DRAFT OF 06-05-97
As filed with the Securities and Exchange Commission on
____________June 9, 1997
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
THE LIPOSOME COMPANY, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 22-2370691
(State or other jurisdiction (I.R.S.
Employer
of incorporation or organization) Identification
No.)
One Research Way
Princeton Forrestal Center
Princeton, New Jersey 08540
(609) 452-7060
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Charles A. Baker
Chairman and Chief Executive Officer
The Liposome Company, Inc.
One Research Way
Princeton Forrestal Center
Princeton, New Jersey 08540
609-452-7060
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. o
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. x
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration number of the earlier effective
registration statement for the same offering. o _________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. o _________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. o
CALCULATION OF REGISTRATION FEE
Standby Purchase Agreement
Page 6
STANDBY PURCHASE AGREEMENT
BETWEEN
THE LIPOSOME COMPANY, INC.
AND
ROSS FINANCIAL CORPORATION
September 12, 1996
Ross Financial Corporation
c/o Dart Management Ltd.
P.O. Box 31363 S.M.B.
Grand Cayman, Cayman Islands
British West Indies
Ladies and Gentlemen:
The Liposome Company, Inc., a Delaware corporation (the "Company"),
proposes to call for redemption on October 14, 1996 (the "Redemption Date") all
outstanding shares of its Series A Cumulative Convertible Exchangeable Preferred
Stock, (the "Preferred Stock") at a redemption price of $26.40, plus accrued and
unpaid dividends thereon through the Redemption Date in the amount of $0.5597
per Depositary Share for a total of $26.9597 per Depositary Share (the
"Redemption Price") (each Depositary Share representing 1/10 of a share of
Preferred Stock, collectively the "Depositary Shares"), and will cause requisite
notice of such redemption to be duly given. The shares of Preferred Stock are
convertible into shares of the Company's common stock, $.01 par value (the
"Common Stock"), at a conversion price of $12.85 per share of Common Stock
(equivalent to a conversion rate (the "Conversion Rate") of 1.9455 shares of
Common Stock for each Depositary Share). The right to convert the shares of
Preferred Stock into shares of Common Stock will terminate on the Conversion
Expiration Date (as defined below).
To assure the availability of funds to effect the contemplated redemption
of the shares of Preferred Stock, the Company desires to make arrangements
pursuant to which you (the "Purchaser") would purchase from the Company the
shares of Preferred Stock represented by Depositary Shares (hereafter, the
"Redemption Shares") that are not duly surrendered for conversion on or prior to
5:00 p.m. New York City time on October 14, 1996 (the "Conversion Expiration
Date") and convert those shares into shares of Common Stock in accordance with
this Agreement. The number of Redemption Shares currently outstanding is
1,180,446.
The Company hereby confirms its agreement with the Purchaser with respect
to those arrangements. This Standby Purchase Agreement shall be referred to
herein as the "Agreement".
1. Purchase and Conversion of Redemption Shares.
On the basis of the representations, warranties and agreements of the
parties contained herein, and subject to the terms and conditions herein set
forth, the Purchaser agrees to purchase, the Redemption Shares, at and for a
price (the "Purchase Price") of $26.40 per Share. Immediately upon such
purchase, the Purchaser agrees that the Redemption Shares shall be converted
into shares of Common Stock (the "Shares") at the Conversion Rate.
2. Payment and Delivery.
(a) No later than 6:00 p.m. New York City time, on the Conversion Expiration
Date, the Company shall give to the Purchaser written or facsimile notice
of the aggregate number of Redemption Shares. The Purchaser hereby elects
to convert all Redemption Shares into Shares, and such conversion will be
deemed effective as of the Conversion Expiration Date. No later than 3:00
p.m., New York City time, on the Closing Date (as hereafter defined), the
Purchaser shall, to the extent not already provided pursuant to section
4(a), remit to the Company or, at the Company's prior written direction, to
American Stock Transfer and Trust Co. (the "Depositary") as successor
depositary to MidLantic Bank, N.A. under the Deposit Agreement, dated as of
January 15, 1993, relating to the shares of Preferred Stock (the "Deposit
Agreement"), for the account of the Company, by wire transfer of
immediately available funds, a sum equal to the aggregate Purchase Price of
the Redemption Shares. Simultaneously with such payment, the Company shall
deliver to the Purchaser, at the Purchaser's address set forth in section
11 hereof, or at such other location as shall be mutually acceptable to the
Company and the Purchaser, certificates evidencing the Shares. The date
and time of such payment and delivery shall be October 18, 1996, at 3:00
p.m., Eastern Time, but such date may be changed by agreement between the
Purchaser and the Company, and such date shall be referred to herein as the
"Closing Date". Certificates representing the Shares shall be registered
in the Purchaser's name and shall bear the legend set forth below.
(b) The Company acknowledges that it is aware that, until the close of business
on the Conversion Expiration Date, the Purchaser may (but shall have no
obligation to) purchase Depositary Shares, in the open market or otherwise,
in such amounts and at such prices as the Purchaser may deem advisable.
The Purchaser agrees to convert on or prior to the close of business on the
Conversion Expiration Date any shares of Preferred Stock beneficially owned
by the Purchaser. Shares of Common Stock issued to the Purchaser, if
permitted by law, on conversion of shares of Preferred Stock so acquired
may be sold by the Purchaser at any time or from time to time. The Company
further acknowledges that it is aware that the Purchaser may purchase or
sell shares of Common Stock for long or short account on the Nasdaq
National Market or otherwise, at such times and prices and on such terms as
the Purchaser deems advisable, and that such purchases or sales, if
commenced, may be discontinued at any time.
(c) The Purchaser agrees that the Purchaser will not solicit conversions of
shares of Preferred Stock by the holders of Depositary Shares. The Company
has not paid or given, and will not pay or give, directly or indirectly,
any commission or other remuneration in connection with soliciting
conversions of shares of Preferred Stock into Common Stock except to
Corporate Investor Communications, acting as information agent, and
American Stock Transfer and Trust Co., acting as Depositary.
(d) On September 13, 1996, or such other date as the Company may give notice of
the redemption of the Preferred Stock (the "Notice Date"), the Company
shall mail or cause to be mailed the required notice of the redemption of
all outstanding shares of Preferred Stock on the Redemption Date in the
form heretofore submitted to the Purchaser and shall furnish to the
Purchaser such number of copies thereof as the Purchaser reasonably may
request.
3. Compensation.
As full compensation to the Purchaser for the Purchaser's commitments hereunder,
the Company shall pay to the Purchaser by wire transfer of next day funds on the
date hereof, the aggregate sum of thirty thousand two hundred ninety eight
dollars ($30,298) (the "Standby Commitment Fee"), which shall be equal to the
amount paid by the Purchaser to obtain the "Letter of Credit," as defined
herein. The Purchaser shall have the right, in lieu of receiving payment of the
Standby Commitment Fee from the Company, to deduct an amount equal to the
Standby Commitment Fee from the aggregate Purchase Price of the Redemption
Shares purchased by the Purchaser on the Closing Date.
4. Advance Deposit of Funds and Standby Letter of Credit.
(a) The Purchaser agrees that in the event that American Stock Transfer & Trust
Co. should require from the Company any deposit of funds pursuant to
Section 7 of the Certificate of Designation, the Purchaser shall advance
such funds to the Company and deposit such funds by wire transfer, in
immediately available funds, with American Stock Transfer & Trust Co. on
behalf of the Company (such advance and deposit being referred to as the
"Advance Deposit"); provided that, prior to the Purchaser advancing the
Advance Deposit, the Company shall have delivered to the Purchaser by 2:00
p.m. on the date requested for the Advance Deposit, a certificate signed by
the Chairman of the Board and Chief Executive Officer or the Vice
President, Finance and Chief Financial Officer of the Company stating the
amount of the Advance Deposit. The Company agrees to repay or to cause
American Stock Transfer & Trust Co. to repay to the Purchaser on the
Closing Date that portion of the Advance Deposit that exceeds the aggregate
Purchase Price of the Redemption Shares (less the amount of the Standby
Commitment Fee), plus Purchaser's cost of funds on any such Advance Deposit
from the date of such deposit through the Closing Date.
(b) Prior to the Notice Date, the Purchaser or one of its Affiliates will
obtain from a banking institution (the "Bank") acceptable to the Company
and deliver to the Company a standby letter of credit (the "Letter of
Credit") in the amount of the aggregate Redemption Price times the number
of Depositary Shares outstanding as of the close of business on the last
business day before the Notice Date. The Letter of Credit will be in a
form reasonably acceptable to the Company and will give the Company the
right to draw from the Bank (i) any portion of Advance Deposit that has not
been deposited as required by subsection 4(a) and (ii) any portion of the
aggregate Purchase Price of the Redemption Shares to be purchased by the
Purchaser that has not been paid as required by subsection 2(a) or been
included in the Advance Deposit. The right of the Company to proceed
against the Letter of Credit in the event of a default by the Purchaser
shall be absolute and irrevocable.
5. Registration Rights.
(a) Definitions. For purposes of this Section 5:
(i) The terms "register," "registration" and "registered" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act, and the declaration
or ordering of effectiveness of such registration statement or document;
(ii) The term "Registrable Securities" means: (A) the Shares and (B)
any Common Stock or other securities of the Company issued as (or issuable
upon the conversion or exercise of any warrant, right or other security
which is issued as) a dividend, satisfaction of a dividend obligation or
other distribution with respect to, in exchange for, or in replacement of,
the Shares (or any Common Stock issued or issuable upon the exercise
thereof), which, in the case of either (A) or (B), are at the time
restricted securities under Rule 144 or its equivalent;
(iii) The number of shares of "Registrable Securities then
outstanding" shall be determined by the number of Shares then outstanding
and the number of shares of Common Stock issuable pursuant to then-
exercisable or readily convertible securities which upon issuance would be,
Registrable Securities; and
(iv) The term "Purchaser" means any person owning or having the right
to acquire Registrable Securities or any permitted transferee thereof in
accordance with section 6 hereof.
(b) Request for Registration.
(i) If the Company shall receive at any time after the Closing Date,
but prior to the expiration of two (2) years from the date hereof, a
written request from the Purchaser that the Company file a registration
statement covering all of the Registrable Securities then outstanding, then
the Company shall file and process to effectiveness (and maintain in effect
for a period of not less than the remainder of such two (2)-year period) a
registration statement on Form S-3 (or any successor similar form under the
Securities Act) to permit the sale of the Registrable Securities by the
Purchaser; provided, however, that the Company shall in no event be
required to register shares pursuant to this section unless the number of
Registrable Securities then outstanding exceeds twenty-five thousand
(25,000) shares.
(ii) At any time prior to the effective date of any registration
statement prepared or to be prepared pursuant to a request by the Purchaser
under this section, the Company may decline to effect the registration of
the Registrable Securities hereunder; provided, however, that all of the
Registrable Securities otherwise to be registered pursuant to this section
are simultaneously included in another registration of the Company's
securities, which shall occur no later than thirty (30) days following the
proposed effective date of the registration statement, in which event the
registration of the Registrable Securities shall be treated as a
registration under this section (except that there shall be no minimum
number of Registrable Securities that may be included in such offering).
(c) Incidental Registration.
(i) If (but without any obligation to do so) the Company proposes to
register any shares of Common Stock under the Securities Act in connection
with an underwritten public offering of such securities (other than a
registration relating solely to the sale of securities to participants in a
stock plan of the Company, or a registration which does not relate to
shares of Common Stock, or a registration on any form which does not
include substantially the same information as would be required to be
included in a registration statement covering the sale of the Registrable
Securities), the Company shall, at such time, promptly give the Purchaser
written notice of such registration. Upon the written request of the
Purchaser given within ten (10) days after receipt of such notice from the
Company, the Company shall, subject to the provisions of this subsection
5(c), use its best efforts to cause to be registered under the Securities
Act all of the Registrable Securities that the Purchaser has requested be
registered.
(ii) In connection with any offering subject to subsection 5(c)(i)
involving an underwriting of shares being issued by the Company, the
Company shall not be required under this subsection 5(c) to include any of
the Purchaser's securities in such underwriting unless the Purchaser
accepts the terms of the underwriting as agreed upon between the Company
and the underwriters selected by the Company. If the Purchaser holds
Registrable Securities that have not been registered under subsection 5(b),
and if the Company's offering is to be registered on a form that also
permits registration of securities offered by selling shareholders, the
Purchaser shall be entitled to include in the offering all or any portion
of its Registrable Securities that have not been previously registered.
(d) Obligations of the Company. Whenever required under this section 5 to
effect the registration of any Registrable Securities, the Company shall,
from and after the effective date of the applicable registration statement:
(i) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of
the Securities Act with respect to the disposition of all securities
covered by such registration statement;
(ii) Furnish to the Purchaser such numbers of copies of a prospectus
in conformity with the requirements of the Securities Act, and such other
documents as it may reasonably request in order to facilitate the
disposition of Registrable Securities owned by the Purchaser;
(iii) Use its best efforts to register and qualify the securities
covered by such registration statement under the securities laws of such
jurisdictions as shall be reasonably requested by the Purchaser, provided
that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions;
(iv) Notify the Purchaser at any time when the Purchaser informs the
Company that it intends to deliver a prospectus relating thereto for the
purpose of offering or selling any Registrable Securities covered by such
registration statement, 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 the light of the circumstances then
existing, after which the Company will promptly amend the prospectus, and
the Purchaser agrees not to deliver the prospectus until such amendment has
been declared effective;
(v) Furnish, at the request of the Purchaser requesting registration
of Registrable Securities pursuant to subsection 5(c), on the date that
such Registrable Securities are delivered to the underwriters for sale in
connection with a registration pursuant to subsection 5(c), an opinion,
dated such date, of the Company's counsel for the purposes of such
registration, in form and substance as is customarily given to underwriters
in an underwritten public offering, addressed to the underwriters and to
the Purchaser; and
(vi) List the Registrable Securities being registered on any national
securities exchange on which a class of the Company's equity securities are
listed or qualify the Registrable Securities being registered for inclusion
on the Nasdaq National Market System if the Company does not have a class
of equity securities listed on a national securities exchange.
(e) Purchaser's Obligation to Furnish Information. It shall be a condition
precedent to the obligations of the Company to take any action pursuant to
this section 5 that the Purchaser shall furnish to the Company such
information regarding itself, the Registrable Securities held by it, any
investment banker, broker or other agent retained by the Purchaser to
assist it in selling the Registrable Securities, and the intended method of
disposition of such securities as shall be reasonably required to effect
the registration of its Registrable Securities.
(f) Expenses of Registration. Except as otherwise provided herein, all
expenses other than underwriting discounts and commissions relating to
Registrable Securities incurred in connection with the registration,
filings or qualifications pursuant to this section 5, including, without
limitation, all registration filing and qualification fees, printing and
accounting fees and fees and disbursements of the Company's counsel, shall
be borne by the Company. Notwithstanding the foregoing, all underwriting
discounts and selling commissions applicable to the Registrable Securities
covered by any registration and all fees and disbursements of special
counsel to the Purchaser shall be borne by the Purchaser, in proportion to
the number of Registrable Securities sold by the Purchaser, and if any
applicable state securities laws require the Purchaser to share the
expenses of the offering with the Company, then the Purchaser shall share
such expenses in accordance with the applicable law of such state.
(g) Delay of Registration. So long as the Company has given every notice
required by this section 5, the Purchaser shall not have any right to take
any action to restrain or otherwise delay any such registration as the
result of any controversy that might arise with respect to the
interpretation or implementation of this section 5.
(h) Indemnification. In the event any Registrable Securities are included in a
registration statement under this section 5:
(i) To the extent permitted by law, the Company will indemnify and
hold harmless the Purchaser, the officers and directors of the Purchaser,
any underwriter (as defined in the Securities Act) for the Purchaser and
each person, if any, who controls the Purchaser or underwriter within the
meaning of the Securities Act or the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), against any losses, claims, damages or
liabilities (joint or several) to which they may become subject under the
Securities Act, the Exchange Act or other federal or state law, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any of the following statements, omissions
or violations (collectively, a "Violation"): (A) any untrue statement or
alleged untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, (B) the
omission or alleged omission to state therein a material fact required to
be stated therein, or necessary to make the statements therein not
misleading, or (C) 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. The Company will reimburse the Purchaser, officer or
director, underwriter or controlling person for any legal or other expenses
reasonably incurred by it in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this clause (i) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if
such settlement is effected without the consent of the Company (which
consent shall not be unreasonably withheld), nor shall the Company be
liable in any such case for any such loss, claim, damage, liability or
action to the extent that it arises out of or is based upon a Violation
which occurs in reliance upon and in conformity with written information
furnished expressly for use in connection with such registration by the
Purchaser, or by any officer, director, underwriter or controlling person
of the Purchaser.
(ii) To the extent permitted by law, the Purchaser will indemnify and
hold harmless the Company, each of its directors, each of its officers who
has signed the registration statement, each person, if any, who controls
the Company within the meaning of the Securities Act, each agent and any
underwriter for the Company or any person who controls such underwriter,
against any losses, claims, damages or liabilities (joint or several) to
which the Company or any such director, officer, controlling person, agent
or underwriter, director or officer or controlling person thereof, may
become subject, under the Securities Act, the Exchange Act or other federal
or state law, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are 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 by the Purchaser or by any officer, director, underwriter or
controlling person of the Purchaser expressly for use in connection with
such registration; and the Purchaser will reimburse any legal or other
expenses reasonably incurred by the Company or any such director, officer,
controlling person, agent or underwriter, officer, director or controlling
person thereof, in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this clause (ii) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of the Purchaser,
which consent shall not be unreasonably withheld.
(iii) Promptly after receipt by an indemnified party under this
subsection 5(h) of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this subsection
5(h), 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 the
defense thereof with counsel mutually satisfactory to the parties;
provided, however, that an indemnified party shall have the right to retain
its own counsel, reasonably satisfactory to the indemnifying party, with
the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential
differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend
such action, shall relieve such indemnifying party of any liability to the
indemnified party under this subsection 5(h), but the omission so to
deliver written notice to the indemnifying party shall not relieve it of
any liability that it may have to any indemnified party otherwise than
under this subsection 5(h).
(iv) The obligations of the indemnifying party under this subsection
5(h) shall survive the completion of any offering of Registrable Securities
in a registration statement under this subsection 5(h) and otherwise.
(i) Reports Under the Exchange Act. With a view to making available to the
Purchaser the benefits of Rule 144, the Company agrees to:
(i) make and keep public information available at all times, as those
terms are understood and defined in Rule 144;
(ii) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange
Act; and
(iii) furnish to the Purchaser, so long as it owns any Registrable
Securities, forthwith upon request (A) a written statement by the Company
that it has complied with the reporting requirements of Rule 144 and the
Exchange Act, (B) 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 (C) such other information as may be reasonably requested in availing
the Purchaser of any rule or regulation of the SEC which permits the
selling of any such securities without registration.
6. Restrictions on Transfer.
(a) The rights contained in this Agreement, including the registration rights,
may be transferred by the Purchaser only to one of its "Affiliates", as
determined under Rule 12b-2 of the General Rules and Regulations under the
Exchange Act. Prior to such transfer, the Company shall be furnished with
prior written notice of the name and address of such transferee, the
Company shall give its prior written consents to such transfer, which
consent shall not be unreasonably withheld, and such transferee shall agree
to be bound by the terms and provisions of this Agreement.
(b) Except pursuant to the requirements of Rule 144, the Shares may not be sold
or otherwise disposed of except as follows:
(i) to a person or persons who, in the opinion of counsel reasonably
satisfactory to the Company, is a person to whom the Shares may legally be
transferred without registration and without the delivery of a current
prospectus with respect thereto; or
(ii) to any person upon delivery of a prospectus then meeting the
requirements of the Securities Act relating to such securities (as to which
a registration statement under the Securities Act shall then be in effect)
and the offering thereof for such sale or disposition.
(c) The Purchaser will not knowingly sell or otherwise transfer more than one-
third of the Shares to a single purchaser or group of purchasers without
the Company's prior written consent and will not knowingly sell or
otherwise transfer any Shares to a purchaser or group of purchasers that
owns ten percent (10%) of the Company's outstanding shares of Common Stock
at the time of such transfer. At any time that the Purchaser owns more
than forty thousand (40,000) shares of Common Stock, the Purchaser will not
engage in a transaction resulting in the merger of the Purchaser with, or
transfer of control of the Purchaser to, any person or group of persons
that would, following such transaction, own, directly or indirectly, more
than ten percent (10%) of the Company's outstanding shares of Common Stock
(d) This Agreement shall inure to the benefit of the Company and the Purchaser
and, with respect to the provisions of subsection 5(h) hereof, the several
parties (in addition to the Company and the Purchaser) indemnified under
the provisions of said subsection 5(h), and their respective personal
representatives, successors and assigns. Nothing in this Agreement is
intended or shall be construed to give to any other person, firm or
corporation any legal or equitable remedy or claim under or in respect of
this Agreement or any provision herein contained. The term "successors and
assigns" as herein used shall not include any purchaser, as such purchaser,
of any of the Shares from the Purchaser.
7. Representations of the Purchaser.
(a) The Purchaser is an Accredited Investor within the meaning of Regulation D
of the rules and regulations of the Securities and Exchange Commission
("SEC") under the Securities Act of 1933, as amended (the "Securities
Act").
(b) The Purchaser is a corporation duly organized and validly existing under
the laws of the Cayman Islands, is in good standing under such laws, and
has all requisite corporate powers and authority to enter into this
Agreement.
(c) The Purchaser is a closely-held corporation, all of whose outstanding
shares of Common Stock are owned by Kenneth Dart, an individual residing in
the Cayman Islands.
(d) On or prior to the Closing Date, the Purchaser will have taken all action
necessary for the authorization, execution, delivery and performance of
this Agreement.
(e) The Purchaser has (i) carefully reviewed this Agreement, and any other
written statements and documents delivered to the Purchaser; (ii) received
satisfactory response from the Company as to all matters about which the
Purchaser has inquired relating to this Agreement, and other documents
described above and relating to the Company's business condition, prospects
and plans; and (iii) visited the Company's business location and received
all information requested from the Company and had access to all
information and personnel that the Purchaser deemed necessary to evaluate
the merits and risks of acquiring the Shares.
(f) The Purchaser (i) has had the risks involved in the investment represented
by this Agreement explained; (ii) has knowledge and experience in financial
and business matters to evaluate the merits and risks of the investment
represented by this Agreement; (iii) is able to bear the economic risk of
the investment represented by this Agreement (including a complete loss of
this investment); and (iv) has determined that this investment is suitable
for the Purchaser in light of the Purchaser's financial circumstances and
available investment opportunities.
(g) The Purchaser is acquiring the Shares for its own account and with its
general assets for the purpose of investment and not with a view to the
resale, transfer or distribution thereof, and has no present intention of
selling, transferring, negotiating or otherwise disposing of any Shares.
The Purchaser is acquiring the Shares in conformity with Federal Regulation
16 CFR 802.9 solely for the purpose of investment in accordance with that
regulation.
(h) The Purchaser understands that the Shares may not be sold, transferred or
otherwise disposed of without registration under the Securities Act or
pursuant to an exemption therefrom, and that in the absence of an effective
registration statement covering the Shares or an available exemption from
registration under the Securities Act, the Shares must be held
indefinitely. Accordingly, the Purchaser will not offer or sell any of the
Shares except pursuant to an effective registration statement under the
Securities Act or in one or more transactions that do not require
registration under the Securities Act.
(i) The Purchaser, together with its "Affiliates" and "Associates," as
determined under Rule 12b-2 of the General Rules and Regulations under the
Exchange Act, will not purchase or otherwise acquire from any source for a
period of two (2) years from the date of this Agreement, shares of Common
Stock that cause the Purchaser, together with its Affiliates and
Associates, to own more than fifteen percent (15%) of the then outstanding
shares of Common Stock, without the prior written consent of the Company.
(j) The Company shall place conspicuously upon each certificate representing
the Shares a legend substantially in the following form, the terms of which
are agreed to by the Purchaser:
"The securities represented by this certificate have been issued without
registration or qualification under the Securities Act of 1933, as amended
(the "Securities Act"), or any applicable state securities laws (the "State
Acts"). Such securities may not be sold, assigned, transferred or
otherwise disposed of, beneficially or on the records of the company,
unless the securities represented by this certificate have been registered
or qualified under the Securities Act and the applicable State Acts or
there has been delivered to the company an opinion of counsel, satisfactory
to the company, to the effect that such registration and qualification are
not required."
(k) The Purchaser has not retained any broker or finder or incurred any
liability for any brokerage fees, commissions or finders' fees for which
the Company may be liable in connection with the transactions contemplated
by this Agreement.
8. Representations of the Company.
(a) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, has
full corporate power and authority to own or lease its properties and
conduct its business as being conducted, and is duly qualified as a foreign
corporation and in good standing in all jurisdictions in which the
character of the property owned or leased or the nature of the business
transacted by it makes qualification necessary (except where the failure to
be so qualified would not have a material adverse effect on the business,
properties, financial condition or earnings of the Company and its
subsidiaries, taken as a whole).
(b) The Company has all requisite corporate power to enter into this Agreement
and to sell the Shares and to carry out and perform its obligations under
the terms of this Agreement.
(c) All corporate action on the part of the Company, its directors and
stockholders, necessary for the authorization, execution, delivery and
performance by the Company of this Agreement and the consummation of the
transactions contemplated herein, and for the authorization, issuance and
delivery of the Agreement and the Shares has been taken. This Agreement is
a valid and binding obligation of the Company, enforceable in accordance
with its terms, subject to the discretion of a court in granting equitable
relief or specific performance and except to the extent that such
enforceability may be subject to or affected by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or
affecting the rights of creditors generally and except to the extent any
consent of or filing with any governmental authority is required in
connection with the resale of the Shares. Except as provided in the
preceding sentence, the execution, delivery and performance by the Company
of this Agreement and compliance therewith and the issuance and sale of the
Shares will not result in any violation of and will not conflict with, or
result in a breach of any of the terms of, or constitute a default under,
any provision of state or federal law to which the Company is subject, the
Company's Certificate of Incorporation or By-Laws, the certificate of
designation relating to the shares of Preferred Stock (the "Certificate of
Designation"), or any mortgage, indenture, agreement, instrument, judgment,
decree, or order to which the Company is a party or by which it is bound.
(d) All of the outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and non-assessable,
and no holder thereof is or will be subject to personal liability solely by
reason of being such a holder.
(e) The Shares have been duly authorized and, when issued in accordance with
this Agreement, such Shares will be validly issued, fully paid and non-
assessable; no holder thereof will be subject to personal liability solely
by reason of being such a holder; and all corporate action required to be
taken for the authorization, issuance and sale of the Shares has been
validly and sufficiently taken.
(f) No authorization, approval, consent or license of any government,
governmental instrumentality or court, domestic or foreign (other than
under the Securities Act, the securities or Blue Sky laws of the various
states and the Nasdaq National Market) is required for the valid
authorization, issuance and delivery of the Shares or the execution,
delivery or performance of this Agreement by the Company, except such
filings as shall have been made prior to the Closing.
(g) Except for American Stock Transfer & Trust Co. acting as Depositary, the
Company has neither paid nor given, nor will pay or give, directly or
indirectly, any commission or other remuneration in connection with
soliciting the conversion of shares of Preferred Stock into Common Stock.
9. Publicity.
Except as agreed by the parties, neither the Company nor the Purchaser shall
release any information to any third party with respect to any of the terms of
this Agreement without the prior written consent of the other, which consent
shall not be unreasonably withheld. This prohibition includes, but is not
limited to, press releases, promotional materials and discussions with the
media. If the Company determines that it is required by law to release
information to any third party regarding the terms of this Agreement, it shall
notify the Purchaser in advance of the intended disclosure. The notice to the
Purchaser shall include the text of the information proposed for release. The
Purchaser shall have the right to confer with the Company regarding the
necessity for the disclosure and the text of the information proposed for
release.
10. Effective Date of the Agreement: Termination.
This Agreement shall be effective as of the date first stated above and shall
not be terminable by either party for any reason except the serious and willful
default of the other party, which remains uncured fifteen (15) days after the
receipt of written notice from the non-defaulting party.
11. Miscellaneous.
(a) The parties hereto may amend, modify or supplement this Agreement at any
time, but only in writing duly executed on behalf of each of the parties.
(b) The terms set forth in this Agreement are intended by the parties as a
final, complete and exclusive expression of the terms of their agreement
and may not be contradicted, explained or supplemented by evidence of any
prior agreement, any contemporaneous oral agreement or any consistent
additional terms.
(c) Any terms, covenants, representations, warranties or agreements of any
party hereto may be waived at any time by an instrument in writing executed
by the party for whose benefit such terms exist. The failure of any party
at any time or times to require performance of any provisions hereof shall
in no manner affect its right at a later time to enforce the same. No
waiver by any party of any condition or of any breach of any terms,
covenants, representations, warranties or agreements shall be effective
unless in writing, and no waiver in any one or more instances shall be
deemed to be a further or continuing waiver of any such condition or breach
in other instances or a waiver of any other condition or any breach of any
other terms, covenants, representations, warranties or agreements.
(d) This Agreement may be executed simultaneously 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.
(e) The headings preceding the text of the paragraphs of this Agreement are for
convenience only and shall not be deemed parts hereof.
(f) Any notice or demand desired or required to be given hereunder shall be in
writing and given by personal delivery, certified or registered mail, air
courier, telegram, facsimile or telex addressed as follows:
To the Company: The Liposome Company, Inc.
One Research Way
Princeton Forrestal Center
Princeton, NJ 08540-6619
Attention: General Counsel
To the Purchaser: Ross Financial Corporation
c/o Dart Management Limited
P.O. Box 31363 S.M.B.
Grand Cayman, Cayman Islands
British West Indies
Attention: Ms. Sharon M. Cornwell
(g) This Agreement shall be governed by and construed in accordance with the
laws of the State of New Jersey, regardless of that or any other state's
choice of law principles.
(h) The representations and warranties in this Agreement shall remain in full
force and effect regardless of (a) any termination of this Agreement, or
(b) delivery of and payment for the Shares under this Agreement.
Please sign and return to the Company the enclosed copies of this letter,
whereupon this letter will become a binding agreement between the Company and
the Purchaser in accordance with its terms.
Very truly yours,
THE LIPOSOME COMPANY, INC.
By: /s/ Charles A. Baker
Name: Charles A. Baker
Title: Chairman and Chief Executive Officer
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
ROSS FINANCIAL CORPORATION
By: Sharon M. Cornwell
Authorized Signer
STKPURCH.AGT
Stock Purchase Agreement
Page 2 of 12
STOCK PURCHASE AGREEMENT
BETWEEN
THE LIPOSOME COMPANY, INC.
AND
ROSS FINANCIAL CORPORATION
April 23, 1997
Ross Financial Corporation
c/o Dart Management Ltd.
P.O. Box 31363 S.M.B.
Grand Cayman, Cayman Islands
British West Indies
Ladies and Gentlemen:
The Liposome Company, Inc., a Delaware corporation (the "Company"), is
willing to sell to you, and you have agreed to purchase, one million (1,000,000)
shares (the "Shares") of the Company's authorized but unissued common stock,
$.01 par value (the "Common Stock"), at a price of twenty and 0.875 dollars
($20.875) per share of Common Stock, on the following terms and conditions:
1. Registration Rights.
(a) Definitions. For purposes of this Section 1:
(i) The terms "register," "registration" and "registered" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act, and the declaration
or ordering of effectiveness of such registration statement or document;
(ii) The term "Registrable Securities" means: (A) the Shares and (B)
any Common Stock or other securities of the Company issued as (or issuable
upon the conversion or exercise of any warrant, right or other security
which is issued as) a dividend, satisfaction of a dividend obligation or
other distribution with respect to, in exchange for, or in replacement of,
the Shares (or any Common Stock issued or issuable upon the exercise
thereof), which, in the case of either (A) or (B), are at the time
restricted securities under Rule 144 or its equivalent;
(iii) The number of shares of "Registrable Securities then
outstanding" shall be determined by the number of Shares then outstanding
and the number of shares of Common Stock issuable pursuant to then-
exercisable or readily convertible securities which upon issuance would be,
Registrable Securities; and
(iv) The term "Purchaser" means any person owning or having the right
to acquire Registrable Securities or any permitted transferee thereof in
accordance with section 2 hereof.
(b) Request for Registration.
(i) If the Company shall receive at any time after the Closing Date,
but prior to the expiration of one (1) year from the date hereof, a written
request from the Purchaser that the Company file a registration statement
covering all of the Registrable Securities then outstanding, then the
Company shall file and process to effectiveness (and maintain in effect for
a period of not less than the remainder of such one (1)-year period) a
registration statement on Form S-3 (or any successor similar form under the
Securities Act) to permit the sale of the Registrable Securities by the
Purchaser; provided, however, that the Company shall in no event be
required to register shares pursuant to this section unless the number of
Registrable Securities then outstanding exceeds twenty-five thousand
(25,000) shares.
(ii) At any time prior to the effective date of any registration
statement prepared or to be prepared pursuant to a request by the Purchaser
under this section, the Company may decline to effect the registration of
the Registrable Securities hereunder; provided, however, that all of the
Registrable Securities otherwise to be registered pursuant to this section
are simultaneously included in another registration of the Company's
securities, which shall occur no later than thirty (30) days following the
proposed effective date of the registration statement, in which event the
registration of the Registrable Securities shall be treated as a
registration under this section (except that there shall be no minimum
number of Registrable Securities that may be included in such offering).
(c) Incidental Registration.
(i) If (but without any obligation to do so) the Company proposes to
register any shares of Common Stock under the Securities Act in connection
with an underwritten public offering of such securities (other than a
registration relating solely to the sale of securities to participants in a
stock plan of the Company, or a registration which does not relate to
shares of Common Stock, or a registration on any form which does not
include substantially the same information as would be required to be
included in a registration statement covering the sale of the Registrable
Securities), the Company shall, at such time, promptly give the Purchaser
written notice of such registration. Upon the written request of the
Purchaser given within ten (10) days after receipt of such notice from the
Company, the Company shall, subject to the provisions of this subsection
1(c), use its best efforts to cause to be registered under the Securities
Act all of the Registrable Securities that the Purchaser has requested be
registered.
(ii) In connection with any offering subject to subsection 1(c)(i)
involving an underwriting of shares being issued by the Company, the
Company shall not be required under this subsection 1(c) to include any of
the Purchaser's securities in such underwriting unless the Purchaser
accepts the terms of the underwriting as agreed upon between the Company
and the underwriters selected by the Company. If the Purchaser holds
Registrable Securities that have not been registered under subsection 1(b),
and if the Company's offering is to be registered on a form that also
permits registration of securities offered by selling shareholders, the
Purchaser shall be entitled to include in the offering all or any portion
of its Registrable Securities that have not been previously registered.
(d) Obligations of the Company. Whenever required under this section 1 to
effect the registration of any Registrable Securities, the Company shall,
from and after the effective date of the applicable registration statement:
(i) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of
the Securities Act with respect to the disposition of all securities
covered by such registration statement;
(ii) Furnish to the Purchaser such numbers of copies of a prospectus
in conformity with the requirements of the Securities Act, and such other
documents as it may reasonably request in order to facilitate the
disposition of Registrable Securities owned by the Purchaser;
(iii) Use its best efforts to register and qualify the securities
covered by such registration statement under the securities laws of such
jurisdictions as shall be reasonably requested by the Purchaser, provided
that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions;
(iv) Notify the Purchaser at any time when the Purchaser informs the
Company that it intends to deliver a prospectus relating thereto for the
purpose of offering or selling any Registrable Securities covered by such
registration statement, 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 the light of the circumstances then
existing, after which the Company will promptly amend the prospectus, and
the Purchaser agrees not to deliver the prospectus until such amendment has
been declared effective;
(v) Furnish, at the request of the Purchaser requesting registration
of Registrable Securities pursuant to subsection 1(c), on the date that
such Registrable Securities are delivered to the underwriters for sale in
connection with a registration pursuant to subsection 1(c), an opinion,
dated such date, of the Company's counsel for the purposes of such
registration, in form and substance as is customarily given to underwriters
in an underwritten public offering, addressed to the underwriters and to
the Purchaser; and
(vi) List the Registrable Securities being registered on any national
securities exchange on which a class of the Company's equity securities are
listed or qualify the Registrable Securities being registered for inclusion
on the Nasdaq National Market System if the Company does not have a class
of equity securities listed on a national securities exchange.
(e) Purchaser's Obligation to Furnish Information. It shall be a condition
precedent to the obligations of the Company to take any action pursuant to
this section 1 that the Purchaser shall furnish to the Company such
information regarding itself, the Registrable Securities held by it, any
investment banker, broker or other agent retained by the Purchaser to
assist it in selling the Registrable Securities, and the intended method of
disposition of such securities as shall be reasonably required to effect
the registration of its Registrable Securities.
(f) Expenses of Registration. Except as otherwise provided herein, all
expenses other than underwriting discounts and commissions relating to
Registrable Securities incurred in connection with the registration,
filings or qualifications pursuant to this section 1, including, without
limitation, all registration filing and qualification fees, printing and
accounting fees and fees and disbursements of the Company's counsel, shall
be borne by the Company. Notwithstanding the foregoing, all underwriting
discounts and selling commissions applicable to the Registrable Securities
covered by any registration and all fees and disbursements of special
counsel to the Purchaser shall be borne by the Purchaser, in proportion to
the number of Registrable Securities sold by the Purchaser, and if any
applicable state securities laws require the Purchaser to share the
expenses of the offering with the Company, then the Purchaser shall share
such expenses in accordance with the applicable law of such state.
(g) Delay of Registration. So long as the Company has given every notice
required by this section 1, the Purchaser shall not have any right to take
any action to restrain or otherwise delay any such registration as the
result of any controversy that might arise with respect to the
interpretation or implementation of this section 1.
(h) Indemnification. In the event any Registrable Securities are included in a
registration statement under this section 1:
(i) To the extent permitted by law, the Company will indemnify and
hold harmless the Purchaser, the officers and directors of the Purchaser,
any underwriter (as defined in the Securities Act) for the Purchaser and
each person, if any, who controls the Purchaser or underwriter within the
meaning of the Securities Act or the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), against any losses, claims, damages or
liabilities (joint or several) to which they may become subject under the
Securities Act, the Exchange Act or other federal or state law, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any of the following statements, omissions
or violations (collectively, a "Violation"): (A) any untrue statement or
alleged untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, (B) the
omission or alleged omission to state therein a material fact required to
be stated therein, or necessary to make the statements therein not
misleading, or (C) 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. The Company will reimburse the Purchaser, officer or
director, underwriter or controlling person for any legal or other expenses
reasonably incurred by it in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this clause (i) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if
such settlement is effected without the consent of the Company (which
consent shall not be unreasonably withheld), nor shall the Company be
liable in any such case for any such loss, claim, damage, liability or
action to the extent that it arises out of or is based upon a Violation
which occurs in reliance upon and in conformity with written information
furnished expressly for use in connection with such registration by the
Purchaser, or by any officer, director, underwriter or controlling person
of the Purchaser.
(ii) To the extent permitted by law, the Purchaser will indemnify and
hold harmless the Company, each of its directors, each of its officers who
has signed the registration statement, each person, if any, who controls
the Company within the meaning of the Securities Act, each agent and any
underwriter for the Company or any person who controls such underwriter,
against any losses, claims, damages or liabilities (joint or several) to
which the Company or any such director, officer, controlling person, agent
or underwriter, director or officer or controlling person thereof, may
become subject, under the Securities Act, the Exchange Act or other federal
or state law, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are 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 by the Purchaser or by any officer, director, underwriter or
controlling person of the Purchaser expressly for use in connection with
such registration; and the Purchaser will reimburse any legal or other
expenses reasonably incurred by the Company or any such director, officer,
controlling person, agent or underwriter, officer, director or controlling
person thereof, in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this clause (ii) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of the Purchaser,
which consent shall not be unreasonably withheld.
(iii) Promptly after receipt by an indemnified party under this
subsection 1(h) of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this subsection
1(h), 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 the
defense thereof with counsel mutually satisfactory to the parties;
provided, however, that an indemnified party shall have the right to retain
its own counsel, reasonably satisfactory to the indemnifying party, with
the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential
differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend
such action, shall relieve such indemnifying party of any liability to the
indemnified party under this subsection 1(h), but the omission so to
deliver written notice to the indemnifying party shall not relieve it of
any liability that it may have to any indemnified party otherwise than
under this subsection 1(h).
(iv) The obligations of the indemnifying party under this subsection
1(h) shall survive the completion of any offering of Registrable Securities
in a registration statement under this subsection 1(h) and otherwise.
(i) Reports Under the Exchange Act. With a view to making available to the
Purchaser the benefits of Rule 144, the Company agrees to:
(i) make and keep public information available at all times, as those
terms are understood and defined in Rule 144;
(ii) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange
Act; and
(iii) furnish to the Purchaser, so long as it owns any Registrable
Securities, forthwith upon request (A) a written statement by the Company
that it has complied with the reporting requirements of Rule 144 and the
Exchange Act, (B) 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 (C) such other information as may be reasonably requested in availing
the Purchaser of any rule or regulation of the SEC which permits the
selling of any such securities without registration.
2. Restrictions on Transfer.
(a) The rights contained in this Agreement, including the registration rights,
may be transferred by the Purchaser only to one of its "Affiliates", as
determined under Rule 12b-2 of the General Rules and Regulations under the
Exchange Act. Prior to such transfer, the Company shall be furnished with
prior written notice of the name and address of such transferee, the
Company shall give its prior written consents to such transfer, which
consent shall not be unreasonably withheld, and such transferee shall agree
to be bound by the terms and provisions of this Agreement.
(b) Except pursuant to the requirements of Rule 144, the Shares may not be sold
or otherwise disposed of except as follows:
(i) to a person or persons who, in the opinion of counsel reasonably
satisfactory to the Company, is a person to whom the Shares may legally be
transferred without registration and without the delivery of a current
prospectus with respect thereto; or
(ii) to any person upon delivery of a prospectus then meeting the
requirements of the Securities Act relating to such securities (as to which
a registration statement under the Securities Act shall then be in effect)
and the offering thereof for such sale or disposition.
(c) The Purchaser will not knowingly sell or otherwise transfer more than one-
third of the Shares to a single purchaser or group of purchasers without
the Company's prior written consent and will not knowingly sell or
otherwise transfer any Shares to a purchaser or group of purchasers that
owns ten percent (10%) of the Company's outstanding shares of Common Stock
at the time of such transfer. At any time that the Purchaser owns more
than forty thousand (40,000) shares of Common Stock, the Purchaser will not
engage in a transaction resulting in the merger of the Purchaser with, or
transfer of control of the Purchaser to, any person or group of persons
that would, following such transaction, own, directly or indirectly, more
than ten percent (10%) of the Company's outstanding shares of Common Stock
(d) This Agreement shall inure to the benefit of the Company and the Purchaser
and, with respect to the provisions of subsection 1(h) hereof, the several
parties (in addition to the Company and the Purchaser) indemnified under
the provisions of said subsection 1(h), and their respective personal
representatives, successors and assigns. Nothing in this Agreement is
intended or shall be construed to give to any other person, firm or
corporation any legal or equitable remedy or claim under or in respect of
this Agreement or any provision herein contained. The term "successors and
assigns" as herein used shall not include any purchaser, as such purchaser,
of any of the Shares from the Purchaser.
(e) The Company acknowledges that it is aware that the Purchaser may purchase
or sell shares of Common Stock for long or short account on the Nasdaq
National Market or otherwise, at such times and prices and on such terms as
the Purchaser deems advisable, and that such purchases or sales, if
commenced, may be discontinued at any time.
3. Representations of the Purchaser.
(a) The Purchaser is an Accredited Investor within the meaning of Regulation D
of the rules and regulations of the Securities and Exchange Commission
("SEC") under the Securities Act of 1933, as amended (the "Securities
Act").
(b) The Purchaser is a corporation duly organized and validly existing under
the laws of the Cayman Islands, is in good standing under such laws, and
has all requisite corporate powers and authority to enter into this
Agreement.
(c) The Purchaser is a closely-held corporation, all of whose outstanding
shares of Common Stock are owned by Kenneth Dart, an individual residing in
the Cayman Islands.
(d) On or prior to the Closing Date, the Purchaser will have taken all action
necessary for the authorization, execution, delivery and performance of
this Agreement.
(e) The Purchaser has (i) carefully reviewed this Agreement, and any other
written statements and documents delivered to the Purchaser; (ii) received
satisfactory response from the Company as to all matters about which the
Purchaser has inquired relating to this Agreement, and other documents
described above and relating to the Company's business condition, prospects
and plans; and (iii) visited the Company's business location and received
all information requested from the Company and had access to all
information and personnel that the Purchaser deemed necessary to evaluate
the merits and risks of acquiring the Shares.
(f) The Purchaser (i) has had the risks involved in the investment represented
by this Agreement explained; (ii) has knowledge and experience in financial
and business matters to evaluate the merits and risks of the investment
represented by this Agreement; (iii) is able to bear the economic risk of
the investment represented by this Agreement (including a complete loss of
this investment); and (iv) has determined that this investment is suitable
for the Purchaser in light of the Purchaser's financial circumstances and
available investment opportunities.
(g) The Purchaser is acquiring the Shares for its own account and with its
general assets for the purpose of investment and not with a view to the
resale, transfer or distribution thereof, and has no present intention of
selling, transferring, negotiating or otherwise disposing of any Shares.
The Purchaser is acquiring the Shares in conformity with Federal Regulation
16 CFR 802.9 solely for the purpose of investment in accordance with that
regulation.
(h) The Purchaser understands that the Shares may not be sold, transferred or
otherwise disposed of without registration under the Securities Act or
pursuant to an exemption therefrom, and that in the absence of an effective
registration statement covering the Shares or an available exemption from
registration under the Securities Act, the Shares must be held
indefinitely. Accordingly, the Purchaser will not offer or sell any of the
Shares except pursuant to an effective registration statement under the
Securities Act or in one or more transactions that do not require
registration under the Securities Act.
(i) The Purchaser, together with its "Affiliates" and "Associates," as
determined under Rule 12b-2 of the General Rules and Regulations under the
Exchange Act, will not purchase or otherwise acquire from any source for a
period of one (1) year from the date of this Agreement, shares of Common
Stock that cause the Purchaser, together with its Affiliates and
Associates, to own more than twenty-five percent (25%) of the then
outstanding shares of Common Stock, without the prior written consent of
the Company.
(j) The Company shall place conspicuously upon each certificate representing
the Shares a legend substantially in the following form, the terms of which
are agreed to by the Purchaser:
"The securities represented by this certificate have been issued without
registration or qualification under the Securities Act of 1933, as amended
(the "Securities Act"), or any applicable state securities laws (the "State
Acts"). Such securities may not be sold, assigned, transferred or
otherwise disposed of, beneficially or on the records of the company,
unless the securities represented by this certificate have been registered
or qualified under the Securities Act and the applicable State Acts or
there has been delivered to the company an opinion of counsel, satisfactory
to the company, to the effect that such registration and qualification are
not required."
(k) The Purchaser has not retained any broker or finder or incurred any
liability for any brokerage fees, commissions or finders' fees for which
the Company may be liable in connection with the transactions contemplated
by this Agreement.
4. Representations of the Company.
(a) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, has
full corporate power and authority to own or lease its properties and
conduct its business as being conducted, and is duly qualified as a foreign
corporation and in good standing in all jurisdictions in which the
character of the property owned or leased or the nature of the business
transacted by it makes qualification necessary (except where the failure to
be so qualified would not have a material adverse effect on the business,
properties, financial condition or earnings of the Company and its
subsidiaries, taken as a whole).
(b) The Company has all requisite corporate power to enter into this Agreement
and to sell the Shares and to carry out and perform its obligations under
the terms of this Agreement.
(c) All corporate action on the part of the Company, its directors and
stockholders, necessary for the authorization, execution, delivery and
performance by the Company of this Agreement and the consummation of the
transactions contemplated herein, and for the authorization, issuance and
delivery of the Agreement and the Shares has been taken. This Agreement is
a valid and binding obligation of the Company, enforceable in accordance
with its terms, subject to the discretion of a court in granting equitable
relief or specific performance and except to the extent that such
enforceability may be subject to or affected by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or
affecting the rights of creditors generally and except to the extent any
consent of or filing with any governmental authority is required in
connection with the resale of the Shares. Except as provided in the
preceding sentence, the execution, delivery and performance by the Company
of this Agreement and compliance therewith and the issuance and sale of the
Shares will not result in any violation of and will not conflict with, or
result in a breach of any of the terms of, or constitute a default under,
any provision of state or federal law to which the Company is subject, the
Company's Certificate of Incorporation or By-Laws, the certificate of
designation relating to the shares of Preferred Stock (the "Certificate of
Designation"), or any mortgage, indenture, agreement, instrument, judgment,
decree, or order to which the Company is a party or by which it is bound.
(d) All of the outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and non-assessable,
and no holder thereof is or will be subject to personal liability solely by
reason of being such a holder.
(e) The Shares have been duly authorized and, when issued in accordance with
this Agreement, such Shares will be validly issued, fully paid and non-
assessable; no holder thereof will be subject to personal liability solely
by reason of being such a holder; and all corporate action required to be
taken for the authorization, issuance and sale of the Shares has been
validly and sufficiently taken.
(f) No authorization, approval, consent or license of any government,
governmental instrumentality or court, domestic or foreign (other than
under the Securities Act, the securities or Blue Sky laws of the various
states and the Nasdaq National Market) is required for the valid
authorization, issuance and delivery of the Shares or the execution,
delivery or performance of this Agreement by the Company, except such
filings as shall have been made prior to the Closing.
(g) The Company has neither paid nor given, nor will pay or give, directly or
indirectly, any commission or other remuneration in connection with the
sale of the Shares.
5. Publicity.
Except as agreed by the parties, neither the Company nor the Purchaser shall
release any information to any third party with respect to any of the terms of
this Agreement without the prior written consent of the other, which consent
shall not be unreasonably withheld. This prohibition includes, but is not
limited to, press releases, promotional materials and discussions with the
media. If the Company determines that it is required by law to release
information to any third party regarding the terms of this Agreement, it shall
notify the Purchaser in advance of the intended disclosure. The notice to the
Purchaser shall include the text of the information proposed for release. The
Purchaser shall have the right to confer with the Company regarding the
necessity for the disclosure and the text of the information proposed for
release.
6. Effective Date of the Agreement: Termination.
This Agreement shall be effective as of the date first stated above and shall
not be terminable by either party for any reason except the serious and willful
default of the other party, which remains uncured fifteen (15) days after the
receipt of written notice from the non-defaulting party.
7. Closing
The Purchaser shall make payment for the Shares by wire transfer to the account
of The Liposome Company, Inc., account no. 959-701-257, routing number
021202162, at the Princeton branch of Summit Bank. The person to contact at
that branch in the event of problems in transmission is Mr. Tom Weekes, whose
telephone number is 609-987-3489. Such transfer shall be made before 3:00 p.m.,
Eastern Daylight Time, on April 29, 1997 (the "Closing Date"), at which time the
Company shall deliver to the Purchaser's representative in New York, New York,
or such other location as the parties may agree, certificates representing the
Shares.
8. Miscellaneous.
(a) The parties hereto may amend, modify or supplement this Agreement at any
time, but only in writing duly executed on behalf of each of the parties.
(b) The terms set forth in this Agreement are intended by the parties as a
final, complete and exclusive expression of the terms of their agreement
and may not be contradicted, explained or supplemented by evidence of any
prior agreement, any contemporaneous oral agreement or any consistent
additional terms.
(c) Any terms, covenants, representations, warranties or agreements of any
party hereto may be waived at any time by an instrument in writing executed
by the party for whose benefit such terms exist. The failure of any party
at any time or times to require performance of any provisions hereof shall
in no manner affect its right at a later time to enforce the same. No
waiver by any party of any condition or of any breach of any terms,
covenants, representations, warranties or agreements shall be effective
unless in writing, and no waiver in any one or more instances shall be
deemed to be a further or continuing waiver of any such condition or breach
in other instances or a waiver of any other condition or any breach of any
other terms, covenants, representations, warranties or agreements.
(d) This Agreement may be executed simultaneously 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.
(e) The headings preceding the text of the paragraphs of this Agreement are for
convenience only and shall not be deemed parts hereof.
(f) Any notice or demand desired or required to be given hereunder shall be in
writing and given by personal delivery, certified or registered mail, air
courier, telegram, facsimile or telex addressed as follows:
To the Company: The Liposome Company, Inc.
One Research Way
Princeton Forrestal Center
Princeton, NJ 08540-6619
Attention: General Counsel
To the Purchaser: Ross Financial Corporation
c/o Dart Management Limited
P.O. Box 31363 S.M.B.
Grand Cayman, Cayman Islands
British West Indies
Attention: Ms. Sharon M. Cornwell
(g) This Agreement shall be governed by and construed in accordance with the
laws of the State of New Jersey, regardless of that or any other state's
choice of law principles.
(h) The representations and warranties in this Agreement shall remain in full
force and effect regardless of (a) any termination of this Agreement, or
(b) delivery of and payment for the Shares under this Agreement.
Please sign and return to the Company the enclosed copies of this letter,
whereupon this letter will become a binding agreement between the Company and
the Purchaser in accordance with its terms.
Very truly yours,
THE LIPOSOME COMPANY, INC.
By: /s/ Charles A. Baker
Name: Charles A. Baker
Title: Chairman and Chief Executive Officer
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
ROSS FINANCIAL CORPORATION
By: Sharon M. Cornwell
Authorized Signer
STKPRCH2.AGT
Exhibit 5.1
June 9, 1997
The Liposome Company, Inc.
One Research Way
Princeton Forrestal Center
Princeton, New Jersey 08540
Ladies and Gentlemen:
We have acted as counsel to The Liposome Company, Inc. a Delaware
corporation (the "Company"), in connection with the filing by the Company of a
Registration Statement on Form S-3 on the date hereof (the "Registration
Statement") relating to the offering for resale of 7,514,346 shares (the
"Shares") of the Company's Common Stock, $.01 par value per share.
Based on the foregoing, it is our opinion that:
1. The Shares have been lawfully and duly authorized and issued; and
2. When the Shares have been sold upon the terms stated in the
Registration Statement, the Shares will be legally issued, fully paid and
nonassessable.
We consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the references to this firm under the heading
"Legal Matters" in the Prospectus included in such Registration Statement.
Very truly yours,
/s/ DEWEY BALLANTINE
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-3 of our report dated February 3, 1997, on our audits of the financial
statements of The Liposome Company, Inc. included in the company's annual report
on Form 10-K for the year ended December 29, 1996. We also consent to the
references to our firm under the caption "Experts".
Coopers & Lybrand L.L.P.
Princeton, New Jersey
June 9, 1997
