications.
2
<PAGE> 3
4. Amendment and Consent to Assignment
4.1 It is agreed to amend the Allos License Agreement to refer to
"Allos Therapeutics" throughout the document wherever "Hemotech" is mentioned.
4.2 It is agreed to amend the Allos License Agreement at Article 1.1
by deleting the first two sentences and substituting the following language
therefore:
"C.I.T. possesses several disclosures of technology developed by Dr.
Donald J. Abraham et al. Which are related to allosteric modifiers of
hemoglobin (C.I.T. Case Nos. 116, 169, 214A, 214B, 538, and 569). This
technology being more fully described in the following U.S. Patents, U.S. Patent
Applications, foreign patents, and foreign patent applications:
U.S. Patents: 5,409,695; 5,122,539; 5,248,785; 5,250,701; 5,290,803;
5,382,680; 5,432,191; 5,591,892; and 5,648,375
U.S. Patent Applications: 08/374,206; 08/478,108; 08/478,371;
08/482,808; 08/741,174; and 08/848,485
Foreign Patents: UK 0,471,811; Italy 0,471,811; France 0,471,811;
Germany 691157901-08
Foreign Patent Applications: Europe 92912561.5; Japan 504932/91; Japan
05-500,270; Canada 2,051,693; and Canada 2,109,575"
It being further agreed that this change does not substantively change
the License Agreement as it is amended.
4.3 Allos consents to the assignment set forth in Article 2.1 of this
Agreement.
4.4 Allos agrees to make all reports, notices, reimbursements and
payments due under the Allos License Agreement and its amendments to VCUIPF.
4.5 Allos acknowledges and affirms its obligations to C.I.T. with
respect to any monetary or stock obligation to C.I.T. which accrues prior to the
Effective Date of this Agreement.
5. Miscellaneous
5.1 Counterparts - This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but such counterparts
shall together constitute but one and the same Agreement.
5.2 Entire Agreement - This Agreement and all attachments referenced
herein, together constitutes the entire agreement among the parties hereto
pertaining to the subject matter hereof, and supersedes all prior and
contemporaneous agreements, understandings, negotiations, and discussions of the
parties, whether oral or written, and there are no warranties,
3
<PAGE> 4
representations, or other agreements between the parties in connection with the
subject matter hereof.
5.3 Governing Law and Jurisdiction - This Agreement shall be construed
and interpreted according to the laws of the Commonwealth of Virginia. Each of
the parties hereto hereby irrevocably and unconditionally agrees to submit to
the jurisdiction and venue of the State and Federal Courts which include
Herndon, Virginia in their respective districts for purposes of resolving any
actions, suits or proceedings brought under this Agreement, and not to object to
convenience of the forum.
5.4 Severability - The provisions of this Agreement are severable, and
in the event that any provisions of this Agreement shall be determined to be
invalid or unenforceable, such invalidity and unenforceability shall not in any
way affect the validity or enforceability of the remaining provisions hereof.
ACCEPTED AND AGREED TO:
THE CENTER FOR INNOVATIVE TECHNOLOGY
By: /s/ ROBERT G. TEMPLIN, JR. Date: 7-28-97
--------------------------------- ------------------------------
Robert G. Templin, Jr.
President
VIRGINIA COMMONWEALTH UNIVERSITY INTELLECTUAL PROPERTY
FOUNDATION, INC.
By: /s/ RICHARD C. FRANSON Date: 7-30-97
------------------------------------- ------------------------------
Richard C. Franson, Ph.D.
------------------------------------
Title: Director,
Office of Technology Transfer
-----------------------------
ALLOS THERAPEUTICS, INC.
By: /s/ STEPHEN J. HOFFMAN Date: 8/8/97
--------------------------------- ------------------------------
Stephen J. Hoffman
President
4
<PAGE> 1
EXHIBIT 10.06
[VIRGINIA COMMONWEALTH UNIVERSITY LETTERHEAD]
March 23, 1998
Exercise of Option to Nonheme Protein License Agreement
Whereas an Agreement between VCU-IPF and Allos Therapeutics Inc (Allos) was
reached on or about June 30, 1997 which grants to Allos an exclusive option to
acquire a license to technology derived from the sponsored research contract
(VCU Project #97-1329-01) entitled "Nonheme Allosteric Proteins - PK".
Whereas an invention entitled "New Allosteric Effectors of Pyruvate Kinase" has
been developed from the above referenced sponsored research agreement and was
reported to VCU Office of Technology Transfer on March 10, 1998.
Whereas, Allos desires to exercise its option to acquire a license and has so
notified the VCU-Intellectual Property Foundation.
Now, therefore, VCU-IPF hereby grants to Allos a license to the technology
(VCU-98-13; "New Allosteric Effectors of Pyruvate Kinase") subject to the terms
and conditions in the above referenced Agreement.
Accepted and Agreed to by:
VCU-Intellectual Property Foundation Allos Therapeutics, Inc.
/s/ RICHARD C. FRANSON /s/ STEPHEN J. HOFFMAN
- ------------------------------------ -----------------------------
Richard C. Franson, President Stephen J. Hoffman, President
3/24/98 3/31/98
- ------------------------------------ -----------------------------
Date Date
<PAGE> 1
EXHIBIT 10.07
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL (WHICH MAY BE COMPANY COUNSEL)
REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES
LAWS.
WARRANT AGREEMENT
To Purchase Shares of the Series B Preferred Stock of
ALLOS THERAPEUTICS, INC.
Dated as of April 15, 1996 (the "Effective Date")
WHEREAS, Allos Therapeutics, Inc., a Virginia corporation (the "Company")
has entered into a Master Lease Agreement dated as of April 15, 1996, Equipment
Schedule No. VL-1 dated as of April 15, 1996, and related Summary Equipment
Schedules (collectively, the "Leases") with Comdisco, Inc., a Delaware
corporation (the "Warrantholder"); and
WHEREAS, the Company desires to grant to Warrantholder, in consideration
for such Leases, the right to purchase shares of its Series B Preferred Stock;
NOW, THEREFORE, in consideration of the Warrantholder executing and
delivering such Leases and in consideration of mutual covenants and agreements
contained herein, the Company and Warrantholder agree as follows:
1. GRANT OF THE RIGHT TO PURCHASE PREFERRED STOCK.
The Company hereby grants to the Warrantholder, and the Warrantholder is
entitled, upon the terms and subject to the conditions hereinafter set forth, to
subscribe to and purchase, from the Company, 17,500 fully paid and
non-assessable shares of the Company's Series B Preferred Stock ("Preferred
Stock") at a purchase price of $1.60 per share (the "Exercise Price"). The
number and purchase price of such shares are subject to adjustment as provided
in Section 8 hereof.
2. TERM OF THE WARRANT AGREEMENT.
(a) Except as otherwise provided for herein, the term of this Warrant
Agreement and the right to purchase Preferred Stock as granted herein shall
commence on the Effective Date and shall be exercisable for a period of (i) ten
(10) years or (ii) five (5) years from the effective date of the Company's
initial public offering, whichever is longer.
(b) Notwithstanding the term of this Warrant Agreement fixed pursuant to
Section 2(a) hereof, the right to purchase Preferred Stock as granted herein
shall expire, if not previously exercised, immediately upon the closing of a
merger, reorganization, consolidation or sale of all or substantially all of the
Company's properties and assets in which the Company's shareholders immediately
prior to such transaction possess less than fifty percent (50%) of the voting
securities of the surviving, continuing or purchasing entity (or parent, if any,
immediately after the transaction) (an "Accelerating Merger").
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<PAGE> 2
The company shall notify the Warrantholder in writing at least fifteen (15)
days in advance of the closing of an Accelerating Merger, and if the company
fails to deliver such written notice, then notwithstanding anything to the
contrary in the Warrant Agreement, the rights to purchase the Company's
Preferred Stock shall not expire until the Company complies with such notice
provisions. Such notice shall also contain such details of the proposed
Accelerating Merger as are reasonable in the circumstances. If such closing does
not take place, the Company shall promptly notify the Warrantholder that such
proposed transaction has been terminated, and the Warrantholder may rescind any
exercise of its purchase rights promptly after such notice of termination of the
proposed transaction if the exercise of warrants occurred after the Company had
notified the Warrantholder that the Accelerating Merger was proposed or if the
exercise was otherwise precipitated by such proposed Accelerating Merger. In the
event of such rescission, the Warrants will continue to be exercisable on the
terms and conditions contained herein.
3. EXERCISE OF THE PURCHASE RIGHTS.
The purchase rights set forth in this Warrant Agreement are exercisable by
the Warrantholder, in whole or in part, at any time, or from time to time, prior
to the expiration of the term set forth in Section 2 above, by tendering to the
Company at its principal office a notice of exercise in the form attached hereto
as Exhibit I (the "Notice of Exercise"), duly completed and executed. Promptly
upon receipt of the Notice of Exercise and the payment of the purchase price in
accordance with the terms set forth below, and in no event later than twenty-one
(21) days thereafter, the Company shall issue to the Warrantholder a certificate
for the number of shares of Preferred Stock purchased and shall execute the
acknowledgment of exercise in the form attached hereto as Exhibit II (the
"Acknowledgment of Exercise") indicating the number of shares which remain
subject to future purchases, if any.
The Exercise Price may be paid at the Warrantholder's election either (i)
by cash or check, or (ii) by surrender of Warrants ("Net Issuance") as
determined below. If the Warrantholder elects the Net Issuance method, the
Company will issue Preferred Stock in accordance with the following formula:
X = Y(A-B)
------
A
Where: X = the number of shares of Preferred Stock to be issued to
the Warrantholder.
Y = the number of shares of Preferred Stock requested to be
exercised under this Warrant Agreement.
A = the fair market value of one (1) share of Preferred Stock.
B = the Exercise Price.
For purposes of the above calculation, current fair market value of
Preferred Stock shall mean with respect to each share of Preferred Stock:
(i) if the exercise is in connection with an initial public offering of
the Company's Common Stock, and if the Company's Registration Statement
relating to such public offering has been declared effective by the
SEC, then the fair market value per share shall be the product of (x)
the initial "Price to Public" specified in the final prospectus with
respect to the offering and (y) the number of shares of Common Stock
into which each share of Preferred Stock is convertible at the time of
such exercise;
(ii) if this Warrant is exercised after, and not in connection with the
Company's initial public offering, and:
(a) if traded on a securities exchange, the fair market value
shall be deemed to be the product of (x) the average of the
closing prices over a twenty-one (21) day period ending three
days before the day the current fair market value of the
securities is being determined and (y) the number of shares of
Common Stock into which each share of Preferred Stock is
convertible at the time of such exercise; or
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<PAGE> 3
(b) if actively traded over-the-counter, the fair market
value shall be deemed to be the product of (x) the average
of the closing bid and asked prices quoted on the NASDAQ
system (or similar system) over the twenty-one (21) day
period ending three days before the day the current fair
market value of the securities is being determined and (y)
the number of shares of Common Stock into which each share of
Preferred Stock is convertible at the time of such exercise;
(iii) if at any time the Common Stock is not listed on any securities
exchange or quoted in the NASDAQ System or the over-the-counter market, the
current fair market value of Preferred Stock shall be the product of (x)
the highest price per share which the Company could obtain from a willing
buyer (not a current employee or director) for shares of Common Stock sold
by the Company, from authorized but unissued shares, as determined in good
faith by its Board of Directors and (y) the number of shares of Common
Stock into which each share of Preferred Stock is convertible at the time
of such exercise, unless the Company shall become subject to a merger,
acquisition or other consolidation pursuant to which the Company is not the
surviving party, in which case the fair market value of Preferred Stock
shall be deemed to be the value received by the holders of the Company's
Preferred Stock on a common equivalent basis pursuant to such merger or
acquisition.
Upon partial exercise by either cash or Net Issuance, the Company shall
promptly issue an amended Warrant Agreement representing the remaining number of
shares purchasable hereunder. All other terms and conditions of such amended
Warrant Agreement shall be identical to those contained herein, including, but
not limited to the Effective Date hereof.
4. RESERVATION OF SHARES.
(a) Authorization and Reservation of Shares. During the term of this
Warrant Agreement, the Company will at all times have authorized and reserved a
sufficient number of shares of its Preferred Stock to provide for the exercise
of the rights to purchase Preferred Stock as provided for herein.
(b) Registration or Listing. If any shares of Preferred Stock required to
be reserved hereunder require registration with or approval of any governmental
authority under any Federal or State law (other than any registration under the
1933 Act, as then in effect, or any similar Federal statute then enforced, or
any state securities law, required by reason of any transfer involved in such
conversion), or listing on any domestic securities exchange, before such shares
may be issued upon conversion, the Company will, at its expense and as
expeditiously as possible, use its best efforts to cause such shares to be duly
registered, listed or approved for listing on such domestic securities exchange,
as the case may be.
5. NO FRACTIONAL SHARES OR SCRIP.
No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of the Warrant, but in lieu of such fractional shares
the Company shall make a cash payment therefor upon the basis of the Exercise
Price then in effect.
6. NO RIGHTS AS SHAREHOLDER.
This Warrant Agreement does not entitle the Warrantholder to any voting
rights or other rights as a shareholder of the Company prior to the exercise of
the Warrant.
7. WARRANTHOLDER REGISTRY.
The Company shall maintain a registry showing the name and address of the
registered holder of this Warrant Agreement.
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<PAGE> 4
8. ADJUSTMENT RIGHTS.
The purchase price per share and the number of shares of Preferred Stock
purchasable hereunder are subject to adjustment, as follows:
(a) Merger and Sale of Assets. Except as otherwise set forth in Sections 2
and 3 hereof, at any time there shall be a capital reorganization of the shares
of the Company's stock (other than a combination, reclassification, exchange or
subdivision of shares otherwise provided for herein), or a merger or
consolidation of the Company with or into another corporation when the Company
is not the surviving corporation, or the sale of all or substantially all of the
Company's properties and assets to any other person (hereinafter referred to as
a "Merger Event"), then, as a part of such Merger Event, lawful provision shall
be made so that the Warrantholder shall thereafter be entitled to receive, upon
exercise of the Warrant, the number of shares of preferred stock or other
securities of the successor corporation resulting from such Merger Event,
equivalent in value to that which would have been issuable if Warrantholder had
exercised this Warrant immediately prior to the Merger Event. In any such case,
appropriate adjustment (as determined in good faith by the Company's Board of
Directors) shall be made in the application of the provisions of this Warrant
Agreement with respect to the rights and interest of the Warrantholder after the
Merger Event to the end that the provisions of this Warrant Agreement (including
adjustments of the Exercise Price and number of shares of Preferred Stock
purchasable) shall be applicable to the greatest extent possible.
(b) Reclassification of Shares. If the Company at any time shall, by
combination, reclassification, exchange or subdivision of securities or
otherwise, change any of the securities as to which purchase rights under this
Warrant Agreement exist into the same or a different number of securities of any
other class or classes, this Warrant Agreement shall thereafter represent the
right to acquire such number and kind of securities as would have been issuable
as the result of such change with respect to the securities which were subject
to the purchase rights under this Warrant Agreement immediately prior to such
combination, reclassification, exchange, subdivision or other change.
(c) Subdivision or Combination of Shares. If the Company at any time shall
combine or subdivide its Preferred Stock, the Exercise Price shall be
proportionately decreased in the case of a subdivision, or proportionately
increased in the case of a combination.
(d) Stock Dividends. If the Company at any time shall pay a dividend
payable in, or make any other distribution (except any distribution specifically
provided for in the foregoing subsections (a) or (b)) of the Company's stock,
then the Exercise Price shall be adjusted, from and after the record date of
such dividend or distribution, to that price determined by multiplying the
Exercise Price in effect immediately prior to such record date by a fraction (i)
the numerator of which shall be the total number of all shares of the Company's
stock outstanding immediately prior to such dividend or distribution, and (ii)
the denominator of which shall be the total number of all shares of the
Company's stock outstanding immediately after such dividend or distribution. The
Warrantholder shall thereafter be entitled to purchase, at the Exercise Price
resulting from such adjustment, the number of shares of Preferred Stock
(calculated to the nearest whole share) obtained by multiplying the Exercise
Price in effect immediately prior to such adjustment by the number of shares of
Preferred Stock issuable upon the exercise hereof immediately prior to such
adjustment and dividing the product thereof by the Exercise Price resulting from
such adjustment.
(e) Right to Purchase Additional Stock. If, the Warrantholder's total cost
of equipment leased pursuant to the Leases exceeds $350,000, Warrantholder shall
have the right to purchase from the Company, at the Exercise Price (adjusted as
set forth herein), an additional number of shares, which number shall be
determined by (i) multiplying the amount by which the Warrantholder's total
equipment cost exceeds $350,000 by 8%, and (ii) dividing the product thereof by
the Exercise Price per share referenced above.
(f) Antidilution Rights. Additional antidilution rights applicable to the
Preferred Stock purchasable hereunder are as set forth in the Company's Amended
and Restated Articles of Incorporation, as amended through the Effective Date, a
true and complete copy of which is attached hereto as Exhibit IV (the "Charter")
and the
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<PAGE> 5
Company shall provide Warrantholder with copies of all notices provided to
holders of Preferred Stock. The Company shall promptly provide the Warrantholder
with any restatement, amendment, modification or waiver of the Charter. The
Company shall provide Warrantholder with prior written notice of any issuance of
its stock or other equity security (other than such issuances as are set forth
in the Charter) to occur after the Effective Date of this Warrant, which notice
shall include (a) the price at which such stock or security is to be sold, (b)
the number of shares to be issued, and (c) such other information as necessary
for Warrantholder to determine if a dilutive event has occurred.
(g) Notice of Adjustments. If: (i) the Company shall declare any dividend
or distribution upon its stock, whether in cash, property, stock or other
securities; (ii) the Company shall offer for subscription prorata to the holders
of any class of its Preferred or other convertible stock any additional shares
of stock of any class or other rights; (iii) there shall be any Merger Event;
(iv) there shall be an initial public offering; or (v) there shall be any
voluntary dissolution, liquidation or winding up of the Company; then, in
connection with each such event, the Company shall send to the Warrantholder:
(A) at least twenty (20) days' prior written notice of the date on which the
books of the Company shall close or a record shall be taken for such dividend,
distribution, subscription rights (specifying the date on which the holders of
Preferred Stock shall be entitled thereto) or for determining rights to vote in
respect of such Merger Event, dissolution, liquidation or winding up; (B) in the
case of any such Merger Event, dissolution, liquidation or winding up, at least
twenty (20) days' prior written notice of the date when the same shall take
place (and specifying the date on which the holders of Preferred Stock shall be
entitled to exchange their Preferred Stock for securities or other property
deliverable upon such Merger Event, dissolution, liquidation or winding up); and
(C) in the case of a public offering, the Company shall give the Warrantholder
at least twenty (20) days written notice prior to the closing date thereof.
Each such written notice shall set forth, in reasonable detail, (i) the
event requiring the adjustment, (ii) the amount of the adjustment, (iii) the
method by which such adjustment was calculated, (iv) the Exercise Price, and (v)
the number of shares subject to purchase hereunder after giving effect to such
adjustment, and shall be given by first class mail, postage prepaid, addressed
to the Warrantholder, at the address as shown on the books of the Company.
(g) Timely Notice. Failure to timely provide such notice required by
subsection (f) above shall entitle Warrantholder to retain the benefit of the
applicable notice period notwithstanding anything to the contrary contained in
any insufficient notice received by Warrantholder. The notice period shall begin
on the date Warrantholder actually receives a written notice containing all the
information specified above.
9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.
(a) Reservation of Preferred Stock. The Preferred Stock issuable upon
exercise of the Warrantholder's rights has been duly and validly reserved and,
when issued in accordance with the provisions of this Warrant Agreement, will be
validly issued, fully paid and non-assessable, and will be free of any taxes,
liens, charges or encumbrances of any nature whatsoever; provided, however, that
the Preferred Stock issuable pursuant to this Warrant Agreement may be subject
to restrictions on transfer under state and/or Federal securities laws. The
Company has made available to the Warrantholder true, correct and complete
copies of its Charter and Bylaws, as amended. The issuance of certificates for
shares of Preferred Stock upon exercise of the Warrant Agreement shall be made
without charge to the Warrantholder for any issuance tax in respect thereof, or
other cost incurred by the Company in connection with such exercise and the
related issuance of shares of Preferred Stock. The Company shall not be required
to pay any tax which may be payable in respect of any transfer involved and the
issuance and delivery of any certificate in a name other than that of the
Warrantholder.
(b) Due Authority. The execution and delivery by the Company of this
Warrant Agreement and the performance of all obligations of the Company
hereunder, including the issuance to Warrantholder of the right to acquire the
shares of Preferred Stock, have been duly authorized by all necessary corporate
action on the part of the Company, and the Leases and this Warrant Agreement are
not inconsistent with the Company's Charter or Bylaws, do not contravene any law
or governmental rule, regulation or order applicable to it, do not and will not
contravene any provision of, or constitute a default under, any indenture,
mortgage, contract or other instrument to which it is
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<PAGE> 6
a party or by which it is bound, and the Leases and this Warrant Agreement
constitute legal, valid and binding agreements of the Company, enforceable in
accordance with their respective terms.
(c) Consents and Approvals. No consent or approval of, giving of notice to,
registration with, or taking of any other action in respect of any state,
Federal or other governmental authority or agency is required with respect to
the execution, delivery and performance by the Company of its obligations under
this Warrant Agreement, except for the filing of notices pursuant to Regulation
D under the 1933 Act and any filing required by applicable state securities law,
which filings will be effective by the time required thereby.
(d) Issued Securities. All issued and outstanding shares of Common Stock,
Preferred Stock or any other securities of the Company have been duly authorized
and validly issued and are fully paid and nonassessable. All outstanding shares
of Common Stock, Preferred Stock and any other securities were issued in full
compliance with all Federal and state securities laws. In addition:
(i) The authorized capital of the Company consists of (A) 20,000,000 shares
of Common Stock, of which 2,940,242 shares are issued and outstanding, and (B)
10,050,000 shares of preferred stock, consisting of 5,000,000 of Series A of
which 5,000,000 are issued and outstanding and 5,050,000 of Series B of which
5,000,000 are issued and outstanding and are convertible into 10,050,000 shares
of Common Stock.
(ii) The Company has reserved (A) 2,000,000 shares of Common Stock for
issuance under its 1995 Stock Option Plan, under which 326,000 options are
outstanding at an average price of $.10 per share. There are no other options,
warrants, conversion privileges or other rights presently outstanding to
purchase or otherwise acquire any authorized but unissued shares of the
Company's capital stock or other securities of the Company.
(iii) In accordance with the Company's Amended and Restated Articles of
Incorporation, no shareholder of the Company has preemptive rights to purchase
new issuances of the Company's capital stock.
(e) Insurance. The Company has in full force and effect insurance policies,
with extended coverage, insuring the Company and its property and business
against such losses and risks, and in such amounts, as are customary for
corporations engaged in a similar business and similarly situated and as
otherwise may be required pursuant to the terms of any other contract or
agreement.
(f) Other Commitments to Register Securities. Except as set forth in this
Warrant Agreement and the Amended and Restated Shareholder Rights Agreement, the
Company is not, pursuant to the terms of any other agreement currently in
existence, under any obligation to register under the 1933 Act any of its
presently outstanding securities or any of its securities which may hereafter be
issued.
(g) Exempt Transaction. Subject to the accuracy of the Warrantholder's
representations in Section 10 hereof, the issuance of the Preferred Stock upon
exercise of this Warrant will constitute a transaction exempt from (i) the
registration requirements of Section 5 of the 1933 Act, and (ii) the
qualification requirements of the applicable state securities laws.
(h) Compliance with Rule 144. At the written request of the Warrantholder,
who proposes to sell Preferred Stock issuable upon the exercise of the Warrant
in compliance with Rule 144 promulgated by the Securities and Exchange
Commission, the Company shall furnish to the Warrantholder, within ten days
after receipt of such request, a written statement confirming the Company's
compliance with the filing requirements of the Securities and Exchange
Commission as set forth in such Rule, as such Rule may be amended from time to
time.
10. REPRESENTATIONS AND COVENANTS OF THE WARRANTHOLDER.
This Warrant Agreement has been entered into by the Company in reliance
upon the following representations and covenants of the Warrantholder:
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<PAGE> 7
(a) Investment Purpose. The right to acquire Preferred Stock or the
Preferred Stock issuable upon exercise of the Warrantholder's rights contained
herein will be acquired for investment and not with a view to the sale or
distribution of any part thereof, and the Warrantholder has no present intention
of selling or engaging in any public distribution of the same except pursuant to
a registration or exemption.
(b) Private Issue. The Warrantholder understands (i) that the Preferred
Stock issuable upon exercise of this Warrant is not registered under the 1933
Act or qualified under applicable state securities laws on the ground that the
issuance contemplated by this Warrant Agreement will be exempt from the
registration and qualifications requirements thereof, and (ii) that the
Company's reliance on such exemption is predicated on the representations set
forth in this Section 10.
(c) Disposition of Warrantholder's Rights. In no event will the
Warrantholder make a disposition of any of its rights to acquire Preferred Stock
or Preferred Stock issuable upon exercise of such rights unless and until (i) it
shall have notified the Company of the proposed disposition, and (ii) if
requested by the Company, it shall have furnished the Company with an opinion of
counsel (which counsel may either be inside or outside counsel to the
Warrantholder) satisfactory to the Company and its counsel to the effect that
(A) appropriate action necessary for compliance with the 1933 Act has been
taken, or (B) an exemption from the registration requirements of the 1933 Act is
available. Notwithstanding the foregoing, the restrictions imposed upon the
transferability of any of its rights to acquire Preferred Stock or Preferred
Stock issuable on the exercise of such rights do not apply to transfers from the
beneficial owner of any of the aforementioned securities to its nominee or from
such nominee to its beneficial owner, and shall terminate as to any particular
share of Preferred Stock when (1) such security shall have been effectively
registered under the 1933 Act and sold by the holder thereof in accordance with
such registration or (2) such security shall have been sold without registration
in compliance with Rule 144 under the 1933 Act, or (3) a letter shall have been
issued to the Warrantholder at its request by the staff of the Securities and
Exchange Commission or a ruling shall have been issued to the Warrantholder at
its request by such Commission stating that no action shall be recommended by
such staff or taken by such Commission, as the case may be, if such security is
transferred without registration under the 1933 Act in accordance with the
conditions set forth in such letter or ruling and such letter or ruling
specifies that no subsequent restrictions on transfer are required. Whenever the
restrictions imposed hereunder shall terminate, as hereinabove provided, the
Warrantholder or holder of a share of Preferred Stock then outstanding as to
which such restrictions have terminated shall be entitled to receive from the
Company, without expense to such holder, one or more new certificates for the
Warrant or for such shares of Preferred Stock not bearing any restrictive
legend.
(d) Financial Risk. The Warrantholder has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of its investment, and has the ability to bear the economic risks of its
investment.
(e) Risk of No Registration. The Warrantholder understands that if the
Company does not register with the Securities and Exchange Commission pursuant
to Section 12 of the 1933 Act, or file reports pursuant to Section 15(d), of the
Securities Exchange Act of 1934 (the "1934 Act"), or if a registration statement
covering the securities under the 1933 Act is not in effect when it desires to
sell (i) the rights to purchase Preferred Stock pursuant to this Warrant
Agreement, or (ii) the Preferred Stock issuable upon exercise of the right to
purchase, it may be required to hold such securities for an indefinite period.
The Warrantholder also understands that any sale of its rights of the
Warrantholder to purchase Preferred Stock or Preferred Stock which might be made
by it in reliance upon Rule 144 under the 1933 Act may be made only in
accordance with the terms and conditions of that Rule.
(f) Accredited Investor. Warrantholder is an "accredited investor" within
the meaning of the Securities and Exchange Rule 501 of Regulation D, as
presently in effect.
11. TRANSFERS. Subject to the terms and conditions contained in Section 10
hereof, this Warrant Agreement and all rights hereunder are transferable in
whole or in part by the Warrantholder and any successor transferee, provided,
however, in no event shall the number of transfers of the rights and interests
in all of the Warrants exceed three (3) transfers. The transfer shall be
recorded on the books of the Company upon receipt by the
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<PAGE> 8
Company of a notice of transfer in the form attached hereto as Exhibit III (the
"Transfer Notice"), at its principal offices and the payment to the Company of
all transfer taxes and other governmental charges imposed on such transfer.
12. MISCELLANEOUS.
(a) Effective Date. The provisions of this Warrant Agreement shall be
construed and shall be given effect in all respects as if it had been executed
and delivered by the Company on the date hereof. This Warrant Agreement shall be
binding upon any successors or assigns of the Company.
(b) Attorneys' Fees. In any litigation, arbitration or court proceeding
between the Company and the Warrantholder relating hereto, the prevailing party
shall be entitled to attorneys' fees and expenses and all costs of proceedings
incurred in enforcing this Warrant Agreement.
(c) Governing Law. This Warrant Agreement shall be governed by and
construed for all purposes under and in accordance with the laws of the State of
Illinois.
(d) Counterparts. This Warrant Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(e) Notices. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery, facsimile
transmission (provided that the original is sent by personal delivery or mail as
hereinafter set forth) or seven (7) days after deposit in the United States
mail, by registered or certified mail, addressed (i) to the Warrantholder at
6111 North River Road, Rosemont, Illinois 60018, attention: James Labe, Venture
Group, cc: Legal Department, attn: General Counsel, (and/or, if by facsimile,
(847) 518-5465 and (847) 518-5088) and (ii) to the Company at 7000 North
Broadway, Denver, Colorado, attention: John T. Greff, Chief Financial Officer,
(and/or if by facsimile, (303) 412-9160) or at such other address as any such
party may subsequently designate by written notice to the other party.
(f) Remedies. In the event of any default hereunder, the non-defaulting
party may proceed to protect and enforce its rights either by suit in equity
and/or by action at law, including but not limited to an action for damages as a
result of any such default, and/or an action for specific performance for any
default where Warrantholder will not have an adequate remedy at law and where
damages will not be readily ascertainable. The Company expressly agrees that it
shall not oppose an application by the Warrantholder or any other person
entitled to the benefit of this Agreement requiring specific performance of any
or all provisions hereof or enjoining the Company from continuing to commit any
such breach of this Agreement.
(g) No Impairment of Rights. The Company will not, by amendment of its
Charter or through any other means, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times in good
faith assist in the carrying out of all such terms and in the taking of all such
actions as may be necessary or appropriate in order to protect the rights of the
Warrantholder against impairment.
(h) Survival. The representations, warranties, covenants and conditions
of the respective parties contained herein or made pursuant to this Warrant
Agreement shall survive the execution and delivery of this Warrant Agreement.
(i) Severability. In the event any one or more of the provisions of
this Warrant Agreement shall for any reason be held invalid, illegal or
unenforceable, the remaining provisions of this Warrant Agreement shall be
unimpaired, and the invalid, illegal or unenforceable provision shall be
replaced by a mutually acceptable valid, legal and enforceable provision, which
comes closest to the intention of the parties underlying the invalid, illegal or
unenforceable provision.
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<PAGE> 9
(j) Amendments. Any provision of this Warrant Agreement may be amended by a
written instrument signed by the Company and by the Warrantholder.
(k) Additional Documents. The Company, upon execution of this Warrant
Agreement, shall provide the Warrantholder with certified resolutions with
respect to the representations, warranties and covenants set forth in
subparagraphs (a) through (d), (f) and (g) of Section 9 above. If the purchase
price for the Leases referenced in the preamble of this Warrant Agreement
exceeds $1,000,000, the Company will also provide Warrantholder with an opinion
from the Company's counsel with respect to those same representations,
warranties and covenants. The Company shall also supply such other documents as
the Warrantholder may from time to time reasonably request.
IN WITNESS WHEREOF, the parties hereto have caused this Warrant Agreement
to be executed by its officers thereunto duly authorized as of the Effective
Date.
Company: ALLOS THERAPEUTICS, INC. Warrantholder: COMDISCO, INC.
By: /s/ JOHN GREFF By: /s/ JAMES P. LABE
----------------------------- -------------------------
Title: VP Finance & CFO JAMES P. LABE, PRESIDENT
Title: VENTURE LEASE DIVISION
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<PAGE> 10
EXHIBIT I
NOTICE OF EXERCISE
To:
---------------------
(1) The undersigned Warrantholder hereby elects to purchase ____________ shares
of the Series B Preferred Stock of _________________, pursuant to the terms
of the Warrant Agreement dated the ______ day of April, 1996 (the "Warrant
Agreement") between _______________________ and the Warrantholder, and
tenders herewith payment of the purchase price for such shares in full,
together with all applicable transfer taxes, if any.
(2) In exercising its rights to purchase the Series B Preferred Stock of Allos
Therapeutics, Inc., the undersigned hereby confirms and acknowledges the
investment representations and warranties made in Section 10 of the Warrant
Agreement.
(3) Please issue a certificate or certificates representing said shares of
Series B Preferred Stock in the name of the undersigned or in such other
name as is specified below.
- ------------------------------
(Name)
- ------------------------------
(Address)
Warrantholder: COMDISCO, INC.
By:
---------------------------
Title:
------------------------
Date:
-------------------------
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<PAGE> 11
EXHIBIT II
ACKNOWLEDGMENT OF EXERCISE
The undersigned _______________________________________, hereby acknowledge
receipt of the "Notice of Exercise" from Comdisco, Inc., to purchase ___ shares
of the Series B Preferred Stock of Allos Therapeutics, Inc., pursuant to the
terms of the Warrant Agreement, and further acknowledges that ________ shares
remain subject to purchase under the terms of the Warrant Agreement.
Company:
By:
------------------------
Title:
----------------------
Date:
----------------------
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<PAGE> 12
EXHIBIT III
TRANSFER NOTICE
(To transfer or assign the foregoing Warrant Agreement execute this form
and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant Agreement and all rights
evidenced thereby are hereby transferred and assigned to
- -----------------------------------------------------
(Please Print)
whose address is
-------------------------------------
- -----------------------------------------------------
Dated
----------------------------------------
Holder's Signature
---------------------------
Holder's Address
-----------------------------
---------------------------------------------
Signature Guaranteed:
--------------------------------
NOTE: The signature to this Transfer Notice must correspond with the
name as it appears on the face of the Warrant Agreement,
without alteration or enlargement or any change whatever.
Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of
authority to assign the foregoing Warrant Agreement.
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EXHIBIT 10.08
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 AS AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF
COUNSEL (WHICH MAY BE COMPANY COUNSEL) REASONABLY SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS.
WARRANT AGREEMENT
To Purchase Shares of the Series C Preferred Stock of
ALLOS THERAPEUTICS, INC.
Dated as of May 5, 1998 (the "Effective Date")
WHEREAS, Allos Therapeutics, Inc., a Delaware corporation (the
"Company") has entered into a Master Lease Agreement dated as of April 15, 1996,
Equipment Schedule No. VL-2 dated as of May 5, 1998, and related Summary
Equipment Schedules (collectively, the "Leases") with Comdisco, Inc., a Delaware
corporation (the "Warrantholder"); and
WHEREAS, the Company desires to grant to Warrantholder, in
consideration for such Leases, the right to purchase shares of its Series C
Preferred Stock;
NOW, THEREFORE, in consideration of the Warrantholder executing and
delivering such Leases and in consideration of mutual covenants and agreements
contained herein, the Company and Warrantholder agree as follows:
1. GRANT OF THE RIGHT TO PURCHASE PREFERRED STOCK.
The Company hereby grants to the Warrantholder, and the Warrantholder
is entitled, upon the terms and subject to the conditions hereinafter set forth,
to subscribe to and purchase, from the Company, 5,524 fully paid and
non-assessable shares of the Company's Series C Preferred Stock ("Preferred
Stock") at a purchase price of $1.81 per share (the "Exercise Price"). The
number and purchase price of such shares are subject to adjustment as provided
in Section 8 hereof.
2. TERM OF THE WARRANT AGREEMENT.
(a) Except as otherwise provided for herein, the term of this Warrant
Agreement and the right to purchase Preferred Stock as granted herein shall
commence on the Effective Date and shall be exercisable for a period of (i) ten
(10) years or (ii) five (5) years from the effective date of the Company's
initial public offering, whichever is longer.
(b) Notwithstanding the term of this Warrant Agreement fixed pursuant
to Section 2(a) hereof, the right to purchase Preferred Stock as granted herein
shall expire, if not previously exercised, immediately upon the closing of a
merger, reorganization, consolidation or sale of all or substantially all of the
Company's properties and assets in which the Company's shareholders immediately
prior to such transaction possess less than fifty percent (50%) of the voting
securities of the surviving, continuing or purchasing entity (or parent, if any,
immediately after the transaction) (an "Accelerating Merger").
The Company shall notify the Warrantholder in writing at least fifteen
(15) days in advance of the closing of an Accelerating Merger, and if the
company fails to deliver such written notice, then notwithstanding anything to
the contrary in the Warrant Agreement, the rights to purchase the Company's
Preferred Stock shall not expire until the
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Company complies with such notice provisions. Such notice shall also contain
such details of the proposed Accelerating Merger as are reasonable in the
circumstances. If such closing does not take place, the Company shall promptly
notify the Warrantholder that such proposed transaction has been terminated, and
the Warrantholder may rescind any exercise of its purchase rights promptly after
such notice of termination of the proposed transaction if the exercise of
warrants occurred after the Company had notified the Warrantholder that the
Accelerating Merger was proposed or if the exercise was otherwise precipitated
by such proposed Accelerating Merger. In the event of such rescission, the
Warrants will continue to be exercisable on the terms and conditions contained
herein.
3. EXERCISE OF THE PURCHASE RIGHTS.
The purchase rights set forth in this Warrant Agreement are exercisable
by the Warrantholder, in whole or in part, at any time, or from time to time,
prior to the expiration of the term set forth in Section 2 above, by tendering
to the Company at its principal office a notice of exercise in the form attached
hereto as Exhibit I (the "Notice of Exercise"), duly completed and executed.
Promptly upon receipt of the Notice of Exercise and the payment of the purchase
price in accordance with the terms set forth below, and in no event later than
twenty-one (21) days thereafter, the Company shall issue to the Warrantholder a
certificate for the number of shares of Preferred Stock purchased and shall
execute the acknowledgment of exercise in the form attached hereto as Exhibit II
(the "Acknowledgment of Exercise") indicating the number of shares which remain
subject to future purchases, if any.
The Exercise Price may be paid at the Warrantholder's election either
(i) by cash or check, or (ii) by surrender of Warrants ("Net Issuance") as
determined below. If the Warrantholder elects the Net Issuance method, the
Company will issue Preferred Stock in accordance with the following formula:
X = Y(A-B)
------
A
Where:
X = the number of shares of Preferred Stock to be issued to
the Warrantholder.
Y = the number of shares of Preferred Stock requested to be
exercised under this Warrant Agreement.
A = the fair market value of one (1) share of Preferred Stock.
B = the Exercise Price.
For purposes of the above calculation, current fair market value of
Preferred Stock shall mean with respect to each share of Preferred Stock:
(i) if the exercise is in connection with an initial public offering of
the Company's Common Stock, and if the Company's Registration Statement
relating to such public offering has been declared effective by the
SEC, then the fair market value per share shall be the product of (x)
the initial "Price to Public" specified in the final prospectus with
respect to the offering and (y) the number of shares of Common Stock
into which each share of Preferred Stock is convertible at the time of
such exercise;
(ii) if this Warrant is exercised after, and not in connection with the
Company's initial public offering, and:
(a) if traded on a securities exchange, the fair market value
shall be deemed to be the product of (x) the average of the
closing prices over a twenty-one (21) day period ending three
days before the day the current fair market value of the
securities is being determined and (y) the number of shares of
Common Stock into which each share of Preferred Stock is
convertible at the time of such exercise; or
(b) if actively traded over-the-counter, the fair market value
shall be deemed to be the product of (x) the average of the
closing bid and asked prices quoted on the NASDAQ system (or
similar system) over the twenty-one (21) day period ending
three days before the day the current fair market value of
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the securities is being determined and (y) the number of
shares of Common Stock into which each share of Preferred
Stock is convertible at the time of such exercise;
(iii) if at any time the Common Stock is not listed on any securities
exchange or quoted in the NASDAQ System or the over-the-counter market,
the current fair market value of Preferred Stock shall be the product
of (x) the highest price per share which the Company could obtain from
a willing buyer (not a current employee or director) for shares of
Common Stock sold by the Company, from authorized but unissued shares,
as determined in good faith by its Board of Directors and (y) the
number of shares of Common Stock into which each share of Preferred
Stock is convertible at the time of such exercise, unless the Company
shall become subject to a merger, acquisition or other consolidation
pursuant to which the Company is not the surviving party, in which case
the fair market value of Preferred Stock shall be deemed to be the
value received by the holders of the Company's Preferred Stock on a
common equivalent basis pursuant to such merger or acquisition.
Upon partial exercise by either cash or Net Issuance, the Company shall
promptly issue an amended Warrant Agreement representing the remaining number of
shares purchasable hereunder. All other terms and conditions of such amended
Warrant Agreement shall be identical to those contained herein, including, but
not limited to the Effective Date hereof.
4. RESERVATION OF SHARES.
(a) Authorization and Reservation of Shares. During the term of this
Warrant Agreement, the Company will at all times have authorized and reserved a
sufficient number of shares of its Preferred Stock to provide for the exercise
of the rights to purchase Preferred Stock as provided for herein.
(b) Registration or Listing. If any shares of Preferred Stock required
to be reserved hereunder require registration with or approval of any
governmental authority under any Federal or State law (other than any
registration under the 1933 Act, as then in effect, or any similar Federal
statute then enforced, or any state securities law, required by reason of any
transfer involved in such conversion), or listing on any domestic securities
exchange, before such shares may be issued upon conversion, the Company will, at
its expense and as expeditiously as possible, use its best efforts to cause such
shares to be duly registered, listed or approved for listing on such domestic
securities exchange, as the case may be.
5. NO FRACTIONAL SHARES OR SCRIP.
No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of the Warrant, but in lieu of such fractional shares
the Company shall make a cash payment therefor upon the basis of the Exercise
Price then in effect.
6. NO RIGHTS AS SHAREHOLDER.
This Warrant Agreement does not entitle the Warrantholder to any voting
rights or other rights as a shareholder of the Company prior to the exercise of
the Warrant.
7. WARRANTHOLDER REGISTRY.
The Company shall maintain a registry showing the name and address of
the registered holder of this Warrant Agreement.
8. ADJUSTMENT RIGHTS.
The purchase price per share and the number of shares of Preferred
Stock purchasable hereunder are subject to adjustment, as follows:
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(a) Merger and Sale of Assets. If at any time there shall be a capital
reorganization of the shares of the Company's stock (other than a combination,
reclassification, exchange or subdivision of shares otherwise provided for
herein), or a merger or consolidation of the Company with or into another
corporation whether or not the Company is the surviving corporation, or the sale
of all or substantially all of the Company's properties and assets to any other
person (hereinafter referred to as a "Merger Event"), then, as a part of such
Merger Event, lawful provision shall be made so that the Warrantholder shall
thereafter be entitled to receive, upon exercise of the Warrant, the number of
shares of preferred stock or other securities of the successor corporation
resulting from such Merger Event, equivalent in value to that which would have
been issuable if Warrantholder had exercised this Warrant immediately prior to
the Merger Event. In any such case, appropriate adjustment (as determined in
good faith by the Company's Board of Directors) shall be made in the application
of the provisions of this Warrant Agreement with respect to the rights and
interest of the Warrantholder after the Merger Event to the end that the
provisions of this Warrant Agreement (including adjustments of the Exercise
Price and number of shares of Preferred Stock purchasable) shall be applicable
to the greatest extent possible.
(b) Reclassification of Shares. If the Company at any time shall, by
combination, reclassification, exchange or subdivision of securities or
otherwise, change any of the securities as to which purchase rights under this
Warrant Agreement exist into the same or a different number of securities of any
other class or classes, this Warrant Agreement shall thereafter represent the
right to acquire such number and kind of securities as would have been issuable
as the result of such change with respect to the securities which were subject
to the purchase rights under this Warrant Agreement immediately prior to such
combination, reclassification, exchange, subdivision or other change.
(c) Subdivision or Combination of Shares. If the Company at any time
shall combine or subdivide its Preferred Stock, the Exercise Price shall be
proportionately decreased in the case of a subdivision, or proportionately
increased in the case of a combination.
(d) Stock Dividends. If the Company at any time shall pay a dividend
payable in, or make any other distribution (except any distribution specifically
provided for in the foregoing subsections (a) or (b)) of the Company's stock,
then the Exercise Price shall be adjusted, from and after the record date of
such dividend or distribution, to that price determined by multiplying the
Exercise Price in effect immediately prior to such record date by a fraction (i)
the numerator of which shall be the total number of all shares of the Company's
stock outstanding immediately prior to such dividend or distribution, and (ii)
the denominator of which shall be the total number of all shares of the
Company's stock outstanding immediately after such dividend or distribution. The
Warrantholder shall thereafter be entitled to purchase, at the Exercise Price
resulting from such adjustment, the number of shares of Preferred Stock
(calculated to the nearest whole share) obtained by multiplying the Exercise
Price in effect immediately prior to such adjustment by the number of shares of
Preferred Stock issuable upon the exercise hereof immediately prior to such
adjustment and dividing the product thereof by the Exercise Price resulting from
such adjustment.
(e) Right to Purchase Additional Stock. If, the Warrantholder's total
cost of equipment leased pursuant to the Leases exceeds $250,000, Warrantholder
shall have the right to purchase from the Company, at the Exercise Price
(adjusted as set forth herein), an additional number of shares, which number
shall be determined by (i) multiplying the amount by which the Warrantholder's
total equipment cost exceeds $250,000 by 4%, and (ii) dividing the product
thereof by the Exercise Price per share referenced above.
(f) Antidilution Rights. Additional antidilution rights applicable to
the Preferred Stock purchasable hereunder are as set forth in the Company's
Certificate of Incorporation, as amended through the Effective Date, a true and
complete copy of which is attached hereto as Exhibit IV (the "Charter"). The
Company shall promptly provide the Warrantholder with any restatement,
amendment, modification or waiver of the Charter. The Company shall provide
Warrantholder with prior written notice of any issuance of its stock or other
equity security (other than such issuances as are set forth in the Charter) to
occur after the Effective Date of this Warrant, which notice shall include (a)
the price at which such stock or security is to be sold, (b) the number of
shares to be issued, and (c) such other information as necessary for
Warrantholder to determine if a dilutive event has occurred.
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(g) Notice of Adjustments. If: (i) the Company shall declare any
dividend or distribution upon its stock, whether in cash, property, stock or
other securities; (ii) the Company shall offer for subscription prorata to the
holders of any class of it Preferred or other convertible stock any additional
shares of stock of any class or other rights; (iii) there shall be any Merger
Event; (iv) there shall be an initial public offering; or (v) there shall be any
voluntary dissolution, liquidation or winding up of the Company; then, in
connection with each such event, the Company shall send to the Warrantholder:
(A) at least twenty (20) days' prior written notice of the date on which the
books of the Company shall close or a record shall be taken for such dividend,
distribution, subscription rights (specifying the date on which the holders of
Preferred Stock shall be entitled thereto) or for determining rights to vote in
respect of such Merger Event, dissolution, liquidation or winding up; (B) in the
case of any such Merger Event, dissolution, liquidation or winding up, at least
twenty (20) days' prior written notice of the date when the same shall take
place (and specifying the date on which the holders of Preferred Stock shall be
entitled to exchange their Preferred Stock for securities or other property
deliverable upon such Merger Event, dissolution, liquidation or winding up); and
(C) in the case of a public offering, the Company shall give the Warrantholder
at least twenty (20) days written notice prior to the effective date thereof.
Each such written notice shall set forth, in reasonable detail, (i) the
event requiring the adjustment, (ii) the amount of the adjustment, (iii) the
method by which such adjustment was calculated, (iv) the Exercise Price, and (v)
the number of shares subject to purchase hereunder after giving effect to such
adjustment, and shall be given by first class mail, postage prepaid, addressed
to the Warrantholder, at the address as shown on the books of the Company.
(g) Timely Notice. Failure to timely provide such notice required by
subsection (f) above shall entitle Warrantholder to retain the benefit of the
applicable notice period notwithstanding anything to the contrary contained in
any insufficient notice received by Warrantholder. The notice period shall begin
on the date Warrantholder actually receives a written notice containing all the
information specified above.
9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.
(a) Reservation of Preferred Stock. The Preferred Stock issuable upon
exercise of the Warrantholder's rights has been duly and validly reserved and,
when issued in accordance with the provisions of this Warrant Agreement, will be
validly issued, fully paid and non-assessable, and will be free of any taxes,
liens, charges or encumbrances of any nature whatsoever; provided, however, that
the Preferred Stock issuable pursuant to this Warrant Agreement may be subject
to restrictions on transfer under state and/or Federal securities laws. The
Company has made available to the Warrantholder true, correct and complete
copies of its Charter and Bylaws, as amended. The issuance of certificates for
shares of Preferred Stock upon exercise of the Warrant Agreement shall be made
without charge to the Warrantholder for any issuance tax in respect thereof, or
other cost incurred by the Company in connection with such exercise and the
related issuance of shares of Preferred Stock. The Company shall not be required
to pay any tax which may be payable in respect of any transfer involved and the
issuance and delivery of any certificate in a name other than that of the
Warrantholder.
(b) Due Authority. The execution and delivery by the Company of this
Warrant Agreement and the performance of all obligations of the Company
hereunder, including the issuance to Warrantholder of the right to acquire the
shares of Preferred Stock, have been duly authorized by all necessary corporate
action on the part of the Company, and the Leases and this Warrant Agreement are
not inconsistent with the Company's Charter or Bylaws, do not contravene any law
or governmental rule, regulation or order applicable to it, do not and will not
contravene any provision of, or constitute a default under, any indenture,
mortgage, contract or other instrument to which it is a party or by which it is
bound, and the Leases and this Warrant Agreement constitute legal, valid and
binding agreements of the Company, enforceable in accordance with their
respective terms.
(c) Consents and Approvals. No consent or approval of, giving of notice
to, registration with, or taking of any other action in respect of any state,
Federal or other governmental authority or agency is required with respect to
the execution, delivery and performance by the Company of its obligations under
this Warrant Agreement, except for the filing of notices pursuant to Regulation
D under the 1933 Act and any filing required by applicable state securities law,
which filings will be effective by the time required thereby.
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(d) Issued Securities. All issued and outstanding shares of Common
Stock, Preferred Stock or any other securities of the Company have been duly
authorized and validly issued and are fully paid and nonassessable. All
outstanding shares of Common Stock, Preferred Stock and any other securities
were issued in full compliance with all Federal and state securities laws. In
addition as May 4, 1998:
(i) The authorized capital of the Company consists of (A)
30,000,000 shares of Common Stock, of which 3,231,825 shares
are issued and outstanding, and (B) 20,250,000 shares of
preferred stock, of which 19,977,250 shares are issued and
outstanding and are convertible into 19,977,250 shares of
Common Stock at $1 to $1.81 per share.
(ii) The Company has reserved (A) 2,650,000 shares of Common Stock for
issuance under its Stock Option Plan, under which 809,000 options are
outstanding at an weighted average price of $0.19 per share, Except for the
Warrant Agreement previously issued to Comdisco, Inc. and pending Warrant for
Sosei Company, Ltd. and the rights of first offer set forth in the Company's
Third Amended and Restated Stockholders Rights Agreement, there are no other
options, warrants, conversion privileges or other rights presently outstanding
to purchase or otherwise acquire any authorized but unissued shares of the
Company's capital stock or other securities of the company.
(iii) In accordance with the Company's Articles of Incorporation, no
shareholder of the Company has preemptive rights to purchase new issuances of
the Company's capital stock.
(e) Insurance. The Company has in full force and effect insurance
policies, with extended coverage, insuring the Company and its property and
business against such losses and risks, and in such amounts, as are customary
for corporations engaged in a similar business and similarly situated and as
otherwise may be required pursuant to the terms of any other contract or
agreement.
(f) Other Commitments to Register Securities. Except as set forth in
this Warrant Agreement and the Company's Third Amended and Restated Stockholders
Rights Agreement, the Company is not, pursuant to the terms of any other
agreement currently in existence, under any obligation to register under the
1933 Act any of its presently outstanding securities or any of its securities
which may hereafter be issued.
(g) Exempt Transaction. Subject to the accuracy of the Warrantholder's
representations in Section 10 hereof, the issuance of the Preferred Stock upon
exercise of this Warrant will constitute a transaction exempt from (i) the
registration requirements of Section 5 of the 1933 Act, in reliance upon Section
4(2) thereof, and (ii) the qualification requirements of the applicable state
securities laws.
(h) Compliance with Rule 144. At the written request of the
Warrantholder, who proposes to sell Preferred Stock issuable upon the exercise
of the Warrant in compliance with Rule 144 promulgated by the Securities and
Exchange Commission, the Company shall furnish to the Warrantholder, within ten
days after receipt of such request, a written statement confirming the Company's
compliance with the filing requirements of the Securities and Exchange
Commission as set forth in such Rule, as such Rule may be amended from time to
time.
10. REPRESENTATIONS AND COVENANTS OF THE WARRANTHOLDER.
This Warrant Agreement has been entered into by the Company in reliance
upon the following representations and covenants of the Warrantholder:
(a) Investment Purpose. The right to acquire Preferred Stock or the
Preferred Stock issuable upon exercise of the Warrantholder's rights contained
herein will be acquired for investment and not with a view to the sale or
distribution of any part thereof, and the Warrantholder has no present intention
of selling or engaging in any public distribution of the same except pursuant to
a registration or exemption.
(b) Private Issue. The Warrantholder understands (i) that the Preferred
Stock issuable upon exercise of this Warrant is not registered under the 1933
Act or qualified under applicable state securities laws on the ground that the
issuance contemplated by this Warrant Agreement will be exempt from the
registration and qualifications requirements
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thereof, and (ii) that the Company's reliance on such exemption is predicated on
the representations set forth in this Section 10.
(c) Disposition of Warrantholder's Rights. In no event will the
Warrantholder make a disposition of any of its rights to acquire Preferred Stock
or Preferred Stock issuable upon exercise of such rights unless and until (i) it
shall have notified the Company of the proposed disposition, and (ii) if
requested by the Company, it shall have furnished the Company with an opinion of
counsel (which counsel may either be inside or outside counsel to the
Warrantholder) satisfactory to the Company and its counsel to the effect that
(A) appropriate action necessary for compliance with the 1933 Act has been
taken, or (B) an exemption from the registration requirements of the 1933 Act is
available. Notwithstanding the foregoing, the restrictions imposed upon the
transferability of any of its rights to acquire Preferred Stock or Preferred
Stock issuable on the exercise of such rights do not apply to transfers from the
beneficial owner of any of the aforementioned securities to its nominee or from
such nominee to its beneficial owner, and shall terminate as to any particular
share of Preferred Stock when (1) such security shall have been effectively
registered under the 1933 Act and sold by the holder thereof in accordance with
such registration or (2) such security shall have been sold without registration
in compliance with Rule 144 under the 1933 Act, or (3) a letter shall have been
issued to the Warrantholder at its request by the staff of the Securities and
Exchange Commission or a ruling shall have been issued to the Warrantholder at
its request by such Commission stating that no action shall be recommended by
such staff or taken by such Commission, as the case may be, if such security is
transferred without registration under the 1933 Act in accordance with the
conditions set forth in such letter or ruling and such letter or ruling
specifies that no subsequent restrictions on transfer are required. Whenever the
restrictions imposed hereunder shall terminate, as hereinabove provided, the
Warrantholder or holder of a share of Preferred Stock then outstanding as to
which such restrictions have terminated shall be entitled to receive from the
Company, without expense to such holder, one or more new certificates for the
Warrant or for such shares of Preferred Stock not bearing any restrictive
legend.
(d) Financial Risk. The Warrantholder has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of its investment, and has the ability to bear the economic risks of its
investment.
(e) Risk of No Registration. The Warrantholder understands that if the
Company does not register with the Securities and Exchange Commission pursuant
to Section 12 of the 1933 Act, or file reports pursuant to Section 15(d), of the
Securities Exchange Act of 1934 (the "1934 Act"), or if a registration statement
covering the securities under the 1933 Act is not in effect when it desires to
sell (i) the rights to purchase Preferred Stock pursuant to this Warrant
Agreement, or (ii) the Preferred Stock issuable upon exercise of the right to
purchase, it may be required to hold such securities for an indefinite period.
The Warrantholder also understands that any sale of its rights of the
Warrantholder to purchase Preferred Stock or Preferred Stock which might be made
by it in reliance upon Rule 144 under the 1933 Act may be made only in
accordance with the terms and conditions of that Rule.
(f) Accredited Investor. Warrantholder is an "accredited investor"
within the meaning of the Securities and Exchange Rule 501 of Regulation D, as
presently in effect.
11. TRANSFERS. Subject to the terms and conditions contained in Section 10
hereof, this Warrant Agreement and all rights hereunder are transferable in
whole or in part by the Warrantholder and any successor transferee, provided,
however, in no event shall the number of transfers of the rights and interests
in all of the Warrants exceed three (3) transfers. The transfer shall be
recorded on the books of the Company upon receipt by the Company of a notice of
transfer in the form attached hereto as Exhibit III (the "Transfer Notice"), at
its principal offices and the payment to the Company of all transfer taxes and
other governmental charges imposed on such transfer.
12. MISCELLANEOUS.
(a) Effective Date. The provisions of this Warrant Agreement shall be
construed and shall be given effect in all respects as if it had been executed
and delivered by the Company on the date hereof. This Warrant Agreement shall be
binding upon any successors or assigns of the Company.
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(b) Attorney's Fees. In any litigation, arbitration or court proceeding
between the Company and the Warrantholder relating hereto, the prevailing party
shall be entitled to attorneys' fees and expenses and all costs of proceedings
incurred in enforcing this Warrant Agreement.
(c) Governing Law. This Warrant Agreement shall be governed by and
construed for all purposes under and in accordance with the laws of the State of
Illinois.
(d) Counterparts. This Warrant Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(e) Notices. Any notice required or permitted hereunder shall be given
in writing and shall be deemed effectively given upon personal delivery,
facsimile transmission (provided that the original is sent by personal delivery
or mail as hereinafter set forth) or seven (7) days after deposit in the United
States mail, by registered or certified mail, addressed (i) to the Warrantholder
at 6111 North River Road, Rosemont, Illinois 60018, attention: James Labe,
Venture Group, cc: Legal Department, attn: General Counsel, (and/or, if by
facsimile, (847) 518-5465 and (847) 518-5088) and (ii) to the Company at 7000
North Broadway, Denver, Colorado, attention: Paulette M. Tucker, Controller,
(and/or if by facsimile, (303) 412-9160) or at such other address as
any such party may subsequently designate by written notice to the other party.
(f) Remedies. In the event of any default hereunder, the non-defaulting
party may proceed to protect and enforce its rights either by suit in equity
and/or by action at law, including but not limited to an action for damages as a
result of any such default, and/or an action for specific performance for any
default where Warrantholder will not have an adequate remedy at law and where
damages will not be readily ascertainable. The Company expressly agrees that it
shall not oppose an application by the Warrantholder or any other person
entitled to the benefit of this Agreement requiring specific performance of any
or all provisions hereof or enjoining the Company from continuing to commit any
such breach of this Agreement.
(g) No Impairment of Rights. The Company will not, by amendment of its
Charter or through any other means, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times in good
faith assist in the carrying out of all such terms and in the taking of all such
actions as may be necessary or appropriate in order to protect the rights of the
Warrantholder against impairment.
(h) Survival. The representations, warranties, covenants and conditions
of the respective parties contained herein or made pursuant to this Warrant
Agreement shall survive the execution and delivery of this Warrant Agreement.
(i) Severability. In the event any one or more of the provisions of
this Warrant Agreement shall for any reason be held invalid, illegal or
unenforceable, the remaining provisions of this Warrant Agreement shall be
unimpaired, and the invalid, illegal or unenforceable provision shall be
replaced by a mutually acceptable valid, legal and enforceable provision, which
comes closest to the intention of the parties underlying the invalid, illegal or
unenforceable provision.
(j) Amendments. Any provision of this Warrant Agreement may be amended
by a written instrument signed by the Company and by the Warrantholder.
(k) Additional Documents. The Company, upon execution of this Warrant
Agreement, shall provide the Warrantholder with certified resolutions with
respect to the representations, warranties and covenants set forth in
subparagraphs (a) through (d), (f) and (g) of Section 9 above. If the purchase
price for the Leases referenced in the preamble of this Warrant Agreement
exceeds $1,000,000, the Company will also provide Warrantholder with an opinion
from the Company's counsel with respect to those same representations,
warranties and covenants. The Company shall also supply such other documents as
the Warrantholder may from time to time reasonably request.
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IN WITNESS WHEREOF, the parties hereto have caused this Warrant
Agreement to be executed by its officers thereunto duly authorized as of the
Effective Date.
Company: ALLOS THERAPEUTICS, INC.
By: /s/ Stephen J. Hoffman
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Title: President
Warrantholder: COMDISCO, INC.
By: /s/ JAMES P. LABE
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Title: PRESIDENT
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COMDISCO VENTURES DIVISION
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EXHIBIT I
NOTICE OF EXERCISE
To:
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(1) The undersigned Warrantholder hereby elects to purchase _________
shares of the Series C Preferred Stock of Allos Therapeutics, Inc.,
pursuant to the terms of the Warrant Agreement dated the ___________
day of _______________________, 1998 (the "Warrant Agreement") between
Allos Therapeutics, Inc. and the Warrantholder, and tenders herewith
payment of the purchase price for such shares in full, together with
all applicable transfer taxes, if any.
(2) In exercising its rights to purchase the Series C Preferred Stock of
Allos Therapeutics, Inc., the undersigned hereby confirms and
acknowledges the investment representations and warranties made in
Section 10 of the Warrant Agreement.
(3) Please issue a certificate or certificates representing said shares of
Series C Preferred Stock in the name of the undersigned or in such
other name as is specified below.
- --------------------------------
(Name)
- --------------------------------
(Address)
Warrantholder: COMDISCO, INC.
By:
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Title:
-------------------------
Date:
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EXHIBIT II
ACKNOWLEDGMENT OF EXERCISE
The undersigned __________________________________, hereby acknowledge
receipt of the "Notice of Exercise" from Comdisco, Inc., to purchase _________
shares of the Series C Preferred Stock of Allos Therapeutics, Inc., pursuant to
the terms of the Warrant Agreement, and further acknowledges that ______________
shares remain subject to purchase under the terms of the Warrant Agreement.
Company:
By:
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Title:
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Date:
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EXHIBIT III
TRANSFER NOTICE
(To transfer or assign the foregoing Warrant Agreement execute this
form and supply required information. Do not use this form to purchase
shares.)
FOR VALUE RECEIVED, the foregoing Warrant Agreement and all rights
evidenced thereby are hereby transferred and assigned to
- ---------------------------------------------------
(Please Print)
whose address is
-----------------------------------
- ---------------------------------------------------
Dated
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Holder's Signature
---------------
Holder's Address
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---------------------------------
Signature Guaranteed:
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NOTE: The signature to this Transfer Notice must correspond with the
name as it appears on the face of the Warrant Agreement,
without alteration or enlargement or any change whatever.
Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of
authority to assign the foregoing Warrant Agreement.
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EXHIBIT 10.09
TABLE OF CONTENTS
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SECTION 1 AUTHORIZATION AND SALE OF SHARES............................................................................1
1.1 Authorization.......................................................................................1
1.2 Sale of Shares......................................................................................1
SECTION 2 CLOSING DATE; DELIVERY......................................................................................2
2.1 Closing.............................................................................................2
2.2 Subsequent Closings.................................................................................2
2.3 Delivery............................................................................................2
SECTION 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY...............................................................3
3.1 Organization and Standing...........................................................................3
3.2 Certificate and Bylaws..............................................................................3
3.3 Corporate Power.....................................................................................3
3.4 Subsidiaries........................................................................................3
3.5 Capitalization......................................................................................3
3.6 Authorization.......................................................................................4
3.7 Title to Properties and Assets......................................................................4
3.8 Related Party Transactions..........................................................................4
3.9 Permits.............................................................................................4
3.10 Material Liabilities................................................................................5
3.11 Intellectual Property...............................................................................5
3.12 Material Contracts..................................................................................5
3.13 Compliance with Other Instruments...................................................................6
3.14 Litigation..........................................................................................6
3.15 Registration Rights.................................................................................6
3.16 Governmental Consent................................................................................6
3.17 Employees...........................................................................................6
3.18 Confidentiality/Non-Solicitation/Non-Compete Agreements.............................................7
3.19 Tax Returns, Payments, and Elections................................................................7
3.20 Environmental and Safety Laws.......................................................................7
3.21 Section 83(b) Elections.............................................................................7
3.22 Brokers or Finders..................................................................................7
3.23 Disclosure..........................................................................................7
3.24 Securities Act......................................................................................8
3.25 Financial Statements................................................................................8
3.26 U...................................................................................................8
SECTION 4 REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS............................................................8
4.1 Experience..........................................................................................8
4.2 Investment..........................................................................................8
4.3 Rule 144............................................................................................9
4.4 No Public Market....................................................................................9
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TABLE OF CONTENTS
(CONTINUED)
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4.5 Access to Data......................................................................................9
4.6 Authorization.......................................................................................9
4.7 Brokers or Finders..................................................................................9
4.8 Accredited Investor.................................................................................9
4.9 Brokers or Finders..................................................................................9
SECTION 5 CONDITIONS TO CLOSING OF THE PURCHASERS....................................................................10
5.1 Representations and Warranties.....................................................................10
5.2 Covenants..........................................................................................10
5.3 Compliance Certificate.............................................................................10
5.4 Blue Sky Law.......................................................................................10
5.5 Restated Certificate...............................................................................10
5.6 Reservation of Stock...............................................................................10
5.7 Proceedings and Documents..........................................................................10
5.8 Opinion of Counsel.................................................................................10
5.9 Stockholder Rights Agreement.......................................................................10
5.10 Due Diligence Review...............................................................................11
5.11 Information Rights Letter..........................................................................11
SECTION 6 CONDITIONS TO CLOSING OF THE COMPANY.......................................................................11
6.1 Representations and Warranties.....................................................................11
6.2 Blue Sky Law.......................................................................................11
6.3 Restated Certificate...............................................................................11
6.4 Legal Matters......................................................................................11
SECTION 7 COVENANTS OF THE COMPANY...................................................................................11
7.1 Compensation Committee.............................................................................11
7.2 Use of Proceeds....................................................................................12
SECTION 8 GENERAL PROVISIONS.........................................................................................12
8.1 Governing Law......................................................................................12
8.2 Survival...........................................................................................12
8.3 Successors and Assigns; Third Party Beneficiaries..................................................12
8.4 Entire Agreement; Amendment and Waiver.............................................................12
8.5 Notices, etc.......................................................................................12
8.6 Delays or Omissions................................................................................13
8.7 References.........................................................................................13
8.8 Severability.......................................................................................13
8.9 Aggregation of Stock...............................................................................13
8.10 Fees and Expenses..................................................................................13
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TABLE OF CONTENTS
(CONTINUED)
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8.11 Pronouns...........................................................................................13
8.12 Counterparts.......................................................................................13
8.13 Indemnification for Finders' Fees..................................................................13
8.14 U S. Real Property Interest Statement..............................................................14
</TABLE>
LIST OF EXHIBITS
EXHIBIT A - SCHEDULE OF PURCHASERS
EXHIBIT B - AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
EXHIBIT C - SCHEDULE OF EXCEPTIONS
EXHIBIT D - COMPLIANCE CERTIFICATE
EXHIBIT E - FOURTH AMENDED AND RESTATED STOCKHOLDER RIGHTS
AGREEMENT
EXHIBIT F - OPINION OF COUNSEL TO COMPANY
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ALLOS THERAPEUTICS, INC.
SERIES C CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
This agreement (this "Agreement") is made effective as of October 4,
1999, between Allos Therapeutics, Inc., a Delaware corporation (the "Company"),
and each of the persons and entities set forth on the "Schedule of Purchasers"
attached hereto as Exhibit A (the "Purchasers").
WHEREAS, the Company has issued and sold to certain purchasers
9,944,750 shares of Series C Preferred Stock of the Company pursuant to a Series
C Convertible Preferred Stock Purchase Agreement dated January 13, 1998, as
amended by the Amendment Agreement dated May 4, 1998.
WHEREAS, the Company now desires to issue and sell to the Purchasers
additional shares of Series C Preferred Stock.
NOW, THEREFORE, the parties agree as follows:
SECTION 1
AUTHORIZATION AND SALE OF SHARES
1.1 Authorization. The Company will have authorized before the Closing
(as defined below) the sale and issuance of up to 6,629,843 shares of Series C
Preferred Stock (the "Shares"), with the Shares having the rights, preferences,
privileges, and restrictions as set forth in the Company's Amended and Restated
Certificate of Incorporation in the form attached hereto as Exhibit B (the
"Restated Certificate").
The "Conversion Stock" means the shares of the Company's Common Stock
issuable or issued upon conversion of the Shares.
1.2 Sale of Shares. Subject to the terms and conditions hereof, the
Company shall sell and issue to each Purchaser, and each Purchaser shall
purchase from the Company, the number of Shares specified opposite such
Purchaser's name on the Schedule of Purchasers, at the purchase price set forth
on such schedule. The Company's agreement with each of the Purchasers is a
separate agreement, and the sale of Shares to each of the Purchasers is a
separate sale.
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SECTION 2
CLOSING DATE; DELIVERY
2.1 Closing. The closing of the purchase and sale of [5,311,036] Shares
hereunder (the "Closing") shall be held at the offices of Wilson Sonsini
Goodrich & Rosati, Professional Corporation, located at 650 Page Mill Road, Palo
Alto, CA 94304 at 1:00 p.m., California time, on October 4 1999, or at such
other place and time upon which the Company and a majority in interest of the
Purchasers shall agree, as evidenced by the completion of the transactions
contemplated hereby. The date of the Closing is referred to as the "Closing
Date."
2.2 Subsequent Closings.
(a) For 90 days following the Closing Date, the Company may sell
any remaining shares of Series C Preferred Stock to certain purchasers (the
"Additional Purchasers"), at a purchase price of not less than $1.81 per share
(the "Additional Shares"). The closing of the purchases and sales of the
Additional Shares shall take place at such times and places as the Company and
the Additional Purchaser(s) shall mutually agree (each closing a "Subsequent
Closing"). The date of each Subsequent Closing is hereinafter referred to as a
"Subsequent Closing Date." Unless the context requires otherwise, the Closing
and any Subsequent Closing is generally referred to as a Closing.
(b) Each Additional Purchaser under this Section 2.2 shall be
deemed to be a Purchaser under this Agreement subject to the terms and
conditions hereunder, and any Additional Shares purchased and sold in a
Subsequent Closing shall be deemed to be "Shares" (as defined in Section 1.1 of
this Agreement) under this Agreement (which purchase and sale shall be deemed to
have occurred as of the date of this Agreement), and any such Purchaser shall
become a party to the Fourth Amended and Restated Stockholder Rights Agreement
(the "Stockholder Rights Agreement") in the form attached to this Agreement as
Exhibit E, and shall have the rights and obligations hereunder and thereunder.
2.3 Delivery. At the Closing the Company shall deliver to each
Purchaser a certificate, representing the Shares purchased by the Purchaser from
the Company, dated the date of such Closing. Each Purchaser shall deliver
payment of the purchase price therefor by wire transfer, a check made payable to
the order of the Company or by cancellation of indebtedness (or any combination
thereof).
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SECTION 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth on the Schedule of Exceptions attached hereto as
Exhibit C, the Company hereby represents and warrants to the Purchasers as
follows:
3.1 Organization and Standing. The Company is a corporation duly
organized and validly existing under the laws of the State of Delaware and is in
good standing under such laws. The Company has all requisite corporate power to
own and operate its properties and assets, and to carry on its business as
presently conducted and as proposed to be conducted by the Company. The Company
is qualified to do business as a foreign corporation in each jurisdiction in
which the failure to be so qualified would have a material adverse effect on the
Company.
3.2 Certificate and Bylaws. The Company has made available to counsel
for the Purchasers true, correct, and complete copies of the Company's
certificate of incorporation, as amended, and the Company's bylaws, as amended.
3.3 Corporate Power. The Company has all requisite corporate power to
execute and deliver this Agreement, to sell and issue the Shares hereunder, to
issue the Conversion Stock, and to carry out and perform its obligations under
the terms of this Agreement.
3.4 Subsidiaries. The Company has no subsidiaries and does not
otherwise own or control, directly or indirectly, any other corporation,
association, or business entity. The Company is not a participant in any joint
venture, partnership, or similar arrangement.
3.5 Capitalization. The authorized capital stock of the Company will,
upon the filing of the Restated Certificate, consist of (i) 50,000,000 shares of
Common Stock and (ii) 26,660,000 shares of Preferred Stock, of which 5,000,000
shares will be designated Series A Preferred Stock, 5,050,000 shares will be
designated Series B Preferred Stock, and 16,610,000 shares will be designated
Series C Preferred Stock. Immediately prior to the Closing, 3,249,221 shares of
Common Stock, 5,000,000 shares of Series A Preferred Stock, 5,032,500 shares of
Series B Preferred Stock, and 9,944,750 shares of Series C Preferred Stock are
issued and outstanding, and 2,400,779 shares of Common Stock have been reserved
for future issuance upon exercise of options granted or to be granted pursuant
to the Company's 1995 Stock Option Plan (the "Plan"). All such issued and
outstanding shares have been duly authorized and validly issued, are fully paid
and nonassessable, and were issued in compliance with all applicable federal and
state securities laws. The rights, privileges, and preferences of the Shares
will be as stated in the Restated Certificate. Except as set forth in the
Schedule of Exceptions, there are no options, warrants, conversion privileges,
or preemptive or other rights or agreements presently outstanding to purchase or
otherwise acquire any shares of the capital stock or other securities of the
Company. Except as set forth in the "Stockholder Rights Agreement," the Company
is not a party or subject to any agreement or understanding, and, to the best of
the Company's knowledge, there is no agreement or
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understanding between any persons that affects or relates to the voting or
giving of written consents with respect to any security or the voting by a
director of the Company.
3.6 Authorization. All corporate action on the part of the Company, its
officers, directors, and its stockholders necessary for the authorization,
execution, delivery, and performance of this Agreement and all other agreements
executed in connection with the transactions contemplated hereby (collectively,
the "Ancillary Agreements"), the authorization, sale, issuance, and delivery of
the Shares and the Conversion Stock, and the performance of all of the Company's
obligations hereunder and thereunder will have been taken prior to the Closing.
This Agreement and each of the Ancillary Agreements, when executed and delivered
by the Company, will constitute valid and legally binding obligations of the
Company, enforceable in accordance with their terms, subject to (i) laws of
general application relating to bankruptcy, insolvency, and the relief of
debtors, and (ii) rules of law governing specific performance, injunctive
relief, or other equitable remedies. The Company has reserved 6,629,843 shares
of Series C Preferred Stock for issuance pursuant to this Agreement and
6,629,843 shares of Common Stock for issuance upon conversion of the Shares. The
Shares and the Conversion Stock, when issued in accordance with this Agreement,
will be duly authorized, validly issued, fully paid, and nonassessable, and will
have the rights, preferences, privileges, and actions as set forth in the
Restated Certificate. The Shares and the Conversion Stock, when issued, will be
free of any liens or encumbrances created by the Company; provided, however,
that the Shares and the Conversion Stock will be subject to (i) restrictions on
transfer under federal and state securities laws and as set forth herein and
(ii) certain other restrictions contained herein and in the Ancillary
Agreements.
3.7 Title to Properties and Assets. The Company has good and marketable
title to all its properties (both real and personal) and assets, and has good
title to all its leasehold interests, in each case subject to no mortgage,
pledge, lien, lease, conditional sale agreement, security interest, encumbrance,
or charge, other than (i) the lien of current taxes not yet due and payable, and
(ii) possible minor liens and encumbrances which have arisen in the ordinary
course of business and which do not, in any case or in the aggregate, materially
detract from the value of the property subject thereto or materially impair the
operations of the Company.
3.8 Related Party Transactions. No employee, officer, or director of
the Company or member of his or her immediate family is indebted to the Company,
nor is the Company indebted (or committed to make loans or extend or guarantee
credit) to any of them. To the best of the Company's knowledge, none of such
persons has any direct or indirect ownership interest in any firm or corporation
with which the Company is affiliated or with which the Company has a business
relationship, or any firm or corporation that competes with the Company, except
that employees, officers, or directors of the Company and members of their
immediate families may own stock in publicly traded companies that may compete
with the Company. To the best of the Company's knowledge, no officer or director
or any member of their immediate families is, directly or indirectly, interested
in any material contract with the Company.
3.9 Permits. The Company has all franchises, permits, licenses,
authorizations, approvals, and any similar authority necessary for the conduct
of its business as now being
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conducted by it, the lack of which could materially and adversely affect the
business, properties, prospects, financial condition, or operating results of
the Company. The Company believes it can obtain, without undue burden or
expense, any similar authority for the conduct of its business as planned by the
Company to be conducted. The Company is not in default in any material respect
under any of such franchises, permits, licenses, authorizations, approvals, or
other similar authority.
3.10 Material Liabilities. The Company has no liabilities, absolute or
contingent, in excess of $50,000 individually or $200,000 in the aggregate.
3.11 Intellectual Property. To the Company's knowledge, the Company
owns or possesses sufficient legal rights to all patents, trademarks, service
marks, trade names, copyrights, trade secrets, licenses, information, and
proprietary rights and processes necessary for its business as now conducted and
as proposed to be conducted without any conflict with, or infringement of the
rights of, others. The Schedule of Exceptions contains a complete list of
patents and pending patent applications of the Company. There are no outstanding
options, licenses, or agreements of any kind relating to the foregoing, the loss
of any of which the Company reasonably believes will cause a material adverse
effect on the business prospects or financial conditions of the Company, nor is
the Company bound by or a party to any options, licenses, or agreements of any
kind with respect to the patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, information, and proprietary rights and
processes of any other person or entity which involve obligations of or payments
to the Company in excess of $100,000 individually or which are otherwise
material to the Company. The Company has not received any communication alleging
that the Company has violated or, by conducting its business as proposed, would
violate any of the patents, trademarks, service marks, trade names, copyrights,
trade secrets, or other proprietary rights or processes of any other person or
entity. The Company is not aware that any of its employees is obligated under
any contract (including licenses, covenants, or commitments of any nature) or
other agreement, or subject to any judgment, decree, or order of any court or
administrative agency, that would interfere with the use of such employee's best
efforts to promote the interests of the Company or that would conflict with the
Company's business as proposed to be conducted. None of the execution or
delivery of this Agreement, or the carrying on of the Company's business by the
employees of the Company, or the conduct of the Company's business as proposed,
will, to the best of the Company's knowledge, conflict with or result in a
breach in the terms, conditions, or provisions of, or constitute a default
under, any contract, covenant, or instrument under which any of such employees
is now obligated. The Company does not believe it is or will be necessary to use
any inventions of any of its employees (or persons it currently intends to hire)
made prior to their employment by the Company.
3.12 Material Contracts. All material contracts, agreements, and
instruments to which the Company is a party, are valid, binding, and in full
force and effect, and are enforceable by the Company in accordance with their
respective terms, subject to (i) laws of general application relating to
bankruptcy, insolvency and the relief of debtors, (ii) rules of law governing
specific performance, injunctive relief or other equitable remedies, and (iii)
actions or omissions of parties other than the Company; provided, however, that
the Company has no knowledge of any such actions or omissions. True and complete
copies of such contracts, agreements, and instruments have been
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provided to special counsel for the Purchasers. The Schedule of Exceptions lists
all contracts, agreements and instruments which involve obligations of or
payments to the Company in excess of $100,000 individually or which are
otherwise material to the Company.
3.13 Compliance with Other Instruments. The Company is not in any
violation of any term of its certificate of incorporation or bylaws, or in any
material respect of any term or provision of any mortgage, indebtedness,
indenture, contract, agreement, instrument, judgement, or decree, and is not in
violation of any order, statute, rule, or regulation (any of which, a "Law")
applicable to the Company. The execution, delivery, and performance of and
compliance with this Agreement and the Ancillary Agreements, and the issuance of
the Shares, and the consummation of the transactions contemplated hereby and
thereby do not violate, or conflict with, or constitute a default under, any
such term or provision or Law or result in the creation of any mortgage, pledge,
lien, encumbrance, or charge upon any of the properties or assets of the Company
or the suspension, revocation, impairment, forfeiture, or non-renewal of any
material franchise, permit, license, authorization, or approval applicable to
the Company. There is no such term or provision or Law which materially and
adversely affects the business of the Company or any of its properties or
assets.
3.14 Litigation. There are no actions, suits, proceedings, or
investigations pending or threatened against the Company or its properties
before any court or governmental agency (nor, to the Company's knowledge, is
there any basis therefor). The Company is not a party to, or to the knowledge of
the Company, named in any order, writ, injunction, judgment, or decree of any
court, government agency, or instrumentality. There is no action, suit or
proceeding by the Company currently pending or that the Company currently
intends to initiate.
3.15 Registration Rights. Except as set forth in the Stockholder Rights
Agreement, the Company is not under any obligation to register any of its
presently outstanding securities or any of its securities which may hereafter be
issued.
3.16 Governmental Consent. No consent, approval, or authorization of or
designation, declaration, or filing with any governmental authority on the part
of the Company is required in connection with the valid execution and delivery
of this Agreement and the Ancillary Agreements, or the offer, sale, or issuance
of the Shares, or the consummation of any other transaction contemplated hereby,
except (i) filing of the Restated Certificate with the Delaware Secretary of
State, and (ii) qualification (or taking such action as may be necessary to
secure an exemption from qualification, if available) of the offer and sale of
the Shares under applicable blue sky laws, which filing and qualification, if
required, will be accomplished in a timely manner prior to or, if permitted,
promptly after the Closing.
3.17 Employees. To the best of the Company's knowledge, no employee of
the Company is or will be in violation of any judgment, decree, or order, or any
term of any employment contract, patent disclosure agreement, or other contract
or agreement relating to the relationship of any such employee with the Company,
or any other party because of the nature of the business conducted or to be
conducted by the Company or the use by the employee of his or her best efforts
with respect to such business. Except for the Plan, the Company is not a party
to or bound by any currently effective employment contract, deferred
compensation agreement, bonus plan, incentive plan, profit
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sharing plan, retirement agreement, or other employee compensation agreement.
The Company is not aware that any officer or key employee, or that any group of
key employees, intends to terminate his, her or their employment with the
Company, nor does the Company have a present intention to terminate the
employment of any of the foregoing. Subject to general principles related to
wrongful termination of employees, the employment of each officer and employee
of the Company is terminable at the will of the Company.
3.18 Confidentiality/Non-Solicitation/Non-Compete Agreements. Each
employee and officer of the Company has executed a
Confidentiality/Non-Solicitation/Non-Compete Agreement substantially in the form
or forms which have been delivered to special counsel for the Purchasers.
3.19 Tax Returns, Payments, and Elections. The Company has filed all
tax returns and reports as required by law. These returns and reports are true
and correct in all material respects. The Company has paid all taxes and other
assessments due, except those contested by it in good faith. The Company has not
elected pursuant to the Internal Revenue Code of 1986, as amended ("Code"), to
be treated as a collapsible corporation pursuant to Section 1362(a) or Section
341(f) of the Code, nor has it made any other elections pursuant to the Code
(other than elections that relate solely to methods of accounting, depreciation,
or amortization) that would have a material effect on the business, properties,
prospects, or financial condition of the Company. The Company has withheld or
collected from each payment made to each of its employees the amount of all
taxes and has paid the same to the proper tax receiving officers or authorized
depositories.
3.20 Environmental and Safety Laws. The Company is not in violation of
any applicable statute, law, or regulation relating to the environment or
occupational health and safety, and to its knowledge, no material expenditures
are or will be required in order to comply with any such existing statute, law,
or regulation.
3.21 Section 83(b) Elections. To the best of the Company's knowledge,
all individuals who have purchased shares of the Company's Common Stock that are
subject to a right of repurchase by the Company have timely filed elections
under Section 83(b) of the Internal Revenue Code and any analogous provisions of
applicable state tax laws.
3.22 Brokers or Finders. The Company has not incurred, and will not
incur, directly or indirectly, as a result of any action taken by the Company,
any liability for brokerage or finders' fees or agents' commissions or any
similar charges in connection with this Agreement or any transaction
contemplated hereby.
3.23 Disclosure. No representation or warranty of the Company contained
in this Agreement, in the Schedule of Exceptions, in the exhibits attached
hereto or any certificate furnished or to be furnished to the Purchasers
pursuant hereto or in connection with the transactions contemplated hereby, when
read together, contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained herein
or therein not misleading in light of the circumstances under which they were
made. There is no fact known to the Company which materially and adversely
affects the properties, assets, business, operations, affairs,
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prospects, financial condition, or operating results of the Company, which has
not been set forth in this Agreement or in the exhibits attached hereto or in
any written statement.
3.24 Securities Act. Subject to the accuracy of the Purchasers'
representations in Section 4 hereof and in written responses to the Company's
inquiries, the offer, sale, and issuance of the Shares in conformity with the
terms of this Agreement constitute transactions exempt from the registration
requirements of Section 5 of the Securities Act of 1933, as amended (the
"Securities Act").
3.25 Financial Statements. The Company has furnished to each Purchaser
(i) its audited balance sheets as of December 31, 1998, and the related
statements of operations, stockholder's equity and cash flows for the period
ending December 31, 1998, and (ii) its unaudited balance sheets as of [June 30],
1999 and the related statement of operations for the period ending [June 30],
1999 (collectively, the "Financial Statements"). The Financial Statements (i)
are complete and correct in all material respects, (ii) are in accordance with
the Company's books and records, (iii) present fairly its financial position,
results of operations, and changes in stockholder's equity and cash flows as of
the dates and for the periods indicated, and (iv) have been prepared in
conformity with generally accepted accounting principles consistently applied
throughout the periods indicated, subject to year end adjustments which will not
be material and the absence of footnotes in the unaudited statements.
3.26 U. S. Real Property Holding Corporation. The Company is not now
and has never been a "United States real property holding corporation," as
defined in Section 897(c)(2) of the Code and Section 1.897-2(b) of the
Regulations promulgated by the Internal Revenue Service, and the Company has
filed with the Internal Revenue Service all statements, if any, with its United
States income tax returns which are required under Section 1.897-2(h) of such
Regulations.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser hereby severally (and not jointly) represents and
warrants to the Company with respect to the purchase of the Shares as follows:
4.1 Experience. Such Purchaser has substantial experience in evaluating
and investing in private placement transactions of securities in companies
similar to the Company so that such Purchaser is capable of evaluating the
merits and risks of such Purchaser's investment in the Company and has the
capacity to protect such Purchaser's own interests.
4.2 Investment. Such Purchaser is acquiring the Shares for investment
for such Purchaser's own account not as a nominee or agent and not with the view
to, or for resale in connection with, any distribution thereof. Such Purchaser
understands that the Shares have not been, and will not be, registered under the
Securities Act or the securities laws of any state by reason of exemptions from
the registration provisions of the Securities Act and such laws which depend
upon,
-8-
<PAGE> 12
among other things, the bona fide nature of the investment intent and the
accuracy of such Purchaser's representations as expressed herein.
4.3 Rule 144. Such Purchaser acknowledges that the Shares must be held
indefinitely unless subsequently registered under the Securities Act or an
exemption from such registration is available. Such Purchaser is aware of the
provisions of Rule 144 promulgated under the Securities Act which permit limited
resale of shares purchased in a private placement subject to the satisfaction of
certain conditions.
4.4 No Public Market. Such Purchaser understands that no public market
now exists for any of the securities issued by the Company and that there is no
assurance that a public market will ever exist for the Shares.
4.5 Access to Data. Such Purchaser has had an opportunity to discuss
the Company's business, management, and financial affairs with the Company's
management and the opportunity to review the Company's facilities. Such
Purchaser has also had an opportunity to ask questions of officers of the
Company, which questions were answered to such Purchaser's satisfaction. Such
Purchaser has carefully reviewed the representations concerning the Company
contained in this Agreement. Such Purchaser acknowledges that (a) the purchase
of the Shares involves a high degree of risk and has taken full cognizance of
and understands such risks, (b) the Company is a developmental stage business
with no operating history to date, and (c) the success of the Company is highly
dependent upon certain key personnel, the loss of whose services could have a
materially adverse affect on the Company.
4.6 Authorization. This Agreement, when executed and delivered by such
Purchaser, will constitute a valid and legally binding obligation of such
Purchaser, enforceable in accordance with its terms, subject to (i) laws of
general application relating to bankruptcy, insolvency, and the relief of
debtors, and (ii) rules of law governing specific performance, injunctive
relief, or other equitable remedies. The Purchaser has full corporate or
partnership power and authority to enter into and to perform this Agreement in
accordance with its terms. The Purchaser represents that it has not been
organized, reorganized or recapitalized specifically for the purpose of
investing in the Company.
4.7 Brokers or Finders. Except as set forth in Section 7.10 hereof, the
Company has not incurred, and will not incur, directly or indirectly, as a
result of any action taken by such Purchaser, any liability for brokerage or
finders' fees or agents' commissions or any similar charges in connection with
this Agreement or any transaction contemplated hereby.
4.8 Accredited Investor. Such Purchaser is an Accredited Investor
within the definition set forth in Rule 501(a) promulgated under the Securities
Act.
4.9 Brokers or Finders. Such Purchaser has not incurred, and will not
incur, directly or indirectly, as a result of any action taken by such
Purchaser, any liability for brokerage or finders' fees or agents' commissions
or any similar charges in connection with this Agreement or any transaction
contemplated hereby.
-9-
<PAGE> 13
SECTION 5
CONDITIONS TO CLOSING OF THE PURCHASERS
Each Purchaser's obligation to purchase any Shares at the Closing is,
at the option of each Purchaser, subject to the fulfillment on or prior to the
Closing Date of the following conditions:
5.1 Representations and Warranties. The representations and warranties
made by the Company in Section 3 shall have been true and correct when made, and
shall be true and correct as of the Closing Date.
5.2 Covenants. All covenants, agreements, and conditions contained in
this Agreement to be performed by the Company on or prior to the Closing Date
shall have been performed or complied with in all respects.
5.3 Compliance Certificate. The Company shall have delivered to the
Purchasers a Compliance Certificate in substantially the form attached hereto as
Exhibit D, executed by an officer of the Company, dated the Closing Date, and
certifying to the fulfillment of the conditions specified in Sections 5.1 and
5.2.
5.4 Blue Sky Law. The Company shall have obtained all necessary blue
sky law permits and qualifications, or secured exemptions therefrom, required by
any state for the offer and sale of the Shares.
5.5 Restated Certificate. The Restated Certificate shall have been
filed with the Delaware Secretary of State.
5.6 Reservation of Stock. The shares of Common Stock initially issuable
upon conversion of the Shares shall have been duly authorized and reserved for
issuance upon such conversion.
5.7 Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated hereby and all documents and
instruments incident to such transactions shall be reasonably satisfactory in
substance and form to counsel for the Purchasers, and they shall have received
all such counterpart originals or certified or other copies of such documents as
they may reasonably request.
5.8 Opinion of Counsel. Each Purchaser shall have received from Wilson
Sonsini Goodrich & Rosati, counsel for the Company, an opinion, dated the
Closing Date in the form attached hereto as Exhibit F.
5.9 Stockholder Rights Agreement. The Company, the Purchasers, CIT,
Donald Abraham, James Farinholt and Stephen J. Hoffman shall have executed the
Stockholder Rights Agreement in the form attached hereto as Exhibit E.
-10-
<PAGE> 14
5.10 Due Diligence Review. The Purchasers shall have completed their
due diligence review of the Company with results satisfactory to the Purchasers.
5.11 Information Rights Letter
The Company shall have delivered to Calvert Social Investment Fund a
letter granting to such purchaser certain information rights, such letter to be
in form satisfactory to such Purchaser.
SECTION 6
CONDITIONS TO CLOSING OF THE COMPANY
The Company's obligation to sell and issue the Shares at the Closing
is, at the option of the Company, subject to the fulfillment on or prior to the
Closing Date of the following conditions:
6.1 Representations and Warranties. The representations and warranties
made by each Purchaser in Section 4 shall have been true and correct when made,
and shall be true and correct as of the Closing Date.
6.2 Blue Sky Law. The Company shall have obtained all necessary blue
sky law permits and qualifications, or secured exemptions therefrom, required by
any state for the offer and sale of the securities.
6.3 Restated Certificate. The Restated Certificate shall have been
filed with the Delaware Secretary of State.
6.4 Legal Matters. All material matters of a legal nature which pertain
to this Agreement and the transactions contemplated hereby shall have been
reasonably approved by counsel for the Company.
SECTION 7
COVENANTS OF THE COMPANY
7.1 Compensation Committee.. The Company shall establish and maintain a
Compensation Committee of the Board of Directors, which shall consist of three
directors, at least two of whom shall be directors elected by the holders of the
Company's Preferred Stock (one of whom shall be a Series C Director, as defined
in the Stockholder Rights Agreement), and the third of whom, if not a directors
elected by the holders of the Company's Preferred Stock, shall be a director who
is not an employee of the Company.
-11-
<PAGE> 15
7.2 Use of Proceeds.. The net proceeds to the Company from the sale of
the Shares shall be used to fund the Company's product development, including
human clinical trials, research activities and general corporate purposes.
SECTION 8
GENERAL PROVISIONS
8.1 Governing Law. This Agreement shall be governed by and construed
according to the laws of the State of Delaware.
8.2 Survival. The representations, warranties, and covenants of the
parties made herein shall survive the Closing and shall in no way be affected by
any investigation of the subject matter thereof made by or on behalf of the
parties.
8.3 Successors and Assigns; Third Party Beneficiaries. Except as
otherwise expressly limited 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.
8.4 Entire Agreement; Amendment and Waiver. This Agreement and the
other documents delivered pursuant hereto constitute the full and entire
understanding and agreement between the parties with regard to the subject
matters hereof and thereof. Any term of this Agreement may be amended and the
observance of any term hereof may be waived (either generally or in a particular
instance) only with the written consent of holders of Shares representing more
than fifty percent (50%) of the Shares purchased by the Purchasers and the
written consent of the Company. Any amendment or waiver effected in accordance
with this Section 7.4 shall be binding upon each holder of the Shares and the
Company. In addition, the Company may waive performance of any obligation owing
to it as to some or all of the holders of the Shares, or agree to accept
alternatives to such performance, without obtaining the consent of any holder of
the Shares.
8.5 Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, or otherwise delivered by hand, facsimile or
messenger, addressed (i) if to a Purchaser, to such Purchaser's address set
forth on the Schedule of Purchasers, or at such other address as such Purchaser
shall have furnished to the Company in writing, or (ii) if to any other holder
of any Shares or Conversion Stock to 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
Shares or Conversion Stock who has so furnished an address or fax numbers to the
Company, or (iii) if to the Company, to Stephen J. Hoffman, President and CEO,
7000 N. Broadway, Suite 400, Denver, Colorado 80221, or at such other address or
fax number as the Company shall have furnished to the Purchasers.
-12-
<PAGE> 16
8.6 Delays or Omissions. No delay or omission to exercise any right,
power, or remedy accruing to any party upon any breach or default under this
Agreement, shall be deemed a waiver of any other breach or default theretofore
or thereafter occurring. Any waiver, permit, consent, or approval of any kind or
character on the part of any party of any breach or default under this
Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any of the parties, shall be
cumulative and not alternative.
8.7 References. Unless the context otherwise requires, any reference to
a "Section" refers to a section of this Agreement. Any reference to "this
Section" refers to the whole number section in which such reference is
contained.
8.8 Severability. If any provision of this Agreement is held to be
unenforceable under applicable law, then such provision shall be excluded from
this agreement and the balance of this agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms. Any court with jurisdiction over such matter may, in its discretion,
substitute for the excluded provision an enforceable provision which in economic
substance reasonably approximates the excluded provision.
8.9 Aggregation of Stock. All Shares held or acquired by affiliated
entities or persons shall be aggregated together for the purpose of determining
the availability of any rights under this Agreement.
8.10 Fees and Expenses. The Company shall pay all reasonable legal fees
and expenses of Cooley Godward LLP, counsel for certain of the Purchasers, in
connection with the negotiation, execution and delivery of this Agreement and
the Ancillary Agreements; provided, however, that the Company shall not be
obligated to pay any of such fees or expenses to the extent that such fees and
expenses exceed $10,000.
8.11 Pronouns. All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the identity of the person
or persons may require.
8.12 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and enforceable against
the parties actually executing such counterpart, and all of which together shall
constitute one instrument.
8.13 Indemnification for Finders' Fees. The Company agrees to indemnify
and to hold the Purchasers, harmless of and from any liability for commission or
compensation in the nature of a finder's fee to any broker or other person or
firm (and the costs and expenses of defending against such liability or asserted
liability) for which the Company, or any of its employees or representatives, is
responsible. Each Purchaser or in the case of Calvert Social Investment Fund,
its investment advisor Calvert Asset Management Company, severally and not
jointly, agrees to indemnify and to hold the Company and the other Purchasers
harmless of and from any liability for any commission or compensation in the
nature of a finder's fee to any broker or other person or firm
-13-
<PAGE> 17
(and the costs and expenses of defending against such liability or asserted
liability) for which such indemnifying Purchaser, or any of his, her or its
employees or representatives, is responsible.
8.14 U S. Real Property Interest Statement. The Company shall provide
prompt written notice to each Purchaser following any "determination date" (as
defined in Treasury Regulation Section 1.897-2(c)(i)) on which the Company
becomes a United States real property holding corporation. In addition, upon a
written request by any Purchaser, the Company shall provide such Purchaser with
a written statement informing the Purchaser whether such Purchaser's interest in
the Company constitutes a U.S. real property interest. The Company's
determination shall comply with the requirements of Treasury Regulation Section
1.897-2(h)(1) or any successor regulation, and the Company shall provide timely
notice to the Internal Revenue Service, in accordance with and to the extent
required by Treasury Regulation Section 1.897-2(h)(2) or any successor
regulation, that such statement has been made. The Company's written statement
to any Purchaser shall be delivered to such Purchaser within ten (10) days of
such Purchaser's written request therefor. The Company's obligation to furnish a
written statement pursuant to this Section 7.13 shall continue notwithstanding
the fact that a class of the Company's stock may be regularly traded on an
established securities market.
-14-
<PAGE> 18
This Series C Convertible Preferred Stock Purchase Agreement is
executed effective as of the date first set forth above.
ALLOS THERAPEUTICS, INC.
By: /s/ STEPHEN J. HOFFMAN
---------------------------------------
Stephen J. Hoffman, President and CEO
<PAGE> 19
INTERNATIONAL BM BIOMEDICINE
HOLDINGS, INC.
By: /s/ G. BLUM
---------------------------------------
Name: Dr. G. Blum
-------------------------------------
Title: Chairman of the Board
------------------------------------
By: /s/ F. KEISER
---------------------------------------
Name: F. Keiser
-------------------------------------
Title: CEO
------------------------------------
-2-
<PAGE> 20
CALVERT SOCIAL INVESTMENT FUND
BALANCED PORTFOLIO
By: /s/ S. WALKER BENDER
---------------------------------------
Name: Susan Walker Bender
-------------------------------------
Title: Asst. Secretary and Authorized
Signer
------------------------------------
CALVERT ASSET MANAGEMENT
COMPANY
(as to Section 7.13 of this Agreement)
By: /s/ S. WALKER BENDER
---------------------------------------
Name: Susan Walker Bender
-------------------------------------
Title: Asst. Sec. and Associate General
Counsel
------------------------------------
-3-
<PAGE> 21
BARBARA PIETTE
Name: /s/ BARBARA PIETTE
-------------------------------------
-4-
<PAGE> 22
ABINGWORTH BIOVENTURES SICAV
By:
---------------------------------------
Attorney-in-fact for
Abingworth Bioventures SICAV
-5-
<PAGE> 23
OAK INVESTMENT PARTNERS V,
LIMITED PARTNERSHIP
By: OAK ASSOCIATES V, LIMITED
PARTNERSHIP, its General Partner
By: /s/ ANN H. LAMONT
---------------------------------------
Ann H. Lamont, General Partner
OAK V AFFILIATES FUND, LIMITED
PARTNERSHIP
By: OAK V AFFILIATES, its General Partner
By: /s/ ANN H. LAMONT
---------------------------------------
Ann H. Lamont, General Partner
ALLOS THERAPEUTICS, INC.
SERIES C CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
<PAGE> 24
DRAKE & CO FOR THE ACCOUNT OF
CITIVENTURE III
By: /s/ MICHAEL GOING
---------------------------------------
Title: Drake & Co. Nominee
------------------------------------
By: INVESCO PRIVATE CAPITAL INC.
as investment manager and
attorney-in-fact
By: /s/ PARWY SAXENA
---------------------------------------
Title: Managing Director
------------------------------------
ALLOS THERAPEUTICS, INC.
SERIES C CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
<PAGE> 25
SCHRODER VENTURES INTERNATIONAL
LIFE SCIENCES FUND L.P. 1
By: SCHRODER VENTURE MANAGERS
INC., its General Partner
By: /s/ NICOLA LAWSON /s/ DEBORAH SPEIGHT
---------------------------------------
Name: Nicola Lawson Deborah Speight
-------------------------------------
Title: Director & VP Director & VP
------------------------------------
SCHRODER VENTURES INTERNATIONAL
LIFE SCIENCES FUND L.P. 2
By: SCHRODER VENTURE MANAGERS
INC., its General Partner
By: /s/ NICOLA LAWSON /s/ DEBORAH SPEIGHT
---------------------------------------
Name: Nicola Lawson Deborah Speight
-------------------------------------
Title: Director & VP Director & VP
------------------------------------
SCHRODER VENTURES INTERNATIONAL
LIFE SCIENCES FUND TRUST
By: CODAN TRUST COMPANY LIMITED,
as Trustee
By: SCHRODER VENTURES MANAGERS
LIMITED, as Attorney-in-Fact
By: /s/ NICOLA LAWSON /s/ DEBORAH SPEIGHT
---------------------------------------
Name: Nicola Lawson Deborah Speight
-------------------------------------
Title: Director Director
------------------------------------
SCHRODER VENTURE MANAGERS
LIMITED, as Manager of Schroder Ventures
International Life Sciences Fund
Co-Investment Scheme
By: /s/ NICOLA LAWSON /s/ DEBORAH SPEIGHT
---------------------------------------
Name: Nicola Lawson Deborah Speight
-------------------------------------
Title: Director Director
------------------------------------
ALLOS THERAPEUTICS, INC.
SERIES C CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
<PAGE> 26
DLJ CAPITAL CORPORATION
By: /s/ PHILIPPE CHAMBON
---------------------------------------
Philippe Chambon
Its: Attorney In Fact
DLJ ESC II, L.P.
By: DLJ LBO Plans Management Corporation
Its: Manager
By: /s/ PHILIPPE CHAMBON
---------------------------------------
Philippe Chambon
Its: Attorney In Fact
SPROUT CAPITAL VIII, L.P.
By: DLJ CAPITAL CORP
Its: Managing General Partner
By: /s/ PHILIPPE CHAMBON
---------------------------------------
Philippe Chambon
Its: Attorney In Fact
THE SPROUT VENTURE CAPITAL, L.P.
By: DLJ CAPITAL CORP
Its: General Partner
By: /s/ PHILIPPE CHAMBON
---------------------------------------
Philippe Chambon
Its: Attorney In Fact
ALLOS THERAPEUTICS, INC.
SERIES C CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
<PAGE> 27
JOHNSON & JOHNSON DEVELOPMENT
CORPORATION
By: /s/ TING PAU OEI
---------------------------------------
Name: Ting Pau Oei
-------------------------------------
Title: Vice President Johnson & Johnson
Dev. Corp.
------------------------------------
ALLOS THERAPEUTICS, INC.
SERIES C CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
<PAGE> 28
BIOTECHNOLOGY DEVELOPMENT FUND, L.P.
By: BioAsia Investments, LLC
Its: General Partner
By: /s/ FRANK KUNG
------------------------------
Frank Kung
Its: Managing Member
ALLOS THERAPEUTICS, INC.
SERIES C CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
<PAGE> 29
SEQUEL LIMITED PARTNERSHIP
By: Sequel Venture Partners L.L.C.
Its: General Partner
By: /s/ KINNEY L. JOHNSON
---------------------------------------
Name:
-------------------------------------
Its: Manager
SEQUEL EURO LIMITED PARTNERSHIP
By: Sequel Venture Partners L.L.C.
Its: General Partner
By: /s/ KINNEY L. JOHNSON
---------------------------------------
Name:
-------------------------------------
Its: Manager
<PAGE> 30
EXHIBIT A
SCHEDULE OF PURCHASERS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
NO. OF SERIES C SHARES
PURCHASER'S NAME AND ADDRESS PURCHASED TOTAL PURCHASE PRICE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
International BM Biomedicine Holdings, AG
Aeschenplatz 7, P.O. Box 136
Basel, CH-4010 2,762,430 $4,999,998.30
Switzerland
- ------------------------------------------------------------------------------------------------------------------------
Calvert Social Investment Fund Balanced Portfolio
4550 Montgomery Ave., Suite 1000N
Bethesda, MD 20814 276,243 $499,999.83
- ------------------------------------------------------------------------------------------------------------------------
Abingworth Bioventures SICAV
26 St. James's Street
London SW1A1HA 166,490 $301,346.90
ENGLAND
- ------------------------------------------------------------------------------------------------------------------------
Drake & Co for the Account of Citiventure III
c/o Chancellor LGT Asset Management, Inc.
1166 Avenue of the Americas 183,739 $332,567.59
New York, NY 10036
- ------------------------------------------------------------------------------------------------------------------------
KME Venture III, L.P.
c/o Chancellor LGT Asset Management, Inc.
1166 Avenue of the Americas 9,632 $17,433.92
New York, NY 10036
- ------------------------------------------------------------------------------------------------------------------------
Oak Investment Partners V, Limited Partnership
One Gorham Island 459,193 $831,139.33
Westport, Connecticut 06880
- ------------------------------------------------------------------------------------------------------------------------
Oak V Affiliates Fund, Limited Partnership
One Gorham Island 10,329 $18,695.49
Westport, Connecticut 06880
- ------------------------------------------------------------------------------------------------------------------------
Johnson & Johnson Development Corporation
One Johnson & Johnson Plaza
New Brunswick, New Jersey 08933 355,179 $642,873.99
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 31
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
NO. OF SERIES C SHARES
PURCHASER'S NAME AND ADDRESS PURCHASED TOTAL PURCHASE PRICE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Schroder Ventures International Life Sciences Fund L.P. 1
Schroders Inc.
787 Seventh Avenue, 34th Floor 202,044 $365,699.64
New York, New York 10019
- ------------------------------------------------------------------------------------------------------------------------
Schroder Ventures International Life Sciences Fund L.P. 2
Schroders Inc.
787 Seventh Avenue, 34th Floor 44,898 $81,265.38
New York, New York 10019
- ------------------------------------------------------------------------------------------------------------------------
Schroder Ventures International Life Sciences Fund Trust
Schroders (Bermuda) Limited
22 Church Street
Hamilton HM 11 71,119 $128,725.39
Bermuda
- ------------------------------------------------------------------------------------------------------------------------
Schroder Venture Managers Ltd.
Schroders (Bermuda) Limited
22 Church Street
Hamilton HM 11 1,598 $2,892.38
Bermuda
- ------------------------------------------------------------------------------------------------------------------------
DLJ Capital Corp.
3000 Sand Hill Road
Building 3, Suite 170 6,613 $11,969.53
Menlo Park, CA 94025
- ------------------------------------------------------------------------------------------------------------------------
DLJ ESC II, L.P.
3000 Sand Hill Road
Building 3, Suite 170 42,191 $76,365.71
Menlo Park, CA 94025
- ------------------------------------------------------------------------------------------------------------------------
Sprout Capital VIII, L.P.
3000 Sand Hill Road
Building 3, Suite 170 423,051 $765,722.31
Menlo Park, CA 94025
- ------------------------------------------------------------------------------------------------------------------------
Sprout Venture Capital, L.P.
3000 Sand Hill Road
Building 3, Suite 170 25,383 $45,943.23
Menlo Park, CA 94025
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
-2-
<PAGE> 32
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
NO. OF SERIES C SHARES
PURCHASER'S NAME AND ADDRESS PURCHASED TOTAL PURCHASE PRICE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Biotechnology Development Fund, L.P.
575 High Street, Suite 201
Palo Alto, CA 94301 76,879 $139,150.99
- ------------------------------------------------------------------------------------------------------------------------
Sequel Limited Partnership
4430 Arapahoe Avenue, Suite 220
Boulder, CO 80303 125,375 $226,928.75
- ------------------------------------------------------------------------------------------------------------------------
Sequel Euro Limited Partnership
4430 Arapahoe Avenue, Suite 220
Boulder, CO 80303 54,838 $99,256.78
- ------------------------------------------------------------------------------------------------------------------------
Barbara Piette
93 Mt. Vernon Street 13,812 $24,999.72
Boston, MA 02108
- ------------------------------------------------------------------------------------------------------------------------
TOTAL 5,311,036 $9,612,975.16
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
-3-
<PAGE> 33
ALLOS THERAPEUTICS, INC.
SERIES C CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
OCTOBER 4, 1999
<PAGE> 1
ALLOS THERAPEUTICS, INC.
FOURTH AMENDED AND RESTATED STOCKHOLDER RIGHTS AGREEMENT
October 4, 1999
<PAGE> 2
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
7. Information Rights..........................................................................................22
7.1 Financial Information..............................................................................22
7.2 Additional Information and Rights..................................................................23
8. Voting and Other Covenants..................................................................................24
8.1 Agreement to Vote..................................................................................24
8.2 Voting Events......................................................................................24
8.3 Designation and Election of Directors..............................................................24
8.4 Successors in Interest.............................................................................25
8.5 Conversion Stock...................................................................................25
9. Miscellaneous...............................................................................................26
9.1 Conditions to Exercise of Rights...................................................................26
9.2 Repurchase Agreement...............................................................................26
9.3 Governing Law......................................................................................26
9.4 Amendment..........................................................................................26
9.5 Assignment of Rights...............................................................................26
9.6 Term...............................................................................................26
9.7 Notices............................................................................................27
9.8 Severability.......................................................................................27
9.9 Attorney Fees......................................................................................27
9.10 Counterparts.......................................................................................27
9.11 Entire Agreement...................................................................................27
9.12 Aggregation of Stock...............................................................................27
</TABLE>
-ii-
<PAGE> 3
FOURTH AMENDED AND RESTATED STOCKHOLDER RIGHTS AGREEMENT
This Amended and Restated Stockholder Rights Agreement (this
"Agreement") is made as of the 4th day of October, 1999 by and among Allos
Therapeutics, Inc., a Delaware corporation (the "Company") and the parties
listed on Exhibit A (the "Stockholders"). This Agreement is being executed in
conjunction with the Company's Series C Convertible Preferred Stock Purchase
Agreement of even date herewith (the "Series C Purchase Agreement").
This Agreement amends and restates the Shareholder Rights Agreement
dated March 15, 1996, as amended (the "Prior Rights Agreement") in its entirety.
Such amendment and restatement shall be effective upon the execution of this
Agreement by (i) the Company, (ii) the holders of more than fifty percent (50%)
in interest of the Restricted Founders Shares (as defined below) outstanding
immediately prior to the execution of the Series C Purchase Agreement and (iii)
the holders of more than fifty percent (50%) in interest of the Registrable
Securities (as defined below) outstanding immediately prior to the execution of
the Series C Purchase Agreement.
In consideration of the mutual covenants set forth herein, the parties
agree as follows:
1. Definitions.
1.1 "CIT" shall mean the Center for Innovative Technology, a Virginia
corporation.
1.2 "CIT Transferees" shall mean Virginia Commonwealth University, the
Virginia Commonwealth University Intellectual Property Foundation, Donald J.
Abraham, Ahmed Mehanna, Ramnarayan Randad and Mona Mahran.
1.3 "Commission" shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.
1.4 "Common Holder" shall mean any holder of outstanding Restricted
Founders Shares.
1.5 "Common Stock" shall mean the Company's outstanding Common Stock
and shares of Common Stock issued or issuable upon conversion of the Company's
outstanding Preferred Stock from time to time.
1.6 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar successor federal statute and the rules and regulations
thereunder, all as the same shall be in effect from time to time.
1.7 "Founders" shall mean Donald J. Abraham, James B. Farinholt, Jr.
and Stephen J. Hoffman.
1.8 "Holder" shall mean any holder of outstanding Registrable
Securities.
<PAGE> 4
1.9 "Initiating Holders" shall mean any Holders of not less than 40% of
the outstanding Registrable Securities.
1.10 "Preferred Holder" shall mean any holder of outstanding Restricted
Preferred Shares.
1.11 "Preferred Stock" shall mean outstanding shares of the Company's
Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock.
1.12 The terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act (and any post-effective amendments filed or
required to be filed), and the declaration or ordering of the effectiveness of
such registration statement.
1.13 "Registrable Securities" shall mean (i) any shares of Common Stock
issued or issuable, directly or indirectly, in respect of such stock upon the
conversion of the Preferred Stock which was purchased under the Series A
Preferred Stock and Warrant Purchase Agreement dated January 14, 1994, the
Series A Preferred Stock Purchase Agreement dated June 20, 1995, the Series B
Preferred Stock Purchase Agreement dated March 17, 1996, as amended by the
Amendment Agreement dated June 26, 1996, the Series C Convertible Preferred
Stock Purchase Agreement dated January 13, 1998, as amended by the Amendment
Agreement dated May 4, 1998, or the Series C Purchase Agreement and (ii) any
shares of Common Stock issued or issuable, directly or indirectly, in respect of
such Registrable Securities upon any stock split, stock dividend,
recapitalization, or similar event, or any shares of Common Stock otherwise
issued or issuable with respect to such Registrable Securities; provided,
however, that Registrable Securities shall not include any shares of Common
Stock which have previously been registered or sold to the public.
1.14 "Registration Expenses" shall mean all expenses incurred by the
Company in complying with Sections 4. 1, 4.2 and 4.3 of this Agreement,
including, without limitation, all registration, qualification and filing fees,
printing expenses, escrow fees, fees and disbursements of counsel for the
Company and fees and disbursements of one counsel for the Holders (up to
$25,000), blue sky fees and expenses, and the expense of any special audits
incident to or required by any such registration (but excluding the compensation
of regular employees of the Company which shall be paid in any event by the
Company). Registration Expenses shall not include selling commissions, discounts
or other compensation paid to underwriters or other agents or brokers to effect
the sale.
1.15 "Restricted Securities" shall mean the securities of the Company
required to bear the legend set forth in Section 6 of this Agreement.
1.16 "Restricted Founders Shares" shall mean shares of Common Stock now
owned or subsequently acquired by (i) the Founders or their transferees or
assignees, including A. P. Investment Corporation and Nancy W. Abraham, Trustee,
U/A 12-14-94 (also, the "Founders"), (ii) CIT or (iii) the CIT Transferees.
1.17 "Restricted Preferred Shares" shall mean shares of the Company's
(i) Preferred Stock and (ii) Common Stock issued or issuable upon conversion of
the Company's Preferred Stock.
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1.18 "Rule 145" shall mean Rule 145 promulgated under the Securities
Act, or any similar successor rule, as the same shall be in effect from time to
time.
1.19 "Rule 415" shall mean Rule 415 promulgated under the Securities
Act, or any similar successor rule, as the same shall be in effect from time to
time.
1.20 "Selling Expenses" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the sale of Registrable
Securities.
1.21 "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, as shall be in effect at the time.
2. Right of First Refusal on Restricted Founders Shares.
2.1 Restrictions on Transfers. Except as provided in this Agreement, no
Common Holder shall transfer or otherwise dispose of any Restricted Founders
Shares owned by such Common Holder, or any interest therein, and any attempt by
any Common Holder to effect a transfer in violation of this Section 2 shall be
void and ineffective for all purposes. The words "transfer" and "dispose"
include the making of any sale, exchange, assignment, gift, security interest,
pledge or other encumbrance, or any contract therefor, any voting trust or other
agreement or arrangement with respect to the transfer of voting rights or any
other beneficial interest in Restricted Founders Shares, the creation of any
other claim thereto or any other transfer or disposition whatsoever, whether
voluntary or involuntary, affecting the right, title, or possession with respect
to the Restricted Founders Shares.
2.2 Third Party Offers. Each Common Holder hereby agrees that subject
to the terms and conditions set forth below, should any Common Holder (the
"Offeree Holder") receive one or more bona fide offers upon specific terms and
conditions (including a purchase price payable in cash or other property)
(collectively the "Purchase Offer"), from any persons, to purchase any
Restricted Founders Shares from such Offeree Holder, then such Offeree Holder
shall promptly notify the Preferred Holders of the terms and conditions of such
Purchase Offer (the "Notice").
2.3 Right of First Refusal.
(a) Each Preferred Holder shall have the right and option (subject
to the provisions of Section 2.3(c) hereof), for a period of 20 days after
receipt of the Notice, to buy all or any of its Proportionate Percentage (as
such term is defined below) of the Restricted Founders Shares so offered at the
purchase price and on the terms stated in the Purchase Offer and to offer, in
any written notice of acceptance, to purchase any of such Restricted Founders
Shares not purchased by other Preferred Holders, in which case such Restricted
Founders Shares not accepted by the other Preferred Holders shall be deemed to
have been offered to and accepted by the Preferred Holder(s) which exercised
their option under this Section 2.3(a) pro rata in accordance with their
respective Proportionate Percentages (as such term is defined below), on the
above-described terms and conditions.
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(b) Sales of Restricted Founders Shares under the terms of Section
2.3(a) above shall be made at the offices of the Company on a mutually
satisfactory business day within 15 days after the expiration of the aforesaid
offering period. Delivery of certificates or other instruments evidencing such
Restricted Founders Shares duly endorsed for transfer to the Preferred Holders
shall be made on such date against payment of the purchase price therefor.
(c) If effective acceptance shall not be received pursuant to
Section 2.3(a) above with respect to all Restricted Founders Shares offered for
sale pursuant to the Notice, then the Offeree Holder may, subject to the
remaining provisions of Sections 2 and 6, sell all or any part of the remaining
Restricted Founders Shares so offered for sale at a price not less than the
price, an on terms and conditions not more favorable to the purchaser thereof
than the terms and conditions, stated in the original Purchase Offer at any time
within 90 days after the expiration of the offer required by Section 2.3(a)
above. In the event the remaining Restricted Founders Shares are not sold by the
Offeree Holder during such 90-day period, the right of the Offeree Holder to
sell such remaining Restricted Founders Shares shall expire and the obligations
of this Section 2 shall be reinstated; provided, however, that in the event the
Offeree Holder determines, at any time during such 90-day period, that the sale
of all or any part of the Restricted Founders Shares on the terms set forth in
the written notice of intention to sell is impractical, the Offeree Holder may
terminate the offer and reinstate the procedure provided in this Section 2
without waiting for the expiration of such 90-day period.
(d) The Offeree Holder may specify in the Notice that all
Restricted Founders Shares mentioned therein must be sold, in which case any
acceptance received pursuant to Section 2.3(a) hereof shall be deemed
conditioned upon (A) receipt of one or more written notices of acceptance with
respect to all Restricted Founders Shares mentioned in such Notice and/or (B)
the sale of the remaining Restricted Founders Shares, if any, pursuant to
Section 2.3(c) above.
(e) "Proportionate Percentage" shall mean the pro rata percentage
of shares of stock being offered by an Offeree Holder pursuant to Section 2.3
hereof which each Preferred Holder shall be entitled to purchase. Such pro rata
percentage, as to each such Preferred Holder, shall be the percentage figure
which expresses the ratio between the number of shares of outstanding Common
Stock owned by such Preferred Holder and the aggregate number of shares of
Common Stock owned by all such Preferred Holders.
(f) Anything contained herein to the contrary notwithstanding, the
Offeree Holder shall, in addition to complying with the provisions of this
Section 2.3 in the event of a proposed sale of Restricted Founders Shares,
comply with the provisions of Section 5.1 hereof.
2.4 Exempt Transfers.
(a) Notwithstanding the foregoing, the provisions of Sections 2 and
5 hereof shall not apply to (i) any pledge of Restricted Founders Shares made by
a Founder pursuant to a bona fide loan transaction that creates a mere security
interest; (ii) any transfer to the ancestors, descendants or spouse or to trusts
for the benefit of such persons or a Founder; or (iii) any bona fide gift by a
Founder, provided that (A) the transferring Founder shall inform the Preferred
Holders of such
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pledge, transfer or gift prior to effecting it and (B) the pledgee, transferee
or donee shall furnish the Preferred Holders with a written agreement to be
bound by and comply with all provisions of Sections 2 and 5 hereof. Such
transferred Restricted Founders Shares shall remain "Restricted Founders Shares"
hereunder, and such pledgee, transferee or donee shall be treated as a "Founder"
and "Common Holder" for purposes of this Agreement.
(b) Notwithstanding the foregoing, the provisions of Sections 2 and
5 hereof shall not apply to any transfer by CIT to a CIT Transferee or by
Virginia Commonwealth University or the Virginia Commonwealth University
Intellectual Property Foundation to a CIT Transferee, provided that such CIT
Transferee agrees in writing to be bound by and comply with all terms and
conditions of this Agreement. Such transferred Restricted Founders Shares shall
remain "Restricted Founders Shares" hereunder and such CIT Transferee shall be
treated as a "Common Holder" for purposes of this Agreement.
(c) Notwithstanding the foregoing, the provisions of Sections 2 and
5 shall not apply to the sale of any Restricted Founders Shares (i) to the
public pursuant to a registration statement filed with and declared effective
by, the Commission under the Securities Act; or (ii) to the Company; or (iii) if
prior to such sale, (A) the Common Holder (other than a Common Holder who is a
CIT Transferee) holds less than 2.5% of the Company's outstanding shares of
capital stock or (B) with respect to the Founders, the Founders collectively
hold less than 5.0% of the Company's outstanding shares of capital stock or (C)
with respect to the Common Holders, the Common Holders collectively hold less
than 0.5% of the Company's outstanding shares of capital stock.
3. Right of First Offer on New Securities.
3.1 Waiver of Right. The Holders under the Prior Rights Agreement waive
their Right of First Offer, including any notice rights pertaining thereto,
under the Prior Rights Agreement to purchase the shares of Series C Preferred
Stock being issued and sold under the Series C Purchase Agreement.
3.2 Right of First Offer to Holders. The Company hereby grants to each
Holder the irrevocable and exclusive first option (the "First Option") to
purchase all or part of such Holders Pro Rata Portion (as defined below) of any
New Securities (as defined in Section 3.4) which the Company may, from time to
time after the date of this Agreement, propose to issue and sell. For purposes
of this Section 3, a Holder's "Pro Rata Portion" shall be equal to the product
of (i) the total number of New Securities proposed to be issued multiplied by
(ii) a fraction, the numerator of which is the number of shares of Common Stock
held by such Holder (computed as set forth in Section 3.3 hereof) as of the date
of the Company Notice provided by the Company pursuant to Section 3.5, and the
denominator of which is the total number of shares of Common Stock which are
outstanding as of such date. Furthermore, if one or more Holders do not,
pursuant to Section 3.5, give notice of its or their intention to exercise in
full its or their option to purchase its or their Pro Rata Portion of the New
Securities, then each Holder who did give notice of such intent (collectively,
the "Fully Participating Holders") shall have the irrevocable and exclusive
second option (the "Second Option") to purchase all or a part of the New
Securities as to which a notice pursuant to the exercise of the First Option
could have been, but was not, delivered (for purposes of this Section 3, the
"Additional
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<PAGE> 8
New Securities"). If more than one Fully Participating Holder gives a notice (a
"Second Notice") pursuant to Section 3.5 of its intention to purchase Additional
New Securities pursuant to the exercise of the Second Option and the total
number of New Securities covered by such notices exceeds the total number of
Additional New Securities, then the Additional New Securities shall be allocated
among such Fully Participating Holders according to the following procedure, or
in such different proportions as such Fully Participating Holders shall agree
among themselves:
(a) Each Oversubscribing Holder (as defined below) shall be
apportioned the lesser of (A) that number of Additional New Securities that it
elected to purchase in its Second Notice and which it has not yet been
apportioned pursuant to this Section 3.2(a); or (B) its Pro Rata Portion of the
Additional New Securities (as defined below);
(b) If the apportionment in Section 3.2(a) is followed and there
remain (A) at least one Oversubscribing Holder who has not yet been apportioned
the number of Additional New Securities it elected to purchase in its Second
Notice and (B) any Additional New Securities, then the procedure described in
Section 3.2(a) shall be repeated; and
(c) For purposes of this Section 3.2, an "Oversubscribing Holder"
means a Fully Participating Holder who has given a Second Notice and who has not
yet been apportioned pursuant to Section 3.2(a) that number of Additional New
Securities that it elected to purchase in its Second Notice, and an
Oversubscribing Holder's "Pro Rata Portion of Additional New Securities" shall
be equal to the number of Additional New Securities multiplied by a fraction,
the numerator of which is the number of shares of Common Stock held by such
Holder as of the date of the Company Notice, and the denominator of which is the
total number of shares of Common Stock held by all Oversubscribing Holders as of
such date.
3.3 Calculation of Number of Shares of Common Stock Held or
Outstanding. For purposes of any calculation of the number of shares of Common
Stock held or outstanding under this Section 3, and with respect to any
numerator or denominator provided herein, the conversion of all securities
convertible into or exchangeable for Common Stock and the exercise of all
outstanding options other than (i) options granted under this Section 3 and (ii)
options granted pursuant to the Company's 1995 Stock Option Plan shall be
assumed.
3.4 "New Securities. " Except as set forth below, "New Securities"
shall mean any shares of capital stock or other equity securities (or debt
securities convertible into such equity securities) of the Company, whether now
authorized or not, and rights, options or warrants to purchase said shares of
capital stock and securities of any type whatsoever that are, or may become,
convertible into said shares of capital stock or other equity securities.
Notwithstanding the foregoing, "New Securities" shall not include:
(a) securities issued upon conversion or exercise of the Preferred
Stock;
(b) securities purchased or issued pursuant to the Series C
Purchase Agreement;
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(c) securities issued pursuant to the acquisition of another
corporation by the Company by merger, purchase of all or substantially all of
the assets or other reorganization whereby the Company or its stockholders
immediately prior to such transaction continue to own more than fifty percent
(50%) of the voting power of the surviving or successor corporation;
(d) securities issued pursuant to any rights or agreements,
including without limitation convertible securities, options and warrants,
provided that unless otherwise provided herein, the rights of first offer
established by this Section 3 shall apply with respect to the initial sale or
grant by the Company of such rights or agreements;
(e) securities issued in connection with any stock split, stock
dividend or recapitalization by the Company;
(f) securities issued to employees, consultants, officers or
directors of the Company pursuant to any stock option, stock purchase or stock
bonus plan, agreement or arrangement approved by the Board of Directors, but not
exceeding 3,650,000 shares of Common Stock (net of purchases of such shares or
cancellations or expirations of options);
(g) securities issued to vendors or customers or to other persons
in similar commercial situations with the Company if such issuance is approved
by the Company's board of directors;
(h) securities issued in connection with obtaining lease financing,
whether issued to a lessor, guarantor or other person; and
(i) securities issued in a firm commitment underwritten public
offering pursuant to an effective registration statement under the Securities
Act, covering the offer and sale of securities for the account of the Company
and/or selling stockholders to the public at such per share price and resulting
in such aggregate net proceeds to the Company and/or the selling stockholders
(after deducting underwriters' discounts and expenses relating to the issuance)
as would result in the automatic conversion of the Company's Preferred Stock
pursuant to the Company's Amended and Restated Certificate of Incorporation.
3.5 Notices With Respect to Proposed Issuance of New Securities. In the
event the Company proposes to undertake an issuance of New Securities, it shall
give each Holder entitled to a right of first offer pursuant to this Section 3
written notice (the "Company Notice") of its intention, describing in detail the
type of New Securities and the price and terms upon which the Company proposes
to issue such New Securities. Each such Holder shall have twenty (20) days from
the date of receipt of any such Company Notice to agree to purchase, pursuant to
the exercise of the First Option, up to such Holder's Pro Rata Portion of such
New Securities for the price and upon the terms and conditions specified in the
Company Notice by giving written notice to the Company and stating therein the
quantity of New Securities to be purchased. If, following the expiration of such
twenty (20) day period, there exist Additional New Securities subject to the
Second Option, then the Company shall give each Fully Participating Holder a
second written notice (the "Second Company Notice") to such effect and each such
Holder shall then have fifteen (15) days from the date of
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receipt of such Second Company Notice to agree to purchase (on the aforesaid
terms and conditions) the quantity of Additional New Securities stated therein,
subject to the application of the procedures set forth in Section 3.2.
3.6 Company's Right to Complete Proposed Sale of New Securities to the
Extent Rights of First Offer are Not Exercised. In the event a Holder fails to
exercise a right of first offer with respect to any New Securities within the
periods specified in Section 3.5, the Company shall have sixty (60) days
thereafter to sell or enter into an agreement (pursuant to which the sale of
such New Securities shall be closed, if at all, within thirty (30) days from the
date of said agreement) to sell the New Securities not elected to be purchased
by Holders at the price and upon terms no more favorable to the purchasers of
such securities than those specified in the Company Notice. In the event the
Company has not sold the New Securities or entered into an agreement to sell the
New Securities within said 60 day period (or sold and issued New Securities in
accordance with the foregoing within 30 days from the date of said agreement),
the Company shall not thereafter issue or sell such New Securities without first
offering such securities in the manner provided in this Section 3 above.
3.7 Assignment of Right of First Offer. The right of first offer
granted under this Section 3 may be assigned to a transferee or assignee in
connection with any transfer or assignment of Registrable Securities by a
Holder, provided that (a) such transfer or assignment may otherwise be effected
in accordance with applicable securities laws and (b) such transferee or
assignee acquires at least 200,000 shares of Registrable Securities (as adjusted
for combinations, stock dividends and the like) upon consummation of such
transfer or assignment.
3.8 Amendment of Right of First Offer. Notwithstanding the provisions
of Section 9.4 hereof, the written consent of (a) the Company and (b) Holders
holding more than sixty percent (60%) in interest of the Registrable Securities
which are issued or issuable in respect of Series A Preferred Stock of the
Company and (c) Holders holding more than sixty percent (60%) in interest of the
Registrable Securities which are issued or issuable in respect of Series B
Preferred Stock of the Company and (d) Holders holding more than sixty percent
(60%) in interest of the Registrable Securities which are issued or issuable in
respect of Series C Preferred Stock of the Company shall be required to amend
Section 3.4(f) hereof to increase the number of shares of Common Stock excluded
thereby from the definition of New Securities.
4. Registration Rights.
4.1 Requested Registration.
(a) Request for Registration. In case the Company shall receive
from Initiating Holders a written request that the Company effect any
underwritten registration, qualification, or compliance with respect to
Registrable Securities held by such Initiating Holders, then the Company shall:
(i) promptly give written notice of the proposed registration,
qualification, or compliance to all other Holders; and
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(ii) as soon as practicable, use its most diligent efforts to
effect all such registration, qualification, or compliance (including, without
limitation, the execution of an undertaking to file post-effective amendments,
appropriate qualification under applicable blue sky or other state securities
laws, and appropriate compliance with applicable regulations issued under the
Securities Act and any other governmental requirements or regulations) as may be
so requested and as would permit or facilitate the sale and distribution of all
or such portion of such Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any Holders
joining in such request as are specified in a written request received by the
Company, within 20 days after the date the Company mails such written notice;
Provided, however, that the Company shall not be obligated to take any
action to effect any such registration, qualification, or compliance pursuant to
this Section 4.1:
(A) In any jurisdiction in which the Company would be required to
execute a general consent to service of process in effecting such registration,
qualification, or compliance unless the Company is already subject to service in
such jurisdiction and except as may be required by the Securities Act;
(B) During the period starting with the date sixty (60) days prior
to the Company's estimated date of filing of, and ending on the date one hundred
eighty (180) days immediately following the effective date of any registration
statement pertaining to securities of the Company (other than a registration of
securities in a Rule 145 transaction or with respect to an employee benefit plan
or initiated by security holders); or
(C) Unless the aggregate offering price thereof, net of
underwriting discounts and commissions, would be at least $5,000,000;
(D) After the Company has effected two (2) such registrations
pursuant to this Section 4.1 which have been declared or ordered effective and
pursuant to which securities have been sold.
Subject to the foregoing clauses (A) through (D), the Company shall
file a registration statement covering the Registrable Securities so requested
to be registered as soon as practicable, and in any event within 120 days, after
receipt of the request of the Initiating Holders; provided, however, that if the
Company shall furnish to such Holder a certificate signed by the president of
the Company stating that in the good faith judgment of the board of directors of
the Company, it would be seriously detrimental to the Company or its
stockholders for such registration statement to be filed on or before the date
filing would be required and it is therefore essential to defer the filing of
such registration statement, the Company shall have the right to defer such
filing for a reasonable period not to exceed 120 days; provided, however, that
the Company shall not utilize this right more than once in any twelve-month
period.
(b) Underwriting. The right of any Holder to registration pursuant
to this Section 4.1 shall be conditioned upon such Holder's participation in
such underwriting and the inclusion of such Holder's Registrable Securities in
the underwriting to the extent requested (unless
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otherwise mutually agreed by a majority in interest of the Initiating Holders
and such Holder with respect to such participation and inclusion) to the extent
provided herein.
The Company shall (together with all Holders selling Registrable
Securities) enter into an underwriting agreement in customary form with the
managing underwriter selected for such underwriting by a majority in interest of
the Initiating Holders. Notwithstanding any other provision of this Section 4.1,
if the managing underwriter advises the Initiating Holders in writing that
marketing factors require a limitation of the number of shares to be
underwritten, then the Company shall so advise all Holders and the number of
shares of Registrable Securities and other securities that may be included in
the registration and underwriting shall be allocated among all Holders thereof
in proportion, as nearly as practicable, to the respective amounts of securities
entitled to inclusion (determined without regard to any requirement of a request
to be included in such registration) in such registration held by all such
Holders at the time of filing the registration statement. No Registrable
Securities or other securities excluded from the underwriting by reason of the
underwriter's marketing limitation shall be included in such registration. To
facilitate the allocation of shares in accordance with the above provisions, the
Company and the underwriters may round the number of shares allocated to any
Holder to the nearest 100 shares.
If any Holder of Registrable Securities disapproves of the terms of the
underwriting, such person may elect to withdraw therefrom by written notice to
the Company, the managing underwriter and the Initiating Holders. The
Registrable Securities and/or other securities so withdrawn shall also be
withdrawn from registration, and such Registrable Securities shall not be
transferred in a public distribution prior to 90 days after the effective date
of such registration, or such other shorter period of time as the underwriters
may require. If by the withdrawal of such Registrable Securities a greater
number of Registrable Securities held by other Holders may be included in such
registration (up to the maximum of any limitation imposed by the underwriters),
then the Company shall offer to all Holders who have included Registrable
Securities in the registration the right to include additional Registrable
Securities in the same proportion and manner used in determining the underwriter
limitation in this Section 4.1.
If the managing underwriter has not limited the number of Registrable
Securities to be underwritten, the Company may include securities for its own
account or for the account of others in such registration if the managing
underwriter so agrees and if the number of Registrable Securities which would
otherwise have been included in such registration and underwriting will not
thereby be limited.
4.2 Company Registration.
(a) Notice of Registration. If at any time or from time to time,
the Company shall determine to register in an underwritten offering any of its
securities, either for its own account or the account of a security holder or
holders, other than (i) a registration relating solely to employee benefit
plans, or (ii) a registration relating solely to a Rule 145 transaction, or a
registration on any registration form that does not permit secondary sales, the
Company shall:
(i) promptly give to each Holder written notice thereof; and
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(ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any underwriting
involved therein, all the Registrable Securities specified in a written request
by each Holder received by the Company within 20 days after the Company mails
such written notice, subject to the provisions below.
(b) Underwriting. The right of any Holder to registration pursuant
to this Section 4.2 shall be conditioned upon the participation by such Holder
in such underwriting and the inclusion of the Registrable Securities of such
Holder in the underwriting to the extent provided herein. All Holders proposing
to distribute their securities through such underwriting shall (together with
the Company and the other holders distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with the
managing underwriter selected for such underwriting by the Company.
Notwithstanding any other provisions of this Section 4.2, if the managing
underwriter determines that marketing factors require a limitation of the number
of shares to be underwritten, the managing underwriter may limit the Registrable
Securities held by Holders to be included in such registration, but shall not
limit such Registrable Securities to fewer than 20% of the securities sold in
any offering; provided that in the Company's initial public offering the
managing underwriter may limit the Registrable Securities held by the Holders to
be included in such registration to fewer than 20% of the shares sold in the
offering. The Company shall so advise all Holders and the other holders
distributing their securities through such underwriting, and the number of
shares of Registrable Securities and other securities that may be included in
the registration and underwriting shall be allocated among all Holders and other
holders thereof in proportion, as nearly as practicable, to the respective
amounts of securities entitled to inclusion (determined without regard to any
requirement of a request to be included in such registration) in such
registration held by all such Holders and other holders at the time of filing
the registration statement, provided that no such inclusion of Registrable
Securities and other securities by the underwriter may reduce the securities
being offered by the Company for its own account. To facilitate the allocation
of shares in accordance with the above provisions, the Company may round the
number of shares allocated to any Holder or holder to the nearest 100 shares. If
any Holder disapproves of the terms of any such underwriting, he may elect to
withdraw therefrom by written notice to the Company and the managing
underwriter. Any securities excluded or withdrawn from such underwriting shall
be withdrawn from such registration, and shall not be transferred in a public
distribution prior to 180 days after the effective date of the registration
statement relating thereto or such other shorter period of time as the
underwriter may require.
(c) Right to Terminate Registration. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 4.2 prior to the effectiveness of such registration whether or not any
Holder has elected to include securities in such registration.
4.3 Form S-3 Registration. After its initial public offering, the
Company shall use its best efforts to qualify for registration on Form S-3 or
any comparable or successor form or forms. After the Company has qualified for
the use of Form S-3, in addition to the rights contained in the foregoing
provisions of this Section 4, the Holders of Registrable Securities shall have
the right to request registrations on Form S-3 (such requests shall be in
writing and shall state the number of shares of Registrable Securities to be
disposed of and the intended methods of disposition of such
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shares by such Holder or Holders). In case the Company shall receive from a
Holder or Holders a written request that the Company effect a registration on
Form S-3 and any related qualification or compliance with respect to Registrable
Securities owned by such Holder or Holders, the Company shall:
(a) promptly give written notice of the proposed registration, and
any related qualification or compliance, to all other Holders; and
(b) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Holder's or
Holders' Registrable Securities as are specified in such request together with
all or such portion of the Registrable Securities or any other Holder of Holders
joining in such request as are specified in a written request given within 20
days after receipt of such written notice from the Company; provided, however,
that the Company shall not be obligated to effect any such registration,
qualification, or compliance pursuant to this Section 4.3: (i) if Form S-3 is
not available for such offering by the Holders; (ii) if the Company shall
furnish to the Holders a certificate signed by the president of the Company
stating that in the good faith judgment of the board of directors of the
Company, it would be seriously detrimental to the Company and its stockholders
for such Form S-3 registration to be effected at such time, in which event the
Company shall have the right to defer the filing of the Form S-3 registration
statement for a period of not more than 120 days after receipt of the initiating
request of the Holder or Holders under this Section 4.3; provided, however, that
the Company shall not utilize this right more than once in any twelve-month
period; (iii) if the Company has, within the six-month period preceding the date
of such request, already effected a registration on Form S-3 for any Holders
pursuant to this Section 4.3 or already effected a total of four (4)
registrations on Form S-3 pursuant to this Section 4.3; (iv) if the anticipated
aggregate offering price of the Registrable Securities to be included in such
registration, net of underwriting discounts and commissions, would be less than
$1,000,000; or (v) in any jurisdiction in which the Company would be required to
execute a general consent to service of process in effecting such registration,
qualification or compliance unless the Company is already subject to service in
such jurisdiction and except as may be required by the Securities Act.
Subject to the foregoing, the Company shall effect such registration,
qualification, or compliance (including, without limitation, the execution of an
undertaking to file post-effective amendments, appropriate qualification under
applicable blue sky or other state securities laws and appropriate compliance
with applicable regulations issued under the Securities Act and any other
governmental requirements or regulations) covering the Registrable Securities
and other securities so requested to be registered as soon as practicable after
receipt of the request or requests of the Holder. Registrations effected
pursuant to this Section 4.3 shall not be counted as demands for registration or
registrations effected pursuant to Sections 4.1 or 4.2.
If the registration to be effected pursuant to this Section 4.3 is to
be an underwritten public offering, it shall be managed by an underwriter or
underwriters acceptable to Company selected by a majority in interest of the
Holders requesting registration. In such event, the right of any Holder to
registration pursuant to Section 4.3 shall be conditioned upon the participation
by such
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<PAGE> 15
Holder in such underwriting and the inclusion of the Registrable Securities of
such Holder in the underwriting to the extent provided herein. It the managing
underwriter so selected determines that marketing factors require a limitation
of the number of shares to be underwritten, the managing underwriter may limit
the Registrable Securities held by such Holders to be included in such
registration. The Company shall so advise such Holders, and the number of shares
of Registrable Securities that may be included in the registration shall be
allocated among such Holders in proportion to the respective amounts of
Registrable Securities which would be held by each of such Holders at the time
of filing of the registration statement. Any Registrable Securities that are so
excluded from the underwriting shall be excluded from the registration. As used
throughout this Section the term "Form S-3" shall be deemed to include any
equivalent successor form for registration pursuant to the Act.
4.4 Expenses of Registration. All Registration Expenses incurred in
connection with the registration, qualification or compliance pursuant to
Sections 4.1, 4.2 and 4.3 shall be borne by the Company; provided, however, that
the Company shall not be required to pay for expenses of any registration
proceeding begun pursuant to Section 4.1, the request of which has been
subsequently withdrawn by the Initiating Holders, in which case such expenses
shall be borne by the Holders of securities (including Registrable Securities)
pro rata in accordance with the number of shares initially sought to be
registered requesting or causing such withdrawal. All Selling Expenses relating
to securities so registered shall be borne by the holders of such securities pro
rata on the basis of the number of shares of securities so registered on their
behalf.
4.5 Registration Procedures. If and whenever the Company is required by
the provisions of this Section 4 to use its most diligent efforts to effect
promptly the registration of Registrable Securities, the Company shall:
(a) Prepare and file with the Commission a registration statement
with respect to such Registrable Securities and use its most diligent efforts to
cause such registration statement to become and remain effective as provided
herein.
(b) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
current and to comply with the provisions of the Securities Act with respect to
the sale of or other disposition of all Registrable Securities covered by such
registration statement, including such amendments and supplements as may be
necessary to reflect the intended method of disposition of the prospective
seller or sellers of such Registrable Securities, but for no longer than one
hundred eighty (180) days subsequent to the effective date of such registration
in the case of a registration statement on Form S-1 (or any similar form of
registration statement required to set forth substantially identical
information) and for no longer than one hundred twenty (120) days in the case of
a registration statement on Form S-3; provided, however, that (i) such period
shall be extended for a period of time equal to the period the Holder refrains
from selling any securities included in such registration at the request of an
underwriter of Common Stock (or other securities) of the Company; and (ii) in
the case of any registration of Registrable Securities on Form S-3 which are
intended to be offered on a continuous or delayed
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<PAGE> 16
basis, such period shall be extended, if necessary, to keep the registration
statement effective until all such Registrable Securities are sold, provided
that Rule 415 permits an offering on a continuous or delayed basis, and provided
further that applicable rules under the Securities Act governing the obligation
to file a post-effective amendment permit, in lieu of filing a post-effective
amendment that (I) includes any prospectus required by Section 10(a)(3) of the
Securities Act or (II) reflects facts or events representing a material or
fundamental change in the information set forth in the registration statement,
the incorporation by reference of information required to be included in (I) and
(II) above to be contained in periodic reports filed pursuant to Section 13 or
15(d) of the Exchange Act in the registration statement.
(c) Furnish to each prospective seller of Registrable Securities
such number of copies of a prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other
documents, as such seller may reasonably request in order to facilitate the
public sale or other disposition of the Registrable Securities of such seller.
(d) Notify each seller of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or incomplete in the light of the
circumstances then existing, and at the request of any such seller, prepare and
furnish to such seller a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such shares, such prospectus shall not include an
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 not misleading or
incomplete in the light of the circumstances then existing.
(e) Cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange or approved for quotation on
any inter-dealer quotation system on which similar securities issued by the
Company are then listed or quoted.
(f) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant to such registration statement and a CUSIP number
of all such Registrable Securities, in each case not later than the effective
date of such registration.
(g) Otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering the
period of at least twelve months, but not more than eighteen months, beginning
with the first month after the effective date of the registration statement,
which earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act.
(h) In connection with any underwritten offering pursuant to a
registration statement filed pursuant to Section 4.1 hereof, the Company will
enter into an underwriting agreement reasonably necessary to effect the offer
and sale of Common Stock, provided such
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<PAGE> 17
underwriting agreement contains customary underwriting provisions and provided
further that if the underwriter so requests the underwriting agreement will
contain customary contribution provisions.
4.6 Indemnification. In the event any of the Registrable Securities are
included in a registration statement under this Section 4:
(a) The Company will indemnify each Holder, each of its officers
and directors and partners and such Holder's separate legal counsel and
independent accountants, and each person controlling such Holder within the
meaning of Section 15 of the Securities Act; and each underwriter, if any, and
each person who controls any underwriter within the meaning of Section 15 of the
Securities Act, against all expenses, claims, losses, damages or liabilities (or
actions in respect thereof), including any of the foregoing incurred in
settlement of any litigation, commenced or threatened, arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained, on the effective date thereof, in any registration statement, any
prospectus contained therein, or any amendment or supplement thereto, or based
on any omission (or alleged omission) to state therein a material fact required
to be stated therein or necessary to make the statements therein (in the case of
a prospectus, in the light of the circumstances under which they were made) not
misleading, or any violation by the Company of any rule or regulation
promulgated under the Securities Act applicable to the Company in connection
with any such registration, qualification or compliance, and the Company will
reimburse each such Holder, each of its officers and directors and partners and
such Holders' separate legal counsel and independent accountants and each person
controlling such Holder, each such underwriter and each person who controls any
such underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, provided that the Company will not be liable in any
such case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission or alleged untrue
statement or omission, made in reliance upon and in conformity with written
information furnished to the Company by an instrument duly executed by such
Holder or underwriter and stated to be specifically for use therein.
(b) Each Holder, severally and not jointly, will, if Registrable
Securities held by such Holder are included in the securities as to which such
registration, qualification or compliance is being effected, indemnify the
Company, each of its directors and officers and its legal counsel and
independent accountants, each underwriter, if any, of the Company's securities
covered by such a registration statement, each person who controls the Company
or such underwriter within the meaning of Section 15 of the Securities Act; and
each other such Holder, each of its officers and directors and each person
controlling such Holder within the meaning of Section 15 of the Securities Act,
against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained, on the effective date thereof, in any
such registration statement; any prospectus contained therein, or any omission
(or alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein (in the case of a
prospectus, in the light of the circumstances under which they were made) not
misleading, and will reimburse the Company, such Holders, such directors,
officers, persons, underwriters or control persons for any legal or any other
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<PAGE> 18
expenses reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability or action, in each case to the extent, but
only to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement or
prospectus in reliance upon and in conformity with written information furnished
to the Company by an instrument duly executed by such Holder and stated to be
specifically for use therein; provided, however, that the obligations of such
Holders hereunder shall be limited to an amount equal to the net proceeds to
each such Holder of Registrable Securities sold as contemplated herein.
(c) Each party entitled to indemnification under this Section (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Section 4.6 to the extent such failure is not
prejudicial. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation.
(d) If the indemnification provided for in this Section is held by
a court of competent jurisdiction to be unavailable to an Indemnified Party with
respect to any loss, liability, claim, damage or expense referred to herein,
then the Indemnifying Party, in lieu of indemnifying the Indemnified Party,
shall contribute to the amount paid or payable by such Indemnified Party with
respect to such loss, liability, claim, damage or expense in the proportion that
is appropriate to reflect the relative fault of the Indemnifying Party and the
Indemnified Party in connection with the statements or omissions that resulted
in such loss, liability, claim, damage or expense, as well as any other relevant
equitable considerations. The relative fault of the Indemnifying Party and the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of material fact or the omission
(or alleged omission) to state a material fact relates to information supplied
by the Indemnifying Party or by the Indemnified Party, and the parties' relative
intent; knowledge, access to information and opportunity to correct or prevent
such statement or omission.
4.7 Information by Holder. The Holder or Holders of Registrable
Securities included in any registration shall furnish to the Company such
information regarding such Holder or Holders and the distribution proposed by
such Holder or Holders as the Company may reasonably request in writing and as
shall be required in connection with any registration, qualification or
compliance referred to in this Section.
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<PAGE> 19
4.8 Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time permit the
sale of the Restricted Securities to the public without registration, after such
time as a public market exists for the Common Stock of the Company, the Company
shall use its best efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, beginning 90 days
after (i) the effective date of the first registration statement filed by the
Company for an offering of its securities to the general public, (ii) the
Company registers a class of securities under Section 12 of the Exchange Act, or
(iii) the Company issues an offering circular meeting the requirements of
Regulation A under the Securities Act;
(b) File with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements);
(c) Furnish to any Holder promptly upon request a written statement
as to its compliance with the reporting requirements of Rule 144 (at any time
after 90 days after the effective date of the first registration statement filed
by the Company for an offering of its securities to the general public), and of
the Securities Act and the Exchange Act (at any time after it has become subject
to such reporting requirements), a copy of the most recent annual or quarterly
report of the Company, and such other reports and documents of the Company and
other information in the possession of or reasonably obtainable by the Company
as a Holder may reasonably request in availing itself of any rule or regulation
of the Commission allowing a Holder to sell any such securities without
registration.
4.9 Assignment of Registration Rights. The rights to cause the Company
to register securities granted under this Section 4 may be assigned to a
transferee or assignee in connection with the transfer or assignment of shares
of Registrable Securities only if (i) such shares represent at least 1% of the
outstanding shares of the Company's capital stock (assuming conversion of all
issued and outstanding shares of Preferred Shares to Common Stock) on the date
of such assignment, or (ii) the transfer of such shares occurs in a distribution
from a Purchaser which is a partnership to a partner thereof.
4.10 Grant of Additional Registration Rights. The Company will not
grant registration rights which are superior to or on parity with the
registration rights granted under this Agreement without the written consent of
the holders of a majority of the Registrable Securities.
4.11 Amendment of Registration Rights. The registration rights provided
in this Section may be amended with the written consent of the Company and the
holders of a majority of the Registrable Securities. Any amendment effected in
accordance with this Section 4.11 shall be binding upon each Holder and the
Company.
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<PAGE> 20
5. Right of Co-Sale and Prohibited Transfers.
5.1 Right of Co-Sale. In the event that (x) the Preferred Holders do
not purchase pursuant to Section 2.3(a) all of the Restricted Founders Shares
which an Offeree Holder proposed to sell, assign or transfer, and (y) the
Purchase Offer will result in (1) the transfer of 25,000 or more shares of
Common Stock by such Offeree Holder or (2) the transferee of such shares holding
more than 50% of the Common Stock, each of the Preferred Holders shall have the
right, exercisable upon written notice to the Offeree Holder within 30 business
days after receipt of the Notice of the Purchase Offer, to participate in the
Offeree Holder's sale of Restricted Founders Shares pursuant to the specified
terms and conditions of such Purchase Offer. To the extent one or more of the
Preferred Holders exercise such right of participation, in accordance with the
terms and conditions hereof, the number of shares of Restricted Founders Shares
which the Offeree Holder may sell pursuant to such Purchase Offer shall be
correspondingly reduced. The right of participation of each of the Preferred
Holders shall be subject to the following terms and conditions:
(a) Each of the Preferred Holders may sell all or any part of that
number of shares of Common Stock equal to the product obtained by multiplying
(1) the aggregate number of shares of Restricted Founders Shares covered by the
Purchase Offer by (2) a fraction, the numerator of which is the number of shares
of Common Stock at the time owned by such Preferred Holder computed in
accordance with Section 5.1(g) below) and the denominator of which is the
aggregate number of shares of Common Stock (computed in accordance with Section
5.1(g) below) at the time owned by the Common Holders and the Preferred Holders.
(b) To the extent that any Preferred Holder fails to elect to fully
participate in such sale pursuant to subparagraph (a) above, the Offeree Holder
shall give written notice of such failure to the Preferred Holders who did so
elect (the "Participants") within five (5) days after such failure. The
Participants shall have five (5) days from the date such notice was given to
agree to sell their pro rata share of the unsold portion. For purposes of this
paragraph, a Participant's pro rata share shall be equal to the product obtained
by multiplying (1) the number of shares in the unsold portion by (2) a fraction
the numerator of which is the number of shares of Common Stock held by such
Participant (computed in accordance with Section 5.1(g) below) and the
denominator of which is the total number of shares of Common Stock held by the
Participants and the Offeree Holder (computed in accordance with Section 5.1(g)
below).
(c) Each Participant shall effect its participation in the sale by
promptly delivering to the Offeree Holder for transfer to the prospective
purchaser one or more certificates, properly endorsed for transfer, which
represent:
(i) the type and number of shares of Common Stock which such
Participant elects to sell; or
(ii) that number of convertible securities of the Company,
which is at such time convertible into the number of shares of Common Stock
which such Participant elects to sell; provided, however, that if the
prospective purchaser objects to the delivery of convertible securities of the
Company in lieu of Common Stock, such Participant shall convert such convertible
securities
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<PAGE> 21
into Common Stock and deliver Common Stock as provided in subparagraph (i)
above. The Company agrees to make any such conversion concurrent with the actual
transfer of such shares to the purchaser.
(d) The stock certificate or certificates that the Participant
delivers to the Offeree Holder pursuant to Section 5.1(c) above shall be
transferred to the prospective purchaser in consummation of the sale of
Restricted Founders Shares pursuant to the terms and conditions specified in the
Notice, and the Offeree Holder shall concurrently therewith remit to such
Participant that portion of the sale proceeds to which such Participant is
entitled by reason of its participation in such sale. To the extent that any
prospective purchaser or purchasers prohibits such assignment or otherwise
refuses to purchase shares or other securities from a Participant exercising its
right of co-sale hereunder, the Offeree Holder shall not sell to such
prospective purchaser or purchasers any Restricted Founders Shares unless and
until, simultaneously with such sale, the Offeree Holder shall purchase such
number of shares of Common Stock or other securities which each Participant
would have been able to sell under Section 5.1(a) from such Participant.
(e) The exercise or non-exercise of the rights of the Participants
hereunder to participate in one or more sales of Restricted Founders Shares made
by the Offeree Holders shall not adversely affect their rights to participate in
subsequent sales of Restricted Founders Shares subject to this Section 5.1.
(f) If none of the Preferred Holders elects to participate in the
sale of the Restricted Founders Shares subject to the Notice, the Offeree Holder
may, not later than sixty (60) days following delivery to the Company and each
of the Preferred Holders of the Notice, enter into an agreement providing for
the closing of the transfer of the Restricted Founders Shares covered by the
Notice within thirty (30) days of such agreement on terms and conditions not
more favorable than those described in the Notice. Any subsequent proposed
transfer of any of the Restricted Founders Shares by the Offeree Holder shall
again be subject to the co-sale rights of the Preferred Holders and shall
require compliance by the Offeree Holder with the procedures described in this
Section 5.1.
(g) For purposes of any calculation of the number of shares of
Common Stock outstanding under this Section 5.1, and with respect to any
numerator or denominator provided herein, the conversion of all securities
convertible into or exchangeable for Common Stock and the exercise of all
outstanding options (other than options granted pursuant to the Company's 1995
Stock Option Plan) and warrants shall be assumed.
5.2 Prohibited Transfers.
(a) In the event an Offeree Holder should sell any Restricted
Founders Shares in contravention of the co-sale rights of the Preferred Holders
under Section 5.1 of this Agreement (a "Prohibited Transfer"), each Preferred
Holder, in addition to such other remedies as may be available at law, in equity
or hereunder, shall have the put option provided below, and the Offeree Holder
shall be bound by the applicable provisions of such option.
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(b) In the event of a Prohibited Transfer, each Preferred Holder
shall have the right to sell to the Offeree Holder the type and number of shares
of Common Stock equal to the number of shares each Preferred Holder would have
been entitled to transfer to the transferee had the Prohibited Transfer under
Section 5.1 hereof been effected pursuant to and in compliance with the terms
hereof. such sale shall be made on the following terms and conditions.
(i) The price per share at which the shares are to be sold to
the Offeree Holder shall be equal to the price per share paid by the transferee
to the Offeree Holder in the prohibited Transfer. The Offeree Holder shall also
reimburse each Preferred Holder for any and all fees and expenses, including
legal fees and expenses incurred pursuant to the exercise or the attempted
exercise of the Preferred Holder rights under Section 5.1
(ii) Within 90 days after the later of the dates on which the
Preferred Holder (A) receives notice of the prohibited Transfer or (B) otherwise
became aware of the Prohibited Transfer, each Preferred Holder shall, if
exercising the option created hereby, deliver to the Offeree Holder the
certificate or certificates representing share to be sold, each certificate to
be properly endorsed for transfer.
(iii) The Offeree Holder shall, upon receipt of the certificate
or certificates for the share to be sold by a Preferred Holder, pursuant to this
Section 5.2(b), pay the aggregate purchase price therefor and the amount of
reimbursable fees and expenses, as specified in Section 5.2(b)(i), in cash or by
other means acceptable to the Preferred Holder.
(iv) Notwithstanding the foregoing, any attempt by an Offeree
Holder to transfer Restricted Founders Shares in violation of Section 5.1 hereof
shall be void and the Company will not effect such a transfer nor will it treat
any alleged transferee as the holder of such shares without written consent of a
majority in interest of the Preferred Holders.
6. Restrictive Legends and Restrictions on Transfer.
6.1 Restrictive Legends.
(a) Each certificate representing shares of Common Stock and
Preferred Stock or any other securities issued in respect of such Common Stock
and Preferred Stock upon any stock split, stock dividend, recapitalization,
merger, consolidation, or similar event, shall (unless otherwise permitted by
the provisions of Section 6.2 be stamped or otherwise imprinted with legends in
substantially the following form (in addition to any legend required under
applicable state securities laws) now or hereafter owned by the Common Holders
or Preferred Holders shall be endorsed with the following legends:
THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS
OF A CERTAIN AMENDED AND RESTATED STOCKHOLDER RIGHTS AGREEMENT BY AND
BETWEEN THE CORPORATION AND THE STOCKHOLDERS OF THE CORPORATION.
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<PAGE> 23
COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON REQUEST TO THE SECRETARY
OF THE CORPORATION.
THE SALE AND ISSUANCE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR UNDER THE SECURITIES LAW OF ANY STATE OR OTHER
JURISDICTION. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND
NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE DISTRIBUTION THEREOF.
THESE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED, OR TRANSFERRED
UNLESS A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO THESE
SECURITIES AND SUCH OFFER, SALE, PLEDGE, OR TRANSFER IS IN COMPLIANCE
WITH APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OR
THERE IS AN OPINION OF COUNSEL OR OTHER EVIDENCE, SATISFACTORY TO THE
CORPORATION THAT AN EXEMPTION THEREFROM IS AVAILABLE AND THAT SUCH
OFFER, SALE, PLEDGE, OR TRANSFER IS IN COMPLIANCE WITH APPLICABLE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION.
(b) Each Common Holder and Preferred Holder agrees that the Company
may instruct its transfer agent to impose transfer restrictions on the shares
represented by certificates bearing the legends referred to in Section 6.1(a)
above to enforce the provisions of this Agreement and the Company to promptly do
so. The first legend set forth in Section 6.1(a) shall be removed upon
termination of this Agreement pursuant to Section 7.6(a).
6.2 Permitted Transfers. The Company shall be obligated to reissue
promptly certificates without the second legend set forth in Section 6.1(a) at
the request of any Holder thereof if the holder shall have obtained an opinion
of counsel (which counsel may be counsel to the Company) reasonably acceptable
to the Company to the effect that the securities proposed to be disposed of may
lawfully be so disposed of without registration, qualification or legend. Any
legend endorsed on an instrument pursuant to applicable state securities laws
and the stop-transfer instructions with respect to such securities shall be
removed upon receipt by the Company of an order of the appropriate blue sky
authority authorizing such removal.
6.3 Notice of Proposed Transfers.
(a) Prior to any proposed transfer of any Restricted Securities,
unless there is in effect a registration statement under the Securities Act
covering the proposed transfer, the Holder or Common Holder thereof shall give
written notice (the "Notice") to the Company of such Holder's or Common Holder's
intention to make such transfer. If reasonably requested by the Company prior to
the transfer being effected, the Holder or Common Holder shall provide to the
Company a written opinion of legal counsel who shall be reasonably satisfactory
to the Company, addressed to the Company and reasonably satisfactory in form and
substance to the Company's counsel, to the effect that the proposed transfer of
the Restricted Securities may be effected without registration under the
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Securities Act. It is agreed that the Company will not require opinions of
counsel for transactions made pursuant to Rule 144 under the Securities Act
except in unusual circumstances. Notwithstanding the foregoing provisions of
this paragraph, no such registration statement or opinion of counsel shall be
necessary for a transfer by a holder which is (i) a partnership to its partners
or retired partners in accordance with partnership interests, or (ii) an
individual to a family member or trust for the benefit of such Holder, Common
Holder or a family member, provided the transferee will be subject to the terms
of this Section 6.3 to the same extent as if he were an original Holder or
Common Holder hereunder. Each certificate evidencing the Restricted Securities
so transferred shall bear the appropriate restrictive legends set forth in
Section 6.1, except that such certificate shall not bear the second restrictive
legend set forth in Section 6.1(a) if in the opinion of counsel for the Company
such legend is not required in order to establish compliance with any provisions
of the securities laws.
(b) Each Holder and Common Holder consents to the Company making a
notation on its records and giving instructions to any transfer agent of the
Restricted Securities in order to implement the restrictions on transfer
described in this Section.
7. Information Rights.
7.1 Financial Information. The Company will furnish the following to
each Holder (or its representative) which, alone or together with entities
affiliated with such Holder, in the aggregate, owns at least 500,000 Restricted
Preferred Shares and to each Holder which represents that it is a "venture
capital operating company" for purposes of Department of Labor Regulation
Section 2510.3-101 and who requests them (in each case, a "Significant Holder"):
(i) as soon as practicable within 30 days after the end of each
month, an unaudited monthly statement of operations, statement of cash flows and
balance sheet, in each case prepared on a consolidated basis for the Company.
The monthly financial statements shall include comparisons to budget;
(ii) as soon as practicable after the end of each fiscal
quarter, and in any event within 45 days thereafter, statements of operations
and statements of cash flows for such fiscal quarter, balance sheets of the
Company as of the end of such fiscal quarter, in each case prepared on a
consolidated basis for the Company; and
(iii) as soon as practicable after the end of each fiscal year,
and in any event within 90 days thereafter, statements of operations and
statements of cash flows for such fiscal year, balance sheets of the Company as
of the end of such fiscal year, all certified by independent public accountants
of recognized national standing selected by the Company.
All financial statements provided for above shall be prepared in
accordance with general accepted accounting principles applied on a consistent
basis (except that such unaudited financial statements may be prepared without
footnotes and will be subject to normal year-end audit adjustments).
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Each Significant Holder agrees that any information obtained by such
Significant Holder pursuant to this Section 7.1 which may be proprietary to the
Company or otherwise confidential shall not be disclosed without the prior
written consent of the Company; provided, however, that Chancellor LGT Asset
Management, Inc. may cause any information to be disclosed to Citiventure III
and to KME Venture III, L.P., each of which shall be bound by the
confidentiality provisions hereof. Each Significant Holder further acknowledges
and understands that any information so obtained which may be considered
"inside" non-public information will not be utilized by such Significant Holder
in connection with purchases and/or sales of the Company's securities except in
compliance with applicable state and federal antifraud statutes.
7.2 Additional Information and Rights.
(a) The Company will permit any Significant Holder to visit and
inspect any of the properties of the Company, including its books of account and
other records (and make copies thereof and take extracts therefrom), and to
discuss its affairs, finances and accounts with the Company's officers and its
independent public accountants, all at such reasonable times and as often as
such person may reasonably request.
(b) The Company will deliver the reports described below in this
Section 7.2(b) to each Significant Holder:
(i) Annually (but in any event at least thirty (30) days prior
to the commencement of each fiscal year of the Company) the annual budget of the
Company, in such manner and form as approved by the Board of Directors of the
Company, which annual budget shall include a projection of income and a
projected cash flow statement for such fiscal year and a projected balance sheet
as of the end of such fiscal year. Any material changes in such annual budget
shall be submitted as promptly as practicable after such changes have been
approved by the Board of Directors of the Company.
(ii) With reasonable promptness, such other information and
data with respect to the Company and its subsidiaries as any such person may
from time to time reasonably request.
(c) Each Holder who represents to the Company that it is a "venture
capital operating company" for purposes of Department of Labor Regulation
Section 2510.3-101 shall have the right to consult with and advise the officers
of the Company as to the management of the Company.
(d) The provisions of Section 7.1 and this Section 7.2 shall not be
in limitation of any rights which any stockholder may have with respect to the
books and records of the Company and its subsidiaries, or to inspect their
properties or discuss their affairs, finances and accounts, under the laws of
the jurisdictions in which the Company is incorporated.
(e) Anything in this Section 7 to the contrary notwithstanding, no
Significant Holder by reason of this Agreement shall have access to any trade
secrets or classified information
-23-
<PAGE> 26
of the Company. Each Significant Holder hereby agrees to hold in confidence and
trust and not to misuse or disclose any confidential information provided
pursuant to this Section 7.2 (it being understood that Chancellor LGT Asset
Management, Inc., may cause any information provided to it to be disclosed to
Citiventure III and to KME Venture III, L.P., each of which shall be bound by
the confidentiality provisions hereof. Each Significant Holder shall notify the
Company in writing (which notice shall be delivered no less frequently than
annually) of such Significant Holder's ownership of any securities of entities
which such Significant Holder reasonably determines to be a competitor of the
Company.
8. Voting and Other Covenants.
8.1 Agreement to Vote. Each of the holders of Preferred Stock (and
their permitted assigns) and each of the Stockholders holding Common Stock (and
their permitted assigns) hereby agrees to vote all shares of the Company's
Preferred Stock or Common Stock now or hereafter owned by it, whether
beneficially or otherwise, at any regular or special meeting of stockholders of
the Company, or, in lieu of any such meeting, to give their written consent, as
provided in this Section 8.
8.2 Voting Events. If there shall be submitted to the stockholders of
the Company any proposal concerning the election or removal of directors of the
Company, then each of the holders of Preferred Stock (and their permitted
assigns) and each of the Stockholders holding Common Stock (and their permitted
assigns) shall vote or act with respect to all shares of Preferred Stock or
Common Stock so as to elect to the board of directors of the Company, as the two
directors to be elected by the holders of Series A Preferred Stock and Series B
Preferred Stock, as the three directors to be elected by the holders of Series C
Preferred Stock and as two of the three directors to be elected by the holders
of Preferred Stock and Common Stock in accordance with Section 3(b) of Article V
of the Company's Amended and Restated Certificate of Incorporation, the
designees specified in Section 8.3 hereof.
8.3 Designation and Election of Directors.
(a) So long as any shares of Series A Preferred Stock or Series B
Preferred Stock shall be outstanding, the holders of Series A Preferred Stock
and the holders of Series B Preferred Stock, voting together, shall together
have the right to designate two directors for election to the Company's board of
directors in accordance with the provisions of this Section 8. The designation
made in accordance with the preceding sentence shall be made by the holders of a
majority of the issued and outstanding shares of Series A Preferred Stock and
Series B Preferred Stock.
(b) So long as any shares of Series C Preferred Stock shall be
outstanding, the holders of Series C Preferred Stock shall have the right to
designate three directors (the "Series C Directors") for election to the
Company's board of directors in accordance with the provisions of this Section
8. So long as Schroder Ventures International Life Sciences Fund L.P. 1,
together with its affiliates (collectively, "Schroder"), holds at least
2,013,966 shares of Series C Preferred Stock, (as adjusted to reflect stock
dividends, splits, combinations and other recapitalizations), the designation of
one of the Series C Directors shall be made by Schroder. In the event Schroder
holds less than
-24-
<PAGE> 27
2,013,966 shares of Series C Preferred Stock, (as adjusted to reflect stock
dividends, splits, combinations and other recapitalizations), the designation
made in accordance with the preceding sentence shall be made by the holders of a
majority of the issued and outstanding shares of Series C Preferred Stock. So
long as International BM Biomedicine Holdings, Inc., together with its
affiliates (collectively, "Biomedicine"), holds at least 2,209,945 shares of
Series C Preferred Stock, (as adjusted to reflect stock dividends, splits,
combinations and other recapitalizations), the designation of one of the Series
C Directors shall be made by Biomedicine. In the event Biomedicine holds less
than 2,209,945 shares of Series C Preferred Stock, , (as adjusted to reflect
stock dividends, splits, combinations and other recapitalizations), the
designation made in accordance with the preceding sentence shall be made by the
holders of a majority of the issued and outstanding shares of Series C Preferred
Stock. So long as Sprout Capital VII, L.P., together with its affiliates
(collectively, "Sprout"), holds at least 3,020,952 shares of Series C Preferred
Stock, , (as adjusted to reflect stock dividends, splits, combinations and other
recapitalizations), the designation of one of the Series C Directors shall be
made by Sprout. In the event Sprout holds less than 3,020,952 shares of Series C
Preferred Stock, , (as adjusted to reflect stock dividends, splits, combinations
and other recapitalizations), the designation made in accordance with the
preceding sentence shall be made by the holders of a majority of the issued and
outstanding shares of Series C Preferred Stock.
(c) During the term of this Agreement, each of the Stockholders
agrees to vote the shares of Common Stock and Preferred Stock now or hereafter
owned by such Stockholder, whether beneficially or otherwise, so that one of the
directors elected pursuant to the provisions of Article V, Section 3(b) of the
Company's Amended and Restated Certificate of Incorporation by the holders of
Common Stock of the Company and the holders of the Preferred Stock of the
Company, voting together as a class, shall be the Company's Chief Executive
Officer.
(d) During the term of this Agreement, each of the Stockholders
agrees to vote the shares of Common Stock and Preferred Stock now or hereafter
owned by such Stockholder, whether beneficially or otherwise, so that two of the
directors elected pursuant to the provisions of Article V, Section 3(b) of the
Company's Amended and Restated Certificate of Incorporation by the holders of
Common Stock of the Company and the holders of the Preferred Stock of the
Company, voting together as a class, shall be persons who are not affiliates of
the Company or of any of the Company's stockholders and who have experience in
the biotechnology industry.
8.4 Successors in Interest. The provisions of this Section 8 shall be
binding upon the successors in interest of any of the shares of the Preferred
Stock or any of the shares of Common Stock held by Stockholders. The Company
shall not permit the transfer of any shares of Preferred Stock or any shares of
Common Stock held by a Stockholder on its books or issue a new certificate
representing any shares of Preferred Stock or Common Stock held by a Stockholder
unless and until the person to whom such security is transferred shall have
executed a written agreement pursuant to which such person becomes subject to
the provisions of this Section 8 and agrees to be bound by all the provisions
hereof.
8.5 Conversion Stock. The provisions of Section 8.3(a) and Section
8.3(b) shall not apply to any shares of Common Stock issued or issuable upon
conversion of the Preferred Stock.
-25-
<PAGE> 28
9. Miscellaneous.
9.1 Conditions to Exercise of Rights. Exercise of the Holders' rights
under this Agreement shall be subject to and conditioned upon, and each Holder
and the Company shall use its or his best efforts to assist each Holder in,
compliance with applicable laws.
9.2 Repurchase Agreement. This Agreement is subject to, and shall in no
manner limit the right of the Company to repurchase securities from a Founder at
cost pursuant to any stock restriction agreement or other agreement between the
Company and the Founder.
9.3 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
9.4 Amendment. Any provision may be amended and the observance thereof
may waived (either generally or in a particular instance), only by the written
consent of the Company and Holders holding more than fifty percent (50%) in
interest of the Registrable Securities which are issued or issuable in respect
of Series A Preferred Stock of the Company and Holders holding more than fifty
percent (50%) in interest of the Registrable Securities which are issued or
issuable in respect of Series B Preferred Stock of the Company and Holders
holding more than fifty percent (50%) in interest of the Registrable Securities
which are issued or issuable in respect of Series C Preferred Stock of the
Company; provided, however, that any amendment or waiver of any provisions of
Sections 2 or 5 or 8.3(c) or 8.3(d) also requires the written consent of the
Common Holders holding more than fifty percent (50%) in interest of the
Restricted Founders Shares. Any amendment or waiver effected in accordance with
this paragraph shall be binding upon each Holder, Common Holder, its successors
and assigns, heirs, executors and the Company.
9.5 Assignment of Rights. This Agreement and the rights and obligations
of the parties hereunder shall inure to benefit of and be binding upon, their
respective successors, assigns and legal representatives. The provisions of
Section 4.6 shall also inure to the benefit of each Indemnified Party.
9.6 Term.
(a) Sections 2, 3, 5, 7 and 8 of this Agreement shall terminate
upon the earlier of (i) the closing of a firm commitment underwritten public
offering pursuant to an effective registration statement under the Securities
Act of 1933, as amended, covering the offer and sale of Common Stock for the
account of the Company and/or selling stockholders to the public at such per
share price and resulting in such aggregate net proceeds to the Company and/or
the selling stockholders (after deducting underwriters' discounts and expenses
relating to the issuance) as would result in the automatic conversion of the
Company's Preferred Stock pursuant to the Company's Amended and Restated
Certificate of Incorporation, and (ii) the closing of the sale of all or
substantially all of the Company's assets or the acquisition of the Company by
another entity by means of merger or consolidation resulting in the exchange of
the outstanding shares of the Company's capital stock for securities or
consideration issued, or caused to be issued, by the acquiring entity or by the
acquiring company's parent or subsidiary.
-26-
<PAGE> 29
(b) No Holder shall be entitled to exercise any rights provided for
in Section 4 of this Agreement after five (5) years following a firm commitment
offering of the type described in Section 9.6(a)(i).
9.7 Notices. Unless otherwise stated herein, all notices required or
permitted hereunder shall be in writing and shall be deemed effectively given
upon personal delivery to the party to be notified or five days after deposit in
the United States mail, by registered or certified mail, postage prepaid, or
otherwise delivered by hand, facsimile or messenger and properly addressed to
the party to be notified as set forth on the signature page hereof or at such
other address as such party may designate by ten (10) days' advance written
notice to the other parties hereto.
9.8 Severability. In the event one or more of the provisions of this
Agreement should, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
9.9 Attorney Fees. In the event that any dispute among the parties to
this Agreement should result in litigation, 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.
9.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and enforceable against
the parties actually executing such counterpart, and all of which together shall
constitute one instrument.
9.11 Entire Agreement. This Agreement constitutes the entire agreement
between the parties relative to the specific subject matter hereof. Any previous
agreement among the parties relative to the specific subject matter hereof is
superseded by this Agreement.
9.12 Aggregation of Stock. All Shares held or acquired by affiliated
entities or persons shall be aggregated together for the purpose of determining
the availability of any rights under this Agreement. For purposes of
aggregation, Citiventure III and KME Venture III, L.P. shall be considered
affiliates of each other.
-27-
<PAGE> 30
The foregoing Fourth Amended and Restated Stockholder Rights Agreement
is hereby executed as of the date first above written.
ALLOS THERAPEUTICS, INC.
By: /s/ Stephen Hoffman
----------------------------------------
Title: President
-------------------------------------
Address: 7000 North Broadway
Suite 400
Denver, CO 80221
<PAGE> 31
ABINGWORTH BIOVENTURES SICAV
By: /s/ M.-Rose Doch /s/ Fernand Heim
-----------------------------------
Director Mandatory
Abingworth Bioventures SICAV
Address: 231 Valdes Bons Malades
Kirchberg 2121
Luxembourg
ALLOS THERAPEUTICS, INC.
FOURTH AMENDED AND RESTATED STOCKHOLDER RIGHTS AGREEMENT
<PAGE> 32
/s/ Donald J. Abraham
- --------------------------------------
Donald J. Abraham
NANCY W. ABRAHAM, TRUSTEE,
U/A 12-14-94
By: /s/ Nancy W. Abraham
-----------------------------------
Title: Trustee
--------------------------------
Address: 3511 Buckhead Rd.
Midlothian, VA 23113
ALLOS THERAPEUTICS, INC.
FOURTH AMENDED AND RESTATED STOCKHOLDER RIGHTS AGREEMENT
<PAGE> 33
/s/ Stephen J. Hoffman
- --------------------------------------
Stephen J. Hoffman
Address: 7000 North Broadway
Suite 400
Denver, CO 80221
ALLOS THERAPEUTICS, INC.
FOURTH AMENDED AND RESTATED STOCKHOLDER RIGHTS AGREEMENT
<PAGE> 34
A. P. INVESTMENT CORPORATION
/s/ James B. Farinholt, Jr.
- --------------------------------------
James B. Farinholt, Jr.
Title: President
--------------------------------
Address: Westham Green #77
300 North Ridge Road
Richmond, VA 23229
ALLOS THERAPEUTICS, INC.
FOURTH AMENDED AND RESTATED STOCKHOLDER RIGHTS AGREEMENT
<PAGE> 35
VIRGINIA COMMONWEALTH UNIVERSITY
INTELLECTUAL PROPERTY FOUNDATION
By: /s/ Richard C. Franson
-----------------------------------
Title: President VCU-IPF, Director,
Office of Technology Transfer
--------------------------------
Address: Director of Technology Transfer
Virginia Commonwealth University
P.O. Box 980568
Richmond, VA 23298-0568
ALLOS THERAPEUTICS, INC.
FOURTH AMENDED AND RESTATED STOCKHOLDER RIGHTS AGREEMENT
<PAGE> 36
DRAKE & CO FOR THE ACCOUNT OF CITIVENTURE III
By: /s/ Michael Going
-----------------------------------
its
KME VENTURE III, L.P.
BY: INVESCO Private Capital Inc.
as investment manager and
attorney-in-fact
By: /s/ Paing Saxeva
-----------------------------------
Paing Saxeva, Managing Director
Address: INVESCO Private Capital, Inc.
1166 Avenue of the Americas
New York, NY 10036
Attn: Mark Radovanovich
ALLOS THERAPEUTICS, INC.
FOURTH AMENDED AND RESTATED STOCKHOLDER RIGHTS AGREEMENT
<PAGE> 37
JOHNSON & JOHNSON DEVELOPMENT
CORPORATION
By: /s/ Ting Pau Oei
-----------------------------------
Title: Vice President
--------------------------------
Address: 1 Johnson & Johnson Plaza
New Brunswick, NJ 08933
ALLOS THERAPEUTICS, INC.
FOURTH AMENDED AND RESTATED STOCKHOLDER RIGHTS AGREEMENT
<PAGE> 38
BAYVIEW INVESTORS, LTD.
By: /s/ [ILLEGIBLE]
-----------------------------------
Title: Authorized Signatory
--------------------------------
Address: 555 California Street, 23rd Floor
San Francisco, CA 94104
ALLOS THERAPEUTICS, INC.
FOURTH AMENDED AND RESTATED STOCKHOLDER RIGHTS AGREEMENT
<PAGE> 39
MARQUETTE VENTURE PARTNERS II, L.P.
By: MARQUETTE GENERAL II, its General Partner
By: /s/ James E. Daverman
-----------------------------------
James E. Daverman or Lloyd D. Ruth
Authorized Signatory
MVP II AFFILIATES FUND, L.P.
By: MARQUETTE GENERAL II, its General Partner
By: /s/ James E. Daverman
-----------------------------------
James E. Daverman or Lloyd D. Ruth
Authorized Signatory
Address: 520 Lake Cook Road
Suite 450
Deerfield, IL 60015
ALLOS THERAPEUTICS, INC.
FOURTH AMENDED AND RESTATED STOCKHOLDER RIGHTS AGREEMENT
<PAGE> 40
SCHRODER VENTURES INTERNATIONAL LIFE SCIENCES FUND L.P. 1
By: SCHRODER VENTURE MANAGERS INC., its General Partner
By: /s/ Nicola Lawson /s/ Deborah Speight
---------------------------------------
Name: Nicola Lawson Deborah Speight
-------------------------------------
Title: Directors and V.P.s
------------------------------------
SCHRODER VENTURES INTERNATIONAL LIFE SCIENCES FUND L.P. 2
By: SCHRODER VENTURE MANAGERS INC., its General Partner
By: /s/ Nicola Lawson /s/ Deborah Speight
---------------------------------------
Name: Nicola Lawson Deborah Speight
-------------------------------------
Title: Directors and V.P.s
------------------------------------
Address: Schroders Inc.
787 Seventh Avenue, 34th Floor
New York, New York 10019
SCHRODER VENTURES INTERNATIONAL LIFE SCIENCES TRUST
By: CODAN TRUST COMPANY LIMITED, as Trustee
By: SCHRODER VENTURE MANAGERS LIMITED, as Attorney-in-Fact
By: /s/ Nicola Lawson /s/ Deborah Speight
---------------------------------------
Name: Nicola Lawson Deborah Speight
-------------------------------------
Title: Directors
--------------------------------
SCHRODER VENTURE MANAGERS LIMITED, as Manager of the Co-Investment Scheme
By: /s/ Nicola Lawson /s/ Deborah Speight
---------------------------------------
Name: Nicola Lawson Deborah Speight
-------------------------------------
Title: Directors
--------------------------------
Address: Schroders (Bermuda) Limited
22 Church Street
Hamilton HM 11
Bermuda
ALLOS THERAPEUTICS, INC.
FOURTH AMENDED AND RESTATED STOCKHOLDER RIGHTS AGREEMENT
<PAGE> 41
DLJ CAPITAL CORP.
By: /s/ Philippe Chambon
-----------------------------------
Philippe Chambon
Its: Attorney In Fact
DLJ ESC II, L.P.
By: DLJ LBO Plans Management Corporation
Its: Manager
By: /s/ Philippe Chambon
-----------------------------------
Philippe Chambon
Its: Attorney In Fact
SPROUT CAPITAL VII, L.P.
By: DLJ CAPITAL CORP
Its: Managing General Partner
By: /s/ Philippe Chambon
-----------------------------------
Philippe Chambon
Its: Attorney In Fact
THE SPROUT CEO FUND, L.P.
By: DLJ CAPITAL CORP
Its: General Partner
By: /s/ Philippe Chambon
-----------------------------------
Philippe Chambon
Its: Attorney In Fact
Address: 3000 Sand Hill Road
Building 3, Suite 170
Menlo Park, CA 94025
ALLOS THERAPEUTICS, INC.
FOURTH AMENDED AND RESTATED STOCKHOLDER RIGHTS AGREEMENT
<PAGE> 42
SPROUT CAPITAL VIII, L.P.
By: DLJ CAPITAL CORPORATION
Its: Managing General Partner
By: /s/ Philippe Chambon
-----------------------------------
Philippe Chambon
Its: Attorney In Fact
SPROUT VENTURE CAPITAL, L.P.
By: DLJ Capital Corporation
Its: General Partner
By: /s/ Philippe Chambon
-----------------------------------
Philippe Chambon
Its: Attorney In Fact
Address: 3000 Sand Hill Road
Building 3, Suite 170
Menlo Park, CA 94025
ALLOS THERAPEUTICS, INC.
FOURTH AMENDED AND RESTATED STOCKHOLDER RIGHTS AGREEMENT
<PAGE> 43
- --------------------------------------
Paul Baryames
- --------------------------------------
Louis Berneman
/s/ Jon S. Saxe
- --------------------------------------
/s/ Myrna G. Marshall
- --------------------------------------
Jon S. Saxe and Myrna G. Marshall
as joint tenants with right of survivorship
/s/ Jeffrey S. Vender
- --------------------------------------
Jeffrey S. Vender
/s/ John T. Greff
- --------------------------------------
John T. Greff
/s/ Michael J. Gerber
- --------------------------------------
Michael J. Gerber
- --------------------------------------
Matthew Gibbs
/s/ Elizabeth Crump
- --------------------------------------
Elizabeth Crump
- --------------------------------------
Susan Quagliata
ALLOS THERAPEUTICS, INC.
FOURTH AMENDED AND RESTATED STOCKHOLDER RIGHTS AGREEMENT
<PAGE> 44
OAK V AFFILIATES FUND,
LIMITED PARTNERSHIP
By: OAK V AFFILIATES,
its General Partner
By: /s/ Ann H. Lamont
-----------------------------------
Ann H. Lamont, General Partner
Address: One Gorham Island
Westport, CT 06880
OAK INVESTMENT PARTNERS V,
LIMITED PARTNERSHIP
By: OAK ASSOCIATED V, LLC
its General Partner
By: /s/ Ann H. Lamont
-----------------------------------
Ann H. Lamont, Managing Member
Address: One Gorham Island
Westport, CT 06880
ALLOS THERAPEUTICS, INC.
FOURTH AMENDED AND RESTATED STOCKHOLDER RIGHTS AGREEMENT
<PAGE> 45
BIOTECHNOLOGY DEVELOPMENT FUND, L.P.
By: BioAsia Investments, LLC
Its: General Partner
By: /s/ Frank Kung
-----------------------------
Frank Kung
Its: Managing Member
ALLOS THERAPEUTICS, INC.
FOURTH AMENDED AND RESTATED STOCKHOLDER RIGHTS AGREEMENT
<PAGE> 46
SEQUEL LIMITED PARTNERSHIP
By: Sequel Venture Partners L.L.C.
Its: General Partner
By: /s/ Kinney Johnson
-----------------------------
Name:
---------------------------
Its: Manager
SEQUEL EURO LIMITED PARTNERSHIP
By: Sequel Venture Partners L.L.C.
Its: General Partner
By: /s/ Kinney Johnson
-----------------------------
Name:
---------------------------
Its: Manager
Address: 4430 Arapahoe Avenue
Suite 220
Boulder, CO 80303
ALLOS THERAPEUTICS, INC.
FOURTH AMENDED AND RESTATED STOCKHOLDER RIGHTS AGREEMENT
<PAGE> 47
INTERNATIONAL BM BIOMEDICINE HOLDINGS, INC.
By: /s/ G. Blum
-----------------------------
Name: Dr. G. Blum
---------------------------
Its: Chairman of the Board
By: /s/ F. Keiser
-----------------------------
Name: F. Keiser
---------------------------
Its: CEO
ALLOS THERAPEUTICS, INC.
FOURTH AMENDED AND RESTATED STOCKHOLDER RIGHTS AGREEMENT
<PAGE> 48
CALVERT SOCIAL INVESTMENT FUND BALANCED PORTFOLIO
By: /s/ Susan Walker Bender
-----------------------------------
Susan Walker Bender
Title: Assistant Secretary
Address: Calvert Social Investment Fund Balanced Portfolio
4550 Montgomery Ave., Suite 1000N
Bethesda, MD 20814
ATTN: Susan Walker Bender
ALLOS THERAPEUTICS, INC.
FOURTH AMENDED AND RESTATED STOCKHOLDER RIGHTS AGREEMENT
<PAGE> 49
BARBARA PIETTE
/s/ Barbara Piette
- --------------------------------------
Address: 93 Mt. Vernon Street
Boston, MA 02108
ALLOS THERAPEUTICS, INC.
FOURTH AMENDED AND RESTATED STOCKHOLDER RIGHTS AGREEMENT
<PAGE> 50
EXHIBIT A
STOCKHOLDERS TO THE FOURTH AMENDED AND RESTATED STOCKHOLDER
RIGHTS AGREEMENT
<PAGE> 51
EXHIBIT A
Abingworth Bioventures SICAV
Donald J. Abraham
Nancy W. Abraham, Trustee U/A 12-14-94
A. P. Investment Corporation
Center for Innovative Technology, Inc.
Drake & Co for the Account of Citiventure III
KME Venture III, L.P.
Stephen J. Hoffman
Johnson & Johnson Development Corporation
Marquette Venture Partners II, L.P.
MVP II Affiliates Fund, L.P.
Oak V Affiliates Fund, Limited Partnership
Oak Investment Partners V, Limited Partnership
ADDED JUNE 26, 1996, PURSUANT TO AMENDMENT AGREEMENT DATED JUNE 26, 1996:
Paul Baryames
Louis Berneman
Jon S. Saxe and Myrna G. Marshall as joint tenants with right of survivorship
Jeffrey S. Vender
John T. Greff
Michael J. Gerber
Matthew Gibbs
Elizabeth Crump
Susan Quagliata
ALLOS THERAPEUTICS, INC.
FOURTH AMENDED AND RESTATED STOCKHOLDER RIGHTS AGREEMENT
<PAGE> 52
ADDED AUGUST 1, 1996, PURSUANT TO CIT TRANSFER:
Mona Mahran
Ahmed Mehanna
Ramnarayan Randad
Virginia Commonwealth University Intellectual Property Foundation
ADDED SEPTEMBER 4, 1996, PURSUANT TO DONALD ABRAHAM TRANSFER:
Gajanan S. Joshi
ADDED JANUARY 13, 1998, PURSUANT TO SERIES C CONVERTIBLE PREFERRED STOCK
PURCHASE AGREEMENT:
Schroder Ventures International Life Sciences Fund L.P. 1
Schroder Ventures International Life Sciences Fund L.P. 2
Schroder Ventures International Life Sciences Trust
Schroder Venture Managers Limited
DLJ Capital Corp.
DLJ ESC II, L.P.
Sprout Capital VII, L.P.
The Sprout CEO Fund, L.P.
Bayview Investors, Ltd.
Joshua Lederberg
ADDED MAY 4, 1998, PURSUANT TO AMENDMENT AGREEMENT DATED MAY 4, 1998:
Biotechnology Development Fund, L.P.
Biotechnology Development Fund III, L.P.
Sequel Limited Partnership
Sequel Euro Limited Partnership
ADDED MAY 11, 1998, PURSUANT TO TRANSFER FROM STEPHEN J. HOFFMAN
Barbara Dau Southwell
ADDED OCTOBER 4, 1999, PURSUANT TO SERIES C CONVERTIBLE PREFERRED STOCK
PURCHASE AGREEMENT:
International BM Biomedicine Holdings, Inc.
Calvert Social Investment Fund Balanced Portfolio
Barbara Piette
Sprout Capital VIII, L.P.
Sprout Venture Capital, L.P.
ALLOS THERAPEUTICS, INC.
FOURTH AMENDED AND RESTATED STOCKHOLDER RIGHTS AGREEMENT
<PAGE> 1
EXHIBIT 10.11
ALLOS THERAPEUTICS, INC.
1995 STOCK OPTION PLAN
(AS AMENDED EFFECTIVE MAY 7, 1997)
1. Purposes of the Plan. The purposes of this Stock Option Plan are to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees and Consultants of
the Company and any Parent or Subsidiary and to promote the success of the
Company's business. Options granted under the Plan may be Incentive Stock
Options or Nonstatutory Stock Options, as determined by the Administrator at the
time of grant of an option and subject to the applicable provisions of Section
422 of the Code and the regulations promulgated thereunder.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees appointed
pursuant to Section 4 of the Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means a Committee appointed by the Board of Directors
in accordance with Section 4 of the Plan.
(e) "Common Stock" means the Common Stock of the Company.
(f) "Company" means Allos Therapeutics, Inc.
(g) "Consultant" means any person who is engaged by the Company or any
Parent or Subsidiary to render consulting or advisory services and is
compensated for such services, and any director of the Company whether
compensated for such services or not. If and in the event the Company registers
any class of any equity security pursuant to the Exchange Act, the term
Consultant shall thereafter not include directors who are not compensated for
their services or are paid only a director's fee by the Company.
(h) "Continuous Status as an Employee or Consultant" means that the
employment or consulting relationship with the Company, any Parent or Subsidiary
is not interrupted or terminated. Continuous Status as an Employee or Consultant
shall not be considered interrupted in the case of (i) any leave of absence
approved by the Company or (ii) transfers between locations of the Company or
between the Company, its Parent, any Subsidiary, or any successor. A leave of
absence approved by the Company shall include sick leave, military leave, or any
other personal leave. For purposes of Incentive Stock Options, no such leave may
exceed 90 days, unless reemployment upon expiration of such leave is guaranteed
by statute or contract, including Company policies. If
<PAGE> 2
reemployment upon expiration of a leave of absence approved by the Company is
not so guaranteed, on the 181st day of such leave any Incentive Stock Option
held by the Optionee shall cease to be treated as an Incentive Stock Option and
shall be treated for tax purposes as a Nonstatutory Stock Option.
(i) "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code.
(j) "Employee" means any person, including officers and directors,
employed by the Company or any Parent or Subsidiary of the Company. The payment
of a director's fee by the Company shall not be sufficient to constitute
"employment" by the Company.
(k) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(1) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market of the National Association of Securities Dealers, Inc.
Automated Quotation ("Nasdaq") System, its Fair Market Value shall be the
closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or system for the last market trading day
prior to the time of determination, as reported in The Wall Street Journal or
such other source as the Administrator deems reliable;
(ii) If the Common Stock is quoted on the Nasdaq System (but not
on the National Market System thereof) or regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high bid and low asked prices for the Common Stock
on the last market trading day prior to the day of determination; or
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the
Administrator.
(m) "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.
(n) "Nonstatutory Stock Option" means an Option not intended to qualify
as an Incentive Stock Option.
(o) "Option" means a stock option granted pursuant to the Plan.
(p) "Optioned Stock" means the Common Stock subject to an Option.
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<PAGE> 3
(q) "Optionee" means an Employee or Consultant who receives an Option.
(r) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(s) "Plan" means this 1995 Stock Option Plan.
(t) "Section 16(b)" means Section 16(b) of the Securities Exchange Act
of 1934, as amended.
(u) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 11 below.
(v) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 11 of
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 2,250,000 Shares. The Shares may be authorized, but unissued,
or reacquired Common Stock.
If an Option expires or becomes unexercisable without having been
exercised in full, or is surrendered pursuant to an Option Exchange Program, the
unpurchased Shares which were subject thereto shall become available for future
grant or sale under the Plan (unless the Plan has terminated); provided,
however, that Shares that have actually been issued under the Plan shall not be
returned to the Plan and shall not become available for future distribution
under the Plan, except that if unvested Shares are repurchased by the Company at
their original purchase price, and the original purchaser of such Shares did not
receive any benefits of ownership of such Shares, such Shares shall become
available for future grant under the Plan. For purposes of the preceding
sentence, voting rights shall not be considered a benefit of Share ownership.
4. Administration of the Plan.
(a) Initial Plan Procedure. Prior to the date, if any, upon which the
Company becomes subject to the Exchange Act, the Plan shall be administered by
the Board or a committee appointed by the Board.
(b) Plan Procedure after the Date, if any, upon Which the Company
becomes Subject to the Exchange Act.
(i) Administration With Respect to Directors and Officers Subject
to Section 16(b). With respect to Option grants made to Employees who are also
Officers or Directors subject to Section 16(b) of the Exchange Act, the Plan
shall be administered by (A) the Board, if the Board may administer the Plan in
a manner complying with the rules under Rule 16b-3 relating to the
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<PAGE> 4
disinterested administration of employee benefit plans under which Section 16(b)
exempt discretionary grants and awards of equity securities are to be made, or
(B) a committee designated by the Board to administer the Plan, which committee
shall be constituted to comply with the rules under Rule 16b-3 relating to the
disinterested administration of employee benefit plans under which Section 16(b)
exempt discretionary grants and awards of equity securities are to be made. Once
appointed, such Committee shall continue to serve in its designated capacity
until otherwise directed by the Board. From time to time the Board may increase
the size of the Committee and appoint additional members, remove members (with
or without cause) and substitute new members, fill vacancies (however caused),
and remove all members of the Committee and thereafter directly administer the
Plan, all to the extent permitted by the rules under Rule 16b-3 relating to
the disinterested administration of employee benefit plans under which Section
16(b) exempt discretionary grants and awards of equity securities are to be
made.
(ii) Administration With Respect to Other Persons. With respect
to Option grants made to Employees or Consultants who are neither Directors nor
Officers of the Company, the Plan shall be administered by (A) the Board or (B)
a committee designated by the Board, which committee shall be constituted to
satisfy the legal requirements, if any, relating to the administration of
incentive stock option plans of state corporate and securities laws, of the
Code, and of any stock exchange or national market system upon which the Common
Stock is then listed or traded (the "Applicable Laws"). Once appointed, such
Committee shall serve in its designated capacity until otherwise directed by the
Board. The Board may increase the size of the Committee and appoint additional
members, remove members (with or without cause) and substitute new members, fill
vacancies (however caused), and remove all members of the Committee and
thereafter directly administer the Plan, all to the extent permitted by
Applicable Laws.
(c) Powers of the Administrator. Subject to the provisions of the Plan
and, in the case of a Committee, the specific duties delegated by the Board to
such Committee, and subject to the approval of any relevant authorities,
including the approval, if required, of any stock exchange or national market
system upon which the Common Stock is then listed, the Administrator shall have
the authority, in its discretion:
(i) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(l) of the Plan;
(ii) to select the Consultants and Employees to whom Options may
from time to time be granted hereunder;
(iii) to determine whether and to what extent Options are granted
hereunder;
(iv) to determine the number of shares of Common Stock to be
covered by each such award granted hereunder;
(v) to approve forms of agreement for use under the Plan;
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<PAGE> 5
(vi) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any award granted hereunder. Such terms and conditions
may include, but are not limited to, the exercise price, the time or times when
Options may be exercised, any vesting acceleration or waiver of forfeiture
restrictions, and any restriction or limitation regarding any Option or the
Shares relating thereto, based in each case on such factors as the
Administrator, in its sole discretion, shall determine;
(vii) to determine whether and under what circumstances an Option
may be settled in cash under Section 9(e) instead of Common Stock;
(viii) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option has declined since the date the Option was granted;
(ix) to provide for the early exercise of Options for the
purchase of unvested Shares, subject to such terms and conditions as the
Administrator may determine; and
(x) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan.
(d) Effect of Administrator's Decision. All decisions, determinations
and interpretations of the Administrator shall be final and binding on all
Optionees and any other holders of any Options.
5. Eligibility.
(a) Nonstatutory Stock Options may be granted to Employees and
Consultants. Incentive Stock Options may be granted only to Employees. An
Employee or Consultant who has been granted an Option may, if otherwise
eligible, be granted additional Options.
(b) Each Option shall be designated in the written option agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options.
(c) For purposes of Section 5(b), Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair Market
Value of the Shares shall be determined as of the time the Option with respect
to such Shares is granted.
(d) The Plan shall not confer upon any Optionee any right with respect
to the continuation of the Optionee's employment or consulting relationship with
the Company, nor shall it
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<PAGE> 6
interfere in any way with the Optionee's right or the Company's right to
terminate the Optionee's employment or consulting relationship at any time, with
or without cause.
6. Term of Plan. The Plan shall become effective upon the earlier to occur
of its adoption by the Board of Directors or its approval by the shareholders of
the Company, as described in Section 17 of the Plan. It shall continue in effect
for a term of ten (10) years unless sooner terminated under Section 13 of the
Plan.
7. Term of Option. The term of each Option shall be the term stated in the
Option Agreement; provided, however, that the term shall be no more than ten
(10) years from the date of grant thereof. However, in the case of an Incentive
Stock Option granted to an Optionee who, at the time the Option is granted, owns
stock representing more than ten percent (10%) of the voting power of all
classes of stock of the Company or any Parent or Subsidiary, the term of the
Option shall be five (5) years from the date of grant thereof or such shorter
term as may be provided in the Option Agreement.
8. Option Exercise Price and Consideration.
(a) The per share exercise price for the Shares to be issued pursuant
to exercise of an Option shall be such price as is determined by the Board, but
shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of the grant of such
Incentive Stock Option, owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant.
(B) granted to any Employee other than an Employee described in the
preceding paragraph, the per Share exercise price shall be no less than 100% of
the Fair Market Value per Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option, the per share
exercise price shall be determined by the Administrator.
(b) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist entirely of (1) cash, (2)
check, (3) promissory note, (4) other Shares which (x) in the case of Shares
acquired upon exercise of an Option have been owned by the Optionee for more
than six months on the date of surrender and (y) have a Fair Market Value on the
date of surrender equal to the aggregate exercise price of the Shares as to
which such Option shall be exercised, (5) delivery of a properly executed
exercise notice together with such other documentation as the Administrator and
the
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<PAGE> 7
broker, if applicable, shall require to effect an exercise of the Option and
delivery to the Company of the sale or loan proceeds required to pay the
exercise price, or (6) any combination of the foregoing methods of payment. In
making its determination as to the type of consideration to accept, the
Administrator shall consider if acceptance of such consideration may be
reasonably expected to benefit the Company.
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. Any Option granted
hereunder shall be exercisable at such times and under such conditions as
determined by the Administrator, including performance criteria with respect to
the Company and/or the Optionee, and as shall be permissible under the terms of
the Plan.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may, as authorized by the Administrator, consist of any
consideration and method of payment allowable under Section 8(b) of the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate promptly upon exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 11 of the Plan.
Exercise of an Option in any manner shall result in a decrease in
the number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) Termination of Employment or Consulting Relationship. Upon
termination of an Optionee's Continuous Status as an Employee or Consultant,
other than upon the Optionee's death or Disability, the Optionee may exercise
his or her Option, but only within such period of time as is specified in the
Notice of Grant, and only to the extent that the Optionee was entitled to
exercise it at the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Notice of Grant). In
the absence of a specified time in the Notice of Grant, the Option shall remain
exercisable for three (3) months following the Optionee's termination. In the
case of an Incentive Stock Option, such period of time for exercise shall not
exceed three (3) months from the date of termination. If, on the date of
termination, the Optionee is not entitled to exercise the Optionee's entire
Option, the Shares covered by the unexercisable portion of the Option shall
revert to the Plan. If, after termination, the Optionee does not exercise his or
her Option within the time
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<PAGE> 8
specified by the Administrator, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.
Notwithstanding the above, in the event of an Optionee's change in
status from Consultant to Employee or Employee to Consultant, an Optionee's
Continuous Status as an Employee or Consultant shall not automatically terminate
solely as a result of such change in status. However, in such event, an
Incentive Stock Option held by the Optionee shall cease to be treated as an
Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory
Stock Option three months and one day following such change of status.
(c) Disability of Optionee. In the event of termination of an
Optionee's Continuous Status as an Employee or Consultant as a result of his or
her Disability, the Optionee may, but only within twelve (12) months from the
date of such termination (and in no event later than the expiration date of the
term of his or her Option as set forth in the Option Agreement), exercise the
Option to the extent the Optionee was otherwise entitled to exercise it on the
date of such termination. To the extent that the Optionee is not entitled to
exercise the Option on the date of termination, or if the Optionee does not
exercise the Option to the extent so entitled within the time specified herein,
the Option shall terminate, and the Shares covered by the Option shall revert to
the Plan.
(d) Death of Optionee. In the event of the death of an Optionee, the
Option may be exercised at any time within twelve (12) months following the date
of death (but in no event later than the expiration of the term of such Option
as set forth in the Notice of Grant), by the Optionee's estate or by a person
who has acquired the right to exercise the Option by bequest or inheritance, but
only to the extent that the Optionee was entitled to exercise the Option at the
date of death. If, at the time of death, the Optionee was not entitled to
exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall immediately revert to the Plan. If, after death the
Optionee's estate or a person who acquires the right to exercise the Option by
bequest or inheritance does not exercise the Option within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.
(e) Buyout Provisions. The Administrator may at any time offer to buy
out for a payment in cash or Shares, an Option previously granted, based on such
terms and conditions as the Administrator shall establish and communicate to the
Optionee at the time that such offer is made.
(f) Rule 16b-3. Options granted to persons subject to Section 16(b) of
the Exchange Act must comply with Rule 16b-3 and shall contain such additional
conditions or restrictions as may be required thereunder to qualify for the
maximum exemption from Section 16 of the Exchange Act with respect to Plan
transactions.
10. Non-Transferability of Options. Options may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.
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<PAGE> 9
11. Adjustments Upon Changes in Capitalization or Merger.
(a) Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until ten (10) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares as
to which the Option would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Option shall lapse as to all such Shares,
provided the proposed dissolution or liquidation takes place at the time and in
the manner contemplated. To the extent it has not been previously exercised, an
Option will terminate immediately prior to the consummation of such proposed
action.
(c) Merger or Asset Sale. In the event of a merger of the Company with
or into another corporation, or the sale of substantially all of the assets of
the Company:
(i) Options. Each Option may be assumed or an equivalent option
substituted by such successor corporation (including as a "successor" any
purchaser of substantially all of the assets of the Company) or a parent or
subsidiary of such successor corporation. Alternatively, the Administrator in
its discretion may, as soon as practicable prior to the effective date of such
transaction, provide for an Optionee to have the right to exercise an Option as
to all of the Optioned Stock covered thereby, including Shares as to which the
Option would not otherwise be exercisable. In such event the Administrator shall
notify the Optionee as soon as practicable prior to the effective date of such
transaction that the Option shall be fully exercisable for a period of ten (10)
days from the date of such notice, and the Option shall terminate upon the
expiration of such period. For the purposes of this paragraph, an Option shall
be considered assumed if, following the merger, the option confers the right to
purchase or receive, for each Share of Optioned Stock subject to the
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<PAGE> 10
Option immediately prior to the merger, the consideration (whether stock, cash,
or other securities or property) received in the merger by holders of Common
Stock for each Share held on the effective date of the transaction (and if
holders were offered a choice of consideration, the type of consideration chosen
by the holders of a majority of the outstanding Shares). If such consideration
received in the merger is not solely common stock of the successor corporation
or its Parent, the Administrator may, with the consent of the successor
corporation, provide for the consideration to be received upon the exercise of
the Option, for each Share of Optioned Stock subject to the Option, to be solely
common stock of the successor corporation or its Parent equal in fair market
value to the per share consideration received by holders of Common Stock in the
merger.
(ii) Shares Subject to Repurchase Option. Any Shares subject to a
repurchase option of the Company shall be exchanged for the consideration
(whether stock, cash, or other securities or property) received in the merger or
asset sale by the holders of Common Stock for each Share held on the effective
date of the transaction, as described in the preceding paragraph. If in such
exchange the Optionee receives shares of stock of the successor corporation or a
parent or subsidiary of such successor corporation, and if the successor
corporation has agreed to assume or substitute for Options as provided in the
preceding paragraph, such exchanged shares shall continue to be subject to a
repurchase option as provided in the Optionee's restricted stock purchase
agreement. If, as provided in the preceding paragraph, the Optionee shall have
the right to exercise an Option as to all of the Optioned Stock covered thereby,
all Shares that are subject to a repurchase option of the Company shall be
released from such repurchase option and shall be fully vested.
12. Time of Granting Options. The date of grant of an Option shall, for all
purposes, be the date on which the Administrator makes the determination
granting such Option, or such other date as is determined by the Administrator.
Notice of the determination shall be given to each Employee or Consultant to
whom an Option is so granted within a reasonable time after the date of such
grant.
13. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend, alter,
suspend or discontinue the Plan, but no amendment, alteration, suspension or
discontinuation shall be made which would impair the rights of any Optionee
under any grant theretofore made, without his or her consent. In addition, to
the extent necessary and desirable to comply with Rule 16b-3 under the Exchange
Act or with Section 422 of the Code (or any other applicable law or regulation,
including the requirements of any stock exchange or national market system upon
which the Common Stock is then listed), the Company shall obtain shareholder
approval of any Plan amendment in such a manner and to such a degree as
required.
(b) Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options already granted, and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company.
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<PAGE> 11
14. Conditions Upon Issuance of Shares. Shares shall not be issued pursuant
to the exercise of an Option unless the exercise of such Option and the issuance
and delivery of such Shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933,
as amended, the Exchange Act, the rules and regulations promulgated thereunder,
and the requirements of any stock exchange or national market system upon which
the Common Stock is then listed or traded, and shall be further subject to the
approval of counsel for the Company with respect to such compliance.
As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.
15. Reservation of Shares. The Company, during the term of this Plan, shall
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company's counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.
16. Agreements. Options shall be evidenced by written agreements in such
form as the Administrator shall approve from time to time.
17. Shareholder Approval. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such shareholder approval shall be obtained
in the degree and manner required under applicable state and federal law and the
rules of any stock exchange or national market system upon which the Common
Stock is then listed or traded.
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<PAGE> 1
EXHIBIT 10.12
OFFICE LEASE
THIS LEASE is made this 30th day of October, 1995, by and between Denver Jack
Limited Partnership, (hereinafter referred to as "Lessor") and Allos
Therapeutics, Inc., a Virginia corporation, (hereinafter referred to as
"Lessee").
Lessor hereby leases to Lessee and Lessee hereby leases from Lessor, Suite
No. 310, as designated on the plan attached hereto as Exhibit "A" (hereinafter
referred to as "The Premises") in 7000 North Broadway for the term and upon the
conditions and agreements hereinafter set forth.
1. TERM
The term of this lease is for four (4) years and shall commence on
December 22, 1995 or on such earlier date as Lessee may take possession of the
Premises, and shall and on December 21, 1999.
2. POSSESSION
If Lessor is unable to deliver possession of the Premises to Lessee on the
date of commencement of the term hereof, Lessor shall not be subject to any
liability for the failure to deliver possession on said date, and such failure
shall not affect the validity of this lease or the obligations of Lessee
hereunder or extend the term hereof, but the rent reserved shall not commence
to accrue until possession of the Premises is tendered to Lessee. If Permission
is given to Lessee to occupy the Premises prior to the date specified for
commencement of the term hereof, such occupancy shall be subject to all of the
provisions of this lease.
3. RENT
Lessee shall pay lessor a monthly rent of See Rider Number One, Section 35
dollars ($ ), plus applicable taxes (see Article 9), in lawful money
of the United States which shall be legal tender at the time of payment, in
advance on the first day of each calendar month during said term, at the office
of Lessor or at such other place as Lessor may from time to time so designate
in writing, except that the first month's rent shall be paid upon the execution
hereof. Said rental shall be paid without deduction or setoff. The installment
of rent payable for any portion, less than all, of a calendar month shall be a
pro rata portion of the installment payable for a full calendar month.
4. RENT ADJUSTMENT
(a) Real Estate Taxes.
The Lessor agrees to pay real estate taxes assessed to Lessor upon the
demised Premises except that, in the event at the any time during the term of
this lease, the real estate taxes assessed on the real property (the term "real
property" includes the building thereon) of which the demised Premises are a
part are increased above $ ** per square foot, then Lessee shall within
fifteen (15) days upon receipt from Lessor of a notice and bill for such
increase, pay to Lessor as additional rent the amount of said increase. ** the
Base Year 1995 actual expenses.
In all events, any taxes assessed on Lessee's personal property, or any
improvements, alterations or installations made by Lessee, and any other tax
or assessments arising out of the existence of this Lease except income,
estate, or inheritance taxes shall be paid by Lessee.
The term "real estate taxes" described above shall include all taxes
hereafter in substitution for or in lieu of present real estate taxes.
(b) Operating Expenses.
If, in any calendar year (the comparison year) during the term of this
lease, the Operating Expenses (as hereinafter defined) paid or incurred by
Lessor, for the building of which the demised Premises are a part, shall be
higher than $ *** per square foot, the rent payable by Lessee for the
comparison year shall be increased by the amount of said Operating Expenses
increase. *** the Base Year 1995 actual expenses.
Operating Expenses shall include:
(i) All Utility charges paid or incurred by Lessor for lights, heat,
air conditioning, power, water, sewer, drainage and waste disposal.
(ii) All other costs paid or incurred by Lessor for operation,
maintenance replacement and repair including, without limiting the
generality of the foregoing, the following: security, landscape
maintenance, pest control, management fees, supplies, insurance, cost of
service of independent contractors, wages (including employment taxes and
fringe benefits of all employees performing services uniformly available to
or performed for substantially all building tenants) licenses and permits,
equipment and tools, and professional fees which reduce or attempt to
reduce Operating Expenses.
Operating Expenses shall not include tenant alterations, depreciation,
interest, leasing fees or capital expenditures required to be capitalized for
federal income tax purposes. However, capital expenditures made to reduce the
Operating Expenses may be included if allocated over the life of the component
or extended life of the building.
As soon as possible after the end of each comparison year, Lessor shall
furnish to Lessee a written statement showing in reasonable detail Lessor's
Operating Expenses for the applicable comparison year and showing the amount, if
any, due from Lessee for said comparison year.
On the monthly rent payment date next following Lessee's receipt of such
statement, Lessee shall pay to Lessor (in the case of a rent increase),
one-twelfth (1/12th) of the rent adjustment for the comparison year multiplied
by the number of rent payment dates then elapsed in the current year.
Subsequent rent payments shall be increased by one-twelfth (1/12th) of the rent
adjustment for such comparison year.
The annual determination and statement of said Operating Expenses shall be
prepared in accordance with generally recognized accounting practices and each
such annual determination and statement, certified by Lessor, shall be final
and conclusive on both parties.
5. SECURITY DEPOSIT
Lessee has deposited with Lessor the sum of Twelve Thousand One Hundred
Sixty Six and 56/100 dollars ($12,166.56) as security for the full and faithful
performance of every provision of this Lease to be performed by Lessee. If
Lessee defaults with respect to any provision of this Lease, including but not
limited to the provisions relating to the payment of any rent or any other sum
in default, or for the payment of any other amount which Lessor may spend by
reason of Lessee's default or to compensate Lessor for any other loss or damage
which Lessor may suffer by reason of Lessee's default. If any portion of said
deposit is so used or applied, Lessee shall within five (5) days after written
demand therefore deposit cash with Lessor in an amount sufficient to restore the
security deposit to its original amount and Lessee's failure to do so shall be a
material breach of this Lease. Lessor shall not be required to keep this
security deposit separate from its general funds and Lessee shall not be
entitled to interest on such deposit. If Lessee shall fully and faithfully
perform every provision of this Lease to be performed by it, the security
deposit or any balance thereof shall be returned to Lessee (or, at Lessor's
option, to the last assignee of Lessee's interests hereunder) at the expiration
of the lease term.
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6. CONSTRUCTION
Lessor agrees to cause the leased Premises to be completed in accordance
with the plans, specifications and agreements approved by both parties, which
are attached to and made a part of this lease. Lessor will not be obliged to
construct or install at its expense any improvements or facilities of any kind
other than those called for on the attached specifications and agreements.
Lessor agrees to commence and complete the construction of the building and/or
improvements with reasonable diligence.
7. HOLDING OVER
Lessee shall have no right to hold over after the expiration of the term
of this lease without Lessor's consent. If, with Lessor's consent, Lessee holds
over after the termination of this lease, Lessee shall become a tenant from
month-to-month only, upon each and all of the terms herein provided as may be
applicable to such month-to-month tenancy and any such holding over shall not
constitute extension of this lease. During such holding over, Lessee shall pay
rent at 150% of the monthly rate then prevailing at the expiration of the term
of this lease, payable in advance on or before the first day of each month. In
such event Lessee shall continue in possession or until Lessee or Lessor shall
have given to the other party a written notice of its intention to terminate
such tenancy. Such written notice must be given no less than thirty (30) days
prior to said termination date.
8. USE
(a) Lessee shall use and occupy the Premises for general office use for
the purpose of administrative offices for a pharmaceutical research and
development company, and for no other purpose.
(b) Lessee shall:
(i) Not use or permit upon the Premises anything that would invalidate
any policies or insurance now or hereafter carried on the building or that
will increase the rate of insurance on the Premises or on the building.
(ii) Pay all extra insurance premiums which may be caused by the use
which Lessee shall make of the Premises;
(iii) Not use or permit upon the Premises anything that may be
dangerous to life or limb;
(iv) Not in any manner deface or injure the building or any part
thereof or overload any floor of the premises;
(v) Not do anything or permit anything to be done upon the Premises in
any way tending to create a nuisance, or tending to disturb any other
lessee in the building or the occupants of neighboring property, or tending
to injure the reputation of the building;
(vi) Comply with all governmental, health and police requirements and
regulations respecting the Premises;
(vii) Not use the Premises for lodging or sleeping purposes or for any
immoral or illegal purpose, nor conduct or permit to be conducted upon the
Premises any activity contrary to any of the laws of the United States of
America or of the State of Colorado or which is contrary to the ordinances
of the unincorporated Adams County nor commit or suffer to be committed any
waste upon the Premises.
9. TAXES
(a) Lessee shall pay, prior to delinquency, all taxes assessed against or
levied upon Lessee's fixtures, furnishings, equipment and other personal
property located in or upon the Premises. Lessee shall cause said fixtures,
furnishings, equipment and other personal property to be assessed and billed
separately from the real property. In the event any or all of Lessee's
fixtures, furnishings or equipment and other personal property shall be
assessed and taxed with said real property, Lessee shall pay to Lessor its
share of such taxes within fifteen (15) days after delivery to Lessee by Lessor
of a statement in writing setting forth the amount of such taxes applicable to
Lessee's personal property.
(b) Lessee shall, simultaneously with the payment of any sums required
hereunder, reimburse Lessor for any excise, sales or transaction privilege tax
imposed or levied by any government or governmental agency upon Lessor as a
result of Lessor's receipt of any such payment.
10. CONDITION OF PREMISES
Lessee's taking possession shall be conclusive evidence as against the
Lessee that the Premises were in good order and satisfactory condition when
Lessee took possession. No promise of Lessor to alter, remodel or improve the
Premises or the building and no representation respecting the condition of the
Premises or the building have been made by Lessor to Lessee, other than as may
be contained herein or in a separate rider or work letter attached hereto and
made a part hereof.
11. BUILDING SERVICES
(a) Lessor agrees to furnish to the premises during reasonable hours of
generally recognized business days, to be determined by Lessor, and subject to
the rules and regulations of the building of which the premises are a part,
water, electricity, heat and air conditioning and janitorial services required
in the Lessor's judgment for the comfortable use and occupation of the
Premises. Lessor shall not be liable for, and Lessee shall not be entitled to,
any abatement or reduction of rental by reason of Lessor's failure to furnish
any of the foregoing when such failure is due to any cause beyond the
reasonable control of Lessor. Lessor shall not be liable under any
circumstances for loss, however occurring, through or in connection with or
incidental to failure to furnish any of the foregoing.
(b) Lessee will not, without the written consent of Lessor, use any
apparatus or device in the Premises, including but without limitation thereto,
electronic data processing machines, punch card machines and machines using
current in excess of 110 volts, which will in any way increase the amount of
electricity, water or other utilities, which would otherwise be furnished or
supplied for use of the Premises as a general office space; nor connect with
electric current except through existing electrical outlets in the Premises, or
water pipes, or any apparatus or device for the purposes of using electric
current, water or other utilities. Whenever heat generating machines or
equipment are used in the Premises which affect the temperature otherwise
maintained by the air conditioning system, lessor reserves the right to install
supplementary air conditioning units in the Premises and the cost thereof,
including the cost of installation and the cost of operation and maintenance
thereof, shall be paid by Lessee to Lessor upon demand by Lessor.
12. ASSIGNMENT AND SUBLETTING
Lessee shall not, either voluntarily or by operation of law, sell, assign,
hypothecate or transfer this lease, or sublet the premises or any part thereof,
or permit the Premises or any part thereof to be occupied by anyone other than
Lessee or Lessee's employees, without the prior written consent of Lessor in
each instance. Lessor's consent shall not be reasonably withheld provided the
proposed assignee or sublessee is reasonably satisfactory to Lessor as to
credit and character and will occupy the Premises for office purposes
consistent with Article 8 of this Lease and Lessor's commitments to other
tenants. Any sale, assignment, mortgage, transfer or subletting of this lease
which is not in compliance with the provisions of this Article 12 shall be
voidable and shall, at the option of Lessor, terminate this lease. The consent
by Lessor to any assignment of subletting shall not be construed as relieving
Lessee from obtaining the express written consent of Lessor to any further
assignment or subletting or as releasing Lessee from any liability of
obligation hereunder, whether or not then accrued. The
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Lessor reserves the right, should the Lessee request such assignment or
subletting, to release the Lessee from the terms and provision of this lease and
the Lessor shall have thirty (30) days to make such determination. Should the
Lessor exercise this right, then the lease shall terminate as set forth in
Article 27 as of the date notice is given to Lessee.
13. CARE OF PREMISES
(a) Lessee, at Lessee's own expense, shall take good care of the Premises
and shall promptly repair all damages to the Premises and the building and
replace or repair all damaged or broken fixtures and appurtenances which are
made necessary as a result of any use, misuse, neglect or negligence of Lessee,
its employees or invitees. If Lessee does not do so, Lessor may, but need not,
make such repairs and replacements, and Lessee shall pay Lessor the cost
thereof upon being billed for same, or Lessor shall have the right to deduct
the same from the security deposit held by Lessor. Lessor may, but shall not be
required to do so, enter the Premises at all reasonable times to make any
repairs as Lessor shall desire or deem necessary to the Premises or to the
building of which the premises form a part or to any equipment located in the
building or as Lessor may be required to do by the unincorporated Adams
County or by the order or decree of any court or by any other governmental
authority.
(b) Except as otherwise provided herein, Lessor shall repair and maintain
the building (including the plumbing, heating, air conditioning and electrical
systems), grounds and common areas and facilities. Lessor shall not be liable
for any failure to make any repairs or to perform any maintenance unless
written notice of the need for such repairs or maintenance is given to Lessor by
Lessee, and unless Lessor then fails to commence within a reasonable period of
time, to make such repairs or perform such maintenance and thereafter fails to
use due diligence in so doing. Except as provided in Article 17 hereof, there
shall be no abatement of rent and no liability of Lessor by reason of any entry
to or interference with Lessee's business arising from the making of any repairs
in or to any portion of the building or the premises or in or to fixtures,
appurtenances and equipment therein. Lessee waives the right to make repairs at
Lessor's expense under any provision of statutory or common law now or hereafter
in effect.
14. ALTERATIONS
Lessee shall make no alterations, additions or improvements (including initial
tenant improvements) to the Premises without the prior written consent of
Lessor, which consent shall not be unreasonably withheld, and Lessor may
impose, as a condition of such consent, such requirements as Lessor in its sole
discretion may deem reasonable or desirable, including without limiting the
generality of the foregoing requirements as to the manner in which, the time or
times at which, and the contractor by whom such work shall be done. All such
alterations, additions, or improvements shall become the property of Lessor and
shall be surrendered with the Premises, as a part thereof, at the end of the
term hereof, except that the Lessor may, by written notice to Lessee given at
least thirty (30) days prior to the end of the term, require Lessee to remove
all partitions, counters, railings and the like installed by Lessee, and to
repair any damages to the Premises from such removal.
15. CERTAIN RIGHTS RESERVED BY LESSOR
(a) Lessor shall have the following rights, exercisable without notice
and without liability to Lessee for damage or injury to property, person or
business and without effecting an eviction, construction or actual, or
disturbance of Lessee's use or possession or giving rise to any claim for set
off or abatement of rents:
(i) To change the building's name or street address.
(ii) To install, affix and maintain any and all signs on the
exterior, interior and/or roof of the building.
(iii) To designate and/or approve, prior to installation, all types
of window shades, blinds, drapes, awnings, window ventilators and other
similar equipment and to control all internal lighting, that may be
visible from the exterior lobbies, hallways or other common areas.
(iv) To show the Premises to prospective tenants at reasonable
hours and if vacated by Lessee, to prepare the Premises for reoccupancy.
(v) To retain at all times and to use in appropriate instances,
keys to all doors within and into the Premises. No lock shall be changed
and no new lock shall be installed without the prior written consent of
Lessor.
(vi) To decorate and to make repairs, alterations, additions or
improvements, whether structural or otherwise, in and about the building
or in any part thereof and for such purposes to enter upon the Premises
and, during the continuance of any such work, to temporarily close doors,
entryways, public space and corridors in the building and to interrupt or
temporarily suspend building services and facilities, all without
abatement of rent or affecting any of Lessee's obligations hereunder so
long as the Premises are reasonably accessible.
(vii) To have and retain a paramount title to the premises, free
and clear of any act of Lessee purporting to burden or encumber it.
(viii)To grant or deny to anyone the right to conduct any business
or render any service in or to the building, provided such exclusive right
shall not operate to exclude Lessee from the use expressly permitted
herein.
(ix) To require all furniture and similar items to be moved into
and/or out of the building and Premises only at such times and in such
manner as Lessor shall direct in writing. Movements of Lessee's property
into or out of the building and within the building are entirely at the
risk and responsibility of Lessee and Lessor reserves the right to require
permits before allowing any such property to be moved into or out of the
building.
(x) To approve or disapprove in writing the placing of vending or
dispensing machines of any kind in or about the Premises.
(xi) To have access for Lessor and other tenants of the building
to any mail chutes located on the Premises according to the rules of the
United States Post Office.
(xii) To close the building after regular working hours and on
Saturday, Sunday and legal holidays, subject, however, to Lessee's right
to admittance under such regulations as Lessor may prescribe from time to
time.
(b) Lessor may enter upon the Premises and may exercise any or all of the
foregoing rights hereby reserved without being deemed guilty of an eviction or
of a disturbance of Lessee's use or possession, and without being deemed guilty
of an eviction or of a disturbance of Lessee's use or possession, and without
being liable in any manner to Lessee.
16. DAMAGE TO PROPERTY; INJURY TO PERSONS; INSURANCE
(a) Lessee shall indemnify and hold Lessor harmless from any and all
claims arising from Lessee's use of the Premises or of the conduct of its
business or from any activity, work, or thing done, permitted or suffered by
Lessee in or about the Premises and shall further indemnify and hold Lessor
harmless from any and all claims arising from any breach or default in the
performance of any obligation on Lessee's part to be performed under the terms
of this lease, or arising from any act or negligence of Lessee, or of its
agents or employees, and from all costs, attorneys' fees, expenses and
liabilities incurred as a result of any such claim or any action or proceeding
brought thereon; and in case any action or proceeding be brought against Lessor
by reason of any such claim. Lessee, upon notice from Lessor, shall defend the
same at Lessee's expense by counsel satisfactory to Lessor. Lessee, as a
material part of the consideration to Lessor, hereby assumes all risk of damage
to property or injury to persons, in, upon, or about the end liabilities
incurred as a result of any such claim or any action or Premises from any cause
which does not result from the negligence of Lessor and Lessee hereby waives
all claims in respect thereof against Lessor.
(b) Lessor or anyone authorized to act for Lessor shall not be liable for
any damage to property entrusted to employees of the building, nor for loss of
or damage to any property by theft or otherwise, nor for any injury or damage
to persons or property resulting from fire, explosion, falling plaster, steam,
gas, electricity, water or rain which may leak from any part of the building or
from the pipes, appliances or plumbing works therein, or from the roof, street
or subsurface, or from any other place resulting from damages or any other
cause whatsoever which does not result from the negligence of Lessor, Lessor or
its agents shall not be liable for interference with the natural light, nor
shall Lessor be liable for any latent defect in the Premises or in the
building. Lessee shall give prompt notice to Lessor of any fire, accident or
defect discovered within the Premises or the building.
(c) Lessee agrees to carry at its own expense throughout the term of the
lease, comprehensive public liability insurance insuring both Lessor and Lessee
against all claims, demands or actions arising out of or in connection with
Lessee's use or occupancy, of the Premises, or by the conditions of Premises
with a combined single limit of liability of $500,000 per
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person and $500,000 per occurrence for property damage. Lessee shall deliver a
Certificate of Insurance to Lessor prior to the date of occupancy of the
Premises and said insurance policy shall list and protect Lessor and Lessee as
their interests may appear and shall contain an endorsement stating that the
Insurer agrees to give no less than thirty (30) days prior written notice to
Lessor in the event of any material reduction in coverage with respect to this
lease document or cancellation thereof.
(d) Lessee shall be responsible for its own personal property insurance
17. FIRE OR CASUALTY
(a) Except as provided in paragraph 13 relating to repair of the Premises,
if the Premises or the building (including machinery and equipment used in its
operation) are wholly or partially destroyed or damaged by fire or other
casualty which is covered by the usual form of fire and extended coverage
insurance, and if such destruction or damage is not caused by the act or neglect
of Lessee, its agents or servants, then Lessor shall be obligated to repair and
restore the same with reasonable promptness, unless Lessor elects to terminate
this lease as hereinafter set forth. In the event the Premises or the building
are wholly or partially destroyed or damaged as a result of any cause, other
than the perils covered by the usual form of fire and extended coverage
insurance, or in the event the Premises or the building are destroyed or damaged
by any fire or casualty to the extent of not less than twenty-five percent (25%)
of the replacement cost thereof, then Lessor shall have the option to terminate
this lease by giving notice to Lessee within sixty (60) days after the
occurrence of such damage or destruction. If Lessor does not terminate this
lease as provided above, it shall proceed to complete the necessary restoration
or repairs with reasonable promptness and this lease shall continue in full
force and effect; provided, however, that if any destruction or damage not
caused by the act or neglect of Lessee, its agents or servants, renders the
Premises untenantable, and if this lease is not terminated as provided herein by
reason of such damage or destruction, then rent shall abate during the period
beginning with the date of such destruction or damage and end with the date when
the Premises are again rendered tenantable by an amount bearing the same ratio
to the total amount of rent due for such period that the untenantable portion of
the Premises bears to the entire Premises.
(b) Lessor shall in no event be obligated to repair any injury or damage by
fire or other cause or to make any repairs or replacements of any items
originally installed by Lessee at its expense.
18. ACCESS
Lessor and anyone authorized by Lessor shall have the right to enter the
Premises at all reasonable times for the purpose of examining or inspecting the
same, showing the same to prospective purchasers or lessees of the building,
and making such alterations, repairs, improvements or additions to the Premises
or the building of which they are a part as Lessor may deem necessary or
desirable. If Lessee shall not personally be present to open and permit an
entry into the Premises at any time when such entry by Lessor is necessary or
permitted hereunder, Lessor may enter by means of a master key or may enter
forcibly, without liability to Lessee except for any failure to exercise due
care of Lessee's property, and without breaching the terms of this lease.
19. CONDEMNATION
If the whole or any part of the Premises or of the building shall be taken
or condemned by any governmental authority for any public use or purpose or if
any adjacent property or street shall be condemned or improved in such manner
as to require the use of the whole or any part of the premises or of the
building, the term of this lease, at the option of Lessor, shall end on the
date when the possession of the part so taken shall be required for such use or
purpose and Lessor shall be entitled to receive the entire award without any
payment to Lessee. Current rent shall be apportioned as of the date of such
termination. In the event of a taking which does not result in the termination
of this lease, the rent shall be apportioned according to the part of the
Premises remaining usable by Lessee.
20. ABANDONMENT
Lessee shall not vacate or abandon the Premises at any time during the
term, and if Lessee shall abandon, vacate or surrender said Premises or be
dispossessed by process of law or otherwise, any personal property belonging to
Lessee and left in the Premises shall be conclusively presumed to be abandoned
and may be kept or disposed of by Lessor as provided in Article 27 hereof.
21. SALE BY LESSOR
In the event of a sale or conveyance by Lessor of the building containing
the Premises, the same shall operate to release Lessor from any future liability
upon any of the covenants or conditions, express or implied, herein contained
in favor of Lessee, and in such event Lessee agrees to look solely to the
responsibility of the successor in interest of Lessor in and to this lease.
This lease shall not be affected by any such sale, and Lessee agrees to attorn
to such successor in interest. If any security deposit has been made by Lessee
hereunder, Lessor may transfer such security deposit to such successor in
interest and thereupon Lessor shall be discharged from any further liability in
reference thereto.
22. MUTUAL RELEASE/WAIVER OF SUBROGATION
Lessor and Lessee each hereby release the other from any and all liability
or responsibility for any director or consequential loss, injury or damage to
the Premises, or its contents, caused by fire or any other casualty, during the
term of this lease, even if such fire or other casualty may have been caused
by the negligence of the other party or one for whom such party may be
responsible. Inasmuch as the above mutual waivers will preclude the assignment
of any aforesaid claim by way of subrogation (or otherwise) to an insurance
company (or any other person), each party hereto agrees if required by said
policies to give to each insurance company which has issued to it fire and
other property insurance, written notice of the terms of said mutual waivers,
and to have said insurance policies properly endorsed, if necessary to prevent
the invalidation of said insurance coverage by reason of said waivers.
23. WAIVER
(a) No waiver by Lessor of any provision of this lease or any breach by
Lessee hereunder shall be deemed to be a waiver of any other provision hereof,
or of any subsequent breach by Lessee of the same or any other provision.
Lessor's consent to or approval of any act by Lessee requiring Lessor's consent
or approval shall not be deemed to render unnecessary the obtaining of Lessor's
consent to or approval of any subsequent act of Lessee whether or not similar
to the act so consented to or approved. No act done by Lessor or anyone
authorized by Lessor during the term of this lease shall be deemed an
acceptance of a surrender of Premises, and no agreement to accept such
surrender shall be valid unless in writing and signed by Lessor. No employee of
Lessor or of anyone authorized by Lessor shall have any power to accept the keys
to the Premises prior to the termination of this lease, and the delivery of the
keys to any such employee shall not operate as a termination of the lease or a
surrender of the Premises.
(b) Except as provided in Article 26 relating to Lessor's remedies, Lessee
hereby expressly waives the service of any notice of intention to terminate
this lease or to re-enter the Premises and waives the service of any demand for
payment of rent or for possession and waives the service of any other notice or
demand prescribed by any statute or other law.
24. ESTOPPEL CERTIFICATE
(a) Lessee shall at any time and from time to time upon not less than ten
(10) days' prior written notice from Lessor execute, acknowledge and deliver to
Lessor a statement in writing (i) certifying that this lease, is unmodified and
in full force and effect (or if modified, stating the nature of such
modification and certifying that this lease, as so modified, is in full force
and effect) and the dates to which the rental and other charges are paid in
advance, if any, and (ii) acknowledging that there are not, to Lessee's
knowledge, any uncured defaults on the part of Lessor hereunder, or specifying
such defaults if they are claimed. Any such statement may be relied upon by any
prospective purchaser or encumbrancer of all or any portion of the real property
of which the Premises are a part.
<PAGE> 5
(b) Lessee's failure to deliver such statement within such time shall be
conclusive upon Lessee (i) that this lease is in full force and effect, without
modification except as may be represented by Lessor, (ii) that there are no
uncured defaults in Lessor's performance, and (iii) that not more than one
month's rental had been paid in advance.
25. INTEREST ON PAST DUE OBLIGATIONS
Any amount due from Lessee to Lessor hereunder which is not paid when due
shall bear interest at the rate of one and one half percent (1 1/2%) per month
from the due date until paid, unless otherwise specifically provided herein,
but payment of such interest shall not excuse or cure any default by Lessee
under this lease.
26. DEFAULTS; REMEDIES; EARLY TERMINATION
(a) Defaults. The occurrence of any one or more of the following events
shall constitute a material default ("Default") and breach of this lease by
Lessee:
(i) The vacating or abandonment of the Premises by Lessee.
(ii) The failure of Lessee to make any payment of rent or any other
payment required to be made by Lessee hereunder, as when due, where such
failure shall continue for a period of five (5) days after written notice
thereof from Lessor to Lessee.
(iii) The failure by Lessee to observe or perform any of the
covenants, conditions or provisions of this lease to be observed or performed
by Lessee, other than described above, where such failure shall continue for a
period of fifteen (15) days after written notice thereof from Lessor to Lessee.
(iv) The making by Lessee of any general assignment, or general
arrangement for the benefit of creditors; the filing by or against Lessee of a
petition to have Lessee adjudged as bankrupt or a petition for reorganization or
arrangement under any law relating to bankruptcy (unless, in the case of a
petition filed against Lessee, the same is dismissed within sixty (60) days);
the appointment of a trustee or receiver to take possession of substantially
all of Lessee's assets located at the Premises or of Lessee's interest in this
lease, where possession is not restored to Lessee within thirty (30) days; or
the attachment, execution or other judicial seizure of substantially all of
Lessee's assets located at the Premises or of Lessee's interest in this lease
where such seizure is not discharged within thirty (30) days.
(b) Remedies. In the event of any Default by Lessee, at any time
thereafter, and without limiting Lessor in the exercise of any other right or
remedy which Lessor may have by reason of such default or breach, Lessor may:
(a) choose not to reenter but to hold Lessee responsible for all terms of this
lease, (b) reenter the Premises and terminate this lease and hold Lessee
responsible for all damages resulting from the breach; or (c) reenter the
Premises, keep this lease intact, and attempt to relet the Premises on behalf
of Lessee as Lessee's agent. Lessor shall have no obligation to attempt to
relet. Upon reentering the Premises, Lessor may relet the Premises or any part
thereof for such term, on such conditions and at such rental as Lessor may deem
advisable with the right to make alterations and repairs to the premises.
Lessor may remove therefrom all automobiles, signs and other property and such
property may be removed and stored in any place for the account and the
expense and risk of Lessee. Lessee hereby waives all claims for damages which
may be caused by the reentry of Lessor add taking possession of the Premises,
or the removing or storage of the property as herein provided, and will save
Lessor harmless from any loss, cost or damages occasioned thereby, and no such
reentry shall be considered or construed to be forcible entry or detainer.
Should Lessor elect to reenter as herein provided, rentals received by
Lessor from reletting shall be applied in this order: first, to any Indebtedness
other than rent due under this lease; second, to the payment of any costs of
such reletting; third, to the payment of the cost of any alteration and repairs
to the Premises; and fourth, to the payment of rent due and unpaid under this
lease; and the remainder, if any, shall be held by Lessor and applied in payment
of future rent as the same becomes due and payable under this lease. Should
rentals received from such reletting during any month be less than that agreed
to be paid during that month by Lessee under this lease, then Lessee immediately
shall pay and be liable for such deficiency to Lessor. No such reentry or taking
possession by Lessor shall be construed as an election on its part to terminate
this lease unless a written notice of such intention is given to Lessee.
Notwithstanding any such reletting without termination, at any time thereafter,
Lessor may elect to terminate this lease for such previous default. Should
Lessor at any time terminate this lease for any default, in addition to any
other remedy it may have, Lessor may recover from Lessee all damages Lessor may
incur by reason of such breach, including, without limitation, the cost of
recovering the Premises and the present worth at the time of such termination of
the rent and charges equivalent to rent as reserved in this lease for the
remainder of the stated term.
27. SURRENDER OF POSSESSION
Upon the termination of this lease and the term hereby created or upon the
termination of Lessee's right of possession, whether by lapse of time or at the
option of Lessor as aforesaid, Lessee will at once surrender possession of the
premises to Lessor in good order, repair and condition, ordinary wear excepted,
and remove all effects therefrom. Without limiting the generality of the
foregoing, Lessee agrees to remove, at the termination of this lease, the items
of personal property to which Lessee is entitled under article 14 hereof,
together with any alterations, improvements or additions as Lessor shall
designate to be removed. All damage to the premises or the building arising out
of Lessee's moving of property in or out of the building, including damage to
floors due to overloading, shall be fully repaired at Lessee's sole cost and
expense. If Lessee shall fail or refuse to remove all such property from the
Premises Lessee shall be conclusively presumed to have abandoned the same, and
the title thereto shall thereupon pass to Lessor without cost either by setoff,
credit allowance or otherwise, and Lessor may, at its option, accept the title
to such property, or, at Lessee's expense, (a) remove the same or any part
thereof in any manner that Lessor shall choose and (b) store the same without
incurring liability to Lessee or any other person.
28. NOTICES
All notices to be given by one party to the other under this lease shall
be in writing, mailed or delivered to each as follows:
(a) To Lessor:
c/o CB Commercial Management, a Property Manager for Denver
Jack Limited Partnership
Independence Plaza
1050 17th Street, Suite 800
Denver, Colorado 80265
(b) To Lessee:
Mr. John Greff
Allos Therapeutics Inc.
7000 Broadway, Suite 310
Denver, Colorado 80221
Mailed notices shall be sent by United States certified or registered
mail, postage prepaid. Such notices shall be deemed to have been given upon
posting in the United States mail.
5
<PAGE> 6
29. INABILITY TO PERFORM
This lease and the obligations of Lessee hereunder shall not be affected or
impaired because Lessor is unable to fulfill any of its obligations hereunder or
it delayed in doing so, if such inability of delay is caused by reason of any
strike, other labor dispute or other cause beyond the reasonable control of
Lessor.
30. SUBORDINATION
Lessor expressly reserves the right at any time to place liens and
encumbrances on and against the Premises and the building, superior in lien and
effect to this lease and the estate created hereby, provided however, that any
such lien or encumbrance shall provide that the holder thereof will recognize
Lessee's rights hereunder, notwithstanding any foreclosure of such lien or
encumbrance.
31. SUBSTITUTION OF PREMISES
Lessor may, at its election; upon thirty (30) days' written notice to
Lessee of its desire to do so, exclude the specified leased Premises from the
lease and substitute other Premises within the building therefore, upon the
following terms and conditions:
(a) The substituted Premises shall contain approximately the same square
footage as the specified leased Premises, without increase of rental and shall
be usable for Lessee's purpose.
(b) Any and all costs necessary or incidental to Lessee's move to the
substituted Premises shall be at the sole cost and expense of Lessor and free of
all cost and expense to Lessee.
(c) Upon the expiration of thirty (30) days after such written notice to
Lessee, the substituted Premises shall be considered the leased Premises
described in the lease, for all uses and purposes, as though originally leased
unto Lessee at the time of the execution and delivery of this lease, and the
specified leased Premises shall be considered excluded from the lease.
32. MISCELLANEOUS
(a) All rights and remedies of Lessor under this lease shall be cumulative
and none shall exclude any other rights and remedies allowed by law.
(b) The provisions hereof shall apply without regard to the number or
gender of words and expressions unused herein.
(c) Each of the provisions of this lease shall extend to and shall, as the
case may require, bind or inure to the benefit, not only of Lessor and of
Lessee, but also their respective heirs, legal representatives, successors and
assigns, provided this clause shall not permit any assignment contrary to the
provisions of Article 12 hereof.
(d) Submission of this Instrument for examination shall not bind Lessor in
any manner, and no lease or obligation of Lessor shall arise until this
Instrument is signed and delivered by Lessor and Lessee.
(e) No rights to light or air over any property, whether belonging to
Lessor or any other person, are granted to Lessee by this lease.
(f) Lessor shall not be responsible to Lessee for the nonperformance by
any other tenant or occupant of the building of any of the rules and regulations
established by the Lessor for the building.
(g) Clauses, plats and riders, if any, signed by Lessor and Lessee and
endorsed on or affixed to this lease are a part hereof.
(h) Time is of the essence with respect to the performance of every
provision of this lease in which time of performance is a factor.
(i) The article captions contained in this lease are for convenience only
and shall not be considered in the construction or interpretation of any
provision hereof.
(j) This lease contains all of the agreements of the parties hereto with
respect to any matter covered or mentioned in this lease, and no prior agreement
or understanding pertaining to any such matter shall be effective for any
purpose. No provision of this lease may be amended or added to except by an
agreement in writing signed by the parties hereto or their respective successors
in interest.
(k) This lease shall be governed by and controlled pursuant to the laws of
the State of Colorado.
(l) In the event of any legal action or proceeding brought by either party
against the other out of this lease in any manner whatsoever, the prevailing
party shall be entitled to recover reasonable attorney's fees incurred in such
action and such amount shall be included in any judgment rendered in such
proceeding.
33. SPECIAL PROVISIONS
A. Tenant's Responsibility Regarding Hazardous Substances
1. Hazardous Substances. The term "Hazardous Substances", as used in
this Lease, shall include, without limitation, flammables, explosives,
radioactive materials, asbestos, polychlorinated byphenyls (PCB's), chemicals
known to cause cancer or reproductive toxicity, pollutants, contaminates,
hazardous wastes, toxic substances or related materials, petroleum and petroleum
products, and substances declared to be hazardous or toxic under any law or
regulation now or hereafter enacted or promulgated by any governmental
authority.
2. Tenant's Restrictions. Tenant shall not cause or permit to occur:
(a) Any violation of any federal, state, or local law, ordinance, or regulation
now or hereafter enacted, related to environmental conditions on, under, or
about the Premises, or arising from Tenant's use or occupancy of the Premises,
including, but not limited to, soil and ground water conditions; or (b) The use,
generation, release, manufacture, refining, production, processing, storage, or
disposal of any Hazardous Substance on, under or about the Premises, or the
transportation to or from the Premises of any Hazardous Substance, except as
specifically disclosed on Schedule A to this Lease.
3. Environmental clean-up: (a) Tenant shall, at Tenant's own
expense, comply with all laws regulating the use, generation, storage,
transportation, or disposal of Hazardous Substances ("Laws"). (b) Tenant shall,
at Tenant's own expense, make all submissions to, provide all information
required by, and comply with all requirements of all governmental authorities
(the "Authorities") under the Laws. (c) Should any Authority or any third party
demand that a clean-up plan be prepared and that a clean-up be undertaken
because of any deposit, spill, discharge, or other release of Hazardous
Substances that occurs during the term of this Lease, at or from the Premises,
or which arises at any time from Tenant's use or occupancy of the Premises, then
Tenant shall, at Tenant's own expense, prepare and submit the required plans and
all related bonds and other financial assurances; and Tenant shall carry out all
such clean-up plans. (d) Tenant shall promptly provide all information regarding
the use, generation, storage, transportation, or disposal of Hazardous
Substances that is requested by Owner. If Tenant fails to fulfill any duty
imposed under this Paragraph (3) within reasonable time, Owner may do so; and in
such case, Tenant shall cooperate with Owner in order to prepare all documents
Owner deems necessary or appropriate to determine the applicability of the Laws
to the Premises and Tenant's use thereof, and for compliance therewith, the
Tenant shall execute all documents promptly upon Owner's request. No such action
by Owner and no attempt made by Owner to mitigate damages under any Law shall
constitute a waiver of any of Tenant's obligations under this Paragraph (3). (e)
Tenant's obligations and liabilities under this Paragraph (3) shall survive the
expiration of this Lease.
<PAGE> 7
4. Tenant's Indemnity: (a) Tenant shall Indemnify, defend, and hold harmless
Owner, the manager of the property, and their respective officers, directors,
beneficiaries, shareholders, partners, agents, and employees from all fines,
suits, procedures, claims, and actions of every kind, and all costs associated
therewith (including attorneys' and consultants' fees) arising out of or in any
way connected with any deposit, spill, discharge, or other release of Hazardous
Substances that occurs during the term of this lease, at or from the Premises,
or which arises at any time from Tenant's use or occupancy of the Premises, or
from Tenant's failure to provide all information, make all submissions, and take
all steps required by all Authorities under the Laws and all other environmental
laws. (b) Tenant's obligations and liabilities under this Paragraph (4) shall
survive the expiration of this Lease.
See Also the Rider Number One attached hereto and made part hereof and
containing Articles 34 through 39.
LESSEE: Allos Therapeutics, Inc.,
a Virginia Corporation
- -------------------------------------------
By: Stephen J. Hoffman
----------------------------------------
Its: President and Chief Executive Officer
---------------------------------------
LESSOR: AmberJack, Ltd., General Partner
for Denver Jack Limited Partnership
By: Earle B. Johnson
----------------------------------------
Its: Vice President
---------------------------------------
By: Neil O. Brown
----------------------------------------
Its: President
---------------------------------------
<PAGE> 8
RIDER NUMBER ONE
THIS RIDER NUMBER ONE is attached to and forms a part of that certain Lease
dated October 30, 1995 between Denver Jack Limited Partnership, Lessor, and
Allos Therapeutics, Inc., a Virginia corporation, Lessee, covering Suite 310,
approximately 4,022 square feet in 7000 Broadway, Denver, Colorado. The parties
agree that should there be any conflict between this Rider Number One and the
Lease, the terms, conditions and covenants of this Rider Number One shall
govern and control.
34. PREMISES
Lessor hereby leases to Lessee and Lessee leases from Lessor those certain
premises, known as Suite 310, consisting of approximately 4,022 rentable square
feet in the building located at 7000 Broadway, Denver, CO 80221, all as
described on Exhibit "A".
35. RENT
December 22, 1995 - December 21, 1996 Three Thousand Eight Hundred
Eighty-Seven and 93/100 Dollars
($3,887.93) per month
December 22, 1996 - December 21, 1998 Four Thousand Fifty-Five and 52/100
dollars ($4,055.52) per month
December 22, 1998 - December 21, 1999 Four Thousand Two Hundred Twenty-Three
and 10/100 Dollars ($4,223.10) per month
36. TENANT IMPROVEMENTS
Lessor shall construct the Tenant Improvements for the Premises in accordance
with the plans and specification in Exhibit "A" (Floorplan) prepared by
McDermott Planning and Design dated October 5, 1995. As part of the Tenant
Improvements Lessor will shampoo the carpet and paint the Premises. Lessor
shall pay the cost of the Tenant Improvements and Lessee shall pay the costs
incurred as a result of any changes, modifications or additions to the plans
and specifications in Exhibit "A".
The Tenant Improvements for this Lease specifically do not include the following
items in the scope of the work to be performed by Lessor, and shall be the
responsibility of the Lessee:
i. Premises security system
ii. Office furniture, supplies, equipment and accessories,
iii. Office plantscaping,
iv. Modular furniture and partitions,
v. Lessee's telephone system and cabling,
vi. Computer equipment,
vii. Computer cabling.
37. PARKING
Lessee shall have the right to use on an unassigned, unreserved basis twenty
(20) parking spaces in the 7000 Broadway parking area free of charge for the
term of the Lease.
38. PERCENTAGE OF OPERATING EXPENSES
Lessee's percentage of Operating Expenses shall consist of 8.86%.
<PAGE> 9
LANDLORD'S NOTICE OF LEASE COMMENCEMENT
AND VERIFICATION OF LEASE TERMS
RE: Shopping Center Lease (the "Lease") dated October 30, 1995 between DENVER
JACK LIMITED PARTNERSHIP ("Landlord") and ALLOS THERAPEUTICS, INC., a
Virginia corporation ("Tenant") for the premises located at 7000 North
Broadway, Suite 310, Denver, Colorado ("Premises")
The undersigned, as Tenant, hereby confirms as of this 22nd day of
February, 1996, the following:
1. The Substantial Completion of the Premises was completed on January 11,
1996, and Tenant is currently occupying the same.
2. The Commencement Date, as defined in the Lease, as well as the date on
which the term expires are as follows:
Commencement Date: January 11, 1996
Expiration Date: January 10, 2000
3. Initial Minimum Rent: $3,887.93
4. As of the date hereof, Landlord has fulfilled all of its obligations
under the Lease.
5. The Lease is in full force and effect and has not been modified,
altered, or amended.
Please indicate your verification of the above terms by signing below.
ACCEPTED AND AGREED:
ALLOS THERAPEUTICS, INC., a
Virginia corporation
By: /s/ [ILLEGIBLE]
-------------------------
Title: CFO
----------------------
Date: 2-22-96
-----------------------
<PAGE> 10
39. RIGHT OF FIRST REFUSAL TO LEASE ADDITIONAL SPACE
If Lessee is not in default under the Lease on the date Lessee desired to
exercise its Right of First Refusal, Lessee shall have a Right of First Refusal
to lease all of Suite 320 consisting of 2,337 rentable square feet (Expansion
Space).
Lessor agrees to notify Lessee pursuant to the requirements of Article 28 of the
Lease of Lessor's intention to offer the Expansion Space for lease. Lessee shall
have three (3) days from its receipt of such notice to notify Lessor in writing
of Lessee's intent to exercise its Right of First Refusal and to execute a
mutually agreed upon Rider to this Lease to include Expansion Space.
If Lessee does not exercise its Right of First Refusal, this Right of First
Refusal shall terminate and Lessor may lease any portion or all of the Expansion
Space to any third party.
If Lessee so elects to exercise its Right of First Refusal to lease the
Expansion Space, the rent, terms, and conditions for leasing the Expansion
Space, shall be based on the then current lease proposal for the Expansion Space
in conjunction with prevailing rental rates for properties of equivalent
quality, size, utility, and location, with the length of the Lease Term and
credit standing of Lessee to be taken into account, but in no event shall the
rent be less than the rent set forth in Section 3 of this Lease and Section 35
of this Rider Number One for the Lease Term, otherwise subject to all the terms,
covenants and conditions of this Lease. Within fifteen (15) business days from
the date of Lessee's election to exercise its Right of First Refusal, Lessee
shall execute plans and specifications and other documents as necessary showing
the construction costs to be paid by Lessee for the Space, if any, otherwise
Lessee's Right of First Refusal shall terminate and Lessor may lease the
Expansion Space to any third party.
<PAGE> 11
7000 BROADWAY
BUILDING
[FLOOR PLAN]
McDERMOTT PLANNING & DESIGN
EXHIBIT "A"
Floor Plan
ALLOS THERAPEUTICS
THIRD FLOOR SPACE PLAN
<PAGE> 12
EXHIBIT "B"
RULES AND REGULATIONS
1. Signs, Directories
No sign, advertisement or notice shall be inscribed, painted or affixed on
any part of the inside or outside of the building, including windows, doors and
corridors, unless of such color, size and style and in such place upon or in
said building as shall be first designated by Lessor. There shall be no
obligation or duty by Lessor to allow any sign, advertisement or notice to be
inscribed, painted or affixed on any part of the inside or outside of said
building. Lessee shall not mark, paint, drill into, or in any way deface the
walls ceiling, partitions, doors or floors of the building and shall not put
therein any spikes, hooks, screws or nails, except by written consent of
Lessor. Initial nameplate and suite number on doors will be provided by the
Lessor. The cost of additional nameplates for doors shall be borne by Lessee. A
building directory with the names of the tenants will be provided by the Lessor
in the lobby. Any necessary revision in such directory will be made by Lessor
within a reasonable time after written notice from the Lessee of the change
making the revision necessary, but Lessor shall not be responsible for any
inconvenience or damage caused by Lessee as a result of any error in such a
directory. Initial directory listings will be at the cost of Lessor. Changes or
revisions in directory listing will be at the expense of Lessee. No showcase or
any other fixture or objects whatsoever shall be placed in front of the
building or in the court or corridor by Lessee, without written consent of
Lessor.
2. Building Hours
The Lessor specifically reserves the right to refuse admittance to the
building after 9:00 p.m. daily, after 6:00 p.m. on Saturday, on Sunday or on
legal holidays to any person or persons who cannot furnish satisfactory
identification or to any person or persons who for any other reason should be
denied access to the Premises. Lessor also reserves the right to designate such
hours as the building shall be open and closed.
3. Deliveries, Moving of Heavy Equipment
All safes, furniture, office equipment or other heavy articles shall be
carried up or into the Premises only at such hours and in such manner as shall
be prescribed by Lessor, and Lessor shall in all cases have the right to specify
the proper weight and position of any such safe or other heavy article. All
hand trucks shall be equipped with rubber tires and side guards. Any damage
done to the building by taking in or removing any safe or heavy article or from
overloading any floor in any way shall be paid by Lessee. Defacing or injuring
in any way any part of the building by the Lessee, his agent, employee or
servants shall be paid by the Lessee. Any and all deliveries made to Lessee's
leased Premises shall be made via the back entrance of the building or other
area to be designated by Lessor.
4. Walk and Passageway Obstruction
The sidewalks, entries, passages, courts, corridors, stairways and
elevators shall not be obstructed by Lessee, Lessee's employees, or agents or
used by them for other purposes than for ingress or egress to and from their
respective suites.
5. Unattended Premises
Lessee, its agents, servants and employees shall, before leaving Premises
unattended, close and lock all doors and turn off all lights.
6. Lost Items
Lessor will not be responsible for lost or stolen property, equipment,
money or any article taken from Premises, building or garage facilities
regardless of how loss occurs and whether such loss occurs when such area is
locked against entry.
7. Locks
All locks for doors in Lessee's leased areas shall be building standard
and no additional locks shall be placed upon any doors without the written
consent of Lessor nor shall any duplicate keys be made. All necessary keys
shall be furnished by the Lessor and the same shall be surrendered upon the
termination of the Lease. Lessee shall then give to Lessor an explanation of
the combination of all locks upon the doors of vaults. Two keys per every 1,000
square feet of leased area only will be provided as each lockset is installed
or as Lessee's space is occupied. Any requests for additional keys shall be
made to Lessor and shall be at the expense of lessee. Additional locksets
provided by Lessor at request of Lessee will be at the expense of Lessee.
8. Janitorial Service
Lessee shall not employ any person or persons other than the janitor of
the Lessor for the purpose of cleaning or taking charge of the Premises leased,
without the consent of Lessor. Lessor shall be in no way responsible to any
Lessee for any loss of property from the leased Premises, however occurring, or
for any damage done to any property by the janitor or any of his employees, or
by any other person or persons whomsoever. If janitorial services are provided
in the Premises, the janitor of the building may at all times keep a pass-key
and shall at all reasonable times by allowed admittance to said leased
Premises. Lessor's janitors shall not be hindered by Lessee after 5:30 p.m.
9. Excess Trash Disposal
In the event Lessee must dispose of crates, boxes, and other bulky waste,
it will be the responsibility of Lessee to dispose of same. In no event will
tenant place such items in public hallways or other areas of the building
(excepting Lessee's own Premises) for disposal.
10. Hazardous Materials
The Lessee shall not bring into the building, store or permit the use of
any toxic, flammable, or explosive material or any unlawful or controlled
substance. Lessee shall not bring into or allow to be kept in the building any
bicycles, vehicles or animals.
11. Utilities
Lessor reserves the right to make such rules and regulations as it may see
fit, concerning the use of electric current, gas, water and other supplies of
the said building.
12. Extra Utility Usage
In the event Lessee desires utility or air conditioning service at other
than normal operating hours the request must be made to the project manager's
office at a reasonable length of time prior to need for this service. This
service will be made available at the then prevailing rate established on an
hourly basis.
13. Elevator Service
The Lessor shall not be liable for any damages from stoppage of elevators
for necessary or desirable repairs or improvements or delays of any sort of
duration in connection with the elevator service.
14. Carpet Damage
<PAGE> 13
Lessee will be responsible for any damage to carpeting and flooring as a
result of rust or corrosion of the file cabinets, potted plant saucers, roller
chairs and metal objects.
15. Vending, Canvassing and Soliciting
Canvassing, soliciting and peddling in the building is prohibited. No
vending machines of any type shall be allowed in the Premises without prior
written consent of Lessor.
16. Contractor Approval
All contractors and/or technicians performing work for Lessee shall be
referred to Lessor for approval and control. This provision shall apply to all
work performed in the building including, but not limited to, installation of
electrical devices, telephones, telegraphs and other communications equipment.
Lessee will in all areas be responsible for damages to the building caused by
said contractors. If Lessee desires telegraphic, telephonic, annunciator or
other electrical connections or communication services, the Lessor will direct
the electricians as to where and how the wires may be introduced, and without
such directions, no boring or cutting of wires will be permitted.
17. Additional Rules
The Lessor reserves the right to rescind and of these rules and
regulations and to make such other and further reasonable rules and regulations
as in its judgment may from time to time be needed for the safety, protection,
care and cleanliness of the Premises, and for the preservation of good order
therein, and the protection and comfort of the Lessee's and their agents,
employees and invitees upon which such rules and regulations shall be binding in
like manner as if originally herein prescribed.
<PAGE> 1
EXHIBIT 10.13
FIRST AMENDMENT
TO 7000 BROADWAY BUILDING OFFICE LEASE
between
DENVER JACK LIMITED PARTNERSHIP
and
ALLOS THERAPEUTICS, INC.
Dated October 30, 1995
THIS FIRST AMENDMENT is to that certain lease agreement (the "Lease") dated
October 30, 1995, by and between DENVER JACK LIMITED PARTNERSHIP ("Lessor") and
ALLOS THERAPEUTICS, INC. ("Lessee") with respect to approximately 4,022 square
feet of space on the third floor, known as Suite 310 (the "Premises"), in the
building known as 7000 Broadway, Denver, Colorado (the "Building"). In the event
of any conflict between the terms and provisions of the lease and the terms and
provisions of this First Amendment, the terms and provisions of this First
Amendment shall control.
1) Amendment to Article 4 of the Lease Document.
Landlord and Tenant do hereby agree that a portion of Article 4, Rent
Adjustment, Paragraph (a) Real Estate Taxes and Paragraph (b) Operating
Expenses shall be amended to read "the Base Year 1996 actual expenses".
This will effectively change the Base Year for Operating Expense and Real
Estate Tax adjustments from 1995 to 1996.
Except as herein specifically set forth, all other provisions of the Lease shall
remain in full force and effect and be binding upon the parties in accordance
with their terms.
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals the day
and year fist above written.
LESSOR:
AMBERJACK, LTD., General Partner for
DENVER JACK LIMITED PARTNERSHIP
By: CB Commercial Real Estate Group, Inc.
---------------------------------------
Its: As Manager
--------------------------------------
By: [ILLEGIBLE]
---------------------------------------
Its: Senior Vice President
--------------------------------------
[ILLEGIBLE]
Asst. V.P.
LESSEE:
ALLOS THERAPEUTICS, INC.
a Virginia corporation
By: John Greff
---------------------------------------
Its: V.P. Finance & CFO
--------------------------------------
<PAGE> 1
EXHIBIT 10.14
SECOND AMENDMENT
TO 7000 BROADWAY BUILDING OFFICE LEASE
between
DENVER JACK LIMITED PARTNERSHIP
and
ALLOS THERAPEUTICS, INC., A Virginia Corporation
Dated June 7, 1996
THIS SECOND AMENDMENT is to that certain office lease (the "Lease") dated
October 30, 1995 and First Amendment to 7000 Broadway Building Office Lease
dated October 30, 1995, by and between Denver Jack Limited Partnership
("Lessor") and Allos Therapeutics, Inc., a Virginia Corporation ("Lessee") with
respect to approximately 4,022 square feet of space on the 3rd floor, known as
Suite 310 (the "Premises"), in the building known as 7000 Broadway, Denver,
Colorado (the "Building"). In the event of any conflict between the terms and
provisions of the Lease as amended by the First Amendment, and the terms and
provisions of this Second Amendment, the terms and provisions of this Second
Amendment shall control.
1. Amendment to Article 34, Rider Number One of the Lease Document. Lessor
and Lessee do hereby agree that effective June 12, 1996 (the "Effective
Date") the description of the Premises shall be deemed to be amended to
include approximately 2,308 rentable square feet of additional office
space located on the third (3rd) floor known as Suite 320 (the
"Expansion Space") as outlined on the diagram of the third (3rd) floor
of the building, attached hereto as Exhibit "A".
Tenant's right to occupy and obligation to pay Base Rent on the
"Expansion Space" shall commence on the "Effective Date" and shall
terminate with the lease term which is redefined in paragraph 2 of this
Second Amendment.
Except as otherwise specifically provided herein, as of the "Effective
Date" any reference to the term "Premises" in the Lease or any
amendments thereto, including this Amendment, shall be deemed to include
the "Expansion Space" as though originally a part of the Premises under
the Lease and Tenant's occupancy thereof shall be subject to all of the
terms and conditions of the Lease.
2. Amendment to Article 1 of the Lease Document. Lessor and Lessee do
hereby agree that as of the "Effective Date", the lease term as
described in Article 1 of the Lease shall be extended through June 30,
2001.
3. Amendment to Article 35 of Rider Number One to the Lease document. As of
the "Effective Date", Lessor and Lessee do hereby agree that the Rent
obligation in Article 35 of Rider Number One to the lease document be
amended as outlined below:
06/12/96 - 12/31/96: $6,215.16 per month
01/01/97 - 12/31/98: $6,382.75 per month
01/01/99 - 06/30/01: $6,550.33 per month
Such other charges as may be required by the terms of this Lease to be
paid by Lessee may be referred to in the Lease document as "Additional
Rent." Lessor shall have the same rights as to the Additional Rent as it
has to the payment of the rent set forth above.
All payments are due on or before the first day of the first full
calendar month of the term hereof and a like sum on or before the first
day of each and every successive calendar month thereafter during the
term hereof. Rent for any period during the term hereof, which is less
than one month, shall be prorated based on a thirty (30) day calendar
month. All rents payable hereunder shall be paid to Lessor in lawful
money of the United States of America constituting legal tender at the
time of payment, at the office of the building or to such other person
at such other place as Lessor may, from time to time, designate in
writing. The current payments or notice to Lessor shall be c/o CB
Commercial Real Estate Group, Inc., 1050 Seventeenth Street, Suite 800,
Denver, Colorado 80265.
<PAGE> 2
4. Tenant Improvements. Lessee shall take the "Expansion Space" in its
"as-is" condition.
5. Amendment to Article 39 of Rider Number One to the Lease Document. As of
the Effective Date, Tenant shall have the right to use on an unassigned,
unreserved basis, an additional eleven (11) parking spaces in the 7000
Broadway parking area free of charge the term of the Lease. These spaces
will be in addition to the twenty (20) parking spaces under Lessee's
control in the Lease document.
6. Amendment to Article 38 of Rider Number One of the Lease Document.
Lessee's percentage of Operating Expenses as of the "Effective Date"
shall be that proportion which the rentable area leased bears to the
rentable area of the building. For purposes of the Lease, as herein
amended, such percentage is 13.94%.
7. Conflicts. If there is any conflict between the terms and provisions of
this First Amendment and the terms and provisions of the Lease, the
terms and provisions of this First Amendment shall govern. Except as
herein specifically set forth, all other provisions of the Lease shall
remain in full force and effect and be binding upon the parties in
accordance with their terms.
LANDLORD:
DENVER JACK LIMITED PARTNERSHIP
CB COMMERCIAL REAL ESTATE GROUP, INC.
AS MANAGER
By: /s/ ILLEGIBLE
-------------------------------------
Its: Senior Vice President
-------------------------------------
By: /s/ ILLEGIBLE
-------------------------------------
Its: Assistant Vice President
-------------------------------------
TENANT:
ALLOS THERAPEUTICS,
A VIRGINIA CORPORATION
By: /s/ JOHN T. GREFF
-------------------------------------
Its: VP Finance & CFO
-------------------------------------
STATE OF COLORADO
COUNTY OF ADAMS
The foregoing instrument was acknowledged before me this 17th day of June, 1996
by John T. Guff as VP Finance and CFO.
Witness my hand and official seal.
My commission expires: May 2, 1999
/s/ Lisa D. Lange
-------------------------------
Notary Public
[SEAL]
<PAGE> 3
7000 BROADWAY
BUILDING
McDERMOTT PLANNING & DESIGN
EXHIBIT "A"
FLOOR PLAN
ALLOS THERAPEUTICS
THIRD FLOOR SPACE PLAN
<PAGE> 1
EXHIBIT 10.15
THIRD AMENDMENT
TO 7000 BROADWAY BUILDING OFFICE LEASE
between
DENVER JACK LIMITED PARTNERSHIP (Lessor)
and
ALLOS THERAPEUTICS, INC., a Delaware Corporation (Lessee)
Dated March 26, 1998
THIS THIRD AMENDMENT is to that certain office lease (the "Lease") dated October
30, 1995, First Amendment to 7000 Broadway Building Office Lease dated October
30, 1995 and Second Amendment to 7000 Broadway Building Office Lease dated June
7, 1996, by and between Denver Jack Limited Partnership ("Lessor") and Allos
Therapeutics, Inc., a Delaware Corporation ("Lessee") with respect to
approximately 4,022 and 2,308 square feet of space on the 3rd floor, known as
Suite 310 and 320 (the "Premises"), in the building known as 7000 Broadway,
Denver, Colorado (the "Building"). In the event of any conflict between the
terms and provisions of the Lease as amended by the First and Second Amendments,
and the terms and provisions of this Third Amendment, the terms and provisions
of this Third Amendment shall control.
1. Amendment to Article 34 of Rider Number One to the Lease Document and
Article 1 of the Second Amendment. Lessor and Lessee do hereby agree
that effective July 1, 1998 or when Landlord delivers Premises to
Tenant (the "Effective Date") the description of the Premises shall be
deemed to be amended to include approximately 9,208 rentable square
feet of office space located on the fourth (4th) floor known as Suite
400 (the "New Premises") as outlined on the diagram of the fourth
(4th) floor of the building, attached hereto as Exhibit "A".
As of the Effective Date, Lessee shall be released of its obligation
from suite 310 excluding the shower area consisting of approximately
3,810 rentable square feet leaving approximately 2,520 rentable square
feet in suite 320 and shower area ("suite 320").
Lessee's right to occupy and obligation to pay Base Rent on the "New
Premises" shall commence on the "Effective Date" and shall terminate
with the lease term which is redefined in paragraph 2 of this Third
Amendment.
Except as otherwise specifically provided herein, as of the "Effective
Date" any reference to the term "Premises" and/or "New Premises" in
the Lease or any amendments thereto, including this Amendment, shall
be known as suite 400, approximately 9,208 rentable square feet and
suite 320, approximately 2,520 rentable square feet and Lessee's
occupancy thereof shall be subject to all of the terms and conditions
of the Lease.
2. Amendment to Article 1 of the Lease Document and Article 2 of the
Second Amendment. Lessor and Lessee do hereby agree that as of the
"Effective Date", the lease term as described in Article 1 of the
Lease and Article 2 of the Second Amendment shall remain the same for
suite 320 and shall be extended through April 30, 2002 for suite 400.
3. Amendment to Article 35 of Rider Number One to the Lease document and
Article 3 of the Second Amendment. As of the "Effective Date", Lessor
and Lessee do hereby agree that the Rent obligation in Article 35 of
Rider Number One and Article 3 of the Second Amendment to the lease
document be amended as outlined below:
Suite 400 Approximately 9,208 Rentable Square Feet
--------------------------------------------------
<TABLE>
<S> <C> <C>
07/01/98 - 06/30/99 $10,359.00 per month ($13.50 RSF/Yr)
07/01/99 - 06/30/00 $10,550.83 per month ($13.75/RSF/Yr)
07/01/00 - 06/30/01 $10,934.50 per month ($14.25/RSF/Yr)
07/01/01 - 06/30/02 $11,126.33 per month ($14.50 RSF/Yr)
</TABLE>
Suite 320 Approximately 2,520 Rentable Square Feet
--------------------------------------------------
<TABLE>
<S> <C> <C>
07/01/98 - 12/31/98 $2,541.00 per month ($12.10/RSF/Yr)
01/01/99 - 06/30/01 $2,608.20 per month ($12.42/RSF/Yr)
</TABLE>
<PAGE> 2
Such other charges as may be required by the terms of this Lease to be
paid by Lessee may be referred to in the Lease document as "Additional
Rent." Lessor shall have the same rights as to the Additional Rent as
it has to the payment of the rent set forth above.
All payments are due on or before the first day of the first full
calendar month of the term hereof and a like sum on or before the
first day of each and every successive calendar month thereafter
during the term hereof. Rent for any period during the term hereof,
which is less than one month, shall be prorated based on a thirty (30)
day calendar month. All rents payable hereunder shall be paid to
Lessor in lawful money of the United States of America constituting
legal tender at the time of payment, at the office of the building or
to such other person at such other place as Lessor may, from time to
time, designate in writing. The current payments or notice to Lessor
shall be c/o CB Commercial Real Estate Group, Inc., 1050 Seventeenth
Street, Suite 800, Denver, Colorado 80265.
4. Lessee Improvements. Lessor shall provide "turnkey" Lessee
improvements with building standard materials per the attached Exhibit
"A" prepared by McDermott Planning dated March 26, 1998. Any increase
in cost of the Lessee improvements due to Lessee changing, modifying
or altering the plan shall be the responsibility of Lessee.
5. Amendment to Article 39 of Rider Number One to the Lease Document and
Article 5 of the Second Amendment. As of the Effective Date, Lessee
shall have the right to use on an unassigned, unreserved basis, one
(1) parking space for every 200 rentable square feet leased in the
7000 Broadway parking area free of charge for the term of the Lease.
6. Amendment to Article 38 of Rider Number One of the Lease Document and
Article 6 of the Second Amendment. Lessee's percentage of Operating
Expenses as of the "Effective Date" shall be 5.54% for suite 320 and
20.27% for suite 400.
7. Moving Allowance. Lessor shall provide Lessee with up to $18,416.00 to
offset costs associated with moving of furniture, equipment,
telecommunications and data communications lines, and changing of
letterhead. Said allowance shall be paid to Lessee upon Lessee's
furnishing original receipts of each expense to Lessor.
8. Conflicts. If there is any conflict between the terms and provisions
of this Third Amendment and the terms and provisions of the Lease as
amended by the First and Second Amendments, the terms and provisions
of this Third Amendment shall govern. Except as herein specifically
set forth, all other provisions of the Lease shall remain in full
force and effect and be binding upon the parties in accordance with
their terms.
LESSOR: LESSEE:
AMBERJACK, LTD., GENERAL PARTNER FOR ALLOS THERAPEUTICS
DENVER JACK LIMITED PARTNERSHIP BY A DELAWARE CORPORATION
CB COMMERCIAL REAL ESTATE GROUP, INC.,
AS MANAGER
By: /s/ [ILLEGIBLE] By: /s/ Stephen J. Hoffman
--------------------------------- -----------------------------
Its: Vice President Its: CEO
--------------------------------- -----------------------------
By: /s/ [ILLEGIBLE] By:
--------------------------------- -----------------------------
Its: SVP Its:
--------------------------------- -----------------------------
STATE OF COLORADO
COUNTY OF ADAMS
The foregoing instrument was acknowledge before me this 7th day of
April, 1998 by Stephen J. Hoffman as CEO.
Witness my hand and official seal.
My commission expires: 5/2/99
/s/ LISA D. LANGE
-------------------------------
Notary Public
(SEAL)
<PAGE> 3
CB COMMERCIAL
[EXHIBIT "A"]
ALLOS SPACE PLAN
NOT TO SCALE [NORTH LOGO]
<PAGE> 4
[FLOOR PLAN]
[EXHIBIT "B"]
<PAGE> 1
EXHIBIT 10.16
FOURTH AMENDMENT
TO 7000 BROADWAY BUILDING OFFICE LEASE
between
DENVER JACK LIMITED PARTNERSHIP (Lessor)
and
ALLOS THERAPEUTICS, INC., A Delaware Corporation (Lessee)
Dated June 29, 1998
THIS FOURTH AMENDMENT is to that certain office lease (the "Lease") dated
October 30, 1995, First Amendment to 7000 Broadway Building Office lease dated
October 30, 1995, Second Amendment to 7000 Broadway Building Office Lease dated
June 7, 1996, and Third Amendment to 7000 Broadway Building Office Lease dated
March 26, 1998, by and between DENVER JACK LIMITED PARTNERSHIP ("Lessor") and
ALLOS THERAPEUTICS, INC., A DELAWARE CORPORATION ("Lessee") with respect to
approximately 4,022 and 2,308 square feet of space on the 3rd floor, known as
Suite 310 and 320 (the "Premises"), in the building known as 7000 Broadway,
Denver, Colorado (the "Building"). In the event of any conflict between the
terms and provisions of the Lease as amended by the First, Second and Third
Amendments, and the terms and provisions of this Fourth Amendment, the terms and
provisions of this Third Amendment shall control.
1. AMENDMENT TO ARTICLE 34 OF RIDER NUMBER ONE TO THE LEASE DOCUMENT AND
ARTICLE 1 OF THE SECOND AMENDMENT. Lessor and Lessee do hereby agree
that effective July 15, 1998 or when Landlord delivers Premises to
Tenant (the "Effective Date") the description of the Premises shall be
deemed to be amended to include approximately 9,208 rentable square feet
of office space located on the fourth (4th) floor known as Suite 400
(the "New Premises") as outlined on the diagram of the fourth (4th)
floor of the building, attached hereto as Exhibit "A".
As of the Effective Date, Lessee shall be released of its obligation
from suite 310 excluding the shower area consisting of approximately
3,882 rentable square feet leaving approximately 2,448 rentable square
feet in suite 320 and shower area ("suite 320"), attached hereto as
Exhibit "C".
Lessee's right to occupy and obligation to pay Base Rent on the "New
Premises" shall commence on the "Effective Date" and shall terminate
with the lease term which is redefined in paragraph 2 of this Fourth
Amendment.
Except as otherwise specifically provided herein, as of the "Effective
Date" any reference to the term "Premises" and/or "New Premises" in the
Lease or any amendments thereto, including this Amendment, shall be
known as suite 400, approximately 9,208 rentable square feet and suite
320, approximately 2,448 rentable square feet and Lessee's occupancy
thereof shall be subject to all of the terms and conditions of the
Lease.
2. AMENDMENT TO ARTICLE 1 OF THE LEASE DOCUMENT AND ARTICLE 2 OF THE SECOND
AMENDMENT. Lessor and lessee do hereby agree that as of the "Effective
Date", the lease term as described in Article 1 of the Lease and Article
2 of the Second Amendment shall remain the same for suite 320 and shall
be extended through July 14, 2002 for suite 400.
3. AMENDMENT TO ARTICLE 35 OF RIDER NUMBER ONE TO THE LEASE DOCUMENT AND
ARTICLE 3 OF THE SECOND AMENDMENT. As of the "Effective Date", Lessor
and Lessee do hereby agree that the Rent obligation in Article 35 of
Rider Number One and Article 3 of the Second Amendment to the lease
document be amended as outlined below:
Suite 400 Approximately 9,208 Rentable Square Feet
--------------------------------------------------
<TABLE>
<S> <C> <C>
07/15/98 - 07/31/98 $ 5,680.74 per month ($13.50/RSF/Yr)
08/01/98 - 07/31/99 $10,359.00 per month ($13.50/RSF/Yr)
08/01/99 - 07/31/00 $10,550.83 per month ($13.75/RSF/Yr)
08/01/00 - 07/31/01 $10,934.50 per month ($14.25/RSF/Yr)
08/01/01 - 06/30/02 $11,126.33 per month ($14.50/RSF/Yr)
07/01/02 - 07/14/02 $ 5,024.79 per month ($14.50/RSF/Yr)
</TABLE>
Suite 320 Approximately 2,448 Rentable Square Feet
--------------------------------------------------
<TABLE>
<S> <C> <C>
07/15/98 - 7/31/98 $ 1,393.45 ($12.10/RSF/Yr)
</TABLE>
<PAGE> 2
08/01/98 - 12/31/98 $2,541.00 per month ($12.10/RSF/Yr)
01/01/99 - 06/30/01 $2,608.20 per month ($12.42/RSF/Yr)
Such other charges as may be required by the terms of this Lease to be
paid by Lessee may be referred to in the Lease document as "Additional
Rent." Lessor shall have the same rights as to the Additional Rent as it
has to the payment of the rent set forth above.
All Payments are due on or before the first day of the first full
calendar month of the term hereof and a like sum on or before the first
day of each and every successive calendar month thereafter during the
term hereof. Rent for any period during the term hereof, which is less
than one month, shall be prorated based on a thirty (30) day calendar
month. All rents payable hereunder shall be paid to Lessor in lawful
money of the United States of America constituting legal tender at the
time of payment, at the office of the building or to such other person
at such other place as Lessor may, from time to time, designate in
writing. The current payments or notice to Lessor shall be c/o CB
Commercial Real Estate Group, Inc., 1050 Seventeenth Street, Suite 800,
Denver, Colorado 80265.
4. LESSEE IMPROVEMENTS. Lessor shall provide "turnkey" Lessee improvements
with building standard materials per the attached Exhibit "A" prepared
by McDermott Planning dated March 26, 1998. Any increase in cost of the
Lessee improvements due to Lessee changing, modifying or altering the
plan shall be the responsibility of Lessee.
5. AMENDMENT TO ARTICLE 39 OF RIDER NUMBER ONE OF THE LEASE DOCUMENT AND
ARTICLE 5 OF THE SECOND AMENDMENT. As of the Effective Date, Lessee
shall have the right to use on an unassigned, unreserved basis, one (1)
parking space for every 200 rentable square feet leased in the 7000
Broadway parking area free of charge for the term of the Lease.
6. AMENDMENT TO ARTICLE 38 OF RIDER NUMBER ONE OF THE LEASE DOCUMENT AND
ARTICLE 6 OF THE SECOND AMENDMENT. Lessee's percentage of Operating
Expenses as of the "Effective Date" shall be 5.39% for suite 320 and
20.27% for suite 400.
7. MOVING ALLOWANCE. Lessor shall provide Lessee with up to $18,416.00 to
offset costs associated with moving of furniture, equipment,
telecommunications and data communications lines, and changing of
letterhead. Said allowance shall be paid to Lessee upon Lessee's
furnishing original receipts of each expense to Lessor.
8. CONFLICTS. If there is any conflict between the terms and provisions of
this Fourth Amendment and the terms and provisions of the Lease as
amended by the First, Second and Third Amendments, the terms and
provisions of this Third Amendment shall govern. Except as herein
specifically set forth, all other provisions of the Lease shall remain
in full force and effect and be binding upon the parties in accordance
with their terms.
LESSOR: LESSEE:
DENVER JACK LIMITED PARTNERSHIP BY ALLOS THERAPEUTICS
CB RICHARD ELLIS, INC. PROPERTY A DELAWARE CORPORATION
MANAGER
By: /s/ [ILLEGIBLE] By: /s/ STEPHEN J. HOFFMAN
--------------------------------- -----------------------------
Its: Vice President Its: President
--------------------------------- -----------------------------
By: /s/ [ILLEGIBLE]
---------------------------------
Its: Senior Vice President
---------------------------------
STATE OF COLORADO
COUNTY OF ADAMS
The foregoing instrument was acknowledge before me this 1st day of July,
1998 by Stephen J. Hoffman as President.
Witness my hand and official seal.
My commission expires: May 2, 1999 /s/ LISA D. LANGE
(SEAL) ---------------------------
Notary Public
<PAGE> 3
CB COMMERCIAL
[EXHIBIT "A"]
ALLOS SPACE PLAN
<PAGE> 4
[FLOOR PLAN]
[EXHIBIT "B"]
<PAGE> 5
7000 BROADWAY
MANAGED BY
CB COMMERCIAL
[EXHIBIT "C"]
ALLOS THIRD FLOOR
2448 R.S.F.
NOT TO SCALE [NORTH LOGO]
<PAGE> 1
EXHIBIT 10.17
Lease Term Sheet
<TABLE>
<CAPTION>
Blank
No. Information Needed Applicable Information
- ----- ------------------ ----------------------
<S> <C> <C>
[1] Date of Lease July 29, 1999
[2] Name of Tenant and type of organization A Virginia Corporation
(e.g., XYZ Corporation, a Virginia
corporation)
[3] Suite Number 200
[4] Floor on which Lease Premises located 2nd
[5] Number of rentable square feet 1,860
[6] Lease commencement date November 1, 1999
[7] Lease Year at the end of which October 31, 2004
Lease terminates
[8] Monthly rent during first Lease Year $4,330.70
[9] Annual rent escalation Three percent
[10] Amount of security deposit $4,330.70
[11] Notice address for Tenant Allos Therapeutics, Inc.
7000 North Broadway
Suite 400
Denver, CO 80221
</TABLE>
<PAGE> 2
LEASE AGREEMENT
THIS LEASE AGREEMENT (the "Lease"), dated July 28, 1999 between VIRGINIA
BIOTECHNOLOGY RESEARCH PARK AUTHORITY, a political subdivision of the
Commonwealth of Virginia (the "Landlord"), and ALLOS THERAPEUTICS, INC, a
Delaware Corporation (the "Tenant"), recites and provides:
RECITALS:
The Landlord owns a real estate project located in the City of Richmond,
Virginia, known as the Virginia Biotechnology Research Park (the "Project").
By lease dated as of August 18, 1994 (as amended, the "Master Lease"), the
Landlord leased to Virginia Commonwealth University ("VCU") the Biotech one
building (the "Building") a portion of phase one of the Project.
The Landlord desires to lease a portion of the Building to the Tenant in
accordance with the terms of this Lease. VCU joins in this Lease solely to
release (but only during the term of this Lease) all of its right, title and
interest under the Master Lease in and to the premises hereby leased to the
Tenant, during the term of this Lease to the Tenant.
NOW, therefore, for and in consideration of the terms, conditions,
covenants, promises and agreements herein made, the Landlord hereby leases and
demises unto Tenant the following described real property (the "Leased
Premises"), located on the 2nd floor of the Building, consisting of
approximately 1,860 rentable square feet as shown outlined in red on the floor
plan attached hereto as Exhibit A, together with a right to use in common with
other tenants of the Project the common areas and common facilities as may be
designated from time to time by the Landlord. This Lease shall be subject to all
of the terms and conditions of the Master Lease.
1. Term. The term of this Lease (the "Term") and the Tenant's obligation to
pay rent hereunder shall commence on the later of November 1,1999 or on the date
when the improvements required to be constructed by the Landlord under Section 3
have been substantially completed (the "Commencement Date"), unless the Tenant
takes possession of the Leased Premises on an earlier date, in which event such
earlier date shall be the Commencement Date. This Lease shall terminate on the
last day of the 5th consecutive full Lease Year. The Lease may be renewed for
two more five-year periods. The term "Lease Year" as used herein shall mean a
period of 12 consecutive full calendar months. The first Lease Year shall begin
on the Commencement Date if it is the first day of a calendar month. If the
Commencement Date is
1
<PAGE> 3
not the first day of a calendar month, the first Lease Year shall begin on the
first day of the calendar month immediately following the Commencement Date.
Each succeeding Lease Year shall commence on the anniversary of the first day
of the first Lease Year.
2. Rent. (a) Tenant covenants to pay Landlord the sum of $51,968 as base
rent during the first Lease Year in monthly installments of $4,330.70, due and
payable in advance on the first day of each month (the "Monthly Rent"), without
notice or demand and without setoff. If the Monthly Rent is not received in the
Authority's office within five (5) days after the first day of each rental
month, the Authority has the right to apply a service charge of 1.5% of the
monthly rental amount. If the Commencement Date is not the first day of a
calendar month, the Tenant shall pay on the first day of the first calendar
month following the Commencement Date a proportionate amount of the Monthly
Rent for the period of time from the Commencement Date to the date on which
such first payment of Monthly Rent is due. Rent shall be paid to the Landlord
at 800 East Leigh Street, Richmond, Virginia 23219, or to such other party and
such other place as Landlord may from time to time designate in writing as
provided herein.
(b) The Monthly Rent shall be increased annually on each anniversary
of the first day of the first Lease Year by an amount equal to three percent
(3%) of the Monthly Rent payable during the preceding Lease Year.
(c) All costs in addition to the Monthly Rent required to be paid by
the Tenant in accordance with the terms of this Lease shall be deemed to be
additional rent (the "Additional Rent"). Additional Rent shall be due and
payable with the next installment of Monthly Rent unless some other due date is
expressly provided under this Lease.
3. Tenant Improvements. The Landlord agrees to provide improvements as
shown or described on architectural plans and specifications prepared by
Baskervill & Son dated July 28, 1999 approved by the Landlord and Tenant and
incorporated herein (the "Tenant Improvements").
4. Use of Premises. The Tenant shall use the Leased Premises solely for
biomedical and biotechnology research and related uses approved in writing by
the Landlord and VCU.
5. Security Deposit.
(a) Upon execution of this Lease, the Tenant shall deposit with the
Landlord a cash deposit (the "Security Deposit") in the amount of $4,330.70
(one month's rent). The Security
2
<PAGE> 4
Deposit shall be held by the Landlord, without interest due to the Tenant, for
the term of this Lease, and until all of the Tenant's monetary obligations
under this Lease have been paid in full and Tenant has performed all of its
obligations under this Lease.
(b) If, at any time during the term of this Lease, any Monthly Rent,
Additional Rent or other cost is not paid by Tenant when due, or if the Tenant
fails to perform any of its obligations under this Lease, the Landlord may, at
its option, apply all or any part of the Security Deposit to (1) the payment
of any such Monthly Rent, Additional Rent or other cost, and/or (2) reimburse
the Landlord for any loss or damage sustained as a result of the Tenant's
failure to perform its obligations, and/or (3) reimburse the Landlord for the
expenses incurred in performing obligations which were the responsibility of
the Tenant.
(c) If the Security Deposit, or any part thereof, is applied by the
Landlord as provided in Section 5(b), upon written demand by the Landlord, the
Tenant shall pay to the Landlord forthwith an amount equal to the amount
necessary to restore the Security Deposit to the original amount set forth in
Section 5(a). At the termination of this Lease, if all the Tenant's monetary
obligations have been paid in full and Tenant has performed all of its
obligations under this Lease, the Landlord shall return to the Tenant the
Security Deposit or any lesser amount remaining after application of all or any
portion of the Security Deposit as provided in Section 5(b). The Landlord shall
have the right to transfer the Security Deposit to VCU or to any purchaser or
mortgagee of the Project, and upon any such transfer the Landlord shall be
discharged from any further liability with respect thereto.
6. Common Areas and Common Facilities. All common areas and common
facilities furnished by the Landlord in or about the Project for the general
use, in common, of tenants of the Project and their employees and invitees
shall at all times be subject to the exclusive control and management of the
Landlord. The Landlord, with the approval of VCU, shall have the right from
time to time to establish, modify and enforce reasonable rules and regulations
with respect to all such common areas and facilities. The Landlord shall have
the right to remove common areas from common use with the approval of VCU; to
construct, maintain and operate lighting facilities in or on all such common
areas and facilities; to police such areas and facilities; from time to time to
change the area and arrangement of the common facilities with the approval of
VCU; to close temporarily all or any portion of such areas or facilities for
maintenance purposes; and to do and perform such other acts in and to such
areas and facilities as the Landlord, in its reasonable discretion, shall
3
<PAGE> 5
deem advisable. The Tenant shall have the right to use, in common with other
tenants of the Project, all such common areas and facilities of the Project. In
the event of removal of the right to use a common area or diminution of a
common area, the Landlord shall not be subject to any liability for damages
caused to Tenant by such removal or diminution, nor shall the Tenant be
entitled to any compensation or diminution or abatement of Monthly Rent or
Additional Rent.
7. Services and Utilities.
(a) The Landlord shall provide the Tenant the following services
during the term hereof:
(i) Hot and cold water and lavatory supplies. Hot and cold water
shall be provided only at those points of supply provided for the general use of
other tenants of the Project.
(ii) Automatically operated elevator service.
(iii) Cleaning and janitorial services after normal business
hours Monday through Friday of each week, except holidays recognized by the
Commonwealth of Virginia, which services shall not be performed between 9:00
a.m. and 5:00 p.m.
(iv) Heating and air conditioning in season Monday through Friday
from 8:00 a.m. to 6:00 p.m. and on Saturday from 9:00 a.m. to 2:00 p.m., except
on the following holidays: Christmas, New Year's Day, Thanksgiving, July 4th,
Memorial Day and Labor Day.
(v) Maintenance and electric lighting service for all common
areas in the Project.
(vi) Electricity and proper electrical facilities to furnish
sufficient electricity, comparable to services provided for typical business
office operations, for equipment of the Tenant installed under this Lease. To
the extent the Leased Premises is not then separately metered, then if any
portion or all of the Tenant's equipment shall cause its demand for electricity
to exceed an average of 5 watts per square foot of area in the Leased Premises,
the Tenant shall pay for the cost of such excess electricity at the rate charged
by the public utility for furnishing such excess, assuming continuous operation
of the Tenant's equipment during normal business hours.
(b) If any law, regulation or executive or administrative order
requires the Landlord or Tenant to reduce or maintain at a certain level the
consumption of electricity from the Leased Premises or the Project which
affects the heating, air
4
<PAGE> 6
conditioning, lighting or hours of operation of the Leased Premises or the
Project, the Tenant shall adhere to and abide by such laws, regulations or
executive or administrative order without any reduction in rent.
(c) Failure by the Landlord to any extent to furnish the services
listed above or any cessation thereof resulting from causes beyond the control
of the Landlord shall not render the Landlord liable for damages to either
person or property, nor be construed as an eviction of the Tenant, nor work an
abatement of rent, nor relieve the Tenant from fulfillment of any of the terms
and conditions of this Lease. If any equipment or machinery ceases to function
properly, the Tenant shall have no claim for rent abatement or damages due to
any interruptions in service occasioned thereby or resulting therefrom.
8. Tenant's Equipment, Fixtures and Alterations. (a) The Tenant will not
install in the Leased Premises any electrically operated equipment or other
machinery, other than personal desktop computers (other than mainframe
computers), electric typewriters or word processing equipment, adding machines,
radios, televisions, tape recorders, dictaphones, bookkeeping machines, copying
machines, a coffee-maker, a small refrigerator and clocks, without the prior
written consent of the Landlord, which consent may be conditioned upon payment
by the Tenant of Additional Rent as compensation for additional consumption of
electricity or water, to the extent the Leased Premises is not then separately
metered. The Tenant shall not install any equipment which will necessitate any
changes, replacements or additions to, or changes in the use of, the water
system, heating system, plumbing system, air-conditioning system or electrical
system in the Leased Premises without the prior written consent of the
Landlord. If Tenant uses equipment that increases the heat levels in the Leased
Premises above those customarily found in an office, Landlord shall have the
option to install supplemental air conditioning equipment. All costs of such
installation, operation, maintenance and replacement of equipment by
Landlord shall be at Tenant's expense.
(b) The Tenant shall not make or cause to be made any interior or
exterior modifications or additions to the Leased Premises without the prior
written consent of the Landlord. The Tenant shall present to the Landlord plans
and specifications for such work at the time such consent is sought. If the
plans and specifications are approved, the Tenant shall employ a contractor,
selected by the Tenant and approved by the Landlord, to make the improvements.
All improvements shall comply with the requirements of all federal, state and
local governmental authorities. The Tenant shall be solely responsible for the
prompt payment of all costs related to the improvements and, if any mechanics'
or materialmen's lien is filed, the Tenant shall
5
<PAGE> 7
have such lien released by payment or bond within ten days after the Tenant
receives notice thereof.
(c) Upon the termination or expiration of the term of this Lease, the
Tenant shall remove all trade fixtures and furnishings installed by the Tenant
and not a part of the real estate or mechanical equipment and shall repair all
damage to the Leased Premises caused by the installation or removal of any
trade fixtures or other furnishings. All trade fixtures and furnishings which
the Tenant has not removed prior to the termination or expiration of the term
hereof shall, at the Landlord's option, become the property of the Landlord.
9. Tenant's Insurance; Compliance with Laws.
(a) Tenant shall maintain at its sole cost and expense the following
insurance with respect to the Leased Premises:
(i) Contractual and commercial general liability insurance
against claims for bodily injury, death or property damage occurring on, in or
about the Project, which insurance shall be written on an occurrence basis and
shall provide protection with a combined single limit of Two Million
($2,000,000) Dollars (or in such increased limit to reflect declines in the
purchasing power of the dollar as Landlord may, from time to time, reasonably
request). Tenant shall hold the Landlord and VCU harmless from any liability for
death or bodily injury to any person or damage to property owned by a third
party occurring in the Leased Premises arising from any cause whatsoever.
(ii) Insurance for the Tenant's furniture, furnishings,
equipment, improvements and trade fixtures located in the Leased Premises under
a standard fire and extended coverage insurance policy, in amounts to prevent
Landlord, and Tenant from becoming co-insurers, and in any event, in amounts not
less than the actual replacement cost of such property. The Landlord shall not
be responsible for providing insurance of any kind on the Tenant's furniture and
furnishings or its equipment, improvements or trade fixtures and the Tenant
shall be solely liable to repair or replace the same in the event of damage or
destruction to the Leased Premises.
(iii) Such additional and/or other insurance in such amounts as
is requested by Landlord and customarily carried by prudent tenants with respect
to improvements similar in character, location and use.
(b) Each policy of insurance required by this Section shall name the
Landlord, VCU and any person or entity having an interest in the Project and
designated by the Landlord or VCU as
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<PAGE> 8
insured parties and shall provide that the insurer shall not cancel or change
the terms of such insurance policy without first giving the Landlord, VCU and
other insureds thirty (30) days' prior written notice thereof. The insurance
policies shall be issued by an insurance company, licensed to do business in
Virginia, and approved by the Landlord. Copies of the policies or the issuer's
certificates of insurance shall be delivered to the Landlord, VCU and to all
other insured parties on or before the Commencement Date and thereafter promptly
upon request.
(c) The Tenant shall not do or allow to be done in or about the
Leased Premises anything which is prohibited under any policy of insurance
carried by the Landlord or VCU. If Tenant's use or occupancy of the Leased
Premises causes the premium for fire or other insurance carried by the Landlord
or VCU to be higher than the premium otherwise payable for such insurance, the
Tenant shall pay the difference as Additional Rent.
(d) The Tenant shall at all times and at its expense, promptly
comply with, or promptly cause to be complied with, all applicable laws, rules,
regulations and other governmental requirements, now existing or hereafter
enacted, to which the Tenant or the Leased Premises is subject.
10. Landlord's Access to Leased Premises. The Landlord shall have the
right at all reasonable times to enter the Leased Premises to perform routine
maintenance, repairs and alterations, to inspect the Leased Premises and to
show such property to prospective tenants, mortgages or purchasers. If the
Tenant is not present to open and permit entry to the Leased Premises at any
time when for any reason entry there is necessary or permissible hereunder, the
Landlord may use a master key to enter the Leased Premises. The Landlord may
enter the Leased Premises at any time to make emergency repairs and may
forcibly enter the Leased Premises in an emergency situation. Such entry shall
not be deemed to constitute an eviction of the Tenant or to give the Tenant any
right to abatement of rent for loss or interruption of the business of the
Tenant. The Landlord shall have the right to place upon the Leased Premises
"For Rent" signs at any time during the final Lease Year.
11. Surrender of Possession. The Tenant shall, at the expiration or
termination of the term of this Lease, surrender possession of the Leased
Premises peacefully and promptly in as good condition as at the commencement of
its occupancy, ordinary wear and tear excepted. The Tenant shall surrender all
keys used in connection with the Leased Premises.
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<PAGE> 9
12. Tenant's Personal Property.
(a) All property of the Tenant kept or stored in the Leased Premises
shall be kept or stored at the sole risk of the Tenant, and the Tenant shall
hold the Landlord and VCU harmless from any liability for loss of or damage to
such property.
(b) The Tenant agrees to notify the Landlord immediately of any fire
or other casualty or known defect in the Leased Premises, the Building and in
the fixtures or equipment located therein.
(c) The Tenant shall be responsible for and shall pay when due all
municipal, city or state taxes assessed during the term of this Lease against
any leasehold interest or personal property of any kind, owned by or placed in
the Leased Premises by the Tenant.
13. Rules and Regulations. The rules and regulations attached to this
Lease as Exhibit C, as amended and supplemented from time to time as provided
below, are hereby made a part of this Lease (the "Rules and Regulations"), and
Tenant shall be subject to all provisions thereof. The Landlord, with the
approval of VCU, reserves the right to make reasonable amendments and
supplements to the Rules and Regulations. The Landlord shall give the Tenant at
least ten (10) days written notice prior to the implementation of any
amendments or supplements.
The Tenant shall be liable for the payment of all costs and expenses,
including reasonable attorneys' fees incurred by the Landlord in enforcing the
Rules and Regulations and other provisions of this Lease.
14. Indemnification. (a) The Tenant agrees to indemnify and hold the
Landlord and VCU harmless from all claims, actions, damages, liability and
expense in connection with loss of life or personal injury to persons and
damage to property arising in or about the Leased Premises, or the occupancy or
use of the Leased Premises, or any part thereof, by the Tenant, or occasioned
wholly or in part by any act or failure to act by the Tenant, its agents,
contractors, employees, or subtenants.
(b) The Tenant waives all claims, demands or rights of indemnity
against the Landlord or VCU due to loss of or damage to the Leased Premises or
to any personal property located therein resulting from fire or other casualty
regardless of the cause of the damage or destruction.
15. Estoppel Certificate. Upon request by the Landlord, the Tenant shall
deliver to the Landlord, or to any party designated by the Landlord, a written
statement in recordable
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<PAGE> 10
form certifying: the commencement and termination dates of this Lease; that
this Lease is or is not in full force and effect; that the Tenant has or has
not accepted the Leased Premises and is or is not in complete possession
thereof; that this Lease has not been modified or amended, or if it has,
stating the specific modifications or amendments thereto; that all improvements
to the Leased Premises to be made by the Landlord have been fully completed in
accordance with the applicable plans and specifications or stating specifically
any failure to complete such improvements; that, as of the date of
certification, the Tenant has not paid Monthly Rent more than 30 days in
advance (or stating the amount of rent paid more than 30 days in advance);
that no proceedings are pending or threatened against Tenant before or by any
court or administrative agency which, if adversely decided, would materially
and adversely affect this Lease or the Tenant's ability to perform its
obligations hereunder or, if any such proceedings are pending or threatened,
specifying and describing such proceedings; and that there are no defaults
under this Lease, nor defenses or offsets, or stating the specific defaults,
defenses or offsets claimed by the Tenant. Such statement shall include any
other certification reasonably requested.
16. Attornment. In the event of the exercise of any power of
sale under the provisions of any mortgage or deed of trust now or hereafter
encumbering the Project, or a transfer of the Project in lieu thereof, the
Tenant agrees that, if requested by the purchaser at such foreclosure sale or by
the transferee, it shall attorn to the purchaser or transferee and it shall
recognize such purchaser or transferee as the Landlord under the terms of this
Lease and shall continue this Lease in full force and effect regardless of
whether such mortgage or deed of trust was superior or subordinate to this
Lease.
17. Subordination. This Lease is subject and subordinate to the lien
and the provisions of any and all mortgages, deeds of trust and other security
instruments which may now or hereafter encumber or otherwise affect the
Project, and to all renewals, replacements, extensions and modifications
thereof. The foregoing subordination shall be self-operative and effected by
execution of this Lease. Upon request by the Landlord, the Tenant agrees to
confirm the subordination of its rights hereunder to any mortgage or deed of
trust or any other security instrument resulting from any method of financing
now or hereafter affecting the Project and to all advances made or hereafter to
be made thereunder. Notwithstanding the foregoing, the beneficiary of any deed
of trust on the Project may, at its option, subordinate at any time its deed of
trust to this Lease by executing and recording a unilateral declaration to such
effect.
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18. Assignment and Subletting.
(a) The Tenant shall not mortgage or assign this Lease, in whole or
in part, nor sublet all or any part of the Leased Premises without the prior
written consent of the Landlord and VCU, which consent may be withheld, delayed
or conditioned in the sole and absolute discretion of Landlord and VCU. This
prohibition on assignment and subletting shall include a prohibition against
any assignment or subletting by operation of law. Any consent given by the
Landlord and VCU to any mortgage, assignment or subletting by the Tenant shall
not constitute a waiver of the requirement for such consent to any subsequent
mortgage, assignment or subletting, nor shall the Tenant be released from
performing any of the terms, covenants and conditions of this Lease. If this
Lease is assigned or the Leased Premises sublet, the Landlord may collect
Monthly Rent and Additional Rent and other costs from the assignee or sublessee
and apply the amount collected to Tenant's obligation for Monthly Rent,
Additional Rent and other costs due in accordance with the provisions of this
Lease.
19. Damage or Destruction. (a) If the Leased Premises are damaged by fire
or other casualty, but no portion thereof is thereby rendered untenantable for
the purpose or use for which Tenant has leased the Leased Premises in
Landlord's reasonable opinion, upon being so notified by Tenant by certified or
registered mail, return receipt requested, the Landlord shall [except as
provided in paragraph (ii) of Section 10(a)], at its expense, cause such damage
to be repaired and the rent shall not be abated. If by reason of fire or other
casualty, the Leased Premises are rendered untenantable in part for the purpose
or use for which Tenant has leased the Leased Premises in Landlord's reasonable
opinion, the Landlord shall [except as provided in paragraph (ii) of Section
10(a)], at its expense, subject to availability of insurance proceeds, cause
such damage to be repaired, and the Monthly Rent shall be adjusted on a
pro-rata basis for the period of such repair and restoration for that portion
of the Leased Premises rendered untenantable. If the leased Premises are
damaged by fire or other casualty so as to render same untenantable for the
purpose or use for which Tenant has leased same in Landlord's reasonable
opinion, the Landlord shall [except as provided in paragraph (ii) of Section
10(a)], at its expense, subject to availability of insurance proceeds, cause
such damage to be repaired, and the Monthly Rent shall be abated in full for
the period of such repair and restoration, provided, however, that if, within
60 days after the fire or other casualty, the Landlord gives the Tenant written
notice that it has elected not to cause the Leased Premises to be repaired and
restored, then this Lease shall terminate as of the date of the fire or other
casualty.
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<PAGE> 12
(b) If the Project is damaged by fire or other casualty with the
result that its general use is impaired, then, notwithstanding that the Leased
Premises may be undamaged, the Landlord shall have the right for ninety (90)
days following the date of the fire or other casualty, to terminate this Lease
by giving the Tenant 30 days' prior written notice of the termination.
20. Eminent Domain. If all or part of the Leased Premises is taken or
condemned by any authority or in the event of any purchase in lieu of any such
taking or condemnation, this Lease shall terminate as of the date on which the
Tenant is deprived of possession of the Leased Premises. Any award for the land
and buildings of which the Leased Premises are a part and for damages to the
residue, or any negotiated payment by private sale in lieu thereof, shall be
the property of the Landlord, and the Tenant hereby assigns to the Landlord all
its right, title and interest in and to any such award or payment. The Tenant
shall bear the cost of removing its property from the Leased Premises.
21. Environmental Hazards. Tenant will not on, about or under the Leased
Premises, handle, store, make, treat or dispose of any "Hazardous Materials"
(defined below), except in accordance with all applicable federal, state and
municipal laws and regulations (collectively, the "Environmental Laws")
governing Hazardous Materials. "Hazardous Materials" as used herein shall
include, without limitation, "hazardous substances" as defined in the
Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. Section 9601 et seq. ("CERCLA"); all chemicals, petroleum, crude oil or
any fraction thereof, hydrocarbons, polychlorinated biphenyls (PCBs), asbestos,
asbestos-containing materials and/or products, urea formaldehyde, or any
substances which are classified as "hazardous" or "toxic" under CERCLA;
hazardous waste as defined under the Solid Waste Disposal Act, as amended, 42
U.S.C. Section 6901; air pollutants regulated under the Clean Air Act, as
amended, 42 U.S.C. Section 7401, et seq.; pollutants as defined under the Clean
Water Act, as amended, 33 U.S.C. Section 125, et seq., any pesticide as defined
by Federal Insecticide, Fungicide, and Rodenticide Act, as amended, 7 U.S.C.
Section 136, et seq., any hazardous chemical substance or mixture or imminently
hazardous substance or mixture regulated by the Toxic Substances Control Act, as
amended, 15 U.S.C. Section 2601, et seq.; any substance listed in the United
States Department of Transportation Table at 45 CFR 172.101; any chemicals
included in regulations promulgated under the above listed statutes; any
explosives, radioactive material, and any chemical regulated by state statutes
similar to the federal statutes listed above and regulations promulgated under
such state statutes.
During the term of this Lease, to the extent at any
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time required by the Environmental Laws, Tenant shall remove any Hazardous
Materials placed, generated or stored by it on or about the Leased Premises,
and Tenant shall defend, indemnify and hold the Landlord and VCU, their
officers, directors, shareholders, partners and employees harmless from and
against any and all causes of action, suits, demand or judgments of any nature
whatsoever, losses, damages, penalties, expenses, fees, claims, costs
(including, but not limited to, attorneys' fees and costs of litigation,
arising out of or in any manner connected with the violation of any applicable
federal, state or local environmental law with respect to the Leased Premises;
the handling, storage, "release" or "threatened release" of or failure to
remove, as required by this Section, Hazardous Materials from the Leased
Premises.
Tenant represents and warrants that it will not install any
underground storage tank without specific, prior written approval from the
Landlord and VCU. Tenant will not store combustible or flammable materials on
the Leased Premises in violation of the Environmental Laws.
22. Default; Remedies upon Default.
(a) Events of Default: Any one or more of the following events shall
constitute a default (a "Default") under this Lease:
(i) Failure by the Tenant to pay any Monthly Rent, Additional
Rent or other amount due under this Lease within five days after the date when
due.
(ii) Failure by the Tenant to observe or perform any covenant,
condition or agreement on its part to be observed or performed hereunder or
under the Rules and Regulations, other than as referred to in clause (i) above,
which failure shall continue for a period of thirty (30) days after written
notice of such failure is given by the Landlord to the Tenant.
(iii) The commencement by Tenant, or the commencement against
Tenant, of a case under federal bankruptcy law, as now or hereafter
constituted, or under any other applicable federal or state bankruptcy,
insolvency, moratorium or similar law.
(b) Remedies upon Default.
(i) Whenever any Default shall have occurred, the Landlord may
take any one or more of the following actions:
(a) The Landlord may immediately re-
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enter and take possession of all or any part of the Leased Premises without
terminating this Lease, exclude the Tenant from possession of all or any part
of the Leased Premises, and, for the account of the Tenant, keep in force and
effect any assignments or subleases entered into with the consent of Landlord
pursuant to Section 18 (or which Landlord decides to acknowledge even if not
consented to) which then are outstanding and not in default and lease all or
any part of the Leased Premises which is not then so subleased or assigned to
one or more parties, at a rental rate and upon such terms and conditions as
Landlord deems acceptable in its sole discretion, in each case holding the
Tenant liable for the difference between the proceeds of the reletting (less
costs of reletting including without limitation brokerage fees, architect's
fees, attorneys' fees and costs of alterations and redecorating) and all
Monthly Rent, Additional Rent and other amounts due from Tenant under this
Lease.
(b) The Landlord may immediately terminate this Lease as to
all or any part of the Leased Premises and exclude the Tenant from possession of
all or any part of the Leased Premises.
(c) The Landlord may immediately terminate this Lease and
declare all payments of Monthly Rent due from the date of termination through
the date that would otherwise have been the normal expiration of this Lease to
be immediately due and payable, discounted to present value as of the date of
payment at an annual rate equal to six percent per year.
(d) The Landlord may exercise rights of self-help and/or
take whatever action at law or in equity may appear necessary or desirable to
collect the Monthly Rent, Additional Rent or other amounts then due and
thereafter to become due, or to enforce performance and observance of any
obligation, agreement or covenant of the Tenant under this Lease. No termination
of this Lease shall relieve Tenant from liability for payment of Monthly Rent,
Additional Rent and other amounts accrued to the date of termination.
(ii) No re-entry or taking possession of the Leased Premises by the
Landlord shall be construed as an election by the Landlord to terminate this
Lease unless (i) written notice of such termination is given by the Landlord to
the Tenant, or (ii) this Lease is terminated by an order or a decree of a court
of competent jurisdiction. Notwithstanding any re-entry and taking possession
by the Landlord of all or any part of the Leased Premises without terminating
this Lease, the Landlord may at any time thereafter elect to terminate this
Lease for any previous Default by the Tenant. Upon and re-entry and taking
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possession of the Leased Premises by Landlord, or upon any termination of this
Lease, any property of the Tenant may be removed by Landlord, without liability
for loss of or damage to said property, and stored elsewhere at the risk of and
at the expense of Tenant.
(iii) Upon a Default, the Tenant shall on demand pay Landlord as
Additional Rent all reasonable attorneys' fees, court costs and other
reasonable expenses incurred by Landlord in the collection of Monthly Rent,
Additional Rent and other amounts due under this lease and/or the enforcement
of any other obligations of Tenant. Upon a Default, the Tenant shall on demand
pay Landlord as Additional Rent all reasonable expenses incurred by the
Landlord in attempting to cure the Default by the exercise of self-help.
(iv) No delay or omission by the Landlord in exercising any right
accruing upon a Default shall be construed to be a waiver of any such right,
but any such right may be exercised from time to time as often as deemed
expedient.
23. Force Majeure.
If by reason of acts of God, strikes, lockouts or other industrial
disturbances; acts of public enemies; orders of any kind of the government of
the United States or the Commonwealth of Virginia, or any civil or military
authority; insurrections; riots; epidemics; landslides; lightning; earthquakes;
fires; hurricanes; tornadoes; blizzards, or other storms; floods, washouts;
droughts; arrests; restraint of government and people; civil disturbances;
explosions; breakage or accident to machinery; partial or entire failure of
utilities; or any cause or event not reasonably within the control of the
Landlord, the Landlord is unable in whole or in part to carry out its
agreements contained in this Lease, the Landlord shall not be deemed in Default
during the continuance of such inability.
24. Successors. Subject to the provisions of this Lease prohibiting or
restricting the right of the Tenant to encumber, sublease or assign its
interests under this Lease and the provisions of the Section headed
"Subordination", this Lease shall be binding upon and inure to the benefit of
the Landlord, VCU and the Tenant and their respective successors and assigns.
25. Non-Waiver. The failure of the Landlord, to enforce strict compliance
with any of the terms and conditions of this Lease shall not constitute or be
construed as a waiver or relinquishment of the right to enforce strict
compliance thereafter with the terms and conditions of this Lease. The payment
of rent by the Tenant or the acceptance of rent by the Landlord, with knowledge
of the breach of any term or condition
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of this Lease, shall not be deemed a waiver of such breach.
26. Notices. All notices required or permitted by this Lease shall be in
writing and delivered or sent by registered or certified mail and addressed as
follows:
If To the Landlord:
Virginia Biotechnology Research Park Authority
800 East Leigh Street
Richmond, Virginia 23219
Attn: Executive Vice President
If to the Tenant:
Dr. Stephen J. Hoffman
President & Chief Executive Officer
Allos Therapeutics, Inc.
7000 North Broadway
Suite 400
Denver, CO 80221
Either party may, at any time, designate in writing a substitute address for
the address set forth above, and thereafter notices shall be directed to such
substitute address.
27. Exculpation. In the event of a breach by the Landlord of any of its
obligations under this Lease, any monetary judgment against the Landlord, shall
be satisfied solely from the equity of the Landlord in the Project.
28. Titles. The titles and paragraph headings used herein are for purposes
of convenience only and shall not be construed to limit or extend the meaning
of any part of this Lease.
29. Applicable Law. This Lease shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia.
30. Entire Agreement. This Lease constitutes the entire full and complete
understanding and agreement of the parties and all representations, conditions,
statements, warranties, covenants, promises or agreements previously made or
given by either party to the other are expressly merged into this written Lease
and shall be null, void and without legal effect; provided, however, that this
Lease does not modify or amend the provisions of the Master Lease. Except for
amendments and supplements to the Rules and Regulations as expressly permitted
under the terms of this Lease, this Lease shall not be altered, amended or
modified except by written agreement of the parties hereto with the same
formality as this Lease.
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31. EDA Grant Requirements. In the event the Leased Premises are located
in whole or in part on the second floor of the Project, then the following
provisions shall apply:
(i) Use. The Tenant (i) acknowledges Leased Premises may be improved,
in part, with funding from the United States Economic Development
Administration (the "EDA"), Award Number 01-01-03469 (the "EDA Grant"), and
(ii) agrees to use the Leased Premises in a manner consistent with the
authorized general and special purpose of the EDA Grant, if obtained, which is
biomedical or biotechnology related businesses.
(ii) Nonrelocation. The Tenant agrees to comply with EDA's
Nonrelocation Regulation as set forth in 13 CFR 309.3, which is incorporated
herein by this reference. Under this restriction, EDA financial assistance may
not be used directly or indirectly to assist employers who transfer one or more
jobs from one commuting area to another. A commuting area is that locality of
the project receiving EDA financial assistance. Upon request by the Landlord,
the Tenant shall execute the EDA form Employer's Certificate of Nonrelocation.
(iii) Nondiscrimination. The Tenant agrees to provide service without
discrimination to all persons without regard to their age, race, color,
religion, sex, handicap or national origin. Upon request by the Landlord, Tenant
shall execute the EDA form Assurance of Compliance with Civil Rights and Other
Legal Requirements for Other Parties.
WITNESS the following signatures:
[SIGNATURE PAGES TO FOLLOW.]
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<PAGE> 18
SIGNATURE PAGE
LEASE AGREEMENT
VIRGINIA BIOTECHNOLOGY RESEARCH
PARK AUTHORITY, a political
subdivision of the Commonwealth of
Virginia
By: /s/ ROBERT T. SKUNDA (SEAL)
----------------------------
Name: Robert T. Skunda
Title: President and CEO
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<PAGE> 19
SIGNATURE PAGE
LEASE AGREEMENT
ALLOS THERAPEUTICS, INC.
A Virginia Corporation
By: /s/ STEPHEN J. HOFFMAN (SEAL)
---------------------------
Name: Dr. Stephen J. Hoffman
Title: President and CEO
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<PAGE> 20
SIGNATURE PAGE
LEASE AGREEMENT
The undersigned joins in the execution of this Lease for the sole purpose of
releasing (but only during the term of this Lease) all of its right, title and
interest under the Master Lease in and to the premises hereby leased to the
Tenant.
COMMONWEALTH OF VIRGINIA, VIRGINIA
COMMONWEALTH UNIVERSITY
By: /s/ EUGENE P. TRANI (SEAL)
----------------------------
Name: Eugene P. Trani
Title: Chair, Virginia
Biotechnology
Research Park Authority
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<PAGE> 21
LIST OF EXHIBITS
Exhibit A - Floor Plan
Exhibit B - Tenant Improvements
Exhibit C - Rules and Regulations
Exhibit D - In Premises Support/Shared Access/Shared Use of Common Facilities
and Equipment in the Virginia Biotechnology Center
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<PAGE> 22
[FLOOR PLAN]
EXHIBIT "A"
NOTE:
ALL BIOTECH ONE CALCULATIONS ARE TO BE CONSIDERED USABLE SQUARE FEET
BIOTECH ONE - SECOND FLOOR
- --------------------------------------------------------------------------------
BASKERVILL & SON
<PAGE> 23
EXHIBIT B
TENANT IMPROVEMENTS
Architectural Plans developed by Baskervill & Son dated July 28, 1999.
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<PAGE> 24
EXHIBIT C
RULES AND REGULATIONS
The following rules and regulations shall be a part of the foregoing Lease
and shall be observed by the Tenant:
1. The sidewalks, entrances, elevators, stairways, corridors and other
common areas in and about the Project shall not be obstructed or encumbered by
the Tenant or used for any purpose other than ingress and egress to and from
the Leased Premises. The Tenant shall not interfere with the use and enjoyment
by other tenants of the common areas of Biotech One.
2. The Tenant shall not place or maintain any sign, awning, canopy,
advertising matter or other thing on any exterior part of the Leased Premises,
on the doors or on the windows in the Leased Premises, or in any other location
in Biotech One without the prior written consent of the Landlord. No drapes,
blinds, shades or screens shall be attached to or hung in, or used in
connection with any window or door of the Leased Premises without the prior
written consent of the Landlord.
3. The Tenant, at its expense, shall make any repairs to the Leased
Premises made necessary as a result of any failure of the Tenant to perform its
obligations hereunder or by the negligence or willful misconduct of the Tenant,
its agents,
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<PAGE> 1
EXHIBIT 10.18
TERM SHEET FOR CONTRACT API SUPPLY
BETWEEN ALLOS AND HOVIONE
This Term Sheet sets forth the principal terms for a supply agreement (the
"Agreement") [ * ] (the "API") for clinical and commercial use between Allos
Therapeutics, Inc., the customer and developer of the API, a Delaware
Corporation, with its principal place of business in Denver, CO, USA, ("Allos")
and The Hovione Group ("Hovione"), herein represented by Hovione Inter Limited a
Swiss corporation, with its principal place of business in Luzern, Switzerland,
the API manufacturer. The parties shall negotiate in good faith the full and
complete terms of the Agreement, which shall be consistent with those terms set
forth in this Term Sheet, but until such Agreement is fully executed by both
parties neither party shall be obligated to enter into any agreements.
PARTIES: The parties to the Agreement shall be Allos and Hovione and
their successors and permitted assigns.
During the Agreement's Term, Hovione shall be Allos' primary
API manufacturer and Allos and its affiliates and licensees
shall purchase no less than the percentages set forth in this
Term Sheet of its [ * ] from Hovione, subject to their supply
capacity and conformance with the Agreement.
AGREEMENT Pre-commercial Supply Phase--includes all activities and API
PHASES lots manufactured after the effective date of this Agreement
and before Allos submits an NDA to FDA for the finished
product manufactured from the API.
Commercial Supply Phase--includes all activities and API lots
manufactured after Allos submits an NDA to FDA for the
finished product manufactured from the API.
PROJECT Each Party shall designate an official contact with full
MANAGEMENT: authority to represent company on technical and project
matters ("Project Managers"), Hovione and Allos (with
participation of Hovione's agent) shall hold periodic project
management and status meetings. Hovione shall provide Allos
with a monthly, written production status report, describing
progress on completion of outstanding obligations (e.g.,
process development, validation, stability data, production
runs, pending corrective actions).
The Project Managers shall approve and authorize updates of
all Master Batch Records, Validation Protocols & Reports,
Corrective Action Plans and Implementation Reports, and
Changes to the foregoing.
PROJECT SCHEDULE: Hovione will be kept advised in writing of
Allos' intentions and time-lines concerning the NDA filing.
Allos shall provide Hovione with written notice of
significant time-line changes; shall milestones within the
time-line be moved by more than 3 months Hovione must be
given at least 6 months written notice where reasonably
possible; should Allos be unable to provide such notice
Hovione will only be obliged to make a best effect attempt at
meeting the new time-line. [ * ] batches will be scheduled
with at least 9 months written notice.
Confidential Term Sheet: Ver.02 Page 1 March 25, 1999
<PAGE> 2
HOVIONE Hovione shall perform the following, as more fully
OBLIGATIONS: described in Attachment A.
1. Hovione shall manufacture and deliver such quantities of
the API as ordered by Allos in accordance with the
forecasting and purchase procedures.
2. Prior to the Allos NDA submission date, Hovione shall
complete the following in time to permit completion and
submission of such NDA:
o Process scale-up and validation (including, but not
limited to, all vendors, equipment, processes,
cleaning, facilities, and methods), and revalidation,
and be prepared for an FDA and EU PAI;
o Successful manufacture and delivery of at least three
fully independent validation batches suitable for
preparing data for submission to FDA and which shall
demonstrate that the process has been successfully
validated. Hovione shall provide data to demonstrate
no less than 24 months real time bulk stability (at
least six months of data shall be available 60 days
prior to NDA submission).
o Successful characterization and delivery of samples of
final API reference standard( amount to be determined).
3. Hovione shall be responsible, at its expense, for all
ongoing validation and to ensure compliance of its
manufacturing facility.
4. All regulatory filings on the API will be made and owned
by Allos. Hovione, in consultation with Allos, shall
prepare at its expense the description of the API
manufacturing operations and related information (e.g.,
methods validation package, stability, representative data
and batch records) as required for inclusion in the filing
to FDA and other regulatory authorities (e.g., EU), which
will contain all of the manufacturing information. Hovione
will assist Allos in the preparation of annual updates and
in promptly responding to any questions from regulatory
agencies. Hovione shall provide qualified technical
representatives to attend meetings and/or teleconferences
with FDA and other regulatory authorities as needed.
5. [ * ]
6. Hovione accepts responsibility for that documentation
which is filed at the health authority for which it has
prepared the information (this shall be referred to as
"Hovione's filing at FDA"). Allos will provide Hovione with
a certified true copy of every submission and update that
directly addresses the information in Hovione's filing at
FDA at least 10 days before its filing at the health
authority, for joint approval prior to filing.
Confidential Term Sheet: Ver.02 Page 2 March 25, 1999
<PAGE> 3
FORECASTING & FORECASTING: During the Commercial Supply phase of the term
PURCHASE ORDERS of this contract, [ * ]
PURCHASE ORDERS: During the Pre-commercial Supply phase
Allos may place purchase orders with Hovione as per Davos'
offer dated 6th May 1998.
During the Term of this Agreement, Allos shall place
purchase orders for, and Hovione shall not refuse to
supply, at least the following percent of Allos' [ * ]:
<TABLE>
<S> <C> <C>
(i) [ * ]
(ii) [ * ]
(i) [ * ]
(i) [ * ]
</TABLE>
During the Commercial Supply Phase purchase orders for
specific quantities of [ * ] shall be submitted for
quarterly quantities 90 days prior to the start of each
calendar quarter. Each such purchase order shall be formally
accepted by Hovione within 30 days, and shall not be
rejected so long as Allos has not materially breached the
Agreement and failed to cure such breach following written
notice from Hovione. Purchase orders shall be based on the
API batch size. Aggregate purchase order quantities for a
quarter shall not be less than one half nor more than twice
-- of the forecast for the quarter covered by the most
recently delivered rolling forecast for that quarter,
without Hovione's consent which shall be withheld only for
reasonable cause; provided, that Hovione shall use its best
efforts to timely supply purchase orders in excess of 200%
of the applicable forecast. Deliveries shall be made on the
dates specified in the purchase orders and agreed to in the
form of an order acknowledgement by Hovione or its agent.
COST: All the work to be carried out under this Agreement prior to
NDA Submission, during the [ * ]
After NDA submission, that is during the Commercial Supply
Phase, the charge
Confidential Term Sheet: Ver.02 Page 3 March 25, 1999
<PAGE> 4
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
Hovione shall notify Allos of any process improvements or of
any possible patent applications. Hovione shall not seek or
assist others in seeking, prosecuting, defending or
enforcing any patents related to [ * ] (including any
composition of matter containing [ * ]), including any
method of its manufacture or use without the approval of
Allos.
[ * ]
DELIVERY & All API lots shall be delivered to CIF Allos' designated
ACCEPTANCE drug product manufacturer location, and accompanied by
certificates of analysis and compliance with manufacturing
requirements. Upon Allos' request, in-process and finished
API test samples shall be sent to Allos' designated test lab
for testing prior to shipment of sampled lots. Any costs
incurred with special packing requirements or courier
services shall be for Allos' account.
API lots shall be considered accepted upon successful
completion of acceptance testing (which shall be initiated
upon delivery), subject to revocation upon determination of
any latent defects (e.g., subsequent inspections or audits,
stability data, failure investigations). However if the
communication of defect or complaint which would be detected
by such acceptance testing is received more than 90 days
after the airwaybill date, Hovione will be under no
obligation to replace the lot. Notwithstanding the
foregoing, Allos shall be entitled to rely on the accuracy
and validity of Hovione certificates of analysis provided
with each delivered lot.
At the request of either party, unresolved disputes over
conformance of a lot to its specifications will be referred
to mutually acceptable referee lab. Such referee lab will
rule based on Hovione's filings at the FDA, such ruling will
be final. Costs will be for the account of the party at
fault. Hovione shall be responsible for no more than the
prompt replacement of each rejected non-conforming lot, or
at Allos' election
Confidential Term Sheet: Ver.02 Page 4 March 25, 1999
<PAGE> 5
refunding the amounts paid or incurred by Allos on account
of such rejected batch.
Each party is obligated to immediately inform the other of
any information that indicates or suggests that delivered
lots do not conform to applicable requirements under the
Agreement or should not be used.
PAYMENTS & 1. [ * ]
SCHEDULE
2. [ * ]
3. Hovione or Hovione's agent shall ensure all API lots are
delivered free of any liens. Hovione has the option to
arrange the invoicing by any company of the Hovione group or
by its agent, provided Allos is notified and is in
agreement, such agreement not being unreasonably withheld.
Any such person seeking payment from Allos shall be subject
to all defenses, claims and rights that Allos might have
against Hovione. Hovione shall have no set-off rights or
remedy against Allos in the event that its agent fails to
remit payments received from Allos.
SUPPLY 1. All API manufacture shall occur at Hovione's Loures,
ASSURANCE Portugal establishment. [ * ]
2. Subject to Allos' approval, Hovione may establish
alternate API manufacturing operations at its Macau facility
under mutually acceptable conditions to be agreed to (e.g.,
time and product volume).
3. Except where not possible, or not desired by the parties
(e.g., cGMP corrective actions), Hovione shall make no
change in the API manufacture (as defined in Hovione's
filings at FDA, and the applicable Master Batch Records,
SOPs, compendia standards) and shall remain in compliance
with FDA and EU laws, regulations and guidance documents.
Allos may require production of additional safety stock,
pending completion of change validation and/or FDA approval.
All such changes shall be made in conformance to Allos'
change control policy and applicable requirements. The
implementation of changes shall be subordinated to Allos
authorization in the light of regulatory implications,
however Allos (and Allos licensees or other users of [ * ])
recognize that change is necessary to enable Hovione to
remain efficient and cost-effective and thus shall be fully
supportive of the implementation of such changes.
4. During the Commercial Phase, Hovione shall, upon Allos'
request, maintain a six-
Confidential Term Sheet: Ver.02 Page 5 March 25, 1999
<PAGE> 6
month Safety Stock inventory of all critical raw materials
or, if requested by Allos during Commercial Phase, finished
API based upon the rolling forecast. In case Hovione if
forced to keep in its inventories one or more batches of
approved API for a period greater than 180 days beyond what
was stated as firm delivery shipping dates in the annual
rolling forecast for that quantity of API, Hovione is free
to invoice such unshipped batches. Such batches shall be
kept in trust for Allos until such time as Allos requests
their shipment.
5. Should Hovione fail to supply in excess of 5% of the
amount of API specified in a purchase order for any reason,
including Force Majeure, or conditions occur in which
Hovione cannot give satisfactory assurance of supply (e.g.,
insolvency, adverse FDA actions, loss of supply). In the
event of such a failure to supply, Allos shall (among other
remedies, including termination and/or reduction of its
purchase obligations) have the right to require technology
transfer to Allos or any Allos designated manufacturer, and
Hovione shall fully assist with such transfer, and no
royalties or any obligation shall be due for such transfer
or products manufactured by the contingent supplier.
6. The parties agree to cure all material breaches within
90 days. If no agreement can be reached within 90 days of
notification of a breach, the parties agree to the use of an
independent and binding arbitrator. The arbitrator's ruling
will be binding on all parties. Allos also shall have the
right to cancel this agreement in the event the breach
cannot be cured as per the above in addition to such
arbitration.
PERFORMANCE All API lots, and the manufacture and import of such lots,
CRITERIA: shall fully conform with all of the following (as such
requirements are in effect at the time of the Manufacture of
the applicable lots):
1. Applicable specifications, Master Batch Record
procedures, and any description in Hovione's filing at the
FDA.
2. US applicable laws and regulations, specifically
including 21 CFR Parts 11, 207, 210,& 211 and the then
current version of the FDA guidance documents pertaining to
the manufacture of an Active Pharmaceutical Ingredient) and
the then current USP/NF requirements.
3. Applicable requirements established for the manufacture
and supply of the API for the European Union and Japan,
including those under statute, regulation and pharmacopoeia.
4. All other laws and regulations applicable to the
operations of Hovione.
5. Hovione shall successfully pass FDA PAI and all other
regulatory inspections carried out by FDA and other
regulatory authorities, and Allos audits, without material
objection. Except as specifically permitted in Hovione's
filing at FDA, Hovione shall not carryout any reworking,
in-process or batch blending (including recrystallization or
recycling of mother liquors or solvents) or reprocessing
without
Confidential Term Sheet: Ver.02 Page 6 March 25, 1999
<PAGE> 7
prior written authorization from Allos, and shall promptly
inform Allos of all OOS events, and provide it with the
applicable investigation report and corrective action plans
prior to release of the in-process or finished lots that are
subject to the OOS event (including related lots).
INSPECTIONS & Hovione will permit and cooperate with inspections of all
AUDITS: relevant Hovione facilities, equipment, materials,
personnel, operations, records relating to the services
performed under the Agreement by representatives of Allos,
FDA, and other US and foreign authorities. Allos full-time
employees and appointed experts may be present during any or
all parts of manufacturing activities. Hovione will provide
Allos with immediate notice of any inspections by FDA or
other authorities as the inspection pertains to Hovione's
manufacture of, or its ability to manufacture, the API.
Where possible, Allos full-time employees or a consultant to
the Allos Manufacturing or Quality Control Units will have
the right to be present for such inspections, and will in
all cases be provided a copy of any inspection reports or
communications from such inspectors or regulatory
authorities, and to review and comment on any planned
response by Hovione.
During the Commercial Phase Allos may have up to two
representatives of its Manufacturing or Quality Control
Unit, and its appointed experts, present for and observe any
manufacturing operations related to the API, and may conduct
two complete quality assurance audits each year during the
performance of manufacturing operations, upon 60 days prior
notice, and additional audits (with no fewer than 5 days
notice) upon the occurrences of any product problems, or
changes in manufacturing equipment, facilities or
operations. Allos will provide a clear identification of the
individuals it wishes to have present at Hovione facilities;
Hovione may reasonably refuse entry to individuals, other
than the Allos Directors of Manufacturing, Operations or
Quality Assurance, that it reasonably believes are present
for reasons other than a quality function.
Allos will have access to DUNE for review of analytical and
batch data in real-time. Allos shall be provided with copies
of all documentation related to process deviations and
out-of-specification or out-of trend results, and their
investigation and corrective actions proposed by Hovione.
During audits to Hovione's facilities Allos is entitled to
review all documentation that is usually made available to
an FDA inspector, in at least an equivalent manner.
There shall be no charge for any inspections or audits, and
Hovione shall cooperate with both providing of reasonable
space for review of documents and assistance of key
personnel. Allos representatives, when present at a Hovione
site, shall at all times comply with Hovione's internal
policies.
INTELLECTUAL Allos shall exclusively own and have the full right to use,
PROPERTY RIGHTS: assign and sublicense inventions, process improvements and
analytical methods developed under this Agreement that
relate to the use, manufacture or testing of [ * ], whether
patentable or not; provided, that during the term of this
Agreement Hovione shall be entitled to receive good
consideration for the use by others of its Know-how as set
forth below. Such consideration shall only be due if Hovione
is not in breach of this
Confidential Term Sheet: Ver. 02 Page 7 March 25, 1999
<PAGE> 8
Agreement, and Allos shall not authorize more than three
parties at any one time (other than Allos) to use such
improvements. Allos, with the consultation of Hovione, shall
control decisions on patent prosecution, defense and
enforcement, and Hovione at Allos' expense, shall reasonably
assist Allos in such prosecution, defense and enforcement.
Hovione shall have the right to use (but not sublicense or
disclose) generically applicable process improvements and
analytical methods; provided that such process improvements
or analytical methods shall not be used to manufacture or
test RSR13 or chemically related compounds covered by US
patents (or patent applications) owned by or exclusively
licensed to Allos (collectively the [ * ]) for any person
other than Allos until the end of all of the following three
periods (the "Exclusivity Period"):
(i) The life of the U.S. and EU patents for the [ * ]
Compounds (including any term extensions and non-patent
market exclusivity periods); and
(ii) Five years from the approval of the FDA NDA of
[ * ]; and
(iii) The number of years during which Hovione supplied
Allos with at least 65% of any of its annual
Pre-Commercial or Commercial Supply requirements, plus
24 months.
Except as directed by Allos, neither Hovione, nor any of its
affiliates shall manufacture [ * ], or any other [ * ]
Compounds, during the term of the Agreement and the
Exclusivity Period.
CONSIDERATION In order to provide Hovione with an incentive to explore
FOR HOVIONE patent opportunities and process improvements; and in order
KNOW-HOW to assure that Hovione acts in the best interests of Allos
and its other manufacturers Hovione will be entitled, for as
long as it is not in breach of contract, to good
consideration as follows:
o [ * ]
[ * ]
CONFIDENTIALITY: Each party shall agree to be bound by obligations of
confidentiality, non-use and non-disclosure of the
confidential and proprietary information of the other
parties, subject to rights under the Agreement. The terms of
the confidentiality agreement dated 7th July 1998 shall be
deemed to be included in the Agreement. The period during
which the obligations of confidentiality shall continue shall
be extended to endure for ten years from the return of the
other party's confidential information that is in its
possession, so long as such information remains confidential
Confidential Term Sheet: Ver. 02 Page 8 March 25, 1999
<PAGE> 9
information.
UNINTERRUPTED During the validity of this agreement Hovione is obligated
SUPPLY AND FIRST to assure that Allos has an uninterrupted supply of API:
REFUSAL RIGHT
o To this end Allos assures that it will offer to Hovione a
right of first refusal for its requirements beyond the 30
tonnes/year amount. This right of first refusal shall
only apply to the 65% of the annual demand which exceeds
30 tonnes. Hovione may exercise this right in its
entirety or in part, and must do so at a competitive
price as evidenced by written bids obtained by Allos from
equivalent third-parties
o To this end, and in the event that Hovione does not
exercise the option as set out above, Hovione is
obligated to find alternative sources of API. Hovione
must also assure that up-to-date technology is
transferred to the alternative supplier(s) as efficiently
as possible and that the regulatory process is handled
successfully.
o To this end, and in the event that Hovione cannot find
alternative sources of API which are acceptable to Allos,
Hovione at its expense shall invest in additional
capacity to meet all Allos requirements and shall remain
the primary supplier of 65% of the API needs for a
further 5 years' period at prices to be negotiated in
good faith.
TERMINATION: [ * ]
[ * ]
[ * ]
[ * ]
Confidential Term Sheet: Ver.02 Page 9 March 25, 1999
<PAGE> 10
[ * ]
In the event of the Agreement's termination by Allos because
of reasons other than Hovione material breach (but not its
expiration), Allos, at its election, will either: (i)
purchase, at Hovione's documented purchase cost, its raw and
in-process materials reasonably purchased for production of
[ * ] and that cannot be returned for credit or used for the
manufacture products for other customers (subject to the
generic competition restriction), plus shipping costs; or
(ii) pay for such reasonable raw and in-process materials to
be manufactured into API in accordance with the Agreement.
Hovione shall inform Allos of the quantities of raw and
in-process that Hovione is maintaining in its inventory on a
periodic basis (but no less than quarterly). In no event
shall Allos be responsible for raw or in-process materials
that exceed the amounts that would be required to meet more
than API forecasts for six months following the date of
termination.
Indemnification, intellectual property and other applicable
obligations shall survive termination and expiration of the
Agreement.
INSURANCE: Hovione is not required to carry any product liability
insurance, but shall carry such other standard insurance as
mutually acceptable to the parties.
INDEMNIFICATION: Allos will indemnify, defend and hold Hovione (and their
employees, officers and directors) harmless from (i) product
liability claims arising from the testing, sale or use of
the API or the product manufactured with it, and (ii)
infringement claims arising from breach of Allos warranty.
Allos obligations shall not include such claims to the
extent that they arise from the (i) breach by any Hovione
indemnitee of its obligations under the Agreement, or (ii)
any negligent or otherwise wrongful act or omission of any
Hovione indemnitee.
Hovione will indemnify, defend and hold Allos (and its
employees, officer and directors) harmless from (i) product
liability claims arising from the manufacture of the API to
the extent caused by Hovione's breach of any obligation
under the Agreement, and (ii) infringement claims arising
from breach of Hovione warranty. Hovione obligations shall
not include such claims to the extent that they arise from
the (i) breach by any Allos indemnitee of its obligations
under the Agreement, or (ii) any negligent or otherwise
wrongful act or omission of any Allos indemnitee.
In the event that it is ruled by arbitration or in a court
of law that Hovione was negligent in observing cGMP's or
that it manufactured product in a manner that conflicts with
that described in Hovione's filings at FDA or the terms of
the Agreement, it shall contribute to the costs associated
with a recall or with similar damages. However, in no case
shall Hovione's total aggregate liability under the
Agreement for any recall ever cause it to pay recall costs
and similar damages in a total which exceeds the amount of
receipts due from Allos in the 12 months periods immediately
before the first notification of the issue that led to the
liability/recall and the delivery of the batches involved in
such recall.
Confidential Term Sheet: Ver.02 Page 10 March 25, 1999
<PAGE> 11
WARRANTIES: Standard legal, financial, corporate, capability and
conflict, Force Majeure, intellectual property and other
warranties, including regulatory (including Generic Drug
Enforcement Act) and legal compliance, as mutually
acceptable to the parties.
Allos and Hovione shall each warrant that to the best of its
knowledge and belief the manufacture, import, and sale of
[ * ] will not infringe any third party patents or other
proprietary rights.
Hovione shall warrant that it is not using in the
manufacture of [ * ] any process or materials covered by any
patent owned or licensed to it without Allos' consent.
ASSIGNMENT: Assignment of the Agreement is permitted subject to a
written agreement by the other party.
MISCELLANEOUS: Standard legal and other provisions as mutually acceptable
to the parties. The Agreement and all disputes relating to
it shall be interpreted under New York law and enforceable
against all of the parties in the courts of New York. The UN
Convention on the Sale of Goods shall not apply. Parties
shall submit any disputes, not resolved by meeting between
senior management, to binding arbitration held in New York
or other any location acceptable to the parties.
ACKNOWLEDGED AND AGREED
ALLOS THERAPEUTICS, INC. HOVIONE INTER LIMITED
By: /s/ STEPHEN J. HOFFMAN By: /s/ GUY VILLAX
------------------------------------ ----------------------------
Stephen J. Hoffman, Ph.D., MD Guy Villax
President & Chief Executive Officer Chief Executive Officer
Date: 3/25/99 Date: 3/25/99
Confidential Term Sheet: Ver. 02 Page 11 March 25, 1999
<PAGE> 1
EXHIBIT 10.19
[ALLOS THERAPEUTICS, INC. LOGO]
January 11, 2000
On March 25, 1999 representatives of Hovione, SA and Allos Therapeutics, Inc.
signed a term sheet indicating the intent of Hovione and Allos to establish a
supply agreement and its anticipated terms. [ * ] during clinical development
and for a designated number of years after commercialization. [ * ]
This letter has two purposes: (1) To recognize that both parties still agree
that the terms in March 25, 1999 term sheet will form the basis of the
definitive contract and (2) that the terms contained in the term sheet will
function as a supply agreement until the definitive agreement is reached.
Acknowledged and Agreed
ALLOS THERAPEUTICS, INC. HOVIONE INTER LIMITED
By: /s/ Stephen J. Hoffman, Ph.D., M.D. By: /s/ Chry Villax
------------------------------------ -------------------------
Stephen J. Hoffman, Ph.D., M.D. Chry Villax
President & Chief Executive Officer Chief Executive Officer
Date: 1/12/00 Date: 13th January 2000
----------- ---------------------
CONFIDENTIAL-[HOVIONE LOGO] HOVIONE
7000 North Broadway, Suite 600 - Denver, CO 80231 - 303/426-6262
Fax 303/412-9160
<PAGE> 1
EXHIBIT 10.20
[TAYLOR PHARMACEUTICALS LOGO]
DEVELOPMENT & INVESTIGATIONAL SUPPLY PROPOSAL
[ * ] IN 500ML VIALS
FOR ALLOS THERAPEUTICS, INC.
PROJECT SCOPE:
Pursuant to a Request for Proposal from Allos Therapeutics, Inc., Taylor
Pharmaceuticals has defined the Scope of Work as follows:
The [ * ] is a clinical product that is currently being manufactured by Taylor
Pharmaceuticals for Allos Therapeutics. [ * ] and is filled into a 100mL bottle.
[ * ] The fill volume has also been adjusted to 500mL from the original size of
100mL.
FINALIZE FORMULATION DEVELOPMENT
Based on information provided from Allos Therapeutics, the new formulation
will likely be:
1. [ * ]
2. [ * ]
3. [ * ]
4. [ * ]
Taylor will begin with the existing formulation and determine the
appropriate buffer concentration and pH target. Taylor will also perform
the following:
1. [ * ]
2. [ * ]
3. [ * ]
4. [ * ]
5. [ * ]
ANALYTICAL METHODS DEVELOPMENT
Stability indicating (as required) methods will optimized and validated
(per current ICH guidelines), [ * ]:
1. [ * ]
2. [ * ]
3. [ * ]
4. [ * ]
<PAGE> 2
Development & Investigational Supply Proposal
Allos Therapeutics, Inc. - [ * ]
28 December 1998
Page 2 of 6
LABORATORY SCALE STABILITY PROGRAM
[ * ]
CLINICAL BATCH MANUFACTURING
Taylor will manufacture the clinical batches and placebo using production
equipment under cGMP controls. All components and ingredients will be released
by Quality Assurance and tested by the QC or Product Development laboratories.
All Products will be filled under aseptic conditions. Terminal sterilization, as
appropriate, will be done by autoclave. Taylor will supply clinical labeling and
packaging support as needed.
NDA STABILITY EXHIBIT BATCH MANUFACTURING
Note: Typically clients will manufacture clinical and registration batches as a
single activity in order to minimize manufacturing charges.
Taylor will manufacture stability batches using Production equipment under cGMP
controls. All components and ingredients will be released by Quality Assurance
and tested by the QC or Product Development laboratories. Production controls
shall be the same as the clinical batches. Pilot scale to full size production
size batches can be produced.
STABILITY STUDIES
Taylor Product Development will support full release and stability testing
including chemical and microbiological testing. [ * ] All stability reports are
reviewed by Taylor Quality Assurance. Interim reports will be published to Allos
Therapeutics, Inc. upon the completion of each test station.
PROCESS VALIDATION
Taylor process validation includes, but is not limited to:
o [ * ]
o [ * ]
o [ * ]
o [ * ]
o [ * ]
o [ * ]
<PAGE> 3
DEVELOPMENT & INVESTIGATIONAL SUPPLY PROPOSAL
ALLOS THERAPEUTICS, INC. - [ * ]
28 DECEMBER 1998
PAGE 3 OF 6
PRODUCT DEVELOPMENT REPORT AND REGULATORY SUPPORT
Taylor will provide a Product Development Report in support of a typical
CMC section for regulatory filing.
To better define our quotation, we have outlined the Allos Therapeutics, Inc.'s
responsibilities.
ALLOS THERAPEUTICS, INC. WILL BE RESPONSIBLE FOR THE FOLLOWING:
1. Reviewing and, if acceptable, approving all Master Formula Batch
Records.
2. Providing on-site presence during the manufacture of
clinical/registration batch manufacture (preferred but can be waived at
Allos Therapeutics, Inc.'s request).
3. Providing release specifications for active drug substance and
excipients.
4. Furnishing released and certified active substance for development and
manufacture of at least 1 pilot formulation and the required exhibit
batches).
5. Providing a current MSDS for the active drug substance and product.
6. Providing camera-ready artwork for labeling.
7. Providing shipping instructions, addresses, preferred carrier and
carrier account number.
8. [ * ]
9. Preparing any applicable product import/export registrations.
10. Preparing and filing applicable regulatory submissions.
ITEMS NOT INCLUDED AS PART OF THE PROPOSAL:
1. Third Party Laboratory charges which are necessary for Taylor to
execute this agreement.
2. Analytical columns and standards that are not commonly available.
3. Capital equipment or change parts except those that are explicitly
stated herein.
4. Import/export duties.
5. FDA User Fees, establishment fees or other expenses necessary to
register the product with the appropriate regulatory agency.
6. Preparing product submissions.
7. Shipping and shipping insurance for product/placebo, samples,
documentation, etc.
8. Travel and travel related expenses, including labor. Required only if
travel to another site is requested by Allos Therapeutics, Inc.
CONFIDENTIAL
REF: ALLOS1098C
<PAGE> 4
DEVELOPMENT & INVESTIGATIONAL SUPPLY PROPOSAL
ALLOS THERAPEUTICS, INC.- [ * ]
28 DECEMBER 1998
PAGE 4 OF 6
QUOTATION:
The following is our current price quotation for manufacture of [ * ] in 500mL
vials for Investigational and Stability Batch Protocols:
DEVELOPMENT ACTIVITIES:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
ACTIVITY BATCH SIZE PRICE
- ---------------------------------------------------------------------------------------------
PHASE I
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Finalize Formulation N/A [ * ]
Total
- ---------------------------------------------------------------------------------------------
Perform stopper compatibility N/A [ * ]
study Total
- ---------------------------------------------------------------------------------------------
Perform photostability study per N/A [ * ]
ICH guidelines Total
- ---------------------------------------------------------------------------------------------
Analytical Method Optimization N/A [ * ]
and validation Total
(Active Drug Substance)
- ---------------------------------------------------------------------------------------------
Analytical Method Development N/A [ * ]
(B/F and LAL) Total
- ---------------------------------------------------------------------------------------------
PHASE II
- ---------------------------------------------------------------------------------------------
Batch Manufacture - 500mL vials 2,500 units or less [ * ]
(clinical/registration lots) (split batch)(1) per lot
- -product- ----------------------------------------------------------
2,500 units or less [ * ]
(single batch) per lot
-----------------------------------------------------------
2,501 to 4,000 units [ * ]
(single batch) per lot
-----------------------------------------------------------
4,001 to 6,500 units [ * ]
(single batch) per lot
- ---------------------------------------------------------------------------------------------
Stability Studies N/A [ * ]
(including container closure for split lot with two sublots
integrity throughout study) -----------------------------------------------------------
N/A [ * ]
per lot
- ---------------------------------------------------------------------------------------------
PHASE III AND MISCELLANEOUS
- ---------------------------------------------------------------------------------------------
Process Validation N/A [ * ]
(excluding media fills) Per product and dosage form
- ---------------------------------------------------------------------------------------------
Distribution of product to clinical N/A [ * ] per shipment
sites (up to 500 units, excludes
transportation charges)
- ---------------------------------------------------------------------------------------------
Preparing CMC data Package N/A [ * ]/hour
Not to exceed [ * ] total
- ---------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 5
DEVELOPMENT & INVESTIGATIONAL SUPPLY PROPOSAL
ALLOS THERAPEUTICS, INC. - [ * ]
28 DECEMBER 1998
PAGE 5 OF 6
(1)Split batch = Batch will be evenly split in two sublots. One sublot will use
4432 stoppers. The other group will use Fluorotech stoppers. Both lots will
be placed on stability. The batch price includes line purge between stopper
type, additional batch record generation and all materials.
ESTIMATE FOR COMMERCIAL MANUFACTURING:
(NOTE: Commercial estimates are based on information exchanged as of the
above date and may need to be revised upon the completion of development
activities)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
ACTIVITY PRICE ESTIMATE
- ---------------------------------------------------------------------------------------------------
<S> <C>
Price per unit [ * ] in [ * ]
500 mL vials) [ * ]
Commercial Batch Size: [ * ] [ * ]
[ * ]
[ * ]
[ * ]
Routine shelf life surveillance program per [ * ]
ICH guidelines
(one commercial lot, per strength, per
dosage form, per year)
Regulatory Assistance, as necessary [ * ]
- ---------------------------------------------------------------------------------------------------
</TABLE>
PAYMENT SCHEDULE [ * ]
o [ * ]
o [ * ]
o [ * ]
CANCELLATION CHARGES AND LATE PAYMENT CHARGES. [ * ]
CHANGES TO SCOPE OF WORK. With any development program, changes from the
original scope or work will be deemed necessary from time to time. It is
essential, for both parties, that these periodic and potentially critical
changes be properly documented. Before Taylor Pharmaceuticals will initiate
and work outside of this proposal a Project Change Authorization will be
generated and submitted to Allos Therapeutics, Inc. for approval. This document
ensures that both parties agree to the work to be performed, the timing of the
work and any additional charges incurred by the deviation from the original
scope of work.
<PAGE> 6
DEVELOPMENT & INVESTIGATIONAL SUPPLY PROPOSAL
ALLOS THERAPEUTICS, INC.- [ * ]
28 DECEMBER 1998
PAGE 6 OF 6
LIMIT OF LIABILITY. Taylor will not be responsible for Active Drug Substance
that is lost or damaged prior to receipt at Taylor. Taylor will not be
responsible for batch rejections that are not the result of gross negligence. If
any lot of product fails to achieve analytical or microbiological limits that
have been agreed to by both companies, Taylor will maintain a limit of liability
of $25,000 per process lot or the cost of customer supplied materials, whichever
is less.
FORCE MAJEURE. The period for which performance (other than the payment of
money) is required by a party shall be extended by the period during which such
party is unable to perform due to strikes, acts of God, war shortages or
unavailability of supplies, or other causes beyond the party's reasonable
control.
TERM. [ * ]
Please submit purchase orders and shipping documentation to:
Thomas Handel
Executive Director - Business Development
Taylor Pharmaceuticals
150 S. Wyckles Rd.
Decatur, IL 62522
If this proposal is acceptable, please complete both forms in Attachment I. Keep
one form for your file and return the second approved form to the attention of
Thomas Handel at the above address.
Taylor Pharmaceuticals thanks you for your interest in our Contract
Pharmaceutical Services and the opportunity to provide Allos Therapeutics, Inc.
with this proposal. I hope that we have adequately responded to your request and
look forward to working with Allos Therapeutics, Inc.
CONFIDENTIAL
REF: allos1098c
<PAGE> 7
ATTACHMENT I
PROPOSAL ACCEPTANCE SHEET FOR TAYLOR PHARMACEUTICALS, INC.
- -------------------------------------------------------------------------------
This is to confirm the acceptance of Taylor Pharmaceuticals, Inc., Development
Proposal number allos1098c, to Allos Therapeutics, Inc., dated 28 December
1998, for RSR13 (New Formulation) in vials.
All invoicing for this contract is to be referenced against Allos Therapeutics,
Inc. Purchase Number: ALLOS-12
All invoicing is to be sent directly to:
[X] Accounts Payable
[ ] Other (please specify)
-------------------------------------------------------
-------------------------------------------------------
Accepted By:
/s/ S. J. HOFFMAN 30-DEC-98
- -------------------------------
Signature Date
STEPHEN HOFFMAN
- -------------------------------
Name (Type or Print)
President
- -------------------------------
Title
of
Allos Therapeutics, Inc.
Please sign both acceptance sheets; returning one signed original to:
Thomas Handel
Executive Director-Business Development
Taylor Pharmaceuticals
150 S. Wyckles Road
Decatur, IL 62522
<PAGE> 1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in this Registration Statement on Form S-1 (File
No. 333- ) of our report dated January 26, 2000, relating to the financial
statements of Allos Therapeutics, Inc. which appear in such Registration
Statement. We also consent to the references to us under the headings "Experts"
and "Selected Financial Data" in such Registration Statement.
PricewaterhouseCoopers LLP
Denver, Colorado
January 26, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001097264
<NAME> ALLOS THEREAPEUTICS, INC.
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 2,597,884
<SECURITIES> 6,877,303
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 9,929,513
<PP&E> 552,587
<DEPRECIATION> 322,227
<TOTAL-ASSETS> 10,205,514
<CURRENT-LIABILITIES> 1,145,223
<BONDS> 69,320
0
25,289
<COMMON> 3,261
<OTHER-SE> 8,962,421
<TOTAL-LIABILITY-AND-EQUITY> 10,205,514
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 10,782,438
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 33,802
<INCOME-PRETAX> (10,472,740)
<INCOME-TAX> 0
<INCOME-CONTINUING> (10,472,740)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (10,472,740)
<EPS-BASIC> (6.24)
<EPS-DILUTED> (6.24)
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