SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended DECEMBER 31, 1995 Commission File No. 0-12957
ENZON, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 22-2372868
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
20 KINGSBRIDGE ROAD, PISCATAWAY, NEW JERSEY 08854
(Address of principal executive offices) (Zip Code)
(908) 980-4500
(Registrant's telephone number, including area code:)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
The number of shares of common stock, $.01 par value, outstanding as of
February 7, 1996 was 27,428,946 shares.
<PAGE>
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ENZON, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
December 31, 1995 and June 30, 1995
<TABLE>
<CAPTION>
ASSETS LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C> <C> <C> <C>
December 31, June 30, December 31, June 30,
1995 1995 1995 1995
(unaudited) * (unaudited) *
Current assets: Current liabilities:
Cash and cash $5,309,045 $8,102,989 Accounts payable $2,483,176 $1,561,968
equivalents 2,775,147 2,362,277 Accrued expenses 3,414,892 4,045,302
Accounts receivable 1,053,829 792,453 Other current liabilities due to Sanofi - 1,312,829
Inventories 282,160 185,226 Winthrop
Other current assets Total current liabilities 5,898,068 6,920,099
Total current assets 9,420,181 11,442,945 Accrued rent 1,001,350 1,006,508
Royalty advance - RPR 2,747,986 2,955,841
Other liabilities 2,937 4,076
3,752,273 3,966,425
Property and equipment 15,806,365 15,758,058 Commitments and contingencies
Less accumulated
depreciation 10,948,825 9,968,024 Stockholders' equity:
and amortization
4,857,540 5,790,034 Preferred stock-$.01 par value, authorized
3,000,000 shares;
Other assets: issued and outstanding 109,000 shares at
Investments 78,616 78,616 December 31, 1995 and June 30, 1995
Other assets, net 55,952 46,627 (liquidation preference $25 per share
Patents, net 1,745,650 1,825,820 aggregating $2,725,000
1,880,218 1,951,063 at December 31, 1995) 1,090 1,090
Common Stock-$.01 par value, authorized
40,000 shares; issued and outstanding
26,328,874 shares at December 31,
1995 and June 30, 1995 263,289 263,289
Additional paid-in capital 111,740,179 111,494,180
Accumulated deficit (105,496,960)(103,461,041)
Total stockholders' equity 6,507,598 8,297,518
Total assets $16,157,939 $19,184,042 Total liabilities and
stockholders' equity $16,157,939 $19,184,042
*Condensed from audited financial statements.
The accompanying notes are an integral part of these unaudited consolidated
condensed financial statements.
<PAGE>
ENZON, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Three Months and Six Months Ended December 31, 1995 and 1994
(Unaudited)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Three months ended Six months ended
December 31, December 31, December 31, December 31,
1995 1994 1995 1994
Revenues
Sales $2,541,976 $2,102,147 $5,351,024 $4,159,324
Contract revenue 788,236 100,000 904,736 1,900,000
Total revenues 3,330,212 2,202,147 6,255,760 6,059,324
Costs and expenses
Cost of sales 1,063,637 436,667 2,028,338 1,387,226
Research and development expenses 2,390,822 3,402,126 5,081,470 6,758,350
Selling, general and administrative 1,404,350 1,872,380 2,676,320 3,819,717
expenses
Total costs and expenses 4,858,809 5,711,173 9,786,128 11,965,293
Operating loss (1,528,597) (3,509,026) (3,530,368) (5,905,969)
Other income (expense)
Interest and dividend income 81,734 42,999 184,079 88,745
Interest expense (4,263) (818) (10,952) (3,588)
Other 1,318,379 39,238 1,321,322 685,584
1,395,850 81,419 1,494,449 770,741
Net loss ($132,747) ($3,427,607) ($2,035,919) ($5,135,228)
Net loss per common share ($0.01) $(0.14) ($0.08) ($0.21)
Weighted average number of common
shares outstanding
during the period 26,328,874 25,156,485 26,328,874 24,940,527
</TABLE>
The accompanying notes are an integral part of these unaudited consolidated
condensed financial statements.
<PAGE>
ENZON, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Six Months Ended December 31, 1995 and 1994
(Unaudited)
<TABLE>
<CAPTION>
Six months ended
<S> <C> <C>
December 31, December 31,
1995 1994
Cash flows from operating activities:
Net loss ($2,035,919) ($5,135,228)
Adjustment for decrease in liability recognized
pursuant to Sanofi Winthrop Agreement (1,312,829) -
Adjustment for depreciation and amortization 1,060,971 1,314,897
Compensation expense for issuance of stock options - 31,535
Reserve for shutdown of Enzon Labs Inc. - (75,601)
Gain on retirement of equipment - (37,968)
(Decrease) increase in accrued rent (5,158) 98,650
Decrease in royalty advance - RPR (207,855) -
Changes in assets and liabilities (243,836) (1,285,428)
Net cash used in operating activities (2,744,626) (5,089,143)
Cash flows from investing activities:
Capital expenditures (48,307) (211,321)
Proceeds from sale of equipment - 830,225
Proceeds from cash surrender value of
officers' life insurance - 373,186
insurance
Net cash (used in) provided by
investing activities (48,307) 992,090
Cash flows from financing activities:
Proceeds from issuance of common stock - 1,733,042
Principal payments of obligations
under capital leases (1,011) (12,712)
Net cash (used in) provided by
financing activities (1,011 1,720,330
Net decrease in cash and cash equivalents (2,793,944) (2,376,723)
Cash and cash equivalents at beginning
of period 8,102,989 5,731,461
Cash and cash equivalents at end of period $5,309,045 $3,354,738
</TABLE>
The accompanying notes are an integral part of these unaudited consolidated
condensed financial statements.
ENZON, INC. AND SUBSIDIARIES
Notes To Consolidated Condensed Financial Statements
(Unaudited)
(1) ORGANIZATION AND BASIS OF PRESENTATION
The unaudited consolidated condensed financial statements have been
prepared from the books and records of Enzon, Inc. and subsidiaries in
accordance with generally accepted accounting principles for interim financial
information. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments
(consisting only of normal and recurring adjustments) considered necessary for
a fair presentation have been included. Interim results are not necessarily
indicative of the results that may be expected for the year.
(2) NET LOSS PER COMMON SHARE
Net loss per common share is based on net loss for the relevant period,
adjusted for cumulative undeclared preferred stock dividends of $109,000 for
the six months ended December 31, 1995 and 1994, and $55,000 for the three
months ended December 31, 1995 and 1994, divided by the weighted average number
of shares issued and outstanding during the period. Stock options, warrants
and common stock issuable upon conversion of the preferred stock are not
reflected as their effect would be antidilutive for both primary and fully
diluted earnings per share computations. The total number of shares issued to
former shareholders of Enzon Labs Inc. (formerly known as Genex Corporation),
which was acquired on October 31, 1991, have been included in the weighted
average number of outstanding shares, as if all shares had been issued on
October 31, 1991, the date of acquisition.
(3) INVENTORIES
The composition of inventories at December 31, 1995 and June 30, 1995 is
as follows:
December 31, June 30,
<TABLE>
<CAPTION> <C> <C>
1995 1995
Raw materials $467,000 $398,000
Work in process 459,000 134,000
Finished goods 128,000 260,000
$1,054,000 $792,000
</TABLE>
(4) CASH FLOW INFORMATION
The Company considers all highly liquid securities with original
maturities of three months or less to be cash equivalents. Cash payments for
interest were approximately $11,000 and $1,000 for the six months ended
December 31, 1995 and 1994, respectively. There were no income tax payments
made for the six months ended December 31, 1995 and 1994. As part of the
commission due to the real estate broker in connection with the termination of
the lease at 40 Kingsbridge Road, the Company issued 150,000 five-year warrants
to purchase the Company's Common Stock at $2.50 per share during the six months
ended December 31, 1995. This transaction is a non-cash financing activity.
ENZON, INC. AND SUBSIDIARIES
Notes To Consolidated Condensed Financial Statements, Continued
(Unaudited)
(5) NON-QUALIFIED STOCK OPTION PLAN
During the six months ended December 31, 1995, the Company issued 550,000
stock options at an average exercise price of $3.42 under the Company's Non-
Qualified Stock Option Plan (the "Plan"), of which 180,000 were granted to
executive officers of the Company. None of the options granted during the
period are exercisable as of December 31, 1995. All options were granted with
exercise prices that equalled or exceeded the fair market value of the
underlying stock on the date of grant.
On December 5, 1995, the stockholders voted to amend the Plan to increase
the number of shares reserved for issuance to 6,200,000.
(6) RESTRUCTURING EXPENSE
During the quarter ended March 31, 1995, the Company recorded a
restructuring charge related to a workforce reduction and the termination of
one of its facility leases. As of June 30, 1995, approximately $758,000 of the
restructuring charge was unpaid and recorded in accrued expenses in the
Consolidated Condensed Balance Sheet. During the six months ended December 31,
1995, the Company paid the remaining $758,000, the majority of which
represented fees due the Company's real estate broker in connection with the
termination of the lease.
(7) OTHER INCOME
During the quarter ended December 31, 1995, the Company recognized as
other income approximately $1,313,000, representing the unused portion of an
advance received under a development and license agreement with Sanofi
Winthrop, Inc. ("Sanofi"). During October 1995, the Company learned that
Sanofi intended to cease development of PEG-SOD (Dismutec) due to the product's
failure to show a statistically significant difference between the treatment
group and the control group in a pivotal Phase III trial. Due, in part, to
this product failure, the Company believes it has no further obligations under
its agreement with Sanofi with respect to the $1,313,000 advance and therefore,
the Company has reversed the amount due Sanofi previously recorded as a current
liability.
(8) SUBSEQUENT EVENT
On January 31, 1996, the Company completed a private placement (the
"Private Placement") of Common Stock and Series B Convertible Preferred Stock
("Convertible Preferred Stock"), resulting in gross proceeds of $7,000,000,
with an institutional investor pursuant to Regulation D of the Securities Act
of 1933, as amended. The Company issued 1,094,890 shares of Common Stock for
$3,000,000, raising the outstanding common shares to 27,423,764 and 40,000
shares of Convertible Preferred Stock for $4,000,000. The Company also issued
five-year warrants (the "Warrants") to purchase 638,686 shares of Common Stock
at $4.11 per share. The Convertible Preferred Stock is convertible commencing
70 days after issuance. The conversion price for the Convertible Preferred
Stock is 80% of the market price for the five consecutive trading days ending
one trading day prior to the date of the conversion notice and the stated value
is $100 per share. The Convertible Preferred Stock will not pay a dividend.
In connection with the Private Placement, the Company agreed to register on a
Registration Statement on Form S-3 the Common Stock issued, the shares of
Common Stock underlying the Convertible Preferred Stock, the shares of Common
Stock underlying the Warrants and certain shares of Common Stock issuable in
the event the Company does not comply with certain of its obligations under the
agreements. The issuance of the Private Placement stock and warrants would not
have changed the net loss per common share reported for the three and six
months ended December 31, 1995.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31, 1995 VS. THREE MONTHS ENDED DECEMBER 31, 1994
REVENUES. Revenues for the three months ended December 31, 1995 increased by
51% to $3,330,000 as compared to $2,202,000 for the same period in 1994. The
components of revenues are sales and contract revenues. Sales increased by 21%
to $2,542,000 for the three months ended December 31, 1995 as compared to
$2,102,000 for the same period in the prior year, due to increased revenues
from ONCASPAR, which is marketed in the U.S. by Rhone-Poulenc Rorer
Pharmaceuticals, Inc. ("RPR"). ADAGEN sales for the three months ended
December 31, 1995 and 1994 were $2,039,000 and $2,094,000, respectively.
Contract revenue for the three months ended December 31, 1995 increased to
$788,000, as compared to $100,000 for the same period in 1994. The increase
was principally due to a payment received in connection with the signing of a
worldwide non-exclusive licensing agreement with RPR for the Company's Single-
Chain Antigen-Binding ("SCA") protein technology during the three months ended
December 31, 1995. During the three months ended December 31, 1995 and 1994,
the Company had export sales of $491,000 and $549,000, respectively. Sales in
Europe were $429,000 and $466,000 for the three months ended December 31, 1995
and 1994, respectively.
COST OF SALES. Cost of sales, as a percentage of sales, increased to 42% for
the three months ended December 31, 1995 as compared to 21% for the same period
in 1994. The increase was due primarily to a payment in lieu of satisfying the
minimum purchase requirements under the Company's long-term supply agreement
for a raw material used in the production of ONCASPAR and the write-off of
excess inventories of this raw material, as well as an increase in the charge
recorded for the three months ended December 31, 1995 for idle capacity at the
Company's manufacturing facility. During the quarter ended December 31, 1995,
the Company utilized approximately 21% of its manufacturing capacity for the
production of its approved products.
RESEARCH AND DEVELOPMENT. Research and development expenses for the three
months ended December 31, 1995 decreased by 30% to $2,391,000 from $3,402,000
for the same period in 1994. This decrease was primarily due to (i) reductions
in personnel, principally in the clinical and research administration areas,
and related costs, such as payroll taxes and benefits, (ii) decreased research
facilities and occupancy costs, and (iii) other cost containment measures taken
by the Company.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses for the three months ended December 31, 1995 decreased
by 25% to $1,404,000 from $1,872,000 for the same period in 1994. The decrease
was due to (i) reductions in personnel and related costs, such as payroll taxes
and benefits, (ii) a reduction in facility and occupancy costs, and (iii) other
cost containment measures taken by the Company.
OTHER INCOME/EXPENSE. Other income/expense increased by $1,314,000 to
$1,396,000 for the three months ended December 31, 1995 as compared to $81,000
for the same period last year. The increase was due principally to the
recognition as other income of approximately $1,313,000 representing the unused
portion of an advance received under a development and license agreement with
Sanofi Winthrop, Inc. ("Sanofi"). During October 1995, the Company learned
that Sanofi intended to cease development of PEG-SOD (Dismutec) due to the
product's failure to show a statistically significant difference between the
treatment group and the control group in a pivotal Phase III trial. Due, in
part, to this product failure, the Company believes it has no further
obligations under its agreement with Sanofi with respect to the $1,313,000
advance and therefore, the Company has recognized as other income the amount
due Sanofi previously recorded as a current liability.
SIX MONTHS ENDED DECEMBER 31, 1995 VS. SIX MONTHS ENDED DECEMBER 31, 1994
REVENUES. Revenues for the six months ended December 31, 1995 increased by 3%
to $6,256,000 as compared to $6,059,000 for the same period in 1994. The
components of revenues are sales and contract revenues. Sales increased by 29%
to $5,351,000 for the six months ended December 31, 1995 as compared to
$4,159,000 for the same period in the prior year, due to increased ONCASPAR
revenues from RPR and an increase in ADAGEN sales resulting from an increase in
patients receiving ADAGEN. ADAGEN sales for the six months ended December 31,
1995 and 1994 were $4,214,000 and $4,009,000, respectively. Contract revenue
for the six months ended December 31, 1995 decreased by 52% to $905,000, as
compared to $1,900,000 for the same period in 1994. The decrease was
principally due to a payment of $1,800,000 recorded during the six months ended
December 31, 1994 from Bristol-Myers Squibb related to the exercise of its
option under an agreement dated September 1993, to acquire a worldwide non-
exclusive license for all therapeutic indications for the Company's SCA protein
technology. This decrease was offset in part by a worldwide non-exclusive
license for the Company's SCA protein technology signed with RPR in 1995.
During the six months ended December 31, 1995 and 1994, the Company had export
sales of $1,131,000 and $999,000, respectively. Sales in Europe were $983,000
and $871,000 for the six months ended December 31, 1995 and 1994, respectively.
COST OF SALES. Cost of sales, as a percentage of sales, increased to 38% for
the six months ended December 31, 1995 as compared to 33% for the same period
in 1994. The increase was due primarily to a payment in lieu of satisfying the
minimum purchase requirements under the Company's long-term supply agreement
for a raw material used in the production of ONCASPAR and the write-off of
excess inventories of this raw material, as well as an increase in the charge
recorded for the six months ended December 31, 1995 for idle capacity at the
Company's manufacturing facility. This increase was offset in part by a
decrease in cost of sales as a percentage of sales for the Company's product
ADAGEN. ADAGEN's margins improved during the six months ended December 31,
1995, due to the elimination of inefficiencies experienced in the filling
process during the previous year.
RESEARCH AND DEVELOPMENT. Research and development expenses for the six months
ended December 31, 1995 decreased by 25% to $5,081,000 from $6,758,000 for the
same period in 1994. This decrease was primarily due to (i) reductions in
personnel, principally in the clinical and research administration areas, and
related costs, such as payroll taxes and benefits, (ii) decreased research
facilities and occupancy costs, and (iii) other cost containment measures taken
by the Company.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses for the six months ended December 31, 1995 decreased by
30% to $2,676,000 from $3,820,000 for the same period in 1994. The decrease
was due to (i) reductions in personnel and related costs, such as payroll taxes
and benefits, (ii) a reduction in facility and occupancy costs, and (iii) other
cost containment measures taken by the Company.
OTHER INCOME/EXPENSE. Other income/expense increased by $724,000 to $1,494,000
for the six months ended December 31, 1995 as compared to $771,000 for the same
period last year. The increase was due principally to the recognition as other
income of approximately $1,313,000 representing the unused portion of an
advance received under a development and license agreement with Sanofi. During
October 1995, the Company learned that Sanofi intended to cease development of
PEG-SOD (Dismutec) due to the product's failure to show a statistically
significant difference between the treatment group and the control group in a
pivotal Phase III trial. Due, in part, to this product failure, the Company
believes it has no further obligations under its agreement with Sanofi with
respect to the $1,313,000 advance and therefore, the Company has recognized as
other income the amount due Sanofi previously recorded as a current liability.
Other income/expense in the prior year principally consisted of a one-time
insurance payment recorded in the prior year.
LIQUIDITY AND CAPITAL RESOURCES
Enzon had $5,309,000 in cash and cash equivalents as of December 31,
1995. The Company invests its excess cash in a portfolio of high-grade
marketable securities and United States government-backed securities.
The Company's cash reserves, as of December 31, 1995, decreased by
$2,794,000 from June 30, 1995. The decrease in cash reserves was caused by the
funding of operations.
The Company's exclusive U.S. marketing rights license with RPR for
ONCASPAR provides for a payment of $3,500,000 in advance royalties which was
received in January 1995. Royalties due under the revised agreement will be
offset against a credit of $5,970,000, which represents the royalty advance
plus reimbursement of certain amounts due RPR under the previous agreement and
interest expense, before cash payments will be made under the agreement. The
royalty advance is shown as a long term liability with the corresponding
current portion included in accrued expenses on the consolidated condensed
balance sheets and will be reduced as royalties are recognized under the
agreement.
As of December 31, 1995, 940,808 shares of Series A Cumulative
Convertible Preferred Stock ("Series A Preferred Stock") had been converted
into 3,093,411 shares of Common Stock. Accrued dividends on the converted
Series A Preferred Stock in the aggregate of $1,792,000 were settled by the
issuance of 232,383 shares of Common Stock. The Company does not presently
intend to pay cash dividends on the Series A Preferred Stock. As of December
31, 1995, there were $1,258,000 of accrued and unpaid dividends on the Series A
Preferred Stock. These dividends are payable in cash or Common Stock at the
Company's option and accrue on the outstanding Series A Preferred Stock at the
rate of $218,000 per year.
To date, the Company's sources of cash have been the proceeds from the
sale of its stock through public and private placements, sales of ADAGEN, sales
of ONCASPAR, sales of its products for research purposes, contract research and
development fees, technology transfer and license fees and royalty advances.
The Company's current sources of liquidity are its cash, cash equivalents and
interest earned on such cash reserves, sales of ADAGEN, sales of ONCASPAR, the
proceeds of the Company's private placement of Common Stock and Series B
Convertible Preferred Stock described below, sales of its products for research
purposes and license fees. Management believes that its current sources of
liquidity will be sufficient to meet its anticipated cash requirements, based
on current spending levels, for approximately the next two years.
On January 31, 1996, the Company completed a private placement of Common
Stock and Series B Convertible Preferred Stock ("Convertible Preferred Stock"),
resulting in gross proceeds of $7,000,000, with an institutional investor
pursuant to Regulation D of the Securities Act of 1933, as amended. The
Company issued 1,094,890 shares of Common Stock for $3,000,000, and 40,000
shares of Convertible Preferred Stock for $4,000,000. The Company also issued
five-year warrants to purchase 638,686 shares of Common Stock at $4.11 per
share. The Convertible Preferred Stock is convertible commencing 70 days after
issuance. The conversion price for the Convertible Preferred Stock is 80% of
the market price for the five consecutive trading days ending one trading day
prior to the date of the conversion notice and the stated value is $100 per
share. The Convertible Preferred Stock will not pay a dividend.
Upon exhaustion of the Company's current cash reserves, the Company's
continued operations will depend on its ability to realize significant revenues
from the commercial sale of its products, raise additional funds through equity
or debt financing, or obtain significant licensing, technology transfer or
contract research and development fees. There can be no assurance that these
sales, financings or revenue generating activities will be successful.
PART II OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) An annual meeting of stockholders was held on December 5, 1995.
(b) The directors elected at the annual meeting were Dr. Abraham Abuchowski
and Robert LeBuhn. The term of office as a director for each of Peter
G. Tombros, Dr. Rosina B. Dixon, A.M. "Don" MacKinnon and Randy H.
Thurman continued after the annual meeting.
(c) The matters voted upon at the annual meeting and the results of the
voting are set forth below. Brokers' non-votes were not applicable.
(i) The stockholders voted 21,603,414 shares in favor and withheld
1,183,197 votes with respect to the election of Dr. Abraham
Abuchowski as a Class III director of the Company and 21,678,974
shares in favor and withheld 1,107,637 votes with respect to the
election of Robert LeBuhn as a Class III director of the Company.
(ii)The stockholders voted 18,301,163 shares in favor, 4,276,606 against
and 208,842 abstained with respect to a proposal to increase the
number of shares of Common Stock authorized for issuance under the
Company's Non-Qualified Stock Option Plan, as amended, from
5,000,000 to 6,200,000.
(iii)The stockholders voted 22,422,767 shares in favor, 183,628 against
and 180,216 abstained with respect to a proposal to ratify the
selection of KPMG Peat Marwick LLP to audit the Company's
consolidated financial statements for the fiscal year ending June
30, 1996.
ITEM 6. EXHIBIT AND REPORTS ON FORM 8-K
(a) Exhibits (numbered in accordance with Item 601 of Regulation S-K).
<TABLE>
<CAPTION>
<C> <C> <C>
Exhibit Page Number
Number Description or
Incorporation
By Reference
3(i) Certificate of Incorporation, as amended <diamond-suit>
3(ii) By-laws, as amended *(4.2)
10.0 Employment Agreement dated March 25, 1994
with Peter G. Tombros #(10.17)
10.1 Form of Change of Control Agreements dated as of
January 20, 1995 entered into with the Company's
Chief Executive Officers ^(10.2)
10.2 Lease - 300-C Corporate cout, South
Plainfield, New Jersey ***(10.3)
10.3 Modification of Lease - 300-C Corporate Court, South
Plainfield New Jersey ++(10.3)
10.4 Lease Termination Agreement dated March 31, 1995 for
20 Kingsbridge Road and 40 Kingsbridge Road,
Piscataway, New Jersey ^(10.6)
10.5 Option Agreement dated April 1, 1995 regarding 20
Kingsbridge Road, Piscataway, New Jersey ^(10.7)
10.6 Form of Lease - 40 Cragwood Road, South Plainfield,
New Jersey ****(10.9)
10.7 Lease 300A-B Corporate Court, South Plainfield, New Jersey +++(10.10)
10.8 Stock Purchase Agreement dated March 5, 1987
between the Company and Eastman Kodak Company ****(10.7)
10.9 Amendment dated June 19, 1989 to Stock Purchase
Agreement between the Company and Eastman Kodak Company **(10.10)
10.10 Form of Stock Purchase Agreement between the Company and
the purchasers of the Series A Cumulative Convertible
Preferred Stock +(10.11)
10.11 Amendment to License Agreement and Revised License Agreement
between the Company and RCT dated April 25, 1985 ++++(10.5)
10.12 Amendment dated as of May 3, 1989 to Revised License
Agreement dated April 25, 1985 betwee the Company
and Research Corporation **(10.14)
10.13 License Agreement dated September 7, 1989 between the
Company and Research Corporation Technologies, Inc. **(10.15)
10.14 Master Lease Agreement and Purchase Leaseback Agreement dated
October 28, 1994 between the Company and Comdisco, Inc. ###(10.16)
10.15 Amendment dated as of May 15, 1995 to Employment Agreement
with Peter G. Tombros ^^(10.17)
10.16 Stock Purchase Agreement dated as of June 30, 1995 <diamond-suit)
10.17 Securities Purchase Agreement dated as of January 31, 1996 <diamond-suit)
10.18 Registration Rights Agreements dated as of January 31, 1996<diamond-suit)
10.19 Warrants dated as of February 7, 1996 and issued pursuant to the (diamond-suit)
Securities Purchase Agreement dated as of January 31, 1996 (diamond-suit)
27.0 Financial Data Schedule (diamond-suit)
</TABLE>
<diamond-suit>Filed herewith.
* Previously filed as an exhibit to the Company's Registration Statement
on Form S-2 (File No. 33-34874) and incorporated herein by reference
thereto.
** Previously filed as exhibits to the Company's Annual Report on Form 10-K
for the fiscal year ended June 30, 1989 and incorporated herein by
reference thereto.
*** Previously filed as an exhibit to the Company's Registration Statement
on Form S-18 (File No. 2-88240-NY) and incorporated herein by reference
thereto.
**** Previously filed as exhibits to the Company's Registration Statement on
Form S-1 (File No. 2-96279) filed with the Commission and incorporated
herein by reference thereto.
+ Previously filed as an exhibit to the Company's Registration Statement
on Form S-1 (File No. 33-39391) filed with the Commission and
incorporated herein by reference thereto.
++ Previously filed as an exhibit to the Company's Annual Report on Form
10-K for the fiscal year ended June 30, 1992 and incorporated herein by
reference thereto.
+++ Previously filed as an exhibit to the Company's Annual Report on Form
10-K for the fiscal year ended June 30, 1993 and incorporated herein by
reference thereto.
++++ Previously filed as an exhibit to the Company's Annual Report on Form
10-K for the fiscal year ended June 30, 1985 and incorporated herein by
reference thereto.
# Previously filed as an exhibit to the Company's Current Report on Form
8-K dated April 5, 1994 and incorporated herein by reference thereto.
## Previously filed as an exhibit to the Company's Registration Statement
on Form S-3 (File No. 33-80790) and incorporated herein by reference
thereto.
### Previously filed as an exhibit to the Company's quarterly report on Form
10-Q for the quarter ended December 31, 1994 and incorporated herein by
reference thereto.
^ Previously filed as an exhibit to the Company's quarterly report on Form
10-Q for the quarter ended March 31, 1995 and incorporated herein by
reference thereto.
^^ Previously filed as an exhibit to the Company's annual report on Form
10-K for the fiscal year ended June 30, 1995 and incorporated herein by
reference thereto.
(b) Reports on Form 8-K
On October 27, 1995 the Company filed a Current Report on Form 8-K dated
October 19, 1995 regarding the results of Phase III clinical trials for
PEG-SOD.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ENZON, INC.
(Registrant)
Date: February 13, 1996 By: /S/PETER G. TOMBROS
Peter G. Tombros
President and Chief Executive
Officer
By: /S/KENNETH J. ZUERBLIS
Kenneth J. Zuerblis
Vice President, Finance and
Chief Financial Officer
CERTIFICATE OF INCORPORATION
OF
ENZON, INC.
The undersigned incorporator, in order to form a corporation under
the General Corporation Law of the State of Delaware, certifies as follows:
1. NAME. The name of the corporation is
ENZON, INC.
(hereinafter called the "Corporation").
2. ADDRESS REGISTERED AGENT. The address of the Corporation's
registered office is 410 South State Street, Dover, Delaware 19901; and its
registered agent at such address is Corporate Filing Securities, Inc.
3. PURPOSE. The nature of the business and purposes to be
conducted or promoted by the Corporation are to engage in, carry on and conduct
any lawful act or activity for which corporations may be organized under the
General Corporation Law of Delaware.
4. NUMBER OF SHARES. The total number of shares of stock which
the Corporation shall have authority to issue is ten million (10,000,000), all
of which shall be shares of Common Stock of the par value of one cent ($.01)
each.
5. NAME AND ADDRESS OF INCORPORATOR. The name and mailing
address of the incorporator is Dan Brecher, 260 Madison Avenue, New York, New
York 10016.
6. ELECTION OF DIRECTORS. Members of the Board of Directors may
be elected either by written ballot or by voice vote.
7. ADOPTION, AMENDMENT AND/OR REPEAL OF BY-LAWS. The Board of
Directors may from time to time (after adoption by the undersigned of the
original by-laws of the Corporation) make, alter or repeal the by-laws of the
Corporation; provided, that any by-laws made, amended or repealed by the Board
of Directors may be amended or repealed, and any by-laws may be made, by the
stockholders of the Corporation.
8. COMPROMISES AND ARRANGEMENTS. Whenever a compromise or
arrangement is proposed between the Corporation and its creditors or any class
of them and/or between this Corporation and its stockholders or any class of
them, any court of equitable jurisdiction within the State of Delaware may, on
the application in a summary way of this Corporation or of any creditor or
stockholder thereof or on the application of any receiver or receivers
appointed for this Corporation under the provisions of section 291 of Title 8
of the Delaware Code or on the application of trustees in dissolution of any
receiver or receivers appointed for this Corporation under the provisions of
section 279 of Title 8 of the Delaware Code, order a meeting of the creditors
or class of creditors, and/or of the stockolders or class of stockholders of
this Corporation, as the case may be, to be summoned in such manner as the said
court directs. If a majority in number representing three-fourths in value of
the creditors or class or creditors, and/or of the stockholders or class of
stockholders of this Corporation, as the case may be, agree to any compromise
or arrangement and to any reorganization of this Corporation as consequence of
such compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court for which the said application
has been made, be binding on all the creditors or class of creditors, and/or on
all the stockholders or class of stockholders, of this Corporation, as the case
may be, and also on this Corporation.
IN WITNESS WHEREOF, this Certificate has been signed on this __ day
of April, 1983, and the signature of the undersigned shall constitute the
affirmation and acknowledgment of the undersigned, under penalties of perjury,
that the Certificate is the act and deed of the undersigned and that the facts
stated in the Certificate are true.
/S/ DAN BRECHER
Dan Brecher
Incorporator
CERTIFICATE OF CORRECTION
OF
CERTIFICATE OF INCORPORATION
OF
ENZON, INC.
Pursuant to Section 103 (f) of Title 8 of theDelaware Code of 1953, as
Amended
The undersigned, being the sole incorporator of ENZON, INC., a
corporation organized and existing under and by virtue of the General
Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That Article "SECOND" of the Certificate of Incorporation was set
forth incorrectly. In order to correct Article "SECOND" it should read in its
entirety as follows:
SECOND: Address: Registered Agent. The Address of the corporation's
registered office is 410 South State Street, Dover, Delaware 19901; and its
registered agent at such address is Corporate Filing Service, Inc.
IN WITNESS WHEREOF, we have hereunto set our respective seals this 31st
day of May, 1983.
/S/ DAN BRECHER
Dan Brecher, Sole Incorporator
STATE OF NEW YORK
COUNTY OF New York ss:
BE IT REMEMBERED That on this 31 day of May, 1983 personally came before
me Leila Lurie a Notary Public in and for the County and State aforesaid, Dan
Brecher, Sole Incorporator of a corporation of the State of Delaware, the
corporation described in and which executed the foregoing certificate, known to
me personally to be such, and that the said Dan Brecher as such Sole
Incorporator, duly executed the said Certificate before me and acknowledged the
said certificate to be their act and deed and the act and deed of said
corporation and the facts stated therein are true; that the signature of the
said Sole Incorporator of said corporation respectively, and that the seal
affixed to said certificate is the common or corporate seal of said
corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and seal of office the
day and year aforesaid.
/S/ LEILA LURIE
Notary Public (Seal)
CERTIFICATE OF OWNERSHIP AND MERGER
of
ENZON, INC.
(a Delaware corporation)
by
ENZON INC.
(a New Jersey corporation)
Pursuant to Section 253 of the
General Corporation Law of the
STATE OF DELAWARE
Enzon Inc., a corporation formed and existing under the laws of the State
of New Jersey ("Enzon of NJ"), desiring to merge into Enzon, Inc., a
corporation formed and existing under the laws of the State of Delaware ("Enzon
of Del."), pursuant to the provisions of section 253 of the General Corporation
Law of the State of Delaware, does hereby certify as follows:
FIRST: That Enzon of NJ is a corporation formed and existing under the
laws of the State of New Jersey and that its Certificate of Incorporation was
filed in the Office of the Secretary of State of the State of New Jersey on
September 17, 1981.
SECOND: That on and prior to June 23, 1983, Enzon of Del. was a
corporation formed and existing under the laws of the State of Delaware and
that its Certificate of Incorporation was filed in the Office of the Secretary
of State of the State of Delaware on May 11, 1983.
THIRD: That on June 23, 1983, Enzon of NJ lawfully owned one hundred
percent (100%) of the outstanding shares of the outstanding stock of Enzon of
Del.
FOURTH: That this certificate was approved by all the shareholders of
Enzon Inc. a New Jersey Corporation.
FIFTH: That on June 23, 1983, the Board of Directors of Enzon of NJ by
resolutions duly adopted determined to merge Enzon of NJ into Enzon of Del.,
said resolutions being as follows:
WHEREAS, this Corporation lawfully owns one hundred percent (100%) of the
outstanding stock of Enzon, Inc. ("Enzon of Del."), a Delaware corporation, and
desires to merge this Corporation and to have all of this Corporation's estate,
property, rights, privileges and franchises vested in and held and enjoyed by
Enzon of Del.
"NOW, THEREFORE, BE IT RESOLVED that this Corporation merge into Enzon of
Del.; and
"RESOLVED that the effective date of such merger be on June 23, 1983; and
"RESOLVED that the proper officers of this Corporation be, and they
hereby are, authorized and directed to make and execute, in its name and under
its corporate seal, and to file in the proper public offices, a Certificate of
Ownership and Merger pursuant to section 253 of the General Corporation Law of
the State of Delaware setting forth a copy of these resolutions; and
"RESOLVED that the officers of this Corporation be, and they hereby are,
authorized and empowered to take such further action and to execute such other
documents as in their judgment may be necessary or proper to consummate the
merger provided for by these resolutions."
IN WITNESS WHEREOF, said ENZON, INC. has caused this Certificate to be executed
by its officers thereunto duly authorized and its corporate seal to be
thereunto affixed this 29 day of June, 1983.
ENZON, INC.
By: /S/ ABRAHAM ABUCHOWSKI
Abraham Abuchowski
President
ATTEST:
/S/ FRANK DAVIS
Frank Davis
Secretary
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
* * * * *
Enzon, Inc., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware, DOES HEREBY
CERTIFY:
FIRST: That the Board of Directors of said corporation, by the
unanimous written consent of its members, filed with the minutes of the board,
adopted a resolution proposing and declaring advisable the following amendments
to the Certificate of Incorporation of said corporation:
RESOLVED, that Article Fourth of the Certificate of Incorporation
be deleted in its entirety and the following substituted therefor:
"FOURTH - The total number of shares of stock which the
Corporation shall have authority to issue is Fifteen Million
(15,000,000) Shares, all of which shall be shares of Common
Stock of the par value of $.01 each."
SECOND: That in lieu of a meeting and vote of stockholders, the
stockholders holding a majority of the shares currently outstanding have given
their written consent to said amendments in accordance with the provisions of
Section 228 of the General Corporation Law of the State of Delaware.
THIRD: That the aforementioned amendment was duly adopted in
accordance with the applicable provisions of Sections 242 and 228 of the
General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, said Enzon, Inc. has caused this certificate to
be signed by Abraham Abuchowski, its President, and attested by Frank Davis,
its Secretary, this 23rd day of February, 1984.
By /S/ ABRAHAM ABUCHOWSKI
Abraham Abuchowski, President
ATTEST:
By /S/ FRANK DAVIS
Frank Davis, Secretary
<PAGE>
CERTIFICATE
FOR RENEWAL AND REVIVAL OF CERTIFICATE OF INCORPORATION
Enzon, Inc., a corporation organized under the laws of Delaware, the
Certificate of Incorporation of which was filed in the office of the Secretary
of State on the 11th day of May, 1983, the Certificate of Incorporation of
which was voided for non-payment of taxes, now desires to procure a
restoration, renewal and revival of its Certificate of Incorporation, and
hereby certifies as follows:
1. The name of this corporation is Enzon, Inc.
2. Its registered office in the State of Delaware is located at
Corporation Trust Center, 1209 Orange Street, City of Wilmington, County of New
Castle and the name of its registered agent at such address is The Corporation
Trust Company.
3. The date when the restoration, renewal, and revival of the
Certificate of Incorporation of this Corporation is to commence is the 28th day
of February A.D. 1986, same being prior to the date of the expiration of the
Certificate of Incorporation. This renewal and revival of the Certificate of
Incorporation of this corporation is to be perpetual.
4. This corporation was duly organized under the Laws of the State of
Delaware and carried on the business authorized by its Certificate of
Incorporation until the 1st day of March A.D. 1986, at which time its
Certificate of Incorporation became inoperative and void for non-payment of
taxes and this certificate of renewal and revival is filed by authority of the
duly elected directors of the corporation in accordance with the laws of the
State of Delaware.
IN WITNESS WHEREOF, said Enzon, Inc. in compliance with Section 312 of
Title 8 of the Delaware Code has caused this certificate to be signed by
Abraham Abuchowski its last and acting President, and attested by Frank Davis,
its last and acting Secretary, this 17th day of December, 1986.
ENZON, INC.
By /S/ ABRAHAM ABUCHOWSKI
Last and Acting President
ATTEST:
By /S/ FRANK DAVIS
Frank Davis
Last and Acting Secretary
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
ENZON, INC.
* * * * *
Enzon, Inc., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware, DOES HEREBY
CERTIFY:
FIRST: That the Board of Directors of said Corporation, at a
meeting of its members, adopted resolutions proposing and declaring advisable
the following amendments to the Certificate of Incorporation of said
Corporation:
(a) RESOLVED, that Article 4 of the Certificate of Incorporation
be amended as set forth below:
"4: The total number of shares of capital stock which
the Corporation shall have authority to issue is sixteen
million (16,000,000) shares, of which fifteen million
(15,000,000) shares shall be Common Stock, par value $.01 per
share, and one million (1,000,000) shares shall be Preferred
Stock, par value $.01 per share.
The Preferred Stock may be issued from time to time in
one or more series. The board of Directors of the
Corporation is hereby expressly authorized to provide, by
resolution or resolutions duly adopted by it prior to
issuance, for the creation of each such series and to fix the
designation and the powers, preferences, rights,
qualifications, limitations and restrictions relating to the
shares of each such series. The authority of the Board of
Directors with respect to each series of Preferred Stock
shall include, but not be limited to, determining the
following:
(a) the designation of such series, the number of
shares to constitute such series and the stated value thereof
if different from the par value thereof;
(b) whether the shares of such series shall have
voting rights, in addition to any voting rights provided by
law, and, if so, the terms of such voting rights, which may
be general or limited;
(c) the dividends, if any, payable on such series,
whether any such dividends shall be cumulative, and, if so,
from what dates, the conditions and dates upon which such
dividends shall be payable, and the preference or relation
which such dividends shall bear to the dividends payable on
any shares of stock of any other class or any other series of
Preferred Stock;
(d) whether the shares of such series shall be
subject to redemption by the Corporation, and, if so, the
times, prices and other conditions of such redemption;
(e) the amount or amounts payable upon shares of such
series upon, and the rights of the holders of such series in,
the voluntary or involuntary liquidation, dissolution or
winding up, or upon any distribution of the assets, of the
Corporation;
(f) whether the shares of such series shall be
subject to the operation of a retirement or sinking fund and,
if so, the extent to and manner in which any such retirement
or sinking fund shall be applied to the purchase or
redemption of the shares of such series for retirement or
other corporation purposes and the terms and provisions
relating to the operation thereof;
(g) whether the shares of such series shall be
convertible into, or exchangeable for, shares of stock of any
other class or any other series of Preferred Stock or any
other securities and, if so, the price or prices or the rate
or rates of conversion or exchange and the method, if any, of
adjusting the same, and any other terms and conditions of
conversion or exchange;
(h) the conditions or restrictions, if any, upon the
creation of indebtedness of the Corporation or upon the issue
of any additional stock, including additional shares of such
series or of any other series of Preferred Stock or of any
other class; and
(i) any other powers, preferences and relative,
participating, optional and other special rights, and any
qualifications, limitations and restrictions, thereof.
The powers, preferences and relative, participating,
optional and other special rights of each series of Preferred
Stock, and the qualifications, limitations or restrictions
thereof, if any, may differ from those of any and all other
series at any time outstanding. All shares of any one series
of Preferred Stock shall be identical in all respects with
all other shares of such series, except that shares of any
one series issued at different times may differ as to the
dates from which dividends thereof shall be cumulative.
(b) RESOLVED, that an additional Article, Article 9 be added to
the Certificate of Incorporation as set forth below:
"9. The Board of Directors shall consist of not less
than three nor more than fifteen directors, the exact number
of directors to be determined from time to time by resolution
adopted by affirmative vote of a majority of the whole Board
of Directors, and such exact number shall be four until
otherwise determined by resolution adopted by affirmative
vote of a majority of the whole Board of Directors. As used
in this Article 9, the term "whole Board" means the total
number of directors which the Corporation would have if there
were no vacancies. The Board of Directors shall divide the
directors into three classes and, when the number of
directors is changed, shall determine the class or classes to
which the increased or decreased number of directors shall be
apportioned; provided, that no decrease in the number of
directors shall affect the term of any director then in
office. Notwithstanding the foregoing, and except as
otherwise required by law, whenever the holders of any one or
more series of Preferred Stock shall have the right, voting
separately as a class, to elect one or more directors of the
Corporation, the terms of the director or directors elected
by such holders shall expire at the next succeeding annual
meeting of stockholders. The term of office of directors
elected at the 1986 Annual Meeting of Stockholders held on
January 20, 1987 shall be as follows: the term of office of
directors of the first class shall expire at the first annual
meeting of stockholders after their election; the term of
office of directors of the second class shall expire at the
second annual meeting of stockholders after their election;
and the term of office of directors of the third class shall
expire at the third annual meeting of stockholders after
their election; and as to directors of each class, when their
respective successors are elected and qualified. At each
annual meeting of stockholders subsequent to the 1986 Annual
Meeting of Stockholders, directors elected to succeed those
whose terms are expiring shall be elected for a term of
office to expire at the third succeeding annual meeting of
stockholders and when their respective successors are elected
and qualified.
Vacancies in the Board of Directors, however caused,
and newly created directorships shall be filled solely by a
majority vote of the directors then in office, whether or not
a quorum, and any director so chosen shall hold office for a
term expiring at the annual meeting of stockholders at which
the term of the class to which the director has been chosen
expires and when the director's successor is elected and
qualified.
The affirmative vote of the holders of not less than
two-thirds of the outstanding voting shares of capital stock
of the Corporation entitled to vote generally in the election
of directors shall be required to amend, alter, change or
repeal, or adopt any provisions inconsistent with this
Article 9, provided, however, that this paragraph shall not
apply to, and such two-thirds vote shall not be required for,
any amendment, alteration, change, repeal or adoption of any
inconsistent provision declared advisable by the Board of
Directors by the affirmative vote of two-thirds of the Board
and submitted to stockholders for their consideration, but
only if a majority of the members of the Board of Directors
acting upon such matter shall be Continuing Directors. The
term "Continuing Director" shall mean a director who was a
member of the Board as of October 1, 1986."
(c) RESOLVED, that an additional Article, Article 10 be added to
the Certificate of Incorporation as set forth below:
"10. A director of the Corporation shall not be
personally liable to the Corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's
duty of loyalty to the Corporation 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, as
the same exists or hereafter may be amended, or (iv) for any
transaction from which the director derived an improper
personal benefit. If the Delaware General Corporation Law
hereafter is amended to authorize the further elimination or
limitation of the liability of directors, then the liability
of a director of the Corporation, in addition to the
limitation on personal liability provided herein, shall be
limited to the fullest extent permitted by the amended
Delaware General Corporation Law. Any repeal or modification
of this paragraph by the stockholders of the Corporation
shall be prospective only, and shall not adversely affect any
limitation on the personal liability of a director of the
corporation existing at the time of such repeal or
modification."
SECOND: That at an annual meeting of stockholders the holders of a
majority of the outstanding stock entitled to vote thereon voted in favor of
said amendments in accordance with the provisions of Section 216 of the General
Corporation Law of the State of Delaware.
THIRD: That the aforesaid amendments were duly adopted in
accordance with the applicable provisions of Sections 242 and 216 of the
General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, said Enzon, Inc. has caused this certificate to
be signed by Dr. Abraham Abuchowski, its President, and attested by Leslie
Charmatz, asst. secretary, this 20th day of February, 1987.
By:/S/ ABRAHAM ABUCHOWSKI
Abraham Abuchowski, President
ATTEST:
By: /S/ LESLIE H. CHARMATZ
Leslie H. Charmatz, Assistant Secretary
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
ENZON, INC.
* * * * *
Enzon, Inc., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware, DOES HEREBY
CERTIFY:
FIRST: That the Board of Directors of said Corporation, at a
meeting of its members, adopted a resolution proposing and declaring advisable
the following amendments to the Certificate of Incorporation of said
Corporation:
(a) RESOLVED, that Article 4 of the Certificate of Incorporation
be amended as set forth below:
"4: The total number of shares of capital stock which
the Corporation shall have authority to issue is twenty-one
million (21,000,000) shares, of which twenty million
(20,000,000) shares shall be Common Stock, par value $.01 per
share, and one million (1,000,000) shares shall be Preferred
Stock, par value $.01 per share.
The Preferred Stock may be issued from time to time in
one or more series. The board of Directors of the
Corporation is hereby expressly authorized to provide, by
resolution or resolutions duly adopted by it prior to
issuance, for the creation of each such series and to fix the
designation and the powers, preferences, rights,
qualifications, limitations and restrictions relating to the
shares of each such series. The authority of the Board of
Directors with respect to each series of Preferred Stock
shall include, but not be limited to, determining the
following:
(a) the designation of such series, the number of
shares to constitute such series and the stated value thereof
if different from the par value thereof;
(b) whether the shares of such series shall have
voting rights, in addition to any voting rights provided by
law, and, if so, the terms of such voting rights, which may
be general or limited;
(c) the dividends, if any, payable on such series,
whether any such dividends shall be cumulative, and, if so,
from what dates, the conditions and dates upon which such
dividends shall be payable, and the preference or relation
which such dividends shall bear to the dividends payable on
any shares of stock of any other class or any other series of
Preferred Stock;
(d) whether the shares of such series shall be
subject to redemption by the Corporation, and, if so, the
times, prices and other conditions of such redemption;
(e) the amount or amounts payable upon shares of such
series upon, and the rights of the holders of such series in,
the voluntary or involuntary liquidation, dissolution or
winding up, or upon any distribution of the assets, of the
Corporation;
(f) whether the shares of such series shall be
subject to the operation of a retirement or sinking fund and,
if so, the extent to and manner in which any such retirement
or sinking fund shall be applied to the purchase or
redemption of the shares of such series for retirement or
other corporation purposes and the terms and provisions
relating to the operation thereof;
(g) whether the shares of such series shall be
convertible into, or exchangeable for, shares of stock of any
other class or any other series of Preferred Stock or any
other securities and, if so, the price or prices or the rate
or rates of conversion or exchange and the method, if any, of
adjusting the same, and any other terms and conditions of
conversion or exchange;
(h) the conditions or restrictions, if any, upon the
creation of indebtedness of the Corporation or upon the issue
of any additional stock, including additional shares of such
series or of any other series of Preferred Stock or of any
other class; and
(i) any other powers, preferences and relative,
participating, optional and other special rights, and any
qualifications, limitations and restrictions, thereof.
The powers, preferences and relative, participating,
optional and other special rights of each series of Preferred
Stock, and the qualifications, limitations or restrictions
thereof, if any, may differ from those of any and all other
series at any time outstanding. All shares of any one series
of Preferred Stock shall be identical in all respects with
all other shares of such series, except that shares of any
one series issued at different times may differ as to the
dates from which dividends thereof shall be cumulative.
SECOND: That at an annual meeting of stockholders the holders of a
majority of the outstanding stock entitled to vote thereon voted in favor of
said amendments in accordance with the provisions of Section 216 of the General
Corporation Law of the State of Delaware.
THIRD: That the aforesaid amendments were duly adopted in
accordance with the applicable provisions of Sections 242 and 216 of the
General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, said Enzon, Inc. has caused this certificate to
be signed by Dr. Abraham Abuchowski, President, and attested by Frank Davis,
Secretary, this 2nd day of March, 1988.
By:/S/ ABRAHAM ABUCHOWSKI
Abraham Abuchowski, President
ATTEST:
By: /S/ FRANK DAVIS
Frank Davis, Secretary
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
ENZON, INC.
* * * * *
Enzon, Inc., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Corporation, at a
meeting of its members, unanimously adopted a resolution proposing and
declaring advisable the following amendment to the Certificate of Incorporation
of the Corporation:
RESOLVED, that the first sentence of Article 4 of the Certificate
of Incorporation be amended to read in its entirety as set forth
below:
"4: The total number of shares of capital stock which the
Corporation shall have authority to issue is twenty-two million
(22,000,000) shares, of which twenty million (20,000,000) shares
shall be Common Stock, par value $.01 per share, and two million
(2,000,000) shares shall be Preferred Stock, par value $.01 per
share.
SECOND: That the remainder of Article 4 of the Certificate of
Incorporation of said Corporation shall remain unchanged.
THIRD: That at the Annual Meeting of Stockholders of the
Corporation, the holders of a majority of the outstanding stock entitled to
vote thereon in favor of said amendment in accordance with the provisions of
Section 242 of the General Corporation Law of the State of Delaware.
FOURTH: That the aforesaid amendment was duly adopted in
accordance with the applicable provisions of Section 242 of the General
Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, Enzon, Inc. has caused this certificate to be
signed by Dr. Abraham Abuchowski, President and Chief Executive Officer of the
Corporation, and attested to by John Caruso, Secretary of the Corporation, this
8th day of February, 1990.
By:/S/ ABRAHAM ABUCHOWSKI
ABRAHAM ABUCHOWSKI, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
ATTEST:
By: /S/ JOHN CARUSO
JOHN CARUSO, SECRETARY
<PAGE>
CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RIGHTS OF SERIES A CUMULATIVE CONVERTIBLE
PREFERRED STOCK
OF
ENZON, INC.
ENZON, Inc. (the "Company"), a corporation organized and existing
under the General Corporation Law of the State of Delaware, does hereby certify
that, pursuant to authority conferred upon the Board of Directors of the
Company by the Certificate of Incorporation, as amended, of the Company, and
pursuant to Section 151 of the General Corporation Law of the State of
Delaware, the Board of Directors of the Company at a meeting duly held on March
9, 1990, adopted resolutions providing for the designations, preferences and
relative, participating, optional or other rights, and the qualifications,
limitations or restrictions thereof, of one million one hundred thousand
(1,100,000) shares of Series A Cumulative Convertible Preferred Stock (the
"Preferred Shares") of the Company, as follows:
RESOLVED, that the Preferred Shares shall have the following powers,
designations, preferences and other special rights:
DIVIDENDS. The holders of the Preferred Shares shall be entitled to
an annual dividend of $2.00 per Share (pro-rated for any portion of the
applicable period during which the Preferred Shares are outstanding),
payable semi-annually on December 15 and June 15 of each year, but only
when and if declared by the Board of Directors out of funds legally
available therefor. Dividends on the Preferred Shares shall be
cumulative from and after the date of issuance of such Shares. Dividends
will accrue and accumulate but will not be paid until such time as the
Board of Directors deems it appropriate in light of the Company's then
current financial condition. Any accumulation of dividends on the
Preferred Shares shall not bear interest. No dividends shall be paid or
set apart for payment on the Company's common stock, par value, $.01 per
share (the "Common Stock"), nor shall any distribution be made on the
Common Stock (other than a dividend payable in Common Stock or in any
other class of stock ranking junior to the Preferred Shares), nor shall
any shares of Common Stock be redeemed, retired or otherwise acquired for
valuable consideration unless the Company shall have paid in full, or
made appropriate provision for the payment in full of, all dividends
which have then accumulated on the Preferred Shares. In the event that
the Company does not make cash dividend payments for eight (8)
semi-annual periods from the date of issuance of the Preferred Shares,
any holder of the Preferred Shares may elect, upon written notice to the
Company, to be paid all or any part of such accrued and unpaid dividends,
and any dividends which accrue but are unpaid thereafter, in shares of
the Company's Common Stock. In the event of such an election, the
Company shall, to the extent it may legally do so, issue and deliver to
any holder of Preferred Shares who so elects to be paid its accrued
dividends in Common Stock, within thirty (30) days after the Company's
receipt of such holder's notice to so elect, a certificate or
certificates representing such Common Stock registered in such holder's
name. Accrued and unpaid dividends payable to holders of Preferred
Shares as of the date such holder elects to convert the Preferred Shares
into Common Stock may, at the Company's option, be paid by the Company's
issuance of Common Stock to such holder. In order to exercise its option
to so pay accrued dividends upon conversion of the Preferred Shares the
Company shall so notify the holder of such Preferred Shares, in writing,
within twenty (20) days after such holder's conversion of its Preferred
Shares and shall issue and deliver to such holder, within thirty (30)
days after such holder's conversion of its Preferred Shares, a
certificate or certificates representing such Common Stock registered in
such holder's name. In all cases, the number of shares of Common Stock
to be received in lieu of accrued dividends shall be determined by
dividing the aggregate amount of the accrued and unpaid dividends by the
conversion price of the Preferred Shares in effect on the date of
election. Any accrued dividends paid by the Company's delivery of Common
Stock shall be deemed to be paid in full for all purposes.
CONVERSION OF PREFERRED SHARES. The holders of the Preferred Shares
shall have the right, at their option, to convert such Shares into shares
of Common Stock on the following terms and conditions:
(a) Each Preferred Share shall be convertible at any time
(or, if such Share is called for redemption, at any time up to and
including, but not after, the close of business on the fifth full
business day prior to the date fixed for such redemption, unless
default shall be made by the Company in providing the funds for
the payment of the redemption price), into fully paid and
nonassessable shares (calculated to the nearest whole share) of
Common Stock of the Company as constituted at the time of such
conversion, at the conversion price in effect at the time of
conversion determined as hereinafter provided. Each Preferred
Share shall have a value of $25 for the purpose of such
conversion. Every reference herein to the Common Stock of the
Company (unless a different intention is expressed) shall be to
the shares of the Common Stock of the Company, $.01 par value, as
such stock exists immediately after the issuance of the Preferred
Shares provided for hereunder, or to stock into which such Common
Stock may be changed from time to time thereafter.
(b) Commencing on the date of issuance each Preferred Share
shall be convertible into Common Stock at an initial conversion
price of $7.50 per share of Common Stock until the first
anniversary of issuance, and will thereafter be convertible at a
price calculated on each subsequent anniversary as follows:
Commencing on the first anniversary of issuance, each Preferred
Share will be convertible at a price of $7.875 per share of Common
Stock; commencing on the second anniversary of issuance, each
Preferred Share will be convertible at a price of $8.27 per share
of Common Stock; commencing on the third anniversary of issuance
each Preferred Share will be convertible at a price of $9.10 per
share of Common Stock; commencing on the fourth anniversary of
issuance each Preferred Share will be convertible at a price of
$10.00 per share of Common Stock; and commencing on the fifth
anniversary of issuance and thereafter each Preferred Share will
be convertible at a price of $11.00 per share of Common Stock.
Notwithstanding the foregoing, the initial conversion price set
forth above shall not increase unless and until at the time such
increase was to have occurred, the Company shall have obtained the
effectiveness of the registration of the Common Stock issuable
under the conversion terms set forth above (the "Underlying
Shares") under the Securities Act of 1933, as amended; PROVIDED,
HOWEVER, that such increase in the conversion price shall occur if
the delay in obtaining the effectiveness of such registration was
due to the Purchaser's failure to provide the information or
indemnification required under Section 5 of the Stock Subscription
Agreement dated as of March 20, 1990, on file with the Company;
and, FURTHER PROVIDED, HOWEVER, that in the event of such a delay
in the increase of the conversion price, the conversion price will
increase immediately upon the effectiveness of such registration
of the Underlying Shares to the conversion price which would have
otherwise then been in effect under the terms set forth above.
(c) If at any time, or from time to time, the Company shall
(i) declare and pay, on or in respect of, its Common Stock any
dividend payable in shares of Common Stock or (ii) subdivide the
outstanding shares of Common Stock into a greater number of
shares, or reduce the number of outstanding Preferred Shares by
combining such Shares into a smaller number of Shares, the
conversion price in effect at the time of the taking of a record
for such dividend or the taking of such other action shall be
proportionately decreased as of such time, and conversely (iii) if
at any time, or from time to time, the Company shall reduce the
number of outstanding shares of Common Stock by combining such
shares into a smaller number of shares, or subdivide the
outstanding Preferred Shares into a greater number of Preferred
Shares, the conversion price in effect at the time of the taking
of any such action shall be proportionately increased as of such
time.
(d) If the Company shall consolidate with or merge into any
corporation or reclassify its outstanding shares of Common Stock
(other than by way of subdivision or reduction of such shares),
each Preferred Share shall thereafter be convertible into the
number of shares of stock or other securities or property of the
Company, or of the entity resulting from such consolidation or
merger, to which a holder of the number of shares of Common Stock
delivered upon conversion of such Preferred Share would have been
entitled upon such consolidation or merger or reclassification,
had the holder of such Preferred Share exercised its right of
conversion and had such Common Stock been issued and outstanding
and had such holder been the holder of record of such Common Stock
at the time of such consolidation, merger or reclassification; and
the Company shall make lawful provision therefor as a part of such
consolidation, merger or reclassification.
(e) The Company shall not be required to give effect to any
adjustment in the conversion price unless and until the net effect
of one or more adjustments, determined as above provided, shall
have resulted in a change of the conversion price by at least
$0.50, PROVIDED, HOWEVER, that when the cumulative net effect of
more than one adjustment so determined shall be to change the
conversion price by at least $0.50 such change in the conversion
price shall thereupon be given effect.
(f) Whenever the conversion price is adjusted, as herein
provided, the Company shall promptly deliver to each holder of
Preferred Shares and file with the records of the Company a
statement signed by the Company's Chief Financial Officer setting
forth the adjusted conversion price, determined as so provided.
Such statement shall set forth in reasonable detail such facts as
may be necessary to show the reason for and the manner of
computing such adjustment.
(g) The Company shall not issue any fraction of a share of
Common Stock upon any conversion, but shall pay in cash therefor
at the conversion price then in effect multiplied by such
fraction.
(h) On presentation and surrender to the Company or at any
office or agency maintained for the transfer of the Preferred
Shares of the certificates of Preferred Shares so to be converted,
duly endorsed in blank for transfer or accompanied by proper
instruments of assignment or transfer in blank, with signatures
guaranteed, the holder of such Preferred Shares shall be entitled,
subject to the limitations herein contained, to receive in
exchange therefor a certificate or certificates for fully paid and
nonassessable shares, and cash for fractional shares, of Common
Stock on the foregoing basis. The Preferred Shares shall be
deemed to have been converted and the person converting the same
to have become the holder of record of Common Stock, for the
purpose of receiving dividends and for all other purposes as of
the date when the certificate or certificates for such Preferred
Shares are surrendered to the Company as aforesaid. The Company
shall not be required to make any such conversion, and no
surrender of the Preferred Shares shall be effective for such
purpose, while the books for the transfer of either Preferred
Shares or Common Stock are closed for any purpose, but the
surrender of such Preferred Shares for conversion during any
period while such books are closed shall become effective for all
purposes of conversion immediately upon the reopening of such
books, as if the conversion had been made on the date such
Preferred Shares were surrendered.
(i) The Company shall, so long as any of the Preferred
Shares are outstanding, reserve and keep available out of its
authorized and unissued Common Stock, solely for the purpose of
effecting the conversion of the Preferred Shares, such number of
shares of Common Stock as shall from time to time be sufficient to
effect the conversion of all of the Preferred Shares then
outstanding.
(j) The Company shall pay any and all taxes which may be
imposed upon it with respect to the issuance and delivery of
Common Stock upon the conversion of the Preferred Shares as herein
provided. The Company shall not be required in any event to pay
any transfer or other taxes by reason of the issuance of such
Common Stock in names other than those in which the Preferred
Shares surrendered for conversion are registered on the Company's
records, and no such conversion or issuance of Common Stock shall
be made unless and until the person requesting such issuance has
paid to the Company the amount of any such tax, or has established
to the satisfaction of the Company and its transfer agent, if any,
that such tax has been paid. Upon any conversion of Preferred
Shares as herein provided no adjustment or allowance shall be made
for dividends on the Preferred Shares so converted, and all rights
to dividends which would otherwise accrue subsequent to the date
of conversion, if any, shall cease and be deemed satisfied,
PROVIDED, HOWEVER, that subject to the Company's right to pay
accrued and unpaid dividends by the issuance of Common Stock
discussed above, nothing shall be deemed to relieve the Company
from its obligation to pay any dividends which shall have accrued
but remain unpaid to holders of Preferred Shares of record as of a
date prior to such conversion even though the payment date for
such dividend is subsequent to the date of conversion.
VOTING RIGHTS. Preferred Shares may be voted for the election of
Directors and all other corporate matters upon which the holders of
Common Stock have the right to vote. Each Preferred Share will be
entitled to one vote. Except as otherwise provided herein, for the
purpose of determining a quorum or the vote on any such matters the
Preferred Shares and Common Stock will be deemed to be one class of
voting stock. Holders of Preferred Shares shall have all of the same
rights to receive notice of and call meetings of stockholders as holders
of the Common Stock.
REDEMPTION. The Company may, at any time subsequent to the fifth
anniversary of the issuance thereof, redeem the whole or any part of the
Preferred Shares then outstanding at a redemption price of $25.00 per
Preferred Share, plus in each case a sum equal to all accumulated and
unpaid dividends thereon through the date fixed for redemption, in
accordance with the following redemption procedures:
(a) In case of redemption of only part of the Preferred
Shares at any time outstanding, the Company shall designate the
amount of Preferred Shares so to be redeemed and shall redeem such
Preferred Shares on a PRO RATA basis. Subject to the limitations
and provisions herein contained, the Board of Directors shall have
the power and authority to prescribe the terms and conditions upon
which the Preferred Shares shall be redeemed from time to time.
(b) Notice of every redemption shall be given by mail to
every holder of record of any Preferred Shares then to be
redeemed, at least thirty (30), but no more than ninety (90), days
prior to the date fixed as the date for the redemption thereof, at
the respective addresses of such holders as the same shall appear
on the stock transfer books of the Company. The notice shall
state that the Preferred Shares shall be redeemed by the Company
at the redemption price of $25.00 per share, plus a sum equal to
all accumulated and unpaid dividends thereon through the date
fixed for redemption, upon the surrender for cancellation, at the
time and place designated in such notice, of the certificates
representing the Preferred Shares to be redeemed, properly
endorsed in blank for transfer, or accompanied by proper
instruments of assignment and transfer in blank, with signatures
guaranteed, and bearing all necessary transfer tax stamps thereto
affixed and cancelled. On and after the date specified in the
notice described above, each holder of Preferred Shares called for
redemption shall be entitled to receive therefor the specified
redemption price upon presentation and surrender at the place
designated in such notice of the certificates for Preferred Shares
called for redemption, properly endorsed in blank for transfer or
accompanied by proper instruments of assignment or transfer in
blank, with signatures guaranteed, and bearing all necessary
transfer tax stamps thereto affixed and cancelled.
(c) If the Company shall give notice of redemption as
aforesaid (and unless the Company shall fail to pay the redemption
price of the Preferred Shares presented for redemption in
accordance with such notice), all Preferred Shares called for
redemption shall be deemed to have been redeemed on the date
specified in such notice, whether or not the certificates for such
Preferred Shares shall be surrendered for redemption, and such
Preferred Shares so called for redemption shall from and after
such date cease to represent any interest whatsoever in the
Company or its property, and the holders thereof shall have no
rights other than the right to receive such redemption price
without any interest thereon from and after such date.
(d) Notwithstanding the foregoing, if such notice of
redemption shall have been duly given as herein provided in this
section or if the Company shall have given to a bank or trust
company irrevocable authorization to give or complete such notice
as herein provided, and if prior to the redemption date specified
in such notice the funds necessary for such redemption shall have
been deposited by the Company with a bank or trust company in good
standing, organized under the laws of the United States of America
or the State of New York, and having capital, surplus and
undivided profits aggregating at least $50,000,000 according to
its last published statement of condition, in trust to be applied
to the redemption of the Preferred Shares called for redemption,
and such notice shall state that such deposit has taken place and
the date thereof, then notwithstanding that any certificate for
such Preferred Shares shall not have been surrendered for
redemption, from and after the time of such deposit all such
Preferred Shares so called for redemption shall no longer be
deemed to be outstanding and all rights with respect to such
Preferred Shares shall forthwith cease and terminate, except only
the right of the holders thereof to receive from such bank or
trust company at any time after the time of such deposit the funds
so deposited, without interest, and the right of the holders
thereof to convert the Preferred Shares as discussed above. Any
funds so set aside or deposited, as the case may be, and unclaimed
one day prior to the end of three (3) years from such redemption
date shall be released or repaid to the Company, after which the
holders of the Preferred Shares called for redemption shall look
only to the Company for payment thereof. Any interest accrued on
any funds so deposited shall be paid to the Company from time to
time; and no such holder shall have any right thereto.
LIQUIDATION, DISSOLUTION, WINDING UP. In the event of any
voluntary or involuntary liquidation, dissolution or winding up of the
Company, the holders of the Preferred Shares shall be entitled to receive
in cash out of the assets of the Company, whether from capital or from
earnings, available for distribution to its stockholders, before any
amount shall be paid to the holders of the Common Stock, the sum of $25
per Preferred Share, plus an amount equal to all accumulated and unpaid
dividends thereon through the date fixed for payment of such distributive
amount. The purchase or redemption by the Company of stock of any class,
in any manner permitted by law, shall not, for the purposes hereof, be
regarded as a liquidation, dissolution or winding up of the Company.
Neither the consolidation nor merger of the Company with or into any
other corporation or corporations, nor the sale or transfer by the
Company of all or any part of its assets, shall, for the purposes hereof,
be deemed to be a liquidation, dissolution or winding up of the Company.
No holder of Preferred Shares shall be entitled to receive any amounts
with respect thereto upon any liquidation, dissolution or winding up of
the Company other than the amounts provided for herein.
PREFERRED RANK. All shares of Common Stock shall be of junior rank
to all Preferred Shares in respect of the preferences as to dividends,
distributions and payments upon the liquidation, dissolution or winding
up of the Company. The rights of the shares of Common Stock shall be
subject to the preferences and relative rights of the Preferred Shares.
Notwithstanding the foregoing, the Company may authorize and issue
additional or other preferred stock which is of equal rank with the
Preferred Shares in respect of the preferences as to dividends,
distributions and payments upon the liquidation, dissolution or winding
up of the Company; PROVIDED, HOWEVER, that for so long as the Preferred
Shares remain outstanding the Company shall not issue any capital stock
which is more senior in rank than the Preferred Shares in respect of the
foregoing preferences or which shall have greater voting rights than the
Preferred Shares. In the event of a merger or consolidation of the
Company with or into another corporation, the Preferred Shares shall
maintain their relative powers, designations and preferences provided for
herein.
VOTE TO CHANGE PREFERRED SHARES. The affirmative vote at a meeting
duly called for such purpose or the written consent without a meeting of
the holders of not less than two-thirds (66 2/3%) of the then outstanding
Preferred Shares shall be required to amend, alter, change or repeal any
of the powers, designations, preferences and rights of the Preferred
Shares.
IN WITNESS WHEREOF, the Company has caused this certificate to be
signed by Abraham Abuchowski, its Chief Executive Officer and President, and
John Caruso, its Secretary, this 21st day of March, 1990.
ENZON, INC.
By:/S/ ABRAHAM ABUCHOWSKI
Abraham Abuchowski, Chief
Executive Officer and President
ATTEST:
By: /S/JOHN CARUSO
John Caruso, Secretary
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
ENZON, INC.
* * * * *
Enzon, Inc., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Corporation, at a
meeting of its members, unanimously adopted a resolution proposing and
declaring advisable the following amendment to the Certificate of Incorporation
of the Corporation:
RESOLVED, that the first sentence of Article 4 of the Certificate
of Incorporation be amended to read in its entirety as set forth
below:
"4: The total number of shares of capital stock which the
Corporation shall have authority to issue is thirty-three million
(33,000,000) shares, of which thirty million (30,000,000) shares
shall be Common Stock, par value $.01 per share, and three million
(3,000,000) shares shall be Preferred Stock, par value $.01 per
share."
SECOND: That the remainder of Article 4 of the Certificate of
Incorporation of said Corporation shall remain unchanged.
THIRD: That at the Annual Meeting of Stockholders of the
Corporation, the holders of a majority of the outstanding stock entitled to
vote thereon and a majority of the outstanding stock of each class entitled to
vote thereon as a class voted in favor of said amendment in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
FOURTH: That the aforesaid amendment was duly adopted in
accordance with the applicable provisions of Section 242 of the General
Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, Enzon, Inc. has caused this certificate to be
signed by Abraham Abuchowski, President and Chief Executive Officer of the
Corporation, and attested to by John Caruso, Secretary of the Corporation, this
17 day of January, 1991.
By:/S/ ABRAHAM ABUCHOWSKI
ABRAHAM ABUCHOWSKI, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
ATTEST:
By: /S/ JOHN CARUSO
JOHN CARUSO, SECRETARY
<PAGE>
AMENDMENT TO CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RIGHTS OF SERIES A CUMULATIVE CONVERTIBLE
PREFERRED STOCK
OF ENZON, INC.
ENZON, Inc. (the "Company"), a corporation organized and existing
under the General Corporation Law of the State of Delaware, does hereby certify
that, pursuant to Section 242 of the Delaware General Corporation Law and the
authority conferred upon the holders of the Company's Series A Cumulative
Convertible Preferred Stock (the "Series A Preferred Stock") pursuant to the
Certificate of Designations, Preferences and Rights of Series A Cumulative
Convertible Preferred Stock filed with the Secretary of State of the State of
Delaware on March 22, 1990 (the "Certificate of Designations"), in excess of 66
2/3% of the holders of the Series A Preferred Stock pursuant to a Written
Consent of such holders dated December 16, 1992, adopted a resolution providing
for an addition to the voting rights section at the end of the Certificate of
Designations as follows:
In addition to the voting rights currently possessed by the holders
of the Series A Preferred Stock, if and whenever at any time or times dividends
payable on the Company's Convertible Exchangeable Preferred Stock (the
"Convertible Preferred Stock") shall have been in arrears and unpaid in an
aggregate amount equal to or exceeding any amount of dividends payable thereon
for six full quarterly periods, then the holders of the Convertible Preferred
Stock, the Series A Preferred Stock and of any parity preferred stock having
similar voting rights then exercisable shall have the exclusive right, voting
as a single class without regard to series, to elect two directors of the
Corporation, such directors to be in addition to the number of directors
constituting the board immediately prior to the accrual of that right. The
remaining directors shall be elected in accordance with the provisions of the
Corporation's Certificate of Incorporation and By-Laws by the other class or
classes of stock entitled to vote therefor at each meeting of stockholders held
for the purpose of electing directors. Such voting right of the Series A
Preferred Stock shall continue until such time as all cumulative dividends
accumulated on the Convertible Preferred Stock shall have been paid in full at
which time such voting right of the holders of the Series A Preferred Stock
shall terminate, subject to revesting in accordance with the provisions of the
first sentence of this subparagraph in the event of each
IN WITNESS WHEREOF, the Company has caused this certificate to be
signed by its President and attested to be its Secretary this 16th day of
December 1992.
ENZON, INC.
By: /S/ ABRAHAM ABUCHOWSKI
Abraham Abuchowski
President and
Chief Executive Officer
ATTEST:
By: /S/ JOHN CARUSO
John Caruso, Secretary
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
ENZON, INC.
* * * * * * * * *
Enzon, Inc., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Corporation, at a meeting
of its members, unanimously adopted a resolution proposing and declaring
advisable the following amendment to the Certificate of Incorporation of the
Corporation:
RESOLVED, that the first sentence of Article 4 of the Certificate
of Incorporation be amended to read in its entirety as set forth
below:
"4: The total number of shares of capital stock which the
Corporation shall have authority to issue is forty-three million
(43,000,000) shares, of which forty million (40,000,000) shares
shall be Common Stock, par value $.01 per share, and three million
(3,000,000) shares shall be Preferred Stock, par value $.01 per
share".
SECOND: That the remainder of Article 4 of the Certificate of
Incorporation of said Corporation shall remain unchanged.
THIRD: That at the Annual Meeting of Stockholders of the
Corporation, the holders of a majority of the outstanding stock entitled to
vote thereon and a majority of the outstanding stock of each class entitled to
vote thereon as a class voted in favor of said amendment in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
FOURTH: That the aforesaid amendment was duly adopted in accordance
with the applicable provisions of Section 242 of the General Corporation law of
the State of Delaware.
IN WITNESS WHEREOF, Enzon, Inc. has caused this certificate to be
signed by Abraham Abuchowski, President and Chief Executive Officer of the
Corporation, and attested to by John A. Caruso, Secretary of the Corporation,
this 17th day of February, 1993.
By:/S/ ABRAHAM ABUCHOWSKI
ABRAHAM ABUCHOWSKI, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
ATTEST:
By:/S/ JOHN A. CARUSO
JOHN A. CARUSO, SECRETARY
<PAGE>
CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RIGHTS OF SERIES B CONVERTIBLE
PREFERRED STOCK
OF
ENZON, INC.
ENZON, Inc. (the "COMPANY"), a corporation organized and existing under
the General Corporation Law of the State of Delaware, does hereby certify that,
pursuant to authority conferred upon the Board of Directors of the Company by
the Certificate of Incorporation, as amended, of the Company, and pursuant to
Section 151 of the General Corporation Law of the State of Delaware, the Board
of Directors of the Company at a meeting duly held on January 31, 1996, adopted
resolutions providing for the designations, preferences and relative,
participating, optional or other rights, and the qualifications, limitations or
restrictions thereof, of forty thousand (40,000) shares of Series B Convertible
Preferred Stock (the "SERIES B PREFERRED SHARES") of the Company, as follows:
RESOLVED, that the Company is authorized to issue 40,000 shares of
Series B Convertible Preferred Stock (the "SERIES B PREFERRED
SHARES") which shall have the following powers, designations,
preferences and other special rights:
(1) DIVIDENDS. The holders of the Series B Preferred
Shares shall not be entitled to dividends.
(2) CONVERSION OF SERIES B PREFERRED SHARES. The holders
of the Series B Preferred Shares shall have the right, at their
option, to convert the Series B Preferred Shares into shares of
Common Stock on the following terms and conditions:
(a) Each Preferred Share shall be convertible at any
time after seventy (70) days after the date of issuance (or, if
such Series B Preferred Share is called for redemption, at any time
up to and including, but not after, the close of business on the
fifth full business day prior to the date fixed for such
redemption, unless default shall be made by the Company in
providing the funds for the payment of the redemption price), into
fully paid and nonassessable shares (calculated to the nearest
whole share) of Common Stock of the Company as constituted at the
time of such conversion, at the conversion price (the "CONVERSION
PRICE") in effect at the time of conversion determined as
hereinafter provided; PROVIDED, HOWEVER, that in no event shall any
holder be entitled to convert Series B Preferred Shares if, after
giving effect to such conversion, the number of shares of Common
Stock purchased pursuant to the Securities Purchase Agreement dated
January 31, 1996 by and among the Company and certain investors
(the "SECURITIES PURCHASE AGREEMENT") set forth therein providing
for the purchase of Common Stock, the Series B Preferred Shares and
Warrants or issued on exercise of such Warrants, or conversion of
Series B Preferred Shares and beneficially owned by such holder and
all other holders whose holdings would be aggregated with such
holder for purposes of calculating beneficial ownership in
accordance with Sections 13(d) and 16 of the Securities Exchange
Act of 1934, as amended, and the regulations thereunder ("SECTIONS
13(D) AND 16"), including, without limitation, any person serving
as an adviser to any holder (collectively, the "RELATED PERSONS"),
would exceed four and nine-tenths percent (4.9%) of the outstanding
shares of Common Stock (calculated in accordance with Sections
13(d) and 16). Common Stock issuable upon conversion of Series B
Preferred Shares or exercise of the warrants for the purchase of
Common Stock held by such holder or the Related Persons shall not
be deemed to be beneficially owned by such holder or the Related
Persons for this purpose. Each Preferred Share shall have a value
of $100 (the "STATED VALUE") for the purpose of such conversion and
the number of shares of Common Stock issuable upon conversion of
each of the Series B Preferred Shares shall be determined by
dividing the Stated Value thereof by the Conversion Price then in
effect. Every reference herein to the COMMON STOCK of the Company
(unless a different intention is expressed) shall be to the shares
of the Common Stock of the Company, $.01 par value, as such stock
exists immediately after the issuance of the Series B Preferred
Shares provided for hereunder, or to stock into which such Common
Stock may be changed from time to time thereafter.
(b) The Conversion Price shall be eighty percent
(80%) (the "CONVERSION PERCENTAGE") of the Average Market Price (as
defined below) for the Common Stock for the five (5) consecutive
trading days ending one trading day prior to the date the
Conversion Notice (as defined below) is received by the Company,
subject to adjustment as provided herein. If the registration
statement (the "REGISTRATION STATEMENT") covering the shares of
Common Stock issuable upon conversion of the Series B Preferred
Shares required to be filed by the Company pursuant to the
Registration Rights Agreement between the Company and initial
holders of the Series B Preferred Shares (the "REGISTRATION RIGHTS
AGREEMENT") has not been declared effective by the U.S. Securities
and Exchange Commission ("SEC") within ninety (90) days after the
date of issuance of the Series B Preferred Shares, or if, after the
Registration Statement has been declared effective by the SEC,
sales cannot be made pursuant to the Registration Statement by
reason of stop order, the Company's failure to update the
Registration Statement or otherwise, or if the Common Stock is not
listed or included for quotation on the National Association of
Securities Dealers Automated Quotation ("NASDAQ") National Market
System (the "NASDAQ-NMS"), the New York Stock Exchange (the
"NYSE"), the American Stock Exchange (the "AMEX"), or the NASDAQ
SmallCap Market (the "NASDAQ SMALLCAP") then, as partial relief for
the damages to the holder by reason of any such delay in or
reduction of its ability to sell the shares of Common Stock (which
remedy shall not be exclusive of any other remedies available at
law or in equity, except that such remedy shall be the exclusive
remedy for any delay in the effectiveness of the Registration
Statement provided the Registration Statement is declared effective
by the SEC within 180 days after the date of issuance of the Series
B Preferred Shares), the Conversion Percentage shall be reduced by
a number of percentage points equal to three (3) times the sum of:
(i) the number of months (prorated for partial months) after the
end of such 90 day period and prior to the date the Registration
Statement is declared effective by the SEC, provided, however, that
there shall be excluded from such period (and from any period under
clause (ii) immediate below) delays which are attributable to
changes in the Registration Statement required by the Investors (as
that term is defined in the Registration Rights Agreement),
including, without limitation, changes in the plan of distribution;
(ii) the number of months (prorated for partial months) that sales
cannot be made pursuant to the Registration Statement (by reason of
stop order, the Company's failure to update the Registration or
otherwise) after the Registration Statement has been declared
effective; and (iii) the number of months (prorated for partial
months) that the Common Stock is not listed or included for
quotation on the NASDAQ-NMS, NYSE, AMEX, or NASDAQ SmallCap after
the Registration Statement has been declared effective; provided
that the aggregate number of months that are the basis of a
reduction in the Conversion Percentage pursuant to the foregoing
clauses (i), (ii) and (iii) shall not exceed twelve (12). (For
example, if the Registration Statement becomes effective one and
one-half (1 1/2 ) months after the end of such 90 day period, the
Conversion Percentage would be 75.5% until any subsequent
adjustment; if thereafter sales could not be made pursuant to the
Registration Statement for a period of two (2) months, the
Conversion Percentage would then be 69.5%.) If the holder converts
Series B Preferred Shares into Common Stock and an adjustment to
the Conversion Percentage is required subsequent to such
conversion, but prior to the sale of such Common Stock by such
holder, the Company shall pay to such holder, within five (5) days
after receipt of a notice of the sale of such Common Stock from
such holder, an amount equal to the Average Market Price of the
Common Stock obtained upon conversion of such Series B Preferred
Shares for the five (5) trading days ending one (1) trading day
prior to the date of conversion multiplied by three-hundredths
(.03) times the number of months (prorated for partial months) for
which an adjustment was required; provided that the aggregate
number of months for which such an adjustment is required (when
added to the number of months for which an adjustment is made
pursuant to clauses (i), (ii) and (iii) above) shall not exceed
twelve (12). Such amount may be paid at the Company's option in
cash or Common Stock valued based on the Average Market Price of
the Common Stock for the period of five (5) consecutive trading
days ending on the date of the sale of such Common Stock; PROVIDED,
HOWEVER, that any amounts due as to that period during which the
shares are not traded or included for quotation on the NASDAQ-NMS,
NYSE, AMEX or NASDAQ SmallCap shall be paid in cash only; PROVIDED,
FURTHER, HOWEVER, that in no event shall shares be issued hereunder
if, after giving effect to such issuance, the number of shares of
Common Stock purchased pursuant to the Securities Purchase
Agreement or issued on exercise of the Warrants or conversion of
the Series B Preferred Shares and beneficially owned by such holder
and all Related Persons would exceed four and nine-tenths percent
(4.9%) of the outstanding shares of Common Stock (calculated in
accordance with Sections 13(d) and 16; cash shall be paid in lieu
of any shares which cannot be issued pursuant to this second
proviso. Common Stock issuable upon conversion of Series B
Preferred Shares or exercise of the warrants for the purchase of
Common Stock held by such holder or the Related Persons shall not
be deemed to be beneficially owned by such holder or the Related
Persons for this purpose. (For example, if the Conversion
Percentage was 75.5% at the time of conversion of $1,000,000 in
Stated Value of Series B Preferred Shares (such that the Series B
Preferred Shares were converted into Common Stock having an Average
Market Price for the applicable period in aggregate of $1,324,503)
and subsequent to conversion there was a further two (2) month
delay in the Registration Statement's being declared effective, and
such Common Stock was sold at the end of such two (2) month period,
the Company would pay to the holder $79,470.20 in cash or Common
Stock.)
"AVERAGE MARKET PRICE" of any security for any period
shall be computed as the arithmetic average of the closing bid
prices for such security for each trading day in such period on the
NASDAQ-NMS, or, if the NASDAQ-NMS is not the principal trading
market for such security, on the principal trading market for such
security, or, if market value cannot be calculated for such period
on any of the foregoing bases, the average fair market value during
such period as reasonably determined in good faith by the Board of
Directors of the Company.
(c) If the Company shall consolidate with or merge
into any corporation or reclassify its outstanding shares of Common
Stock (other than by way of subdivision or reduction of such
shares) (each a "MAJOR TRANSACTION"), then each Series B Preferred
Share shall thereafter be convertible into the number of shares of
stock or securities (the "RESULTING SECURITIES") or property of the
Company, or of the entity resulting from such consolidation or
merger, to which a holder of the number of shares of Common Stock
delivered upon conversion of such Series B Preferred Share would
have been entitled upon such Major Transaction had the holder of
such Series B Preferred Share exercised its right of conversion and
had such Common Stock been issued and outstanding and had such
holder been the holder of record of such Common Stock at the time
of such Major Transaction, and the Company shall make lawful
provision therefor as a part of such consolidation, merger or
reclassification; PROVIDED, HOWEVER, that the Company shall give
the holders of the Series B Preferred Shares written notice of any
Major Transaction promptly upon the execution of any agreement
whether or not binding in connection therewith (including without
limitation a letter of intent or agreement in principle) and in no
event shall a Major Transaction be consummated prior to ninety (90)
days after such notice.
(d) The Company shall not issue any fraction of a
share of Common Stock upon any conversion, but shall pay in cash
therefor at the Conversion Price then in effect multiplied by such
fraction.
(e) On presentation and surrender to the Company (or
at any office or agency maintained for the transfer of the Series B
Preferred Shares) of the certificates of Series B Preferred Shares
so to be converted, duly endorsed in blank for transfer or
accompanied by proper instruments of assignment or transfer in
blank (a "CONVERSION NOTICE"), with signatures guaranteed, the
holder of such Series B Preferred Shares shall be entitled, subject
to the limitations herein contained, to receive in exchange
therefor a certificate or certificates for fully paid and
nonassessable shares, which certificates shall be delivered by the
second trading day after the date of delivery of the Conversion
Notice, and cash for fractional shares, of Common Stock on the
foregoing basis. The Series B Preferred Shares shall be deemed to
have been converted, and the person converting the same to have
become the holder of record of Common Stock, for all purposes as of
the date of delivery of the Conversion Notice.
(f) The Company shall, so long as any of the Series B
Preferred Shares are outstanding, reserve and keep available out of
its authorized and unissued Common Stock, solely for the purpose of
effecting the conversion of the Series B Preferred Shares, such
number of shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all of the Series B
Preferred Shares then outstanding.
(g) The Company shall pay any and all taxes which may
be imposed upon it with respect to the issuance and delivery of
Common Stock upon the conversion of the Series B Preferred Shares
as herein provided. The Company shall not be required in any event
to pay any transfer or other taxes by reason of the issuance of
such Common Stock in names other than those in which the Series B
Preferred Shares surrendered for conversion are registered on the
Company's records, and no such conversion or issuance of Common
Stock shall be made unless and until the person requesting such
issuance has paid to the Company the amount of any such tax, or has
established to the satisfaction of the Company and its transfer
agent, if any, that such tax has been paid.
(3) VOTING RIGHTS. Holders of Series B Preferred Shares
shall have no voting rights, except as required by law and by
Section 7 hereof.
(4) REDEMPTION. The Company may, but shall not be
obligated to, at any time subsequent to ninety (90) days after the
issuance of the Series B Preferred Shares, redeem the whole or any
part of the Series B Preferred Shares then outstanding at a
redemption price of $127 per Preferred Share, in accordance with
the following redemption procedures:
(a) In case of redemption of only part of the Series
B Preferred Shares at any time outstanding, the Company shall
designate the amount of Series B Preferred Shares so to be redeemed
and shall redeem such Series B Preferred Shares on a PRO RATA
basis. Subject to the limitations and provisions herein contained,
the Board of Directors shall have the power and authority to
prescribe the terms and conditions upon which the Series B
Preferred Shares shall be redeemed from time to time.
(b) Notice of every redemption shall be given by mail
to every holder of record of any Series B Preferred Shares then to
be redeemed, at least thirty (30), but no more than ninety (90),
days prior to the date fixed as the date for the redemption
thereof, at the respective addresses of such holders as the same
shall appear on the stock transfer books of the Company. The
notice shall state that the Series B Preferred Shares shall be
redeemed by the Company at the redemption price specified above,
upon the surrender for cancellation, at the time and place
designated in such notice, of the certificates representing the
Series B Preferred Shares to be redeemed, properly endorsed in
blank for transfer, or accompanied by proper instruments of
assignment and transfer in blank, with signatures guaranteed, and
bearing all necessary transfer tax stamps thereto affixed and
cancelled. On and after the date specified in the notice described
above, each holder of Series B Preferred Shares called for
redemption shall be entitled to receive therefor the specified
redemption price upon presentation and surrender at the place
designated in such notice of the certificates for Series B
Preferred Shares called for redemption, properly endorsed in blank
for transfer or accompanied by proper instruments of assignment or
transfer in blank, with signatures guaranteed, and bearing all
necessary transfer tax stamps thereto affixed and cancelled.
(c) If the Company shall give notice of redemption as
aforesaid (and unless the Company shall fail to pay the redemption
price of the Series B Preferred Shares presented for redemption in
accordance with such notice), all Series B Preferred Shares called
for redemption shall be deemed to have been redeemed on the date
specified in such notice, whether or not the certificates for such
Series B Preferred Shares shall be surrendered for redemption, and
such Series B Preferred Shares so called for redemption shall from
and after such date cease to represent any interest whatsoever in
the Company or its property, and the holders thereof shall have no
rights other than the right to receive such redemption price
without any interest thereof from and after such date.
(5) LIQUIDATION, DISSOLUTION, WINDING UP. In the event of
any voluntary or involuntary liquidation, dissolution or winding up
of the Company, the holders of the Series B Preferred Shares shall
be entitled to receive in cash out of the assets of the Company,
whether from capital or from earnings, available for distribution
to its stockholders (the "PREFERRED FUNDS"), before any amount
shall be paid to the holders of the Common Stock, an amount equal
to the Stated Value per Series B Preferred Share, provided that, if
the Preferred Funds are insufficient to pay the full amount due to
the holders of Series B Preferred Shares and holders of shares of
other classes or series of preferred stock of the Company that are
of equal rank with the Series B Preferred Shares as to payments of
Preferred Funds (the "PARI PASSU SHARES"), then each holder of
Series B Preferred Shares and Pari Passu Shares shall receive a
percentage of the Preferred Funds equal to the full amount of
Preferred Funds payable to such holder as a percentage of the full
amount of Preferred Funds payable to all holders of Series B
Preferred Shares and Pari Passu Shares. The purchase or
redemption by the Company of stock of any class, in any manner
permitted by law, shall not, for the purposes hereof, be regarded
as a liquidation, dissolution or winding up of the Company.
Neither the consolidation nor merger of the Company with or into
any other corporation or corporations, nor the sale or transfer by
the Company of less than substantially all of its assets, shall,
for the purposes hereof, be deemed to be a liquidation, dissolution
or winding up of the Company. No holder of Series B Preferred
Shares shall be entitled to receive any amounts with respect
thereto upon any liquidation, dissolution or winding up of the
Company other than the amounts provided for herein.
(6) PREFERRED RANK. All shares of Common Stock shall be of
junior rank to all Series B Preferred Shares in respect to the
preferences as to distributions and payments upon the liquidation,
dissolution or winding up of the Company. The rights of the shares
of Common Stock shall be subject to the preferences and relative
rights of the Series B Preferred Shares. The Series B Preferred
Shares shall be of equal rank with the Company's Series A
Cumulative Convertible Preferred Stock in respect of distributions
and payments upon the liquidation, dissolution or winding up of the
Company. Notwithstanding the foregoing, the Company may authorize
and issue additional or other preferred stock which is of equal or
junior rank with the Series B Preferred Shares in respect of the
preferences as to distributions and payments upon the liquidation,
dissolution or winding up of the Company; PROVIDED, HOWEVER, that
for so long as the Series B Preferred Shares remain outstanding the
Company shall not issue any capital stock which is more senior in
rank than the Series B Preferred Shares in respect of the foregoing
preferences. In the event of the merger or consolidation of the
Company with or into another corporation, the Series B Preferred
Shares shall maintain their relative powers, designations and
preferences provided for herein.
(7) VOTE TO CHANGE THE TERMS OF SERIES B PREFERRED SHARES.
The affirmative vote at a meeting duly called for such purpose or
the written consent without a meeting of the holders of not less
than two-thirds (2/3) of the then outstanding Series B Preferred
Shares shall be required to amend, alter, change or repeal any of
the powers, designations, preferences and rights of the Series B
Preferred Shares.
IN WITNESS WHEREOF, the Company has caused this certificate to be signed
by Peter G. Tombros, its President, and John A. Caruso, its Secretary, this
31st day of January 1996.
ENZON, INC.
By:/S/ PETER G. TOMBROS
President
Attest:/S/ JOHN A. CARUSO
Secretary
<PAGE>
STOCK PURCHASE AGREEMENT
AGREEMENT dated as of June 30, 1995 by and between ENZON, INC., a
Delaware corporation, with offices at 20 Kingsbridge Road, Piscataway, New
Jersey 08854 ("Seller" or "Company") and SCHERING CORPORATION, a New Jersey
corporation with offices at 2000 Galloping Hill Road, Kenilworth, New Jersey
07003 ("Purchaser").
W I T N E S S E T H:
WHEREAS, Purchaser desires hereby to make an equity investment in
Seller on the terms and conditions hereinafter set forth; and
WHEREAS, Seller desires Purchaser to make such an investment.
NOW, THEREFORE, in consideration of the mutual covenants and
conditions contained herein, the parties hereto agree as follows:
SECTION 1. PURCHASE AND SALE OF THE SHARES.
1.1 PURCHASE AND SALE. Subject to and upon the terms and
conditions of this Agreement, Seller agrees to sell to Purchaser, and Purchaser
agrees to purchase from Seller, on the Closing Date (as defined in Section 8.1)
hereof, that number of shares (the "Shares") of the Seller's $.01 par value
common stock (the "Common Stock") equal to the quotient of (i) $2,000,000,
divided by (ii) the Per Share Purchase Price (as defined in Section 1.2).
1.2 PURCHASE PRICE. The per share purchase price (the "Per Share
Purchase Price") for the Shares shall be the average of the last reported sale
price of the Common Stock during the period commencing on May 18, 1995 and
ending on June 28, 1995, as reported by the National Association of Securities
Dealers Automated Quotation National Market System ("NASDAQ") (adjusted for
stock splits, recapitalizations or similar events). The aggregate purchase
price for the Shares shall be $2,000,000 (the "Purchase Price").
1.3 PAYMENT AT CLOSING AND DELIVERY OF SHARES. On the Closing
Date, Purchaser shall pay to Seller the Purchase Price for the Shares in
immediately available funds by either bank or cashier's check or wire transfer
to an account designated by the Seller. Simultaneously therewith, Seller shall
deliver to Purchaser certificates representing the Shares.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller hereby represents and warrants to Purchaser as follows:
2.1 ORGANIZATION AND QUALIFICATION. Each of the Seller and its
subsidiaries is a corporation duly organized and existing in good standing
under the laws of the jurisdiction in which it is incorporated, except, in the
case of such subsidiaries, as would not have a Material Adverse Effect (as
defined below), and has the requisite corporate power to own its properties and
to carry on its business as now being conducted. Each of the Seller and its
subsidiaries is duly qualified as a foreign corporation to do business and is
in good standing in every jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary and where
the failure so to qualify would have a Material Adverse Effect. "Material
Adverse Effect" means any material adverse effect on the operations, properties
or financial condition of the Seller and its subsidiaries taken as a whole.
2.2 AUTHORIZATION; ENFORCEMENT. (i) The Seller has the requisite
corporate power and authority to enter into and perform this Agreement and to
issue the Shares in accordance with the terms hereof, (ii) the execution and
delivery of this Agreement by the Seller and the consummation by it of the
transactions contemplated hereby have been duly authorized by the Seller's
Board of Directors and no further consent or authorization of the Seller or its
Board of Directors or stockholders is required, (iii) this Agreement has been
duly executed and delivered by the Seller, and (iv) this Agreement constitutes
a valid and binding obligation of the Seller enforceable against the Seller in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally the enforcement of creditors'
rights and remedies or by other equitable principles of general application.
2.3 CAPITALIZATION. As of March 31, 1995, the authorized capital
stock of the Seller consisted of (i) 40,000,000 shares of Common Stock of which
25,481,385 shares were issued and outstanding and (ii) 3,000,000 shares of
Preferred Stock $.01 par value, of which 109,000 shares designated as Series A
Cumulative Convertible Preferred Stock (the "Preferred Stock"), were issued and
outstanding. All of such outstanding shares have been validly issued and are
fully paid and nonassessable. No shares of Common Stock or Preferred Stock are
entitled to preemptive rights. Except as disclosed in SCHEDULE 2.3, as of
March 31, 1995, there are no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Seller or any of its subsidiaries, or arrangements by which the Seller or any
of its subsidiaries is or may become bound to issue additional shares of
capital stock of the Seller or any of its subsidiaries or options, warrants,
scrip, rights to subscribe to, or commitments to purchase or acquire, any
shares, or securities or rights convertible into shares, of capital stock of
the Seller or any of its subsidiaries. The Seller has furnished to the
Purchaser true and correct copies of the Seller's Certificate of Incorporation
as in effect on the date hereof ("Certificate of Incorporation") and the
Seller's By-laws as in effect on the date hereof (the "By-laws").
2.4 ISSUANCE OF SHARES. The Shares are duly authorized and when
paid for in accordance with the terms hereof shall be validly issued, fully
paid and non-assessable and, based in part on the representations of Purchaser
contained in Sections 3 and 4 of this Agreement, will be issued to Purchaser in
compliance with all applicable Federal and State securities laws.
2.5 NO CONFLICTS. The execution, delivery and performance of
this Agreement by the Seller and the consummation by the Seller of the
transactions contemplated thereby do not (i) result in a violation of the
Seller's Certificate of Incorporation or By-laws, or (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which the Seller or any of its subsidiaries is a party, or to the
best knowledge of Seller, result in a violation of any law, rule, regulation,
order, judgment or decree (including Federal and state securities laws and
regulations) applicable to the Seller, any of its subsidiaries or by which any
property or asset of the Seller or any of its subsidiaries is bound or affected
(except for such conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations as would not, individually or in the aggregate,
have a Material Adverse Effect). To the best of Seller's knowledge, the
businesses of the Seller and its subsidiaries are not being conducted, in
violation of any law, ordinance or regulation of any governmental entity,
except for possible violations which either singly or in the aggregate do not
have a Material Adverse Effect. Except as required under the Securities Act of
1933, as amended (the "Securities Act") and any applicable state securities
laws, the Seller is not required to obtain any consent, authorization or order
of, or make any filing or registration with, any court or governmental agency
in order for it to execute, deliver or perform any of its obligations under
this Agreement or issue the Shares, and sell the Shares in accordance with the
terms hereof.
2.6 SEC DOCUMENTS, FINANCIAL STATEMENTS. The Seller has filed
all reports, schedules, forms, statements and other documents required to be
filed by it with the Securities and Exchange Commission (the "SEC") pursuant to
the reporting requirements of the Securities Exchange Act of 1934 (the
"Exchange Act"), except that the Company inadvertently did not file a Financial
Data Schedule to its Quarterly Report on Form 10-Q for the quarter ended March
31, 1995 which it intends to file as soon as reasonably practicable by
amendment to such Form 10-Q (all of the foregoing filed during the period
commencing on January 1, 1993 and ending as of the date hereof and all exhibits
included therein and financial statements and schedules thereto and documents
(other than exhibits) incorporated by reference therein, being hereinafter
referred to herein as the "SEC Documents"). The Seller has delivered to the
Purchaser true and complete copies of the SEC Documents, except for such
exhibits, schedules and incorporated documents. As of their respective dates,
the SEC Documents complied in all material respects with the requirements of
the Exchange Act and the rules and regulations of the SEC promulgated
thereunder applicable to such SEC Documents, and none of the SEC Documents, at
the time they were filed with the SEC, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. As of their
respective dates, the financial statements of the Seller included in the SEC
Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto. Such financial statements have been prepared in accordance
with generally accepted accounting principles applied on a consistent basis
during the periods involved (except (i) as may be otherwise indicated in such
financial statements or the notes thereto or (ii) in the case of unaudited
interim statements, to the extent they may not include footnotes or may be
condensed or summary statements) and fairly present in all material respects
the consolidated financial position of the Seller and its consolidated
subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments).
2.7 ABSENCE OF UNDISCLOSED LIABILITIES. Except as disclosed in
SCHEDULE 2.7, the Seller and its subsidiaries do not have any "Undisclosed
Liabilities." For purposes hereof, "Undisclosed Liabilities" shall mean any
and all liabilities or obligations (whether absolute, accrued, contingent or
otherwise), which are neither (i) accrued or reserved against in the Seller's
financial statements contained in the SEC Documents or reflected in the notes
thereto, (ii) reflected or disclosed in any other Schedule furnished under and
referred to in this Agreement, or (iii) normally recurring liabilities incurred
subsequent to March 31, 1995 in the ordinary course of business and consistent
with past practice.
2.8 ABSENCE OF ADVERSE CHANGES. Except as set forth in SCHEDULE
2.8, since March 31, 1995 through the date hereof, there has not been any (i)
material adverse change in the business, operations, properties, assets,
liabilities or condition (financial or otherwise) of the Seller or its
subsidiaries; (ii) damage, destruction or loss, whether covered by insurance or
not, adversely affecting in any material respect the business, properties or
financial condition of the Seller or its subsidiaries; (iii) change by the
Seller or its subsidiaries in accounting methods or principles used for
financial reporting purposes; or (iv) agreement, whether in writing or
otherwise, to take any action which would result in a condition described in
this Section 2.8.
2.9 LITIGATION. There is no judicial or administrative action or
other proceeding pending or, to the best of the knowledge of the Seller,
threatened, nor, to the best of the knowledge of the Seller, is there any
governmental investigation pending or threatened, that questions the validity
of any of the transactions contemplated by this Agreement.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser hereby represents and warrants to Seller as follows:
3.1 AUTHORIZATION; ENFORCEMENT. (i) The Purchaser has the
requisite corporate power and authority to enter into and perform this
Agreement, (ii) the execution and delivery of this Agreement by the Purchaser
and the consummation by it of the transactions contemplated thereby have been
duly authorized by all necessary corporate action, and no further consent or
authorization of the Purchaser or its Board of Directors or stockholders is
required, (iii) this Agreement has been duly authorized, executed and delivered
by the Purchaser, and (iv) this Agreement constitutes a valid and binding
obligation of the Purchaser enforceable against the Purchaser in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally the enforcement of, creditors' rights and
remedies or by other equitable principles of general application.
3.2 NO CONFLICTS. The execution, delivery and performance of
this Agreement and the consummation by the Purchaser of the transactions
contemplated hereby do not (i) result in a violation of the Purchaser's charter
documents or by-laws or (ii) conflict with, or constitute a default (or an
event of default) under, any agreement, indenture or instrument to which the
Purchaser or any of its subsidiaries is a party, or result in a violation of
any law, rule, regulation, order, judgment or decree of any court or
governmental agency (including Federal and state securities laws and
regulations) applicable to the Purchaser, any of its subsidiaries or their
respective properties (except for such conflicts, defaults and violations as
would not, individually or in the aggregate, have a material adverse effect on
the Purchaser). The Purchaser is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court
or governmental agency in order for it to execute, deliver or perform any of
its obligations under this Agreement or purchase the Shares in accordance with
the terms hereof.
3.3 INVESTMENT INTENT. Purchaser is purchasing the Shares for
investment only for its own account, and not with a view to the sale or
distribution of all or any part thereof, and Purchaser has no present intention
of selling or distributing any of the Shares. Purchaser understands and agrees
that the Shares are not and will not be registered under the Securities Act in
reliance on the fact that the sale of the Shares provided for in this Agreement
and the issuance of such securities are exempt from the registration provisions
of the Securities Act and that Seller's reliance on any exemptions from such
registration provisions is predicated, in part, on the Purchaser's
representations set forth herein.
3.4 DISCLOSURE OF INFORMATION; ETC. The Purchaser represents
that it has received all the information it considers necessary or appropriate,
including the SEC Documents, to make its decision to purchase the Shares. The
Purchaser further represents that it has had an opportunity to ask questions
and receive answers from the Seller regarding the terms and conditions of the
purchase of the Shares.
3.5 STOCK OWNERSHIP. Prior to the consummation of the
transactions contemplated by this Agreement, Purchaser will have owned no
shares of Common Stock, warrants or other securities of Seller.
SECTION 4. SECURITIES ACT RESTRICTIONS.
4.1 NO REGISTRATION UNDER THE SECURITIES ACT OF 1933. The
Purchaser represents and warrants to the Seller that the Purchaser will not
dispose of any Shares (or any other securities issued with respect thereto upon
any conversion, stock split, stock dividend, recapitalization or similar event)
(collectively the "Restricted Securities") except pursuant to (i) an effective
registration statement filed under the Securities Act, (ii) Rule 144 under the
Securities Act (or any similar rule under the Securities Act relating to the
disposition of securities) or (iii) an opinion of counsel, reasonably
satisfactory to counsel for Seller, that an exemption from such registration is
available.
4.2 CERTIFICATES TO BEAR LEGENDS. The Restricted Securities
shall be subject to a stop-transfer order and the certificate or certificates
evidencing the Restricted Securities shall bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR (ii) TO THE
EXTENT APPLICABLE, UNDER RULE 144 UNDER THE SECURITIES ACT (OR ANY SIMILAR RULE
UNDER THE SECURITIES ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii)
AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO
COUNSEL FOR THIS CORPORATION, THAT AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT IS AVAILABLE.
4.3 REMOVAL OF LEGENDS AND TRANSFER RESTRICTIONS. The legend
relating to the Securities Act endorsed on each certificate for Restricted
Securities pursuant to Section 4.2 and any stop transfer instructions with
respect to the Restricted Securities represented by such certificate shall be
removed and Seller shall issue a certificate without such legend pursuant to
instructions received from the Purchaser if such Restricted Securities are sold
pursuant to a registration under the Securities Act and a prospectus meeting
the requirements of Section 10 of the Securities Act is available, or if the
Purchaser provides to Seller an opinion of counsel for the Purchaser reasonably
satisfactory to Seller, or a no-action letter or interpretive opinion of the
staff of the SEC to the effect that a public sale, transfer or assignment of
such Restricted Securities may be made without registration under the
Securities Act.
4.4 TRANSFER TO AFFILIATES. Notwithstanding the provisions of
Section 4.1 above, no registration under the Securities Act or opinion of
counsel shall be necessary for a transfer by Purchaser of the Shares to a
subsidiary, shareholder or affiliate of the Purchaser, if the transferee agrees
in writing to be subject to the terms hereof to the same extent as if such
transferee were the Purchaser hereunder.
SECTION 5. CONDITIONS TO CLOSING.
5.1 CONDITIONS TO PURCHASER'S OBLIGATION TO CLOSE. The obligation
of Purchaser to consummate the transactions contemplated by this Agreement is
subject to the satisfaction at or before the Closing Date of all of the
following conditions:
(i) PERFORMANCE BY SELLER. Each of the acts and undertakings of
Seller to be performed at or before the Closing Date pursuant
to the terms of this Agreement shall have been performed in all
material respects.
(ii) ACCURACY OF REPRESENTATIONS. The representations and
warranties of Seller in this Agreement shall be true and
correct in all respects on and as of the Closing Date.
(iii) CERTIFICATES. Seller shall have furnished Purchaser with a
certificate of its chief executive officer to the effect set forth
in Sections 5.1(i) and (ii).
(iv) OPINION OF COUNSEL. Purchaser shall have received an opinion,
dated the Closing Date, of Ross & Hardies, counsel to Seller in
reasonable and customary form.
5.2 CONDITIONS TO SELLER'S OBLIGATION TO CLOSE. The obligation of
Seller to consummate the transactions contemplated by this Agreement is subject
to the satisfaction at or before the Closing Date of all of the following
conditions:
(i) PERFORMANCE BY PURCHASER. Each of the acts and undertakings of
Purchaser to be performed at or before the Closing Date
pursuant to the terms of this Agreement shall have been
performed in all material respects.
(ii) ACCURACY OF REPRESENTATIONS. The representations and
warranties of Purchaser in this Agreement shall be true and
correct in all respects on and as of the Closing Date.
(iii) CERTIFICATES. Purchaser shall have furnished Seller with a
certificate of an executive officer to the effect set forth in this
Section 5.2(i) and (ii).
SECTION 6. TERMINATION.
This Agreement and the transactions contemplated hereby may be
abandoned or terminated on or before the Closing Date without any obligation to
any party hereunder: (i) by mutual agreement of Purchaser and the Seller; or
(ii) at the option of Seller or the Purchaser, if (a) any legal action or
proceeding shall have been instituted or threatened by a third party seeking to
restrain, prohibit, invalidate or otherwise affect the consummation of the
transactions contemplated hereby, or (b) the transactions contemplated hereby
are not consummated by August 31, 1995.
SECTION 7. REGISTRATION OF COMMON STOCK: COVENANTS OF THE COMPANY.
7.1 DEFINITIONS. Unless the context otherwise requires, the terms
defined in this Section 7 shall have the meanings herein specified for all
purposes of this Agreement, applicable to both the singular and plural forms of
any of the terms herein defined.
"BOARD" means the Board of Directors of the Company.
"HOLDER" of any security means the record or beneficial owner
of such security or any permitted assignee thereof.
"PERSON" means any natural person, corporation, trust,
association, company, partnership, joint venture or other entity or any
government, governmental agency, instrumentality or political subdivision.
The terms "REGISTER", "REGISTERED" "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration for ordering of the
effectiveness of such registration statement.
"REGISTRABLE SECURITIES" means (i) the shares of Common Stock
sold pursuant to this Agreement and (ii) any Common Stock issued or issuable
(either directly or upon the conversion of or exercise of any warrant, right or
other security) with respect to the Common Stock referred to in clause (i)
above by way of a stock dividend or stock split or in connection with a
combination of shares, reclassification, recapitalization, merger or
consolidation or reorganization; provided, however that such shares of Common
Stock shall cease to be Registrable Securities if they are (w) sold to or
through a broker or dealer or underwriter in a public distribution or a public
securities transaction, or (x) sold in a transaction pursuant to Rule 144 under
the Securities Act, or (y) otherwise transferred or disposed of, and new
certificates therefor not bearing a legend restricting further transfer shall
have been delivered by the Company, and subsequent transfer or disposition of
them shall not require their registration or qualification under the Securities
Act or any similar state law then in force, or (z) they cease to be
outstanding.
7.2 DEMAND REGISTRATION.
(a) If and whenever the Company shall receive at any time
after six (6) months after the Closing Date hereunder a written request
therefor from the Holders of at least 25 percent of the Registrable Securities,
the Company agrees to prepare and file promptly a registration statement under
the Securities Act covering the shares of Registrable Securities which are the
subject of such request and agrees to use its best efforts to cause such
registration statement to become effective as expeditiously as possible. Upon
the receipt of such request, the Company agrees to give prompt written notice
to all Holders of Registrable Securities that such registration is to be
effected. The Company agrees to include in such registration statement such
shares of Registrable Securities for which it has received a written request to
register such shares by the Holders thereof within twenty (20) days after the
receipt by the Holders of the written notice from the Company.
(b) The Company shall be obligated to prepare, file and
cause to become effective only three (3) registration statements pursuant to
this Section 7.2. A registration required to be effected by the Company
pursuant to this Section 7.2 shall not be deemed to have been effected even
though a registration statement with respect thereto has become effective (i)
if after it has become effective, such registration becomes the subject of any
stop order, injunction, or other order or requirement of the SEC or other
governmental agency or court, for any reason not attributable to the Holders
initiating the registration request hereunder (the "Initiating Holders") with
respect to such registration statement, and has not thereafter become effective
or (ii) if the conditions to closing specified in the underwriting agreement,
if any, entered into in connection with such registration are not satisfied or
waived, other than by reason of a failure on the part of the Initiating Holders
with respect to such registration statement.
(c) If the Initiating Holders intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
they agree to provide the Company with the name of the managing underwriter or
underwriters (the "Managing Underwriter"), who shall be reasonably acceptable
to the Company, that the Initiating Holders holding a majority of the Shares to
be included in the registration propose to employ, as part of their request
made pursuant to this Section 7.2, and the Company agrees to include such
information in its written notice referred to in Section 7.2.(a). In such
event, the right of any Holder to registration pursuant to this Section 7.2
shall be conditioned upon such Holder's participation in such underwriting and
the inclusion of such Holder's Registrable Securities in the underwriting
(unless otherwise mutually agreed by the Holders of a majority of the shares of
Registrable Securities to be included in such registration and such Holder).
All Holders proposing to distribute their securities through such underwriting
agree to enter into (together with the Company) an underwriting agreement with
the underwriter or underwriters elected for such underwriting, in the manner
set forth above, provided that such underwriting agreement is in customary form
and is reasonably acceptable to the Holders of a majority of the shares of
Registrable Securities to be included in such registration.
(d) Notwithstanding the foregoing, if the Managing
Underwriter of an underwritten distribution advises the Company and the Holders
of Registrable Securities participating in such registration in writing that in
its good faith judgment the number of shares of Registrable Securities and the
other securities requested to be included in such registration exceeds the
number of shares of Registrable Securities and the other securities which can
be sold in such offering, then (i) the other securities so requested to be
included in such registration shall initially be reduced and the number of
shares of Registrable Securities so requested to be included in such
registration shall subsequently be reduced, together to that number of shares
which in the good faith judgment of the Managing Underwriter can be sold in
such offering and (ii) the reduced number of Registrable Securities to be
included in the underwriting shall be allocated pro rata among all Holders of
Registrable Securities. Those Registrable Securities which are excluded from
the underwriting by reason of the Managing Underwriter's marketing limitation
shall not be included in such registration and shall be withheld from the
market by the Holders thereof for a period which the Managing Underwriter
reasonably determines is necessary to effect the underwritten public offering,
which in no event shall be in excess of 120 days.
7.3 "PIGGYBACK" REGISTRATION.
(a) Each time the Company shall determine to file a
registration statement under the Securities Act (other than pursuant to Section
7.2 hereof and other than on Form S-4, S-8 or a registration statement on Form
S-1 covering solely any employee benefit plan) in connection with the proposed
offer and sale for money of any of its securities either for its own account or
on behalf of any other security holder, the Company agrees to give prompt
written notice of its determination to all Holders of Registrable Securities.
Upon the written request of a Holder of any shares of Registrable Securities
given within twenty (20) days after the receipt of such written notice from the
Company, the Company agrees to cause all such Registrable Securities, the
Holders of which have so requested registration thereof, to be included in such
registration statement and to use its best efforts to cause such registration
statement to become effective under the Securities Act. In the event that the
proposed registration by the Company is, in whole or in part, an underwritten
public offering of securities of the Company, any request pursuant to this
Section 7.3(a) to register Registrable Securities may specify that such
securities are to be included in the underwriting (i) on the same terms and
conditions as the shares of Common Stock, if any, otherwise being sold through
underwriters, under such registration, or (ii) on terms and conditions
comparable to those normally applicable to offerings of Common Stock in
reasonably similar circumstances in the event that no shares of Common Stock
other than Registrable Securities are being sold through underwriters in such
registration.
(b) If the registration of which the Company gives written
notice pursuant to Section 7.3(a) is for an underwritten public offering, the
Company agrees to so advise the Holders as a part of its written notice. In
such event the right of any Holder to registration pursuant to this Section 7.3
shall be conditioned upon such Holder's participation in such underwriting and
the inclusion of such Holder's Registrable Securities in the underwriting to
the extent provided herein. All Holders proposing to distribute their
Registrable Securities through such underwriting agree to enter into (together
with the Company and the other Holders distributing their securities through
such underwriting) an underwriting agreement with the underwriter or
underwriters selected for such underwriting by the Company.
(c) Notwithstanding any other provision of this Section 7.3,
if the Managing Underwriter of an underwritten distribution advises the Company
and the Holders of the Registrable Securities requesting participation in such
registration in writing that in its good faith judgment the number of shares of
Registrable Securities and the other securities requested to be registered
under this Section 7.3 exceeds the number of shares of Registrable Securities
and other securities which can be sold in such offering, then (i) the number of
shares of Registrable Securities and other securities so requested to be
included in the offering shall be reduced to that number of shares which in the
good faith judgment of the Managing Underwriter can be sold in such offering
(except for shares to be issued by the Company in a public offering, which
shall have priority over the Registrable Securities), and (ii) such reduced
number of shares shall be allocated among all participating Holders of
Registrable Securities and holders of other securities in proportion, as nearly
as practicable, to the respective number of shares of Registrable Securities
and other securities requested to be registered held by such Holders at the
time of filing the registration statement. All Registrable Securities and
other securities which are excluded from the underwriting by reason of the
Managing Underwriter's marketing limitation and all other Registrable
Securities not originally requested to be so included shall not be included in
such registration and shall be withheld from the market by the Holders thereof
for a period which the Managing Underwriter reasonably determines is necessary
to effect the underwritten public offering, which in no event shall exceed 120
days.
7.4 REGISTRATION EXPENSES.
(a) The Company shall pay all expenses incurred in effecting
the registration of Registrable Securities pursuant to Section 7 including,
without limitation, all federal and state registration, qualification and
filing fees (subject to Section 7.5(d)), printing expenses, fees and
disbursements of counsel for the Company, reasonable fees and disbursements of
one counsel for the participating Holders together, blue sky fees and expenses,
and the expense of any special audits incident to or required by any such
registration, but not including underwriting discounts, commissions and
expenses.
(b) Notwithstanding the foregoing, in the event that a
registration pursuant to Section 7.2 is requested by the Initiating Holders and
such request is withdrawn prior to the filing of a registration statement by
the Company, or such Holder causes the Company to withdraw a registration
statement prior to its effectiveness, then at the choice of the Initiating
Holders and Holders requesting inclusion of their shares in such registration
statement either (i) the Initiating Holders and Holders requesting inclusion of
their shares in such registration shall bear pro rata all expenses otherwise
borne by the Company and set forth in Section 7.4(a) or (ii) such requested
registration shall be deemed to be one of the registrations the Company is
required to effect pursuant to Section 7.2 hereof; provided however, if at the
time of the withdrawal, the Initiating Holders and the other Holders have
learned of a material adverse change which would have a Material Adverse Effect
with respect to the Company which was not known to such Holders at the time of
their request, then such Holders shall not be required to pay any of such
registration expenses and shall retain their rights pursuant to Section 7.2.
7.5 REGISTRATION PROCEDURES. If and whenever the Company is
required by the provisions of Section 7 to effect the registration of
Registrable Securities under the Securities Act, the Company will, as
expeditiously as possible:
(a) prepare and file with the SEC a registration statement
which includes the Registrable Securities and use its best efforts to cause
such registration statement to become and remain effective until the
distribution described in the registration statement has been completed;
(b) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective and to comply with the provisions of the Securities Act with respect
to the sale or other disposition of Registrable Securities covered by such
registration statement whenever a Holder shall desire to sell or otherwise
dispose of the same;
(c) furnish to each participating Holder (and to each
underwriter, if any, of Registrable Securities) such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, in order to facilitate the public sale or
other disposition of the Registrable Securities;
(d) use its best efforts to register or qualify the
Registrable Securities covered by such registration statement under such state
securities or blue sky laws of such jurisdiction as each participating Holder
shall reasonably request and do any and all other acts and things which may be
necessary under such securities or blue sky laws to enable such Holder to
consummate the public sale or other disposition of the Registrable Securities
in such jurisdictions, except that the Company shall not for any purpose be
required to consent generally to service of process or qualify to do business
as a foreign corporation in any jurisdiction wherein it is not so qualified;
(e) before filing the registration statement or prospectus
or amendments or supplements thereto, furnish to counsel selected by the
participating Holders copies of such documents proposed to be filed which shall
be subject to the reasonable approval of such counsel;
(f) enter into and perform its obligations under an
underwriting agreement, in usual and customary form, with the Managing
Underwriter of such offering;
(g) notify the participating Holders at any time when a
prospectus relating to any Registrable Securities covered by such registration
statement is required to be delivered under the Securities Act, of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances in which they were made and promptly file such amendments and
supplements as may be necessary so that, as thereafter delivered to such
Holders of such Registrable Securities, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances in which they were made and use its best efforts
to cause each such amendment to become effective;
(h) furnish at the request of the participating Holders on
the date that such Registrable Securities are delivered to the underwriters for
sale in connection with a registration pursuant to Section 7 (i) an opinion
addressed to the underwriters, if any, and to such Holders, dated such date, of
the counsel representing the Company customarily given by company counsel to
the underwriters in an underwritten public offering, and (ii) a letter dated
such date addressed to the underwriters, if any, and to such Holders, from the
independent certified public accountants of the Company, in form and substance
as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering; and
(i) use its best efforts to cause all such Registrable
Securities to be listed on the securities exchange, if any, or the National
Association of Securities Dealers Automated Quotation National Market System
("NASDAQ/NMS"), on which the Common Stock is then listed.
7.6 FORM S-3 REGISTRATION. In case the Company shall receive no
sooner than six (6) months after the Closing Date from any Holder or Holders a
written request or requests that the Company effect a registration on Form S-3
and any related qualification with respect to all or a part of the Registrable
Securities owned by such Holder or Holders, the Company shall:
(a) promptly give written notice of the proposed
registration, and any related qualification, to all other Holders; and
(b) as soon as practicable, file a registration statement
and effect such registration and all such qualifications as may be so
requested, subject to Section 7.5(d) hereof, and as such portion of such
Holder's or Holders' Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any other
Holder or Holders joining in such request as are specified, in a written
request given within 15 business days after receipt of such written notice from
the Company, provided, however, that the Company shall not be obligated to
effect any such registration or qualification pursuant to this Section 7.6:
(i) if Form S-3 is not available for such offering by the Holders; (ii) if the
Holders, together with the holders of any other securities of the Company
entitled to inclusion in such registration, propose to sell Registrable
Securities and such other securities (if any) at an aggregate price to the
public (net of any underwriters' discounts or commissions) of less than Five
Hundred Thousand Dollars ($500,000); (iii) if the Company shall furnish to the
Holders a certificate signed by the President or Chief Executive Officer of the
Company stating that in the good faith judgment of the Board, it would be
seriously detrimental to the Company for such Form S-3 Registration to be
effected at such time, in which event the Company shall have the right to defer
the filing of the Form S-3 Registration Statement for a period of not more than
90 days after receipt of the request of the Holder or Holders under this
Section 7.6; provided, however, that the Company shall not utilize this right
more than once in any 12-month period; (iv) if the Company has, within the 12-
month period preceding the date of such request, already effected one
registration on Form S-3 for the Holders pursuant to this Section 7.6; or (v)
in any particular jurisdiction in which the Company would be required to
qualify to do business or to execute a general consent to service of process in
effecting such registration, qualification or compliance.
(c) Registrations effected pursuant to this Section 7.6
shall not be counted as demand registrations effected pursuant to Section 7.2.
7.7 INDEMNIFICATION. In the event Registrable Securities are
registered pursuant to this Section 7:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless each Holder of Registrable Securities which are
included in a registration statement pursuant to the provisions of the
Agreement and any underwriter (within the meaning of the Securities Act) with
respect to the Registrable Securities, and each officer, director, employee and
agent thereof and each person, if any, who otherwise controls such Holder or
underwriter (within the meaning of the Securities Act), against any losses,
claims, damages, expenses or liabilities, joint or several, to which they may
become subject under the Securities Act, the Securities Exchange Act of 1934,
as amended (the "Exchange Act") or other federal or state law, or otherwise,
insofar as such losses, claims, damages, expenses or liabilities arise out of
or are based upon any untrue or allegedly untrue statement of any material fact
contained in the registration statement for the Registrable Securities,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, or any document incident to the
registration or qualification of any Registrable Securities, or arise out of or
are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or allegedly necessary to make the
statements therein not misleading or arise out of any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any state securities law; and will reimburse such Holder,
any underwriter, officer, director, employee, agent or controlling person for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this Section
7.7(a) shall not apply to amounts paid in settlement of any such loss, claim,
damage, expense, liability or action if such settlement is effected without the
written consent of the Company, which shall not be unreasonably withheld, nor
shall the Company be liable under this Section 7.7(a) to such Holder, such
underwriter, officer, director, employee, agent or controlling person for any
such loss, claim, damage, expense, liability or action to the extent that it
arises out of, or is based upon, an untrue statement or allegedly untrue
statement or omission or alleged omission made in connection with such
registration statement, preliminary prospectus, final prospectus, or amendments
or supplements thereto, in reliance upon and in conformity with information
furnished in writing expressly for use in connection with such registration by
such Holder, such underwriter, officer, director, employee, agent or such
controlling person, nor shall the Company be liable under this Section 7.7(a)
to any underwriter or person who controls any underwriter (within the meaning
of the Securities Act) who participates in the offering or sale of the
Registrable Securities, with respect to any preliminary prospectus, final
prospectus, or amendments or supplements thereto to the extent that any such
loss, claim, damage or liability results from the fact that such underwriter
sold Registrable Securities to a person to whom there was not sent or given, at
or prior to the written confirmation of such sale, a copy of the final
prospectus or of the final prospectus as then amended or supplemented,
whichever is most recent, if the Company has previously furnished copies
thereof to such underwriter.
(b) To the extent permitted by law, each Holder of
Registrable Securities which are included in a registration statement pursuant
to the provisions of this Agreement will indemnify and hold harmless the
Company, each of its employees, agents, directors and officers, each person, if
any, who otherwise controls the Company (within the meaning of the Securities
Act), and any underwriter (within the meaning of the Securities Act) against
any losses, claims, damages, expenses or liabilities to which the Company or
any such person or underwriter may become subject under the Securities Act, the
Exchange Act or other federal or state law or otherwise, insofar as such
losses, claims, damages, expenses or liabilities (or action in respect thereof)
arise out of, or are based upon any untrue or allegedly untrue statement of any
material fact contained in a registration statement for the Registrable
Securities, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, or any document incident to
the registration or qualification of any Registrable Securities, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or allegedly necessary to make the
statements therein not misleading; in each case to the extent that such untrue
statement or allegedly untrue statement or omission or alleged omission was
made in such registration statement, preliminary prospectus, or amendments or
supplements thereto, in reliance upon and in conformity with information
furnished in writing by such Holder expressly for use in connection with such
registration; provided, however, that the indemnity agreement contained in this
Section 7.7(b) shall not apply to amounts paid in settlement of any such loss,
claim, damage, expense, liability or action if such settlement is effected
without the written consent of such Holder, which shall not be unreasonably
withheld; and such Holder will reimburse the Company or any such person or
underwriter for any legal or other expenses reasonably incurred by the Company
or any such person or underwriter in connection with investigating or defending
such loss, claim, damage, liability, expense or action.
(c) Promptly after receipt by an indemnified party under
this Section 7.7 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against any
indemnifying party under this Section 7.7, notify the indemnifying party in
writing of the commencement thereof and generally summarize such action. The
indemnifying party shall have the right to participate in and to assume the
defense thereof with counsel mutually satisfactory to the parties. An
indemnifying party shall not have the right to direct the defense of such an
action on behalf of an indemnified party if such indemnified party has
reasonably concluded that there may be defenses available to it that are
different from or additional to those available to the indemnifying party;
provided, however, that in such event, the indemnifying party shall bear the
fees and expenses of only one (1) separate counsel for all indemnified parties.
The failure to notify an indemnifying party promptly of the commencement of any
such action if prejudicial to the ability to defend such action, shall relieve
such indemnifying party of any liability to the indemnified party under this
Section 7.7, but the omission so to notify the indemnifying party will not
relieve such party of any liability that such party may have to any indemnified
party otherwise than under this Section 7.7.
(d) To the extent permitted by law, the indemnification
provided for under this Section 7.7 will remain in full force and effect
regardless of any investigation made by a controlling person (within the
meaning of the Securities Act) of such indemnified party and will survive the
transfer of any securities.
(e) If for any reason the foregoing indemnity is unavailable
to, or is insufficient to hold harmless an indemnified party, then the
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such losses, claims, damages, expenses or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party on the one hand and the indemnified
party on the other or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, or provides a lesser sum to the indemnified
party than the amount representing such proportion as is appropriate to reflect
not only the relative benefits received by the indemnifying party on the one
hand and the indemnified party on the other but also the relative fault of the
indemnifying party and the indemnified party as well as any other relevant
equitable considerations. Notwithstanding the foregoing, no underwriter, if
any, shall be required to contribute any amount in excess of the amount by
which the total price at which the securities underwritten by it and
distributed to the public were offered to the public were offered to the public
exceeds the amount of any damages which underwriter has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligation of any underwriters to contribute pursuant
to this Section 7.7(e) shall be several in proportion to their respective
underwriting commitments and not joint.
7.8 REPORTS UNDER EXCHANGE ACT. With a view to making available to
the Holders the benefits of Rule 144 promulgated under the Securities Act and
any other rule or regulation of the SEC that may at any time permit a Holder to
sell Registrable Securities to the public without registration, and with a view
to making it possible for any such Holder to register the Registrable
Securities pursuant to a registration on Form S-3, the Company agrees to:
(a) use its best efforts to take such action as is necessary
to enable a Holder to utilize Form S-3 for the sale of Registrable Securities;
(b) use its best efforts to file with the SEC in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and
(c) Furnish to a Holder owning any Registrable Securities
upon request (i) a written statement by the Company as to whether it has
complied with the reporting requirements of the Securities Act and the Exchange
Act, or that it qualifies as a registrant whose Registrable Securities may be
resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy of
the most recent annual or quarterly report of the Company and such other
reports and documents so filed by the Company, and (iii) such other information
as may be reasonably required in availing any Holder of Registrable Securities
of any such Registrable Securities without registration or pursuant to such
form.
7.9 TRANSFERABILITY. The right to cause the Company to register
Registrable Securities granted by the Company to the Holders under this
Agreement may be assigned by any Holder to a transferee or assignee of any
Registrable Securities, provided that the Company must receive written notice
prior to or at the time of said transfer, stating the name and address of said
transferee or assignee and identifying the securities with respect to which
such rights are being assigned. The limitations set forth in this Section 7
with respect to registration rights shall apply to all transferees or assignees
of Registrable Securities.
SECTION 8. CLOSING.
8.1 CLOSING DATE. The "Closing Date" shall be the 20th day
subsequent to the date hereof, or such other date as the parties may mutually
agree to in writing. The closing shall commence at 10:00 a.m. at the offices
of Schering Corporation, 2000 Galloping Hill Road, Kenilworth, New Jersey
07033, or such other time or place as the parties may mutually agree in
writing.
8.2 INSTRUMENTS TO BE DELIVERED TO PURCHASER. On the Closing Date,
the Seller shall deliver to the Purchaser:
(i) Certificate(s) representing the Shares.
(ii) Certificate of the Seller's chief executive officer required by
Section 5.1(iii).
8.3 INSTRUMENTS AND PAYMENTS TO BE DELIVERED TO SELLER. On the
Closing Date, the Purchaser shall deliver to the Seller:
(i) The Purchase Price as provided in Section 1.2.
(ii) Certificate of an executive officer required by Section 5.2(iii).
SECTION 9. NOTICES.
SECTION 9.1 NOTICES. Any notice or other communication required
or permitted to be given hereunder shall be in writing and shall be effective
(i) upon hand delivery or delivery by facsimile (with confirmation of such
receipt made by first class mail) at the address or number designated below (if
delivered on any business day during normal business hours where such notice is
to be received), or the first business day following such delivery (if
delivered other than on a business day during normal business hours where such
notice is to be received) or (ii) on the second business day following the date
of mailing by express courier service, fully prepaid, addressed to such
address, or upon actual receipt of such mailing, whichever shall first occur.
The addresses for such communications shall be:
If to the Seller:
Enzon, Inc
20 Kingsbridge Road
Piscataway, New Jersey 08854
Telecopy: (908) 980-9606
Attention: Corporate Secretary
With copies to:
Ross & Hardies
65 East 55th Street
31st Floor
New York, New York 10022
Telecopy: (212) 421-5682
Attention: Kevin T. Collins, Esq.
If to the Purchaser:
Schering Corporation
2000 Galloping Hill Road
Kenilworth, New Jersey 07033
Telecopy: (908) 298-5379
Attention: Vice President, Business Development
With copies to:
Schering-Plough Corporation
One Giralda Farms
Madison, New Jersey 07940-1000
Telecopy: (201) 822-1960
Attention: Senior Vice President and General Counsel
Either party hereto may from time to time change its address for notices under
this Section 9.1 by giving at least ten (10) days' written notice of such
changed address to the other party hereto.
SECTION 10. MISCELLANEOUS.
10.1 EXPENSES. Whether or not the transactions contemplated by
this Agreement are consummated, Seller and Purchaser shall each pay all of
their own fees and expenses incidental to the negotiation, preparation and
execution of this Agreement, including the fees and expenses of their own
counsel, accountants and other experts.
10.2 BROKERAGE. Seller and Purchaser each represent and warrant
to the other that no finder's fee or business brokerage commission is payable
to any person, firm or corporation by virtue of the execution and delivery of
this Agreement and the consummation of the transactions contemplated by this
Agreement.
10.3 SURVIVAL OF REPRESENTATIONS, WARRANTIES, AND AGREEMENTS. The
representations, warranties and covenants of the parties set forth herein shall
survive the Closing Date.
10.4 ASSIGNMENT. This Agreement and all of its provisions shall
be binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties without the prior written consent of the other party.
10.5 DESCRIPTIVE HEADINGS. The descriptive headings of the
several sections of this Agreement are inserted for convenience of reference
only and shall neither be deemed to constitute part, nor be given any effect in
the interpretation, of this Agreement.
10.6 GOVERNING LAW AND JURISDICTION. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
Jersey with respect to agreements made and to be performed entirely in such
state without giving effect to conflict of laws principles.
10.7 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.8 MODIFICATION. This Agreement may not be modified or
terminated orally. Any modification or termination of this Agreement shall not
be valid unless expressed in writing and signed by the parties.
10.9 WAIVER OF COMPLIANCE. Any failure of Seller, on the one
hand, or Purchaser, on the other, to comply with any obligation, covenant,
agreement or condition herein may be expressly waived in writing by Seller, in
the case of Purchaser, and by the Purchaser, in the case of Seller, but such
waiver or failure to insist upon strict compliance with such obligation,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure. Moreover, any such waiver
shall not be deemed to be a waiver of the right to seek damages for a
nonmaterial breach hereof.
10.10 ENTIRE AGREEMENT. This Agreement, and the other documents
referred to herein which form a part hereof, contain the entire understanding
of the parties in respect of the subject matter contained herein. There are no
agreements, restrictions, promises, warranties, covenants, or undertakings,
other than those expressly set forth or referred to herein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
10.11 PUBLICITY. No party shall originate any publicity, news
release, or other announcement, written or oral, relating to this Agreement, or
to performance hereunder or the existence of an arrangement between the parties
hereto without the prior written approval of the other. Nothing contained
herein shall prevent any party from at any time disclosing or furnishing any
information to any governmental authority which it is by law so obligated to
disclose or furnish or from making any disclosure which its counsel deems
necessary or advisable in order to fulfill such party's disclosure obligations
under applicable law or the rules of the NASDAQ/NMS (or any exchange on which
the Company's securities are hereafter registered) or the New York Stock
Exchange.
10.12 MUTUAL CONTRIBUTION. This Agreement has been drafted on the
basis of the mutual contribution of language by the parties and is not to be
construed against any party as being the drafter or causing the same to be
drafted.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
ENZON, INC.
By:/S/ PETER G. TOMBROS
Peter G. Tombros, President
and Chief Executive Officer
SCHERING CORPORATION
By:/S/ DAVID POORVIN
Name: DAVID POORVIN
Title: VICE PRESIDENT
<PAGE>
SCHEDULE 2.3
As of March 31, 1995 there were 3,756,880 outstanding options to
purchase the Company's common stock (the "Common Stock"), $.01 par value per
share, of which (i) 3,556,880 were reserved for issuance at March 31, 1995
pursuant to the Company's Non-Qualified Stock Option Plan and (ii) 200,000 were
issued to Abraham Abuchowski, the Company's Chairman of the Board, pursuant to
an employment agreement.
As of March 31, 1995, there were 109,000 shares of Series A
Cumulative Convertible Preferred Stock (the "Series A Preferred Stock") of the
Company outstanding which are convertible into 247,727 shares of Common Stock.
As of March 31, 1995, there were 60,014 warrants outstanding to
purchase 60,014 shares of Series A Preferred Stock, which in turn would be
convertible into 136,395 shares of Common Stock.
<PAGE>
SCHEDULE 2.7
Subsequent to March 31, 1995, the Company agreed to settle a fee
dispute by paying $470,000 and issuing a warrant to purchase an aggregate of
150,000 shares of the Company's Common Stock.
<PAGE>
SCHEDULE 2.8
None.
<PAGE>
ENZON, INC.
OFFICER'S CERTIFICATE
Reference is made to the Purchase Agreement (the "Purchase Agreement")
dated as of June 30, 1995, between Schering Corporation, a corporation
organized and existing under the laws of the State of New Jersey (the
"Purchaser"), and Enzon, Inc., a corporation organized and existing under
the laws of the State of Delaware (the "Company"). All capitalized terms
used but not otherwise defined herein shall have the meanings ascribed to
such terms in the Purchase Agreement. The undersigned, Peter G. Tombros,
President and Chief Executive Officer of the Company, pursuant to Section
5.1(iii) of the Purchase Agreement hereby certifies that:
1. Each of the acts and undertakings of the Company to be performed
pursuant to the terms of the Purchase Agreement has been performed in all
material respects.
2. The representations and warranties of the Company contained in the
Purchase Agreement were true and correct in all respects when made and are
true and correct in all respects as of the date hereof, as if made on the
date hereof (except for representations and warranties that speak as of a
particular date, which were true and correct in all respects when made and
have not changed in any respect which could have a Material Adverse Affect
on the Company or the transactions contemplated by the Purchase Agreement).
IN WITNESS WHEREOF, the undersigned has executed this Certificate as
of June 30, 1995.
/S/ PETER G. TOMBROS
PETER G. TOMBROS
President and Chief
Executive Officer
<PAGE>
SCHERING CORPORATION
OFFICER'S CERTIFICATE
Reference is made to the Purchase Agreement (the "Purchase
Agreement") dated as of June 30, 1995, between Schering Corporation, a
corporation organized and existing under the laws of the State of New
Jersey (the "Purchaser"), and Enzon, Inc., a corporation organized and
existing under the laws of the State of Delaware. All capitalized terms
used but not otherwise defined herein shall have the meanings ascribed to
such terms in the Purchase Agreement. The undersigned, Vice President of
the Purchaser, pursuant to Section 5.2 (iii) of the Purchase Agreement
hereby certifies that:
1. Each of the acts and undertakings of the Purchaser to be
performed pursuant to the terms of the Purchase Agreement has been
performed in all material respects.
2. The representations and warranties of the Purchaser contained
in the Purchase Agreement were true and correct in all respects when made
and are true and correct in all respects as of the date hereof.
IN WITNESS WHEREOF, the undersigned has executed this Certificate
as of June 30, 1995.
/S/ DAVID POORVIN
David Poorvin
Vice President
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (this "AGREEMENT"), dated as of January
31, 1996 by and among ENZON, INC., a Delaware corporation, with
headquarters located at 20 Kingsbridge Road, Piscataway, NJ 08854 (the
"COMPANY"), and the undersigned (collectively, the "BUYER").
WHEREAS:
A. The Company and the Buyer are executing and delivering this
Agreement in reliance upon the exemption from securities registration
afforded by Rule 506 under Regulation D ("REGULATION D") as promulgated by
the United States Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "1933 ACT");
B. The Buyer wishes to purchase, in the amounts and upon the terms
and conditions stated in this Agreement, (i) shares of the Company's common
stock, par value $.01 per share (the "COMMON STOCK"), and (ii) shares of
the Company's preferred stock, $.01 par value per share (the "PREFERRED
STOCK"); and
C. Contemporaneous with the issuance of the Preferred Stock pursuant
to this Agreement, the Company is issuing to the Buyer certain warrants to
purchase shares of the Common Stock (the "WARRANTS"), and contemporaneous
with the closing pursuant to this Agreement, the parties hereto are
executing and delivering a Registration Rights Agreement (the "REGISTRATION
RIGHTS AGREEMENT") pursuant to which the Company has agreed to provide
certain registration rights under the 1933 Act and the rules and
regulations promulgated thereunder, and applicable state securities laws;
NOW THEREFORE, the Company and the Buyer hereby agrees as follows:
1. PURCHASE AND SALE OF COMMON STOCK AND PREFERRED STOCK.
a. PURCHASE OF COMMON STOCK. The Company shall issue and sell to
the Buyer and the Buyer shall purchase 1,094,890 shares of Common Stock
(the "COMMON SHARES"), which number of shares shall not result in
beneficial ownership (as that term is defined under Rule 13d-3 promulgated
under the 1934 Act (as hereinafter defined)) by the Buyer of more than four
and nine-tenths percent (4.9%) of the outstanding shares of Common Stock.
The per share purchase price for the Common Shares shall be $2.74, which is
equal to eighty percent (80%) of the average (rounded to the nearest
thousandth) closing bid price for the Common Stock as reported on the
National Association of Securities Dealers Automated Quotation National
Market System ("NASDAQ-NMS") during the five (5) consecutive trading days
ending one trading day prior to the Closing Date, as defined below (such
closing bid price being the "CLOSING DATE AVERAGE MARKET PRICE").
b. PURCHASE OF PREFERRED STOCK. The Company shall issue and sell to
the Buyer and the Buyer shall purchase 40,000 shares of Series B
Convertible Preferred Stock (the "PREFERRED SHARES"), which shall be
convertible into shares of Common Stock (the "CONVERSION SHARES") in
accordance with the terms of the Certificate of Designations, Preferences
and Rights of Series B Convertible Preferred Stock attached hereto as
EXHIBIT A (the "CERTIFICATE OF DESIGNATION"). The per share purchase price
for the Preferred Shares shall be One Hundred Dollars ($100).
c. ISSUANCE OF THE WARRANTS. In consideration of the Buyer's
purchase of the Common Shares and the Preferred Shares, the Company agrees
to issue to the Buyer in accordance with Sections 1(e) and (f) below,
without separate consideration, the Warrants to purchase 638,686 shares of
Common Stock (the "WARRANT SHARES"). The exercise price of the Warrants
shall be $4.11 per Warrant Share. The Warrants shall expire five (5) years
from the date of issuance and shall be in the form attached hereto as
EXHIBIT B. The Common Shares, the Preferred Shares, and the Warrants are
hereafter collectively referred to as the "SECURITIES."
d. ALLOCATION OF SECURITIES. The Securities shall be allocated
among the parties which are the Buyer as specified on their respective
counterpart signature pages to this Agreement.
e. FORM OF PAYMENT. The Buyer shall pay the purchase price for the
Common Shares and the Preferred Shares (the "PURCHASE PRICE") by wire
transfer of United States Dollars to the Company. Three Million Dollars
($3,000,000), representing payment for the Common Shares, shall be paid on
the Closing Date (as defined below). Four Million Dollars ($4,000,000),
representing payment for the Preferred Shares, shall be paid on February 7,
1996. The Company shall promptly deliver stock certificates, duly executed
on behalf of the Company, representing the Common Shares and the Preferred
Shares (the "STOCK CERTIFICATES") on the Closing Date and on February 7,
1996, respectively, and shall deliver the Warrants on February 7, 1996, all
to Buyer's counsel, no later than 4:00 p.m. Eastern Standard Time on the
respective dates.
f. CLOSING DATE. The date and time of the issuance and sale of the
Common Shares (the "CLOSING DATE") shall be no later than 4:00 Eastern
Standard Time on January 31, 1996. The date and time of the issuance and
sale of the Preferred Shares and of the issuance of the Warrants shall be
no later than 4:00 Eastern Standard Time on February 7, 1996. After the
Closing Date, the Buyer's obligation to pay the purchase price for the
Preferred Shares shall be conditioned only on the contemporaneous receipt
of the Preferred Shares and Warrants and the Company's obligation to issue
the Preferred Shares and Warrants shall be conditioned only on the
contemporaneous payment of the purchase price for the Preferred Shares.
2. BUYER'S REPRESENTATIONS AND WARRANTIES
The Buyer represents and warrants to the Company that:
a. INVESTMENT PURPOSE. The Buyer is purchasing the Common Shares,
the Preferred Shares and the Warrants for its own account for investment
only and not with a view towards the public sale or distribution thereof
except pursuant to sales registered under the 1933 Act.
b. ACCREDITED INVESTOR STATUS. The Buyer is an "accredited
investor" as that term is defined in Rule 501(a)(3) of Regulation D.
c. RELIANCE ON EXEMPTIONS. The Buyer understands that the
Securities are being offered and sold to it in reliance on specific
exemptions from the registration requirements of United States federal and
state securities laws and that the Company is relying upon the truth and
accuracy of, and the Buyer's compliance with, the representations,
warranties, agreements, acknowledgments and understandings of the Buyer set
forth herein in order to determine the availability of such exemptions and
the eligibility of the Buyer to acquire the Securities.
d. INFORMATION. The Buyer and its advisors, if any, have been
furnished with all materials relating to the business, finances and
operations of the Company and materials relating to the offer and sale of
the Securities which have been requested by the Buyer. The Buyer and its
advisors, if any, have been afforded the opportunity to ask questions of
the Company and have received complete and satisfactory answers to any such
inquiries. The Buyer understands that its investment in the Securities
involves a high degree of risk.
e. GOVERNMENTAL REVIEW. The Buyer understands that no United States
federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Securities.
f. TRANSFER OR RESALE. The Buyer understands that (i) except as
provided in the Registration Rights Agreement, the Common Shares, the
Preferred Shares, the Conversion Shares, the Warrants, the Warrant Shares,
and the shares of Common Stock that may be issued to the Buyer pursuant to
Section 2(c) of the Registration Rights Agreement and pursuant to Section
(2)(b) of the Certificate of Designation (collectively, the "DAMAGE
SHARES") have not been and are not being registered under the 1933 Act or
any state securities laws, and may not be transferred unless (a)
subsequently registered thereunder, or (b) the Buyer shall have delivered
to the Company an opinion of counsel, reasonably satisfactory in form,
scope and substance to the Company, to the effect that the securities to be
sold or transferred may be sold or transferred pursuant to an exemption
from such registration; (ii) any sale of such securities made in reliance
on Rule 144 promulgated under the 1933 Act may be made only in accordance
with the terms of said Rule and further, if said Rule is not applicable,
any resale of such securities under circumstances in which the seller (or
the person through whom the sale is made) may be deemed to be an
underwriter (as that term is defined in the 1933 Act) may require
compliance with some other exemption under the 1933 Act or the rules and
regulations of the SEC thereunder; and (iii) neither the Company nor any
other person is under any obligation to register such securities (other
than pursuant to the Registration Rights Agreement) under the 1933 Act or
any state securities laws or to comply with the terms and conditions of any
exemption thereunder.
g. LEGENDS. The Buyer understands that the Warrants, the Preferred
Shares and, until such time as the Common Shares, the Conversion Shares,
the Warrant Shares, and the Damage Shares (collectively, the "REGISTRABLE
SECURITIES") have been registered under the 1933 Act as contemplated by the
Registration Rights Agreement, the stock certificates for the Registrable
Securities may bear a restrictive legend in substantially the following
form (and a stop-transfer order may be placed against transfer of such
stock certificates):
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended. The
securities have been acquired for investment and may not be sold,
transferred or assigned in the absence of an effective
registration statement for the securities under said Act, or an
opinion of counsel, reasonably satisfactory in form, scope and
substance to the Company, that registration is not required under
said Act.
h. AUTHORIZATION; ENFORCEMENT. This Agreement has been duly and
validly authorized, executed and delivered on behalf of the Buyer and is a
valid and binding agreement of the Buyer enforceable in accordance with its
terms, subject as to enforceability to general principles of equity and to
bankruptcy, insolvency, moratorium, and other similar laws affecting the
enforcement of creditors' rights generally.
i. RESIDENCY. The Buyer is a resident of the country specified in
its address on the signature page hereof.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the Buyer that:
a. ORGANIZATION AND QUALIFICATION. Each of the Company and its
subsidiaries is a corporation duly organized and existing in good standing
under the laws of the jurisdiction in which it is incorporated, except, in
the case of any such subsidiaries, as would not have a Material Adverse
Effect (as defined below), and has the requisite corporate power to own its
properties and to carry on its business as now being conducted. Each of
the Company and its subsidiaries is duly qualified as a foreign corporation
to do business and is in good standing in every jurisdiction in which the
nature of the business conducted by it makes such qualification necessary
and where the failure so to qualify would have a Material Adverse Effect.
"MATERIAL ADVERSE EFFECT" means any material adverse effect on the
operations, properties or financial condition of the Company and its
subsidiaries taken as a whole.
b. AUTHORIZATION; ENFORCEMENT. (i) The Company has the requisite
corporate power and authority to enter into and perform this Agreement and
the Registration Rights Agreement, and to issue the Registrable Securities,
the Preferred Shares and the Warrants, in accordance with the terms hereof
and thereof, (ii) the execution and delivery of this Agreement by the
Company and the consummation by it of the transactions contemplated hereby
have been duly authorized by the Company's Board of Directors and no
further consent or authorization of the Company, its Board or Directors, or
its stockholders, except with respect to the reverse stock split referred
to in Section 4(g), is required, (iii) this Agreement has been duly
executed and delivered by the Company, and (iv) this Agreement constitutes
a valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally, the
enforcement of creditors' rights and remedies or by other equitable
principles of general application.
c. CAPITALIZATION. As of January 26, 1996, the authorized capital
stock of the Company consists of (i) 40,000,000 shares of Common Stock of
which 26,334,056 shares were issued and outstanding, and (ii) 3,000,000
shares of Preferred Stock $.01 par value, of which 109,000 shares
designated as Series A Cumulative Convertible Preferred Stock and no shares
designated as Series B Convertible Preferred Stock were issued and
outstanding. All of such outstanding shares have been validly issued and
are fully paid and nonassessable. No shares of Common Stock or Preferred
Stock are subject to preemptive rights or any other similar rights of the
stockholders of the Company or any liens or encumbrances. Except as
disclosed in SCHEDULE 3(C), as of January 26, 1996, (i) there are no
outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or
rights convertible into, any shares of capital stock of the Company or any
of its subsidiaries, or arrangements by which the Company or any of its
subsidiaries is or may become bound to issue additional shares of capital
stock of the Company or any of its subsidiaries, and (ii) there are no
agreements or arrangements under which the Company or any of its
subsidiaries is obligated to register the sale of any of its or their
securities under the 1933 Act (except the Registration Rights Agreement).
The Company has furnished to the Buyer true and correct copies of the
Company's Certificate of Incorporation as in effect on the date hereof
("CERTIFICATE OF INCORPORATION") and the Company's By-laws, as in effect on
the date hereof (the "BY-LAWS"). The Company shall provide the Buyer with
a written update of this representation signed by the Company's Chief
Executive or Chief Financial Officer on behalf of the Company as of the
Closing Date.
d. ISSUANCE OF SHARES. The Registrable Securities, the Preferred
Shares and the Warrants are duly authorized and, upon issuance in
accordance with the terms hereof and thereof, shall be validly issued,
fully paid and non-assessable, and free from all taxes, liens and charges
with respect to the issue thereof.
e. NO CONFLICTS. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby will not (i) result in a violation of the
Certificate of Incorporation or By-laws or (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or
both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company or any of its subsidiaries is
a party, or result in a violation of any law, rule, regulation, order,
judgment or decree (including federal and state securities laws and
regulations) applicable to the Company or any of its subsidiaries or by
which any property or asset of the Company or any of its subsidiaries is
bound or affected (except for such conflicts, defaults, terminations,
amendments, accelerations, cancellations and violations as would not,
individually or in the aggregate, have a Material Adverse Effect). The
businesses of the Company and its subsidiaries are not being conducted, and
shall not be conducted through the date of the expiration of any
unexercised Warrants issued to the Buyer, in violation of any law,
ordinance or regulation of any governmental entity, except for possible
violations which either singly or in the aggregate do not have a Material
Adverse Effect. Except as required under the 1933 Act and any applicable
state securities laws, the Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any
court or governmental agency in order for it to execute, deliver or perform
any of its obligations under this Agreement in accordance with the terms
hereof.
f. SEC DOCUMENTS, FINANCIAL STATEMENTS. Since June 30, 1992, the
Company has filed all reports, schedules, forms, statements and other
documents required to be filed by it with the SEC pursuant to the reporting
requirements of the Exchange Act of 1934, as amended (the "1934 ACT") (all
of the foregoing filed prior to the date hereof and all exhibits included
therein and financial statements and schedules thereto and documents (other
than exhibits) incorporated by reference therein, being hereinafter
referred to herein as the "SEC DOCUMENTS"). The Company has delivered to
the Buyer true and complete copies of the SEC Documents, except for such
exhibits, schedules and incorporated documents. As of their respective
dates, the SEC Documents complied in all material respects with the
requirements of the 1934 Act and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading.
As of their respective dates, the financial statements of the Company
included in the SEC Documents complied as to form in all material respects
with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such financial statements
have been prepared in accordance with generally accepted accounting
principles, consistently applied, during the periods involved (except (i)
as may be otherwise indicated in such financial statements or the notes
thereto, or (ii) in the case of unaudited interim statements, to the extent
they may include footnotes or may be condensed or summary statements) and
fairly present in all material respects the consolidated financial position
of the Company and its consolidated subsidiaries as of the dates thereof
and the consolidated results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments). No other information provided by or on behalf
of the Company to the Buyer and referred to in Section 2(d) of this
Agreement, when made, contained any untrue statement of a material fact or
omitted to state any material fact necessary in order to make the
statements therein, in the light of the circumstance under which they were
made, not misleading. In the aggregate, the information provided by or on
behalf of the Company to the Buyer and referred to in Section 2(d),
including without limitation the SEC Documents, does not omit to state a
material fact or contain material inaccuracies.
g. ABSENCE OF CERTAIN CHANGES. Since June 30, 1995, there has been
no material adverse change and no material adverse development in the
business, properties, operations, financial condition, results of
operations or prospects of the Company, except as disclosed in the
documents referred to in Section 2(d) hereof or in the SEC Documents.
h. ABSENCE OF LITIGATION. Except as disclosed in SCHEDULE 3(H),
there is no action, suit, proceeding,inquiry or investigation before or by
any court, public board or body pending or, to the knowledge of the Company
or any of its subsidiaries, threatened against or affecting the Company or
any of its subsidiaries, wherein an unfavorable decision, ruling or finding
would have a Material Adverse Effect or which would adversely affect the
validity or enforceability of, or the authority or ability of the Company
to perform its obligations under, this Agreement or any of the documents
contemplated herein.
4. COVENANTS.
a. BEST EFFORTS. The parties shall use their best efforts timely to
satisfy each of the conditions described in Section 6 and 7 of this
Agreement.
b. FORM D; BLUE SKY LAWS. The Company agrees to file a Form D with
respect to the Securities as required under Regulation D and to provide a
copy thereof to the Buyer promptly after such filing. The Company shall,
on or before the Closing Date, take such action as the Company shall
reasonably determine is necessary to qualify the Securities for, or obtain
exemption for the Securities for, sale to the Buyer at the closing pursuant
to this Agreement under applicable securities or "blue sky" laws of the
states of the United States, and shall provide evidence of any such action
so taken to the Buyer on or prior to the Closing Date.
c. REPORTING STATUS. Until such date as is the earlier of (i) at
least three (3) years after the date of the expiration of all the Warrants,
or (ii) the date on which (a) all of the Warrants have been exercised or
expired, (b) no Registrable Securities are held by any Investor (as that
term is defined in the Registration Rights Agreement), and (c) none of the
Preferred Shares is outstanding (the "REGISTRATION PERIOD"), the Company
shall file all reports required to be filed with the SEC pursuant to the
1934 Act, and the Company shall not terminate its status as an issuer
required to file reports under the 1934 Act even if the 1934 Act or the
rules and regulations thereunder would permit such termination.
d. USE OF PROCEEDS. Without the consent of a majority in interest
of the Registrable Securities, the Company shall not use the proceeds from
the sale of the Common Shares and the Preferred Shares for anything other
than the Company's internal working capital purposes and shall not,
directly or indirectly, use such proceeds for any loan to or investment in
any other corporation, partnership, enterprise or other person; provided
that it is understood that the Company may be required to pay a finder's
fee in connection with the transactions provided for herein.
e. ADDITIONAL EQUITY CAPITAL. The Company agrees that, for a period
of 180 days following February 7, 1996, the Company will not, without the
prior written approval of the Buyer, negotiate or contract with any outside
party to issue additional equity financing in any form, provided that such
restriction shall not apply to the issuance of equity securities in
connection with a license or development agreement between the Company or
one of its subsidiaries and a corporate strategic partner. Notwithstanding
the foregoing, during such 180 day period the Company may negotiate and
contract with an outside party to obtain up to $3,000,000 of additional
equity capital provided that (i) no sale of such securities shall take
place unless the Company first offers such securities to the Buyer on terms
no less favorable in any respect than those subsequently offered to the
eventual purchaser and the Buyer declines such purchase or does not
exercise its right to purchase all of the securities so offered within
fifteen (15) days of receiving a written offer in reasonable detail from
the Company; provided that, the Buyer shall not have the right to purchase
only a portion of the offered securities but must purchase all of the
securities offered, (ii) the terms and conditions on which such equity
securities are sold shall not be more favorable to the purchaser than those
under which the Buyer is purchasing the Common Shares and the Preferred
Shares, and (iii) the sale by such outside party of any such equity
securities shall not be registered on the same registration statement as
registers the sale of the Registrable Securities.
f. EXPENSES. The Company shall pay all expenses incurred in
connection with the negotiation, preparation, execution, delivery and
performance of this Agreement and the Registration Rights Agreement,
including, without limitation, Buyer's attorneys' fees and expenses up to
an aggregate amount of Forty Thousand Dollars ($40,000).
g. REVERSE STOCK SPLIT. The Company agrees to use its best efforts
to effect a reverse one-for-two stock split of the outstanding shares of
Common Stock as soon as practicable after the Closing Date. The Company
shall not be required to seek stockholder approval prior to the annual
meeting thereof.
h. FINANCIAL INFORMATION. The Company agrees to send the following
reports to the Buyer until the Buyer transfers, assigns, or sells all of
the Securities, Conversion Shares, Warrant Shares, and Damage Shares: (i)
within ten (10) days after the filing with the SEC, a copy of its Annual
Report on Form 10-K, its Quarterly Reports on Form 10-Q and any Current
Reports on Form 8-K; and (ii) within one day after release, copies of all
press releases issued by the Company or any of its subsidiaries.
i. RESERVATION OF SHARES. The Company shall at all times have
authorized, and reserved for the purpose of issuance, a sufficient number
of shares of Common Stock to provide for the exercise of the Warrants,
conversion of the Preferred Shares and issuance of the Damage Shares.
j. LISTING. The Company shall promptly secure the listing of the
Registrable Securities upon each national securities exchange or automated
quotation system, if any, upon which shares of Common Stock are then listed
(subject to official notice of issuance) and shall maintain, so long as any
other shares of Common Stock shall be so listed, such listing of all shares
of Registrable Securities from time to time issuable under the terms of
this Agreement and the Registration Rights Agreement.
k. MAJOR TRANSACTIONS. The Company shall not consummate a Major
Transaction (as that term is defined in the Certificate of Designation)
without the prior written approval of the holders of a majority of the
Preferred Shares; PROVIDED, HOWEVER, that this Section shall terminate and
be of no further force and effect if the Company reasonably determines that
performance hereunder would violate NASDAQ rules with regard to the
issuance of voting securities having super-majority voting rights.
5. TRANSFER AGENT INSTRUCTIONS.
The Company shall instruct its transfer agent to issue certificates,
registered in the name of the Buyer or its nominee, for the Conversion
Shares, Warrant Shares and Damage Shares in such amounts as specified from
time to time by the Company to the transfer agent in accordance with the
terms of the applicable security. Prior to sale of the Registrable
Securities, pursuant to an effective registration statement all such
certificates shall bear the restrictive legend specified in Section 2(g) of
this Agreement. The Company shall provide instructions and opinions of
counsel to its transfer agent in accordance with Section 3(o) of the
Registration Rights Agreement. The Company warrants that no instruction
other than such instructions referred to in this Section 5, and stop
transfer instructions to give effect to Section 2(f) hereof prior to
registration of the Registrable Securities under the 1933 Act, will be
given by the Company to its transfer agent and that the Securities and the
Registrable Securities shall otherwise be freely transferable on the books
and records of the Company as and to the extent provided in this Agreement
and the Registration Rights Agreement. Nothing in this Section shall
affect in any way the Buyer's obligations and agreement to comply with all
applicable securities laws upon resale of the Securities and the
Registrable Securities. If the Buyer provides the Company with an opinion
of counsel, reasonably satisfactory in form, scope and substance to the
Company, that registration of a resale by the Buyer of any of the
Securities or the Registrable Securities is not required under the 1933
Act, the Company shall permit the transfer, and, in the case of the Common
Shares, the Preferred Shares, the Conversion Shares, the Warrant Shares or
the Damage Shares, promptly instruct its transfer agent to issue one or
more certificates in such name and in such denominations as specified by
the Buyer.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The obligation of the Company hereunder to sell the Common Shares is
subject to the satisfaction, at or before the Closing Date, of each of the
following conditions, provided that these conditions are for the Company's
sole benefit and may be waived by the Company at any time in its sole
discretion:
a. The parties shall have executed this Agreement and the
Registration Rights Agreement, and delivered the same to each other.
b. The Buyer shall have delivered $3,000,000 of the Purchase Price
to the Company.
c. The representations and warranties of the Buyer shall be true and
correct in all material respects as of the date when made and as of the
Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date), and the Buyer shall have
performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by the Buyer at or prior to the
Closing Date.
7. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.
The obligation of the Buyer hereunder to purchase the Common Shares
and the Preferred Shares is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions, provided that these
conditions are for the Buyer's sole benefit and may be waived by the Buyer
at any time in its sole discretion:
a. The parties shall have executed this Agreement and the
Registration Rights Agreement, and delivered the same to each other.
b. The Company shall have caused the Certificate of Designation to
be filed with Secretary of State for the State of Delaware at or before the
Closing Date.
c. Until the Closing Date, the Common Stock shall be authorized for
quotation on NASDAQ-NMS, and trading in the Common Stock (or on NASDAQ-NMS
generally) shall not have been suspended by the SEC or NASDAQ.
d. The representations and warranties of the Company shall be true
and correct in all material respects as of the date when made and as of the
Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date) and the Company shall have
performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by the Company at or prior to the
Closing Date. The Buyer shall have received a certificate, executed by the
chief executive officer of the Company, dated as of the Closing Date, to
the foregoing effect and as to such other matters as may be reasonably
requested by the Buyer.
e. The Buyer shall have received an opinion of the Company's
counsel, dated as of the Closing Date, in form, scope and substance
reasonably satisfactory to the Buyer and in substantially the same form as
EXHIBIT C attached hereto.
f. The Buyer shall have received the officer's certificate described
in Section 3(c) above, dated as of the Closing Date.
g. The Company shall have delivered to the Buyer the Stock
Certificate for the Common Shares.
8. GOVERNING LAW; MISCELLANEOUS.
a. GOVERNING LAW. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of Delaware without
regard to the principles of conflict of laws.
b. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party
and delivered to the other party. In the event any signature page is
delivered by facsimile transmission, the party using such means of delivery
shall cause four (4) additional original executed signature pages to be
physically delivered to the other party within five (5) days of the
execution and delivery hereof.
c. HEADINGS. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
d. SEVERABILITY. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement or the validity or enforceability of this
Agreement in any other jurisdiction.
e. ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the instruments
referenced herein contain the entire understanding of the parties with
respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor the Buyer
makes any representation, warranty, covenant or undertaking with respect to
such matters. No provision of this Agreement may be waived or amended
other than by an instrument in writing signed by the party to be charged
with enforcement.
f. NOTICES. Any notices required or permitted to be given under the
terms of this Agreement shall be sent by mail or delivered personally or by
courier and shall be effective five days after being placed in the mail, if
mailed, or upon receipt, if delivered personally or by courier, in each
case addressed to a party. The addresses for such communications shall be:
If to the Company:
Enzon, Inc.
20 Kingsbridge Road
Piscataway, NJ 08854
Telecopy: (908) 980-9606
Attention: Corporate Secretary
With copy to:
Ross & Hardies
65 East 55th Street, 31st floor
New York, NY 10022
Telecopy: (212) 421-5682
Attention: Kevin T. Collins, Esq.
If to the Buyer, at the addresses on the signature pages.
With copy to:
Genesee Advisers
11921 Freedom Drive, Suite 550
Reston, VA 22090
Telecopy: (703) 834-6627
Attention: Neil T. Chau
And:
Klehr, Harrison, Harvey, Branzburg & Ellers
1401 Walnut Street
Philadelphia, PA 19102
Telecopy: (215) 568-5725
Attention: Jason M. Shargel, Esq.
Each party shall provide notice to the other party of any change in
address.
g. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and assigns.
Neither the Company nor the Buyer shall assign this Agreement or any rights
or obligations hereunder without the prior written consent of the other
(which consent may be withheld for any reason in the sole discretion of the
party from whom consent is sought). Notwithstanding the foregoing, the
Buyer may assign its rights hereunder to any of its "affiliates," as that
term is defined under the 1934 Act, without the consent of the Company.
h. THIRD PARTY BENEFICIARIES. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not the benefit of, nor may any provision hereof be
enforced by, any other person.
i. SURVIVAL. The representations and warranties of the Company and
the Buyer contained in Sections 2 and 3 and the agreements and covenants
set forth in Sections 1(b), 1(c), 1(e), 1(f), 4, 5, 8(g), 8(h), 8(k) and
8(l), and this subsection shall survive the closing; provided that, in the
event the Buyer fails to deliver payment for the Preferred Shares on or
before February 7, 1996, the covenants contained in the Sections 4(e), 4(g)
and 4(k) shall terminate and be of no further effect, all references to
Preferred Shares and Warrants contained in Section 4 herein and in the
Registration Rights Agreement shall be eliminated and be of no further
effect and the term Registrable Securities used herein and in the
Registration Rights Agreement shall not include the Conversion Shares and
the Warrant Shares (as defined herein) and the Company shall be entitled to
file a Certificate of Elimination with respect to the Certificate of
Designation.
k. PUBLICITY. The Company and the Buyer shall have the right to
approve before issuance any press releases, SEC or NASD filings, or any
other public statements with respect to the transactions contemplated
hereby; PROVIDED, HOWEVER, that the Company shall be entitled, without the
prior approval of the Buyer, to make any press release or SEC or NASD
filings with respect to such transactions as is required by applicable law
and regulations (although the Buyer shall be consulted by the Company in
connection with any such press release prior to its release and shall be
provided with a copy thereof).
l. FURTHER ASSURANCES. Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute
and deliver all such other agreements, certificates, instruments and
documents, as the other party may reasonably request in order to carry out
the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.
m. TERMINATION. In the event that the Closing Date shall not have
occurred on or before thirty (30) days from the date hereof, this Agreement
shall terminate at the close of business on such date.
IN WITNESS WHEREOF, the Buyer and the Company have caused this
Agreement to be duly executed under seal.
ENZON, INC.
By:/S/ PETER G. TOMBROS
Name: PETER G. TOMBROS
Its: PRESIDENT AND CEO
GFL ADVANTAGE FUND LTD.
By:/S/ A.P. DE GROOT
Name: A.P. DE GROOT
Its: PRESIDENT
Address:Genesee Fund Limited
CITCO Building
Wickhams Cay
P.O. Box 662
Road Town, Tortola
British Virgin Islands
Administrator
Curacao International Trust Co. N.V.
Kaya Flamboyan 9
P.O. Box 812
Curacao, Netherland Antilles
Allocated Portion of Securities: Preferred Shares purchased pursuant to
Section 1(b) and Warrant for 364,963 Warrant Shares.
<PAGE>
GFL PERFORMANCE FUND LTD.
By:/S/ A.P. DE GROOT
Name: A.P. DE GROOT
Its: PRESIDENT
Address: Genesee Fund Limited
CITCO Building
Wickhams Cay
P.O. Box 662
Road Town, Tortola
British Virgin Islands
Administrator
Curacao International Trust Co. N.V.
Kaya Flamboyan 9
P.O. Box 812
Curacao, Netherland Antilles
Allocated portion of Securities: Common Shares purchased pursuant to
Section 1(a) and Warrant for 273,723 Warrant Shares.
EXHIBIT A
TO
SECURITIES PURCHASE
AGREEMENT
CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RIGHTS OF SERIES B CONVERTIBLE
PREFERRED STOCK
OF
ENZON, INC.
ENZON, Inc. (the "COMPANY"), a corporation organized and existing
under the General Corporation Law of the State of Delaware, does hereby
certify that, pursuant to authority conferred upon the Board of Directors
of the Company by the Certificate of Incorporation, as amended, of the
Company, and pursuant to Section 151 of the General Corporation Law of the
State of Delaware, the Board of Directors of the Company at a meeting duly
held on January 31, 1996, adopted resolutions providing for the
designations, preferences and relative, participating, optional or other
rights, and the qualifications, limitations or restrictions thereof, of
forty thousand (40,000) shares of Series B Convertible Preferred Stock (the
"SERIES B PREFERRED SHARES") of the Company, as follows:
RESOLVED, that the Company is authorized to issue 40,000 shares
of Series B Convertible Preferred Stock (the "SERIES B PREFERRED
SHARES") which shall have the following powers, designations,
preferences and other special rights:
(1) DIVIDENDS. The holders of the Series B Preferred
Shares shall not be entitled to dividends.
(2) CONVERSION OF SERIES B PREFERRED SHARES. The holders
of the Series B Preferred Shares shall have the right, at their
option, to convert the Series B Preferred Shares into shares of
Common Stock on the following terms and conditions:
(a) Each Preferred Share shall be convertible at any
time after seventy (70) days after the date of issuance (or, if
such Series B Preferred Share is called for redemption, at any
time up to and including, but not after, the close of business on
the fifth full business day prior to the date fixed for such
redemption, unless default shall be made by the Company in
providing the funds for the payment of the redemption price),
into fully paid and nonassessable shares (calculated to the
nearest whole share) of Common Stock of the Company as
constituted at the time of such conversion, at the conversion
price (the "CONVERSION PRICE") in effect at the time of
conversion determined as hereinafter provided; PROVIDED, HOWEVER,
that in no event shall any holder be entitled to convert Series B
Preferred Shares if, after giving effect to such conversion, the
number of shares of Common Stock purchased pursuant to the
Securities Purchase Agreement dated January 31, 1996 by and among
the Company and certain investors (the "SECURITIES PURCHASE
AGREEMENT") set forth therein providing for the purchase of
Common Stock, the Series B Preferred Shares and Warrants or
issued on exercise of such Warrants, or conversion of Series B
Preferred Shares and beneficially owned by such holder and all
other holders whose holdings would be aggregated with such holder
for purposes of calculating beneficial ownership in accordance
with Sections 13(d) and 16 of the Securities Exchange Act of
1934, as amended, and the regulations thereunder ("SECTIONS 13(D)
AND 16"), including, without limitation, any person serving as an
adviser to any holder (collectively, the "RELATED PERSONS"),
would exceed four and nine-tenths percent (4.9%) of the
outstanding shares of Common Stock (calculated in accordance with
Sections 13(d) and 16). Common Stock issuable upon conversion of
Series B Preferred Shares or exercise of the warrants for the
purchase of Common Stock held by such holder or the Related
Persons shall not be deemed to be beneficially owned by such
holder or the Related Persons for this purpose. Each Preferred
Share shall have a value of $100 (the "STATED VALUE") for the
purpose of such conversion and the number of shares of Common
Stock issuable upon conversion of each of the Series B Preferred
Shares shall be determined by dividing the Stated Value thereof
by the Conversion Price then in effect. Every reference herein
to the COMMON STOCK of the Company (unless a different intention
is expressed) shall be to the shares of the Common Stock of the
Company, $.01 par value, as such stock exists immediately after
the issuance of the Series B Preferred Shares provided for
hereunder, or to stock into which such Common Stock may be
changed from time to time thereafter.
(b) The Conversion Price shall be eighty percent (80%)
(the "CONVERSION PERCENTAGE") of the Average Market Price (as
defined below) for the Common Stock for the five (5) consecutive
trading days ending one trading day prior to the date the
Conversion Notice (as defined below) is received by the Company,
subject to adjustment as provided herein. If the registration
statement (the "REGISTRATION STATEMENT") covering the shares of
Common Stock issuable upon conversion of the Series B Preferred
Shares required to be filed by the Company pursuant to the
Registration Rights Agreement between the Company and initial
holders of the Series B Preferred Shares (the "REGISTRATION
RIGHTS AGREEMENT") has not been declared effective by the U.S.
Securities and Exchange Commission ("SEC") within ninety (90)
days after the date of issuance of the Series B Preferred Shares,
or if, after the Registration Statement has been declared
effective by the SEC, sales cannot be made pursuant to the
Registration Statement by reason of stop order, the Company's
failure to update the Registration Statement or otherwise, or if
the Common Stock is not listed or included for quotation on the
National Association of Securities Dealers Automated Quotation
("NASDAQ") National Market System (the "NASDAQ-NMS"), the New
York Stock Exchange (the "NYSE"), the American Stock Exchange
(the "AMEX"), or the NASDAQ SmallCap Market (the "NASDAQ
SMALLCAP") then, as partial relief for the damages to the holder
by reason of any such delay in or reduction of its ability to
sell the shares of Common Stock (which remedy shall not be
exclusive of any other remedies available at law or in equity,
except that such remedy shall be the exclusive remedy for any
delay in the effectiveness of the Registration Statement provided
the Registration Statement is declared effective by the SEC
within 180 days after the date of issuance of the Series B
Preferred Shares), the Conversion Percentage shall be reduced by
a number of percentage points equal to three (3) times the sum
of: (i) the number of months (prorated for partial months) after
the end of such 90 day period and prior to the date the
Registration Statement is declared effective by the SEC,
provided, however, that there shall be excluded from such period
(and from any period under clause (ii) immediate below) delays
which are attributable to changes in the Registration Statement
required by the Investors (as that term is defined in the
Registration Rights Agreement), including, without limitation,
changes in the plan of distribution; (ii) the number of months
(prorated for partial months) that sales cannot be made pursuant
to the Registration Statement (by reason of stop order, the
Company's failure to update the Registration or otherwise) after
the Registration Statement has been declared effective; and (iii)
the number of months (prorated for partial months) that the
Common Stock is not listed or included for quotation on the
NASDAQ-NMS, NYSE, AMEX, or NASDAQ SmallCap after the Registration
Statement has been declared effective; provided that the
aggregate number of months that are the basis of a reduction in
the Conversion Percentage pursuant to the foregoing clauses (i),
(ii) and (iii) shall not exceed twelve (12). (For example, if
the Registration Statement becomes effective one and one-half
(1 1/2 ) months after the end of such 90 day period, the
Conversion Percentage would be 75.5% until any subsequent
adjustment; if thereafter sales could not be made pursuant to the
Registration Statement for a period of two (2) months, the
Conversion Percentage would then be 69.5%.) If the holder
converts Series B Preferred Shares into Common Stock and an
adjustment to the Conversion Percentage is required subsequent to
such conversion, but prior to the sale of such Common Stock by
such holder, the Company shall pay to such holder, within five
(5) days after receipt of a notice of the sale of such Common
Stock from such holder, an amount equal to the Average Market
Price of the Common Stock obtained upon conversion of such Series
B Preferred Shares for the five (5) trading days ending one (1)
trading day prior to the date of conversion multiplied by three-
hundredths (.03) times the number of months (prorated for partial
months) for which an adjustment was required; provided that the
aggregate number of months for which such an adjustment is
required (when added to the number of months for which an
adjustment is made pursuant to clauses (i), (ii) and (iii) above)
shall not exceed twelve (12). Such amount may be paid at the
Company's option in cash or Common Stock valued based on the
Average Market Price of the Common Stock for the period of five
(5) consecutive trading days ending on the date of the sale of
such Common Stock; PROVIDED, HOWEVER, that any amounts due as to
that period during which the shares are not traded or included
for quotation on the NASDAQ-NMS, NYSE, AMEX or NASDAQ SmallCap
shall be paid in cash only; PROVIDED, FURTHER, HOWEVER, that in
no event shall shares be issued hereunder if, after giving effect
to such issuance, the number of shares of Common Stock purchased
pursuant to the Securities Purchase Agreement or issued on
exercise of the Warrants or conversion of the Series B Preferred
Shares and beneficially owned by such holder and all Related
Persons would exceed four and nine-tenths percent (4.9%) of the
outstanding shares of Common Stock (calculated in accordance with
Sections 13(d) and 16; cash shall be paid in lieu of any shares
which cannot be issued pursuant to this second proviso. Common
Stock issuable upon conversion of Series B Preferred Shares or
exercise of the warrants for the purchase of Common Stock held by
such holder or the Related Persons shall not be deemed to be
beneficially owned by such holder or the Related Persons for this
purpose. (For example, if the Conversion Percentage was 75.5% at
the time of conversion of $1,000,000 in Stated Value of Series B
Preferred Shares (such that the Series B Preferred Shares were
converted into Common Stock having an Average Market Price for
the applicable period in aggregate of $1,324,503) and subsequent
to conversion there was a further two (2) month delay in the
Registration Statement's being declared effective, and such
Common Stock was sold at the end of such two (2) month period,
the Company would pay to the holder $79,470.20 in cash or Common
Stock.)
"AVERAGE MARKET PRICE" of any security for any period
shall be computed as the arithmetic average of the closing bid
prices for such security for each trading day in such period on
the NASDAQ-NMS, or, if the NASDAQ-NMS is not the principal
trading market for such security, on the principal trading market
for such security, or, if market value cannot be calculated for
such period on any of the foregoing bases, the average fair
market value during such period as reasonably determined in good
faith by the Board of Directors of the Company.
(c) If the Company shall consolidate with or merge
into any corporation or reclassify its outstanding shares of
Common Stock (other than by way of subdivision or reduction of
such shares) (each a "MAJOR TRANSACTION"), then each Series B
Preferred Share shall thereafter be convertible into the number
of shares of stock or securities (the "RESULTING SECURITIES") or
property of the Company, or of the entity resulting from such
consolidation or merger, to which a holder of the number of
shares of Common Stock delivered upon conversion of such Series B
Preferred Share would have been entitled upon such Major
Transaction had the holder of such Series B Preferred Share
exercised its right of conversion and had such Common Stock been
issued and outstanding and had such holder been the holder of
record of such Common Stock at the time of such Major
Transaction, and the Company shall make lawful provision therefor
as a part of such consolidation, merger or reclassification;
PROVIDED, HOWEVER, that the Company shall give the holders of the
Series B Preferred Shares written notice of any Major Transaction
promptly upon the execution of any agreement whether or not
binding in connection therewith (including without limitation a
letter of intent or agreement in principle) and in no event shall
a Major Transaction be consummated prior to ninety (90) days
after such notice.
(d) The Company shall not issue any fraction of a
share of Common Stock upon any conversion, but shall pay in cash
therefor at the Conversion Price then in effect multiplied by
such fraction.
(e) On presentation and surrender to the Company (or
at any office or agency maintained for the transfer of the Series
B Preferred Shares) of the certificates of Series B Preferred
Shares so to be converted, duly endorsed in blank for transfer or
accompanied by proper instruments of assignment or transfer in
blank (a "CONVERSION NOTICE"), with signatures guaranteed, the
holder of such Series B Preferred Shares shall be entitled,
subject to the limitations herein contained, to receive in
exchange therefor a certificate or certificates for fully paid
and nonassessable shares, which certificates shall be delivered
by the second trading day after the date of delivery of the
Conversion Notice, and cash for fractional shares, of Common
Stock on the foregoing basis. The Series B Preferred Shares
shall be deemed to have been converted, and the person converting
the same to have become the holder of record of Common Stock, for
all purposes as of the date of delivery of the Conversion Notice.
(f) The Company shall, so long as any of the Series B
Preferred Shares are outstanding, reserve and keep available out
of its authorized and unissued Common Stock, solely for the
purpose of effecting the conversion of the Series B Preferred
Shares, such number of shares of Common Stock as shall from time
to time be sufficient to effect the conversion of all of the
Series B Preferred Shares then outstanding.
(g) The Company shall pay any and all taxes which may
be imposed upon it with respect to the issuance and delivery of
Common Stock upon the conversion of the Series B Preferred Shares
as herein provided. The Company shall not be required in any
event to pay any transfer or other taxes by reason of the
issuance of such Common Stock in names other than those in which
the Series B Preferred Shares surrendered for conversion are
registered on the Company's records, and no such conversion or
issuance of Common Stock shall be made unless and until the
person requesting such issuance has paid to the Company the
amount of any such tax, or has established to the satisfaction of
the Company and its transfer agent, if any, that such tax has
been paid.
(3) VOTING RIGHTS. Holders of Series B Preferred Shares
shall have no voting rights, except as required by law and by
Section 7 hereof.
(4) REDEMPTION. The Company may, but shall not be
obligated to, at any time subsequent to ninety (90) days after
the issuance of the Series B Preferred Shares, redeem the whole
or any part of the Series B Preferred Shares then outstanding at
a redemption price of $127 per Preferred Share, in accordance
with the following redemption procedures:
(a) In case of redemption of only part of the Series B
Preferred Shares at any time outstanding, the Company shall
designate the amount of Series B Preferred Shares so to be
redeemed and shall redeem such Series B Preferred Shares on a PRO
RATA basis. Subject to the limitations and provisions herein
contained, the Board of Directors shall have the power and
authority to prescribe the terms and conditions upon which the
Series B Preferred Shares shall be redeemed from time to time.
(b) Notice of every redemption shall be given by mail
to every holder of record of any Series B Preferred Shares then
to be redeemed, at least thirty (30), but no more than ninety
(90), days prior to the date fixed as the date for the redemption
thereof, at the respective addresses of such holders as the same
shall appear on the stock transfer books of the Company. The
notice shall state that the Series B Preferred Shares shall be
redeemed by the Company at the redemption price specified above,
upon the surrender for cancellation, at the time and place
designated in such notice, of the certificates representing the
Series B Preferred Shares to be redeemed, properly endorsed in
blank for transfer, or accompanied by proper instruments of
assignment and transfer in blank, with signatures guaranteed, and
bearing all necessary transfer tax stamps thereto affixed and
cancelled. On and after the date specified in the notice
described above, each holder of Series B Preferred Shares called
for redemption shall be entitled to receive therefor the
specified redemption price upon presentation and surrender at the
place designated in such notice of the certificates for Series B
Preferred Shares called for redemption, properly endorsed in
blank for transfer or accompanied by proper instruments of
assignment or transfer in blank, with signatures guaranteed, and
bearing all necessary transfer tax stamps thereto affixed and
cancelled.
(c) If the Company shall give notice of redemption as
aforesaid (and unless the Company shall fail to pay the
redemption price of the Series B Preferred Shares presented for
redemption in accordance with such notice), all Series B
Preferred Shares called for redemption shall be deemed to have
been redeemed on the date specified in such notice, whether or
not the certificates for such Series B Preferred Shares shall be
surrendered for redemption, and such Series B Preferred Shares so
called for redemption shall from and after such date cease to
represent any interest whatsoever in the Company or its property,
and the holders thereof shall have no rights other than the right
to receive such redemption price without any interest thereof
from and after such date.
(5) LIQUIDATION, DISSOLUTION, WINDING UP. In the event of
any voluntary or involuntary liquidation, dissolution or winding
up of the Company, the holders of the Series B Preferred Shares
shall be entitled to receive in cash out of the assets of the
Company, whether from capital or from earnings, available for
distribution to its stockholders (the "PREFERRED FUNDS"), before
any amount shall be paid to the holders of the Common Stock, an
amount equal to the Stated Value per Series B Preferred Share,
provided that, if the Preferred Funds are insufficient to pay the
full amount due to the holders of Series B Preferred Shares and
holders of shares of other classes or series of preferred stock
of the Company that are of equal rank with the Series B Preferred
Shares as to payments of Preferred Funds (the "PARI PASSU
SHARES"), then each holder of Series B Preferred Shares and Pari
Passu Shares shall receive a percentage of the Preferred Funds
equal to the full amount of Preferred Funds payable to such
holder as a percentage of the full amount of Preferred Funds
payable to all holders of Series B Preferred Shares and Pari
Passu Shares. The purchase or redemption by the Company of
stock of any class, in any manner permitted by law, shall not,
for the purposes hereof, be regarded as a liquidation,
dissolution or winding up of the Company. Neither the
consolidation nor merger of the Company with or into any other
corporation or corporations, nor the sale or transfer by the
Company of less than substantially all of its assets, shall, for
the purposes hereof, be deemed to be a liquidation, dissolution
or winding up of the Company. No holder of Series B Preferred
Shares shall be entitled to receive any amounts with respect
thereto upon any liquidation, dissolution or winding up of the
Company other than the amounts provided for herein.
(6) PREFERRED RANK. All shares of Common Stock shall be of
junior rank to all Series B Preferred Shares in respect to the
preferences as to distributions and payments upon the
liquidation, dissolution or winding up of the Company. The
rights of the shares of Common Stock shall be subject to the
preferences and relative rights of the Series B Preferred Shares.
The Series B Preferred Shares shall be of equal rank with the
Company's Series A Cumulative Convertible Preferred Stock in
respect of distributions and payments upon the liquidation,
dissolution or winding up of the Company. Notwithstanding the
foregoing, the Company may authorize and issue additional or
other preferred stock which is of equal or junior rank with the
Series B Preferred Shares in respect of the preferences as to
distributions and payments upon the liquidation, dissolution or
winding up of the Company; PROVIDED, HOWEVER, that for so long as
the Series B Preferred Shares remain outstanding the Company
shall not issue any capital stock which is more senior in rank
than the Series B Preferred Shares in respect of the foregoing
preferences. In the event of the merger or consolidation of the
Company with or into another corporation, the Series B Preferred
Shares shall maintain their relative powers, designations and
preferences provided for herein.
(7) VOTE TO CHANGE THE TERMS OF SERIES B PREFERRED SHARES.
The affirmative vote at a meeting duly called for such purpose or
the written consent without a meeting of the holders of not less
than two-thirds (2/3) of the then outstanding Series B Preferred
Shares shall be required to amend, alter, change or repeal any of
the powers, designations, preferences and rights of the Series B
Preferred Shares.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this certificate to be
signed by Peter G. Tombros, its President, and John A. Caruso, its
Secretary, this 31st day of January 1996.
By:/S/ PETER G. TOMBROS
President
Attest:/S/ JOHN A. CARUSO
Secretary
<PAGE>
EXHIBIT B
TO
SECURITIES PURCHASE
AGREEMENT
WARRANT TO PURCHASE 364,963 SHARES OF COMMON STOCK VOID AFTER 5:00
P.M. NEW JERSEY TIME, ON FEBRUARY 7, 2001. THIS WARRANT AND THE SHARES OF
COMMON STOCK ISSUABLE UPON THE EXERCISE HEREOF HAVE BEEN AND WILL BE ISSUED
IN TRANSACTIONS WHICH HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE SECURITIES OR BLUE SKY
LAWS. THIS WARRANT AND SUCH SHARES MAY NOT BE SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF, IN WHOLE OR IN PART, IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE
LAW, OR AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
NO. ______1_________ 364,963 SHARES
ENZON, INC.
This certifies that, for value received, GFL Advantage Fund Ltd., the
registered holder hereof, or assigns (the "WARRANTHOLDER") is entitled to
purchase from Enzon, Inc., a Delaware corporation (the "COMPANY"), at any
time on and after the earlier of the date the Registration Statement (filed
with the Securities and Exchange Commission (the "SEC") pursuant to Section
2(a) of a certain Registration Rights Agreement of even date herewith by
and among the parties hereto) is declared effective by the SEC or seventy
(70) days from the date of issuance of this Warrant and before 5:00 p.m.,
New Jersey time, on February 7, 2001 (the "TERMINATION DATE"), at the
purchase price of $4.11 per share (the "EXERCISE PRICE"), the number of
shares of Common Stock, par value $.01 per share (the "COMMON STOCK"), of
the Company set forth above (the "WARRANT STOCK"); PROVIDED, HOWEVER, that
in no event shall the Warrantholder be entitled to exercise this Warrant
if, after giving effect to such exercise, the number of shares of Common
Stock beneficially owned by the Warrantholder and all other holders of
Common Stock whose holdings would be aggregated with the Warrantholder for
purposes of calculating beneficial ownership in accordance with Sections
13(d) and 16 of the Securities Exchange Act of 1934, as amended, and the
regulations thereunder ("SECTIONS 13(D) AND 16"), including without
limitation any person serving as an adviser to any holder (collectively,
the "RELATED PERSONS"), would exceed four and nine-tenths percent (4.9%) of
the outstanding shares of Common Stock (calculated in accordance with
Sections 13(d) and 16). The Common Stock issuable upon conversion of
shares of the Company's preferred stock or exercise of warrants for the
purchase of Common Stock held by the Warrantholder or the Related Persons
shall not be deemed to be beneficially owned by the Warrantholder or such
Related Persons for this purpose. The number of shares of Warrant Stock,
the Termination Date and the Exercise Price per share of this Warrant shall
be subject to adjustment from time to time as set forth below.
SECTION I. TRANSFER OR EXCHANGE OF WARRANT
The Company shall be entitled to treat the Warrantholder as the owner
in fact hereof for all purposes and shall not be bound to recognize any
equitable or other claim to or interest in this Warrant on the part of any
other person. This Warrant shall be transferable only on the books of the
Company, maintained at its principal office, upon delivery of this Warrant
Certificate duly endorsed by the Warrantholder or by its duly authorized
attorney or representative, or accompanied by proper evidence of
succession, assignment or authority to transfer. Upon any registration of
transfer, the Company shall deliver a new Warrant Certificate or
Certificates to the persons entitled thereto.
SECTION II. TERM OF WARRANT; EXERCISE OF WARRANTS
A. TERMINATION. The Company may, in its sole discretion, extend the
Termination Date with respect to the exercise of this Warrant upon notice
to the Warrantholder. As used herein, "TERMINATION DATE" shall be deemed
to include any such extensions.
B. EXERCISE. This Warrant shall be exercised by surrender to the
Company, at its principal office, of this Warrant Certificate, together
with the Purchase Form attached hereto duly completed and signed, and upon
payment to the Company of the Exercise Price for the number of shares of
Warrant Stock in respect of which this Warrant is then exercised. Payment
of the aggregate Exercise Price shall be made in cash or by certified or
official bank check.
C. WARRANT CERTIFICATE. Subject to Section III hereof, upon such
surrender of this Warrant Certificate and payment of the Exercise Price as
aforesaid, the Company shall issue and cause to be delivered to or upon the
written order of the Warrantholder, by the second trading day after
exercise, a certificate or certificates for the number of full shares of
Warrant Stock so purchased upon the exercise of such Warrant, together with
cash, as provided in Section VI hereof, in respect of any fractional shares
of Warrant Stock otherwise issuable upon such surrender. Such certificate
or certificates representing the Warrant Stock shall be deemed to have been
issued and any person so designated to be named therein shall be deemed to
have become a holder of record of such shares of Warrant Stock as of the
date of receipt by the Company of this Warrant Certificate and payment of
the Exercise Price as aforesaid; PROVIDED, HOWEVER, that if, at the date of
surrender of this Warrant Certificate and payment of the Exercise Price,
the transfer books for the Warrant Stock or other class of stock
purchasable upon the exercise of this Warrant shall be closed, the
certificate or certificates for the shares of Warrant Stock in respect of
which this Warrant is then exercised shall be deemed issuable as of the
date on which such books shall next be opened (whether before or after the
Termination Date) and until such date the Company shall be under no duty to
deliver any certificate for such shares of Warrant Stock; PROVIDED FURTHER,
HOWEVER, that the transfer books of record, unless otherwise required by
law, shall not be closed at any one time for a period longer than twenty
(20) days. The rights of purchase represented by this Warrant shall be
exercisable, at the election of the Warrantholder, either in full or from
time to time in part, and, in the event that this Warrant is exercised in
respect of fewer than all of the shares of Warrant Stock purchasable on
such exercise at any time prior to the Termination Date, a new Warrant
Certificate evidencing the remaining Warrant or Warrants will be issued,
and the Company shall deliver the new Warrant Certificate or Certificates
pursuant to the provisions of this Section.
SECTION III. PAYMENT OF TAXES
The Company will pay all documentary stamp taxes, if any, attributable
to the initial issuance of the shares of Warrant Stock upon the exercise of
this Warrant; provided, however, that the Warrantholder shall pay any tax
or taxes which may be payable in respect of any transfer involved in the
issue or delivery of Warrant Certificates or the certificates for the
shares of Warrant Stock in a name other than that of the Warrantholder in
respect of which this Warrant or shares of Warrant Stock are issued.
SECTION IV. MUTILATED OR MISSING WARRANT CERTIFICATES
In case this Warrant Certificate shall be mutilated, lost, stolen or
destroyed, the Company shall, at the request of the Warrantholder, issue
and deliver, in exchange and substitution for and upon cancellation of this
certificate if mutilated, or in lieu of and in substitution for this
certificate if lost, stolen or destroyed, a new Warrant Certificate of like
tenor and representing an equivalent right or interest, but only upon
receipt of evidence reasonably satisfactory to the Company of such loss,
theft or destruction of this Warrant Certificate and indemnity, if
requested, also reasonably satisfactory to the Company.
SECTION V. RESERVATION OF SHARES OF WARRANT STOCK.
There has been reserved, and the Company shall at all times keep
reserved so long as this Warrant remains outstanding, out of its authorized
Common Stock a number of shares of Common Stock sufficient to provide for
the exercise of the rights of purchase represented by this Warrant. The
transfer agent for the Common Stock and every subsequent transfer agent for
any shares of the Company's capital stock issuable upon the exercise of
this Warrant will be irrevocably authorized and directed at all times to
reserve such number of authorized shares as shall be requisite for such
purpose.
SECTION VI. FRACTIONAL SHARES.
No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of this Warrant. With respect to any fraction of
a share called for upon the exercise of this Warrant, the Company shall pay
to the Warrantholder an amount in cash equal to such fraction multiplied by
the Exercise Price then in effect.
SECTION VII. ADJUSTMENTS OF EXERCISE PRICE AND NUMBER OF SHARES.
A. COMPUTATION OF ADJUSTED EXERCISE PRICE. Except as hereinafter
provided, in case the Company shall at any time after the date hereof (i)
issue or sell any shares of Common Stock (except in those instances
referred to in subsection F of this Section VII), including shares held in
the Company's treasury and shares issued upon the exercise of any option,
rights or warrants (with the exception of this Warrant and any other
options, warrants and convertible securities outstanding on the date
hereof, and without duplicating any adjustments pursuant to clause (ii)
below) and shares issued upon the direct or indirect conversion or exchange
of securities for shares of Common Stock (with the exception of the
Company's Series A Cumulative Convertible Preferred Stock and Series B
Convertible Preferred Stock (collectively, the "PREFERRED STOCK"), and
without duplicating any adjustments pursuant to clause (ii) below) for a
consideration per share less than the Market Price (as hereinafter defined)
on the trading day immediately prior to the date of issuance or sale of
such share or without consideration, or (ii) issue any rights, options or
warrants to subscribe for or purchase or otherwise acquire Common Stock
(the "OPTION SECURITIES") or any evidences of indebtedness, shares of stock
or other securities (other than the Preferred Stock) which are convertible
into or exchangeable, with or without payment of consideration, for shares
of Common Stock (the "CONVERTIBLE SECURITIES"), whether or not the right to
exercise such Option Securities or to convert or exchange such Convertible
Securities is immediately exercisable or is conditioned upon the passage of
time, the occurrence or non-occurrence of some other event, or both, for a
consideration per share of Common Stock (calculated in accordance with
subsections A(iii) and A(iv) of this Article VII) less than the Market
Price on the trading day immediately prior to the date of issuance of such
Option Securities or Convertible Securities, then forthwith upon such
issuance or sale the Exercise Price shall (until another such issuance or
sale) be reduced to a price (calculated to the nearest full cent)
determined by multiplying the Exercise Price immediately prior to such
issuance or sale by a fraction, the numerator of which is an amount equal
to the sum of (X) the total number of shares of Common Stock outstanding
immediately prior to such issuance or sale, multiplied by the Market Price
in effect immediately prior to such issuance or sale, plus (Y) the
aggregate of the amount of all consideration, if any, received by the
Company upon such issuance or sale, and the denominator of which is the
Market Price in effect immediately prior to such issuance or sale
multiplied by the total number of shares of Common Stock outstanding
immediately after such issuance or sale; PROVIDED, HOWEVER, that in no
event shall the Exercise Price be adjusted pursuant to this computation to
an amount in excess of the Exercise Price in effect immediately prior to
such computation, except in the case of a combination of outstanding shares
of Common Stock, as provided by subsection B of this Section VII.
For the purposes of any computation to be made in accordance with this
subsection A, the following provisions shall be applicable:
(i) In case of the issuance or sale of shares of Common Stock
for a consideration part or all of which shall be cash, the amount of the
cash consideration therefor shall be deemed to be the amount of the cash
received by the Company for such shares (or, if shares are offered by the
Company for subscription, the subscription price, or, if sold to
underwriters or dealers the public offering price) before deducting
therefrom any compensation paid or discount allowed in the sale,
underwriting or purchase thereof by underwriters or dealers or others
performing similar services, or any expenses incurred in connection
therewith.
(ii) In case of the issuance or sale (otherwise than as a
dividend or other distribution on any stock of the Company) of shares of
Common Stock for a consideration part or all of which shall be other than
cash, the amount of the consideration therefor other than cash shall be
deemed to be the value of such consideration as determined in good faith by
the Board of Directors of the Company.
(iii)In case of the issuance of Convertible Securities (other
than the Convertible Securities described in (iv) below), the aggregate
consideration received therefor shall be deemed to be the consideration, if
any, received by the Company for the issuance of such Convertible
Securities, plus the additional minimum consideration, if any, to be
received by the Company upon the conversion or exchange thereof.
(iv) In the case of the issuance of Option Securities, the
aggregate consideration received therefor shall be deemed to be the
consideration, if any, received by the Company for the issuance of such
Option Securities, plus the additional minimum consideration, if any, to be
received by the Company upon the exercise thereof.
(v) Shares of Common Stock issuable by way of dividend or other
distribution on any stock of the Company shall be deemed to have been
issued immediately after the opening of business on the date following the
record date for the determination of stockholders entitled to receive such
dividend or other distribution and shall be deemed to have been issued
without consideration.
(vi) The reclassification of securities of the Company, other
than shares of Common Stock into securities including shares of Common
Stock, shall be deemed to involve the issuance of such shares for a
consideration other than cash immediately prior to the close of business on
the date fixed for the determination of security holders entitled to
receive such shares, and the value of the consideration allocable to such
shares shall be determined as provided in subsection (ii) of this
subsection A.
(vii) The number of shares of Common Stock at any one time
outstanding shall include the aggregate number of shares issued or issuable
(subject to readjustment upon the actual issuance thereof) upon the
exercise of outstanding options, rights, warrants and upon the conversion
or exchange of outstanding convertible or exchangeable securities.
"MARKET PRICE," as of any date, (i) means the average of the last
reported sale prices for the shares of Common Stock as reported by National
Association of Securities Dealers Automated Quotation National Market
System ("NASDAQ-NMS") for the five consecutive trading days ending on such
date, or (ii) if the NASDAQ-NMS is not the principal trading market for the
shares of Common Stock, the average of the last reported sale prices on the
principal trading market for the Common Stock during the same period, or
(iii) if market value cannot be calculated as of such date on any of the
foregoing bases, the Market Price shall be the average fair market value as
reasonably determined in good faith by the Board of Directors of the
Company.
B. SUBDIVISION AND COMBINATION. In case the Company shall at any
time subdivide or combine the outstanding shares of Common Stock, the
Exercise Price shall forthwith be proportionately decreased in the case of
subdivision or increased in case of combination.
C. ADJUSTMENT IN NUMBER OF SHARES. Upon each adjustment of the
Exercise Price pursuant to the provisions of this Section VII, the number
of shares of Warrant Stock issuable upon the exercise of this Warrant shall
be adjusted to the nearest full share by multiplying a number equal to the
Exercise Price in effect immediately prior to such adjustment by the number
of shares of Warrant Stock issuable upon exercise of this Warrant
immediately prior to such adjustment and dividing the product so obtained
by the adjusted Exercise Price.
D. RECLASSIFICATION, CONSOLIDATION, MERGER, ETC. In case of any
reclassification or change of the outstanding shares of Common Stock (other
than a change in par value to no par value, or from no par value to par
value, or as a result of a subdivision or combination), or in the case of
any consolidation of the Company with, or merger of the Company into,
another corporation (other than a consolidation or merger in which the
Company is the surviving corporation and which does not result in any
reclassification or change of the outstanding shares of Common Stock,
except a change as a result of a subdivision or combination of such shares
or a change in par value, as aforesaid), or in the case of a sale or
conveyance to another corporation of all or substantially all of the
property of the Company, the Warrantholder shall thereafter have the right
to purchase upon the exercise of this Warrant the kind and number of shares
of stock and other securities and property receivable upon such
reclassification, change, consolidation, merger, sale or conveyance as if
the Warrantholder were the owner of the shares of Warrant Stock underlying
this Warrant immediately prior to any such events at the Exercise Price in
effect immediately prior to the record date for such reclassification,
change, consolidation, merger, sale or conveyance as if such Warrantholder
had exercised this Warrant.
E. SPECIAL ADJUSTMENT. If the purchase price provided for in any
Option Securities, the additional consideration, if any, payable upon the
conversion or exchange of any Convertible Securities or the rate at which
any Convertible Securities are convertible into or exchangeable for Common
Stock shall change, or if any Option Securities or Convertible Securities
terminate in whole or in part without being exercised, converted or
exchanged, the Exercise Price in effect at the time of such event shall
forthwith be readjusted. The Exercise Price shall be adjusted to that
amount which would have been in effect at such time had such Option
Securities or Convertible Securities outstanding at such time initially
been granted, issued or sold and the Exercise Price initially adjusted as
provided in subsection A of this Article VII, except that the minimum
amount of additional consideration payable and the total maximum number of
shares issuable shall be determined after giving effect to such event (and
any prior event or events).
F. NO ADJUSTMENT OF EXERCISE PRICE IN CERTAIN CASES. No adjustment
of the Exercise Price shall be made:
(i) Upon the issuance or sale of this Warrant or the shares of
Warrant Stock issuable upon the exercise of this Warrant, or the issuance
or sale of the Preferred Stock, or upon the issuance of shares of Common
Stock in connection with the conversion of such Preferred Stock, or the
issuance of shares of Common Stock pursuant to Section 2(c) of the
Registration Rights Agreement of even date herewith by and among the
Company and the Buyer and pursuant to Section 2(b) of the Certificate of
Designations, Preferences and Rights of Series B Convertible Preferred
Stock of the Company;
(ii) Upon the issuance of options, or shares upon the exercise
thereof, pursuant to the Company's Non-Qualified Stock Option Plan, or any
amendment or successor plan thereto;
(iii) If the amount of said adjustment shall be less than one
cent ($.01) per share; provided, however, that in such case any adjustment
that would otherwise be required then to be made shall be carried forward
and shall be made at the time of and together with any adjustment so
carried forward, shall amount to at least one cent ($.01) per Share;
(iv) Upon the issuance or sale of shares of Common Stock or
securities which are exercisable or convertible into shares of Common Stock
to employees of the Company or its affiliates, under an Employee Stock
Purchase Plan;
(v) Upon the issuance of any Option Securities or the issuance
of shares of Common Stock upon the exercise thereof, where such Option
Security was issued for a consideration price per share of Common Stock
initially deliverable upon exercise of such Option Security equal to or
greater than the Market Price in effect immediately prior to the issuance
or sale of such Option Security;
(vi) Upon the issuance of Convertible Securities where the
conversion price is equal to or greater than the Market Price in effect
immediately prior to the issuance of such Convertible Securities;
(vii)Upon the issuance of Common Stock to non-management
directors of the Company in an amount up to Fourteen Thousand Dollars
($14,000) per such director per year, based upon such method of valuation
as may be established from time to time by the Company's Board of Directors
in its reasonable discretion; or
(viii)Upon the issuance of an aggregate of up to Three Million
Dollars ($3,000,000) of Common Stock or securities which are exercisable or
convertible into Common Stock at a discount to the Market Price as of the
date of such issuance that does not exceed twenty percent (20%).
SECTION VIII. NOTICES TO WARRANTHOLDERS.
So long as this Warrant shall be outstanding and unexercised (a)
if the Company shall pay any dividend or make any distribution upon the
Common Stock or (b) if the Company shall offer to the holders of Common
Stock for subscription or purchase by them any shares of stock of any class
or any other rights or (c) if any capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation or
merger of the Company with or into another corporation, sale, lease or
transfer of the Company to another corporation, or voluntary or involuntary
dissolution, liquidation or winding up of the Company shall be effected,
then, in any such case, the Company shall cause to be delivered to the
Warrantholder, at least ten (10) days prior to the date specified in (i) or
(ii) below, as the case may be, a notice containing a brief description of
the proposed action and stating the date on which (i) a record is to be
taken for the purpose of such dividend or distribution, or (ii) such
reclassification, reorganization, consolidation, merger, conveyance, lease,
dissolution, liquidation or winding up is to take place and the date, if
any, as of which the holders of Common Stock of record shall be entitled to
exchange their shares of Common Stock for securities or other property
deliverable upon such reclassification, reorganization, consolidation,
merger, conveyance, dissolution, liquidation or winding up. Additionally,
so long as this Warrant shall be outstanding and unexercised, if the
Company shall make any adjustment to the Exercise Price, the Company shall
cause to be delivered to the Warrantholder, within twenty (20) days after
the date of such adjustment, a notice containing a description of the
calculations pertaining to such adjustment and stating the date on which
the adjustment to the Exercise Price became effective.
SECTION IX. DELIVERY OF NOTICES.
Any notice pursuant to this Warrant by the Company or by the
Warrantholder shall be in writing and shall be deemed to have been duly
given if delivered or mailed certified mail, return receipt requested, (a)
if to the Company, to it at 20 Kingsbridge Road, Piscataway, New Jersey
08854, Attention: Corporate Secretary and (b) if to the Warrantholder to it
at the address set forth on the signature page hereto. Each party hereto
may from time to time change the address to which such party's notices are
to be delivered or mailed hereunder by notice in accordance herewith to the
other party.
SECTION X. SUCCESSORS.
All the covenants and provisions of this Agreement by or for the
benefit of the Company or the Warrantholder shall bind and inure to the
benefit of their respective successors and assigns hereunder.
SECTION XI. APPLICABLE LAW.
This Warrant shall be deemed to be a contract made under the laws
of the State of Delaware applicable to agreements made and to be performed
entirely in Delaware and for all purposes shall be construed in accordance
with the internal laws of Delaware without giving effect to the conflicts
of laws principles thereof.
SECTION XII. BENEFITS OF THIS AGREEMENT
Nothing in this Warrant shall be construed to give to any person
or corporation other than the Company and the Warrantholder any legal or
equitable right, remedy or claim under this Warrant and this Warrant shall
be for the sole and exclusive benefit of the Company and the Warrantholder.
IN WITNESS WHEREOF, the parties hereto have executed this Warrant
Certificate or caused this Warrant Certificate to be duly executed as of
the 7th day of February, 1996.
ENZON, INC.
By:/S/ PETER G. TOMBROS
Name: Peter G. Tombros
Title:President and CEO
<PAGE>
GFL ADVANTAGE FUND, LTD.
By:/S/ A.P. DE GROOT
Name:A.P. De Groot
Title:President
Address of Warrantholder:
Genesee Fund Limited
CITCO Building
Wickhams Cay
P.O. Box 662
Road Town, Tortola
British Virgin Islands
Administrator
Curacao International Trust Co. N.V.
Kaya Flamboyan 9
P.O. Box 812
Curacao, Netherland Antilles
<PAGE>
GFL PERFORMANCE FUND LTD.
By:/S/ A.P. DE GROOT
Name:A.P. De Groot
Title:President
Address of Warrantholder:
Genesee Fund Limited
CITCO Building
Wickhams Cay
P.O. Box 662
Road Town, Tortola
British Virgin Islands
Administrator
Curacao International Trust Co. N.V.
Kaya Flamboyan 9
P.O. Box 812
Curacao, Netherland Antilles
<PAGE>
PURCHASE FORM
The undersigned hereby irrevocably elects to exercise the Warrant
represented by this Warrant Certificate to the extent of _____ shares of
Common Stock, par value $.01 per share, of Enzon, Inc., and hereby makes
payment of $__________ in payment of the actual exercise price thereof.
[__________________________]
By:________________________________
Name:
Title:
Employer Taxpayer
Identification Number:
Address for delivery of Stock
Certificate:
<PAGE>
ASSIGNMENT FORM
FOR VALUED RECEIVED, ______________________ hereby sells, assigns
and transfers unto _____________________________ address
___________________ the right to purchase Common Stock, par value $.01 per
share, of Enzon, Inc., represented by this Warrant Certificate to the
extent of _______ shares as to which such right is exercisable and does
hereby irrevocably constitute and appoint _______________, to transfer the
same on the books of the Company with full power of substitution in the
premises.
_____________________
Signature
Dated: _______, ____
Notice: The signature of this assignment
must correspond with the name as it appears
upon the face of this Warrant Certificate in
every particular, without alteration or
enlargement or any change whatever.
SIGNATURE GUARANTEED:
__________________________
<PAGE>
WARRANT TO PURCHASE 273,723 SHARES OF COMMON STOCK VOID AFTER
5:00 P.M. NEW JERSEY TIME, ON FEBRUARY 7, 2001. THIS WARRANT AND THE
SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE HEREOF HAVE BEEN AND WILL
BE ISSUED IN TRANSACTIONS WHICH HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE
SECURITIES OR BLUE SKY LAWS. THIS WARRANT AND SUCH SHARES MAY NOT BE SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF, IN WHOLE OR IN
PART, IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT
AND APPLICABLE STATE LAW, OR AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
NO. _______2________ 273,723 SHARES
ENZON, INC.
This certifies that, for value received, GFL Performance Fund
Ltd., the registered holder hereof, or assigns (the "WARRANTHOLDER") is
entitled to purchase from Enzon, Inc., a Delaware corporation (the
"COMPANY"), at any time on and after the earlier of the date the
Registration Statement (filed with the Securities and Exchange Commission
(the "SEC") pursuant to Section 2(a) of a certain Registration Rights
Agreement of even date herewith by and among the parties hereto) is
declared effective by the SEC or seventy (70) days from the date of
issuance of this Warrant and before 5:00 p.m., New Jersey time, on February
7, 2001 (the "TERMINATION DATE"), at the purchase price of $4.11 per share
(the "EXERCISE PRICE"), the number of shares of Common Stock, par value
$.01 per share (the "COMMON STOCK"), of the Company set forth above (the
"WARRANT STOCK"); PROVIDED, HOWEVER, that in no event shall the
Warrantholder be entitled to exercise this Warrant if, after giving effect
to such exercise, the number of shares of Common Stock beneficially owned
by the Warrantholder and all other holders of Common Stock whose holdings
would be aggregated with the Warrantholder for purposes of calculating
beneficial ownership in accordance with Sections 13(d) and 16 of the
Securities Exchange Act of 1934, as amended, and the regulations thereunder
("SECTIONS 13(D) AND 16"), including without limitation any person serving
as an adviser to any holder (collectively, the "RELATED PERSONS"), would
exceed four and nine-tenths percent (4.9%) of the outstanding shares of
Common Stock (calculated in accordance with Sections 13(d) and 16). The
Common Stock issuable upon conversion of shares of the Company's preferred
stock or exercise of warrants for the purchase of Common Stock held by the
Warrantholder or the Related Persons shall not be deemed to be beneficially
owned by the Warrantholder or such Related Persons for this purpose. The
number of shares of Warrant Stock, the Termination Date and the Exercise
Price per share of this Warrant shall be subject to adjustment from time to
time as set forth below.
SECTION I. TRANSFER OR EXCHANGE OF WARRANT
The Company shall be entitled to treat the Warrantholder as the
owner in fact hereof for all purposes and shall not be bound to recognize
any equitable or other claim to or interest in this Warrant on the part of
any other person. This Warrant shall be transferable only on the books of
the Company, maintained at its principal office, upon delivery of this
Warrant Certificate duly endorsed by the Warrantholder or by its duly
authorized attorney or representative, or accompanied by proper evidence of
succession, assignment or authority to transfer. Upon any registration of
transfer, the Company shall deliver a new Warrant Certificate or
Certificates to the persons entitled thereto.
SECTION II. TERM OF WARRANT; EXERCISE OF WARRANTS
A. TERMINATION. The Company may, in its sole discretion,
extend the Termination Date with respect to the exercise of this Warrant
upon notice to the Warrantholder. As used herein, "TERMINATION DATE" shall
be deemed to include any such extensions.
B. EXERCISE. This Warrant shall be exercised by surrender to
the Company, at its principal office, of this Warrant Certificate, together
with the Purchase Form attached hereto duly completed and signed, and upon
payment to the Company of the Exercise Price for the number of shares of
Warrant Stock in respect of which this Warrant is then exercised. Payment
of the aggregate Exercise Price shall be made in cash or by certified or
official bank check.
C. WARRANT CERTIFICATE. Subject to Section III hereof, upon
such surrender of this Warrant Certificate and payment of the Exercise
Price as aforesaid, the Company shall issue and cause to be delivered to or
upon the written order of the Warrantholder, by the second trading day
after exercise, a certificate or certificates for the number of full shares
of Warrant Stock so purchased upon the exercise of such Warrant, together
with cash, as provided in Section VI hereof, in respect of any fractional
shares of Warrant Stock otherwise issuable upon such surrender. Such
certificate or certificates representing the Warrant Stock shall be deemed
to have been issued and any person so designated to be named therein shall
be deemed to have become a holder of record of such shares of Warrant Stock
as of the date of receipt by the Company of this Warrant Certificate and
payment of the Exercise Price as aforesaid; PROVIDED, HOWEVER, that if, at
the date of surrender of this Warrant Certificate and payment of the
Exercise Price, the transfer books for the Warrant Stock or other class of
stock purchasable upon the exercise of this Warrant shall be closed, the
certificate or certificates for the shares of Warrant Stock in respect of
which this Warrant is then exercised shall be deemed issuable as of the
date on which such books shall next be opened (whether before or after the
Termination Date) and until such date the Company shall be under no duty to
deliver any certificate for such shares of Warrant Stock; PROVIDED FURTHER,
HOWEVER, that the transfer books of record, unless otherwise required by
law, shall not be closed at any one time for a period longer than twenty
(20) days. The rights of purchase represented by this Warrant shall be
exercisable, at the election of the Warrantholder, either in full or from
time to time in part, and, in the event that this Warrant is exercised in
respect of fewer than all of the shares of Warrant Stock purchasable on
such exercise at any time prior to the Termination Date, a new Warrant
Certificate evidencing the remaining Warrant or Warrants will be issued,
and the Company shall deliver the new Warrant Certificate or Certificates
pursuant to the provisions of this Section.
SECTION III. PAYMENT OF TAXES
The Company will pay all documentary stamp taxes, if any,
attributable to the initial issuance of the shares of Warrant Stock upon
the exercise of this Warrant; provided, however, that the Warrantholder
shall pay any tax or taxes which may be payable in respect of any transfer
involved in the issue or delivery of Warrant Certificates or the
certificates for the shares of Warrant Stock in a name other than that of
the Warrantholder in respect of which this Warrant or shares of Warrant
Stock are issued.
SECTION IV. MUTILATED OR MISSING WARRANT CERTIFICATES
In case this Warrant Certificate shall be mutilated, lost, stolen
or destroyed, the Company shall, at the request of the Warrantholder, issue
and deliver, in exchange and substitution for and upon cancellation of this
certificate if mutilated, or in lieu of and in substitution for this
certificate if lost, stolen or destroyed, a new Warrant Certificate of like
tenor and representing an equivalent right or interest, but only upon
receipt of evidence reasonably satisfactory to the Company of such loss,
theft or destruction of this Warrant Certificate and indemnity, if
requested, also reasonably satisfactory to the Company.
SECTION V. RESERVATION OF SHARES OF WARRANT STOCK.
There has been reserved, and the Company shall at all times keep
reserved so long as this Warrant remains outstanding, out of its authorized
Common Stock a number of shares of Common Stock sufficient to provide for
the exercise of the rights of purchase represented by this Warrant. The
transfer agent for the Common Stock and every subsequent transfer agent for
any shares of the Company's capital stock issuable upon the exercise of
this Warrant will be irrevocably authorized and directed at all times to
reserve such number of authorized shares as shall be requisite for such
purpose.
SECTION VI. FRACTIONAL SHARES.
No fractional shares or scrip representing fractional shares
shall be issued upon the exercise of this Warrant. With respect to any
fraction of a share called for upon the exercise of this Warrant, the
Company shall pay to the Warrantholder an amount in cash equal to such
fraction multiplied by the Exercise Price then in effect.
SECTION VII. ADJUSTMENTS OF EXERCISE PRICE AND NUMBER OF SHARES.
A. COMPUTATION OF ADJUSTED EXERCISE PRICE. Except as
hereinafter provided, in case the Company shall at any time after the date
hereof (i) issue or sell any shares of Common Stock (except in those
instances referred to in subsection F of this Section VII), including
shares held in the Company's treasury and shares issued upon the exercise
of any option, rights or warrants (with the exception of this Warrant and
any other options and warrants outstanding on the date hereof, and without
duplicating any adjustments pursuant to clause (ii) below) and shares
issued upon the direct or indirect conversion or exchange of securities for
shares of Common Stock (with the exception of the Company's Series A
Cumulative Convertible Preferred Stock and Series B Convertible Preferred
Stock (collectively, the "PREFERRED STOCK"), and without duplicating any
adjustments pursuant to clause (ii) below) for a consideration per share
less than the Market Price (as hereinafter defined) on the trading day
immediately prior to the date of issuance or sale of such share or without
consideration, or (ii) issue any rights, options or warrants to subscribe
for or purchase or otherwise acquire Common Stock (the "OPTION SECURITIES")
or any evidences of indebtedness, shares of stock or other securities
(other than the Preferred Stock) which are convertible into or
exchangeable, with or without payment of consideration, for shares of
Common Stock (the "CONVERTIBLE SECURITIES"), whether or not the right to
exercise such Option Securities or to convert or exchange such Convertible
Securities is immediately exercisable or is conditioned upon the passage of
time, the occurrence or non-occurrence of some other event, or both, for a
consideration per share of Common Stock (calculated in accordance with
subsections A(iii) and A(iv) of this Article VII) less than the Market
Price on the trading day immediately prior to the date of issuance of such
Option Securities or Convertible Securities, then forthwith upon such
issuance or sale the Exercise Price shall (until another such issuance or
sale) be reduced to a price (calculated to the nearest full cent)
determined by multiplying the Exercise Price immediately prior to such
issuance or sale by a fraction, the numerator of which is an amount equal
to the sum of (X) the total number of shares of Common Stock outstanding
immediately prior to such issuance or sale, multiplied by the Market Price
in effect immediately prior to such issuance or sale, plus (Y) the
aggregate of the amount of all consideration, if any, received by the
Company upon such issuance or sale, and the denominator of which is the
Market Price in effect immediately prior to such issuance or sale
multiplied by the total number of shares of Common Stock outstanding
immediately after such issuance or sale; PROVIDED, HOWEVER, that in no
event shall the Exercise Price be adjusted pursuant to this computation to
an amount in excess of the Exercise Price in effect immediately prior to
such computation, except in the case of a combination of outstanding shares
of Common Stock, as provided by subsection B of this Section VII.
For the purposes of any computation to be made in accordance with
this subsection A, the following provisions shall be applicable:
(i) In case of the issuance or sale of shares of Common
Stock for a consideration part or all of which shall be cash, the amount of
the cash consideration therefor shall be deemed to be the amount of the
cash received by the Company for such shares (or, if shares are offered by
the Company for subscription, the subscription price, or, if sold to
underwriters or dealers the public offering price) before deducting
therefrom any compensation paid or discount allowed in the sale,
underwriting or purchase thereof by underwriters or dealers or others
performing similar services, or any expenses incurred in connection
therewith.
(ii) In case of the issuance or sale (otherwise than as a
dividend or other distribution on any stock of the Company) of shares of
Common Stock for a consideration part or all of which shall be other than
cash, the amount of the consideration therefor other than cash shall be
deemed to be the value of such consideration as determined in good faith by
the Board of Directors of the Company.
(iii)In case of the issuance of Convertible Securities
(other than the Convertible Securities described in (iv) below), the
aggregate consideration received therefor shall be deemed to be the
consideration, if any, received by the Company for the issuance of such
Convertible Securities, plus the additional minimum consideration, if any,
to be received by the Company upon the conversion or exchange thereof.
(iv) In the case of the issuance of Option Securities, the
aggregate consideration received therefor shall be deemed to be the
consideration, if any, received by the Company for the issuance of such
Option Securities, plus the additional minimum consideration, if any, to be
received by the Company upon the exercise thereof.
(v) Shares of Common Stock issuable by way of dividend or
other distribution on any stock of the Company shall be deemed to have been
issued immediately after the opening of business on the date following the
record date for the determination of stockholders entitled to receive such
dividend or other distribution and shall be deemed to have been issued
without consideration.
(vi) The reclassification of securities of the Company,
other than shares of Common Stock into securities including shares of
Common Stock, shall be deemed to involve the issuance of such shares for a
consideration other than cash immediately prior to the close of business on
the date fixed for the determination of security holders entitled to
receive such shares, and the value of the consideration allocable to such
shares shall be determined as provided in subsection (ii) of this
subsection A.
(vii) The number of shares of Common Stock at any one time
outstanding shall include the aggregate number of shares issued or issuable
(subject to readjustment upon the actual issuance thereof) upon the
exercise of outstanding options, rights, warrants and upon the conversion
or exchange of outstanding convertible or exchangeable securities.
"MARKET PRICE," as of any date, (i) means the average of the
last reported sale prices for the shares of Common Stock as reported by
National Association of Securities Dealers Automated Quotation National
Market System ("NASDAQ-NMS") for the five consecutive trading days ending
on such date, or (ii) if the NASDAQ-NMS is not the principal trading market
for the shares of Common Stock, the average of the last reported sale
prices on the principal trading market for the Common Stock during the same
period, or (iii) if market value cannot be calculated as of such date on
any of the foregoing bases, the Market Price shall be the average fair
market value as reasonably determined in good faith by the Board of
Directors of the Company.
B. SUBDIVISION AND COMBINATION. In case the Company shall at
any time subdivide or combine the outstanding shares of Common Stock, the
Exercise Price shall forthwith be proportionately decreased in the case of
subdivision or increased in case of combination.
C. ADJUSTMENT IN NUMBER OF SHARES. Upon each adjustment of the
Exercise Price pursuant to the provisions of this Section VII, the number
of shares of Warrant Stock issuable upon the exercise of this Warrant shall
be adjusted to the nearest full share by multiplying a number equal to the
Exercise Price in effect immediately prior to such adjustment by the number
of shares of Warrant Stock issuable upon exercise of this Warrant
immediately prior to such adjustment and dividing the product so obtained
by the adjusted Exercise Price.
D. RECLASSIFICATION, CONSOLIDATION, MERGER, ETC. In case of
any reclassification or change of the outstanding shares of Common Stock
(other than a change in par value to no par value, or from no par value to
par value, or as a result of a subdivision or combination), or in the case
of any consolidation of the Company with, or merger of the Company into,
another corporation (other than a consolidation or merger in which the
Company is the surviving corporation and which does not result in any
reclassification or change of the outstanding shares of Common Stock,
except a change as a result of a subdivision or combination of such shares
or a change in par value, as aforesaid), or in the case of a sale or
conveyance to another corporation of all or substantially all of the
property of the Company, the Warrantholder shall thereafter have the right
to purchase upon the exercise of this Warrant the kind and number of shares
of stock and other securities and property receivable upon such
reclassification, change, consolidation, merger, sale or conveyance as if
the Warrantholder were the owner of the shares of Warrant Stock underlying
this Warrant immediately prior to any such events at the Exercise Price in
effect immediately prior to the record date for such reclassification,
change, consolidation, merger, sale or conveyance as if such Warrantholder
had exercised this Warrant.
E. SPECIAL ADJUSTMENT. If the purchase price provided for in
any Option Securities, the additional consideration, if any, payable upon
the conversion or exchange of any Convertible Securities or the rate at
which any Convertible Securities are convertible into or exchangeable for
Common Stock shall change, or if any Option Securities or Convertible
Securities terminate in whole or in part without being exercised, converted
or exchanged, the Exercise Price in effect at the time of such event shall
forthwith be readjusted. The Exercise Price shall be adjusted to that
amount which would have been in effect at such time had such Option
Securities or Convertible Securities outstanding at such time initially
been granted, issued or sold and the Exercise Price initially adjusted as
provided in subsection A of this Article VII, except that the minimum
amount of additional consideration payable and the total maximum number of
shares issuable shall be determined after giving effect to such event (and
any prior event or events).
F. NO ADJUSTMENT OF EXERCISE PRICE IN CERTAIN CASES. No
adjustment of the Exercise Price shall be made:
(i) Upon the issuance or sale of this Warrant or the shares
of Warrant Stock issuable upon the exercise of this Warrant, or the
issuance or sale of the Preferred Stock, or upon the issuance of shares of
Common Stock in connection with the conversion of such Preferred Stock, or
the issuance of shares of Common Stock pursuant to Section 2(c) of the
Registration Rights Agreement of even date herewith by and among the
Company and the Buyer and pursuant to Section 2(b) of the Certificate of
Designations, Preferences and Rights of Series B Convertible Preferred
Stock of the Company;
(ii) Upon the issuance of options, or shares upon the
exercise thereof, pursuant to the Company's Non-Qualified Stock Option
Plan, or any amendment or successor plan thereto;
(iii) If the amount of said adjustment shall be less than
one cent ($.01) per share; provided, however, that in such case any
adjustment that would otherwise be required then to be made shall be
carried forward and shall be made at the time of and together with any
adjustment so carried forward, shall amount to at least one cent ($.01) per
Share;
(iv) Upon the issuance or sale of shares of Common Stock or
securities which are exercisable or convertible into shares of Common Stock
to employees of the Company or its affiliates, under an Employee Stock
Purchase Plan;
(v) Upon the issuance of any Option Securities or the
issuance of shares of Common Stock upon the exercise thereof, where such
Option Security was issued for a consideration price per share of Common
Stock initially deliverable upon exercise of such Option Security equal to
or greater than the Market Price in effect immediately prior to the
issuance or sale of such Option Security;
(vi) Upon the issuance of Convertible Securities where the
conversion price is equal to or greater than the Market Price in effect
immediately prior to the issuance of such Convertible Securities;
(vii)Upon the issuance of Common Stock to non-management
directors of the Company in an amount up to Fourteen Thousand Dollars
($14,000) per such director per year, based upon such method of valuation
as may be established from time to time by the Company's Board of Directors
in its reasonable discretion; or
(viii)Upon the issuance of an aggregate of up to Three
Million Dollars ($3,000,000) of Common Stock or securities which are
exercisable or convertible into Common Stock at a discount to the Market
Price as of the date of such issuance that does not exceed twenty percent
(20%).
SECTION VIII. NOTICES TO WARRANTHOLDERS.
So long as this Warrant shall be outstanding and unexercised (a)
if the Company shall pay any dividend or make any distribution upon the
Common Stock or (b) if the Company shall offer to the holders of Common
Stock for subscription or purchase by them any shares of stock of any class
or any other rights or (c) if any capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation or
merger of the Company with or into another corporation, sale, lease or
transfer of the Company to another corporation, or voluntary or involuntary
dissolution, liquidation or winding up of the Company shall be effected,
then, in any such case, the Company shall cause to be delivered to the
Warrantholder, at least ten (10) days prior to the date specified in (i) or
(ii) below, as the case may be, a notice containing a brief description of
the proposed action and stating the date on which (i) a record is to be
taken for the purpose of such dividend or distribution, or (ii) such
reclassification, reorganization, consolidation, merger, conveyance, lease,
dissolution, liquidation or winding up is to take place and the date, if
any, as of which the holders of Common Stock of record shall be entitled to
exchange their shares of Common Stock for securities or other property
deliverable upon such reclassification, reorganization, consolidation,
merger, conveyance, dissolution, liquidation or winding up. Additionally,
so long as this Warrant shall be outstanding and unexercised, if the
Company shall make any adjustment to the Exercise Price, the Company shall
cause to be delivered to the Warrantholder, within twenty (20) days after
the date of such adjustment, a notice containing a description of the
calculations pertaining to such adjustment and stating the date on which
the adjustment to the Exercise Price became effective.
SECTION IX. DELIVERY OF NOTICES.
Any notice pursuant to this Warrant by the Company or by the
Warrantholder shall be in writing and shall be deemed to have been duly
given if delivered or mailed certified mail, return receipt requested, (a)
if to the Company, to it at 20 Kingsbridge Road, Piscataway, New Jersey
08854, Attention: Corporate Secretary and (b) if to the Warrantholder to it
at the address set forth on the signature page hereto. Each party hereto
may from time to time change the address to which such party's notices are
to be delivered or mailed hereunder by notice in accordance herewith to the
other party.
SECTION X. SUCCESSORS.
All the covenants and provisions of this Agreement by or for the
benefit of the Company or the Warrantholder shall bind and inure to the
benefit of their respective successors and assigns hereunder.
SECTION XI. APPLICABLE LAW.
This Warrant shall be deemed to be a contract made under the laws
of the State of Delaware applicable to agreements made and to be performed
entirely in Delaware and for all purposes shall be construed in accordance
with the internal laws of Delaware without giving effect to the conflicts
of laws principles thereof.
SECTION XII. BENEFITS OF THIS AGREEMENT
Nothing in this Warrant shall be construed to give to any person
or corporation other than the Company and the Warrantholder any legal or
equitable right, remedy or claim under this Warrant and this Warrant shall
be for the sole and exclusive benefit of the Company and the Warrantholder.
IN WITNESS WHEREOF, the parties hereto have executed this Warrant
Certificate or caused this Warrant Certificate to be duly executed as of
the 7th day of February, 1996.
ENZON, INC.
By:/S/ PETER G. TOMBROS
Name:Peter G. Tombros
Title:President and CEO
<PAGE>
GFL ADVANTAGE FUND, LTD.
By:/S/ A.P. DE GROOT
Name:A.P. De Groot
Title:President
Address of Warrantholder:
Genesee Fund Limited
CITCO Building
Wickhams Cay
P.O. Box 662
Road Town, Tortola
British Virgin Islands
Administrator
Curacao International Trust Co. N.V.
Kaya Flamboyan 9
P.O. Box 812
Curacao, Netherland Antilles
<PAGE>
GFL PERFORMANCE FUND LTD.
By:/S/ A.P. DE GROOT
Name:A.P. De Groot
Title:President
Address of Warrantholder:
Genesee Fund Limited
CITCO Building
Wickhams Cay
P.O. Box 662
Road Town, Tortola
British Virgin Islands
Administrator
Curacao International Trust Co. N.V.
Kaya Flamboyan 9
P.O. Box 812
Curacao, Netherland Antilles
<PAGE>
PURCHASE FORM
The undersigned hereby irrevocably elects to exercise the Warrant
represented by this Warrant Certificate to the extent of _____ shares of
Common Stock, par value $.01 per share, of Enzon, Inc., and hereby makes
payment of $__________ in payment of the actual exercise price thereof.
[__________________________]
By:________________________________
Name:
Title:
Employer Taxpayer
Identification Number:
Address for delivery of Stock
Certificate:
<PAGE>
ASSIGNMENT FORM
FOR VALUED RECEIVED, ______________________ hereby sells, assigns
and transfers unto _____________________________ address
___________________ the right to purchase Common Stock, par value $.01 per
share, of Enzon, Inc., represented by this Warrant Certificate to the
extent of _______ shares as to which such right is exercisable and does
hereby irrevocably constitute and appoint _______________, to transfer the
same on the books of the Company with full power of substitution in the
premises.
_____________________
Signature
Dated: _______, ____
Notice: The signature of this assignment
must correspond with the name as it appears
upon the face of this Warrant Certificate in
every particular, without alteration or
enlargement or any change whatever.
SIGNATURE GUARANTEED:
__________________________
<PAGE>
SCHEDULE 3(C)
OPTIONS, WARRANTS, SCRIPS, RIGHTS TO SUBSCRIBE TO SHARES OF CAPITAL STOCK
As of January 26, 1996, there were outstanding options to purchase
3,863,475 shares of the Company's common stock, $.01 par value per share
(the "Common Stock"), of which (i) 3,663,475 were reserved for issuance at
January 26, 1996 pursuant to the Company's Non-Qualified Stock Option Plan
and (ii) 200,000 were issued to Abraham Abuchowski, the Company's Chairman
of the Board, pursuant to an employment agreement.
As of January 26, 1996, there were 109,000 shares of Series A
Cumulative Convertible Preferred Stock (the "Series A Preferred Stock") of
the Company outstanding which are convertible into an aggregate 247,727
shares of Common Stock.
As of January 26, 1996, there were 150,000 warrants outstanding to
purchase 150,000 shares of Common Stock at $2.50 per share. These warrants
expire on August 8, 2000.
On January 15, 1996, the Board of Directors approved a plan to
compensate non-employee directors which would compensate them with a
retainer of $2,500 per quarter and $500 per Board meeting payable in shares
of Common Stock at the market price of the Common Stock computed as of the
first trading date of the year in which the compensation is earned. The
final authorization of such compensation plan is contingent both on the
draft of such plan by Company counsel and its ratification by the Board and
approval by the shareholders.
REGISTRATION RIGHTS
SCHERING CORPORATION - STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement contains provisions for both demand and
"piggy-back" registration rights for 847,489 shares of Common Stock. The
demand registration rights provide generally for the right, upon the
request of 25% of the holders' of the shares of common stock sold pursuant
to the Stock Purchase Agreement (the "Common Stock") for a period beginning
six months after closing of the agreement and continuing without
limitation, which includes shares of Common Stock issued or issuable by way
of a stock split, or in connection with a combination of shares,
reclassification, recapitalization, merger or consolidation or
reorganization, the right to have such shares included in a registration
statement to be filed with the Securities and Exchange Commission. After
receiving such request, the Company must notify the holders of all shares
of Common Stock covered by the Stock Purchase Agreement, that such holders
may include the shares of Common Stock held by them in such registration
statement if they make a written request to that effect within 20 days.
Should the holders demanding registration of their shares intend to pursue
an underwritten offering, the holders of shares entitled to notice of the
intended registration shall also be entitled to notice of the intended
underwriting. Inclusion of any shares in such underwriting is subject to
the discretion of the underwriter. Any reduction of shares made by such
underwriter shall be made first out of the shares of holders of either
securities seeking inclusion in such underwriting and subsequently out of
the shares of the holders of the Common Stock. Any reduction of shares
included in such underwriting shall be made pro rata among the holders of
the Common Stock requesting inclusion of their shares.
The "piggy-back" registration rights provided for in the Stock
Purchase Agreement give the holders of the Common Stock the right to
include such shares in a registration statement to be filed with the
Commission for an unlimited period of time. Upon the Company's
determination to file such a registration statement, the stockholders of
the Common Stock must receive written notice, after which such holders have
the right to respond within 20 days and request the inclusion of such
shares in the registration statement. The Company covenants to use its
best efforts to cause such registration statement to become effective. In
the event of an underwritten offering, the holder of shares entitled to
notice pursuant to such "piggy-back" rights shall be advised that the
offering is being underwritten. Should the underwriter determine, however,
that the inclusion of certain Common Shares or other securities, will
render the Offering unmarketable, then those shares may be excluded except
for shares being issued by the Company in a public offering. Such reduced
number of shares shall be effected pro rata among such security holders.
In the event of such underwritten offering, the holders of such shares of
Common Stock must agree to distribute such shares through such underwriter
and sign an underwriting agreement with such underwriter.
The Stock Purchase Agreement also specifically provides that, upon
receipt of the request of any holder of Common Stock acquired under the
Agreement that such holder's shares be registered on Form S-3, the Company
shall provide written notice of the proposed registration to all holders of
such Common Stock, and as soon as practicable within 15 days of receipt of
notice by such Common Stock holders, include such shares in a registration
statement. If the Company has filed an S-3 Registration Statement during
the previous 12 months, such request may be denied. This provision is
separate from the demand registration rights outlined above. All expenses
of such registration or registrations will be borne by the Company.
WARRANT AGREEMENT WITH EDWARD S. GORDON & CO. DATED AUGUST 9, 1995
This Warrant Agreement provides for both demand and "piggy-back"
registration rights with respect to 112,500 shares of Common Stock. The
Warrant Agreement provides that if the Company receives the written request
by the Warrant holder to prepare and file a registration statement covering
the shares issuable upon exercise of the Warrant (the "Warrant Shares"),
that the Company will use its best efforts to prepare and file such
registration statement and keep it effective for at least nine months.
Such demand registration rights shall be effective only for the
registration of more than 50,000 Warrant Shares, provided that in reaching
that threshold, any Warrant Shares included by the Pyne Companies, a firm
affiliated with the Warrant holder, shall count towards that amount. In
the event of an underwritten offering in which the Warrant holder requests
inclusion, the underwriter has the discretion to deny inclusion of such
Warrant Shares or other securities, except for shares for which Schering
Corporation requests inclusion. The Warrant Shares and shares held by
Schering should be reduced on a pro rata basis. The denial of the
inclusion of Warrant Shares as shares held by Schering of which will
require the "lock-up" of such Warrant Shares for a period of 120 days.
The Warrant Agreement provides for "piggy-back" registration rights
whereby if the Company prepares to file a registration statement during a
period of five years and ninety days, other than one on Form S-4, S-8 or S-
1 (for an employee stock option plan), the Warrant holder is entitled to
notice of the planned registration and has 20 days to respond to the notice
and request the inclusion of their Warrant Shares in the registration
statement. If the registration statement will be prepared and filed in
connection with an underwritten offering, such underwriter has discretion
over the inclusion of such Warrant Shares or other securities in the
offering and may thereby exclude such shares from the registration
statement, except that any shares requested to be included in the offering
by Schering Corporation in connection with its demand registration rights
shall have priority over any of the Warrant Shares. Such reduced number of
shares shall be allocated pro rata among Warrant Share holders or holders
of other securities requesting inclusion of shares in the offering.
Finally, should the Company decide to use Form S-3 for registration of any
Warrant Shares and if necessary to effect such registration, the Company
may require the Warrant holder to exercise its Warrant as a condition
precedent to the inclusion of such shares in the registration statement.
All of the expenses of such registration or registrations will be borne by
the Company.
WARRANT AGREEMENT WITH THE PYNE COMPANIES DATED AUGUST 9, 1995
This Warrant Agreement provides for only "piggy-back" registration
rights with respect to 37,500 shares of Common Stock. Holders of Warrants
under the Warrant Agreement have the right to register shares of Common
Stock issuable upon exercise of Warrants (the "Warrant Shares") if the
Company prepares to file a registration statement during a period of five
years and ninety days other than one on Form S-4, S-8 or S-1 (for an
employee stock option plan). If the Company plans to file such
registration statement, the Warrant holder is entitled to notice of the
planned registration and has 20 days to respond to the notice and request
the inclusion of their Warrant Shares in the registration statement. If
the registration is part of a public offering, the Warrant holder is
entitled to notice of the same. If the registration statement will be
prepared and filed in connection with an underwritten offering, such
underwriter has discretion over the inclusion of such Warrant Shares or
other securities in the offering and may thereby exclude any such shares
from the registration statement, except that any shares requested to be
included in the offering by Schering Corporation in connection with its
demand registration rights or shares to be issued by the Company in a
public offering shall have priority over any of the Warrant Shares. Such
reduced number of shares shall be allocated pro rata among Warrant Share
holders or holders of other securities requesting inclusion of shares in
the offering. Finally, should the Company decide to use Form S-3 for
registration of any Warrant Shares and if necessary to effect such
registration, the Company may require the Warrant holder to exercise its
Warrant as a condition precedent to the inclusion of such shares in the
registration statement. All of the expenses of such registration or
registrations will be borne by the Company.
<PAGE>
SCHEDULE 3(H)
PENDING OR THREATENED LITIGATION
The Company currently has no pending litigation. There are a number
of matters which the Company has determined to disclose pursuant to this
Stock Purchase Agreement and related documents, as matters which have the
potential to give rise to litigation in the future.
NEOPROBE/ENZON, AUGUST 15, 1992 LICENSE AGREEMENT AND "SCA PROTEIN
DEVELOPMENT" AGREEMENT.
This matter involves a dispute over sums of money due the Company
pursuant to an agreement between the Company and Neoprobe, whereby the
Company agreed to supply a certain amount of research grade single chain
antigen protein to Neoprobe and granted Neoprobe a license under the
Company's SCA patents. Under the agreements, Neoprobe was required to pay
Enzon by delivery of either a $400,000 interest-bearing note or warrants to
purchase 100,000 shares of Neoprobe common stock exercisable at 105% of the
initial public offering price of Neoprobe common stock or $4.00 per share,
and 200,000 shares exercisable at $10.00 per share. The parties disagree
over whether the samples provided by the Company to Neoprobe satisfy
contractual requirements, whether Enzon is entitled to recover a sum equal
to the amount of the note or exercise of the warrants, and whether Enzon
has breached the Agreements so as not to be entitled to either the note or
warrants. To date no litigation has been commenced in this matter.
PATENTS
The Company is aware of certain issued patents and patent
applications, and there may be other patents and applications, containing
subject matter which the Company or its licensees or collaborators may
require in order to research, develop or commercialize at least some of the
Company's products. There can be no assurance that licenses under such
subject matter will be available on acceptable terms. In particular, the
Company is aware of the following:
BIOPURE: US PATENT 5,084,558
In 1992, the Company received correspondence from a member of the
Board of Directors of Biopure Corporation which could be construed as
containing allegations that Biopure's patent for bovine hemoglobin would
cover the Company's PEG-Hemoglobin products. On March 17, 1992, the
Company obtained an opinion of counsel from the firm of Lerner, David,
Littenburg, Krumholtz, & Mentlik, to the effect that the Company's PEG-
Hemoglobin does not infringe any claim of such patent which would be held
valid if litigated. However, there can be no assurance that a court would
find any of the claims of such patent to be invalid, that a court would not
hold that the Company's PEG-Hemoglobin product does infringe one or more
valid claims of such patent, or that a license could be obtained under such
patent on acceptable terms. In October, 1995 Biopure's patent was revoked
by the relevant patent authority of the European Communities.
OXIS U.S. PATENT 5,468,478.
In October, 1995, the Company received a letter from Oxis
International, Inc. (formerly known as "DDI Pharmaceuticals, Inc.")
advising that Claim 10 of this Oxis patent for PEG-Protein conjugates may
be relevant to PEG-protein conjugates with PEG of a less than 20,000
daltons. This claim recites water-soluble polyalkylene glycol (PEG)
protein conjugates in which there are no molecular weight limitations for
the PEG. The original Claim 10 was presented for examination to the U.S.
Patent Office with a limitation requiring the PEG to have a molecular
weight between approximately 35,000 to 200,000. This limitation was
removed by Oxis during the course of its patent prosecution without comment
by the Examiner. The patent was issued to Oxis without reference to the
molecular weight of the PEG. On January 24, 1996, the Company received an
opinion from the law firm of Steinberg, Raskin & Davidson to the effect
that Claim 10 of the Oxis patent, when properly interpreted would be
limited by a U.S. Federal District Court judge to water-soluble
polyalkylene glycol conjugates wherein the PEG portion has a molecular
weight greater than that contemplated by Enzon for its formulations
currently in clinical trials and contemplated for commercialization.
AJINOMOTO, U.S. PATENT 4,301,144.
Ajinomoto, a Japanese corporation, received a patent on November 17,
1991 which applies to the combination of PEG and Hemoglobin and which was
originally scheduled to expire on November 17, 1998. In view of the GATT
treaty, the Company sought the opinion of patent counsel Learner, David,
Littenburg, Krumholtz, & Mentlik to evaluate any extension thereunder.
Such patent has been extended under the GATT Treaty until July 10, 2000.
Additionally, depending on the filing with the FDA for any product approval
by the patentee, or its licensees, the patent could be extended to as late
as November 17, 2003. Nonetheless, this extension until 2003 would depend
upon the patentee or its licensee filing a PLA or NDA prior to November 17,
1998. The Company does not expect that it will have a PEG-Hemoglobin
product approved before the end of 2000, and thus would not conflict with
the patent held by Ajinomoto. Also, although the Company understands that
a licensee of Ajinomoto has been conducting clinical trials of a PEG-
hemoglobin product since July, 1995, the Company believes it is unlikely
that an NDA or PLA can be filed for this product by November 17, 1998.
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of January
31, 1996 by and among ENZON, INC., a Delaware corporation, with
headquarters located at 20 Kingsbridge Road, Piscataway, NJ 08854 (the
"COMPANY"), and the undersigned (collectively, the "BUYER").
WHEREAS:
A. In connection with the Securities Purchase Agreement by and among
the parties of even date herewith (the "SECURITIES PURCHASE AGREEMENT"),
the Company has agreed, upon the terms and subject to the conditions of the
Securities Purchase Agreement, (i) to issue and sell to the Buyer shares
(the "COMMON SHARES") of the Company's common stock (the "COMMON STOCK"),
(ii) to issue and sell to the Buyer shares of the Company's Series B
Convertible Preferred Stock (the "PREFERRED SHARES") which will be
convertible into shares of Common Stock (as converted, the "CONVERSION
SHARES"), and (iii) to issue to the Buyer warrants (the "WARRANTS") for the
purchase of shares of Common Stock (as exercised, the "WARRANT SHARES");
and
B. To induce the Buyer to execute and deliver the Securities
Purchase Agreement, the Company has agreed to provide certain registration
rights under the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute (collectively, the
"1933 ACT"), and applicable state securities laws;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and
the Buyer hereby agree as follows:
1. DEFINITIONS.
a. As used in this Agreement, the following terms shall have
the following meanings:
(i) "INVESTOR" means the Buyer and any transferee or
assignee who agrees to become bound by the provisions of this Agreement in
accordance with Section 9 hereof.
(ii) "REGISTER," "REGISTERED," and "REGISTRATION" refer to a
registration effected by preparing and filing a Registration Statement or
Statements in compliance with the 1933 Act and pursuant to Rule 415 under
the 1933 Act or any successor rule providing for offering securities on a
continuous basis ("RULE 415"), and the declaration or ordering of
effectiveness of such Registration Statement by the United States
Securities and Exchange Commission (the "SEC").
(iii)"REGISTRABLE SECURITIES" means the Common Shares, the
Conversion Shares, the Warrant Shares, and the Damage Shares (as defined
below).
(iv) "REGISTRATION STATEMENT" means a registration statement
of the Company under the 1933 Act.
b. Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings set forth in the Securities
Purchase Agreement.
2. REGISTRATION.
a. MANDATORY REGISTRATION. The Company shall prepare, and, on
or prior to the date which is thirty (30) days after February 7, 1996, file
with the SEC a Registration Statement on Form S-3 covering the resale of
the Registrable Securities, which Registration Statement shall state that,
in accordance with Rule 416 promulgated under the 1933 Act, such
Registration Statement also covers such indeterminate number of additional
shares of Common Stock as may become issuable upon conversion of the
Preferred Shares and exercise of the Warrants to prevent dilution resulting
from stock splits, stock dividends or similar transactions. The
Registration Statement (and each amendment or supplement thereto, and each
request for acceleration of effectiveness thereof) shall be provided to and
approved by the Buyer and its counsel prior to its filing or other
submission.
b. UNDERWRITTEN OFFERING. If any offering pursuant to a
Registration Statement pursuant to Section 2(a) hereof involves an
underwritten offering, the Investors who hold a majority in interest of the
Registrable Securities subject to such underwritten offering shall have the
right to select one legal counsel and an investment banker or bankers and
manager or managers to administer the offering, which investment banker or
bankers or manager or managers shall be reasonably satisfactory to the
Company.
c. PAYMENTS BY THE COMPANY. If the Registration Statement
covering the Registrable Securities required to be filed by the Company
pursuant to Section 2(a) hereof is not declared effective by the SEC by May
7, 1996 or if, after the Registration Statement has been declared effective
by the SEC, sales cannot be made pursuant to the Registration Statement (by
reason of stop order, the Company's failure to update the Registration
Statement or otherwise), or if the Common Stock is not listed or included
for quotation on the National Association of Securities Dealers Automated
Quotation (the "NASDAQ") National Market System (the "NASDAQ-NMS"), the New
York Stock Exchange (the "NYSE"), the American Stock Exchange (the "AMEX")
or the NASDAQ SmallCap Market ("NASDAQ SMALLCAP"), then the Company will
make payments to the Investors in such amounts and at such times as shall
be determined pursuant to this Section 2(c) as partial relief for the
damages to the Investors by reason of any such delay in or reduction of
their ability to sell the Registrable Securities (which remedy shall not be
exclusive of any other remedies available at law or in equity, except that
such remedy shall be the exclusive remedy for delay in the effectiveness of
the Registration Statement provided that the Registration Statement is
declared effective by the SEC within 180 days after February 7, 1996). The
Company shall pay to each holder of Registerable Securities an amount equal
to the Average Market Price (as defined below) of the Common Shares during
the five (5) consecutive trading days ending one (1) trading day prior to
the Closing Date (the "CLOSING DATE AVERAGE MARKET PRICE") multiplied by
three-hundredths (.03) times the sum of: (i) the number of months (prorated
for partial months) after May 7, 1996 and prior to the date the
Registration Statement is declared effective by the SEC, provided, however,
that there shall be excluded from such period (and from any period under
clause (ii) immediately below) delays which are attributable to changes
required by the Investors in the Registration Statement, including, without
limitation, changes to the plan of distribution; (ii) the number of months
(prorated for partial months) that sales cannot be made pursuant to the
Registration Statement after the Registration Statement has been declared
effective; and (iii) the number of months (prorated for partial months)
that the Common Stock is not listed or included for quotation on the
NASDAQ-NMS, NYSE, AMEX or NASDAQ SmallCap after the Registration Statement
has been declared effective; provided that the aggregate number of months
for which payments shall be made pursuant to clauses (i), (ii) and (iii)
above shall not exceed twelve (12). (For example, if the Registration
Statement becomes effective one and one-half (1 1/2 ) months after May 7,
1996, the Company would pay $45,000 for each $1,000,000 of Closing Date
Average Market Price until any subsequent adjustment; if thereafter, sales
could not be made pursuant to the Registration Statement for a period of
two (2) months, the Company would pay an additional $60,000 for each
$1,000,000 of Closing Date Average Market Price.) Such amounts may be paid
at the Company's option in cash or Common Stock (the "DAMAGE SHARES," which
term shall include shares of Common Stock that may be issued pursuant to
Section 2(b) of the Certificate of Designation) valued based on the Average
Market Price for the period (a "DAMAGE PRICING PERIOD") of five (5)
consecutive trading days ending on the trading day prior to the date that
the Registration Statement is declared effective or that sales can be
resumed under the Registration Statement, as applicable; any amounts due as
to any Damage Pricing Period during which the Registration Securities are
not listed or included for quotation on the NASDAQ-NMS, NYSE, AMEX or
NASDAQ SmallCap shall be paid in cash only; PROVIDED, HOWEVER, that in no
event shall Damage Shares be paid hereunder if, after giving effect to such
payment, the number of shares of Common Stock purchased pursuant to the
Securities Purchase Agreement or issued on exercise of the Warrants or
conversion of the Preferred Shares and beneficially owned by such holder
and all other holders whose holdings would be aggregated with such holder
for purposes of calculating beneficial ownership in accordance with
Sections 13(d) and 16 of the Securities Exchange Act of 1934, as amended,
and the regulations thereunder ("SECTIONS 13(D) AND 16"), including,
without limitation, any person serving as an adviser to any holder
(collectively, the "RELATED PERSONS"), would exceed four and nine-tenths
percent (4.9%) of outstanding shares of Common Stock (calculated in
accordance with Sections 13(d) and 16); cash shall be paid for any Damage
Shares which cannot be issued pursuant to this proviso. Common Stock
issuable upon conversion of the Preferred Shares or exercise of Warrants
held by such holder or the Related Persons shall not be deemed to be
beneficially owned by such holder or the Related Persons for this purpose.
Payments of cash or issuances of Damage Shares pursuant hereto shall be
made within five (5) days after the end of each period that gives rise to
such obligation, provided that, if any such period extends for more than
thirty (30) days, interim payments shall be made for each such thirty (30)
day period with the interim payment (if paid in Damage Shares) based on the
last five (5) trading days of such thirty (30) day period. In addition to
the payments provided herein, the Company shall provide an adjustment to
the Conversion Percentage (as that term is defined in the Certificate of
Designation) and pay the amounts specified in Section 2(b) of the
Certificate of Designation. "AVERAGE MARKET PRICE" of any security for any
period shall be computed as the arithmetic average of the closing bid
prices for such security for each trading day in such period on the NASDAQ-
NMS, or, if the NASDAQ-NMS is not the principal trading market for such
security, on the principal trading market for such security, or, if market
value cannot be calculated for such period on any of the foregoing bases,
the Average Market Price shall be the average fair market value during such
period as reasonably determined in good faith by the Board of Directors of
the Company.
d. PIGGY-BACK REGISTRATIONS. If at any time prior to the
expiration of the Registration Period (as hereinafter defined) the Company
shall file with the SEC a Registration Statement relating to an offering
for its own account or the account of others under the 1933 Act of any of
its equity securities (other than on Form S-4 or Form S-8 or their then
equivalents relating to equity securities to be issued solely in connection
with any acquisition of any entity or business or equity securities
issuable in connection with stock option or other employee benefit plans)
the Company shall send to each Investor who is entitled to registration
rights under this Section 2(d) written notice of such determination and, if
within twenty (20) days after receipt of such notice, such Investor shall
so request in writing, the Company shall include in such Registration
Statement all or any part of the Registrable Securities such Investor
requests to be registered, except that if, in connection with any
underwritten public offering for the account of the Company the managing
underwriter(s) thereof shall impose a limitation on the number of shares of
Common Stock which may be included in the Registration Statement because,
in such underwriter(s)' judgment, marketing or other factors dictate that
such limitation is necessary to facilitate public distribution, then the
Company shall be obligated to include in such Registration Statement only
such limited portion of the Registrable Securities with respect to which
such Investor has requested inclusion hereunder; PROVIDED that no portion
of the equity securities which the Company is offering for its own account
shall be excluded; PROVIDED, FURTHER that the Company shall be entitled to
exclude Registrable Securities to the extent necessary to avoid breaching
obligations existing prior to the date hereof to other securityholders of
the Company. Any exclusion of Registrable Securities shall be made pro
rata among the Investors seeking to include Registrable Securities, in
proportion to the number of Registrable Securities sought to be included by
such Investors; PROVIDED, HOWEVER, that the Company shall not exclude any
Registrable Securities unless the Company has first excluded all
outstanding securities, the holders of which are not entitled to inclusion
of such securities in such Registration Statement or are not entitled to
pro rata inclusion with the Registrable Securities; and PROVIDED, FURTHER,
HOWEVER, that, after giving effect to the immediately preceding proviso,
any exclusion of Registrable Securities shall be made pro rata with holders
of other securities having the right to include such securities in the
Registration Statement other than holders of securities entitled to
inclusion of their securities in such Registration Statement by reason of
demand registration rights. No right to registration of Registrable
Securities under this Section 2(d) shall be construed to limit any
registration required under Section 2(a) hereof. The obligations of the
Company under this Section 2(d) may be waived by Investors holding a
majority in interest of the Registrable Securities. If an offering in
connection with which any Investor is entitled to registration under this
Section 2(d) is an underwritten offering, then each Investor whose
Registrable Securities are included in such Registration Statement shall,
unless otherwise agreed by the Company, offer and sell such Registrable
Securities in an underwritten offering using the same underwriter or
underwriters and, subject to the provisions of this Agreement, on the same
terms and conditions as other shares of Common Stock included in such
underwritten offering.
e. ELIGIBILITY FOR FORM S-3. The Company represents and
warrants that it meets the requirements for the use of Form S-3 for
registration of the sale by the Buyer and any other Investor of the
Registrable Securities and the Company shall file all reports required to
be filed by the Company with the SEC in a timely manner so as to maintain
such eligibility for the use of Form S-3. In the event that Form S-3 is
not available for the sale by the Investors of the Registrable Securities,
the Company shall register the sale on another appropriate form.
3. OBLIGATIONS OF THE COMPANY.
In connection with the registration of the Registrable Securities, the
Company shall have the following obligations:
a. The Company shall prepare promptly, and file with the SEC
not later than thirty (30) days after February 7, 1996, a Registration
Statement with respect to the number of Registrable Securities provided in
Section 2(a), and thereafter to use its best efforts to cause each
Registration Statement relating to Registrable Securities to become
effective as soon as possible after such filing, and keep the Registration
Statement effective pursuant to Rule 415 at all times until such date as is
the earlier of (i) at least three (3) years after the date of the
expiration of all the Warrants, or (ii) the date on which (a) all of the
Warrants have been exercised or expired, (b) no Registrable Securities are
held by any Investor, and (c) none of the Preferred Shares is outstanding
(the "REGISTRATION PERIOD"), which Registration Statement (including any
amendments or supplements thereto and prospectuses contained therein) shall
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein, or necessary to make the
statements therein, in light of the circumstances in which they were made,
not misleading.
b. The Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to the
Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to keep the Registration
Statement effective at all times during the Registration Period, and,
during such period, comply with the provisions of the 1933 Act with respect
to the disposition of all Registrable Securities of the Company covered by
the Registration Statement until such time as all of such Registrable
Securities have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in the
Registration Statement.
c. The Company shall furnish to each Investor whose Registrable
Securities are included in the Registration Statement and its legal counsel
(i) promptly after the same is prepared and publicly distributed, filed
with the SEC, or received by the Company, one copy of the Registration
Statement and any amendment thereto, each preliminary prospectus and
prospectus and each amendment or supplement thereto, and, in the case of
the Registration Statement referred to in Section 2(a), each letter written
by or on behalf of the Company to the SEC or the staff of the SEC, and each
item of correspondence from the SEC or the staff of the SEC, in each case
relating to such Registration Statement (other than any portion of any
thereof which contains information for which the Company has sought
confidential treatment), and (ii) such number of copies of a prospectus,
including a preliminary prospectus, and all amendments and supplements
thereto and such other documents as such Investor may reasonably request in
order to facilitate the disposition of the Registrable Securities owned by
such Investor.
d. The Company shall use reasonable efforts to (i) register and
qualify the Registrable Securities covered by the Registration Statement
under such other securities or "blue sky" laws of such jurisdictions in the
United States as the Investors who hold a majority in interest of the
Registrable Securities being offered reasonably request, (ii) prepare and
file in those jurisdictions such amendments (including post-effective
amendments) and supplements to such registrations and qualifications as may
be necessary to maintain the effectiveness thereof during the Registration
Period, (iii) take such other actions as may be necessary to maintain such
registrations and qualifications in effect at all times during the
Registration Period, and (iv) take all other actions reasonably necessary
or advisable to qualify the Registrable Securities for sale in such
jurisdictions; PROVIDED, HOWEVER, that the Company shall not be required in
connection therewith or as a condition thereto to (a) qualify to do
business in any jurisdiction where it would not otherwise be required to
qualify but for this Section 3(d), (b) subject itself to general taxation
in any such jurisdiction, (c) file a general consent to service of process
in any such jurisdiction, (d) provide any undertakings that cause more than
nominal expense or burden to the Company, or (e) make any change in its
charter or bylaws, which in each case the Board of Directors of the Company
determines to be contrary to the best interests of the Company and its
stockholders.
e. In the event Investors who hold a majority in interest of
the Registrable Securities being offered in the offering select
underwriters for the offering, the Company shall enter into and perform its
obligations under an underwriting agreement, in usual and customary form,
including, without limitation, customary indemnification and contribution
obligations, with the underwriters of such offering. The incremental costs
incident to such an underwritten offering shall be paid by the
participating Investors pro rata based on the number of Registrable
Securities sold by them.
f. As promptly as practicable after becoming aware of such
event, the Company shall notify each Investor of the happening of any
event, of which the Company has knowledge, as a result of which the
prospectus included in the Registration Statement, as then in effect,
includes an untrue statement of a material fact or omission to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, and use its best efforts promptly to prepare a
supplement or amendment to the Registration Statement to correct such
untrue statement or omission, and deliver such number of copies of such
supplement or amendment to each Investor as such Investor may reasonably
request.
g. The Company shall use its best efforts to prevent the
issuance of any stop order or other suspension of effectiveness of a
Registration Statement, and, if such an order is issued, to obtain the
withdrawal of such order at the earliest possible moment and to notify each
Investor who holds Registrable Securities being sold (or, in the event of
an underwritten offering, the managing underwriters) of the issuance of
such order and the resolution thereof.
h. The Company shall permit a single firm of counsel,
designated as selling stockholders' counsel by the Investors who hold a
majority in interest of the Registrable Securities being sold, to review
the Registration Statement and all amendments and supplements thereto a
reasonable period of time prior to their filing with the SEC, and not file
any document in a form to which such counsel reasonably objects.
i. The Company shall make generally available to its security
holders as soon as practical, but not later than ninety (90) days after the
close of the period covered thereby, an earnings statement (in form
complying with the provisions of Rule 158 under the 1933 Act) covering a
twelve-month period beginning not later than the first day of the Company's
fiscal quarter next following the effective date of the Registration
Statement.
j. At the request of the Investors who hold a majority in
interest of the Registrable Securities being sold, the Company shall
furnish, on the date that Registrable Securities are delivered to an
underwriter, if any, for sale in connection with the Registration Statement
(i) if required by an underwriter, a letter, dated such date, from the
Company's independent certified public accountants in form and substance as
is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the
underwriters, and (ii) an opinion, dated as of such date, from counsel
representing the Company for purposes of such Registration Statement, in
form, scope and substance as is customarily given in an underwritten public
offering, addressed to the underwriters and the Investors.
k. The Company shall make available for inspection by (i) any
Investor, (ii) any underwriter participating in any disposition pursuant to
the Registration Statement, (iii) one firm of attorneys and one firm of
accountants or other agents retained by the Buyer, (iv) one firm of
attorneys and one firm of accountants or other agents retained by all other
Investors, and (v) one firm of attorneys retained by all such underwriters
(collectively, the "INSPECTORS") all pertinent financial and other records,
and pertinent corporate documents and properties of the Company
(collectively, the "RECORDS"), as shall be reasonably deemed necessary by
each Inspector to enable each Inspector to exercise its due diligence
responsibility, and cause the Company's officers, directors and employees
to supply all information which any Inspector may reasonably request for
purposes of such due diligence; PROVIDED, HOWEVER, that each Inspector
shall hold in confidence and shall not make any disclosure (except to an
Investor) of any Record or other information which the Company determines
in good faith to be confidential, and of which determination the Inspectors
are so notified, unless (a) the disclosure of such Records is necessary to
avoid or correct a misstatement or omission in any Registration Statement,
(b) the release of such Records is ordered pursuant to a subpoena or other
order from a court or government body of competent jurisdiction, or (c) the
information in such Records has been made generally available to the public
other than by disclosure in violation of this or any other agreement. The
Company shall not be required to disclose any confidential information in
such Records to any Inspector until and unless such Inspector shall have
entered into confidentiality agreements (in form and substance satisfactory
to the Company) with the Company with respect thereto, substantially in the
form of this Section 3(k). Each Investor agrees that it shall, upon
learning that disclosure of such Records is sought in or by a court or
governmental body of competent jurisdiction or through other means, give
prompt notice to the Company and allow the Company, at its expense, to
undertake appropriate action to prevent disclosure of, or to obtain a
protective order for, the Records deemed confidential.
l. The Company shall hold in confidence and not make any
disclosure of information concerning an Investor provided to the Company
hereof unless (i) disclosure of such information is necessary to comply
with federal or state securities laws, (ii) the disclosure of such
information is necessary to avoid or correct a misstatement or omission in
any Registration Statement, (iii) the release of such information is
ordered pursuant to a subpoena or other order from a court or governmental
body of competent jurisdiction, or (iv) such information has been made
generally available to the public other than by disclosure in violation of
this or any other agreement. The Company agrees that it shall, upon
learning that disclosure of such information concerning an Investor is
sought in or by a court or governmental body of competent jurisdiction or
through other means, give prompt notice to such Investor, and allow the
Investor, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, such information.
m. The Company shall use its best efforts either to (i) cause
all the Registrable Securities covered by the Registration Statement to be
listed on a national securities exchange and on each additional national
securities exchange on which securities of the same class or series issued
by the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange, or (ii)
secure designation and quotation of all the Registrable Securities covered
by the Registration Statement on the NASDAQ-NMS or, if, despite the
Company's best efforts to satisfy the preceding clause (i) or (ii), the
Company is unsuccessful in satisfying the preceding clause (i) or (ii), to
secure the inclusion for quotation on the NASDAQ SmallCap for such
Registrable Securities and, without limiting the generality of the
foregoing, to arrange for at least two market makers to register with the
National Association of Securities Dealers, Inc. ("NASD") as such with
respect to such Registrable Securities. The Investors' sole remedy for the
Company's failure to perform under this Section shall be as provided
Section 2(c) hereof and in Section 2(b) of the Certificate of Designation.
n. The Company shall provide a transfer agent and registrar,
which may be a single entity, for the Registrable Securities not later than
the effective date of the Registration Statement.
o. The Company shall cooperate with the Investors who hold
Registrable Securities being offered and the managing underwriter or
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be offered pursuant to
the Registration Statement and enable such certificates to be in such
denominations or amounts, as the case may be, as the managing underwriter
or underwriters, if any, or the Investors may reasonably request and
registered in such names as the managing underwriter or underwriters, if
any, or the Investors may request. No later than the effective date of any
Registration Statement registering the resale of Registrable Securities,
the Company shall deliver to its transfer agent instructions, accompanied
by any reasonably required opinion of counsel, that (i) permit sales of
legended securities in a timely fashion that complies with then mandated
securities settlement procedures for regular way market transactions; and
(ii) upon the exercise of Warrants or conversion of Preferred Shares and
the contemporaneous resale, pursuant to an effective Registration
Statement, of the applicable Warrant Shares and Conversion Shares, permit
the issuance of stock certificates without restrictive legends to the
transferees of such Warrant Shares and Conversion Shares.
p. The Company shall take all other reasonable actions
necessary to expedite and facilitate disposition by the Investors of
Registrable Securities pursuant to the Registration Statement.
4. OBLIGATIONS OF THE INVESTORS.
In connection with the registration of the Registrable Securities, the
Investors shall have the following obligations:
a. It shall be a condition precedent to the obligations of the
Company to complete the registration pursuant to this Agreement with
respect to the Registrable Securities of a particular Investor that such
Investor shall furnish to the Company such information regarding itself,
the Registrable Securities held by it and the intended method of
disposition of the Registrable Securities held by it as shall be reasonably
required to effect the registration of such Registrable Securities and
shall execute such documents in connection with such registration as the
Company may reasonably request. At least five (5) days prior to the first
anticipated filing date of the Registration Statement, the Company shall
notify each investor of the information the Company requires from each such
Investor if such Investor elects to have any of such Investor's Registrable
Securities included in the Registration Statement.
b. Each Investor by such Investor's acceptance of the
Registrable Securities agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of
the Registration Statement hereunder, unless such Investor has notified the
Company in writing of such Investor's election to exclude all of such
Investor's Registrable Securities from the Registration Statement.
c. In the event Investors holding a majority in interest of the
Registrable Securities being registered determine to engage the services of
an underwriter, each Investor agrees to enter into and perform such
Investor's obligations under an underwriting agreement, in usual and
customary form, including, without limitation, customary indemnification
and contribution obligations, with the managing underwriter of such
offering and take such other actions as are reasonably required in order to
expedite or facilitate the disposition of the Registrable Securities,
unless such Investor has notified the Company in writing of such Investor's
election to exclude all of such Investor's Registrable Securities from the
Registration Statement. The incremental costs incident to such an
underwritten offering shall be paid by the Investor to the extent provided
in Section 3(e).
d. Each Investor agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section
3(f) or 3(g), such Investor will immediately discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until such Investor's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(f) or 3(g)
and, if so directed by the Company, such Investor shall deliver to the
Company (at the expense of the Company) or destroy (and deliver to the
Company a certificate of destruction) all copies in such Investor's
possession, of the prospectus covering such Registrable Securities current
at the time of receipt of such notice.
e. No Investor may participate in any underwritten registration
hereunder unless such Investor (i) agrees to sell such Investor's
Registrable Securities on the basis provided in any underwriting
arrangements approved by the Investors entitled hereunder to approve such
arrangements, (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements, and
(iii) agrees to pay its pro rata share of all underwriting discounts and
commissions.
5. EXPENSES OF REGISTRATION.
All reasonable expenses, other than underwriting discounts and
commissions, incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation,
all registration, listing and qualifications fees, printers and accounting
fees, the fees and disbursements of counsel for the Company, and the fees
and disbursements of one (1) firm of counsel for the Investors, shall be
borne by the Company.
6. INDEMNIFICATION.
In the event any Registrable Securities are included in a Registration
Statement under this Agreement:
a. To the extent permitted by law, the Company will indemnify,
hold harmless and defend (i) each Investor who holds such Registrable
Securities, (ii) the directors, officers and each person who controls any
Investor within the meaning of the 1933 Act or the Securities Exchange Act
of 1934, as amended (the "1934 ACT"), if any, and (iii) any underwriter (as
defined in the 1933 Act) for the Investors; and the directors, officers and
each person who controls any such underwriter within the meaning of the
1933 Act or the 1934 Act, if any, (each, an "INDEMNIFIED PERSON"), against
any losses, claims, damages, liabilities or expenses (joint or several)
(collectively, "CLAIMS") to which any of them may become subject insofar as
such Claims (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon: (i) any untrue statement
or alleged untrue statement of a material fact in a Registration Statement
or the omission or alleged omission to state therein a material fact
required to be stated or necessary to make the statements therein not
misleading, (ii) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus if used prior to the
effective date of such Registration Statement, or contained in the final
prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged
omission to state therein any material fact necessary to make the
statements made therein, in light of the circumstances under which the
statements therein were made, not misleading, or (iii) any violation or
alleged violation relating to the offer or sale of the Registrable
Securities by the Company of the 1933 Act, the 1934 Act, any other law,
including, without limitation, any state securities law, or any rule or
regulation thereunder (the matters in the foregoing clauses (i) through
(iii) being, collectively, "VIOLATIONS"). Subject to the restrictions set
forth in Section 6(d) with respect to the number of legal counsel, the
Company shall reimburse the Investors and each such underwriter or
controlling person, promptly as such expenses are incurred and are due and
payable, for any reasonable legal fees or other reasonable expenses
incurred by them in connection with investigating or defending any such
Claim, subject to the provisions of Section 6(d). Notwithstanding anything
to the contrary contained herein, the indemnification agreement contained
in this Section 6(a): (i) shall not apply to a Claim arising out of or
based upon a Violation which occurs in reliance upon and in conformity with
information furnished in writing to the Company by any Indemnified Person
or underwriter for such Indemnified Person expressly for use in connection
with the preparation of the Registration Statement or any such amendment
thereof or supplement thereto, if such prospectus was timely made available
by the Company pursuant to Section 3(c) hereof; (ii) with respect to any
preliminary prospectus, shall not inure to the benefit of any such person
from whom the person asserting any such Claim purchased the Registrable
Securities that are the subject thereof (or to the benefit of any person
controlling such person) if the untrue statement or omission of material
fact contained in the preliminary prospectus was corrected in the
prospectus, as then amended or supplemented, if such prospectus was timely
made available by the Company pursuant to Section 3(c) hereof; (iii) shall
not be available to the extent such Claim is based on a failure of the
Investor to deliver or to cause to be delivered the prospectus made
available by the Company; and (iv) shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior
written consent of the Company, which consent shall not be unreasonably
withheld. Such indemnity shall remain in full force and effect regardless
of any investigation made by or on behalf of the Indemnified Person and
shall survive the transfer of the Registrable Securities by the Investors
pursuant to Section 9.
b. In connection with any Registration Statement in which any
Investor is participating, each such Investor agrees to indemnify, hold
harmless and defend, to the same extent and in the same manner set forth in
Section 6(a), the Company, each of its directors, each of its officers who
signs the Registration Statement, each person, if any, who controls the
Company within the meaning of the 1933 Act or the 1934 Act, any underwriter
and any other stockholder selling securities pursuant to the Registration
Statement or any of its directors or officers or any person who controls
such stockholder or underwriter within the meaning of the 1933 Act or the
1934 Act (collectively and together with an indemnified Person, an
"INDEMNIFIED PARTY"), against any Claim to which any of them may become
subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such
Claim arises out of or is based upon any Violation, in each case to the
extent (and only to the extent) that such violation occurs in reliance upon
and in conformity with written information furnished to the Company by such
Investor expressly for use in connection with such Registration Statement
or to the extent such Claim is based upon the failure of the Investor to
deliver or cause to be delivered the prospectus made available by the
Company; and such Investor will reimburse any legal or other expenses
reasonably incurred by them in connection with investigating or defending
any such Claim; PROVIDED, HOWEVER, that the indemnity agreement contained
in this Section 6(b) shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of
such Investor, which consent shall not be unreasonably withheld; PROVIDED,
FURTHER, HOWEVER, that the Investor shall be liable under this Section 6(b)
for only that amount of a Claim as does not exceed the net proceeds to such
Investor as a result of the sale of Registrable Securities pursuant to such
Registration Statement. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such
Indemnified Party and shall survive the transfer of the Registrable
Securities by the Investors pursuant to Section 9. Notwithstanding anything
to the contrary contained herein, the indemnification agreement contained
in this Section 6(b) with respect to any preliminary prospectus shall not
inure to the benefit of any Indemnified Party if the untrue statement or
omission of material fact contained in the preliminary prospectus was
corrected on a timely basis in the prospectus, as then amended or
supplemented.
c. The Company shall be entitled to receive indemnities from
underwriters, selling brokers, dealer managers and similar securities
industry professionals participating in any distribution, to the same
extent as provided above, with respect to information such persons so
furnished in writing by such persons expressly for inclusion in the
Registration Statement.
d. Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 6 of notice of the commencement of any
action (including any governmental action), such Indemnified Person or
Indemnified Party shall, if a Claim in respect thereof is to made against
any indemnifying party under this Section 6, deliver to the indemnifying
party a written notice of the commencement thereof, and the indemnifying
party shall have the right to participate in, and, to the extent the
indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified Person
or the Indemnified Party, as the case may be; PROVIDED, HOWEVER, that an
Indemnified Person or Indemnified Party shall have the right to retain its
own counsel with the fees and expenses to be paid by the indemnifying
party, if, in the reasonable opinion of counsel retained by the
indemnifying party, the representation by such counsel of the Indemnified
Person or Indemnified Party and the indemnifying party would be
inappropriate due to actual or potential differing interests between such
Indemnified Person or Indemnified Party and any other party represented by
such counsel in such proceeding. The Company shall pay for only one
separate legal counsel for the Investors, and such legal counsel shall be
selected by the Investors holding a majority in interest of the Registrable
Securities included in the Registration Statement to which the Claim
relates. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action shall not
relieve such indemnifying party of any liability to the Indemnified Person
or Indemnified Party under this Section 6, except to the extent that the
indemnifying party is prejudiced in its ability to defend such action. The
indemnification required by this Section 6 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as such expense, loss, damage or liability is incurred and is due
and payable.
7. CONTRIBUTION.
To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would
otherwise be liable under Section 6 to the fullest extent permitted by law;
PROVIDED, HOWEVER, that (i) no contribution shall be made under
circumstances where the maker would not have been liable for
indemnification under the fault standards set forth in Section 6, (ii) no
seller of Registrable Securities guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any seller of Registrable Securities who was not guilty
of such fraudulent misrepresentation, and (iii) contribution by any seller
of Registrable Securities shall be limited in amount to the net amount of
proceeds received by such seller from the sale of such Registrable
Securities.
8. REPORTS UNDER THE 1934 ACT.
With a view to making available to the Investors the benefits of Rule
144 promulgated under the 1933 Act or any other similar rule or regulation
of the SEC that may at any time permit the investors to sell securities of
the Company to the public without registration ("RULE 144"), the Company
agrees to:
a. make and keep public information available, as those terms
are understood and defined in Rule 144;
b. file with the SEC in a timely manner all reports and other
documents required of the Company under the 1933 Act and the Exchange Act
so long as the Company remains subject to such requirements (it being
understood that nothing herein shall limit the Company's obligations under
Section 4(c) of the Securities Purchase Agreement) and the filing of such
reports and other documents is required for the applicable provisions of
Rule 144; and
c. furnish to each Investor so long as such Investor owns
Registrable Securities, promptly upon request, (i) a written statement by
the Company that it has complied with the reporting requirements of Rule
144, the 1933 Act and the 1934 Act, (ii) a copy of the most recent annual
or quarterly report of the Company and such other reports and documents so
filed by the Company, and (iii) such other information as may be reasonably
requested to permit the investors to sell such securities pursuant to Rule
144 without registration.
9. ASSIGNMENT OF REGISTRATION RIGHTS.
The rights to have the Company register Registrable Securities
pursuant to this Agreement shall be automatically assignable by the
Investors to any transferee of all or any portion of Registrable Securities
if: (i) the Investor agrees in writing with the transferee or assignee to
assign such rights, and a copy of such agreement is furnished to the
Company within a reasonable time after such assignment, (ii) the Company
is, within a reasonable time after such transfer or assignment, furnished
with written notice of (a) the name and address of such transferee or
assignee, and (b) the securities with respect to which such registration
rights are being transferred or assigned, (iii) immediately following such
transfer or assignment the further disposition of such securities by the
transferee or assignee is restricted under the 1933 Act and applicable
state securities laws, (iv) at or before the time the Company receives the
written notice contemplated by clause (ii) of this sentence the transferee
or assignee agrees in writing with the Company to be bound by all of the
provisions contained herein, (v) such transfer shall have been made in
accordance with the applicable requirements of the Securities Purchase
Agreement, and (vi) such transferee shall be an "ACCREDITED INVESTOR" as
that term defined in Rule 501 of Regulation D promulgated under the 1933
Act.
10. AMENDMENT OF REGISTRATION RIGHTS.
Provisions of this Agreement may be amended and the observance thereof
may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with written consent of the Company
and Investors who hold a majority in interest of the Registrable
Securities. Any amendment or waiver effected in accordance with this
Section 10 shall be binding upon each Investor and the Company.
11. MISCELLANEOUS.
a. A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registrable Securities, the Company shall act upon the basis of
instructions, notice or election received from the registered owner of such
Registrable Securities.
b. Notices required or permitted to be given hereunder shall be
in writing and shall be deemed to be sufficiently given when personally
delivered (by hand, by courier, by telephone line facsimile transmission or
other means) or sent by certified mail, return receipt requested, properly
addressed and with proper postage pre-paid,
if to the Company:
Enzon, Inc.
20 Kingsbridge Road
Piscataway, NJ 08854
Telecopy: (908) 980-9606
Attention: Corporate Secretary
with copy to:
Ross & Hardies
65 East 55th Street, 31st floor
New York, NY 10022
Telecopy: (212) 421-5682
Attention: Kevin T. Collins, Esq.
if to the Buyer, at the addresses listed on their respective signature
pages
with copy to:
Genesee Advisers
11921 Freedom Drive, Suite 550
Reston, VA 22090
Telecopy: (703) 834-6627
Attention: Neil T. Chau
and:
Klehr, Harrison, Harvey, Branzburg & Ellers
1401 Walnut Street
Philadelphia, PA 19102
Telecopy: (215) 568-5725
Attention: Jason M. Shargel, Esq.
and if to any other Investor, at such address as such Investor shall have
provided in writing to the Company, or at such other address as each such
party furnishes by notice given in accordance with this Section 11(b), and
shall be effective, when personally delivered, upon receipt and, when so
sent by certified mail, four days after deposit with the United States
Postal Service.
c. Failure of any party to exercise any right or remedy under
this Agreement or otherwise, or delay by a party in exercising such right
or remedy, shall not operate as a waiver thereof.
d. This Agreement shall be enforced, governed by and construed
in accordance with the laws of the State of Delaware applicable to
agreements made and to be performed entirely within such State. In the
event that any provision of this Agreement is invalid or unenforceable
under any applicable statute or rule of law, then such provision shall be
deemed inoperative to the extent that it may conflict therewith and shall
be deemed modified to conform with such statute or rule of law. Any
provision hereof which may prove invalid or unenforceable under any law
shall not affect the validity or enforceability of any other provision
hereof.
e. This Agreement and the Securities Purchase Agreement
constitute the entire agreement among the parties hereto with respect to
the subject matter hereof and thereof. There are no restrictions,
promises, warranties or undertakings, other than those set forth or
referred to herein and therein. This Agreement and the Securities Purchase
Agreement supersede all prior agreements and understandings among the
parties hereto with respect to the subject matter hereof and thereof.
f. Subject to the requirements of Section 9 hereof, this
Agreement shall inure to the benefit of and be binding upon the successors
and assigns of each of the parties hereto.
g. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
h. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which shall constitute
one and the same agreement. This Agreement, once executed by a party, may
be delivered to the other party hereto by facsimile transmission of a copy
of this Agreement bearing the signature of the party so delivering this
Agreement.
i. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents, as the
other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
IN WITNESS WHEREOF, the parties have caused to be duly executed under
seal as of day and year first above written.
ENZON, INC.
By:/S/ PETER G. TOMBROS
Name: PETER G. TOMBROS
Its: PRESIDENT AND CEO
GFL ADVANTAGE FUND LTD.
By:/S/ A.P. DE GROOT
Name: A.P. DE GROOT
Its: PRESIDENT
Address: Genesee Fund Limited
CITCO Building
Wickhams Cay
P.O. Box 662
Road Town, Tortola
British Virgin Islands
Administrator
Curacao International Trust Co. N.V.
Kaya Flamboyan 9
P.O. Box 812
Curacao, Netherland Antilles
<PAGE>
GFL PERFORMANCE FUND LTD.
By:/S/ A.P. DE GROOT
Name: A.P. DE GROOT
Its: PRESIDENT
Address: Genesee Fund Limited
CITCO Building
Wickhams Cay
P.O. Box 662
Road Town, Tortola
British Virgin Islands
Administrator
Curacao International Trust Co. N.V.
Kaya Flamboyan 9
P.O. Box 812
Curacao, Netherland Antilles
WARRANT TO PURCHASE 364,963 SHARES OF COMMON STOCK VOID AFTER 5:00
P.M. NEW JERSEY TIME, ON FEBRUARY 7, 2001. THIS WARRANT AND THE SHARES OF
COMMON STOCK ISSUABLE UPON THE EXERCISE HEREOF HAVE BEEN AND WILL BE ISSUED
IN TRANSACTIONS WHICH HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE SECURITIES OR BLUE SKY
LAWS. THIS WARRANT AND SUCH SHARES MAY NOT BE SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF, IN WHOLE OR IN PART, IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE
LAW, OR AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
NO. ______1_________ 364,963 SHARES
ENZON, INC.
This certifies that, for value received, GFL Advantage Fund Ltd., the
registered holder hereof, or assigns (the "WARRANTHOLDER") is entitled to
purchase from Enzon, Inc., a Delaware corporation (the "COMPANY"), at any
time on and after the earlier of the date the Registration Statement (filed
with the Securities and Exchange Commission (the "SEC") pursuant to Section
2(a) of a certain Registration Rights Agreement of even date herewith by
and among the parties hereto) is declared effective by the SEC or seventy
(70) days from the date of issuance of this Warrant and before 5:00 p.m.,
New Jersey time, on February 7, 2001 (the "TERMINATION DATE"), at the
purchase price of $4.11 per share (the "EXERCISE PRICE"), the number of
shares of Common Stock, par value $.01 per share (the "COMMON STOCK"), of
the Company set forth above (the "WARRANT STOCK"); PROVIDED, HOWEVER, that
in no event shall the Warrantholder be entitled to exercise this Warrant
if, after giving effect to such exercise, the number of shares of Common
Stock beneficially owned by the Warrantholder and all other holders of
Common Stock whose holdings would be aggregated with the Warrantholder for
purposes of calculating beneficial ownership in accordance with Sections
13(d) and 16 of the Securities Exchange Act of 1934, as amended, and the
regulations thereunder ("SECTIONS 13(D) AND 16"), including without
limitation any person serving as an adviser to any holder (collectively,
the "RELATED PERSONS"), would exceed four and nine-tenths percent (4.9%) of
the outstanding shares of Common Stock (calculated in accordance with
Sections 13(d) and 16). The Common Stock issuable upon conversion of
shares of the Company's preferred stock or exercise of warrants for the
purchase of Common Stock held by the Warrantholder or the Related Persons
shall not be deemed to be beneficially owned by the Warrantholder or such
Related Persons for this purpose. The number of shares of Warrant Stock,
the Termination Date and the Exercise Price per share of this Warrant shall
be subject to adjustment from time to time as set forth below.
SECTION I. TRANSFER OR EXCHANGE OF WARRANT
The Company shall be entitled to treat the Warrantholder as the owner
in fact hereof for all purposes and shall not be bound to recognize any
equitable or other claim to or interest in this Warrant on the part of any
other person. This Warrant shall be transferable only on the books of the
Company, maintained at its principal office, upon delivery of this Warrant
Certificate duly endorsed by the Warrantholder or by its duly authorized
attorney or representative, or accompanied by proper evidence of
succession, assignment or authority to transfer. Upon any registration of
transfer, the Company shall deliver a new Warrant Certificate or
Certificates to the persons entitled thereto.
SECTION II. TERM OF WARRANT; EXERCISE OF WARRANTS
A. TERMINATION. The Company may, in its sole discretion, extend the
Termination Date with respect to the exercise of this Warrant upon notice
to the Warrantholder. As used herein, "TERMINATION DATE" shall be deemed
to include any such extensions.
B. EXERCISE. This Warrant shall be exercised by surrender to the
Company, at its principal office, of this Warrant Certificate, together
with the Purchase Form attached hereto duly completed and signed, and upon
payment to the Company of the Exercise Price for the number of shares of
Warrant Stock in respect of which this Warrant is then exercised. Payment
of the aggregate Exercise Price shall be made in cash or by certified or
official bank check.
C. WARRANT CERTIFICATE. Subject to Section III hereof, upon such
surrender of this Warrant Certificate and payment of the Exercise Price as
aforesaid, the Company shall issue and cause to be delivered to or upon the
written order of the Warrantholder, by the second trading day after
exercise, a certificate or certificates for the number of full shares of
Warrant Stock so purchased upon the exercise of such Warrant, together with
cash, as provided in Section VI hereof, in respect of any fractional shares
of Warrant Stock otherwise issuable upon such surrender. Such certificate
or certificates representing the Warrant Stock shall be deemed to have been
issued and any person so designated to be named therein shall be deemed to
have become a holder of record of such shares of Warrant Stock as of the
date of receipt by the Company of this Warrant Certificate and payment of
the Exercise Price as aforesaid; PROVIDED, HOWEVER, that if, at the date of
surrender of this Warrant Certificate and payment of the Exercise Price,
the transfer books for the Warrant Stock or other class of stock
purchasable upon the exercise of this Warrant shall be closed, the
certificate or certificates for the shares of Warrant Stock in respect of
which this Warrant is then exercised shall be deemed issuable as of the
date on which such books shall next be opened (whether before or after the
Termination Date) and until such date the Company shall be under no duty to
deliver any certificate for such shares of Warrant Stock; PROVIDED FURTHER,
HOWEVER, that the transfer books of record, unless otherwise required by
law, shall not be closed at any one time for a period longer than twenty
(20) days. The rights of purchase represented by this Warrant shall be
exercisable, at the election of the Warrantholder, either in full or from
time to time in part, and, in the event that this Warrant is exercised in
respect of fewer than all of the shares of Warrant Stock purchasable on
such exercise at any time prior to the Termination Date, a new Warrant
Certificate evidencing the remaining Warrant or Warrants will be issued,
and the Company shall deliver the new Warrant Certificate or Certificates
pursuant to the provisions of this Section.
SECTION III. PAYMENT OF TAXES
The Company will pay all documentary stamp taxes, if any, attributable
to the initial issuance of the shares of Warrant Stock upon the exercise of
this Warrant; provided, however, that the Warrantholder shall pay any tax
or taxes which may be payable in respect of any transfer involved in the
issue or delivery of Warrant Certificates or the certificates for the
shares of Warrant Stock in a name other than that of the Warrantholder in
respect of which this Warrant or shares of Warrant Stock are issued.
SECTION IV. MUTILATED OR MISSING WARRANT CERTIFICATES
In case this Warrant Certificate shall be mutilated, lost, stolen or
destroyed, the Company shall, at the request of the Warrantholder, issue
and deliver, in exchange and substitution for and upon cancellation of this
certificate if mutilated, or in lieu of and in substitution for this
certificate if lost, stolen or destroyed, a new Warrant Certificate of like
tenor and representing an equivalent right or interest, but only upon
receipt of evidence reasonably satisfactory to the Company of such loss,
theft or destruction of this Warrant Certificate and indemnity, if
requested, also reasonably satisfactory to the Company.
SECTION V. RESERVATION OF SHARES OF WARRANT STOCK.
There has been reserved, and the Company shall at all times keep
reserved so long as this Warrant remains outstanding, out of its authorized
Common Stock a number of shares of Common Stock sufficient to provide for
the exercise of the rights of purchase represented by this Warrant. The
transfer agent for the Common Stock and every subsequent transfer agent for
any shares of the Company's capital stock issuable upon the exercise of
this Warrant will be irrevocably authorized and directed at all times to
reserve such number of authorized shares as shall be requisite for such
purpose.
SECTION VI. FRACTIONAL SHARES.
No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of this Warrant. With respect to any fraction of
a share called for upon the exercise of this Warrant, the Company shall pay
to the Warrantholder an amount in cash equal to such fraction multiplied by
the Exercise Price then in effect.
SECTION VII. ADJUSTMENTS OF EXERCISE PRICE AND NUMBER OF SHARES.
A. COMPUTATION OF ADJUSTED EXERCISE PRICE. Except as hereinafter
provided, in case the Company shall at any time after the date hereof (i)
issue or sell any shares of Common Stock (except in those instances
referred to in subsection F of this Section VII), including shares held in
the Company's treasury and shares issued upon the exercise of any option,
rights or warrants (with the exception of this Warrant and any other
options, warrants and convertible securities outstanding on the date
hereof, and without duplicating any adjustments pursuant to clause (ii)
below) and shares issued upon the direct or indirect conversion or exchange
of securities for shares of Common Stock (with the exception of the
Company's Series A Cumulative Convertible Preferred Stock and Series B
Convertible Preferred Stock (collectively, the "PREFERRED STOCK"), and
without duplicating any adjustments pursuant to clause (ii) below) for a
consideration per share less than the Market Price (as hereinafter defined)
on the trading day immediately prior to the date of issuance or sale of
such share or without consideration, or (ii) issue any rights, options or
warrants to subscribe for or purchase or otherwise acquire Common Stock
(the "OPTION SECURITIES") or any evidences of indebtedness, shares of stock
or other securities (other than the Preferred Stock) which are convertible
into or exchangeable, with or without payment of consideration, for shares
of Common Stock (the "CONVERTIBLE SECURITIES"), whether or not the right to
exercise such Option Securities or to convert or exchange such Convertible
Securities is immediately exercisable or is conditioned upon the passage of
time, the occurrence or non-occurrence of some other event, or both, for a
consideration per share of Common Stock (calculated in accordance with
subsections A(iii) and A(iv) of this Article VII) less than the Market
Price on the trading day immediately prior to the date of issuance of such
Option Securities or Convertible Securities, then forthwith upon such
issuance or sale the Exercise Price shall (until another such issuance or
sale) be reduced to a price (calculated to the nearest full cent)
determined by multiplying the Exercise Price immediately prior to such
issuance or sale by a fraction, the numerator of which is an amount equal
to the sum of (X) the total number of shares of Common Stock outstanding
immediately prior to such issuance or sale, multiplied by the Market Price
in effect immediately prior to such issuance or sale, plus (Y) the
aggregate of the amount of all consideration, if any, received by the
Company upon such issuance or sale, and the denominator of which is the
Market Price in effect immediately prior to such issuance or sale
multiplied by the total number of shares of Common Stock outstanding
immediately after such issuance or sale; PROVIDED, HOWEVER, that in no
event shall the Exercise Price be adjusted pursuant to this computation to
an amount in excess of the Exercise Price in effect immediately prior to
such computation, except in the case of a combination of outstanding shares
of Common Stock, as provided by subsection B of this Section VII.
For the purposes of any computation to be made in accordance with this
subsection A, the following provisions shall be applicable:
(i) In case of the issuance or sale of shares of Common Stock
for a consideration part or all of which shall be cash, the amount of the
cash consideration therefor shall be deemed to be the amount of the cash
received by the Company for such shares (or, if shares are offered by the
Company for subscription, the subscription price, or, if sold to
underwriters or dealers the public offering price) before deducting
therefrom any compensation paid or discount allowed in the sale,
underwriting or purchase thereof by underwriters or dealers or others
performing similar services, or any expenses incurred in connection
therewith.
(ii) In case of the issuance or sale (otherwise than as a
dividend or other distribution on any stock of the Company) of shares of
Common Stock for a consideration part or all of which shall be other than
cash, the amount of the consideration therefor other than cash shall be
deemed to be the value of such consideration as determined in good faith by
the Board of Directors of the Company.
(iii)In case of the issuance of Convertible Securities (other
than the Convertible Securities described in (iv) below), the aggregate
consideration received therefor shall be deemed to be the consideration, if
any, received by the Company for the issuance of such Convertible
Securities, plus the additional minimum consideration, if any, to be
received by the Company upon the conversion or exchange thereof.
(iv) In the case of the issuance of Option Securities, the
aggregate consideration received therefor shall be deemed to be the
consideration, if any, received by the Company for the issuance of such
Option Securities, plus the additional minimum consideration, if any, to be
received by the Company upon the exercise thereof.
(v) Shares of Common Stock issuable by way of dividend or other
distribution on any stock of the Company shall be deemed to have been
issued immediately after the opening of business on the date following the
record date for the determination of stockholders entitled to receive such
dividend or other distribution and shall be deemed to have been issued
without consideration.
(vi) The reclassification of securities of the Company, other
than shares of Common Stock into securities including shares of Common
Stock, shall be deemed to involve the issuance of such shares for a
consideration other than cash immediately prior to the close of business on
the date fixed for the determination of security holders entitled to
receive such shares, and the value of the consideration allocable to such
shares shall be determined as provided in subsection (ii) of this
subsection A.
(vii) The number of shares of Common Stock at any one time
outstanding shall include the aggregate number of shares issued or issuable
(subject to readjustment upon the actual issuance thereof) upon the
exercise of outstanding options, rights, warrants and upon the conversion
or exchange of outstanding convertible or exchangeable securities.
"MARKET PRICE," as of any date, (i) means the average of the last
reported sale prices for the shares of Common Stock as reported by National
Association of Securities Dealers Automated Quotation National Market
System ("NASDAQ-NMS") for the five consecutive trading days ending on such
date, or (ii) if the NASDAQ-NMS is not the principal trading market for the
shares of Common Stock, the average of the last reported sale prices on the
principal trading market for the Common Stock during the same period, or
(iii) if market value cannot be calculated as of such date on any of the
foregoing bases, the Market Price shall be the average fair market value as
reasonably determined in good faith by the Board of Directors of the
Company.
B. SUBDIVISION AND COMBINATION. In case the Company shall at any
time subdivide or combine the outstanding shares of Common Stock, the
Exercise Price shall forthwith be proportionately decreased in the case of
subdivision or increased in case of combination.
C. ADJUSTMENT IN NUMBER OF SHARES. Upon each adjustment of the
Exercise Price pursuant to the provisions of this Section VII, the number
of shares of Warrant Stock issuable upon the exercise of this Warrant shall
be adjusted to the nearest full share by multiplying a number equal to the
Exercise Price in effect immediately prior to such adjustment by the number
of shares of Warrant Stock issuable upon exercise of this Warrant
immediately prior to such adjustment and dividing the product so obtained
by the adjusted Exercise Price.
D. RECLASSIFICATION, CONSOLIDATION, MERGER, ETC. In case of any
reclassification or change of the outstanding shares of Common Stock (other
than a change in par value to no par value, or from no par value to par
value, or as a result of a subdivision or combination), or in the case of
any consolidation of the Company with, or merger of the Company into,
another corporation (other than a consolidation or merger in which the
Company is the surviving corporation and which does not result in any
reclassification or change of the outstanding shares of Common Stock,
except a change as a result of a subdivision or combination of such shares
or a change in par value, as aforesaid), or in the case of a sale or
conveyance to another corporation of all or substantially all of the
property of the Company, the Warrantholder shall thereafter have the right
to purchase upon the exercise of this Warrant the kind and number of shares
of stock and other securities and property receivable upon such
reclassification, change, consolidation, merger, sale or conveyance as if
the Warrantholder were the owner of the shares of Warrant Stock underlying
this Warrant immediately prior to any such events at the Exercise Price in
effect immediately prior to the record date for such reclassification,
change, consolidation, merger, sale or conveyance as if such Warrantholder
had exercised this Warrant.
E. SPECIAL ADJUSTMENT. If the purchase price provided for in any
Option Securities, the additional consideration, if any, payable upon the
conversion or exchange of any Convertible Securities or the rate at which
any Convertible Securities are convertible into or exchangeable for Common
Stock shall change, or if any Option Securities or Convertible Securities
terminate in whole or in part without being exercised, converted or
exchanged, the Exercise Price in effect at the time of such event shall
forthwith be readjusted. The Exercise Price shall be adjusted to that
amount which would have been in effect at such time had such Option
Securities or Convertible Securities outstanding at such time initially
been granted, issued or sold and the Exercise Price initially adjusted as
provided in subsection A of this Article VII, except that the minimum
amount of additional consideration payable and the total maximum number of
shares issuable shall be determined after giving effect to such event (and
any prior event or events).
F. NO ADJUSTMENT OF EXERCISE PRICE IN CERTAIN CASES. No adjustment
of the Exercise Price shall be made:
(i) Upon the issuance or sale of this Warrant or the shares of
Warrant Stock issuable upon the exercise of this Warrant, or the issuance
or sale of the Preferred Stock, or upon the issuance of shares of Common
Stock in connection with the conversion of such Preferred Stock, or the
issuance of shares of Common Stock pursuant to Section 2(c) of the
Registration Rights Agreement of even date herewith by and among the
Company and the Buyer and pursuant to Section 2(b) of the Certificate of
Designations, Preferences and Rights of Series B Convertible Preferred
Stock of the Company;
(ii) Upon the issuance of options, or shares upon the exercise
thereof, pursuant to the Company's Non-Qualified Stock Option Plan, or any
amendment or successor plan thereto;
(iii) If the amount of said adjustment shall be less than one
cent ($.01) per share; provided, however, that in such case any adjustment
that would otherwise be required then to be made shall be carried forward
and shall be made at the time of and together with any adjustment so
carried forward, shall amount to at least one cent ($.01) per Share;
(iv) Upon the issuance or sale of shares of Common Stock or
securities which are exercisable or convertible into shares of Common Stock
to employees of the Company or its affiliates, under an Employee Stock
Purchase Plan;
(v) Upon the issuance of any Option Securities or the issuance
of shares of Common Stock upon the exercise thereof, where such Option
Security was issued for a consideration price per share of Common Stock
initially deliverable upon exercise of such Option Security equal to or
greater than the Market Price in effect immediately prior to the issuance
or sale of such Option Security;
(vi) Upon the issuance of Convertible Securities where the
conversion price is equal to or greater than the Market Price in effect
immediately prior to the issuance of such Convertible Securities;
(vii)Upon the issuance of Common Stock to non-management
directors of the Company in an amount up to Fourteen Thousand Dollars
($14,000) per such director per year, based upon such method of valuation
as may be established from time to time by the Company's Board of Directors
in its reasonable discretion; or
(viii)Upon the issuance of an aggregate of up to Three Million
Dollars ($3,000,000) of Common Stock or securities which are exercisable or
convertible into Common Stock at a discount to the Market Price as of the
date of such issuance that does not exceed twenty percent (20%).
SECTION VIII. NOTICES TO WARRANTHOLDERS.
So long as this Warrant shall be outstanding and unexercised (a)
if the Company shall pay any dividend or make any distribution upon the
Common Stock or (b) if the Company shall offer to the holders of Common
Stock for subscription or purchase by them any shares of stock of any class
or any other rights or (c) if any capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation or
merger of the Company with or into another corporation, sale, lease or
transfer of the Company to another corporation, or voluntary or involuntary
dissolution, liquidation or winding up of the Company shall be effected,
then, in any such case, the Company shall cause to be delivered to the
Warrantholder, at least ten (10) days prior to the date specified in (i) or
(ii) below, as the case may be, a notice containing a brief description of
the proposed action and stating the date on which (i) a record is to be
taken for the purpose of such dividend or distribution, or (ii) such
reclassification, reorganization, consolidation, merger, conveyance, lease,
dissolution, liquidation or winding up is to take place and the date, if
any, as of which the holders of Common Stock of record shall be entitled to
exchange their shares of Common Stock for securities or other property
deliverable upon such reclassification, reorganization, consolidation,
merger, conveyance, dissolution, liquidation or winding up. Additionally,
so long as this Warrant shall be outstanding and unexercised, if the
Company shall make any adjustment to the Exercise Price, the Company shall
cause to be delivered to the Warrantholder, within twenty (20) days after
the date of such adjustment, a notice containing a description of the
calculations pertaining to such adjustment and stating the date on which
the adjustment to the Exercise Price became effective.
SECTION IX. DELIVERY OF NOTICES.
Any notice pursuant to this Warrant by the Company or by the
Warrantholder shall be in writing and shall be deemed to have been duly
given if delivered or mailed certified mail, return receipt requested, (a)
if to the Company, to it at 20 Kingsbridge Road, Piscataway, New Jersey
08854, Attention: Corporate Secretary and (b) if to the Warrantholder to it
at the address set forth on the signature page hereto. Each party hereto
may from time to time change the address to which such party's notices are
to be delivered or mailed hereunder by notice in accordance herewith to the
other party.
SECTION X. SUCCESSORS.
All the covenants and provisions of this Agreement by or for the
benefit of the Company or the Warrantholder shall bind and inure to the
benefit of their respective successors and assigns hereunder.
SECTION XI. APPLICABLE LAW.
This Warrant shall be deemed to be a contract made under the laws
of the State of Delaware applicable to agreements made and to be performed
entirely in Delaware and for all purposes shall be construed in accordance
with the internal laws of Delaware without giving effect to the conflicts
of laws principles thereof.
SECTION XII. BENEFITS OF THIS AGREEMENT
Nothing in this Warrant shall be construed to give to any person
or corporation other than the Company and the Warrantholder any legal or
equitable right, remedy or claim under this Warrant and this Warrant shall
be for the sole and exclusive benefit of the Company and the Warrantholder.
IN WITNESS WHEREOF, the parties hereto have executed this Warrant
Certificate or caused this Warrant Certificate to be duly executed as of
the 7th day of February, 1996.
ENZON, INC.
By:/S/ PETER G. TOMBROS
Name: Peter G. Tombros
Title:President and CEO
<PAGE>
GFL ADVANTAGE FUND, LTD.
By:/S/ A.P. DE GROOT
Name:A.P. De Groot
Title:President
Address of Warrantholder:
Genesee Fund Limited
CITCO Building
Wickhams Cay
P.O. Box 662
Road Town, Tortola
British Virgin Islands
Administrator
Curacao International Trust Co. N.V.
Kaya Flamboyan 9
P.O. Box 812
Curacao, Netherland Antilles
<PAGE>
GFL PERFORMANCE FUND LTD.
By:/S/ A.P. DE GROOT
Name:A.P. De Groot
Title:President
Address of Warrantholder:
Genesee Fund Limited
CITCO Building
Wickhams Cay
P.O. Box 662
Road Town, Tortola
British Virgin Islands
Administrator
Curacao International Trust Co. N.V.
Kaya Flamboyan 9
P.O. Box 812
Curacao, Netherland Antilles
<PAGE>
PURCHASE FORM
The undersigned hereby irrevocably elects to exercise the Warrant
represented by this Warrant Certificate to the extent of _____ shares of
Common Stock, par value $.01 per share, of Enzon, Inc., and hereby makes
payment of $__________ in payment of the actual exercise price thereof.
[__________________________]
By:________________________________
Name:
Title:
Employer Taxpayer
Identification Number:
Address for delivery of Stock
Certificate:
<PAGE>
ASSIGNMENT FORM
FOR VALUED RECEIVED, ______________________ hereby sells, assigns
and transfers unto _____________________________ address
___________________ the right to purchase Common Stock, par value $.01 per
share, of Enzon, Inc., represented by this Warrant Certificate to the
extent of _______ shares as to which such right is exercisable and does
hereby irrevocably constitute and appoint _______________, to transfer the
same on the books of the Company with full power of substitution in the
premises.
_____________________
Signature
Dated: _______, ____
Notice: The signature of this assignment
must correspond with the name as it appears
upon the face of this Warrant Certificate in
every particular, without alteration or
enlargement or any change whatever.
SIGNATURE GUARANTEED:
__________________________
<PAGE>
WARRANT TO PURCHASE 273,723 SHARES OF COMMON STOCK VOID AFTER
5:00 P.M. NEW JERSEY TIME, ON FEBRUARY 7, 2001. THIS WARRANT AND THE
SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE HEREOF HAVE BEEN AND WILL
BE ISSUED IN TRANSACTIONS WHICH HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE
SECURITIES OR BLUE SKY LAWS. THIS WARRANT AND SUCH SHARES MAY NOT BE SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF, IN WHOLE OR IN
PART, IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT
AND APPLICABLE STATE LAW, OR AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
NO. _______2________ 273,723 SHARES
ENZON, INC.
This certifies that, for value received, GFL Performance Fund
Ltd., the registered holder hereof, or assigns (the "WARRANTHOLDER") is
entitled to purchase from Enzon, Inc., a Delaware corporation (the
"COMPANY"), at any time on and after the earlier of the date the
Registration Statement (filed with the Securities and Exchange Commission
(the "SEC") pursuant to Section 2(a) of a certain Registration Rights
Agreement of even date herewith by and among the parties hereto) is
declared effective by the SEC or seventy (70) days from the date of
issuance of this Warrant and before 5:00 p.m., New Jersey time, on February
7, 2001 (the "TERMINATION DATE"), at the purchase price of $4.11 per share
(the "EXERCISE PRICE"), the number of shares of Common Stock, par value
$.01 per share (the "COMMON STOCK"), of the Company set forth above (the
"WARRANT STOCK"); PROVIDED, HOWEVER, that in no event shall the
Warrantholder be entitled to exercise this Warrant if, after giving effect
to such exercise, the number of shares of Common Stock beneficially owned
by the Warrantholder and all other holders of Common Stock whose holdings
would be aggregated with the Warrantholder for purposes of calculating
beneficial ownership in accordance with Sections 13(d) and 16 of the
Securities Exchange Act of 1934, as amended, and the regulations thereunder
("SECTIONS 13(D) AND 16"), including without limitation any person serving
as an adviser to any holder (collectively, the "RELATED PERSONS"), would
exceed four and nine-tenths percent (4.9%) of the outstanding shares of
Common Stock (calculated in accordance with Sections 13(d) and 16). The
Common Stock issuable upon conversion of shares of the Company's preferred
stock or exercise of warrants for the purchase of Common Stock held by the
Warrantholder or the Related Persons shall not be deemed to be beneficially
owned by the Warrantholder or such Related Persons for this purpose. The
number of shares of Warrant Stock, the Termination Date and the Exercise
Price per share of this Warrant shall be subject to adjustment from time to
time as set forth below.
SECTION I. TRANSFER OR EXCHANGE OF WARRANT
The Company shall be entitled to treat the Warrantholder as the
owner in fact hereof for all purposes and shall not be bound to recognize
any equitable or other claim to or interest in this Warrant on the part of
any other person. This Warrant shall be transferable only on the books of
the Company, maintained at its principal office, upon delivery of this
Warrant Certificate duly endorsed by the Warrantholder or by its duly
authorized attorney or representative, or accompanied by proper evidence of
succession, assignment or authority to transfer. Upon any registration of
transfer, the Company shall deliver a new Warrant Certificate or
Certificates to the persons entitled thereto.
SECTION II. TERM OF WARRANT; EXERCISE OF WARRANTS
A. TERMINATION. The Company may, in its sole discretion,
extend the Termination Date with respect to the exercise of this Warrant
upon notice to the Warrantholder. As used herein, "TERMINATION DATE" shall
be deemed to include any such extensions.
B. EXERCISE. This Warrant shall be exercised by surrender to
the Company, at its principal office, of this Warrant Certificate, together
with the Purchase Form attached hereto duly completed and signed, and upon
payment to the Company of the Exercise Price for the number of shares of
Warrant Stock in respect of which this Warrant is then exercised. Payment
of the aggregate Exercise Price shall be made in cash or by certified or
official bank check.
C. WARRANT CERTIFICATE. Subject to Section III hereof, upon
such surrender of this Warrant Certificate and payment of the Exercise
Price as aforesaid, the Company shall issue and cause to be delivered to or
upon the written order of the Warrantholder, by the second trading day
after exercise, a certificate or certificates for the number of full shares
of Warrant Stock so purchased upon the exercise of such Warrant, together
with cash, as provided in Section VI hereof, in respect of any fractional
shares of Warrant Stock otherwise issuable upon such surrender. Such
certificate or certificates representing the Warrant Stock shall be deemed
to have been issued and any person so designated to be named therein shall
be deemed to have become a holder of record of such shares of Warrant Stock
as of the date of receipt by the Company of this Warrant Certificate and
payment of the Exercise Price as aforesaid; PROVIDED, HOWEVER, that if, at
the date of surrender of this Warrant Certificate and payment of the
Exercise Price, the transfer books for the Warrant Stock or other class of
stock purchasable upon the exercise of this Warrant shall be closed, the
certificate or certificates for the shares of Warrant Stock in respect of
which this Warrant is then exercised shall be deemed issuable as of the
date on which such books shall next be opened (whether before or after the
Termination Date) and until such date the Company shall be under no duty to
deliver any certificate for such shares of Warrant Stock; PROVIDED FURTHER,
HOWEVER, that the transfer books of record, unless otherwise required by
law, shall not be closed at any one time for a period longer than twenty
(20) days. The rights of purchase represented by this Warrant shall be
exercisable, at the election of the Warrantholder, either in full or from
time to time in part, and, in the event that this Warrant is exercised in
respect of fewer than all of the shares of Warrant Stock purchasable on
such exercise at any time prior to the Termination Date, a new Warrant
Certificate evidencing the remaining Warrant or Warrants will be issued,
and the Company shall deliver the new Warrant Certificate or Certificates
pursuant to the provisions of this Section.
SECTION III. PAYMENT OF TAXES
The Company will pay all documentary stamp taxes, if any,
attributable to the initial issuance of the shares of Warrant Stock upon
the exercise of this Warrant; provided, however, that the Warrantholder
shall pay any tax or taxes which may be payable in respect of any transfer
involved in the issue or delivery of Warrant Certificates or the
certificates for the shares of Warrant Stock in a name other than that of
the Warrantholder in respect of which this Warrant or shares of Warrant
Stock are issued.
SECTION IV. MUTILATED OR MISSING WARRANT CERTIFICATES
In case this Warrant Certificate shall be mutilated, lost, stolen
or destroyed, the Company shall, at the request of the Warrantholder, issue
and deliver, in exchange and substitution for and upon cancellation of this
certificate if mutilated, or in lieu of and in substitution for this
certificate if lost, stolen or destroyed, a new Warrant Certificate of like
tenor and representing an equivalent right or interest, but only upon
receipt of evidence reasonably satisfactory to the Company of such loss,
theft or destruction of this Warrant Certificate and indemnity, if
requested, also reasonably satisfactory to the Company.
SECTION V. RESERVATION OF SHARES OF WARRANT STOCK.
There has been reserved, and the Company shall at all times keep
reserved so long as this Warrant remains outstanding, out of its authorized
Common Stock a number of shares of Common Stock sufficient to provide for
the exercise of the rights of purchase represented by this Warrant. The
transfer agent for the Common Stock and every subsequent transfer agent for
any shares of the Company's capital stock issuable upon the exercise of
this Warrant will be irrevocably authorized and directed at all times to
reserve such number of authorized shares as shall be requisite for such
purpose.
SECTION VI. FRACTIONAL SHARES.
No fractional shares or scrip representing fractional shares
shall be issued upon the exercise of this Warrant. With respect to any
fraction of a share called for upon the exercise of this Warrant, the
Company shall pay to the Warrantholder an amount in cash equal to such
fraction multiplied by the Exercise Price then in effect.
SECTION VII. ADJUSTMENTS OF EXERCISE PRICE AND NUMBER OF SHARES.
A. COMPUTATION OF ADJUSTED EXERCISE PRICE. Except as
hereinafter provided, in case the Company shall at any time after the date
hereof (i) issue or sell any shares of Common Stock (except in those
instances referred to in subsection F of this Section VII), including
shares held in the Company's treasury and shares issued upon the exercise
of any option, rights or warrants (with the exception of this Warrant and
any other options and warrants outstanding on the date hereof, and without
duplicating any adjustments pursuant to clause (ii) below) and shares
issued upon the direct or indirect conversion or exchange of securities for
shares of Common Stock (with the exception of the Company's Series A
Cumulative Convertible Preferred Stock and Series B Convertible Preferred
Stock (collectively, the "PREFERRED STOCK"), and without duplicating any
adjustments pursuant to clause (ii) below) for a consideration per share
less than the Market Price (as hereinafter defined) on the trading day
immediately prior to the date of issuance or sale of such share or without
consideration, or (ii) issue any rights, options or warrants to subscribe
for or purchase or otherwise acquire Common Stock (the "OPTION SECURITIES")
or any evidences of indebtedness, shares of stock or other securities
(other than the Preferred Stock) which are convertible into or
exchangeable, with or without payment of consideration, for shares of
Common Stock (the "CONVERTIBLE SECURITIES"), whether or not the right to
exercise such Option Securities or to convert or exchange such Convertible
Securities is immediately exercisable or is conditioned upon the passage of
time, the occurrence or non-occurrence of some other event, or both, for a
consideration per share of Common Stock (calculated in accordance with
subsections A(iii) and A(iv) of this Article VII) less than the Market
Price on the trading day immediately prior to the date of issuance of such
Option Securities or Convertible Securities, then forthwith upon such
issuance or sale the Exercise Price shall (until another such issuance or
sale) be reduced to a price (calculated to the nearest full cent)
determined by multiplying the Exercise Price immediately prior to such
issuance or sale by a fraction, the numerator of which is an amount equal
to the sum of (X) the total number of shares of Common Stock outstanding
immediately prior to such issuance or sale, multiplied by the Market Price
in effect immediately prior to such issuance or sale, plus (Y) the
aggregate of the amount of all consideration, if any, received by the
Company upon such issuance or sale, and the denominator of which is the
Market Price in effect immediately prior to such issuance or sale
multiplied by the total number of shares of Common Stock outstanding
immediately after such issuance or sale; PROVIDED, HOWEVER, that in no
event shall the Exercise Price be adjusted pursuant to this computation to
an amount in excess of the Exercise Price in effect immediately prior to
such computation, except in the case of a combination of outstanding shares
of Common Stock, as provided by subsection B of this Section VII.
For the purposes of any computation to be made in accordance with
this subsection A, the following provisions shall be applicable:
(i) In case of the issuance or sale of shares of Common
Stock for a consideration part or all of which shall be cash, the amount of
the cash consideration therefor shall be deemed to be the amount of the
cash received by the Company for such shares (or, if shares are offered by
the Company for subscription, the subscription price, or, if sold to
underwriters or dealers the public offering price) before deducting
therefrom any compensation paid or discount allowed in the sale,
underwriting or purchase thereof by underwriters or dealers or others
performing similar services, or any expenses incurred in connection
therewith.
(ii) In case of the issuance or sale (otherwise than as a
dividend or other distribution on any stock of the Company) of shares of
Common Stock for a consideration part or all of which shall be other than
cash, the amount of the consideration therefor other than cash shall be
deemed to be the value of such consideration as determined in good faith by
the Board of Directors of the Company.
(iii)In case of the issuance of Convertible Securities
(other than the Convertible Securities described in (iv) below), the
aggregate consideration received therefor shall be deemed to be the
consideration, if any, received by the Company for the issuance of such
Convertible Securities, plus the additional minimum consideration, if any,
to be received by the Company upon the conversion or exchange thereof.
(iv) In the case of the issuance of Option Securities, the
aggregate consideration received therefor shall be deemed to be the
consideration, if any, received by the Company for the issuance of such
Option Securities, plus the additional minimum consideration, if any, to be
received by the Company upon the exercise thereof.
(v) Shares of Common Stock issuable by way of dividend or
other distribution on any stock of the Company shall be deemed to have been
issued immediately after the opening of business on the date following the
record date for the determination of stockholders entitled to receive such
dividend or other distribution and shall be deemed to have been issued
without consideration.
(vi) The reclassification of securities of the Company,
other than shares of Common Stock into securities including shares of
Common Stock, shall be deemed to involve the issuance of such shares for a
consideration other than cash immediately prior to the close of business on
the date fixed for the determination of security holders entitled to
receive such shares, and the value of the consideration allocable to such
shares shall be determined as provided in subsection (ii) of this
subsection A.
(vii) The number of shares of Common Stock at any one time
outstanding shall include the aggregate number of shares issued or issuable
(subject to readjustment upon the actual issuance thereof) upon the
exercise of outstanding options, rights, warrants and upon the conversion
or exchange of outstanding convertible or exchangeable securities.
"MARKET PRICE," as of any date, (i) means the average of the
last reported sale prices for the shares of Common Stock as reported by
National Association of Securities Dealers Automated Quotation National
Market System ("NASDAQ-NMS") for the five consecutive trading days ending
on such date, or (ii) if the NASDAQ-NMS is not the principal trading market
for the shares of Common Stock, the average of the last reported sale
prices on the principal trading market for the Common Stock during the same
period, or (iii) if market value cannot be calculated as of such date on
any of the foregoing bases, the Market Price shall be the average fair
market value as reasonably determined in good faith by the Board of
Directors of the Company.
B. SUBDIVISION AND COMBINATION. In case the Company shall at
any time subdivide or combine the outstanding shares of Common Stock, the
Exercise Price shall forthwith be proportionately decreased in the case of
subdivision or increased in case of combination.
C. ADJUSTMENT IN NUMBER OF SHARES. Upon each adjustment of the
Exercise Price pursuant to the provisions of this Section VII, the number
of shares of Warrant Stock issuable upon the exercise of this Warrant shall
be adjusted to the nearest full share by multiplying a number equal to the
Exercise Price in effect immediately prior to such adjustment by the number
of shares of Warrant Stock issuable upon exercise of this Warrant
immediately prior to such adjustment and dividing the product so obtained
by the adjusted Exercise Price.
D. RECLASSIFICATION, CONSOLIDATION, MERGER, ETC. In case of
any reclassification or change of the outstanding shares of Common Stock
(other than a change in par value to no par value, or from no par value to
par value, or as a result of a subdivision or combination), or in the case
of any consolidation of the Company with, or merger of the Company into,
another corporation (other than a consolidation or merger in which the
Company is the surviving corporation and which does not result in any
reclassification or change of the outstanding shares of Common Stock,
except a change as a result of a subdivision or combination of such shares
or a change in par value, as aforesaid), or in the case of a sale or
conveyance to another corporation of all or substantially all of the
property of the Company, the Warrantholder shall thereafter have the right
to purchase upon the exercise of this Warrant the kind and number of shares
of stock and other securities and property receivable upon such
reclassification, change, consolidation, merger, sale or conveyance as if
the Warrantholder were the owner of the shares of Warrant Stock underlying
this Warrant immediately prior to any such events at the Exercise Price in
effect immediately prior to the record date for such reclassification,
change, consolidation, merger, sale or conveyance as if such Warrantholder
had exercised this Warrant.
E. SPECIAL ADJUSTMENT. If the purchase price provided for in
any Option Securities, the additional consideration, if any, payable upon
the conversion or exchange of any Convertible Securities or the rate at
which any Convertible Securities are convertible into or exchangeable for
Common Stock shall change, or if any Option Securities or Convertible
Securities terminate in whole or in part without being exercised, converted
or exchanged, the Exercise Price in effect at the time of such event shall
forthwith be readjusted. The Exercise Price shall be adjusted to that
amount which would have been in effect at such time had such Option
Securities or Convertible Securities outstanding at such time initially
been granted, issued or sold and the Exercise Price initially adjusted as
provided in subsection A of this Article VII, except that the minimum
amount of additional consideration payable and the total maximum number of
shares issuable shall be determined after giving effect to such event (and
any prior event or events).
F. NO ADJUSTMENT OF EXERCISE PRICE IN CERTAIN CASES. No
adjustment of the Exercise Price shall be made:
(i) Upon the issuance or sale of this Warrant or the shares
of Warrant Stock issuable upon the exercise of this Warrant, or the
issuance or sale of the Preferred Stock, or upon the issuance of shares of
Common Stock in connection with the conversion of such Preferred Stock, or
the issuance of shares of Common Stock pursuant to Section 2(c) of the
Registration Rights Agreement of even date herewith by and among the
Company and the Buyer and pursuant to Section 2(b) of the Certificate of
Designations, Preferences and Rights of Series B Convertible Preferred
Stock of the Company;
(ii) Upon the issuance of options, or shares upon the
exercise thereof, pursuant to the Company's Non-Qualified Stock Option
Plan, or any amendment or successor plan thereto;
(iii) If the amount of said adjustment shall be less than
one cent ($.01) per share; provided, however, that in such case any
adjustment that would otherwise be required then to be made shall be
carried forward and shall be made at the time of and together with any
adjustment so carried forward, shall amount to at least one cent ($.01) per
Share;
(iv) Upon the issuance or sale of shares of Common Stock or
securities which are exercisable or convertible into shares of Common Stock
to employees of the Company or its affiliates, under an Employee Stock
Purchase Plan;
(v) Upon the issuance of any Option Securities or the
issuance of shares of Common Stock upon the exercise thereof, where such
Option Security was issued for a consideration price per share of Common
Stock initially deliverable upon exercise of such Option Security equal to
or greater than the Market Price in effect immediately prior to the
issuance or sale of such Option Security;
(vi) Upon the issuance of Convertible Securities where the
conversion price is equal to or greater than the Market Price in effect
immediately prior to the issuance of such Convertible Securities;
(vii)Upon the issuance of Common Stock to non-management
directors of the Company in an amount up to Fourteen Thousand Dollars
($14,000) per such director per year, based upon such method of valuation
as may be established from time to time by the Company's Board of Directors
in its reasonable discretion; or
(viii)Upon the issuance of an aggregate of up to Three
Million Dollars ($3,000,000) of Common Stock or securities which are
exercisable or convertible into Common Stock at a discount to the Market
Price as of the date of such issuance that does not exceed twenty percent
(20%).
SECTION VIII. NOTICES TO WARRANTHOLDERS.
So long as this Warrant shall be outstanding and unexercised (a)
if the Company shall pay any dividend or make any distribution upon the
Common Stock or (b) if the Company shall offer to the holders of Common
Stock for subscription or purchase by them any shares of stock of any class
or any other rights or (c) if any capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation or
merger of the Company with or into another corporation, sale, lease or
transfer of the Company to another corporation, or voluntary or involuntary
dissolution, liquidation or winding up of the Company shall be effected,
then, in any such case, the Company shall cause to be delivered to the
Warrantholder, at least ten (10) days prior to the date specified in (i) or
(ii) below, as the case may be, a notice containing a brief description of
the proposed action and stating the date on which (i) a record is to be
taken for the purpose of such dividend or distribution, or (ii) such
reclassification, reorganization, consolidation, merger, conveyance, lease,
dissolution, liquidation or winding up is to take place and the date, if
any, as of which the holders of Common Stock of record shall be entitled to
exchange their shares of Common Stock for securities or other property
deliverable upon such reclassification, reorganization, consolidation,
merger, conveyance, dissolution, liquidation or winding up. Additionally,
so long as this Warrant shall be outstanding and unexercised, if the
Company shall make any adjustment to the Exercise Price, the Company shall
cause to be delivered to the Warrantholder, within twenty (20) days after
the date of such adjustment, a notice containing a description of the
calculations pertaining to such adjustment and stating the date on which
the adjustment to the Exercise Price became effective.
SECTION IX. DELIVERY OF NOTICES.
Any notice pursuant to this Warrant by the Company or by the
Warrantholder shall be in writing and shall be deemed to have been duly
given if delivered or mailed certified mail, return receipt requested, (a)
if to the Company, to it at 20 Kingsbridge Road, Piscataway, New Jersey
08854, Attention: Corporate Secretary and (b) if to the Warrantholder to it
at the address set forth on the signature page hereto. Each party hereto
may from time to time change the address to which such party's notices are
to be delivered or mailed hereunder by notice in accordance herewith to the
other party.
SECTION X. SUCCESSORS.
All the covenants and provisions of this Agreement by or for the
benefit of the Company or the Warrantholder shall bind and inure to the
benefit of their respective successors and assigns hereunder.
SECTION XI. APPLICABLE LAW.
This Warrant shall be deemed to be a contract made under the laws
of the State of Delaware applicable to agreements made and to be performed
entirely in Delaware and for all purposes shall be construed in accordance
with the internal laws of Delaware without giving effect to the conflicts
of laws principles thereof.
SECTION XII. BENEFITS OF THIS AGREEMENT
Nothing in this Warrant shall be construed to give to any person
or corporation other than the Company and the Warrantholder any legal or
equitable right, remedy or claim under this Warrant and this Warrant shall
be for the sole and exclusive benefit of the Company and the Warrantholder.
IN WITNESS WHEREOF, the parties hereto have executed this Warrant
Certificate or caused this Warrant Certificate to be duly executed as of
the 7th day of February, 1996.
ENZON, INC.
By:/S/ PETER G. TOMBROS
Name:Peter G. Tombros
Title:President and CEO
<PAGE>
GFL ADVANTAGE FUND, LTD.
By:/S/ A.P. DE GROOT
Name:A.P. De Groot
Title:President
Address of Warrantholder:
Genesee Fund Limited
CITCO Building
Wickhams Cay
P.O. Box 662
Road Town, Tortola
British Virgin Islands
Administrator
Curacao International Trust Co. N.V.
Kaya Flamboyan 9
P.O. Box 812
Curacao, Netherland Antilles
<PAGE>
GFL PERFORMANCE FUND LTD.
By:/S/ A.P. DE GROOT
Name:A.P. De Groot
Title:President
Address of Warrantholder:
Genesee Fund Limited
CITCO Building
Wickhams Cay
P.O. Box 662
Road Town, Tortola
British Virgin Islands
Administrator
Curacao International Trust Co. N.V.
Kaya Flamboyan 9
P.O. Box 812
Curacao, Netherland Antilles
<PAGE>
PURCHASE FORM
The undersigned hereby irrevocably elects to exercise the Warrant
represented by this Warrant Certificate to the extent of _____ shares of
Common Stock, par value $.01 per share, of Enzon, Inc., and hereby makes
payment of $__________ in payment of the actual exercise price thereof.
[__________________________]
By:________________________________
Name:
Title:
Employer Taxpayer
Identification Number:
Address for delivery of Stock
Certificate:
<PAGE>
ASSIGNMENT FORM
FOR VALUED RECEIVED, ______________________ hereby sells, assigns
and transfers unto _____________________________ address
___________________ the right to purchase Common Stock, par value $.01 per
share, of Enzon, Inc., represented by this Warrant Certificate to the
extent of _______ shares as to which such right is exercisable and does
hereby irrevocably constitute and appoint _______________, to transfer the
same on the books of the Company with full power of substitution in the
premises.
_____________________
Signature
Dated: _______, ____
Notice: The signature of this assignment
must correspond with the name as it appears
upon the face of this Warrant Certificate in
every particular, without alteration or
enlargement or any change whatever.
SIGNATURE GUARANTEED:
__________________________
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Enzon,
Inc. and Subsidiaries Consolidated Condensed Balance Sheet as of December 31,
1995 and the Consolidated Condensed Statement of Operations for the three and
six months ended December 31, 1995 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> JUN-30-1996 JUN-30-1996
<PERIOD-END> DEC-31-1995 DEC-31-1995
<CASH> 5,309,045 5,309,045
<SECURITIES> 0 0
<RECEIVABLES> 2,775,147 2,775,147
<ALLOWANCES> 0 0
<INVENTORY> 1,053,829 1,053,829
<CURRENT-ASSETS> 9,420,181 9,420,181
<PP&E> 15,806,365 15,806,365
<DEPRECIATION> 10,948,825 10,948,825
<TOTAL-ASSETS> 16,157,939 16,157,939
<CURRENT-LIABILITIES> 5,898,068 5,898,068
<BONDS> 0 0
0 0
1,090 1,090
<COMMON> 263,289 263,289
<OTHER-SE> 6,243,219 6,243,219
<TOTAL-LIABILITY-AND-EQUITY> 16,157,939 16,157,939
<SALES> 2,541,976 5,351,024
<TOTAL-REVENUES> 3,330,212 6,255,760
<CGS> 1,063,637 2,028,338
<TOTAL-COSTS> 4,858,809 9,786,128
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 4,263 10,952
<INCOME-PRETAX> (132,747) (2,035,919)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (132,747) (2,035,919)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (132,747) (2,035,919)
<EPS-PRIMARY> (0.01) (0.08)
<EPS-DILUTED> 0 0
</TABLE>
