Registration No. 333- _____
As filed with the Securities and Exchange Commission on February 25, 2000
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
IMMUNOMEDICS, INC.
(Exact name of registrant as specified in its charter)
Delaware 61-1009366
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
300 American Road
Morris Plains, New Jersey 07950
(973) 605-8200
(Address, including zip code, and telephone
number, including area code, of
registrant's principal executive offices)
Dr. David M. Goldenberg
Chairman and Chief Executive Officer
Immunomedics, Inc.
300 American Road
Morris Plains, New Jersey 07950
(973) 605-8200
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies of all communications,
including all communications
sent to the agent for
service, should be sent to:
Peter H. Ehrenberg, Esq.
Lowenstein Sandler PC
65 Livingston Avenue
Roseland, New Jersey 10024
(973) 597-2500
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box: [ ]
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, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [x]
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: [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Title of Each Class of Amount of Shares to be Proposed Maximum Proposed Maximum Amount of
Securities to be Registered Registered (1) Offering Price Per Aggregate Registration Fee
Share(2) Offering Price(3)
- --------------------------- -------------- ------------------ ----------------- ----------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par
value per share 2,325,000 $ 26.0625 $ 60,595,312.50 $ 15,998
</TABLE>
(1) Represents shares of common stock available for resale by purchasers under a
Common Stock Purchase Agreement, dated as of February 14, 2000, by and among the
Registrant and such purchasers.
(2) Pursuant to Rule 457(c), the proposed maximum offering price per share and
proposed maximum aggregate offering price have been calculated on the basis of
the average of the high and low sale prices of the registrant's common stock as
reported on The Nasdaq National Market on February 24, 2000.
<PAGE>
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 which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
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The information in this Prospectus is subject to completion and may be changed.
The selling stockholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission (of which this
Prospectus is a part) is effective. This Prospectus is not an offer to sell
these securities, and is not soliciting an offer to buy these securities, in any
state where such offer or sale is not permitted
PROSPECTUS
IMMUNOMEDICS, INC.
2,325,000 Shares of Common Stock
The Issuer
Immunomedics. Inc.
300 American Road
Morris Plains, New Jersey 07950
(973) 605-8200
The Selling Stockholders
The selling stockholders are offering to sell 2,325,000 shares of
common stock that we issued to them on February 14, 2000 pursuant to a Common
Stock Purchase Agreement. Additional information concerning our agreement with
the selling stockholders is set forth under the caption "Immunomedics - February
2000 Financing."
Trading Symbol
Nasdaq National Market - "IMMU"
The closing sale price of a share of our common stock on Nasdaq on
February [__], 2000 was $[__].
The Offering
The selling stockholders may sell shares of our common stock from time
to time on the Nasdaq National Market at the prevailing market price or in
private, negotiated transactions. The shares will be sold at prices determined
by the selling stockholders. We will not receive any part of the proceeds from
the sale. We are paying the expenses in connection with the registration of the
shares with the SEC. The selling stockholders may be deemed to be "underwriters"
within the meaning of the Securities Act in connection with the sale of shares
of our common stock.
A purchase of shares involves a high degree of risk. You should
purchase shares only if you can afford a complete loss of your investment. See
"Risk Factors" beginning on page 4.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
_________, 2000
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TABLE OF CONTENTS
Risk Factors:
We Have a History of Operating Losses and May Never Become
Profitable........................................................
We May Not Be Able to Successfully Develop a Market for Our Approved
Products..........................................................
We May Not Receive Approval to Sell LeukoScan in the United States
in a Timely Manner................................................
We May Not Be Able to Bring to Market the Products We Are Currently
Developing or Sustain Their Sales After Approval..................
If We Require and Do Not Obtain Additional Capital, We May Be
Required to Curtail Our Operations................................
Our Limited Marketing and Sales Experience and Capability Could
Impact Our Ability to Successfully Sell Our Current Products......
We May Have to Rely on Partners to Help Us Market and Sell Our
Products Under Development........................................
We Could Be Temporarily Unable to Sell Our Products If Our Agreements
with our Distributors Were Terminated.............................
We Could Be Temporarily Unable to Sell Our Products If Our Agreement
with our End Stage Manufacturer Was Terminated....................
Our Internal Manufacturing Capability May Limit What We Can Sell.....
We May Be Unable to Continue to Use Mouse Fluids for Future Products
Which Could Require Us to Make Expensive and Time Consuming
Changes to Our Products in Development............................
Our Product Development Is Dependent Upon Our Continued Relationship
with The Center for Molecular Medicine and Immunology.............
Certain Potential Conflicts of Interest Exist with The Center for
Molecular Medicine and Immunology Which Could Affect Our
Operations........................................................
We May Not Be Able to Obtain Government Regulatory Approval in a
Timely Manner to Market and Sell Our Products or Approval May Be
Withdrawn.........................................................
Our Business Involves the Use of Hazardous Materials.................
We Must Maintain Our Manufacturing Facilities in Accordance With
Government Regulatory Requirements................................
We Have Agreed to Certain Covenants in our 1999 Financing Which Place
Restrictions on the Operation of our Business.....................
Changes to Health Care Reimbursement Could Adversely Affect Our
Operations........................................................
The Loss of Key Employees Could Adversely Affect our Operations......
We Face Substantial Competition in the Biotechnology Field and
May Not Be Able to Successfully Compete...........................
Our Products May Be Rendered Obsolete By Rapid Technological Change..
If We Are Unable to Protect Our Intellectual Property Rights, We
Could Lose Our Competitive Advantage..............................
Our Products May Infringe Third Party Intellectual Property Rights...
Our Operations Could Suffer If We Are Unsuccessful in Our Pending
Infringement Claims Concerning Our CEA Antibodies.................
Product Liability Claims in Excess of the Amount of Our Insurance
Would Adversely Affect Our Financial Condition....................
Our Principal Stockholder Can Influence Most Matters Requiring
Approval By Our Stockholders......................................
Resales of Shares Held By Our Directors and Executive Officers May
Lower the Market Price of Our Common Stock........................
Our Stock Price Has Been Volatile....................................
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Stockholders Could Be Adversely Affected By Our Anti-Takeover
Provisions........................................................
Stockholders Should Not Expect that We Will Pay Dividends............
Special Note Regarding Forward-Looking Statements....................
Where You Can Find More Information.............................................
Immunomedics:
Description of Our Business..........................................
February 2000 Financing; Covenants
Use of Proceeds..................................................
Selling Stockholders............................................................
Plan of Distribution:
Manner of Sales; Broker-Dealer Compensation..........................
Filing of a Post-Effective Amendment In Certain Instances............
Certain Persons May Be Deemed to Be Underwriters.....................
Regulation M.........................................................
Indemnification and Other Matters....................................
Legal Matters...................................................................
Experts.........................................................................
You should rely on the information incorporated by reference or
provided in this prospectus or any supplement. We have not authorized anyone to
provide you with different information. You should not assume that the
information in this prospectus or any supplement is accurate as of any date
other than the date on the front of such document. The selling stockholders are
not making an offer of our shares in any state where the offer is not permitted.
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RISK FACTORS
Investing in our common stock involves a high degree of risk. As a
result, you should be able to sustain a complete loss of your investment. In
addition to the other information in this prospectus, you should carefully
consider the following factors before purchasing any of our common stock.
We Have a History of Operating Losses and May Never Become Profitable
We have had significant operating losses since our formation in 1982
and have not earned a profit since our inception. These operating losses and
failure to be profitable have been due mainly to the significant amount of money
that we have had to spend on research and development. As of December 31, 1999,
we had an accumulated deficit of approximately $104.1 million. We expect to
continue to experience operating losses until such time, if at all, that we are
able to generate sufficient revenues from sales of CEA-Scan(r), LeukoScan(r)
and/or our other potential products.
We May Not Be Able to Successfully Develop a Market for Our Approved Products
CEA-Scan and LeukoScan are the only products which we are licensed to
market and sell. To date, we have received only limited revenues from the sale
of these products. We cannot assure you that these products or any of our
proposed products will achieve market acceptance or generate significant sales.
We May Not Receive Approval to Sell LeukoScan in the United States in a Timely
Manner
We have not yet received approval from the FDA to market and sell
LeukoScan in the United States and cannot assure you as to when, if ever, that
we will obtain approval. In addition, the FDA could impose conditions on its
approval, which could significantly affect the commercial viability of the
product or could require us to undertake significant additional studies or
otherwise expend additional significant funds. If we do not receive approval to
market and sell LeukoScan in the United States in the near future or if the FDA
imposes significant conditions or restrictions, our business and operations
could be significantly and adversely affected.
We May Not Be Able to Bring to Market the Products We Are Currently Developing
or Sustain Their Sales After Approval
Before any of our products that we are currently developing can be
marketed and sold, we must undertake substantial research and development. All
new products face a high degree of uncertainty, including the following:
* We may not receive regulatory approval to perform human clinical trials for
the products we currently have planned or we may be unable to successfully
complete our ongoing clinical trials.
* The results from preclinical studies and clinical trials may not be
indicative of results that will be obtained in later-stage testing.
* We may be unable to timely recruit a sufficient number of patients for our
clinical trials. Delays in planned patient enrollment may result in
increased costs and delays.
* We may be unable to obtain approval from the FDA and comparable foreign
authorities because we are unable to demonstrate that the product is safe
and effective for the intended use, or obtaining regulatory approval may
take significantly more time and cost significantly more money than we
currently anticipate.
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* We may discover that the product has undesirable or unintended side effects
or other characteristics that make it impossible or impracticable for us to
continue development or which may limit the product's commercial use.
* We do not expect that any new product which is currently in research and
development will be commercially available for at least several years.
* We may be unable to produce the product in commercial quantities at
reasonable cost.
* We may be unable to successfully market the product or to find an
appropriate corporate partner, if necessary, to assist us in the marketing
of the product.
* The product may not gain satisfactory market acceptance.
* The product may be superseded by another product commercialized for the
same indication or may infringe patents issued to others, which would
prevent us from marketing and selling the product.
* After approval, the product may be recalled or withdrawn at any time as a
result of regulatory issues, including those concerning safety and
efficacy.
If we are unable to continue to develop products that we can successfully
market, our business, financial condition and results of operations will be
significantly and adversely affected.
If We Require and Do Not Obtain Additional Capital, We May Be Required to
Curtail Our Operations
Our February 2000 financing has provided us with needed capital. While
we believe that we have now satisfied our immediate capital requirements, we
cannot assure you that additional capital may not be required in the future. If
we require additional capital and are unable to obtain capital on satisfactory
terms, we may be required to significantly reduce our operating expenses,
including the amount of resources devoted to marketing and sales, product
development and clinical trials, which could have a significant and adverse
effect on us. We cannot assure you that any additional financing will be
available to us at all or on terms we find acceptable or that the terms of any
financing will not cause substantial dilution to our existing stockholders.
Our Limited Marketing and Sales Experience and Capability Could Impact Our
Ability to Successfully Sell Our Current Products
We are relying, in substantial part, on our own limited sales and
marketing organization to market CEA- Scan and LeukoScan. We cannot assure you
that we can successfully maintain and continue to build our sales force. If we
are unable to continue to build and maintain our sales force, our financial
condition and operating results may be significantly and adversely affected.
We May Have to Rely on Partners to Help Us Market and Sell Our Products Under
Development
The marketing and sale of our proposed products may be dependent upon
our entering into arrangements with corporate partners. We cannot assure you
that we will be successful in forming these relationships or that these
relationships, even if formed, will be successful.
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We Could Be Temporarily Unable to Sell Our Products If Our Agreements with our
Distributors Were Terminated
We currently do not have the resources to internally develop and
maintain the operating procedures required by the FDA and comparable foreign
regulatory authorities to oversee distribution of our products. As a result, we
have entered into arrangements with third parties to perform this function for
the foreseeable future. If these agreements are terminated, we will be required
to enter into arrangements with other government approved third parties in order
to be able to distribute our products. We will be unable to continue to
distribute our products until an acceptable alternative is identified. If we
were even only temporarily unable to distribute our products, our business could
be significantly and adversely effected.
We Could Be Temporarily Unable to Sell Our Products If Our Agreement with our
End Stage Manufacturer Was Terminated
We rely on a single third party to perform certain end-stage portions
of the manufacturing process for CEA-Scan and LeukoScan which we are unable or
do not have the resources to perform. If this third party were to become
unavailable, we would be unable to complete the manufacturing process until we
entered into an agreement with another qualified entity. We cannot assure you
that we will be able to negotiate an agreement with another entity on terms we
consider acceptable, if at all. Even if we were able to do so, any substantial
delay in our ability to manufacture our products could significantly and
adversely affect our operations.
Our Internal Manufacturing Capability May Limit What We Can Sell
If demand for our approved product increases significantly, we cannot
assure you that we will continue to have the capacity to manufacture commercial
quantities successfully. In addition, if any of our other products are approved
for marketing and sale, we cannot assure you that we will continue to have the
capacity and expertise to manufacture commercial quantities of multiple products
successfully or with acceptable profit margins. If we were even only temporarily
unable to manufacture sufficient quantities of our products to meet demand, our
business could be significantly and adversely affected.
We May Be Unable to Continue to Use Mouse Fluids for Future Products Which Could
Require Us to Make Expensive and Time Consuming Changes to Our Products in
Development
CEA-Scan and certain of our other imaging agents are derived from
ascites fluid produced in mice. Regulatory authorities, particularly in Europe,
have expressed concerns about the use of mice fluid for the production of
monoclonal antibodies. We cannot assure you that regulatory authorities will
agree that our quality control procedures will be adequate for future products.
While we are continuing our development efforts to produce certain of our
monoclonal antibodies using cell culture methods, this process constitutes a
substantial production change, which will require additional manufacturing
equipment and new regulatory approval. We cannot assure you that we will have
the resources to acquire the additional manufacturing equipment and resources or
that we will receive the required regulatory approval on a timely basis, if at
all. We also have contracted with a third party for the development and
production of certain humanized antibodies, but we cannot assure you that these
efforts will be successful.
Our Product Development Is Dependent Upon Our Continued Relationship with The
Center for Molecular Medicine and Immunology
The Center for Molecular Medicine and Immunology, a not-for-profit
cancer research center, performs pilot and pre-clinical trials in product areas
of importance to us. CMMI also conducts basic research and patient evaluations
in a number of areas of potential interest to us. If CMMI were no longer to
provide these services, we would have to make alternative arrangements with
third parties which could significantly delay and increase expenses associated
with pre-clinical testing and initial clinical trials.
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<PAGE>
Certain Potential Conflicts of Interest Exist with The Center for Molecular
Medicine and Immunology Which Could Affect Our Operations
Dr. David M. Goldenberg, our Chairman and Chief Executive Officer, is
the founder, President and a member of the Board of Trustees of CMMI. Dr.
Goldenberg devotes more of his time working for CMMI than for us. In addition,
other key personnel currently have responsibilities both to CMMI and us. As a
result, the potential for conflict of interest exists and disputes could arise
over the allocation of research projects and ownership of intellectual property
rights.
We May Not Be Able to Obtain Government Regulatory Approval in a Timely Manner
to Market and Sell Our Products or Approval May Be Withdrawn
Regulation by governmental authorities in the United States and foreign
countries is a significant factor in the manufacture and marketing of our
presently marketed and proposed products as well as our research and development
activities. All of our proposed products will require regulatory approval by
governmental agencies prior to commercialization and our products must undergo
rigorous preclinical and clinical testing and other premarket approval
procedures by the FDA and comparable foreign authorities. In addition, since
certain of our potential products involve the application of new technologies,
regulatory approvals may take longer than for products produced using more
conventional methods. Once we begin clinical trials for a new diagnostic or
therapeutic product, it may take five to ten years or more to receive the
required regulatory approval to commercialize that product and begin to market
it to the public. Various federal and, in some cases, state statutes and
regulations also govern or influence the manufacturing, safety, labeling,
storage, record keeping and marketing of these products. The lengthy process of
seeking these approvals, and the subsequent compliance with applicable statutes
and regulations, will require us to expend substantial resources. If we fail to
obtain or are otherwise substantially delayed in obtaining regulatory approvals,
our business and operations could be significantly and adversely affected.
In responding to a new drug application, or a biologic license
application, a government regulator may grant marketing approvals, request
additional information or further research, or deny the application if it
determines that the application does not satisfy its regulatory approval
criteria. Approvals may not be granted on a timely basis, if at all, or if
granted may not cover all the clinical indications for which we are seeking
approval or may contain significant limitations in the form of warnings,
precautions or contraindications with respect to conditions of use. Even after
approval, we may be required to recall or withdraw a product as a result of
subsequently discovered safety or efficacy concerns.
Our Business Involves the Use of Hazardous Materials
In addition to laws and regulations enforced by the FDA, we are also
subject to regulation under various other foreign, federal, state or local laws
and regulations. Our research and development involves the controlled use of
hazardous materials, chemicals, viruses and various radioactive compounds. The
risk of accidental contamination or injury from these materials cannot be
completely eliminated. If an accident occurs, we could be held liable for any
damages that result and any liability could exceed our resources.
We Must Maintain Our Manufacturing Facilities in Accordance With Government
Regulatory Requirements
Our facilities are subject to inspection by the FDA and comparable
foreign authorities. A separate license is sometimes required for commercial
manufacture of any product. Failure to maintain these licenses or to meet the
regulatory inspection criteria would result in disruption to our manufacturing
processes and could have a significant and adverse effect on our business and
operations.
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We Have Agreed to Certain Covenants in our 1999 Financing Which Place
Restrictions on the Operation of our Business
In connection with our December 1999 financing, we have agreed to
certain covenants, including covenants that will apply unless the investors in
that offering and their affiliates beneficially own less than 5% of our common
stock. Among other things, we have agreed that without the prior consent of such
investors, we may not sell our business to anyone that is an affiliate of the
company, unless the sale is for consideration at least equal to (a) the fair
market value in the event of a sale of assets (as determined in good faith by
our board of directors) or (b) the then current market price in the event of a
sale of stock. See "February 2000 Financing; Covenants." As of February 18,
2000, such investors in the aggregate beneficially owned 6.4% of our outstanding
common stock.
Changes to Health Care Reimbursement Could Adversely Affect Our Operations
Our ability to successfully commercialize our products will depend in
part on the extent to which reimbursement for the cost of our products and
related treatment will be available from government health administration
authorities, private health insurers and other organizations. These third-party
payers are increasingly challenging the price of medical products and services.
Several proposals have been made that may lead to a government-directed national
health care system. Adoption of this type of system could further limit
reimbursement for medical products, and we cannot assure you that adequate
third-party coverage will be available to enable us to maintain price levels
sufficient to realize an appropriate return on our investment in product
development. In addition, we also cannot assure you that the U.S. government or
foreign governments will not implement a system of price controls. Any system
might significantly and adversely affect our ability to market our products
profitably.
The Loss of Key Employees Could Adversely Affect our Operations
As a small biotechnology company, we are heavily dependent upon the
talents of Dr. Goldenberg and certain key scientific personnel. If Dr.
Goldenberg or any of our other key personnel leave our employ, our operations
could be significantly and adversely affected. In addition, from time to time we
have a need to expand our management and scientific personnel. Competition for
qualified personnel in the biotechnology and pharmaceutical industries is
intense and we cannot assure you that we will be successful in our recruitment
efforts. If we are unable to retain or, when needed, attract additional
qualified personnel, our operations also could be significantly and adversely
affected.
We Face Substantial Competition in the Biotechnology Field and May Not Be Able
to Successfully Compete
The biotechnology industry is highly competitive, particularly in the
area of cancer diagnostic and therapeutic products. We are likely to encounter
significant competition with respect to our existing products as well as our
products currently under development. A number of companies, including IDEC
Pharmaceuticals, Genentech, SmithKline Beecham, Nycomed Amersham, and Coulter
Pharmaceutical, are engaged in the biotechnology field, and in particular the
development of cancer diagnostic and therapeutic products. Many of these
companies have significantly greater financial, technical and marketing
resources than us. In addition, many of these companies may have more
established positions in the pharmaceutical industry and may be better equipped
than us to develop, refine and market their products.
We also expect to face increasing competition from universities and
other non-profit research organizations. These institutions carry out a
significant amount of research and development in the field of antibody-based
technology. These institutions are becoming increasingly more aware of the
commercial value of their findings and more active in seeking patent and other
proprietary rights, as well as licensing revenues.
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Our Products May Be Rendered Obsolete By Rapid Technological Change
We are pursuing an area of product development in which there is the
potential for extensive technological innovations in relatively short periods of
time. We cannot assure you that our competitors will not succeed in developing
products that are safer or more effective than our products. Rapid technological
change or developments by others may result in our current products as well as
those in development becoming noncompetitive or obsolete.
If We Are Unable to Protect Our Intellectual Property Rights, We Could Lose Our
Competitive Advantage
Our commercial success is highly dependent upon patents and other
proprietary rights that we own or license. We cannot assure you that our key
patents will not be invalidated or will provide us protection that has
commercial significance. Litigation may be necessary to protect our patent
positions, which could be costly and time consuming. If any of our key patents
that we own or license are invalidated, our business may be significantly and
adversely affected. In addition, other companies may independently develop
similar trade secrets or know-how or obtain access to our trade secrets,
know-how or proprietary technology, which could significantly and adversely
affect our business.
Our Products May Infringe Third Party Intellectual Property Rights
Other companies may have filed applications for, or have been issued,
patents and obtained other proprietary rights to technology which may be
potentially useful to us. Since we do not have the resources to maintain a staff
whose primary function is to investigate the level of protection afforded to
third parties on devices and components which we use in our products, it is
possible that a third party could successfully claim that our products infringe
on their intellectual property rights. If this were to occur, we may be subject
to substantial damages, and we may not be able to obtain appropriate licenses at
a cost we could afford and we may not have the ability to timely redesign our
products. If we are required to pay damages or are unable to obtain these
rights, our business could be significantly and adversely affected. Even if we
are successful in defeating any alleged infringement claims, litigation could
result in a substantial diversion of managerial time and resources, which could
be better and more fruitfully utilized on other activities.
Our Operations Could Suffer If We Are Unsuccessful in Our Pending Infringement
Claims Concerning Our CEA Antibodies
We are involved in certain litigation with F. Hoffmann-LaRoche and its
affiliates concerning the validity our European patents covering the antibody we
use in our CEA-Scan cancer imaging product and our CEA-Cide(tm) cancer therapy
product, as well as the use of highly specific anti-CEA antibodies for a number
of other uses. We have claimed that they have infringed our patent and they have
counter-claimed seeking to nullify the patents that were issued. If we receive
an unfavorable outcome in any of these matters, our business could be
significantly and adversely affected.
Product Liability Claims in Excess of the Amount of Our Insurance Would
Adversely Affect Our Financial Condition
The clinical testing, marketing and manufacturing of our products
necessarily involve the risk of product liability. While we currently have
product liability insurance, we cannot assure that we will be able to obtain
insurance in the future at an acceptable cost, if at all. If we cannot maintain
our existing or comparable liability insurance, our ability to test clinically
and market our products may be significantly impaired. Moreover, the amount and
scope of our insurance coverage or indemnification arrangements with any
distributor or other third party upon which we rely may be inadequate to protect
us in the event of a successful product liability claim. Any claim in excess of
the amount of any insurance we then had could significantly and adversely affect
our financial condition and operating results.
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Our Principal Stockholder Can Influence Most Matters Requiring Approval By Our
Stockholders
As of February 18, 2000, Dr. Goldenberg, our Chairman and Chief
Executive Officer, controlled the right to vote over approximately 24.9% of our
common stock (excluding options to purchase 337,500 shares). As a result of this
voting power, Dr. Goldenberg may have the ability to determine the election of
all of our directors, direct our policies and control the outcome of
substantially all matters which may be put to a vote of our stockholders.
Resales of Shares Held By Our Directors and Executive Officers May Lower the
Market Price of Our Common Stock
As of February 18, 2000, we had a total of 48,897,746 shares of common
stock outstanding, 12,290,456 of which were held by our directors and executive
officers (excluding options to purchase 865,000 shares). Absent registration,
these shares may only be resold in limited quantities and only within the
limitations imposed by Rule 144 under the Securities Act. The mere prospect that
these shares may be publicly resold could lower the market price for our common
stock. One of our directors, Dr. Morton Coleman, is eligible to sell shares
pursuant to this prospectus. See "Selling Stockholders."
Our Stock Price Has Been Volatile
We believe that a variety of factors have caused the market price of
our common stock to fluctuate substantially, and that it will continue to
fluctuate in the future. These factors include:
* actual or anticipated fluctuations in our operating results;
* the status of our products in development;
* new products or technical innovations by us or by our existing or potential
competitors;
* the formation or termination of our corporate alliances and distribution
arrangements;
* prolonged periods of regulatory review of new products or new uses for
existing products;
* determinations regarding our patent applications and those of others;
* trading strategies occurring in the market place with respect to our common
stock; and
* general market conditions and other factors unrelated to us or outside our
control.
Stockholders Could Be Adversely Affected By Our Anti-Takeover Provisions
Our board of directors has the authority, without any further vote by
our stockholders, to issue up to 10,000,000 shares of preferred stock in one or
more series and to determine the designations, powers, preferences and relative,
participating, optional or other rights thereof, including the dividend rate,
whether dividends are cumulative, conversion rights, voting rights, rights and
terms of redemption, redemption price and liquidation preference. Issuance of
preferred stock could have the effect of delaying, deterring or preventing a
change in control of our company, or could impose various procedural and other
requirements that could make it more difficult for holders of our common stock
to effect certain corporate actions, including the ability to replace incumbent
directors and to accomplish transactions opposed by the incumbent board of
directors. The rights of the holders of our common stock would be subject to,
and may be adversely affected by, the rights of the holders of any preferred
stock that may be issued in the future.
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Stockholders Should Not Expect That We Will Pay Dividends
We have never paid any dividends on our common stock. For the
foreseeable future, we expect to retain earnings, if any, to finance the
expansion and development of our business. Any future payment of dividends will
be within the discretion of our Board of Directors and will depend upon a
variety of factors, including our earnings, capital requirements, and operating
and financial condition.
Special Note Regarding Forward-Looking Statements
We have made statements in this prospectus, and in the documents we
incorporate by reference, that are "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Sometimes these
statements contain words like "may," "believe," "expect," "continue," "intend,"
"anticipate," "plan," "seek" and "estimate" or other similar words. These
statements could involve known and unknown risks, uncertainties and other
factors that might significantly alter the actual results suggested by the
statements. In other words, our performance might be quite different from what
the forward-looking statements imply. The following factors, as well as those
discussed above in this "Risk Factors" section and in the documents which we
incorporate by reference, could cause our performance to differ from the implied
results:
* inherent uncertainties accompanying the marketing of CEA-Scan and
LeukoScan.
* inherent uncertainties involving new product development and marketing.
* inability to obtain capital for continued product development and
commercialization.
* actions of regulatory authorities concerning product approval.
* actions of government and private organizations concerning reimbursement of
medical expenses.
* impact of competitive products and pricing.
* results of clinical trials.
* loss of key employees.
* changes in general economic and business conditions.
* changes in industry trends.
We have no obligation to release publicly the result of any revisions to any of
our "forward-looking statements" to reflect events or circumstances that occur
after the date of this prospectus or to reflect the occurrence of other
unanticipated events.
-11-
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We publicly file annual, quarterly and current reports, proxy statements
and other documents with the SEC. You may read and copy any of these documents
at the SEC's public reference rooms, which are located at:
450 Fifth Street, N.W.
Washington, D.C. 20549
7 World Trade Center, Suite 1300
New York, New York 10048
500 West Madison Street, Suite 1400
Chicago, Illinois 60661-2511
Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. The SEC maintains an Internet website at
http://www.sec.gov where our publicly filed documents may be obtained.
This prospectus is part of a registration statement filed with the SEC.
Our registration statement contains more information than this prospectus
regarding us and our common stock and includes supplemental exhibits and
schedules. You can obtain a copy of the registration statement from the SEC at
the address listed above or from its Internet website.
The SEC allows us to "incorporate by reference" into this prospectus
the information we file with it. This means that we are deemed to be disclosing
such information to you by referring you to those documents. This information is
important and should be reviewed. The information incorporated by reference is
considered to be part of this prospectus, and later information that we file
with the SEC will automatically update and supersede the information in this
prospectus.
We incorporate by reference into this prospectus the documents listed
below and any future filings we make with the SEC under Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act:
* Annual Report on Form 10-K for the fiscal year ended June 30, 1999;
* Proxy Statement, dated October 18, 1999, with respect to our 1999
annual meeting of stockholders;
* Quarterly Reports on Form 10-Q for the fiscal quarters ended September
30, 1999 and December 31, 1999;
* Current Reports on Form 8-K, dated November 24, 1999 and February 23,
2000; and
* Description of our common stock contained in Item 1 of our
Registration Statement on Form 8-A, dated May 7, 1984.
You may request a copy of these filings, at no cost, by calling or
writing us at the following address:
Immunomedics, Inc.
300 American Road
Morris Plains, New Jersey 07950
(973) 605-8200
Attention: Investor Relations
-12-
<PAGE>
IMMUNOMEDICS
Description of Our Business
We are a biopharmaceutical company, which develops, manufactures and
markets products for the detection and treatment of cancers and other diseases.
These products, which are based on our monoclonal antibody technology, are
designed to deliver radioisotopes, chemotherapeutic agents, toxins, dyes or
other substances to a specific disease site or organ system.
We have received approval from the respective regulatory agencies in
the United States, the 15 member countries of the European Union, Canada and
certain other countries to market and sell CEA-Scan (arcitumomab), our imaging
product for the detection of recurrent and/or metastatic colorectal cancer.
We also have received approval to market and sell LeukoScan
(sulesomab), our imaging product for detection and diagnosis of osteomyelitis
(bone infection) in long bones and in diabetic foot ulcer patients, in the 15
member countries of the European Union. We have filed an application with the
FDA in the U.S. and the comparable regulatory agency in Canada for approval to
market LeukoScan for the imaging of infection in osteomyelitis as well as for
the imaging of infection in acute, atypical appendicitis. We have been advised
by the FDA that there are still deficiencies with our application relating to
the adequacy of our data necessary to support final approval for these
indications. Despite our confidence that we were making progress with the FDA
and had adhered to all agreements and guidelines, it is now clear to us that we
need to take whatever steps are available to us to gain a more receptive
audience in order to gain marketing approval for this product. We can not assure
you that we will receive FDA approval for this product in a timely manner, or at
all.
Marketing, Sales and Distribution
CEA-Scan is marketed and sold in the U.S. directly by our limited
internal sales force, who are focused on new customers in major medical centers.
Our skilled nuclear medicine technicians work with this sales force and provide
technical support directly to our customers. We have entered into a distribution
arrangement in the U.S. with Integrated Commercialization Solutions, a division
of Bergen Brunswig Corporation, to provide product support services including
customer service, order management, distribution, invoicing and collection. We
also have an agreement with Syncor International, a leading provider of
radiopharmacy services, under which Syncor makes CEA-Scan available to its
hospital and clinic accounts throughout the U.S., supported by our sales and
technical support specialists.
Our European operations, headquartered in Hillegom, The Netherlands,
include European management, sales and marketing, customer service and
invoicing, collection and other administrative functions. We also have
established sales representation in most major European markets. We service
other markets through the appointment of local distributors who provide sales
and marketing support as well as local product distribution. We have an
agreement with Eli Lilly Deutschland GmbH to package and distribute our products
throughout the 15 member countries of the European Union and other countries.
Imaging Products
Our imaging products involve injecting a patient with a radioisotope
attached to an antibody fragment. An antibody is a protein that can find and
attach itself to a specific substance called an antigen. These antigens are
present on tumor cells, white blood cells that accumulate at the sites of
infections, and other disease entities. A radioisotope attached to a
disease-targeting antibody is delivered to a disease site for imaging. A
standard nuclear medicine imaging camera is then used to detect and display
radioisotope concentrations at various sites of disease.
-13-
<PAGE>
The antibody fragment in CEA-Scan is directed against carcinoembryonic
antigen (CEA), which is abundant at the site of virtually all cancers of the
colon or rectum. CEA also is associated with many other cancers. We are
conducting phase IV clinical trials to evaluate the product following repeated
administration. We also have been performing clinical trials using CEA-Scan for
imaging lung cancer and breast cancer. We are discussing the results of our
breast cancer trials with European regulatory authorities to determine whether
the data will support the submission of applications for marketing approval. In
addition, we are continuing our efforts in developing cancer detection
applications with CEA-Scan utilizing hand-held radiation-detecting probes for
use in colorectal cancer surgery.
LeukoScan is a monoclonal antibody fragment that seeks out and binds to
white blood cells (granulocytes) associated with a potentially wide range of
infectious and inflammatory diseases.
We are studying the following two other imaging products pursuant to
Investigational New Drug applications that we have filed or plan to file with
the FDA and for which we have ongoing clinical trials:
* LymphoScan(r), for non-Hodgkin's B-cell lymphomas.
* AFP-Scan(r), for liver cancer and germ-cell tumors of the ovaries and
testes.
Therapeutic Products
We are applying our expertise in antibody selection, modification and
chemistry to cancer therapeutics, using monoclonal antibodies labeled with
therapeutic radioisotopes or conjugated with drugs. We are engaged in
developing anti-cancer products, principally with a technique called
radioimmunotherapy. This technique may deliver radiolabeled therapeutic agents
to tumor sites more selectively than current radiation therapy technologies,
while minimizing debilitating side effects. In addition, we are evaluating in
clinical trials the effects of our non-radioactive lymphoma antibody in
non-Hodgkin's lymphoma patients and the effects of our non-radioactive CEA
antibody in colorectal and breast cancer patients.
Research Programs
In addition to concentrating on our products in clinical development,
we conduct ongoing research in many related areas. We conduct research in-house
and in collaboration with The Center for Molecular Medicine and Immunology, also
known as the Garden State Cancer Center, and other academic and research
centers. In March 1999, we entered into a joint venture with Beckman Coulter to
develop the next generation of cancer radiotherapeutics using bi-specific
antibodies. We believe our ongoing research efforts will identify new and
improved products and techniques for diagnosing and treating various cancers and
infectious diseases. However, we cannot assure you that such efforts will be
successful, given the complex issues involved in such diagnosis and treatment.
Our research efforts are focused in various areas related to our core
technology, including antibody engineering and the identification of other
antibody-directed approaches to cancer therapy. We have made significant
progress in humanizing certain mouse antibodies and have reengineered the
humanized antibodies with improved characteristics. We are continuing our work
on selective coupling of therapeutic site-specific agents onto antibody
fragments which will offer the advantage of loading multiple therapeutic
compounds onto antibodies at a particular disease site. We also continue to
investigate pre-targeting, whereby an antibody is administered first as a
bi-specific fusion protein, followed by a radionuclide or drug administration.
We also are continuing our research into the use of alternative
radioisotopes, such as Yttrium-90 in place of Iodine-131. Our research indicates
that Yttrium-90 is retained by lymphoma cells for longer periods after antibody
metabolism, and shows greater efficacy against larger tumors. We also have
developed a technology using a compound called "DOTA" to tightly bind Yttrium-90
to antibodies.
In addition, we are continuing our efforts to scale-up our proprietary
method for technetium-99m radiolabeling of peptides, using single-vial kits.
-14-
<PAGE>
February 2000 Financing; Covenants
On February 14, 2000, we entered into a Common Stock Purchase Agreement
with a small group of private investors, each of whom is described below as a
selling stockholder. Under the Common Stock Purchase Agreement, on February 16,
2000, we sold the investors a total of 2,325,000 shares of our common stock at a
price of $16.00 per share, for gross proceeds of $37.2 million. We intend to use
the net proceeds for continuing research and development for our existing
product line, for future clinical trials, for general working capital purposes
and in the operation of our business.
Under the Common Stock Purchase Agreement, we were required to make
certain promises to the investors. These covenants included the following:
* We agreed to register with the SEC the shares that we sold to the
investors. We promised to file a preliminary prospectus within ten
business days after the closing and thereafter to use our best efforts
to have our registration statement declared effective by the SEC
within 120 after the date of our filing. We were successful in filing
our preliminary prospectus prior to the ten business day deadline.
* We agreed to use the net proceeds in the manner described above.
In a financing that we completed in December 1999 with a different
group of purchasers, we made certain additional covenants. Those covenants
included the following:
* We agreed to refrain from entering into certain transactions with
persons closely related to our company, including our executive
officers and directors, without the prior approval of the investors.
The investors in the December financing agreed not to withhold their
approval unreasonably.
* We agreed that without the prior consent of the investors, we would
not sell our business to anyone that is an affiliate of the company,
unless the sale is for consideration at least equal to (a) the fair
market value in the event of a sale of assets (as determined in good
faith by our board of directors) or (b) the then current market price
in the event of a sale of stock.
* We agreed that we would not amend our certificate of incorporation or
by-laws in a manner that would adversely affect the investors, without
the prior approval of the investors. The investors in the December
financing agreed not to withhold their approval unreasonably.
* We agreed that if, during a six month period specified in our December
1999 Common Stock Purchase Agreement, we issue shares of our common
stock at a price of less than $3.00, we will issue additional shares
of common stock to the investors to protect them against dilution
without requiring any additional payment from the investors. This
covenant is subject to certain exceptions; among other things, no such
adjustment will be required if shares are issued below that price upon
exercise or conversion of options, warrants or convertible securities
outstanding on December 14, 1999 or in connection with corporate
partnering transactions, including mergers. Furthermore, the
calculation of the adjustment is to be made on a weighted average
basis. Thus, if the number of shares that we issue in a non-exempt
transaction is not significant, or if the per share price in a
non-exempt transaction is only slightly below the trigger price, we
would not be required to issue a substantial number of additional
shares to the investors.
-15-
<PAGE>
* We agreed that if, during the twelve months ending December 31, 2000,
we desire to conduct a private placement of our securities through a
placement agent, broker-dealer or finder, we will give an entity
associated with the investors in the December 1999 financing a right
of first refusal to serve as the placement agent in that transaction.
This right was waived in connection with our February 2000 financing.
These covenants will cease to apply at such time as the investors in
the December 1999 financing and their affiliates beneficially own less than 5%
of our common stock. As of February 18, 2000, such investors in the aggregate
beneficially owned 6.4% of our outstanding common stock. Prior to the time, if
ever, when the investors' equity interest falls below 5%, the investors may
waive any one or more of the covenants set forth in our Common Stock Purchase
Agreement.
In connection with the execution of our December 1999 Common
Stock Purchase Agreement, our executive officers and directors agreed that,
subject to a limited carve-out, they would not sell any shares of their common
stock until June 14, 2000. We also agreed to refrain from publicly offering or
selling our shares before March 28, 2000. The investors in the December 1999
financing may waive these restrictions at any time and have waived such
restrictions for purposes of enabling us to file this prospectus. One of our
directors, Dr. Morton Coleman, is eligible to sell shares pursuant to this
prospectus. See "Selling Stockholders."
USE OF PROCEEDS
We will not receive any proceeds from the sale of our common stock by
the selling stockholders. However, we did receive gross proceeds of $37.2
million from the issuance of our common stock to the investors in the February
2000 financing. We estimate that the net proceeds from that issuance will be
approximately $35.5 million. We intend to use the net proceeds for continuing
research and development for our existing product line, for future clinical
trials, for general working capital purposes and in the operation of our
business.
-16-
<PAGE>
SELLING STOCKHOLDERS
The table below presents the following information: (1) the number of
shares of common stock beneficially owned by each selling stockholder as of
February 18, 2000, 1999; (2) the number of shares that the selling stockholder
is offering under this prospectus, and (3) the number of shares that the selling
stockholder will beneficially own after the completion of this offering,
assuming that the selling stockholder does not acquire any other shares of our
common stock subsequent to February 18, 2000. The number of shares shown as
being beneficially owned by each selling stockholder after the offering assumes
that the selling stockholder has sold all the shares of our common stock which
may be sold pursuant to this prospectus.
The number and percentage of shares beneficially owned by each selling
stockholder is determined as of the date of this prospectus in accordance with
Rule 13d-3 of the Securities Exchange Act, and the information is not
necessarily indicative of beneficial ownership for any other purpose. Under this
rule, beneficial ownership includes any shares as to which the selling
stockholder has sole or shared voting power or investment power and also any
shares which the selling stockholder has the right to acquire within 60 days of
the date of this prospectus through the exercise of any stock option, warrant or
other right. [Unless otherwise indicated in the footnotes,] each person has sole
voting and investment power with respect to the shares shown as beneficially
owned.
None of the selling stockholders has had a material relationship with
us within the past three years, other than as described above under
"Immunomedics - February 2000 Financing; Covenants", subject to the following:
* Dr. Morton Coleman is a member of our Board of Directors; and
* the Aires funds were also purchasers in our December 1999 financing and
thus are entitled to the benefits of the covenants that we agreed to at
that time.
[to be completed]
<TABLE>
<CAPTION>
Shares of Common Stock Shares of Common Stock
Beneficially Owned as Shares of Common Beneficially Owned After
Selling Stockholder of February 18, 2000 Stock Being Offered the Offering
- ------------------- ---------------------- ------------------- ------------------------
<S> <C> <C> <C>
DCF Capital L.P. 75,000
DCF Life Sciences Fund LTD 25,000
Dresdner RCM Global Investor 200,000
Franklin Templeton Group 300,000
Global Lifesciences Fund 749,375
Aspen Global Life Sciences Fund 625
JMG Capital 75,000
Moore Global Investments, Ltd. 255,900 160,000 95,900
Remington Investment Strategies, L.P. 64,000 40,000 24,000
Palantir Capital 100,000
Beacon Funds 75,000
1st New York Securities 75,000
Westcliff Master Fund L.P. 40,530
Westcliff Partners L.P. 33,470
Westcliff Partners SA L.P. 8,300
Westcliff Long/Short L.P. 9,940
Westcliff Small Cap Fund L.P. 7,760
Samuel Lupin, M.D. 17,000
</TABLE>
-17-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
F/B/O Arnold M. Lupin IRA 32,000 25,000 7,000
Lupin Foundation 15,000 15,000 -
Sontag Partners 10,000
Robert D. Marcus, M.D. 10,000 10,000 -
E. Ralph Lupin, M.D. 3,000 3,000 -
Fagey Lupin Fischman 10,000 10,000 -
Taylor - Schabelman Group 5,000
Taylor - Schabelman Group 5,000
Morton Coleman, M.D. 104,000 104,000 -
Robert M. Gelfand, M.D. 30,000 20,000 10,000
Mark Pasmentier, M.D. 6,000 6,000 -
Mark Goldblatt 20,000
Aires Domestic Fund, L.P. 834,447 30,482 803,965
Aires Domestic Fund II, L.P. 145,960 5,139 140,821
The Aires Master Fund 1,996,161 64,379 1,931,782
-----------
TOTAL: 2,325,000
============
</TABLE>
PLAN OF DISTRIBUTION
Manner of Sales; Broker-Dealer Compensation
The selling stockholders, or any successors in interest to the selling
stockholders, may sell any shares of our common stock that they acquired
pursuant to our February 14, 2000 Common Stock Purchase Agreement. The sale of
our common stock may be effected in one or more of the following methods:
* ordinary brokers' transactions;
* transactions involving cross or block trades or otherwise on the Nasdaq
National Market;
* purchases by brokers, dealers or underwriters as principal and resale by
these purchasers for their own accounts pursuant to this prospectus;
* "at the market" to or through market makers or into an existing market for
our common stock;
* in other ways not involving market makers or established trading markets,
including direct sales to purchasers or sales effected through agents;
* through transactions in options, swaps or other derivatives (whether
exchange-listed or otherwise);
* in privately negotiated transactions;
* to cover short sales, except to the extent that they are restricted
contractually from doing so; or
* any combination of the foregoing.
The selling stockholders also may sell their shares in reliance upon Rule 144
under the Securities Act at such times as they are eligible to do so.
-18-
<PAGE>
We have been advised by the selling stockholders that they have not
made any arrangements for the distribution of the shares of common stock.
Brokers, dealers or underwriters who effect sales for the selling stockholders
may arrange for other brokers, dealers or underwriters to participate. Brokers,
dealers or underwriters engaged by the selling stockholders will receive
commissions or discounts from them in amounts to be negotiated prior to the
sale. These brokers, dealers or underwriters may act as agent or as principals.
From time to time, one or more of the selling stockholders may pledge,
hypothecate or grant a security interest in some or all of the shares of common
stock acquired by them, and the pledgees, secured parties or persons to whom
these securities have been pledged shall, upon foreclosure in the event of
default, be considered a selling stockholders hereunder. In addition, subject to
contractual limitations, a selling stockholder may, from time to time, sell
short our common stock. In these instances, this prospectus may be delivered in
connection with these short sales.
From time to time one or more of the selling stockholders may transfer,
pledge, donate or assign shares of our common stock that it acquired to lenders
or others and each of these persons will be considered a selling stockholder for
purposes of this prospectus. The number of shares of our common stock
beneficially owned by those selling stockholders who so transfer, pledge, donate
or assign shares of our common stock will decrease as and when they take these
actions. The plan of distribution for our common stock by the selling
stockholders set forth herein will otherwise remain unchanged, except that the
transferees, pledgees, donees or other successors will be considered selling
stockholders hereunder.
Subject to contractual limitations, a selling stockholder may enter
into hedging transactions with broker-dealers and the broker-dealers may engage
in short sales of our common stock in the course of hedging the positions they
assume with this selling stockholder, including in connection with distributions
of our common stock by these broker-dealers. A selling stockholder may also
enter into option or other transactions with broker-dealers that involve the
delivery of our common stock to the broker-dealers, who may then resell or
otherwise transfer these shares. A selling stockholder also may loan or pledge
our common stock to a broker-dealer and the broker-dealer may sell our common
stock so loaned or upon a default may sell or otherwise transfer the pledged
common stock.
Filing of a Post-Effective Amendment In Certain Instances
If any selling stockholder notifies us that it has entered into a
material arrangement (other than a customary brokerage account agreement) with a
broker or dealer for the sale of shares of common stock under this prospectus
through a block trade, purchase by a broker or dealer or similar transaction, we
will file a post- effective amendment to the registration statement under the
Securities Act. The post-effective amendment will disclose:
* The name of each broker-dealer involved in the transaction.
* The number of shares of common stock involved.
* The price at which those shares of common stock were sold.
* The commissions paid or discounts or concessions allowed to the
broker-dealer(s).
* If applicable, that these broker-dealer(s) did not conduct any
investigation to verify the information contained or incorporated by
reference in this prospectus, as supplemented.
* Any other facts material to the transaction.
-19-
<PAGE>
Certain Persons May Be Deemed to Be Underwriters
The selling stockholders and any broker-dealers who execute sales for
them may be deemed to be "underwriters" within the meaning of the Securities Act
because of the number of shares of common stock to be sold or resold by these
persons or entities or the manner of sale of these shares, or both. If a selling
stockholder or any broker-dealer or other holders were determined to be
underwriters, any discounts, concessions or commissions received by them or by
brokers or dealers acting on their behalf and any profits received by them on
the resale of their shares of common stock might be deemed to be underwriting
discounts and commissions under the Securities Act.
Regulation M
We have informed the selling stockholders that Regulation M promulgated
under the Securities Exchange Act may be applicable to them with respect to any
purchase or sale our common stock. In general, Rule 102 under Regulation M
prohibits any person connected with a distribution of our common stock from
directly or indirectly bidding for, or purchasing for any account in which it
has a beneficial interest, any of our common stock or any right to purchase our
common stock, for a period of one business day before and after completion of
its participation in the distribution.
During any distribution period, Regulation M prohibits the selling
stockholders and any other persons engaged in the distribution from engaging in
any stabilizing bid or purchasing our common stock except for the purpose of
preventing or retarding a decline in the open market price of our common stock.
None of these persons may effect any stabilizing transaction to facilitate any
offering at the market. As the selling stockholders will be reoffering and
reselling our common stock at the market, Regulation M will prohibit them from
effecting any stabilizing transaction in contravention of Regulation M with
respect to our common stock.
Indemnification and Other Matters
We paid all of the expenses incident to the registration, offering and
sale of our common stock by the selling stockholders to the public other than
commissions or discounts of underwriters, broker-dealers or agents. We also have
agreed to indemnify the selling stockholders and certain related persons against
certain liabilities, including liabilities under the Securities Act. Insofar as
indemnification for liabilities arising under the Securities Act may be
permitted to our directors, officers and controlling persons, we have been
advised that in the opinion of the SEC this indemnification agreement is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable.
This offering will terminate on the date on which all shares offered
hereby have been sold by the selling stockholders.
LEGAL MATTERS
Lowenstein Sandler PC will give its opinion on the validity of the
common stock.
EXPERTS
Our consolidated financial statements as of June 30, 1999 and 1998, and
for each of the years in the three-year period ended June 30, 1999 have been
incorporated by reference herein and in the registration statement in reliance
upon the report of KPMG LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as experts
in accounting and auditing.
-20-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following is an itemized statement of the estimated amounts of all expenses
payable by us in connection with the registration of the Shares:
SEC registration fee.................................................. $15,998
Legal fees and expenses............................................... 10,000
Accounting fees and expenses.......................................... 2,500
Miscellaneous expenses................................................ 1,502
-----
Total...................................................... $30,000
======
Item 15. Indemnification of Directors and Officers.
The Delaware General Corporation Law provides, in substance, that
Delaware corporations shall have the power, under specified circumstances, to
indemnify their directors, officers, employees and agents in connection with
actions or suits by or in the right of the corporation, by reason of the fact
that they were or are such directors, officers, employees and agents, against
expenses (including attorneys' fees) and, in the case of actions, suits or
proceedings brought by third parties, against judgments, fines and amounts paid
in settlement actually and reasonably incurred in any such action, suit or
proceeding.
The Company's Certificate of Incorporation provides that a director
shall not be personally liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director except for liability (i) for
breach of the director's duty of loyalty to the Company or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the
Delaware General Corporation Law, or (iv) for any transaction from which the
director derived an improper personal benefit. The Company's Bylaws also provide
that the Company may indemnify its directors, officers and legal representatives
to the fullest extent permitted by Delaware law against all awards and expenses
(including attorneys' fees).
Item 16. Exhibits.
Exhibit No. Description
4.1 - Common Stock Purchase Agreement, dated as of February 14,
2000, by and among the Company and the investors named
therein.
5.1 - Opinion of Lowenstein Sandler PC
23.1 - Consent of KPMG LLP.
23.2 - Consent of Lowenstein Sandler PC
(included in their opinion filed as Exhibit 5.1).
24.1 - Power of Attorney (included on the signature page).
II-1
<PAGE>
Item 17. Undertakings.
The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Company's annual
report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement 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.
The Company undertakes that it will:
(1) File, during any period in which it offers or sells
securities, a post-effective amendment to this registration
statement to:
(i) Include any prospectus required by section 10(a)(3) of
the Securities Act;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement.
(iii) Include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material changes to such information in the
registration statement,
provided, however, that the Company does not need to give the
statements in paragraph (1)(i) and (1)(ii) if the information
required in a post-effective amendment is incorporated by
reference from periodic reports filed by the Company under the
Exchange Act.
(2) For determining liability under the Securities Act, treat
each post-effective amendment as a new registration statement of
the securities offered, and the offering of the securities at
that time to be the initial bona fide offering.
(3) File a post-effective amendment to remove from registration
any of the securities that remain unsold at the end of the
offering.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company 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, the Company 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 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.
11-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe it meets all of
the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Morris Plains, State of New Jersey, on February 24,
2000.
IMMUNOMEDICS, INC.
By: /s/ David M. Goldenberg
-----------------------------
David M. Goldenberg
Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)
Each person whose signature appears below constitutes and appoints
David M. Goldenberg, Cynthia Sullivan and Shailesh R. Asher and each of them,
his or her true and lawful attorney-in-fact, with full power of substitution and
resubstitution, for him or her and in his or her 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 file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission under the Securities Act of 1933, hereby
ratifying and confirming all that said attorneys-in-fact or substitutes may
lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Dated:
February 24, 2000 /s/ David M. Goldenberg
-----------------------------
David M. Goldenberg, Chairman
of the Board, Chief Executive
Officer and a Director
(Principal Executive Officer)
February 24, 2000 /s/ Morton Coleman
-----------------------------
Morton Coleman, Director
February , 2000
-----------------------------
Marvin E. Jaffe, Director
February 24, 2000 /s/ Richard R. Pivirotto
-----------------------------
Richard R. Pivirotto,
Director
February 24, 2000 /s/ Richard C. Williams
-----------------------------
Richard C. Williams, Director
February 24, 2000 /s/ Shailesh R. Asher
-----------------------------
Shailesh R. Asher, Controller
and Acting Chief Financial
Officer (Principal Financial
and Accounting Officer)
II-3
<PAGE>
EXHIBIT INDEX
4.1 Common Stock Purchase Agreement, dated as of February 14, 2000,
by and among the Company and the investors named therein
5.1 Opinion of Lowenstein Sandler LP
23.1 Consent of KPMG LLP.
II-4
<PAGE>
This COMMON STOCK PRIVATE PLACEMENT
AGREEMENT (the "Agreement") has been entered into as
of February 14, 2000, by and among IMMUNOMEDICS,
INC., a Delaware corporation (the "Company"), and the
PURCHASERS listed on Exhibit A (individually a
"Purchaser" and collectively the "Purchasers").
This Agreement has been executed by the parties in connection
with the private placement of shares of Common Stock (the "Shares") of the
Company. The parties hereby agree as follows:
1. Agreement to Subscribe; Payment; Subscription Irrevocable.
---------------------------------------------------------
(a) Each Purchaser hereby subscribes for the number of Shares shown
on Exhibit A next to its name at a price of $16.00 per Share
payable to the Company;
(b) Payment for the Shares shall take place no later than three
business days after the execution and delivery of this Agreement
(the "Closing"). The Closing will take place at the offices of
Sutro & Co., Inc. (the "Placement Agent") at 11150 Santa Monica
Blvd., Los Angeles, CA. At the Closing the Company will deliver
to the Purchasers the Shares against payment of the aggregate
purchase price by wire transfer payable to the Placement Agent on
behalf of the Company pursuant to the instructions shown on
Exhibit B. The Shares shall be registered in Purchasers' names,
or the names of designated nominees, in such denominations as
shown in Exhibit A.
(c) Each Purchaser understands that, except as provided in this
Agreement, this subscription may not be revoked by a Purchaser,
and that the execution and delivery of this Agreement will not
constitute an agreement between the Purchaser and the Company
until this Agreement has been accepted by the Company, and then
subject to the terms and conditions of this Agreement.
2. Qualifications of Investor.
--------------------------
(a) Accredited Investor Status. Each Purchaser hereby represents and
warrants to the Company that it is an accredited investor within
the meaning of Regulation D promulgated by the Securities and
Exchange Commission (the "SEC")
(b) Each Purchaser represents and warrants that:
(i) It has not been formed, reformed or recapitalized for the
specific purpose of purchasing the Shares;
(ii) It has been duly formed and is validly existing in good
standing under the laws of the jurisdiction of its
formation, with full power and authority to enter into the
transactions contemplated by this Agreement; and
(iii)This Agreement has been duly and validly authorized,
executed, and delivered by it and when executed and
delivered by the Company, will constitute the valid, binding
and enforceable agreement of the Purchaser.
<PAGE>
3. Independent Investigation.
-------------------------
(a) Independent Investigation. Each Purchaser, in making the decision
to purchase the Shares subscribed for, has relied upon
independent investigation made by it and its representatives
which it deems to be adequate and they have reviewed the
Company's Form 10Q for the quarter ended September 30, 1999 and
the pertinent parts of the Company's S-3 Registration Statement
filed with the SEC on January 11, 2000.
(b) No Governmental Recommendation or Approval. The undersigned
understands that no federal or state agency has passed on or made
any recommendation or endorsement of the Shares.
THE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
THE SECURITIES LAWS OF ANY STATE AND THERE ARE RESTRICTIONS ON THE
TRANSFERABILITY OF THE SHARES.
4. Investment Representations.
--------------------------
(a) Shares Not Registered; Indefinite Holding. Each Purchaser has
been advised by the Company, and understands, that it must bear
the economic risk of an investment in the Shares for an
indefinite period of time because the Shares have not yet been
registered under the Securities Act. Therefore, the Shares must
be held by the Purchaser until they are subsequently registered
under the Securities Act or an exemption from such registration
is available for the transfer of the Shares.
(b) Purchase for own Account. Each Purchaser represents that the
Shares are being acquired solely for its own account for
investment and not with a view toward, or for resale in
connection with, any "distribution" (as that term is used in the
Securities Act and its Rules and Regulations) of any Shares.
(c) No Disposition of Shares Without Securities Law Compliance. Each
Purchaser agrees not to subdivide the Shares or to offer, sell,
pledge, hypothecate or otherwise transfer or dispose of any of
the Shares in the absence of an effective registration statement
under the Securities Act covering such disposition, or an opinion
of counsel, satisfactory to the Company and its counsel, to the
effect that registration under the Securities Act is not required
in respect of such transfer or disposition.
(d) Stop-Transfer and Legends on Certificates. Each Purchaser further
understands that a stop-transfer order will be placed on the
stock-transfer books of the Company respecting the certificates
evidencing the Shares, and such certificates shall bear, until
such time as the Shares shall have been registered under the
Securities Act or shall have been transferred in accordance with
such an opinion of counsel, the following legend (or one
substantially similar).
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER
SAID ACT, OR AN AVAILABLE EXEMPTION THEREUNDER.
plus any legend that may be required under any applicable state
law.
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<PAGE>
(e) "Private Offering" Exemption; Reliance on Representations. The
undersigned understands that the offer and sale of the Shares are
not being registered under the Securities Act in reliance on the
so-called "private offering" exemption provided by Section 4(2)
of the Securities Act and/or Regulation D promulgated pursuant to
the Securities Act, and that the Company is basing its reliance
on that exemption in part on the representations, warranties,
statements and agreements contained in this Agreement.
5. Indemnification.
----------------
Each Purchaser agrees to indemnify and hold the Company, its officers,
directors and stockholders or any other person who may be deemed to
control the Company harmless from any loss, liability, claim, damage or
expense, arising out of the inaccuracy of any of the above
representations, warranties or statements or the breach of any of the
agreements contained in this Agreement, and this indemnification shall
survive the purchase and sale of the Shares.
6. Conditions to the Company's Obligation to Sell.
----------------------------------------------
Each Purchaser understands that the Company's obligation to sell the
Shares is conditioned upon:
(a) the receipt and acceptance by the Company of a fully executed
Agreement for all of the Shares to be purchased in the particular
offering (i.e., either the initial offering of a minimum of 1.5
million Shares or any subsequent offerings of up to an aggregate
of an additional 500,000 Shares); and
(b) No injunction, order, investigation, claim, action or proceeding
before any court or governmental body shall be pending or
threatened wherein an unfavorable judgment, decree or order would
restrain, impair or prevent the carrying out of this Agreement or
any of the transactions contemplated thereby, declare unlawful
the transactions contemplated by this Agreement or cause any such
transaction to be rescinded.
7. Conditions to Purchasers' Obligation to Purchase.
------------------------------------------------
Purchasers' obligation to purchase the Stock in accordance with the
terms of this Agreement is conditioned upon:
(a) Purchasers shall have received from STARR, GERN, DAVISON & RUBIN,
counsel for the Company, its opinion dated the Closing Date in
the form of Exhibit C; and
(b) All of the representations and warranties of the Company
contained in this Agreement shall be true and correct at and as
of the Closing Date; and
(c) No injunction, order, investigation, claim, action or proceeding
before any court or governmental body shall be pending or
threatened wherein an unfavorable judgment, decree or order would
restrain, impair or prevent the carrying out of this Agreement or
any of the contemplated transactions, declare unlawful the
transactions contemplated by this Agreement or cause any such
transaction to be rescinded;
(d) The Company shall have delivered to Purchasers the following:
(i) a certificate of the Secretary of the Company, dated the
Closing Date, as to the continued and valid existence of the
Company, certifying the attached copy of the By-laws of the
Company, the authorization of the execution, delivery and
performance of this Agreement, and the resolutions adopted
by the Board of Directors of the Company authorizing the
actions to be taken by the Company under this Agreement;
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<PAGE>
(ii) a certificate of the Secretary of State of the State of
Delaware, dated a recent date, to the effect that the
Company is in good standing in the State of Delaware and
that all annual reports, if any, have been filed as required
and, if readily available that all franchise taxes and fees
have been paid in connection therewith;
(iii)a certified copy of the Certificate of Incorporation of the
Company as filed with the Secretary of State of the State of
Delaware, including any amendments thereto; and
(e) The Company shall have received from these certain Purchasers
pursuant to an Agreement dated as of December 15, 1999 between
those Purchasers and the Company, their written consent to the
filing of the Shelf Registration Statement described in Section
10 below.
8. Representations and Warranties of the Company.
---------------------------------------------
The representations and warranties of the Company in this Agreement are
subject to and qualified by the disclosures made in the Company's most
recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, as
filed with the SEC (the "SEC Documents"). The Company hereby represents
and warrants to each Purchaser as of the Closing as follows:
(a) Organization. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Delaware. The Company is eligible to be treated as a C
corporation under the Internal Revenue Code of 1986, as amended
(the "Code"). The Company has all requisite corporate power and
authority, and holds all licenses, permits and other required
authorizations from governmental authorities, necessary to
conduct its business as now being conducted or proposed to be
conducted and to own or lease the properties and assets now owned
or held under license or lease. The Company is duly qualified or
licensed and in good standing as a foreign corporation in each
jurisdiction wherein the character of its properties or the
nature of the activities conducted by it makes such qualification
or licensing necessary, except where the failure to so qualify
would not have a material adverse effect on the Company.
(b) Capitalization. As of January 11, 2000, the Company's authorized
capitalization consists of 70,000,000 shares of Common Stock, of
which 43,655,709 shares are issued and outstanding, and
10,000,000 shares of preferred stock, par value $.01 per share
(of which 595.5 shares are designated as Series F Convertible
Preferred Stock but none of which are issued and outstanding).
15,022,288 shares of Common Stock are reserved for issuance upon
the conversion or exercise of convertible securities, options,
warrants or other rights to purchase Common Stock outstanding as
of the Closing Date. All outstanding securities of the Company
are validly issued, fully paid and nonassessable. No stockholder
of the Company is entitled to any preemptive rights with respect
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<PAGE>
to the purchase or sale of any securities by the Company. There
are no outstanding options, warrants or other rights, commitments
or arrangements, written or oral, to purchase or otherwise
acquire any authorized but unissued shares of capital stock of
the Company or any security directly or indirectly convertible
into or exchangeable for any capital stock of the Company or
under which any such option, warrant or convertible security may
be issued in the future except otherwise as set forth on Schedule
8(b). There are no voting trusts or agreements, stockholders'
agreements, pledge agreements, buy-sell, rights of first offer,
negotiation or refusal or proxies or similar arrangements
relating to any securities of the Company to which the Company is
a party, and to the best knowledge of the Company after due
inquiry there are no other such trusts, agreement, rights,
proxies or similar arrangements. Except as otherwise set forth on
Schedule 8(b) or as contemplated by this Agreement, none of the
shares of capital stock of the Company is reserved for any
purpose, and the Company is neither subject to any obligation
(contingent or otherwise), nor has any option to repurchase or
otherwise acquire or retire any shares of its capital stock. (c)
Due Authorization, Valid Issuance, Etc. The Shares to be
purchased on the Closing Date have been duly authorized and, when
issued in accordance with this Agreement upon the Closing Date,
will be validly issued, fully paid and non-assessable and will be
free and clear of all liens imposed by or through the Company,
subject only to restrictions set forth herein, as applicable, or
applicable federal and state securities laws. The issuance, sale
and delivery of such Shares, will not be subject to any
preemptive right of stockholders of the Company or to any right
of first refusal or other right in favor of any person or entity
except for provisions which have been waived or satisfied and as
set forth on Schedule 8(c).
(d) Subsidiaries. The Company has no wholly or partially owned
Subsidiaries and does not control, directly or indirectly, any
other corporation, business trust, firm, partnership,
association, joint venture, entity or organization. Except as set
forth on Schedule 8(d), the Company does not own any shares of
stock, partnership interest, joint venture interest or any other
security, equity or interest in any other corporation or other
Person.
(e) Company Power. The Company has the full corporate power and
authority to execute, deliver and enter into this Agreement and
to perform its obligations, and the execution, delivery and
performance of this Agreement and all other contemplated
transactions have been duly authorized by the Company. This
Agreement constitutes a legal, valid and binding obligation of
the Company, which is not in contravention of any other
agreements of the Company, and this Agreement is enforceable in
accordance with its terms except as such enforceability may be
limited by (a) bankruptcy, insolvency, moratorium and similar
laws affecting creditors' rights generally and (b) the
availability of remedies under general equitable principles.
(f) No Material Adverse Change. Since September 30, 1999, except as
disclosed on Schedule 8(f) there has not at any time been (a) any
material adverse change in the business, financial condition,
operating results, business prospects, employee relations or
customer relations of the Company, or (b) other adverse changes,
which in the aggregate have been materially adverse to the
Company. Except as set forth on Schedule 8(f), no event or
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<PAGE>
circumstance has occurred or exists with respect to the Company
or its business, properties, prospects, operations or financial
condition, which, under applicable law, rule or regulation,
requires public disclosure or announcement by the Company but
which has not been so publicly announced or disclosed.
(g) Disclosure. Neither this Agreement nor any of the schedules,
exhibits, written statements, documents or certificates prepared
or supplied by the Company with respect to the transactions
contemplated by this Agreement, nor any document filed with the
Securities and Exchange Commission after January 1, 1999 contain
any untrue statement of a material fact or omit a material fact
necessary to make the statements contained therein not misleading
in light of the circumstances under which made. Except for
general factors that are common in the market and industry of the
Company, there exists no fact or circumstance which, to the best
knowledge of the Company after due inquiry, materially adversely
affects, or which could reasonably be anticipated to have a
material adverse effect on, the existing or expected financial
condition, operating results, assets, customer relations,
employee relations or business prospects of the Company.
(h) Absence of Certain Developments. Except as contemplated by this
Agreement, and except as set forth on Schedule 8(h) since
September 30, 1999 the Company has not, nor will have prior to
the Closing Date: (i) issued any securities (other than as
permitted or contemplated by this Agreement); (ii) borrowed any
amount or incurred or became subject to any liabilities (absolute
or contingent) which involve $50,000 or more, other than
liabilities incurred in the ordinary course of business and
liabilities under contracts entered into in the ordinary course
of business; (iii) discharged or satisfied any lien, adverse
claim or encumbrance or paid any obligation or liability
(absolute or contingent), other than current liabilities paid in
the ordinary course of business; (iv) declared or made any
payment or distribution of cash or other property to the
stockholders of the Company with respect to the Common Stock or
purchased or redeemed any shares of Common Stock; (v) mortgaged,
pledged or subjected to any lien, adverse claim, charge or any
other encumbrance, any of its properties or assets, except for
liens for taxes not yet due and payable; (vi) sold, assigned or
transferred any of its assets, tangible or intangible, except in
the ordinary course of business and in an amount less than
$50,000, or disclosed to any person, firm or entity not subject
to a confidentiality obligation with the Company any proprietary
confidential information; (vii) suffered any extraordinary losses
or waived any rights of material value; (viii) made any change in
the nature or operations of the business of the Company; or (ix)
resolved or entered into any agreement or understanding with
respect to any of the foregoing.
(i) Properties. The Company has good and marketable title to all of
the real property and good title to all of the personal property
and assets it purports to own as set forth in the Financial
Statements, whether such property is real or personal, free and
clear of all liens, adverse claims, charges, encumbrances or
restrictions of any nature whatsoever, except (a) such as are
reflected on Schedule 8(i), (b) for receivables and charges
collected in the ordinary course of business and (c) immaterial
exceptions of a routine and customary nature. The Company owns or
leases all such properties as are necessary to its operations as
now conducted and as presently proposed to be conducted and all
such properties are, in all material respects, in good operating
condition and repair.
-6-
<PAGE>
(j) Taxes. Except as set forth on Schedule 8(j), the Company has
timely filed all federal, state, local and foreign tax returns
and reports required to be filed, and all taxes, fees,
assessments and governmental charges of any nature shown by such
returns and reports to be due and payable have been timely paid
except for those amounts being contested in good faith and for
which appropriate amounts have been reserved in accordance with
generally accepted accounting principles. There is no tax
deficiency that has been, or, to the best knowledge of the
Company after due inquiry might be, asserted against the Company
that would adversely affect the business or operations, or
proposed business or operations, of the Company. All such tax
returns and reports were prepared in accordance with the relevant
rules and regulations of each taxing authority having
jurisdiction over the Company and are true and correct. The
Company has neither given nor been requested to give any waiver
of any statute of limitations relating to the payment of federal,
state, local or foreign taxes. The Company has not been, nor is
it now being, audited by any federal, state, local or foreign tax
authorities. The Company has made all required deposits for taxes
applicable to the current tax year. The Company is not, and has
never been, a member of any Affiliated group within the meaning
of Section 1504 of the Internal Revenue Code, as in effect from
time to time.
(k) Litigation. Except as set forth on Schedule 8(k), there are no
actions, suits, proceedings, orders, investigations or claims
pending or, to the best knowledge of the Company after due
inquiry, threatened against or affecting the Company, at law or
in equity or before or by any federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality; there are no arbitration proceedings pending
under collective bargaining agreements or otherwise; and, to the
best knowledge of the Company after due inquiry, there is no
basis for any of the foregoing.
(l) Compliance with Law. The Company has complied in all material
respects with all applicable statutes and regulations of the
United States and of all states, municipalities and applicable
agencies and foreign jurisdictions or bodies in respect of the
conduct of its business and operations.
(m) Trademarks and Patents. Each trademark, trade name, patent and
copyright (and application therefor) owned by the Company is not
subject to any license, royalty arrangement, option or dispute
and is free and clear of all liens. To the best knowledge of the
Company after due inquiry, none of the trademarks, trade names,
patents or copyrights used by the Company in connection with its
business infringes any trademark, trade name, patent or copyright
of others in the United States or in any other country, in any
way which adversely affects or which in the future may adversely
affect the business or operations of the Company. No stockholder,
officer or director of the Company or any other person owns or
has any interest in any trademark, trade name, service mark,
patent, copyright or application therefor, or trade secret,
licenses, invention, information or proprietary right or process,
-7-
<PAGE>
if any, used by the Company in connection with its business. The
Company has no notice or knowledge of any objection or claim
being asserted by any person with respect to the ownership,
validity enforceability or use of any such trademarks, trade
names, patents and copyrights (and applications therefor) or
challenging or questioning the validity or effectiveness of any
license relating thereto. There are no unresolved conflicts with,
or pending claims of, any other person, whether in litigation or
otherwise, involving the trademarks, trade names, patents and
copyrights (and applications therefor), and there are no liens,
encumbrances, adverse claims, or rights of any other person which
would prevent the Company from fulfilling its obligations under
this Agreement. To the best knowledge of the Company after due
inquiry, the business of the Company, as presently conducted and
as proposed to be conducted does not and will not cause the
Company to violate any trademark, trade name, patent, copyright,
trade secret, license or proprietary interest of any other person
or entity, in any way which adversely affects or which in the
future may adversely affect the business or operations of the
Company.
(n) Insurance. Each insurance policy maintained by the Company with
respect to its properties, assets and business is in full force
and effect; and the Company is not in default with respect to its
obligations under any of such insurance policies. Such insurance
coverage is in amounts not less than is customarily maintained by
corporations engaged in the same or similar business and
similarly situated, including, without limitation, insurance
against loss, damage, fire, theft, public liability and other
risks. The activities and operations of the Company have been
conducted in a manner so as to conform to all applicable
provisions of these insurance policies and the Company has not
taken or failed to take any action which would cause any such
insurance policy to lapse.
(o) Agreements. Except as set forth on Schedule 8(o), the Company is
not party to nor bound by any agreement or commitment, written or
oral, which obligates the Company to make payments to any person,
or which obligates any person to make payments to the Company, in
the case of each such agreement in an amount exceeding $50,000,
or which is otherwise material to the conduct and operation of
the business or proposed business of the Company or any of its
properties or assets, including, without limitation, all
shareholder, employment, non-competition and consulting
agreements and employee benefit plans and arrangements and
collective bargaining agreements to which the Company is a party
or by which it is bound. All such agreements are legal, valid and
binding obligations of the Company, in full force and effect, and
enforceable in accordance with their respective terms, except as
the enforceability thereof may be limited by (a) bankruptcy,
insolvency, moratorium, and similar laws affecting creditors
rights generally and (b) the availability of remedies under
general equitable principles. The Company has performed all
obligations required to be performed by it, and is not in
default, or in receipt of any claim, under any such agreement or
commitment, and the Company has no present expectation or
intention of not fully performing all of such obligations, nor
does the Company have any knowledge of any breach or anticipated
breach by the other parties to any such agreement or commitment.
The Company is not party to any contract, agreement, instrument
or understanding which materially adversely affects the business,
properties, prospects, operations, assets or condition (financial
or otherwise) of the Company.
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<PAGE>
(p) Undisclosed Liabilities. Except as set forth on Schedule 8(p),
the Company has no obligation or liability (whether accrued,
absolute, contingent, unliquidated, or otherwise, whether due or
to become due, except that, as to contingent liabilities, such
reference is only as to matters which are reasonably possible of
assertion and, which if asserted, could reasonably result in
material liability) of which the Company knows or has reason to
know exists arising out of transactions entered into at or
included on the September 30, 1999 balance sheet included in the
Financial Statements prior to the Closing Date, or any action or
inaction at or prior to the Closing Date, or any state of facts
existing at or prior to the Closing Date, except (i) liabilities
in an amount less than $50,000 incurred in the ordinary course of
business (none of which is a liability for breach of contract,
breach of warranty, torts, infringements, claims or lawsuits); or
(ii) liabilities or obligations disclosed in the schedules to
this Agreement.
(q) Employees; Conflicting Agreements. (i) The Company has caused all
present members of management and all professional employees of
and consultants and advisors to the Company, including all
employees and consultants and advisors involved in research and
development, and will cause all such persons in the future, to be
subject to agreements with respect to (a) nondisclosure of
confidential information, (b) assignment of patents, trademarks,
copyrights and proprietary rights to the Company and (c)
disclosure to the Company of inventions in form and substance
satisfactory to the Purchasers. (ii) To the best knowledge of the
Company after due inquiry, no stockholder, director, officer or
key employee of the Company is a party to or bound by any
agreement, contract or commitment, or subject to any restrictions
in connection with any previous or current employment of any such
person (other than agreements with respect to the Company), which
adversely affects, or which in the future may adversely affect,
the business or the proposed business of the Company or the
rights of any of the Purchasers under this Agreement, including,
without limitation, in respect of Purchasers rights as a holder
of the Common Shares and the shares of Common Stock issuable in
connection therewith.
(r) Compliance with Securities Laws. (i) Assuming the accuracy and
truth of each of Purchasers representations set forth in Section
2, all securities of the Company heretofore sold and issued were
sold and issued, and the Common Shares were offered and will be
sold and issued, in compliance with all applicable federal, state
and foreign securities laws. Neither the Company, nor any of its
Affiliates, nor, to its best knowledge after due inquiry, any
person or entity acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited
any offers to buy any security, under circumstances that would
require registration of the Common Shares under the Securities
Act of 1933, as amended (the "Securities Act") or for the
offering of the same to be integrated with any other offering of
securities; (ii) The Company has not directly or indirectly
purchased or redeemed any shares of Common Stock during the 30
days preceding the Closing Date.
(s) Environmental Matters.
(i) The Company, and all properties owned, operated or leased by
the Company, have obtained and currently maintain all
environmental permits required for their business and
operations and are in compliance with all such environmental
permits. There are no legal proceedings pending nor, to the
best knowledge of the Company after due inquiry, threatened
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<PAGE>
to modify or revoke any such environmental permits. Neither
the Company, nor any property owned, operated or leased by
the Company, has received any notice from any source that
there is lacking any environmental permit required for the
current use or operation of the business of the Company, or
any property owned, operated or leased by the Company.
(ii) All real property owned, operated or leased by the Company,
and, to the best knowledge of the Company after due inquiry,
all property adjacent to such properties, are free from
contamination by any hazardous material; and the Company is
not subject to environmental costs and liabilities with
respect to hazardous materials, and no facts or
circumstances exist which could give rise to environmental
costs and liabilities with respect to hazardous materials.
(iii)There is not now, nor has there been in the past, on, in, or
under any real property owned, leased, or operated by the
Company, or by any of their respective predecessors (a) any
asbestos-containing materials, (b) any underground storage
tanks, (c) above-ground storage tanks, (d) impoundments, (e)
poly-chlorinated biphenyls or (f) radioactive substances
(iv) The Company, and all properties owned, operated or leased by
the Company, comply with all environmental laws
(v) Neither the Company, nor any property owned, leased or
operated by the Company, has received or been issued any
written request for information, or has been notified that
it is a potentially responsible party under the
environmental laws with respect to any on-site or off-site
for which environmental costs and liabilities are asserted.
t. No Brokers. Except for the Placement Agreement, no finder,
broker, agent or other intermediary has acted on behalf of the
Company in connection with the offering of the Shares, the
execution of this Agreement or the consummation of any of the
transactions contemplated by this Agreement.
u. Transactions with Affiliates. Except as previously disclosed in
the Company's SEC filings and in the Company's Proxy Statement,
no director, officer, employee, consultant or agent of the
Company, or member of the family of any such person or any
corporation, partnership, trust or other entity in which any such
person, or any member of the family of any such person, has a
substantial interest in or is an officer, director, trustee,
partner or holder of more than 5% of the outstanding capital
stock thereof, is a party to any transaction with the Company,
including any contract, agreement or other arrangement providing
for the employment of, furnishing of services by or requiring
payments to any such person or firm.
v. Financial Statements. The financial statements of the Company and
the related notes contained in the documents that the Company was
required to file under the Securities and Exchange Act of 1934,
as amended, during the 12 months preceding the date of this
Agreement ("Exchange Act Documents") present fairly, in
accordance with generally accepted accounting principles, the
financial position of the Company as of the dates indicated, and
the results of its operations and cash flows for the periods
therein specified. Such financial statements (including the
related notes) have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis
throughout the periods therein specified, except as may be
disclosed in the SEC Documents.
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<PAGE>
w. Accountants. The auditing firm which the Company expects will
express their opinion with respect to the financial statements to
be incorporated by reference from the Company's Annual Report on
Form 10-K for the year ended December 31, 1999 into the
Registration Statement (as defined below) and the Prospectus
which forms a part thereof, are and shall be independent
accountants as required by the Securities Act and the rules and
regulations promulgated thereunder (the "Rules and Regulations").
x. Transfer Taxes. On the Closing Date, all stock transfer or other
taxes (other than income taxes) which are required to be paid in
connection with the sale and transfer of the Shares to be sold to
the Purchaser hereunder will be, or will have been, fully paid or
provided for by the Company and all laws imposing such taxes will
be or will have been fully complied with.
y. Investment Company. The Company is not an "investment company" or
an "affiliated person" of, or "promoter" or "principal
underwriter" for an investment company, within the meaning of the
Investment Company Act of 1940, as amended.
z. Offering Materials. Other than the SEC Documents and the Private
Placement Memorandum dated the date hereof (the "Offering
Materials"), the Company has not distributed and will not
distribute prior to the Closing Date any offering material in
connection with the offering and sale of the Shares. The Company
has not in the past nor will it hereafter take any action
independent of the Placement Agent to sell, offer for sale or
solicit offers to buy any securities of the Company which would
bring the offer, issuance or sale of the Shares, as contemplated
by this Agreement, within the provisions of Section 5 of the
Securities Act, unless such offer, issuance or sale was or shall
be within the exemptions of Section 4 of the Securities Act.
9. Covenants of the Company.
------------------------
The Company covenants and agrees with the Purchasers as follows:
(a) Restrictive Legend. (1) The Purchasers acknowledge and agree that
until such time as the shares have been registered for resale
under the 1933 Act as contemplated by Section 10 below, the
certificates for the Shares will bear a restrictive legend as
described in Section 4(d) of this Agreement. (2) Once the Shelf
Registration Statement provided in Section 10 has been declared
effective, thereafter (i) upon request of a Purchaser the Company
will promptly (but in no event later than three Trading Days
after receipt of such Purchaser's legended certificates by the
Company) substitute certificates without restrictive legend for
certificates for any Shares issued prior to the dates such Shelf
Registration Statement is declared effective by the SEC which
bear such restrictive legend and remove any stop-transfer
restriction relating thereto and (ii) the Company shall not place
any restrictive legend on certificates for any Shares issued or
impose any stop-transfer restriction thereon.
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<PAGE>
(b) Form D. The Company agrees to file a Form D with respect to the
Shares as required under Regulation D and to provide a copy
thereof to Purchaser promptly after such filing. Each Purchaser
agrees to cooperate with the Company in connection with such
filing and, upon request of the Company, to provide all
information relating to such Purchaser reasonably required for
such filing.
(c) Use of Proceeds. The proceeds of sale of the Shares will be used
for continuing research and development for its existing product
line future clinical trials and for general working capital
purposes and in the operation of the Company's business.
10. Registration of Shares.
----------------------
(a) Not later than 10 business days after the Closing Date, the
Company will file with the SEC a shelf registration statement
(the "Shelf Registration Statement") with respect to the resale
of the Common Shares beneficially owned by Purchasers following
the Closing (the "Registrable Securities"). The Company will use
its best efforts to, within 120 days after the date of such
filing, effect the registrations, qualifications or compliance
(including, without limitation, the execution of any required
undertaking to file post-effective amendments, appropriate
qualifications under applicable blue sky or other state
securities laws and appropriate compliance with applicable
securities laws, requirements or regulations) as may be
reasonably requested and as would permit or facilitate the sale
and distribution of all Registrable Securities until the
distribution is complete; provided that the Company shall not be
obligated to maintain the effectiveness of the Shelf Registration
Statement (and any related qualifications and compliance)
following such time as the Company shall deliver an opinion of
counsel reasonably satisfactory to the holders of Registrable
Securities (such holders are referred to as the "Holders') and in
form and substance satisfactory to each Holder that (i) such
Holders may sell in a single transaction all Registrable
Securities then held or issuable to such Holder on a registered
securities exchange or NASDAQ market under an applicable
exemption from the registration requirements of the Securities
Act and all other applicable securities laws and (ii) all
transfer restrictions and restrictive legends with respect to
such Registrable Securities will be removed upon the consummation
of such sale.
(b) Registration Procedures. In connection with the registration of
any Registrable Securities under the Securities Act as provided
in this Section 10, the Company will use its best efforts, as
expeditiously as possible:
(i) To prepare and file with the SEC the Shelf Registration
Statement with respect to such Registrable Securities and
use its best efforts to cause such Shelf Registration
Statement to become effective as expeditiously as possible;
(ii) To prepare and file with the SEC such amendments and
supplements to such Shelf Registration Statement and the
prospectus used in connection therewith as may be necessary
to keep such Shelf Registration Statement effective until
the disposition of all securities in accordance with the
intended methods of disposition by the seller or sellers set
forth in such Shelf Registration Statement shall be
completed, and to comply with the provisions of the
Securities Act (to the extent applicable to the Company)
with respect to such dispositions;
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<PAGE>
(iii)To furnish to each seller of such Registrable Securities
such number of copies of such Shelf Registration Statement
and of each such amendment and supplement (in each case
including all exhibits), such number of copies of the
prospectus included in such Shelf Registration Statement
(including each 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 disposition of the Registrable Securities
owned by such seller;
(iv) To use its best efforts to register or qualify such
Registrable Securities covered by such Shelf Registration
Statement under such other securities or blue sky laws of
such jurisdictions as any seller reasonably requests, and do
any and all other acts and things which may be reasonably
necessary or advisable to enable such seller to consummate
the disposition in such jurisdictions of the Registrable
Securities owned by such seller, except that the Company
will not for any such purpose be required to qualify
generally to do business as a foreign corporation in any
jurisdiction wherein it would not, but for the requirements
of this Section 10 be obligated to be qualified, to subject
itself to taxation in any such jurisdiction, or to consent
to general service of process in any such jurisdiction;
(v) To provide a transfer agent and registrar for all such
Registrable Securities covered by such Shelf Registration
Statement not later than the effective date of such Shelf
Registration Statement;
(vi) To notify each seller of such Registrable Securities 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
Shelf Registration Statement contains an untrue statement of
a material fact or omits any fact necessary to make the
statements therein not misleading, and, at the request of
any such seller, the Company will prepare a supplement or
amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities,
such prospectus will not contain an untrue statement of a
material fact or omit to state any fact necessary to make
the statements therein not misleading. The Purchasers agree
to suspend, upon request of the Company, any disposition of
Registrable Securities pursuant to the Registration
Statement contemplated hereby during any period, not to
exceed one 30-day period per circumstance or development.
(vii) To use its best efforts to cause all such Registrable
Securities to be listed on each securities exchange or
automated over-the-counter trading system on which similar
securities issued by the Company are then listed;
(viii) To enter into such customary agreements (including, in the
event Purchasers elect to engage an underwriter in
connection with the Shelf Registration Statement, an
underwriting agreement containing customary terms and
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<PAGE>
conditions) and take all such other actions as reasonably
required in order to expedite or facilitate the disposition
of such Registrable Securities; and
(ix) To make available for inspection by any seller of
Registrable Securities, all financial and other records,
pertinent corporation documents and properties of the
Company, and cause the Company's officers, directors and
employees to supply all information reasonably requested by
any such seller in connection with the Shelf Registration
Statement.
(x) With a view to making available to the Purchaser the
benefits of Rule 144 (or its successor rule) and any other
rule or regulation of the SEC that may at any time permit
the Investor to sell Shares to the public without
registration, the Company covenants and agrees to: (i) make
and keep public information available, as those terms are
understood and defined in Rule 144; (ii) file with the SEC
in a timely manner all reports and other documents required
of the Company under the Securities Act and under the
Exchange Act; and (iii) furnish to the Purchaser upon
request, as long as the Purchaser owns at least 25,000
Shares, (A) a written statement by the Company that it has
complied with the reporting requirements of the Securities
Act and the Exchange Act, (B) a copy of the Company's most
recent Annual Report on Form 10-K or Quarterly Report on
Form 10-Q, and (C) such other information as may be
reasonably requested in order to avail the Purchaser of any
rule or regulation of the SEC that permits the selling of
any such Shares without registration.
(c) Registration and Selling Expenses. All expenses incurred by the
Company in connection with the Company's performance of or
compliance with this Section 10, including, without limitation
(i) all registration and filing fees (including all expenses
incident to filing with the National Association of Securities
Dealers, Inc.), (ii) blue sky fees and expenses, (iii) all
necessary printing and duplicating expenses, and (iv) all fees
and disbursements of counsel and accountants retained by the
Company (including the expenses of any audit of financial
statements) (all such expenses being called "Registration
Expenses"), will be paid by the Company.
(d) The Company will, in any event, in connection with any
registration statement, pay its internal expenses (including,
without limitation, all salaries and expenses of its officers and
employees performing legal, accounting or other duties in
connection therewith and expenses of audits of year-end financial
statements), the expense of liability insurance and the expenses
and fees for listing the securities to be registered on one or
more securities exchanges or automated over-the-counter trading
systems on which similar securities issued by the Company are
then listed.
(e) Nothing in this Agreement shall be construed to prevent any
Holder or Holders of Registrable Securities from retaining such
counsel as they shall choose at their own expense.
11. Indemnification.
---------------
(a) The Company shall indemnify, to the extent permitted by law, each
Holder of Registrable Securities, its officers, trustees and
directors, if any, and each person, if any, who controls such
Holder within the meaning of the Securities Act, against all
losses, claims, damages, liabilities and expenses (under the
Securities Act or common law or otherwise) caused by any untrue
statement or alleged untrue statement of a material fact
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<PAGE>
contained in any registration statement or prospectus (and as
amended or supplemented if the Company has furnished any
amendments or supplements) or any preliminary prospectus, which
registration statement, prospectus or preliminary prospectus
shall be prepared in connection with the contemplated
registration, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages, liabilities or expenses
are caused by any untrue statement or alleged untrue statement
contained in or by any omission or alleged omission from
information furnished in writing by such holder to the Company in
connection with the contemplated registration provided the
Company will not be liable pursuant to this Section 10 if such
losses, claims, damages, liabilities or expenses have been caused
by any selling security holder's failure to deliver a copy of the
registration statement or prospectus, or any amendments or
supplements.
(b) In connection with any registration statement in which a Holder
is participating, each such Holder shall furnish to the Company
in writing such information as is reasonably requested by the
Company for use in any such registration statement or prospectus
and shall severally, but not jointly, indemnify, to the extent
permitted by law, the Company, its directors and officers and
each person, if any, who controls the Company within the meaning
of the Securities Act, against any losses, claims, damages,
liabilities and expenses resulting from any untrue statement or
alleged untrue statement of a material fact or any omission or
alleged omission of a material fact required to be stated in the
registration statement or prospectus or any amendment or
supplement or necessary to make the statements therein not
misleading, but only to the extent such losses, claims, damages,
liabilities or expenses are caused by an untrue statement or
alleged untrue statement contained in or by an omission or
alleged omission from information so furnished in writing by such
Holder in connection with the contemplated registration. If the
offering pursuant to any such registration is made through
underwriters, each such Holder agrees to enter into an
underwriting agreement in customary form with such underwriters
and to indemnify such underwriters, their officers and directors,
if any, and each person who controls such underwriters within the
meaning of the Securities Act to the same extent as provided with
respect to indemnification by such Holder of the Company.
Notwithstanding the foregoing or any other provision of this
Agreement, in no event shall a Holder be liable for any losses,
claims, damages, liabilities or expenses in excess of the net
proceeds received by such Holder in the offering.
(c) Promptly after receipt by an indemnified party of notice of the
commencement of any action or proceeding, such indemnified party
will, if a claim is made against the indemnifying party under
such Section, notify the indemnifying party in writing of the
commencement; but the omission so to notify the indemnifying
party will not relieve it from any liability which it may have to
any indemnified party otherwise than under such Section. In case
any such action or proceeding is brought against any indemnified
party, and it notifies the indemnifying party of the
commencement, the indemnifying party will be entitled to
participate, and, to the extent that it wishes, jointly with any
other indemnifying party similarly notified, to assume the
defense, with counsel approved by such indemnified party, and
after notice from the indemnifying party to such indemnified
party of its election so to assume the defense, the indemnifying
party will not be liable to such indemnified party under such
Section for any legal or any other expenses subsequently incurred
-15-
<PAGE>
by such indemnified party in connection with the defense (other
than reasonable costs of investigation) unless incurred at the
written request of the indemnifying party. Notwithstanding the
above, the indemnified party will have the right to employ
counsel of its own choice in any such action or proceeding if the
indemnified party has reasonably concluded that there may be
defenses available to it which are different from or additional
to those of the indemnifying party, or counsel to the indemnified
party is of the opinion that it would not be desirable for the
same counsel to represent both the indemnifying party and the
indemnified party because such representation might result in a
conflict of interest (in either of which cases the indemnifying
party will not have the right to assume the defense of any such
action or proceeding on behalf of the indemnified party or
parties and such legal and other expenses will be borne by the
indemnifying party). An indemnifying party will not be liable to
any indemnified party for any settlement of any such action or
proceeding effected without the consent of such indemnifying
party.
(d) If the indemnification provided for in this Section 11 is
unavailable under applicable law to an indemnified party in
respect of any losses, claims, damages or liabilities referred to
therein, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of
such losses, claims, damages or liabilities in such proportion as
is appropriate to reflect the relative fault of the Company on
the one hand and of the Holders on the other in connection with
the statements or omissions which resulted in such losses,
claims, damages, or liabilities, as well as any other relevant
equitable considerations. The relative fault of the Company on
the one hand and of the Holders on the other shall be determined
by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission to
state a material fact relates to information supplied by the
Company or by the Holders and the parties' relative intent,
knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by
a party as a result of the losses, claims, damages and
liabilities referred to above shall be deemed to include, subject
to the limitations set forth in this Section 11, any legal or
other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim.
Notwithstanding the foregoing or any other provision of this
Agreement, in no event shall a Holder be required to contribute
any amount in excess of the net proceeds received by such Holder
in the offering less any amount paid by such Holder pursuant to
any other provision of this Section 11. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) will be entitled to contribution from any
person who is not guilty of such fraudulent misrepresentation.
(e) Promptly after receipt by the Company or any Holder of notice of
the commencement of any action or proceeding, such party will, if
a claim for contribution is to be made against another party (the
"contributing party"), notify the contributing party of the
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<PAGE>
commencement; but the omission so to notify the contributing
party will not relieve it from any liability which it may have to
any other party other than for contribution under this Agreement.
In case any such action, suit, or proceeding is brought against
any party, and such party notifies a contributing party of the
commencement, the contributing party will be entitled to
participate with the notifying party and any other contributing
party similarly notified.
12. Company Indemnities.
-------------------
The Company agrees to indemnify, defend and hold Purchasers and their
officers, trustees, directors, partners, employees, consultants and
agents (the "Purchasers' Indemnitees") harmless from and against any
damages or third-party claims incurred or suffered by any of
Purchasers' Indemnitees as a result of or arising out of or in
connection with the Company's breach of any representation, warranty,
covenant or agreement of the Company contained in this Agreement and
such indemnity shall survive the execution and delivery of this
Agreement. The applicable Purchasers' Indemnities will promptly notify
the Company of any potential indemnification claim upon discovery of
the facts supporting the potential claim and, if such indemnification
is based on a third-party claim, allow the Company to defend, manage
and resolve the matter at the Company's cost and with the indemnities'
reasonable cooperation.
13. Amendments and Waivers.
----------------------
This Agreement and it's exhibits and schedules set forth the entire
agreement and understanding among the parties as to the subject matter
and merges and supersedes all prior discussions, agreements and
understandings of any and every nature among them. This Agreement may
be amended only by mutual written agreement of the Company and the
Purchasers, and the Company may omit to take any action required to be
performed by it, and any breach of any covenant, agreement, warranty or
representation may be waived, only if the Company has obtained the
written consent or waiver of a majority in interest of the Purchasers.
No course of dealing between or among any persons having any interest
in this Agreement will be deemed effective to modify, amend or
discharge any part of this Agreement or any rights or obligations of
any person under or by reason of this Agreement.
14. Successors and Assigns.
----------------------
This Agreement shall be binding upon and inure to the benefit of the
Company and it's permitted successors and assigns and Purchasers and
their successors and assigns. The provisions which are for Purchasers'
benefit as purchasers or holders of the Common Shares are also for the
benefit of, and enforceable by, any subsequent holder of such Common
Shares.
15. Notices.
-------
All notices, demands and other communications to be given or delivered
under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given personally or when
mailed by certified or registered mail, return receipt requested and
postage prepaid, and addressed to the addresses of the respective
parties set forth below or to such changed addresses as such parties
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<PAGE>
may have fixed by notice; provided, however, that any notice of change
of address shall be effective only upon receipt:
If to the Company:
Immunomedics, Inc.
300 American Road
Morris Plains, New Jersey 07950
Attn: Dr. David M. Goldenberg
With a Copy to:
Starr, Gern, Davison & Rubin, 103 Eisenhower Parkway, Roseland, NJ
07068
If to the Purchasers:
At the addresses shown on Exhibit A with a copy to Sutro & Co., Inc.
16. Governing Law; Consent to Jurisdiction.
--------------------------------------
The validity, performance, construction and effect of this Agreement
shall be governed by those laws of the State of New Jersey. The parties
irrevocably consent to the jurisdiction of the courts of the State of
New Jersey and of any federal court located in such State in connection
with any action or proceeding arising out of or relating to this
Agreement, any document or instrument delivered pursuant to, in
connection with or simultaneously with this Agreement, or a breach of
this Agreement or any such document or instrument.
17. Counterparts.
------------
This Agreement may be executed in any number of counterparts and,
notwithstanding that any of the parties did not execute the same
counterpart, each of such counterparts shall, for all purposes, be
deemed an original, and all such counterparts shall constitute one and
the same instrument binding on all of the parties.
18. Headings.
--------
The headings of the Sections are inserted as a matter of convenience
and for reference only and in no way define, limit or describe the
scope of this Agreement or the meaning of any provision.
19. Severability.
------------
In the event that any provision of this Agreement or the application of
any provision is declared to be illegal, invalid or otherwise
unenforceable by a court of competent jurisdiction, the remainder of
this Agreement shall not be affected except to the extent necessary to
delete such illegal, invalid or unenforceable provision unless the
provision held invalid shall substantially impair the benefit of the
remaining portion of this Agreement.
20. Governing Law.
-------------
This Agreement shall be governed by and interpreted in accordance with
the laws of the State of New Jersey.
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<PAGE>
21. Exculpation Among Purchasers.
----------------------------
Each Purchaser acknowledges and agrees that it is not relying upon any
other Purchaser, or any officer, director, employee partner or
affiliate of any such other Purchaser, in making its investment or
decision to invest in the Company or in monitoring such investment.
Each Purchaser agrees that no Purchaser nor any controlling person,
officer, director, stockholder, partner, agent or employee of any
Purchaser shall be liable for any action heretofore or hereafter taken
or omitted to be taken by any of them relating to or in connection with
the Company or the Shares, or both.
22. Actions by Purchasers.
---------------------
Any actions permitted to be taken by holders or Purchasers of Shares
and any consents required to be obtained from the same under this
Agreement, may be taken or given only by, in the case of consents or
actions requiring approval of a Purchaser, by the applicable Purchaser,
and in all other cases, except to the extent inconsistent with any
explicit provision of this Agreement, only by holders of a majority in
interest of the Common Stock.
23. Publicity.
---------
The Company will not issue any public statement, press release or any
other public disclosure listing Purchaser as one of the purchasers of
the Shares without Purchaser's prior written consent.
[Signature Page Follows]
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<PAGE>
IN WITNESS WHEREOF, this Agreement was duly executed
on the 14th day of February, 2000.
IMMUNOMEDICS, INC.
By: /s/ David M. Goldenberg
-----------------------------
David M. Goldenberg, M.D.,
Chairman
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<PAGE>
Purchasers
The following is a list of the purchasers whose signatures are on the file.
DCF Capital L.P. 75,000
DCF Life Sciences Fund LTD 25,000
Dresdner RCM Global Investor 200,000
Franklin Templeton Group 300,000
Global Lifesciences Fund 749,375
Aspen Global Life Sciences Fund 625
JMG Capital 75,000
Moore Global Investments, Ltd. 160,000
Remington Investment Strategies, L.P. 40,000
Palantir Capital 100,000
Beacon Funds 75,000
1st New York Securities 75,000
Westcliff Master Fund L.P. 40,530
Westcliff Partners L.P. 33,470
Westcliff Partners SA L.P. 8,300
Westcliff Long/Short L.P. 9,940
Westcliff Small Cap Fund L.P. 7,760
Samuel Lupin, M.D. 17,000
F/B/O Arnold M. Lupin IRA 25,000
Lupin Foundation 15,000
Sontag Partners 10,000
Robert D. Marcus, M.D. 10,000
E. Ralph Lupin, M.D. 3,000
Fagey Lupin Fischman 10,000
Taylor - Schabelman Group 5,000
Taylor - Schabelman Group 5,000
Morton Coleman, M.D. 104,000
Robert M. Gelfand, M.D. 20,000
Mark Pasmentier, M.D. 6,000
Mark Goldblatt 20,000
Aires Domestic Fund, L.P. 30,482
Aires Domestic Fund II, L.P. 5,139
The Aires Master Fund 64,379
EXHIBIT 5.1
February 24, 2000
Immunomedics, Inc.
300 American Road
Morris Plains, New Jersey 07950
Gentlemen and Ladies:
You have requested our opinion, as counsel for Immunomedics, Inc., a
Delaware corporation (the "Company"), in connection with a Registration
Statement on Form S-3 (the "Registration Statement") under the Securities Act of
1933 (the "Act"), filed by the Company with the Securities and Exchange
Commission (the "Commission").
The Registration Statement relates to the offering by a group of
selling stockholders of up to 2,325,000 shares of the Company's Common Stock
(the "Shares") purchased from the Company pursuant to a Common Stock Purchase
Agreement
In the preparation of our opinion, we have examined (1) the Restated
Certificate of Incorporation of the Company, as amended to date, (2) the By-Laws
of the Company, in effect on the date hereof, (3) minutes of meetings of the
Company's Board of Directors, as made available to us by executive officers of
the Company, (4) a certificate from an executive officer of the Company, (5) the
Registration Statement and (6) the Common Stock Private Placement Agreement,
dated as of February 14, 2000 (the "Agreement"). In our examinations, we have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to the originals of all documents
submitted to us as certified, photostatic or conformed copies, and the
authenticity of the originals of all such latter documents.
Based upon such examination, we are of the opinion that the Shares
issued to the purchasers under the Agreement were validly issued, fully paid and
non-assessable .
We hereby consent to the filing of our opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption "Legal
Matters" in the prospectus included in the Registration Statement.
Sincerely yours,
Lowenstein Sandler PC
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EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
Immunomedics, Inc.
We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the Prospectus.
KPMG LLP
Short Hills, New Jersey
February 24, 2000
