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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934<F*>
Cytel Corporation
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
23282E 10 0
-----------------------------------------
(CUSIP Number)
Carmela Zammuto
G. D. Searle & Co.
5200 Old Orchard Road
Skokie, Illinois 60077
(847) 470-6968
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
September 18, 1997
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-
1(b)(3) or (4), check the following box / /.
NOTE: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for other
parties to whom copies are to be sent.
[FN]
<F*>The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in
a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 ("Act") or otherwise
subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act (however, see the
Notes).
Page 1 of 6
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SCHEDULE 13D
CUSIP NO. 23282E 10 0 PAGE 2 OF 6 PAGES
------------------------ ----- -----
==============================================================================
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
G. D. Searle & Co.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP<F*> (a)/X/
(b)/ /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS<F*>
AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 2,000,000
OWNED BY -----------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH -0-
-----------------------------------------------------------
9 SOLE DISPOSITIVE POWER
2,000,000
-----------------------------------------------------------
1 SHARED DISPOSITIVE POWER
0 -0-
-----------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,000,000
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES<F*> / /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.4%
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14 TYPE OF REPORTING PERSON<F*>
CO
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<F*>SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 2 of 6
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SCHEDULE 13D
CUSIP NO. 23282E 10 0 PAGE 3 OF 6 PAGES
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==============================================================================
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Monsanto Company
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP<F*> (a)/X/
(b)/ /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS<F*>
00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 2,000,000
OWNED BY -----------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH -0-
-----------------------------------------------------------
9 SOLE DISPOSITIVE POWER
2,000,000
-----------------------------------------------------------
1 SHARED DISPOSITIVE POWER
0 -0-
-----------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,000,000
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES<F*> / /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.4%
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14 TYPE OF REPORTING PERSON<F*>
CO
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[FN]
<F*>SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 3 of 6
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ITEM 1. SECURITY AND ISSUER
-------------------
This Schedule 13D relates to shares of common stock, par value
$.01 per share (the "Shares"), of Cytel Corporation, a Delaware
corporation (the "Issuer"). The address of the principal
executive office of the Issuer is 3525 John Hopkins Court, San
Diego, California 92121.
ITEM 2. IDENTITY AND BACKGROUND
-----------------------
Monsanto Company, a Delaware corporation ("Monsanto"), is filing
this Schedule 13D on behalf of itself and G. D. Searle & Co., a
Delaware corporation and wholly-owned subsidiary of Monsanto
("Searle"), subject to the Joint Filing Agreement referred to in
the next sentence. As required by Rule 13d-1(f)(1), Exhibit 1 to this
Schedule 13D contains the Joint Filing Agreement entered into by
each of the persons filing this Joint Disclosure Statement on
Schedule 13D.
Searle develops, produces and markets prescription
pharmaceuticals. The address of the principal business and
principal office of Searle is 5200 Old Orchard Road, Skokie, IL
60077.
Monsanto and its subsidiaries are engaged in the worldwide
manufacture and sale of agricultural products, pharmaceuticals
and food ingredients. The address of the principal business and
principal office of Monsanto is 800 North Lindbergh Blvd., St.
Louis, MO 63167.
During the past five years, neither Searle nor Monsanto has been
(i) convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) a party to a civil
proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject
to a judgment, decree or final order enjoining future violations
of, or prohibiting or mandating activities subject to United
States federal or state securities laws or finding any violation
with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
-------------------------------------------------
Searle purchased 2,000,000 Shares (the "Searle Shares") for
$5,000,000 on September 18, 1997. The funds used by Searle to
purchase the Searle Shares were loaned to Searle by Monsanto
pursuant to an intercompany arrangement. Monsanto obtained such
funds pursuant to a short-term financing facility.
ITEM 4. PURPOSE OF TRANSACTION
----------------------
On September 18, 1997 Searle entered into a Stock Purchase
Agreement (the "Agreement") with the Issuer pursuant to which
Searle acquired the Searle Shares for investment purposes for the
amount of $5,000,000. Under certain circumstances, the Issuer
may be required to issue to Searle up to an additional 222,222
Shares without further consideration on or prior to December 31,
1997. The Agreement has been filed as Exhibit 2 hereto and the
summary of portions thereof contained herein is qualified in its
entirety by reference to the Agreement as filed.
Searle has acquired the Searle Shares as an investment as
contemplated by a letter of intent dated September 5, 1997
expressing Searle's interest in establishing a collaborative
alliance with the Issuer to enhance the value of its technology
in the cancer treatment area. In addition to providing for
Searle's investment in the Issuer made pursuant to the Agreement,
such letter of intent (i) sets forth the non-binding expression
of interest of Searle and the Issuer in negotiating definitive
agreements that would provide for Searle to invest up to
$10,000,000, in two $5,000,000 installments, in the equity of a
subsidiary, Epimmune, to be formed by the Issuer to hold the
Issuer's cancer treatment technology and (ii) provides that the
definitive agreements will grant to Searle an exclusive,
worldwide license (subject to limited exceptions) in the Issuer's
intellectual property rights to make, have made, use and sell
pharmaceutical products derived from the Issuer's cancer epitopes
and use thereof in ex-vivo therapies. The Agreement provides
that, should Searle and the Issuer fail to timely negotiate
definitive agreements, Searle shall have a right of first
refusal, through December 31, 2000, to obtain an exclusive
license for such products if the Issuer were to propose entering
into any arrangement with a third party relating to these
intellectual property rights. Subject to the foregoing, and the
matters referred to below, Searle may, on an ongoing basis,
evaluate various alternative courses of action including
additional capital investments in the Issuer or the sale of all
or a portion of its holdings in the Issuer in the open market or
in privately negotiated transactions (subject to Rule 144 and its
obligations under the Agreement described below).
Pursuant to the Agreement, Searle has agreed that, prior to
December 31, 2000, it will not, nor will it permit any of its
affiliates to, purchase or otherwise acquire or offer or agree to
acquire, directly or indirectly, beneficial ownership of any
additional equity securities of the Issuer (or rights or options
to purchase such securities) in an amount that would cause Searle
to own, on a fully diluted bases, more than 19% of the
outstanding Shares of the Issuer, without the prior written
consent of the Issuer. In addition, pursuant to the Agreement,
Searle has agreed that during the period specified by the Issuer
and an underwriter of Shares or other securities of the Issuer
following the effective date of a Registration Statement of the
Issuer filed under the Securities Act of 1933, as amended, (which
period shall not exceed
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120 days), to the extent requested by the Issuer and such underwriter, Searle
shall not, nor will it permit any of its affiliates to, directly or
indirectly, sell, contract to sell, grant any option to purchase or otherwise
transfer or dispose of any securities of the Issuer held by any of them
during such period.
The Agreement contains provisions granting Searle a right of
first refusal to purchase its pro rata share of all Equity
Securities, subject to certain exceptions, that the Issuer may,
from time to time on or before September 17, 2002, propose to
sell and issue. The term "Equity Securities" means (i) any
common stock, preferred stock or other security of the Issuer,
(ii) any security convertible, with or without consideration,
into any common stock, preferred stock or other security
(including any option, warrant or other right to purchase such a
convertible security), (iii) any security carrying any warrant or
right to subscribe to or purchase any common stock, preferred
stock or other security, or (iv) any such warrant or right. In
the event that the Issuer issues Equity Securities not subject to
such right of first refusal, the Agreement grants Searle the
right, exercisable no more often than semi-annually, to purchase
from the Issuer a number of Shares at then market value to permit
Searle to maintain its percentage ownership interest in the
Issuer.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
------------------------------------
Searle may be deemed to be the beneficial owner of 2,000,000
Shares, directly owned by it, or approximately 7.4% of the Shares
outstanding. Searle has the sole power to vote and the sole
power to dispose of such Shares.
Monsanto, as the sole stockholder of Searle, may be deemed, for
the purposes of Rule 13d-3 under the Act, to beneficially own
indirectly the 2,000,000 Shares beneficially owned by Searle, or
approximately 7.4% of the Shares outstanding.
The percentage of Shares outstanding reported as beneficially
owned by each person herein on the date hereof is based upon the
number of Shares outstanding as of September 12, 1997, as stated
by the Issuer in the Agreement, and assumes the issuance of
2,000,000 Shares to Searle.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
--------------------------------------------------------
WITH RESPECT TO SECURITIES OF THE ISSUER
----------------------------------------
The information set forth in Item 4 above is incorporated herein
by reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
--------------------------------
The following have been filed as Exhibits to this Schedule 13D:
1. Joint Filing Agreement
2. Stock Purchase Agreement
Page 5 of 6
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SIGNATURES
----------
After reasonable inquiry and to the best of each of the
undersigned's knowledge and belief, each of the undersigned
certify that the information set forth in this Schedule 13D is
true, complete and correct.
Dated: September 26, 1997
G. D. SEARLE & CO.
By:/s/ Richard U. De Schutter
-----------------------------------
Title: Chief Executive Officer
--------------------------------
MONSANTO COMPANY
By:/s/ Robert B. Hoffman
-----------------------------------
Title: Chief Financial Officer
---------------------------------
Page 6 of 6
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Exhibit 1
Joint Filing Agreement
----------------------
In accordance with Rule 13d-1(f) under the Securities Exchange Act of
1934, as amended, each of the persons named below agrees to the joint filing
of a Statement on Schedule 13D (including amendments thereto) with respect
to the common stock, par value $.01 per share, of Cytel Corporation, a
Delaware corporation, and further agrees that this Joint Filing Agreement be
included as an exhibit to such filings; provided that, as contemplated by
Section 13d-1(f)(l)(ii), no person shall be responsible for the completeness
or accuracy of the information concerning the other persons making the
filing, unless such person knows or has reason to believe that such
information is inaccurate. This Joint Filing may be executed in any number
of counterparts, all of which together shall constitute one and the same
instrument.
G. D. Searle & Co.
By: /s/ Richard U. De Schutter
----------------------------------
Title: Chief Executive Officer
-------------------------------
Monsanto Company
By: /s/ Robert B. Hoffman
-----------------------------------
Title: Chief Financial Officer
-------------------------------
<PAGE> 1
Exhibit 2
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made as of September
18, 1997 (the "Effective Date"), by and between CYTEL CORPORATION (the
"Company"), and G.D. SEARLE & CO. (the "Investor").
RECITALS
WHEREAS, the Company and the Investor have entered into that certain
letter of intent dated September 3, 1997 (the "Letter of Intent") and, to
the extent provided therein, have agreed to the transactions and matters
described therein; and
WHEREAS, pursuant to the Letter of Intent, the Investor agreed to
purchase from the Company shares of the Company's Common Stock on the terms
and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants and agreements contained herein, the parties hereto,
intending to be legally bound, do hereby agree as follows:
AGREEMENT
1. DEFINITIONS
Capitalized terms used but not otherwise defined herein shall have the
meanings given such terms in the Letter of Intent.
2. PURCHASE AND SALE OF SHARES
2.1 PURCHASE AND SALE OF SHARES. Subject to the terms and
conditions hereof, at the Closing (as defined below), the Investor shall
purchase from the Company, and the Company shall issue and sell to the
Investor, 2,000,000 shares of Common Stock of the Company, at a per share
purchase price equal to US$2.50, for an aggregate purchase price of
US$5,000,000, subject to adjustment as set forth in Section 2.2 below (such
shares, together with any shares issued pursuant to the adjustment provided
by Section 2.2, collectively, the "Shares").
2.2 ADJUSTMENTS TO NUMBER OF SHARES.
(a) If the Company fails to sell shares of Series A Convertible
Preferred
<PAGE> 2
Stock of the Company, having an aggregate purchase price of not less than
US$7,000,000, to third party investors in the private placement (the
"Private Placement") on substantially the terms and conditions contemplated
by the Company's Confidential Private Placement Memorandum dated July 8,
1997 (the "Private Placement Memorandum") on or before December 31, 1997,
then and in such event the Company shall issue to the Investor, within five
(5) business days after such date, at no additional consideration, 222,222
additional shares of Common Stock of the Company.
(b) If the Company sells shares of Series A Convertible
Preferred Stock of the Company, having an aggregate purchase price of not
less than US$7,000,000, to third party investors in the Private Placement on
or before December 31, 1997 at a per share purchase price of less than
US$2.00, then and in such event the Company shall issue to the Investor,
within five (5) business days after the date of the closing of the Private
Placement, that number of additional shares of Common Stock of the Company
so that the weighted average purchase price per share of the shares of
Common Stock of the Company issued to the Investor pursuant to this Article
2 after giving effect to such additional issuance equals the greater of (i)
US$2.25 per share, or (ii) a per share price equal to US$0.50 plus the per
share purchase price at which shares of the Series A Convertible Preferred
Stock of the Company are sold to third party investors in the Private
Placement (but in no event to exceed $2.50 per share).
2.3 FRACTIONAL SHARES. The number of shares of Common Stock which
the Investor shall purchase pursuant to this Section 2 shall be equal to the
aggregate purchase price to be paid for such shares on the applicable
purchase date divided by the applicable per share price; provided, however,
that the Company shall issue no fractional share, and the Investor shall pay
the aggregate purchase price less an amount equal to the per share price
multiplied by such fractional share.
3. CLOSING DATE; DELIVERY.
3.1 CLOSING. Subject to the terms of Section 6, the closing of the
sale and purchase of the Shares pursuant to Section 2.1 above (the
"Closing") shall be held at 10:00 a.m. (Pacific Time) on the Effective Date,
at the offices of the Company, 3525 John Hopkins Court, San Diego,
California, or at such time and place as the Company and the Investor may
agree.
3.2 DELIVERY. At the Closing, subject to the terms and conditions
hereof, the Company shall deliver to the Investor a stock certificate,
registered in the name of the Investor, representing the Shares purchased
pursuant to Section 2.1 above and dated as of the Closing against payment of
the purchase price therefor by wire transfer, unless other
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means of payment shall have been agreed upon by the Company and the
Investor.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby makes the following representations and warranties
to the Investor, except as set forth in the Schedule of Exceptions attached
hereto as Exhibit A:
4.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The
Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all requisite
corporate power and authority to carry on its business. The Company is duly
qualified to transact business and is in good standing in each jurisdiction
in which the failure so to qualify would have a material adverse effect on
its business or properties.
4.2 AUTHORIZATION; DUE EXECUTION. The Company has the requisite
corporate power and authority to enter into this Agreement and to perform
its obligations under the terms of this Agreement and, at the Closing, will
have the requisite corporate power to sell the Shares. All corporate action
on the part of the Company, its officers, directors and stockholders
necessary for the authorization, execution and delivery of this Agreement
has been taken. This Agreement has been duly authorized, executed and
delivered by the Company, and, upon due execution and delivery by the
Investor, this Agreement will be a valid and binding agreement of the
Company, enforceable in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally or by equitable
principles.
4.3 CAPITALIZATION. The authorized capital stock of the Company
consists of 50,000,000 shares of Common Stock, par value $.01, and
10,000,000 shares of Preferred Stock, par value $.01. As of September 12,
1997, there were 25,214,886 shares of Common Stock and no shares of
Preferred Stock issued and outstanding. Other than (a) options to purchase
4,055,745 shares of Common Stock issued, and 751,651 shares of Common Stock
available for future option grants, to certain employees, officers,
directors, consultants and advisors of the Company, (b) 47,666 shares of
Common Stock to be issued under the Company's Employee Stock Purchase Plan,
(c) warrants to purchase 200,000 shares of Common Stock issued to a certain
investor, (d) those shares of Common Stock to be issued under the Company's
Rights Agreement, and (e) as otherwise set forth in the Letter of Intent,
there are no subscriptions, options, warrants, rights or agreements
(contingent or otherwise), including without limitation, conversion rights,
preemptive rights, rights of first refusal or other rights or agreements,
providing for the issuance by the Company of Common Stock or other equity
securities of the Company. The Shares to be acquired by the Investor
pursuant to Section 2.1 above will constitute (i)
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approximately 7.35% of the outstanding shares of Common Stock of the Company on
an undiluted basis, and (ii) approximately 6.4% of the outstanding Common Stock
of the Company on a fully diluted basis, assuming exercise of all outstanding
rights, warrants and options to acquire Common Stock.
4.4 VALID ISSUANCE OF SHARES. The Shares when issued, sold and
delivered in accordance with the terms hereof for the consideration set
forth herein, will be duly and validly authorized and issued, fully paid and
nonassessable and, based in part upon the representations of the Investor in
this Agreement, will be issued in compliance with all applicable federal and
state securities laws.
4.5 GOVERNMENTAL CONSENTS. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration
or filing with, any federal, state, local or provincial governmental
authority on the part of the Company is required in connection with the
consummation of the transactions contemplated by this Agreement, except for
notices required or permitted to be filed with certain state and federal
securities commissions after the Closing, which notices will be filed on a
timely basis.
4.6 SEC FILINGS. The Company has timely filed all reports,
registration statements and other documents required to be filed by it (the
"SEC Filings") under the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder (the "Securities Act"), and the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (the "Exchange Act"). The SEC Filings were prepared
in accordance and complied in all material respects with the applicable
requirements of the Securities Act or the Exchange Act, as the case may be.
None of such forms, reports and statements, including, without limitation,
any financial statements, exhibits and schedules included therein and
documents incorporated therein by reference, at the time filed, declared
effective or mailed, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. Except to the
extent information contained in any of the SEC Filings has been revised,
corrected or superseded by a later filing of any such form, report or
document, none of the SEC Filings currently contains 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. Since June
30, 1997, (i) there has been no material adverse change in the condition,
financial or otherwise, of the Company and its subsidiaries considered as a
whole, or in the business, operations, or prospects of the Company and its
subsidiaries considered as a whole, whether or not arising in the ordinary
course of business, and (ii) there has been no dividend or distribution of
any kind declared, paid or
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made by the Company on any class of its capital stock.
4.7 NO CONFLICT. The execution, delivery and performance by the
Company of this Agreement do not and will not violate any provision of the
Company's Certificate of Incorporation or By-laws, any provision of any
order, writ, judgment, injunction, decree, determination or award to which
the Company is a party or by which it is bound, or to the Company's
knowledge, any law, rule or regulation (including, without limitation, the
rules and regulations of the Securities and Exchange Commission (the "SEC")
or any regulatory commission of any jurisdiction) currently in effect having
applicability to the Company.
4.8 ABSENCE OF LITIGATION. Except as disclosed in the SEC
Filings, there is no action, suit, proceeding or investigation (including
any such matter related to the Company's intellectual property) pending or
currently threatened against the Company or its properties before any court
or governmental agency, which would, singly or in the aggregate, have a
material adverse effect on the Company's business, operations or assets,
taken as a whole (nor, to the best of the Company's knowledge, is there any
basis therefor). There is no action, suit, proceeding or investigation
which the Company currently intends to initiate.
4.9 CONFIDENTIALITY. The Company hereby represents, warrants and
covenants that it shall maintain in confidence, and shall not use or
disclose without prior written consent of the Investor, the terms of this
Agreement and any information identified in writing as confidential that is
furnished to it by the Investor in connection with this Agreement. This
obligation of confidentiality shall not apply, however, to any information
(a) in the public domain through no unauthorized act or failure to act by
the Company, (b) lawfully disclosed to the Company by a third party who
possessed such information without any obligation of confidentiality, (c)
lawfully developed by the Company independent of any disclosure by the
Company as supported by the Investor's written records, or (d) required to
be disclosed pursuant to applicable law, regulation or order or requirement
of a court, administrative agency or other government body (including the
securities laws of any applicable jurisdiction). The Company further
covenants that it shall return to the Investor all tangible materials
containing such information upon request by the Investor. The Company and
the Investor acknowledge and agree that the Company will be required to
disclose the issuance of the Shares contemplated by this Agreement pursuant
to applicable securities laws and regulations.
5. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR
The Investor hereby makes the following representations and warranties
to the Company as of the Effective Date and the Closing:
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<PAGE> 6
5.1 AUTHORIZATION; DUE EXECUTION. The Investor has the
requisite corporate power and authority to enter into this Agreement and to
perform its obligations under the terms of this Agreement and, at the
Closing, will have the requisite corporate power to purchase the Shares.
All corporate action on the part of the Investor, its officers, directors
and stockholders necessary for the authorization, execution and delivery of
this Agreement has been taken. This Agreement has been duly authorized,
executed and delivered by the Investor, and, upon due execution and delivery
by the Company, this Agreement will be a valid and binding agreement of the
Investor, enforceable in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally or by equitable
principles.
5.2 PURCHASE ENTIRELY FOR OWN ACCOUNT. This Agreement is made
with the Investor in reliance upon such Investor's representation to the
Company, which by such Investor's execution of this Agreement such Investor
confirms, that the Shares to be purchased by such Investor will be acquired
for investment for such Investor's own account, not as a nominee or agent,
and not with a view to the resale or distribution of any part thereof, and
that such Investor has no present intention of selling, granting any
participation in, or otherwise distributing the same (subject to the
disposition of the Investor's property being at all times within its
control). By executing this Agreement, the Investor further represents that
such Investor does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participation to such
person or to any third person, with respect to any of the Shares.
5.3 DISCLOSURE OF INFORMATION. The Investor has received all
the information that it has requested and that it considers necessary or
appropriate for deciding whether to enter into this Agreement and to
purchase the Shares. The Investor further represents that it has had an
opportunity to ask questions and receive answers from the Company regarding
the terms and conditions of the offering of the Shares.
5.4 INVESTMENT EXPERIENCE. The Investor is an investor in
securities of companies in the development stage and acknowledges that it is
able to fend for itself, can bear the economic risk of its investment and
has such knowledge and experience in financial or business matters that it
is capable of evaluating the merits and risks of the investment in the
Shares. The Investor also represents it has not been organized solely for
the purpose of acquiring the Shares.
5.5 ACCREDITED INVESTOR. The Investor is an "accredited
investor" as such term is defined in Rule 501 of the General Rules and
Regulations prescribed by the SEC pursuant to the Securities Act.
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5.6 RESTRICTED SECURITIES. The Investor understands that (a) the
Shares have not been, registered under the Securities Act by reason of a
specific exemption therefrom, that such securities must be held by it
indefinitely and that the Investor must, therefore, bear the economic risk
of such investment indefinitely, unless in each case a subsequent
disposition thereof is registered under the Securities Act or is exempt from
such registration; (b) each certificate representing the Shares will be
endorsed with the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR
AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
and (c) the Company will instruct any transfer agent not to register the
transfer of the Shares (or any portion thereof) unless the conditions
specified in the foregoing legends are satisfied, until such time as a
transfer is made, pursuant to the terms of this Agreement, and in compliance
with Rule 144 or pursuant to a registration statement or, if the opinion of
counsel referred to above is to the further effect that such legend is not
required in order to establish compliance with any provisions of the
Securities Act or this Agreement.
5.7 CONFIDENTIALITY. The Investor hereby represents, warrants and
covenants that it shall maintain in confidence, and shall not use or
disclose without prior written consent of the Company, the terms of this
Agreement and any information identified in writing as confidential that is
furnished to it by the Company in connection with this Agreement. This
obligation of confidentiality shall not apply, however, to any information
(a) in the public domain through no unauthorized act or failure to act by
the Investor, (b) lawfully disclosed to such Investor by a third party who
possessed such information without any obligation of confidentiality, (c)
lawfully developed by such Investor independent of any disclosure by the
Company as supported by the Investor's written records, or (d) required to
be disclosed pursuant to applicable law, regulation or order or requirement
of a court, administrative agency or other government body (including the
securities laws of any applicable jurisdiction). The Investor further
covenants that it shall return to the Company all tangible materials
containing such information upon request by the Company. The Company and
the Investor acknowledge and agree that the Investor will be required to
disclose its investment in the Company and the terms of this Agreement
pursuant to filing of a Form 13D with the SEC under the Exchange Act.
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<PAGE> 8
6. CONDITIONS OF THE INVESTOR'S OBLIGATIONS
The obligations of the Investor under this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions,
any of which may be waived by the Investor (and which conditions shall be
deemed to have been fulfilled or waived upon the occurrence of the Closing):
6.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company contained in Section 4 shall be true and correct
in all material respects on and as of the Closing with the same effect as
though such representations and warranties had been made on and as of said
date.
6.2 PERFORMANCE. The Company shall have performed and complied
with all agreements, obligations and conditions in this Agreement, if any,
that are required to be performed or complied with by it on or before the
Closing.
6.3 DELIVERY OF SHARES. The Company shall have tendered delivery
of the Shares specified in Section 2.1 at the Closing.
6.4 LEGAL OPINION. An opinion of counsel to the Company in the
form attached hereto as Exhibit B shall have been delivered to the Investor
at the Closing.
6.5 PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in
connection with the transactions contemplated at the Closing
and all documents incident thereto shall be reasonably satisfactory in form
and substance to the Investor, and it shall have received all such
counterpart original and certified or other copies of such documents as it
may reasonably request.
7. CONDITIONS OF THE COMPANY'S OBLIGATIONS
The obligations of the Company under this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions by
such Investor, any of which may be waived by the Company (and which
conditions shall be deemed to have been fulfilled or waived upon the
occurrence of the Closing):
7.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Investor contained in Section 5 hereof shall be true and
correct in all material respects on and as of the Closing with the same
effect as though such representations and warranties had been made on and as
of said dates.
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<PAGE> 9
7.2 PERFORMANCE. The Investor shall have performed and complied
with all agreements, obligations and conditions in this Agreement, if any,
that are required to be performed or complied with by it on or before the
Closing.
7.3 PAYMENT OF PURCHASE PRICE. The Investor shall have tendered
delivery of the purchase price for the Shares specified in Section 2.1 at
the Closing.
7.4 PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings in connection with the transactions contemplated at the Closing
and all documents incident thereto shall be reasonably satisfactory in form
and substance to the Company, and it shall have received all such
counterpart original and certified or other copies of such documents as it
may reasonably request.
8. COVENANTS
8.1 DELIVERY OF FINANCIAL STATEMENTS. So long as the Investor
(or any transferee pursuant to Section 11.5) holds the Shares, the Company
shall deliver to the Investor (or any such transferee pursuant to Section
11.5) copies of its Forms 10-K and 10-Q as filed with the SEC, and other
public announcements and releases made by the Company.
8.2 STANDSTILL AGREEMENT. The Investor hereby covenants and
agrees that, prior to December 31, 2000, it will not, nor will it permit any
of its affiliates (including parents, subsidiaries or other related
entities) to, purchase or otherwise acquire or offer or agree to acquire,
directly or indirectly, beneficial ownership of any additional equity
securities of the Company (or rights or options to purchase such securities)
after the Closing in an amount that would cause the Investor to own, on a
fully diluted basis, more than 19% of the outstanding shares of Common Stock
of the Company, without the prior written consent of the Company; provided,
however, that this clause shall not apply to any securities issued with
respect to the Shares pursuant to a stock split, stock dividend,
recapitalization or reclassification approved by a disinterested majority of
the Company's Board of Directors.
8.3 "MARKET STAND-OFF" AGREEMENT. The Investor hereby agrees
that during the period specified by the Company and an underwriter of Common
Stock or other securities of the Company following the effective date of a
Registration Statement of the Company filed under the Securities Act (which
period shall not exceed 120 days), to the extent requested by the Company
and such underwriter, it shall not, nor will it permit any of its affiliates
(including parents, subsidiaries or other related entities) to, directly or
indirectly sell, contract to sell (including, without limitation, any short
sale), grant any option to purchase or otherwise transfer or dispose of any
securities of the Company held
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<PAGE> 10
by any of them during such period; provided, however, that any such request
will be made no more frequently than once every eight (8) months.
8.4 REPORTING PERSON STATUS. For such period as the Investor or
any transferee pursuant to Section 11.5 owns all or part of the Shares, the
Company shall maintain its status as a reporting company under the Exchange
Act and the registration of its Common Stock pursuant to Section 12 of such
Act and shall timely file all forms, reports and documents required to be
filed under the Exchange Act, so as to ensure satisfaction of the condition
contained in Rule 144(c) under the Securities Act relating to availability
of adequate current public information relating to the Company.
8.5 USE OF PROCEEDS. The Company agrees to use the purchase price
of the Shares paid pursuant to Section 2 hereof for the purpose of funding
its Epimmune unit.
8.6 LICENSE RIGHTS. Without altering or affecting the Letter of
Intent or its terms and conditions, the Company and the Investor hereby
agree to, accept, ratify and confirm the terms, conditions and agreements
contained in Section I.A.2(b) of the Letter of Intent, which are
incorporated herein by reference.
9. RIGHT OF FIRST REFUSAL
9.1 SUBSEQUENT OFFERINGS. The Investor shall have a right of
first refusal to purchase its pro rata share of all Equity Securities, as
defined below, that the Company may, from time to time, propose to sell and
issue after the date of this Agreement, other than the Equity Securities
excluded by Section 9.6 hereof. The Investor's pro rata share is equal to
the ratio of (a) the number of Shares purchased pursuant to Article 2, plus
the number of shares of Common Stock (and the number of shares of Common
Stock issued or issuable upon the conversion of any Equity Securities)
previously purchased pursuant to this Article 9, held by the Investor or any
transferee pursuant to Section 11.5, to (b) the total number of shares of
the Company's outstanding Common Stock (including all shares of Common Stock
issued or issuable upon the conversion of any Equity Securities or upon
exercise of any outstanding warrants or options) immediately prior to the
issuance of the Equity Securities. The term "Equity Securities" shall mean
(i) any Common Stock, Preferred Stock or other security of the Company, (ii)
any security convertible, with or without consideration, into any Common
Stock, Preferred Stock or other security (including any option, warrant or
other right to purchase such a convertible security), (iii) any security
carrying any warrant or right to subscribe to or purchase any Common Stock,
Preferred Stock or other security, or (iv) any such warrant or right.
9.2 EXERCISE OF RIGHT OF FIRST REFUSAL. If the Company proposes to
issue any
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<PAGE> 11
Equity Securities, it shall give the Investor written notice of its intention,
describing the Equity Securities, the price and the terms and conditions upon
which the Company proposes to issue the same. The Investor shall have forty
five (45) days from the giving of such notice to agree to purchase its pro rata
share of the Equity Securities for the price and upon the terms and conditions
specified in the notice by giving written notice to the Company and stating
therein the quantity of Equity Securities to be purchased; provided, however,
if the Company reasonably requests in the Company's original notice that the
Investor respond within thirty (30) days (due to timing considerations relating
to the closing of the issuance of such Equity Securities), then the Investor
shall be required to respond to such notice within thirty (30) days.
Notwithstanding the foregoing, the Company shall not be required to offer or
sell such Equity Securities to the Investor if doing so would cause the Company
to be in violation of applicable federal securities laws by virtue of such
offer or sale; provided, however, the Company agrees to use its reasonable best
efforts to take whatever action may be necessary or appropriate to comply with
applicable federal securities laws in connection with such offer or sale.
9.3 ISSUANCE OF EQUITY SECURITIES TO OTHER PERSONS. If the
Investor fails to exercise in full the right of first refusal, the Company
shall have ninety (90) days thereafter to sell the Equity Securities in
respect of which the Investor's right was not exercised, at a price and upon
general terms and conditions materially no more favorable to the purchasers
thereof than specified in the Company's notice to the Investor pursuant to
Section 9.2 hereof. If the Company has not sold such Equity Securities
within ninety (90) days of the notice provided pursuant to Section 9.2, the
Company shall not thereafter issue or sell any Equity Securities, without
first offering such securities to the Investor in the manner provided above.
9.4 TERMINATION OF RIGHT OF FIRST REFUSAL. The right of first
refusal established by this Section 9 shall terminate on the first to occur
of (a) September 17, 2002, or (b) the first date on which the Investor
sells, assigns or otherwise transfers any of the Shares, excluding, however,
transfers pursuant to Section 11.5.
9.5 NO TRANSFER OF RIGHT OF FIRST REFUSAL. The right of first
refusal established by this Section 9 may not be assigned or transferred,
except as otherwise provided in Section 11.5.
9.6 EXCLUDED SECURITIES. The right of first refusal established
by Sections 9.1, 9.2 and 9.3 shall have no application to any of the
following Equity Securities:
(a) shares of Common Stock (and/or options, warrants or other
Common Stock purchase rights issued pursuant to such options, warrants or
other rights) issued or
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<PAGE> 12
to be issued to employees, officers or directors of, or consultants or advisors
to the Company or any subsidiary, pursuant to stock purchase or stock option
plans or other compensatory arrangements that are approved by the Board of
Directors;
(b) stock issued pursuant to any rights, agreements, options or
warrants outstanding as of the date of this Agreement, and stock issued
pursuant to any rights, agreements, options or warrants granted after the
date of this Agreement provided that the right of first refusal established
by this Section 9 did not apply to the initial sale or grant by the Company
of such rights, agreements, options or warrants;
(c) any Equity Securities issued for consideration other than
cash pursuant to a merger, consolidation, acquisition or similar business
combination whereby the stockholders of the Company will own more than fifty
percent (50%) of the voting power of the combined entity;
(d) shares of Common Stock issued in connection with any stock
split, stock dividend or recapitalization by the Company;
(e) shares of Common Stock issued upon conversion of any Equity
Securities;
(f) any Equity Securities issued pursuant to any equipment
leasing arrangement; and
(g) shares of the Company's Common Stock or Preferred Stock
issued in connection with strategic transactions involving the Company and
any third party, including (i) joint ventures, manufacturing, marketing,
corporate partnering or distribution arrangements, or (ii) technology
transfer, research or development arrangements; provided that such strategic
transactions and the issuance of shares therein, has been approved by the
Company's Board of Directors.
Notwithstanding the foregoing, during the term of the right of first
refusal under this Article 9, if at any time or from time to time after the
date of this Agreement the Company issues, pursuant to one or more
transactions described in Sections 9.6 (a) through (g), shares of its Common
Stock (whether a new issuance of Common Stock, or Common Stock issued upon
the exercise of an Equity Security, option, warrant or conversion or
exchange right or other similar right), and if upon such issuance the number
of Shares purchased pursuant to Sections 2.1 and 2.2 hereof, plus the number
of shares of Common Stock (and the number of shares of Common Stock issued
or issuable upon the conversion of any Equity Securities) previously
purchased pursuant to this Article 9 (collectively, the
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<PAGE> 13
"Investor Share Number"), in each case then held by the Investor or any
transferee pursuant to Section 11.5, is less than 95% of the Trigger Percentage
(as defined below) (the date of the consummation of each issuance of Common
Stock causing such occurrence being referred to herein as a "Trigger Date") as
of such Trigger Date, the Investor shall have the right, effective as of the
next February 28 or August 31 immediately following such Trigger Date (such
date being referred to herein as a "Semi-Annual Exercise Date"), except as
otherwise set forth in the first immediately following paragraph, to
purchase from the Company a number of shares of Common Stock (the
"Percentage Purchase Right") such that the sum of (a) the Investor Share
Number, plus (b) the number of shares to be purchased by the Investor
pursuant to the Percentage Purchase Right on such Semi-Annual Exercise Date,
shall equal the Trigger Percentage as of such Semi-Annual Exercise Date.
The "Trigger Percentage" shall mean, as to any date, 7.35% subject to the
following adjustments: In the case (i) the Company issues Common Stock
after the date of this Agreement pursuant to the exercise of any option,
warrant or conversion or exchange right outstanding as of the date of this
Agreement (collectively, "Later Share Issuances"), or (ii) the Investor
waives, or elects not to exercise, a right to purchase Common Stock or other
Equity Securities under this Article 9 (including Section 9.1 and this
Section 9.6) (an "Unexercised Investor Right"), or (iii) the Company issues
any Shares to the Investor pursuant to Section 2.2, then the applicable
Trigger Percentage, as of the date of determination, shall be adjusted to a
percentage which equates to the quotient of (A) the Investor Share Number as
of the date of determining such Trigger Percentage, divided by (B) the sum
of 27,214,886, plus (x) the aggregate number of shares of Common Stock of
the Company issued pursuant to Later Shares Issuances as of the date of
determining such Trigger Percentage, plus (y) the aggregate number of shares
of Common Stock of the Company issued in transactions involving an
Unexercised Investor Right as of the date of determining such Trigger
Percentage, plus (z) the number of Shares (if any) issued pursuant to
Section 2.2.
The Investor shall have the right to waive its Percentage Purchase
Right for any Semi-Annual Exercise Date by giving express written notice of
such waiver to the Company not less than thirty (30) trading days prior to
such Semi-Annual Exercise Date.
The price per share of Common Stock of the Company to be purchased by
the Investor pursuant to the Percentage Purchase Right shall be the fair
market value per share of the Common Stock of the Company as of the
applicable Semi-Annual Exercise Date, determined by averaging the per share
closing prices on the Nasdaq Stock Market of the Common Stock of the Company
for the ten (10) consecutive trading days immediately prior to such
Semi-Annual Exercise Date (the "Market Valuation"). To the extent that the
Company has outstanding or issues Equity Securities, options, warrants or
purchase or subscription rights which convert into or can be exchanged for
shares of Common Stock,
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<PAGE> 14
the parties agree that a Trigger Date shall not have occurred with respect to
such securities until such time as the Common Stock underlying such Equity
Securities, options, warrants, rights or other securities is issued.
If at any time or from time to time the Company issues additional
shares of Common Stock which gives rise to the occurrence of a Trigger Date,
it shall give the Investor written notice within ten (10) days after the
next following Semi-Annual Exercise Date, which notice shall include the
number of shares of Common Stock which are subject to the Percentage
Purchase Right, the Market Valuation of such shares and sufficient
information in order to reasonably substantiate the Market Valuation. Upon
receipt of such notice, the Investor shall have forty-five (45) days to give
written notice to the Company that it wishes to exercise its Percentage
Purchase Right. The purchase and sale of shares of Common Stock pursuant to
exercise of the Percentage Purchase Right shall occur within fifteen (15)
days after such exercise pursuant to a stock purchase agreement containing
terms and conditions substantially the same as those contained in this
Agreement, with appropriate modifications to reflect the terms of such
purchase and sale as contemplated by this Section 9.6 and appropriate
updating of information, and excluding Sections 8.2, 8.3, 8.5 and 8.6.
Notwithstanding the foregoing, the Company shall not be required to offer or
sell such shares of Common Stock to the Investor if doing so would cause the
Company to be in violation of applicable federal securities laws by virtue
of such offer and sale, provided that the Company agrees to use reasonable
--------
best efforts to take whatever action may be necessary or appropriate to
comply with such federal securities laws.
Unless the Investor has timely and expressly waived its Percentage
Purchase Right for any Semi-Annual Exercise Date as set forth above, by
giving express written notice of such waiver to the Company not less than
thirty (30) trading days prior to such Semi-Annual Exercise Date, the
Investor hereby agrees that during the period of thirty (30) trading days
prior to such Semi-Annual Exercise Date, it shall not, and will not permit
any of its affiliates (including parents, subsidiaries or other related
entities) to, directly or indirectly sell, contract to sell (including,
without limitation, any short sale), grant any option to purchase or
otherwise transfer or dispose of any securities of the Company held by any
of them during such period.
9.7 PRIVATE PLACEMENT. If the investors in the Private Placement
are granted rights of first refusal in the Private Placement on terms and
conditions which in the reasonable judgment of the Investor are more
favorable to such investors, taken as a whole, than the right of first
refusal granted to the Investor pursuant to this Article 9, taken as a
whole, then and in such event the Investor shall have the option,
exercisable by written notice to the Company, to deem the provisions of this
Article 9 to be amended in
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<PAGE> 15
their entirety (without further action by either party) to conform with the
terms and conditions of the right of first refusal granted to the investors in
the Private Placement; provided, however, in no event shall the right of first
refusal permit the Investor to purchase the pro rata share of the Equity
Securities of any such investor in the Private Placement or any other person if
such investor or other person fails to exercise its right of first refusal in
full.
9.8 FUTURE REVISIONS. The parties acknowledge and agree that, in
connection with the negotiation of the definitive agreements contemplated by
the Letter of Intent, mutually acceptable and appropriate revisions to the
provisions of this Article 9 will be necessary and appropriate in
recognition of the increased investment by the Investor in the Company and
its subsidiaries.
10. INDEMNIFICATION
10.1 INDEMNIFICATION OF THE INVESTOR. The Company agrees to
indemnify and hold harmless the Investor and its permitted successors and
assigns from and against any and all (i) liabilities, losses, costs or
damages ("Loss") and (ii) reasonable attorneys' and accountants' fees and
expenses, court costs and all other reasonable out-of-pocket expenses
("Expense") incurred by the Investor or its permitted successors and assigns
arising from (A) any breach or failure to perform by the Company of any of
its covenants or agreements contained in this Agreement; or (B) any breach
of any warranty or the inaccuracy of any representation of the Company
contained in this Agreement.
10.2 NOTICE OF CLAIMS BY THE INVESTOR. If any person
indemnified under Section 10.1 hereof believes it has suffered or incurred
any Loss or incurred any Expense as to which it is entitled to
indemnification under Section 10.1 hereof, such person shall so notify the
Company promptly in writing describing such Loss or Expense, the amount
thereof, if known, and the method of computation of such Loss or Expense,
all with reasonable particularity and containing a reference to the
provisions of this Agreement, or any agreement or instrument contemplated
hereby, or any certificate delivered pursuant hereto or thereto in respect
of which such Loss or Expense shall have occurred; and if any action at law
or suit in equity is instituted by or against a third party with respect to
which any such indemnified person intends to claim any Loss or Expense under
Section 10.1, such indemnified person shall promptly notify the indemnifying
party of such action or suit; provided that failure to give such notice
-------- ----
shall not abrogate or diminish the Company's obligations under Section 10.1
if the Company has or receives timely actual knowledge of the existence of
any such claim by any other means or except to the extent such failure
prejudices the Company.
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<PAGE> 16
10.3 INDEMNIFICATION OF THE COMPANY. The Investor agrees to
indemnify and hold harmless the Company and its permitted successors and
assigns from and against any and all Loss and Expense incurred by the
Company and its permitted successors and assigns arising from (i) any breach
or failure to perform by the Investor of any of its covenants or agreements
contained in this Agreement; or (ii) any breach of any warranty or the
inaccuracy of any representation of the Investor contained in this
Agreement.
10.4 NOTICE OF CLAIMS BY THE COMPANY. If any person indemnified
under Section 10.3 believes that it has suffered or incurred any Loss or
incurred any Expense as to which it is entitled to indemnification under
Section 10.3, such person shall so notify the Investor or person responsible
for such indemnification promptly in writing describing such Loss or
Expense, the amount thereof, if known, and the method of computation of such
Loss or Expense, all with reasonable particularity and containing a
reference to the provisions of this Agreement, or any agreement or
instrument contemplated hereby, or any certificate delivered pursuant hereto
or thereto in respect of which such Loss or Expense shall have occurred; and
if any action at law or suit in equity is instituted by or against a third
party with respect to which any such indemnified party intends to claim any
Loss or Expense under Section 10.3, such indemnified party shall promptly
notify the indemnifying party of such action or suit; provided that failure
-------- ----
to give such notice shall not abrogate or diminish the Investor's
obligations under Section 10.3 if the Investor has or receives timely actual
knowledge of the existence of any such claim by any other means or except to
the extent such failure prejudices the Investor.
10.5 THIRD PARTY CLAIMS. The indemnifying party shall have the
right to participate in, and, to the extent the it so desires, jointly with
any other indemnitor similarly noticed, to assume the defense of any third
party claim, demand, action or other proceeding with counsel selected by the
indemnifying party; provided, however, that the indemnified party shall have
-------- -------
the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of the indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to
actual or potential differing interests between the indemnified party and
any other party represented by such counsel in such proceedings. So long as
the indemnifying party has received notice of any third party claim, demand,
action or proceeding for which any indemnified party intends to claim any
Loss or Expense, and within a reasonable period thereafter the indemnifying
party has assumed the defense thereof, the indemnity obligations under this
Article 10 shall not apply to amounts paid in settlement of such third party
claim, demand, action or proceeding if such settlement is effected without
the consent of the indemnifying party, which consent shall not be
unreasonably withheld or delayed. The indemnifying party may not settle or
otherwise consent to an adverse judgment in any such third party claim,
demand, action or proceeding action that diminishes the rights or interests
of the
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<PAGE> 17
indemnified party without the prior express written consent of the indemnified
party. The indemnified party, its employees and agents, shall cooperate
reasonably with the indemnifying party and its legal representatives in the
investigation of any third party claim, demand, action or proceeding covered by
this Article 10.
11. MISCELLANEOUS
11.1 SUCCESSORS AND ASSIGNS. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
permitted successors and assigns of the parties. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the
parties hereto or their respective permitted successors and assigns any
rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.
11.2 GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of California, as applied to contracts
executed and performed entirely within the State of California, without
regard to conflicts of laws rules.
11.3 COUNTERPARTS. This 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.
11.4 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
11.5 ASSIGNMENT. This Agreement may not be assigned or otherwise
transferred, nor, except as expressly provided hereunder, may any right or
obligations hereunder be assigned or transferred, by either party without
the written consent of the other party; provided, however, that either the
Company or the Investor may, without such consent, assign this Agreement and
its rights and obligations hereunder (a) in connection with the transfer or
sale of all or substantially all of its business, if such assets include
substantially all of the assets relating to its performance of its
respective obligations hereunder or (b) in the event of its merger or
consolidation with another company at any time during the term of this
Agreement. Any purported assignment in violation of the preceding sentence
shall be void. Any other permitted assignee shall also assume all
obligations of its assignor under this Agreement.
11.6 NOTICES. Any notice or report required or permitted to be
given or made under this Agreement by one of the parties hereto to the other
shall be in writing, delivered
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<PAGE> 18
personally or by facsimile (and promptly confirmed by personal delivery or
courier) or courier, postage prepaid, addressed to such other party at its
address indicated below, or to such other address as the addressee shall have
last furnished in writing to the addressor and shall be effective upon receipt
by the addressee.
The Company: Cytel Corporation
3525 John Hopkins Court
San Diego, California 92121
Attention: President
Tel: (619) 552-3000
Fax: (619) 552-8801
The Investor: G.D. Searle & Co.
P.O. Box 5110
Chicago, Illinois 60680-5110
Attention: Vice President, Business Development
Tel: (847) 982-7000
Fax: (847) 470-1480
with a copy to: G.D. Searle & Co.
P.O. Box 5110
Chicago, Illinois 60680-5110
Attention: General Counsel
Tel: (847) 982-7000
Fax: (847) 967-2045
11.7 FINDER'S FEE. Each party represents that it neither is nor will be
obligated for any finders' fee or commission in connection with this
transaction. The Investor agrees to indemnify and hold harmless the Company
from any liability for any commission or compensation in the nature of a
finders' fee (and the costs and expenses of defending against such liability or
asserted liability) for which the Investor or any of its officers, partners,
employees or representatives is responsible. The Company agrees to indemnify
and hold harmless the Investor from any liability for any commission or
compensation in the nature of a finder's fee (and the costs and expenses of
defending against such liability or asserted liability) for which the Company
or any of its officers, employees or representatives is responsible.
11.8 EXPENSES. Irrespective of whether the Closing is effected, each
party shall bear its own costs with respect to the negotiation, execution,
delivery and performance of this Agreement.
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<PAGE> 19
11.9 AMENDMENTS AND WAIVERS. Except as specified in this Section 11.9,
any term of this Agreement may be amended and the observance of any term of
this Agreement may be waived (either generally or in a particular instance and
either retroactively or prospectively) only with the written consent of the
Company and the Investor.
11.10 SEVERABILITY. If one or more provisions of this Agreement is held
to be unenforceable under applicable law, 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.
11.11 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with regard to the subject matter hereof.
11.12 FURTHER ASSURANCES. Each party hereto agrees to do such further
actions and things, and to execute and deliver such additional agreements and
instruments, as either party may reasonably request of the other to effectuate
the transactions contemplated by this Agreement.
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<PAGE> 20
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
CYTEL CORPORATION
By: /s/ Deborah Schueren
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Title: V.P. and Chief Financial Officer
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G.D. SEARLE & CO.
By: /s/ Philip Needleman
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Title: President
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