<PAGE>
As filed with the Securities and Exchange Commission on January 20, 1998.
Registration No. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
GENSIA SICOR INC.
(Exact name of registrant as specified in its charter)
Delaware 33-0176647
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
19 Hughes
Irvine, California 92618
(714) 455-4700
(Address, including zip code, and telephone number, including
area code of registrant's principal executive offices)
Copies to:
DONALD E. PANOZ THOMAS E. SPARKS, JR., ESQ.
Interim President and Chief Executive Officer Pillsbury Madison & Sutro LLP
Gensia Sicor Inc. P. O. Box 7880
19 Hughes San Francisco, CA 94120-7880
Irvine, California 92618 (415) 983-1000
(714) 455-4700
(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 as determined by
the Selling Stockholder.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box: [_]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box: [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering: [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [_]
_______________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
Proposed maximum Proposed maximum
Title of each class of securities Amount to be offering price per aggregate offering Amount of
to be registered registered unit/(1)/ price registration fee
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<S> <C> <C> <C> <C>
Common Stock, $.01 par
value 11,618,277/(2)/ $5.40625 $62,811,310 $18,530
===================================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c). Based upon the average of the high and low price
reported on the Nasdaq National Market as of January 13, 1998.
(2) Includes 5,291,006 shares of Common Stock reserved for issuance upon
conversion of subordinated convertible notes and 3,872,759 shares of Common
Stock reserved for issuance upon the issuance and exercise of warrants.
This Registration Statement also covers such indeterminate number of
additional shares, if any, as shall be issuable from time to time as
required pursuant to the terms of such notes or warrants.
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there by any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such state.
Subject to Completion, dated January 20, 1998
GENSIA SICOR INC.
11,618,277 Shares of Common Stock
(par value $.01 per share)
________
This Prospectus relates to shares (the "HCCP Shares") of Common Stock,
par value $.01 ("Common Stock"), of Gensia Sicor Inc. ("Gensia Sicor" or
the "Company") which may be offered for sale from time to time for the
account of Health Care Capital Partners, L.P. and its affiliate Health Care
Executive Partners, L.P (collectively "HCCP" or the "HCCP Selling
Stockholder"). The Shares are issuable by the Company to the HCCP Selling
Stockholder upon conversion of $20,000,000 in principal amount of 2.675%
Subordinated Convertible Notes due May 1, 2004 (the "Notes") and upon
exercise of warrants for the purchase of an aggregate of 2,645,503 shares
of Common Stock at an exercise price of $4.347 per share, subject to
adjustment (the "HCCP Warrants," and together with the Notes, the
"Purchased Securities"). Fifty percent of the HCCP Warrants are
conditional warrants that may not be exercised for three years from the
date of issue and will be cancelled if the Company's Common Stock price
exceeds certain levels during the three-year period ending May 19, 2000.
The Purchased Securities were issued by the Company to the HCCP Selling
Stockholder in a private placement (the "HCCP Private Placement") on May
19, 1997.
In addition, this Prospectus covers the public offering, which is not
being underwritten, of 2,454,512 shares of Common Stock of Gensia Sicor
held by certain persons named in this Prospectus (the "Additional Selling
Stockholders" and, together with the HCCP Selling Stockholder, the "Selling
Stockholders") and up to an additional 1,227,256 shares of Common Stock
issuable upon the exercise of Warrants (the "Additional Warrants" and,
together with the HCCP Warrants, the "Warrants") to purchase Common Stock
held by the Additional Selling Stockholders (such 3,681,768 shares of
Common Stock being collectively referred to herein as the "Additional
Shares" and, together with the HCCP Shares, as the "Shares"). The
Additional Shares have been or may be issued by the Company in connection
with a private placement (the "December Private Placement" and, together
with the HCCP Private Placement, the "Private Placements") of 2,454,512
Units to certain accredited investors in December 1997. Each Unit consists
of one share of Common Stock and an Additional Warrant for the purchase of
one-half share of Common Stock, at an exercise price of $7.34 per share
(subject to adjustment), for each share of Common Stock purchased in the
December Private Placement and held until June 30, 1998 (the "Warrant
Determination Date"), such Warrants to be issued to the Additional Selling
Stockholders promptly following the Warrant Determination Date. The
Company is obligated to use its best efforts to keep the registration
statement, of which this Prospectus is a part, effective until December 31,
2005 or such earlier date as the Shares have been sold or may be sold under
Rule 144(k) of the Securities Act of 1933, as amended.
THIS PROSPECTUS COVERS ONLY DISPOSITIONS OF THE SHARES, INCLUDING SHARES
ISSUABLE UPON CONVERSION OF THE NOTES AND UPON EXERCISE OF THE WARRANTS,
NOT THE ISSUANCE OR TRANSFER OF THE NOTES OR THE WARRANTS THEMSELVES.
NEITHER THE NOTES NOR THE WARRANTS WILL BE LISTED ON ANY SECURITIES
EXCHANGE OR QUOTED IN ANY OVER-THE-COUNTER MARKET.
The Company's Common Stock is traded on the Nasdaq National Market under
the symbol "GNSA." On January 16, 1998, the last reported sale price of
the Company's Common Stock on the Nasdaq National Market was $5.4375.
The Shares are being offered on behalf of the Selling Stockholders,
and the Company will not receive any proceeds from the offering. The
Shares may be sold or distributed from time to time by the Selling
Stockholders, or by pledgees, donees or transferees of, or other successors
in interest to, the Selling Stockholders, directly to one or more
purchasers (including pledgees) or through brokers, dealers or underwriters
who may act solely as agents or may acquire Shares as principals, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices, at negotiated prices, or at fixed prices, which may be
changed. The distribution of the Shares may be effected in one or more of
the following methods: (i) ordinary brokers' transactions, which may
include long or short sales; (ii) transactions involving cross or block
trades or otherwise on the Nasdaq National Market; (iii) purchases by
brokers, dealers or underwriters as principal and resale by such purchasers
for their own accounts pursuant to this Prospectus; (iv) "at the market" to
or through market makers or into an existing market for the Common Stock;
(v) in other ways not involving market makers or established trading
markets, including direct sales to purchasers or sales effected through
agents; (vi) through transactions in options, swaps or other derivatives
(whether exchange-listed or otherwise); or (vii) any combination of the
foregoing, or by any other legally available means. In addition, the
Selling Stockholders or their successors in interest may enter into hedging
transactions with broker-dealers who may engage in short sales of Shares in
the course of hedging the positions they assume with the Selling
Stockholders. The Selling Stockholders or their successors in interest may
also enter into option or other transactions with broker-dealers that
require the delivery by such broker-dealers of the Shares, in which Shares
may be resold thereafter pursuant to this Prospectus. The Selling
Stockholders or their successors in interest may also pledge shares as
collateral for margin accounts and such shares could be resold pursuant to
the terms of such accounts. See "Plan of Distribution."
All expenses (estimated to be $100,000) of the registration of the
Common Stock covered by this Prospectus will be borne by the Company
pursuant to preexisting agreements, except that the Company will not pay
any Selling Stockholder's underwriting discounts or selling commissions.
<PAGE>
The Company will not receive any proceeds from the sale of the Shares.
The Selling Stockholders and any broker-dealers, agents or underwriters
that participate with the Selling Stockholders in the distribution of the
Shares may be determined to be "underwriters" within the meaning of Section
2(11) of the Securities Act of 1933, as amended (the "Securities Act"), and
any commissions received by them and any profit on the sale of the Shares
purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act. See "Selling Stockholders" and "Plan of
Distribution."
______________
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
COMMENCING ON PAGE 6 OF THIS PROSPECTUS.
______________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
______________
The date of this Prospectus is January __, 1998
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information filed by the Company can be
(i) inspected and copied at the public reference facilities maintained by
the Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington,
D.C., and at the Commission's Chicago Regional Office, 500 West Madison
Street, Chicago, Illinois; and New York Regional Office, 7 World Trade
Center, New York, New York and (ii) accessed via a Web site maintained by
the Commission (http://www.sec.gov). Copies of such material can also be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. 20549 at prescribed rates.
The Company has filed with the Commission a Registration Statement on
Form S-3 (Commission File No. 333-___) under the Securities Act, with
respect to the Common Stock offered hereby (the "Registration Statement").
This Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto. For further
information with respect to the Company and the Common Stock, reference is
made to the Registration Statement and the exhibits and schedules thereto.
Statements contained in this Prospectus as to the contents of any contract
or other document are not necessarily complete, and, in each instance,
reference is made to the copy of such contract or document filed as an
exhibit to the Registration Statement, each such statement being qualified
in all respects by such reference. Copies of the Registration Statement,
including all exhibits thereto, may be obtained from the Commission's
principal office in Washington, D.C. upon payment of the fees prescribed by
the Commission, or may be examined without charge at the offices of the
Commission.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents previously filed with the Commission are hereby
incorporated by reference into this Prospectus:
1. The Company's Current Report on Form 8-K (File No. 0-18549) dated
November 14, 1997;
2. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997, Quarterly Report on Form 10-Q, as amended by Form 10-Q/A,
for the quarter ended June 30, 1997 and Quarterly Report on Form 10-Q for
the quarter ended September 30, 1997;
3. The Company's Annual Report on Form 10-K, as amended by Form 10-K/A,
for the year ended December 31, 1996;
4. The Company's Current Report on Form 8-K, as amended by Form 8-K/A,
dated February 28, 1997;
5. The description of Gensia Sicor Common Stock set forth in the
Registration Statement on Form 8-A filed on April 27, 1990; and
6. The description of the rights to purchase Series I Participating
Preferred Stock, $.01 par value, set forth in the Registration Statement on
Form 8-A filed on March 23, 1992.
All documents subsequently filed by Gensia Sicor pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of
the offering to which this Prospectus relates shall be deemed to be
incorporated by reference into this Prospectus and to be part of this
Prospectus from the date of filing thereof.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this
Prospectus and the Registration Statement of which it is a part to the
extent that a statement contained herein or in any other subsequently filed
document which also is incorporated herein modifies or replaces such
statement. Any statement so modified or superseded shall not be deemed, in
its unmodified form, to constitute a part of this Prospectus or such
Registration Statement.
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Upon written or oral request, the Company will provide without charge to
each person to whom a copy of this Prospectus is delivered a copy of the
documents incorporated by reference herein (other than exhibits to such
documents unless such exhibits are specifically incorporated by reference
therein). Requests should be submitted in writing or by telephone at (714)
455-4700 to Gensia Sicor Inc., at the principal executive offices of the
Company, 19 Hughes, Irvine, California 92618.
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
Some of the information presented in connection with this Prospectus,
including the information incorporated by reference, contains forward-
looking statements within the meaning of Section 27A of the Securities Act
and Section 21E of the Exchange Act, including statements regarding, among
other things, (i) the Company's growth strategies; (ii) anticipated trends
in the Company's business and demographics; (iii) the Company's ability to
continue to control costs and maintain quality of products; (iv) the
Company's ability to respond to changes in regulations; and (v) the
Company's ability to enter into contracts with certain suppliers and
customers. In addition, when used in this Prospectus, the words "intends
to," "believes," "anticipates," "expects" and similar expressions are
intended to identify forward-looking statements. These forward-looking
statements are based largely on the Company's expectations and are subject
to a number of risks and uncertainties, certain of which are beyond the
Company's control. Actual results could differ materially from these
forward-looking statements as a result of the factors described in "Risk
Factors" including, among others (a) changes in the industry as a result of
political, economic or regulatory influences; (b) changes in regulations
governing the industry, (c) changes in the competitive marketplace and (d)
continuing downward pressure on the prices of the Company's products. In
light of these risks and uncertainties, there can be no assurance that the
forward-looking information contained in this Prospectus will in fact
transpire.
THE COMPANY
Gensia Sicor Inc. (formerly Gensia, Inc.) ("Gensia Sicor" or the
"Company") is a vertically integrated pharmaceutical company with expertise
in the production of specialty bulk drug substances by synthesis or
fermentation, and the development, manufacture and marketing of injectable
pharmaceuticals. The Company is focused on the worldwide oncology and
injectable pharmaceutical markets. On February 28, 1997 Gensia Sicor
completed its acquisition of Rakepoll Holding B.V. ("Rakepoll Holding")
from Rakepoll Finance N.V. ("Rakepoll Finance"). Rakepoll Holding is the
parent company of three specialty pharmaceutical businesses: SICOR-Societa
Italiana Corticosteroidi S.p.A. ("Sicor") of Milan, Italy, and two
companies located in Mexico: Lemery, S.A. de C.V. ("Lemery") and Sicor de
Mexico, S.A. de C.V. ("Sicor de Mexico"). In addition, in December 1997
the Company announced that Sicor had agreed to purchase a 50% equity
interest in Diaspa S.p.A., an Italian company engaged in the manufacture of
certain raw materials, principally cyclosporine, used in Sicor's business,
for approximately $2.8 million. Gensia Sicor is headquartered in Irvine,
California.
Sicor and Sicor de Mexico produce specialty bulk drug substances.
Lemery manufactures oral and injectable finished multisource drug products.
The specialty drug substances produced by Sicor and Sicor de Mexico are
primarily used in parenteral or topical administration, including
inhalation therapy, and almost all belong to one of three categories: (1)
anticancer agents, (2) steroids or (3) non-depolarizing muscle relaxants
used in anesthesia. The principal markets for Sicor's and Sicor de
Mexico's specialty bulk drug substances are the U.S., Canada, the European
Union and Japan. The finished multisource drug products manufactured by
Lemery are sold primarily to the national health program in Mexico and are
exported to certain countries in Central and South America, North Africa,
the Middle East and Eastern Europe.
Gensia Sicor Pharmaceuticals, Inc. (formerly Gensia Laboratories, Ltd.
and herein referred to as "GSP") is a wholly-owned subsidiary of the
Company. Prior to the acquisition of Rakepoll Holding, the Company's
primary operating unit was GSP. GSP's primary emphasis has been on the
manufacture and marketing of oncology, anesthesiology and other key
multisource injectable pharmaceuticals for the North American market. GSP
is
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currently engaged in discussions with other pharmaceutical companies to
seek to expand its product offerings to foreign markets. In addition, GSP
provides contract manufacturing support and services to a number of
pharmaceutical and biotechnology companies.
Gensia Sicor also conducts basic pharmaceutical research at its San
Diego location through its Metabasis Therapeutics, Inc. subsidiary
("Metabasis"). The Company's current operating plan includes funding
Metabasis' basic research activities primarily through collaborations with
other pharmaceutical companies. Metabasis is currently receiving contract
research revenues through its research collaborations with Pfizer Inc
("Pfizer") in the area of pain management and with Sankyo Co. Ltd.
("Sankyo") for basic research funding to discover and develop drugs for the
treatment of non-insulin dependent (Type II) diabetes. In December 1997,
Sankyo made a $7.25 million equity investment in Metabasis and currently
owns approximately 8% of the shares of Metabasis. Gensia Sicor is
continuing to pursue plans to establish Metabasis as an independent
company. Accomplishment of this goal is dependent on obtaining additional
financing, certain third party consents and tax considerations. To the
extent the Company is unable to establish Metabasis as an independent
company and is unable to fund its research activities through its
collaborations with Sankyo and Pfizer, the Company plans to reduce its
Metabasis associated research expense to the level necessary to fulfill its
obligations under the Pfizer and Sankyo agreements. There can be no
assurance that the Company's product development efforts with Pfizer and
Sankyo will be successful or that Pfizer and or Sankyo will not terminate
their respective collaborations with Metabasis or that Gensia Sicor will be
able to obtain the consents and financing necessary to establish Metabasis
as an independent company.
As part of the Gensia Sicor restructuring, in December 1997 Gensia Sicor
transferred its licensed and proprietary medical products, including the
GenESA(R) System, Brevibloc, and the Feedback Controlled Heparin System
("FCHS") into Gensia Automedics, Inc. ("Automedics") and sold a majority
interest in Automedics to private investors in exchange for certain
milestone and other contingent payments. Due to the contingent nature of
these potential payments, Gensia Sicor will record, in the fourth quarter
of 1997, a charge of approximately $10 million associated with the
Automedics transaction, including the write-off of $7 million of prepaid
royalties and capitalized milestone payments. Gensia Sicor retains a 19%
ownership interest in Automedics. Gensia Sicor has retained potential
obligations under agreements which have been assigned to Automedics, which
obligations could exceed $20 million. Automedics' technology focus is on
developing products which use closed-loop drug delivery. Gensia Sicor may
never achieve profitable operations.
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RISK FACTORS
In addition to the other information contained in this Prospectus, the
following factors should be considered carefully before purchasing the
shares of Common Stock offered hereby.
Future Capital Needs; Uncertainty of Additional Funding
The Company anticipates that its current capital resources, including
$7.25 million received from Sankyo in exchange for an approximate 8%
ownership position in Metabasis ($2.25 million of which was paid directly
to Gensia Sicor), $14.3 million received in the December Private Placement,
$2.5 million received in December 1997 from the sale of common stock to a
collaborator and $2.7 million received in December 1997 from the sale of a
parcel of land, commitments from third parties, and efforts to reduce
overall costs and expenses and working capital requirements will enable it
to maintain its current and planned operations through at least 1998. The
Company will continue to pursue equity, debt and lease financing for its
capital needs. In addition, the Company is seeking additional funding for
Metabasis. There can be no assurance that any such financings will be
available on acceptable terms, if at all.
Loss History; Uncertainty of Future Profitability
Gensia Sicor was founded in 1986, has never made an annual profit, and
has never had positive annual cash flow from operations. As of September
30, 1997, Gensia Sicor had an accumulated deficit of approximately $321.3
million. For the years ended December 31, 1994, 1995 and 1996 and the nine
months ended September 30, 1997, Gensia Sicor had net losses applicable to
common shares of $56.1 million, $11.9 million, $51.8 million and $60.7
million, respectively. Gensia Sicor may incur additional losses in the
future and expects that its losses will continue through at least 1997. In
December 1997, the Company announced that it expected to take a $10 million
charge in the fourth quarter of 1997 as a result of the sale of Automedics
to private investors. Due to the contingent nature of these potential
payments, Gensia Sicor will record, in the fourth quarter of 1997, a charge
of approximately $10 million associated with the Automedics transaction,
including the write-off of $7 million of prepaid royalties and capitalized
milestone payments. Gensia Sicor retains a 19% ownership interest in
Automedics. Gensia Sicor has retained potential obligations under
agreements which have been assigned to Automedics, which obligations could
exceed $20 million. Automedics' technology focus is on developing products
which use closed-loop drug delivery. Gensia Sicor may never achieve
profitable operations.
Competition
Gensia Sicor is engaged in a rapidly evolving field. Competition from
large pharmaceutical companies, biotechnology companies and other companies
is intense and expected to increase. Many of these companies have
substantially greater financial resources and experience in developing,
manufacturing and marketing pharmaceutical products than Gensia Sicor.
There can be no assurance that competitors will not succeed in developing
technologies and products that are more effective or that would render the
technology and products of Gensia Sicor and its subsidiaries obsolete or
noncompetitive. Gensia Sicor competes in the highly competitive
multisource (generic) injectable drug industry with numerous other
pharmaceutical manufacturers, many of which are established companies with
greater financial and other resources than Gensia Sicor. There can be no
assurance that Gensia Sicor will be able to continue to compete effectively
in this market. Because selling prices of multisource injectable drug
products typically decline as competition intensifies, the profitability of
Gensia Sicor will depend in part on its ability to develop and introduce
selected new products to the market in a timely manner, to obtain raw
materials at competitive prices and to improve the efficiency of its
production capability. The development and commercialization process is
time consuming and costly. Delays in any part of the process or the
inability of Gensia Sicor to obtain regulatory approval for its products
could materially and adversely affect the Company.
Dependence on Key Personnel
The success of Gensia Sicor depends in large part upon its ability to
attract and retain qualified scientific, manufacturing, marketing and
management personnel. Gensia Sicor faces competition for such personnel
from other
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<PAGE>
companies, academic institutions, government entities and other
organizations. In addition, the success of Gensia Sicor will be dependent
upon certain key personnel associated with the Company, the loss of which
may have a material adverse effect on the Company's operations. David Hale
resigned as President and Chief Executive Officer in November 1997. Donald
E. Panoz, the Company's Chairman of the Board, has assumed the position of
Interim President and Chief Executive Officer, until such time as a
successor Chief Executive Officer is named.
Dependence Upon Successful Integration of Gensia Sicor, Sicor, Lemery,
Sicor de Mexico and Diaspa S.p.A.
Achieving the anticipated benefits of the acquisition of Sicor, Lemery,
Sicor de Mexico and Diaspa S.p.A. will depend in part upon whether the
integration of the companies' businesses is accomplished in an efficient
and effective manner, and there can be no assurance that this will occur.
The combination of these businesses requires, among other matters,
integration of each of the combining companies' respective development,
administrative, finance, sales, product support, distribution and marketing
organizations, as well as the integration of each such companies' product
offerings and development activities. Of particular significance to the
successful integration of the combining companies' businesses is reassuring
Gensia Sicor's customers that product support and distribution will
continue uninterrupted. There can be no assurance that such integration
will be accomplished smoothly or successfully. Further, there can be no
assurance that the operations, managements or personnel of the combining
companies will be compatible or that Gensia Sicor will not experience the
loss of key personnel. The difficulties of such integration may be
increased by the necessity of coordinating organizations located in
different countries. The integration of certain operations requires the
dedication of management resources which may temporarily distract from the
day-to-day business of the combined company. Additionally, the costs
incurred and difficulties encountered in the transition process may, at
least in the short term, have an adverse impact on the combined company's
operations. The Company took a special charge of $3.2 million in the third
quarter of 1997 to reserve for corporate and employee relocation and
severance costs as a result of the Company moving its headquarters to
Irvine, California. Any inability of management to integrate the
operations of the companies successfully could have a material adverse
effect on the business and results of operations of the combined company.
Uncertainty of Ability to Operate Without Infringing on Patents and
Proprietary Technology of Others
The success of Gensia Sicor will depend, in part, on its ability to
maintain trade secret protection and operate without infringing on the
proprietary rights of third parties. There can be no assurance that the
patents of others will not have an adverse effect on the ability of Gensia
Sicor to commercialize its products. Litigation, which could result in
substantial cost to the Company, may be necessary to determine the scope
and validity of the proprietary rights of third parties. If any of the
Company's products are found to infringe upon patents or other rights owned
by third parties, Gensia Sicor may be required to obtain licenses to
patents or other proprietary rights of third parties which may not be
available on acceptable terms. If Gensia Sicor does not obtain such
licenses, product introductions could be delayed or foreclosed. There can
be no assurance that Gensia Sicor will have sufficient funds to obtain
licenses that may be required in order to develop and commercialize its
products, to contest patents obtained by third parties, or to defend
against suits brought by third parties.
Potential Inability to Obtain Raw Materials or Manufacture Products
Gensia Sicor depends on third party manufacturers for bulk raw materials
for certain of its products. These raw materials are generally available
from a limited number of sources, and certain raw materials are available
only from foreign sources. In addition, GSP utilizes sole sources of supply
for certain raw materials used in the manufacture of its products and
certain packaging components. Any disruption in one or more of these supply
sources could have a material adverse effect on Gensia Sicor.
Uncertainty of Pharmaceutical Pricing, Reimbursement and Related Matters
The levels of revenues and profitability of pharmaceutical companies
will be affected by the continuing efforts of governmental and third party
payors to contain or reduce the costs of health care through various means.
For example, in certain foreign markets pricing or profitability of
prescription pharmaceuticals is subject to government control. In the
United States, there have been, and Gensia Sicor expects that there will
continue to be, a number of
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federal and state proposals to implement government controls. While Gensia
Sicor cannot predict whether any such legislative or regulatory proposals
or reforms will be adopted or the effect such proposals or reforms may have
on its businesses, the announcement of such proposals or reforms could have
a material adverse effect on Gensia Sicor's ability to raise capital and
the adoption of such proposals or reforms could have a material adverse
effect on Gensia Sicor's businesses, financial condition and profitability.
In addition, in both the United States and elsewhere, sales of prescription
pharmaceuticals are dependent in part on the availability of reimbursement
to the consumer from third party payors, such as government and private
insurance plans. Third party payors are increasingly challenging the prices
charged for medical products and services. There can be no assurance that
any of the products of Gensia Sicor will be considered cost effective and
that reimbursement to the consumer will be available or will be sufficient
to allow Gensia Sicor to sell its products on a competitive basis.
Product Liability Exposure; Inadequacy or Unavailability of Product
Liability Insurance
Gensia Sicor, as a manufacturer of finished drug products, faces an
inherent exposure to product liability claims in the event that the use of
any of its technology or products is alleged to have resulted in adverse
effects. This exposure exists even with respect to those products that
receive regulatory approval for commercial sale, as well as those
undergoing clinical trials. While Gensia Sicor has taken and will continue
to take what it believes are appropriate precautions, there can be no
assurance that it will avoid significant product liability exposure.
Adequate insurance coverage might not be available at acceptable costs, if
at all, and product liability claims could adversely affect the business or
financial condition of Gensia Sicor.
In addition, as a manufacturer of bulk drug substances, Gensia Sicor
supplies other pharmaceutical companies with active ingredients which are
contained in finished products. The ability of Gensia Sicor to avoid
significant product liability exposures depends upon its ability to
negotiate appropriate commercial terms and conditions with its customers
and its customers' manufacturing, quality control and quality assurance
practices. There is no assurance that adequate insurance coverage will be
available at acceptable costs, if at all, to insure against such exposures
or that Gensia Sicor will be able to negotiate satisfactory terms and
conditions with its customers. Commencing in 1995, Sicor received claims
from certain of its customers in connection with the shipment of
contaminated products. Rakepoll Holding recorded a reserve of
approximately $2.6 million in its financial statements for the year ended
December 31, 1996 which represented management's estimate of product rework
costs, attorney's costs and other settlement costs. Actual costs to be
incurred in relation to the ultimate settlement may vary from the amount
estimated.
Uncertainty Regarding Mexican Economic Factors, Government Policies and
Inflation
The Mexican government has exercised and continues to exercise
significant influence over many aspects of the Mexican economy.
Accordingly, Mexican government actions could have a significant effect on
Lemery and Sicor de Mexico, and on market conditions and prices in Mexico.
Further, on a cumulative basis, the inflation rate has exceeded 100% in
Mexico over the three-year period ended December 1997. There can be no
assurance that actions by the Mexican government, future developments in
the Mexican economy or Mexico's political, social or economic situation
will not adversely affect the operations of Lemery and Sicor de Mexico.
Risks Related to International Operations
During 1995 and 1996 a significant percentage of the revenues of each of
Sicor, Lemery, Sicor de Mexico, and Diaspa S.p.A. were derived from sales
of pharmaceuticals outside of Western Europe, Japan and the United States.
Operations outside of Western Europe, Japan and the United States are
subject in varying degrees to risks involved in doing business abroad such
as war, civil disturbances, adverse governmental actions (which may disrupt
or impede operations and markets, restrict the movement of funds, impose
limitations on foreign exchange transactions or result in the expropriation
of assets) and economic and governmental instability. There can be no
assurance that Gensia Sicor will not experience material adverse
developments with respect to its operations outside of Western Europe,
Japan and the United States and that such developments, if they were to
occur, would not have a material adverse effect on the results of
operations and financial condition of Gensia Sicor. Further, Archimica
S.p.A., an Italian bulk pharmaceutical company in which Carlo Salvi, who
represents Rakepoll Finance and is
-8-
<PAGE>
Executive Vice President of Gensia Sicor, has a 50% beneficial ownership
interest, purchased a 50% beneficial interest in Diaspa S.p.A. in December
1997. Gensia Sicor also acquired a 50% interest in Diaspa S.p.A. in
December 1997.
Environmental Matters
Gensia Sicor is subject to numerous environmental regulations in the
jurisdictions in which it operates, including regulations relating to the
handling, transport and disposal of hazardous materials and the protection
of the environment. In certain of these jurisdictions, protection of the
environment is becoming an area of increased governmental scrutiny and
surveillance. While Gensia Sicor has implemented practices to comply with
applicable regulations, the cost of doing so in the future may become
prohibitive and may have a significant adverse impact on the companies'
operations. There is no assurance that Gensia Sicor will, in fact, be able
to comply with all applicable laws and regulations or that such laws and
regulations will not have a material adverse impact on the companies'
operations. In addition, Sicor maintains liability insurance for certain
environmental risks which its management believes to be appropriate and in
accordance with industry practice. There can be no assurance, however, that
Sicor will not incur liabilities beyond the limits or outside the coverage
of its insurance or that Sicor will be able to maintain such insurance on
acceptable terms, or at all.
Currency Fluctuations
Gensia Sicor has significant operations in several countries, including
the United States, Italy, and Mexico. In addition, purchases and sales are
made in a large number of other countries. As a result, the business is
subject to the risk and uncertainties of foreign currency fluctuations.
While Gensia Sicor has policies and strategies to minimize this risk, there
can be no assurance that such policies and strategies will be effective in
preventing significant negative financial adjustments in the future.
Control by Rakepoll Finance
Rakepoll Finance owns 29,500,000 shares of Common Stock (representing as
of December 31, 1997 approximately 38% of all outstanding shares of Common
Stock) and, pursuant to a Shareholder's Agreement, dated as of November 12,
1996, as amended by and between Gensia Sicor and Rakepoll Finance, has
designated two of Gensia Sicor's eight directors (and has the right to
designate one additional director), who in turn designated (jointly with
two executive officer directors of Gensia Sicor) four additional directors.
In addition, the consent of the Rakepoll Finance designated directors is
required for Gensia Sicor to take certain actions, such as a merger or sale
of all or substantially all of the business or assets of Gensia Sicor and
certain issuances of securities. As a result of its ownership of Gensia
Sicor Common Stock, Rakepoll Finance may be able to control substantially
all matters requiring approval by the stockholders of Gensia Sicor,
including the election of directors and the approval of mergers or other
business combination transactions.
Possible Volatility of Stock Price; Dividend Policy
The market price of the shares of Gensia Sicor Common Stock, like that
of the common stock of many other life sciences companies, has been and is
likely to continue to be highly volatile, and the market for securities of
such companies has from time to time experienced significant price and
volume fluctuations that are unrelated to the operating performance of
particular companies. The market price of Gensia Sicor Common Stock could
be subject to significant fluctuations in response to variations in Gensia
Sicor's anticipated or actual operating results, sales of substantial
amounts of Gensia Sicor Common Stock, other issuances of substantial
amounts of Gensia Sicor Common Stock pursuant to pre-existing obligations,
announcements concerning Gensia Sicor or its competitors, including the
results of testing, technological innovations or new commercial products or
services, developments in patent or other proprietary rights of Gensia
Sicor or its competitors, including litigation, conditions in the life
sciences or pharmaceuticals industries, governmental regulation, health
care legislation, public concern as to the safety of Gensia Sicor's
products, changes in estimates of Gensia Sicor's performance by securities
analysts, market conditions for life sciences stocks in general, and other
events or factors.
-9-
<PAGE>
Gensia Sicor has never paid cash dividends on Gensia Sicor Common Stock.
Gensia Sicor presently intends to retain earnings, if any, for the
development of its businesses and does not anticipate paying any cash
dividends on Gensia Sicor Common Stock in the foreseeable future. Unless
full cumulative dividends are paid on Gensia Sicor's outstanding $3.75
Convertible Exchangeable Preferred Stock, $.01 par value ("Convertible
Preferred Stock"), cash dividends may not be paid or declared and set aside
for payment on Gensia Sicor Common Stock. Through December 1997, the
Company has approximately $7.5 million in undeclared cumulative preferred
dividends on such Convertible Preferred Stock. The Company made quarterly
cash dividend payments of approximately $1.5 million per quarter on the
Convertible Preferred Stock from June 1, 1993 through March 1, 1995.
Subsequent to March 1995, as a measure to reduce cash outflows, the
Company's Board of Directors suspended quarterly cash dividend payments on
the Convertible Preferred Stock, resuming such cash dividend payments in
September 1996. If Gensia Sicor chooses not to declare dividends for six
cumulative quarters, the holders of Convertible Preferred Stock, voting
separately as a class, will be entitled to elect two additional directors
until the dividend in arrears has been paid.
Subordination of Common Stock to Notes and Preferred Stock
The Company's Common Stock is expressly subordinate to the Notes and to
the Series A Preferred Stock into which the Notes are convertible in the
event of the liquidation, dissolution or winding up of the Company. The
Company's Common Stock is also subordinate to the approximately $80,000,000
(plus accrued and unpaid dividends) liquidation preference of the Company's
outstanding $3.75 Convertible Exchangeable Preferred Stock. If the Company
were to cease operations and liquidate its assets, there can be no
assurance that there would be any remaining value available for
distribution to the holders of Common Stock after providing for the above
liquidation preferences.
Effect of Certain Anti-Takeover Provisions
Gensia Sicor's Certificate of Incorporation and Bylaws include
provisions that could discourage potential takeover attempts and make
attempts by its stockholders to change management more difficult. The
approval of 66-2/3% of Gensia Sicor's voting stock is required to approve
certain transactions and to take certain stockholder actions, including the
calling of a special meeting of stockholders and the amendment of any of
the anti-takeover provisions contained in Gensia Sicor's Certificate of
Incorporation. Further, pursuant to the terms of its stockholder rights
plan, Gensia Sicor has distributed a dividend of one right for each
outstanding share of Gensia Sicor Common Stock. These rights will cause a
substantial dilution to a person or group that attempts to acquire Gensia
Sicor on terms not approved by the Gensia Sicor Board of Directors and may
have the effect of deterring hostile takeover attempts.
-10-
<PAGE>
CAPITAL STOCK
The authorized capital stock of Gensia Sicor consists of 125,000,000
shares of Common Stock, $.01 par value, and 5,000,000 shares of preferred
stock, $.01 par value, of which 160,000 shares have been designated Series
I Preferred Stock and 1,840,000 shares have been designated $3.75
Convertible Exchangeable Preferred Stock.
Common Stock
As of January 14, 1998, there were 79,066,233 shares of Common Stock
outstanding held by approximately 1,015 stockholders of record. The holders
of Common Stock are entitled to one vote for each share held of record on
all matters submitted to a vote of the stockholders. Gensia Sicor's
Restated Certificate of Incorporation (the "Certificate") does not provide
for cumulative voting. Subject to preferences that may be applicable to any
then outstanding preferred stock including the $3.75 Convertible
Exchangeable Preferred Stock, holders of Common Stock are entitled to
receive ratably such dividends as may be declared by the Board of Directors
out of funds legally available therefor. In the event of a liquidation,
dissolution or winding up of Gensia Sicor, holders of Common Stock are
entitled to share ratably in all assets remaining after payment of
liabilities and the liquidation preference of any then outstanding
preferred stock. Holders of Common Stock have no redemption, conversion or
preemptive rights. All outstanding shares of Common Stock are fully paid
and nonassessable.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares
offered hereby.
INCOME TAX CONSIDERATIONS
Each prospective purchaser should consult his or her own tax advisor
with respect to the income tax issues and consequences of holding and
disposing of the Common Stock.
-11-
<PAGE>
SELLING STOCKHOLDERS
Up to 7,936,509 shares of Common Stock are being registered pursuant to
the terms of the Registration Rights Agreement entered into as of May 19,
1997, as amended, by the Company and the HCCP Selling Stockholder in
connection with the HCCP Private Placement.
The following table sets forth the names of the HCCP Selling
Stockholder, the aggregate number of shares of Common Stock identified by
the HCCP Selling Stockholder as being beneficially owned by it as of
January 15, 1998, and the aggregate number of shares of Common Stock that
may be sold by it hereunder:
<TABLE>
<CAPTION>
% of Common Stock
To Be Held After Sale
Shares of Common Assuming Full
Stock Issuable Upon Shares Potentially Other Shares of Issuance, Conversion
Name and Address of Conversion of the Issuable Upon Exercise Common Stock and Exercise of the
Beneficial Owner Purchased Securities of the HCCP Warrants Owned* Purchased Securities
- --------------------------------------- -------------------- ---------------------- --------------- ---------------------
<S> <C> <C> <C> <C>
Health Care Capital Partners, L.P. 5,080,688 2,540,344 - -
Health Care Executive Partners, L.P. 210,318 105,159 - -
The Mill
10 Glenville Street
Greenwich, CT 06831
</TABLE>
* Because the HCCP Selling Stockholder may offer all, some or none of the HCCP
Shares pursuant to this Prospectus, and because there are currently no
agreements, arrangements or understandings with respect to the sale of any
of the HCCP Shares, no estimate can be given as to the number of HCCP Shares
that will be held by the HCCP Selling Stockholder after completion of the
sale of HCCP Shares hereunder. See "Plan of Distribution."
There has been no material relationship between the HCCP Selling Stockholder and
the Company in the past three years except (i) as a result of ownership of the
Purchased Securities and (ii) by way of Mr. Carlos A. Ferrer's, in his capacity
as a Member of Ferrer Freeman Thompson & Co. LLC, the general partner of HCCP,
being a director on the Board of Directors of the Company.
The following table sets forth certain information known to the Company
with respect to the beneficial ownership of the Company's Common Stock as of
January 15, 1998 by each Additional Selling Stockholder. All of the Additional
Selling Stockholders acquired the Additional Shares offered hereby pursuant to
the terms of Unit Purchase Agreements entered into between the Company and the
Selling Stockholders in December 1997 in connection with the December Private
Placement. The Additional Selling Stockholders purchased a total of 2,454,512
Units at a price of $5.8742 per Unit in the December Private Placement. Each
Unit consists of one share of Common Stock and an Additional Warrant for the
purchase of one-half share of Common Stock, at an exercise price of $7.34 per
share (subject to adjustment), for each share of Common Stock purchased in the
December Private Placement and held until June 30, 1998, such Additional
Warrants to be issued promptly following the Warrant Determination Date.
The Unit Purchase Agreements require the Company to register with the
Commission the resale of all of the Additional Shares acquired and acquirable
under the Unit Purchase Agreements. Due to (i) the ability of the Additional
Selling Stockholders to determine independently when and whether they will sell
the Additional Shares under the registration statement of which this Prospectus
is a part and (ii) the uncertainty as to how many Additional Warrants will be
issued and exercised, the Company is unable to determine the exact number of
Additional Shares that will actually be sold.
As of January 15, 1998 there were 16 Additional Selling Stockholders, as
set forth below. Share ownership information is based solely upon either
information furnished to the Company or reports furnished to the Company by the
respective individuals or entities, as the case may be, pursuant to the rules of
the Commission:
-12-
<PAGE>
<TABLE>
<CAPTION>
% of Common
Stock To Be
Shares of Potentially Held After Sale
Common Stock Issuable Upon Other Assuming Full
Held as a Result Exercise of Shares Issuance and
of the Private the Additional of Common Exercise of the
Additional Selling Stockholders Placement Warrants Stock Owned/(1)/ Additional Warrants
------------------------------- ---------------- -------------- ---------------- -------------------
<S> <C> <C> <C> <C>
The Dresdner RCM Small Cap Fund,
a Series of Dresdner RCM Capital
Funds, Inc. ................................. 663,300 331,650 370,000 *
Entities Affiliated with
with Oracle Partners, L.P.(2)................ 510,708 255,354 1,380,000 1.7%
Agnes Varis.................................... 170,236 85,118 0 *
Agnes Varis and Karl Leichtman as Joint Tenants 43,000 21,500 20,000 *
Stephanie A. Gallo 1990 Family Trust........... 57,000 28,500 0 *
Ernest J. Gallo 1991 Family Trust.............. 57,000 28,500 0 *
Joseph C. Gallo 1994 Family Trust.............. 57,000 28,500 0 *
M.S.B. Research................................ 100,000 50,000 502,220(3) *
Curran Partners L.P............................ 60,000 30,000 75,000(4) *
John P. Curran................................. 10,214 5,107 0 *
Ewa Lipton..................................... 12,767 6,383 0 *
Fountainhead Holdings Ltd...................... 340,472 170,206 25,000(5) *
Carlo Salvi(6)................................. 340,472 170,206 30,400,000(7) 38.0%
Donald E. Panoz................................ 13,832 6,916 523,832(8) *
John Sayward................................... 10,000 5,000 63,163(9) *
David C. Dreyer (10)........................... 8,511 4,255 6,000 *
</TABLE>
* Less than one percent.
(1) Includes shares of Common Stock owned by the Additional Selling
Stockholders which are not covered by this Prospectus.
(2) Includes shares issued and issuable to Oracle Partners, L.P. and
affiliated limited partnerships, of which Larry N. Feinberg is the
managing general partner and over which Mr. Feinberg has voting and
investment power.
(3) Includes 63,750 shares held by M.S.B. Research, 61,200 shares held by
Hanover Associates LLC and 395,250 shares held by Mark S. Berg. Mr.
Berg has voting and investment power over the shares held by M.S.B.
Research and shares voting and investment power over shares held by
Hanover Associates LLC.
(4) Includes 25,000 shares subject to a warrant exercisable within 60 days
of December 31, 1997.
(5) Includes 25,000 shares subject to a warrant exercisable within 60 days
of December 31, 1997.
(6) Mr. Salvi is Chairman of Sicor and a director and Executive Vice
President of the Company. Alco Chemicals, Ltd. ("Alco"), a company
wholly-owned by Mr. Salvi, acts as a sales agent for certain bulk
pharmaceutical products produced by Sicor, in exchange for a
commission of 4% of sales. Additionally, Alco acts as a non-exclusive
sales agent for Sicor for certain bulk pharmaceutical products
produced by certain subsidiaries of the Company, in exchange for a
commission of 4% of sales. The parties determine, from time to time,
those bulk pharmaceutical products for which Alco will act as a sales
agent. Further, Archimica S.p.A., in which Mr. Salvi has a 50%
beneficial ownership interest, acquired a 50% beneficial interest in
Diaspa S.p.A. in December 1997. Gensia Sicor also acquired a 50%
beneficial ownership interest in Diaspa S.p.A., which is an Italian
pharmaceutical company specializing in bulk fermentation products.
(7) Includes 29,500,000 shares owned by Rakepoll Finance, a majority-owned
direct subsidiary of Korbona Industries Ltd., which is wholly-owned by
Mr. Salvi. Also includes (i) 440,000 shares owned by Nora Real Estate
S.A. and 50,000 shares owned by Alco, both of which are wholly-owned
by Mr. Salvi and (ii) 50,000 shares subject to a warrant exercisable
within 60 days of December 31, 1997.
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<PAGE>
(8) Includes (i) 200,000 shares Mr. Panoz has the right to acquire within
60 days of December 31, 1997 pursuant to the exercise of vested
options and (ii) 25,000 shares subject to a warrant exercisable within
60 days of December 31, 1997. Also includes 300,000 shares which Mr.
Panoz may have the right to acquire within 60 days of December 31,
1997 pursuant to the exercise of options that vest upon the attainment
of certain corporate objectives. Mr. Panoz is Interim President and
Chief Executive Officer and Chairman of the Company's Board of
Directors.
(9) Includes 46,170 shares Mr. Sayward has the right to acquire within
60 days of December 31, 1997 pursuant to the exercise of options.
Mr. Sayward is Vice President, Finance, Chief Financial Officer and
Treasurer of the Company
(10) Mr. Dreyer is Corporate Controller of the Company.
PLAN OF DISTRIBUTION
The Shares are being offered on behalf of the Selling Stockholders,
and the Company will not receive any proceeds from the offering. The
Shares may be sold or distributed from time to time by the Selling
Stockholders, or by pledgees, donees or transferees of, or other successors
in interest to, the Selling Stockholders, directly to one or more
purchasers (including pledgees) or through brokers dealers or underwriters
who may act solely as agents or may acquire Shares as principals, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices, at negotiated prices, or at fixed prices, which may be
changed. The distribution of the Shares may be effected in one or more of
the following methods: (i) ordinary brokers' transactions, which may
include long or short sales; (ii) transactions involving cross or block
trades or otherwise on the Nasdaq National Market; (iii) purchases by
brokers, dealers or underwriters as principal and resale by purchasers for
their own accounts pursuant to this Prospectus; (iv) "at the market" to or
through market makers or into an existing market for the Common Shares; (v)
in other ways not involving market makers or established trading markets,
including direct sales to purchasers or sales effected through agents; (vi)
through transactions in options, swaps or other derivatives (whether
exchange-listed or otherwise); or (vii) any combination of the foregoing,
or by any other legally available means. In addition, the Selling
Stockholders or their successors in interest may enter into hedging
transactions with broker-dealers who may engage in short sales of Shares in
the course of hedging the positions they assume with the Selling
Stockholders. The Selling Stockholders or its successors in interest may
also enter into option or other transactions with broker-dealers that
require the delivery by such broker-dealers of the Shares, in which Shares
may be resold thereafter pursuant to this Prospectus. The Selling
Stockholders or their successors in interest may also pledge shares as
collateral for margin accounts and such shares could be resold pursuant to
the terms of such accounts.
Brokers, dealers, underwriters or agents participating in the
distribution of the Shares as agents may receive compensation in the form
of commissions, discounts or concessions from the Selling Stockholders
and/or purchasers of the Shares for whom such broker-dealers may act as
agent, or to whom they may sell as principal, or both (which compensation
as to a particular broker-dealer may be less than or in excess of customary
commissions). The Selling Stockholders and any broker-dealers who act in
connection with the sale of Shares hereunder may be deemed to be
"Underwriters" within the meaning of the Securities Act, and any
commissions they receive and proceeds of any sale of Shares may be deemed
to be underwriting discounts and commission under the Securities Act.
Neither the Company nor the Selling Stockholders can presently estimate the
amount of such compensation. The Company knows of no existing arrangement
between the Selling Stockholders, any other stockholder, broker, dealer,
underwriter or agent relating to the sale or distribution of the Shares.
There can be no assurance that any of the Shares will be sold by the
Selling Stockholders. To the extent required, (i) the Shares to be sold
hereby, (ii) the name of the Selling Stockholders, (iii) the purchase
price, (iv) the name of any such agent, dealer or underwriter, (v) any
applicable commissions, discounts or other terms constituting compensation
with respect to a particular offer, (vi) disclosure that such broker or
dealer did not conduct any investigation to verify information set out or
incorporated by reference in this Prospectus and (vii) other facts material
to the transaction will be set forth in an accompanying Prospectus
Supplement.
All expenses (estimated to be $100,000) of the registration of the
Common Stock covered by this Prospectus will be borne by the Company
pursuant to preexisting agreements, except that the Company will not pay
any Selling Stockholder's underwriting discounts or selling commissions.
-14-
<PAGE>
The Company has agreed to indemnify the Selling Stockholders against
certain liabilities in connection with this registration, including
liabilities under the Securities Act.
In order to comply with certain states securities laws, if applicable,
the Common Stock will not be sold in a particular state unless such
securities have been registered or qualified for sale in such state or any
exemption from registration or qualification is available and complied
with.
LEGAL MATTERS
Certain legal matters with respect to the validity of the Shares
offered hereby are being passed upon for the Company by Pillsbury Madison &
Sutro LLP, San Francisco, California. A member of the law firm of
Pillsbury Madison & Sutro LLP owns 30,000 shares of Common Stock.
EXPERTS
The consolidated financial statements of Gensia Sicor Inc. appearing
in Gensia Sicor Inc.'s Annual Report on Form 10-K, as amended by Form 10-
K/A, for the year ended December 31, 1996, have been audited by Ernst &
Young LLP, inde pendent auditors, as set forth in their report thereon
included therein and incorporated herein by reference. Additionally, the
consolidated financial statements of Rakepoll Holding, B.V. appearing in
Gensia Sicor's Current Report on Form 8-K, as amended by Form 8-K/A, dated
February 28, 1997 have been audited by KPMG Accountants N.V., as set forth
in their report included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such reports given upon the authority of such firms as
experts in accounting and auditing.
-15-
<PAGE>
================================================================================
No dealer, salesperson or any other person has been authorized to give
any information or to make any representation not contained in this Prospectus
in connection with the offer made by this Prospectus and, if given or made, such
information or represen tation must not be relied upon as having been autho
rized by the Company or the Selling Stockholders. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any securities
other than the registered securities to which it relates, or an offer in any
jurisdiction to any person to whom it is unlawful to make such an offer in such
jurisdiction. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create any implication that the
information contained herein is correct at any time subsequent to the date
hereof.
_______________________________
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information................................................ 3
Documents Incorporated By Reference.................................. 3
Special Note Regarding Forward-Looking Information................... 4
The Company.......................................................... 4
Risk Factors......................................................... 6
Capital Stock........................................................ 11
Use of Proceeds...................................................... 11
Income Tax Considerations............................................ 11
Selling Stockholders................................................. 12
Plan of Distribution................................................. 14
Legal Matters........................................................ 15
Experts.............................................................. 15
</TABLE>
11,618,277 Shares
Common Stock
GENSIA SICOR INC.
_________________
PROSPECTUS
_________________
_________________
__________, 1998
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the various expenses in connection
with the sale and distribution of the securities being registered hereby,
other than underwriting discounts and commissions. All amounts are
estimated except the Securities and Exchange Commission registration fee
and the Nasdaq National Market listing fee.
<TABLE>
<CAPTION>
Amount
------
<S> <C>
SEC registration fee............................ $ 18,530
Blue Sky fees and expenses...................... 1,000
Accounting fees and expenses.................... 10,000
Legal fees and expenses......................... 50,000
Registrar and transfer agent's fees............. 5,000
NNM listing fee................................. 17,500
Miscellaneous fees and expenses................. 7,970
--------
Total...................................... $110,000
========
</TABLE>
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law (the "Delaware
GCL") permits the Company's board of directors to indemnify any person
against expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in connection
with any threatened, pending or completed action, suit or proceeding in
which such person is made a party by reason of his being or having been a
director, officer, employee or agent of the Company, in terms sufficiently
broad to permit such indemnification under certain circumstances for
liabilities (including reimbursement for expenses incurred) arising under
the Securities Act of 1933, as amended (the "Act"). The Delaware GCL
provides that indemnification pursuant to its provisions is not exclusive
of other rights of indemnification to which a person may be entitled under
any by-law, agreement, vote of stockholders or disinterested directors, or
otherwise.
Article IX of the Company's Restated Certificate of Incorporation
provides for indemnification of the Company's directors, officers,
employees and other agents to the maximum extent permitted by law.
As permitted by Sections 102 and 145 of the Delaware GCL, the
Company's Restated Certificate of Incorporation eliminates a director's
personal liability for monetary damages to the Company and its
stockholders arising from a breach or alleged breach of such director's
fiduciary duty, except for liability under Section 174 of the Delaware GCL
or liability for any breach of the director's duty of loyalty to the
Company or its stockholders, for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law or for
any transaction from which the director derived an improper personal
benefit.
In addition, the Company has entered into separate indemnification
agreements with its directors and officers that will require the Company,
among other things, to indemnify them against certain liabilities that may
arise by reason of their status or service as directors or officers to the
fullest extent not prohibited by law.
II-1
<PAGE>
Item 16. Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description of Document*
------ -----------------------
<C> <S>
4.1/(1)/ Securities Purchase Agreement, dated May 1, 1997, by
and between the Company and HCCP (4.2).
4.2/(1)/ Registration Rights Agreement, dated May 19, 1997, by
and between the Company and HCCP (4.3).
4.2 Amendment No. 1 to Registration Rights Agreement, dated
as of January 20, 1998, by and between the Company and
HCCP.
4.4/(1)/ Form of 2.675% Subordinated Convertible Notes due May
1, 2004, issued to certain affiliates of HCCP (4.4).
4.5/(1)/ Form of Common Stock Purchase Warrant, dated May 19,
1997, issued to certain affiliates of HCCP (4.5).
4.6 Form of Unit Purchase Agreement between Gensia Sicor
and the Additional Selling Stockholders.
4.7/(2)/ Form of Certificate for Gensia Sicor Inc. Common Stock with
Rights Legend (4.1).
5.1 Opinion of Pillsbury Madison & Sutro LLP regarding the
legality of the securities being registered.
23.1 Consent of Ernst & Young LLP, independent auditors.
23.2 Consent of KPMG Accountants N.V., independent auditors.
23.3 Consent of Pillsbury Madison & Sutro LLP (included in
its opinion filed as Exhibit 5.1 to this Registration
Statement).
24.1 Power of Attorney (see page II-4).
</TABLE>
____________________
* Parenthetical references after description of exhibits relate to the
exhibit number under which exhibits were initially filed.
(1) Incorporated by reference to the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1997 (No. 0-18549).
(2) Incorporated by reference to the Company's Registration Statement on
Form S-4 (No. 33-94778).
Item 17. Undertakings
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended (the "Act"), may be permitted to
directors, officers and controlling persons of the Company pursuant to the
foregoing provisions, or otherwise, the Company has been advised that in
the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of
II-2
<PAGE>
expenses incurred or paid by a director, officer or controlling person of
the Company in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection
with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed
in the Act and will be governed by the final adjudication of such issue.
The undersigned Company hereby undertakes:
(1) To file during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement; (i) to include any prospectus required by Section 10(a)(3)
of the Act; (ii) to reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in this Registration Statement; and (iii) to
include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement
or any material change to such information in this Registration
Statement; provided, however, that paragraphs (i) and (ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") that
are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under
the Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(4) For purposes of determining any liability under the Act,
each filing of the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Exchange Act which is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3, and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Irvine, State of California, January 19, 1998.
GENSIA SICOR INC.
By /s/ Donald E. Panoz
---------------------------
Donald E. Panoz
Interim President and
Chief Executive Officer and
Chairman of the Board
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears
below constitutes and appoints Donald E. Panoz and John W. Sayward and each of
them, his true and lawful attorneys-in-fact and agents, each with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments, including post-effective
amendments, to this Registration Statement, and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that each of
said attorneys-in-fact and agents or their substitute or substitutes may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald E. Panoz Interim President and Chief January 19, 1998
- ------------------------ Executive Officer and Chairman of
Donald E. Panoz the Board (Principal Executive
Officer)
/s/ John W. Sayward Vice President, Finance, Chief January 19, 1998
- ------------------------ Financial Officer, and Treasurer
John W. Sayward (Principal Financial and Principal
Accounting Officer)
Director
- ------------------------
James C. Blair, Ph.D.
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Michael D. Cannon Director January 19, 1998
- ------------------------
Michael D. Cannon
/s/ Herbert J. Conrad Director January 19, 1998
- ------------------------
Herbert J. Conrad
/s/ Carlos A. Ferrer Director January 19, 1998
- ------------------------
Carlos A. Ferrer
/s/ David Hale Director January 19, 1998
- ------------------------
David Hale
/s/ Carlo Salvi Director January 19, 1998
- ------------------------
Carlo Salvi
/s/ Patrick D. Walsh Director January 19, 1998
- ------------------------
Patrick D. Walsh
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit
Number Description of Document*
------ -----------------------
<C> <S>
4.1/(1)/ Securities Purchase Agreement, dated May 1, 1997, by
and between the Company and HCCP (4.2).
4.2/(1)/ Registration Rights Agreement, dated May 19, 1997, by
and between the Company and HCCP (4.3).
4.2 Amendment No. 1 to Registration Rights Agreement, dated
as of January 20, 1998, by and between the Company and
HCCP.
4.4/(1)/ Form of 2.675% Subordinated Convertible Notes due May
1, 2004, issued to certain affiliates of HCCP (4.4).
4.5/(1)/ Form of Common Stock Purchase Warrant, dated May 19,
1997, issued to certain affiliates of HCCP (4.5).
4.6 Form of Unit Purchase Agreement between Gensia Sicor
and the Additional Selling Stockholders.
4.7/(2)/ Form of Certificate for Gensia Sicor Inc. Common Stock
with Rights Legend (4.1).
5.1 Opinion of Pillsbury Madison & Sutro LLP regarding the
legality of the securities being registered.
23.1 Consent of Ernst & Young LLP, independent auditors.
23.2 Consent of KPMG Accountants N.V., independent auditors.
23.3 Consent of Pillsbury Madison & Sutro LLP (included in
its opinion filed as Exhibit 5.1 to this Registration
Statement).
24.1 Power of Attorney (see page II-4).
</TABLE>
____________________
* Parenthetical references after description of exhibits relate to the
exhibit number under which exhibits were initially filed.
(1) Incorporated by reference to the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1997 (No. 0-18549).
(2) Incorporated by reference to the Company's Registration Statement on
Form S-4 (No. 33-94778).
<PAGE>
EXHIBIT 4.2
AMENDMENT NO. 1 TO REGISTRATION RIGHTS AGREEMENT
------------------------------------------------
AMENDMENT NO. 1 (the "Amendment"), dated as of January 20, 1998, to the
Registration Rights Agreement, dated as of May 19, 1997 (the "Agreement"), by
and among Gensia Sicor Inc. (the "Company"), Health Care Capital Partners, L.P.
and Health Care Executive Partners, L.P. (herein collectively referred to as
"HCCP").
W I T N E S S E T H :
WHEREAS, in connection with the purchase by HCCP of the Company's
securities, the Company granted to HCCP, pursuant to the Agreement, certain
demand registration rights exercisable at any time after August 28, 1998; and
WHEREAS, in recognition of HCCP's significant contributions to the Company,
the Company now wishes to amend the Agreement to allow such demand registration
rights to be exercised immediately; and
WHEREAS, Section 5 of the Agreement provides that the Agreement may be
amended in a writing signed by the Company and the holders of at least 66-2/3%
of the Registrable Securities (as defined in the Agreement).
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Definitions: References. Capitalized terms used in this Amendment but
-----------------------
not defined herein shall have the meanings ascribed to them in the Agreement.
2. Amendment of Section 2.1. Section 2.1(a) of the Agreement is hereby
------------------------
amended to read in full as set forth below:
"Subject to Section 2.7 hereof, at any time and from time to time after
January 19, 1998, upon the written request of holders (the "Initiating
Holders") of Registrable Securities representing not less than 25% of the
number of shares of Common Stock issuable upon conversion of the Notes and
exercise of the Warrants (excluding Contingent Warrants not then
exercisable or which have expired) that the Company effect the registration
under the Securities Act of all or part of such Initiating Holders'
Registrable Securities, provided that in no event shall the Company be
obligated to register shares of Common Stock pursuant to such request
having a Current Market Value on the date of such request less than $5
million, the Company
-1-
<PAGE>
will promptly, and in any event within ten days, give written notice of
such requested registration to all registered holders of Registrable
Securities, and thereupon the Company will use its best efforts to effect
the registration under the Securities Act of
(i) the Registrable Securities which the Company has been so
requested to register by such Initiating Holders, and
(ii) all other Registrable Securities which the Company has been
requested to register by the holders thereof (such holders together
with the Initiating Holders are hereinafter referred to as the
"Selling Holders") by written request given to the Company within ten
days after the giving of such written notice by the Company, all to
the extent requisite to permit the disposition of the Registrable
Securities so to be registered."
3. Release of Claims. In consideration of the Company's execution of
-----------------
this Amendment, HCCP on its own behalf and on behalf of its partners,
subsidiaries, affiliates, directors, officers, employees, trustees, attorneys,
agents, representatives, assigns and successors, present and former, does hereby
covenant not to sue and acknowledges complete satisfaction of and hereby
remises, releases, absolves and forever discharges:
(a) Claims. Any and all Claims relating to the purchase of the
------
Purchased Securities (as defined in the Securities Purchase Agreement dated
as of May 1, 1997 between the Company and HCCP (the "Securities Purchase
Agreement")) by HCCP (including Claims of breach of any representation or
warranty or certification in the Securities Purchase Agreement or in any of
the agreements, letters or certificates related thereto (collectively, the
"Documents"), or of misrepresentation in connection with such purchase, or
of violation of any and all securities or antifraud laws). "Claims" means
any and all claims, demands, liabilities, damages, costs, expenses, sums of
money, suits, dues, actions and causes of actions.
(b) Parties Against Whom Claims Released. This covenant not to sue
------------------------------------
and release of Claims shall extend to the Company, its successors and
assigns, affiliates, subsidiaries, divisions and affiliated corporations,
past and present, and their trustees, directors, officers, shareholders,
agents, attorneys, advisors, insurers, and employees, past and present, and
each of them.
-2-
<PAGE>
(c) Unknown Claims. HCCP understands and acknowledges that it is
--------------
possible that unknown losses or Claims exist or that present losses may
have been underestimated in amount or severity, and HCCP explicitly took
that into account in determining to enter into this Amendment, and
nonetheless bargained, with the knowledge of the possibility of such
unknown Claims, to provide a full accord, satisfaction and discharge of all
such Claims. Consequently, HCCP expressly waives all rights under
California Civil Code Section 1542, or any similar provision of law.
Section 1542 provides that:
"A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with the
debtor."
(d) No Amendment. This release is not intended to be, and shall not
------------
be construed as, a waiver or amendment of the covenants and agreements in
the Documents (other than the representations, warranties and
certifications referred to in paragraph (a) above), and the parties agree
that the covenants and agreements in the Documents (other than the
representations, warranties and certifications referred to in paragraph (a)
above) shall be strictly adhered to.
4. Full Force and Effect. Except as modified, amended or supplemented
---------------------
above, all rights, terms and conditions of the Agreement shall remain in full
force and effect.
5. Governing Law. This Amendment shall be construed and enforced in
-------------
accordance with, and the rights be governed by and construed under the laws of
the State of Delaware (irrespective of its choice of law principles).
6. Counterparts. This Amendment may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Amendment to the
Agreement as of the date first written above.
GENSIA SICOR INC.
By: /s/ John W. Sayward
______________________________
Name: John W. Sayward
Title: Vice President, Finance, Chief
Financial Officer and Treasurer
-3-
<PAGE>
HEALTH CARE CAPITAL PARTNERS, L.P.
By: FERRER FREEMAN THOMPSON & CO. LLC, its
General Partner
By: /s/ Robert T. Thompson
______________________________
Name: Robert T. Thompson
Title: Manager
HEALTH CARE EXECUTIVE PARTNERS, L.P.
By: FERRER FREEMAN THOMPSON & CO. LLC, its
General Partner
By: /s/ Robert T. Thompson
______________________________
Name: Robert T. Thompson
Title: Manager
-4-
<PAGE>
EXHIBIT 4.6
-----------
EXECUTION COPY
--------------
UNIT PURCHASE AGREEMENT
Gensia Sicor Inc.
9360 Towne Centre Drive
San Diego, California 92121
Ladies & Gentlemen:
The undersigned purchaser (the "Purchaser") hereby confirms its
agreement with you as follows:
1. This Unit Purchase Agreement (the "Purchase Agreement") is made by
and between Gensia Sicor Inc., a Delaware corporation (the "Company"), and the
Purchaser as of the date this Purchase Agreement is accepted by the Company
below (the "Effective Date").
2. The Company has authorized the issuance and sale of up to Three
and One-Half Million (3,500,000) units (the "Units"). Each Unit consists of one
share of the Company's Common Stock, par value $.01 per share (the "Common
Stock"), and a warrant (the "Warrant") to purchase one-half share of the
Company's Common Stock at a per share exercise price of $7.34, such Warrant to
be issued if and to the extent that the Purchaser sells no Common Stock or other
securities of the Company for a period commencing on the Effective Date and
ending on June 30, 1998, all as more fully described in this Purchase Agreement,
the Warrant and accompanying documents.
3. The Company and the Purchaser agree that the Purchaser will
purchase from the Company, and the Company will sell to the Purchaser
________________ Units, at a purchase price per Unit (the "Purchase Price")
equal to $ 5.8742, and pursuant to, the Terms and Conditions for Purchase of
Units attached hereto as Annex I and incorporated herein by reference as if
fully set forth herein.
4. Units will be sold on a first come, first served basis. The
Company makes no representation that this Purchase Agreement will be accepted by
the Company.
5. Purchaser hereby agrees not to engage in the short sale of the
Company's Common Stock for a twenty (20) day period prior to and for a ninety
(90) day period following the Closing Date.
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
between us by signing in the space provided below for that purpose.
PURCHASER
_____________________________________
Print Name
By: _________________________________
Title: ______________________________
Address: ____________________________
ACCEPTED as of December 29, 1997
Gensia Sicor Inc.
By: _____________________
Title: __________________
-2-
<PAGE>
ANNEX I
TERMS AND CONDITIONS FOR PURCHASE OF UNITS
1. Authorization and Sale of the Units.
-----------------------------------
1.1 Authorization of the Units. The Company has authorized the
--------------------------
issuance and sale of up to Three and One-Half Million (3,500,000) units (the
"Units"), each Unit consisting of one share of the Company's Common Stock, par
value $.01 per share (the "Common Stock") and a warrant to purchase one-half
share of the Company's Common Stock (the "Warrant") in the form attached hereto
as Exhibit 1.1.
1.2 Sale of Units. Subject to the terms and conditions hereof, the
-------------
Purchaser will purchase the number of Units agreed upon by the Purchaser at the
Purchase Price, as set forth in the Unit Purchase Agreement by and between the
Company and the Purchaser (the "Purchase Agreement"). The shares of Common
Stock sold to Purchaser pursuant to the Purchase Agreement are hereinafter
referred to as the "Initial Shares" and the shares of Common Stock arising from
the exercise of the Warrant are hereinafter referred to as the "Warrant Shares."
The Initial Shares, the Warrant and the Warrant Shares are hereinafter
collectively referred to as the "Securities."
2. Closing Date.
------------
2.1 Closing Date. The closing of the purchase and sale of the Units
------------
to the Purchaser hereunder (the "Closing") shall be held at the offices of
Pillsbury Madison & Sutro LLP, 235 Montgomery Street, San Francisco 94104, at
9:00 A.M. California time, on December 30, 1997 or at such other time within
five (5) business days thereof as the Company may select. The date of the
Closing is hereinafter referred to as the "Closing Date." As of the Closing
Date, the Company shall prepare a certificate or certificates registered in the
name of the Purchaser representing the Initial Shares to be purchased by such
Purchaser under the Purchase Agreement, and the Purchaser shall send to the
Company a wire transfer (in accordance with the instructions set forth on
Exhibit 2.l(a) hereto) in the amount of the purchase price of the Units to be
purchased by such Purchaser, payable to the Company's order. Funds received
prior to the Closing Date will not bear interest.
2.2 Warrant Issuance. The Company will issue a Warrant to purchase
----------------
one-half share of the Company's Common Stock at a per share exercise price of
$7.34 (with such number of shares and purchase price as adjusted pursuant to the
provisions of Section 3 of the Warrant for any events which occur from and after
the Closing Date and on or prior to June 30, 1998) to each Purchaser for each
share of the Company's Common Stock purchased by the
I-1
<PAGE>
Purchaser at the Closing and held by such Purchaser until June 30, 1998 (the
"Warrant Determination Date"). The Warrant will be issued by the Company
promptly after the Warrant Determination Date; provided, however, that for
purposes of calculating the amount of the Warrant, the number of shares
purchased at the Closing and held until the Warrant Determination Date will be
reduced by any other sales of Company securities (including short sales and
sales or purchases of derivative securities) by the Purchaser from the Closing
Date until the Warrant Determination Date. The Company may request an affidavit
and other reasonable supporting materials as to the foregoing from any Purchaser
prior to issuance of the Warrant.
3. Representations and Warranties of the Company. The Company
---------------------------------------------
represents and warrants to the Purchaser as of the Closing Date as follows:
3.1 Organization and Standing. The Company has been duly
-------------------------
incorporated and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation.
3.2 Corporate Power; Authorization. The Company has all requisite
------------------------------
legal and corporate power and has taken all requisite corporate action to
execute and deliver the Purchase Agreement, to sell and issue the Securities and
to carry out and perform all of its obligations hereunder. The Purchase
Agreement has been duly authorized, executed and delivered on behalf of the
Company and constitutes the valid and binding agreement of the Company,
enforceable in accordance with its terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization or similar laws relating to or affecting
the enforcement of creditors' rights generally, (ii) as limited by equitable
principles generally and (iii) rights to indemnification hereunder may be
limited by applicable law. The consummation of the transactions contemplated
herein and the fulfillment of the terms hereof will not result in a breach of
any of the terms or provisions of, or constitute a default under, the Company's
Certificate of Incorporation, the Company's by-laws, or any material indenture,
mortgage, deed of trust or other agreement or instrument to which the Company is
a party or by which it is bound.
3.3 Units; Warrant Shares. The Company has full corporate power and
---------------------
lawful authority to sell the Units on the terms and conditions contemplated
herein, and when so sold against payment therefor as provided herein, the
Initial Shares and, when issued, the Warrants will be validly authorized and
issued, fully paid and nonassessable. The issuance and delivery of each of the
Initial Shares and the Warrants is not subject to preemptive or any similar
rights of the stockholders of the Company or any liens or encumbrances arising
through the Company and when the Warrant Shares are issued in accordance with
the
I-2
<PAGE>
terms of the Warrants, they will be validly issued and outstanding, fully paid
and nonassessable and free of any liens or encumbrances arising through the
Company.
3.4 SEC Documents; Financial Statements. The reports filed by the
-----------------------------------
Company with the Securities and Exchange Commission (the "Commission") under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") (the "SEC
Documents") since December 31, 1996, have been provided to the Purchaser. The
SEC Documents conform in all material respects to the requirements of the
Exchange Act and the rules, regulations and instructions of the Commission
thereunder. The SEC Documents did not as of their dates 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 made therein, in light of the
circumstances in which they were made, not misleading. The financial statements
of the Company included in the SEC Documents (the "Financial Statements") comply
as to form in all material respects with applicable accounting requirements and
with the published rules and regulations of the Commission with respect thereto.
Except as may be indicated in the notes to the Financial Statements, the
Financial Statements have been prepared in accordance with generally accepted
accounting principles consistently applied and fairly present the consolidated
financial position of the Company and its subsidiaries at the dates thereof and
the consolidated results of their operations, stockholders' equity and cash
flows for the periods then ended (subject, in the case of unaudited statements,
to normal, recurring adjustments).
3.5 Subsequent Events. Except as publicly disclosed, since September
-----------------
30, 1997, (i) neither the Company nor any of its subsidiaries has incurred any
liabilities or obligations, contingent or otherwise, that are material in the
aggregate to the Company and its subsidiaries, taken as a whole, except in the
ordinary course of business, and (ii) there has been no material adverse change
in the condition or results of operations, financial or otherwise, of the
Company and its subsidiaries, taken as a whole.
3.6 Legal Proceedings. Except as set forth in the SEC Documents,
-----------------
there are no material legal proceedings to which the Company or any subsidiary
is a party or of which property of the Company or any subsidiary is the subject
and, to the Company's knowledge, no such proceedings are contemplated by
governmental authorities or others.
3.7 Validity of Securities. The Company has full corporate power and
----------------------
lawful authority to sell the Units on the terms and conditions contemplated in
the Purchase Agreement, and when so sold against payment therefor as provided
therein, the Initial Shares and the Warrant will be validly authorized and
issued, fully paid and nonassessable and will have the rights,
I-3
<PAGE>
preferences and privileges described in the Certificate of Incorporation and the
Warrant, respectively. The issuance and delivery of the Initial Shares, when
issued, and the Warrant are not subject to preemptive or any similar rights of
the stockholders of the Company or any liens or encumbrances arising through the
Company; and when the Warrant Shares are issued in accordance with the terms of
the Warrant, they will be validly issued and outstanding, fully paid and
nonassessable and free of any liens or encumbrances arising through the Company.
Subject to compliance with the provisions of applicable securities laws of state
or foreign jurisdictions, no other approval of any public body (state or
federal) is or will, on the Closing Date be necessary in connection with the
offer, issue and sale of the Initial Shares and the Warrant as contemplated
herein.
3.8 No Breach. The consummation of the transactions contemplated in
---------
the Purchase Agreement and the fulfillment of the terms thereof will not result
in a breach of any of the terms or provisions of, or constitute a default under,
the Company's Certificate of Incorporation, the Company's by-laws, or any
material indenture, mortgage, deed of trust or other agreement or installment to
which the Company is a party or by which it is bound.
3.9 Good Standing. Each of the Company and its subsidiaries has been
-------------
duly incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation with full corporate power
and corporate authority to own, lease and operate its properties and conduct its
businesses as described in the SEC Documents; each of the Company and its
subsidiaries is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which the ownership or leasing of
properties or the conduct of its business as presently conducted require such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the condition (financial or otherwise), earnings,
operations, business or business prospects of the Company and its subsidiaries
taken as a whole; to the knowledge of the Company, each of the Company and its
subsidiaries is in possession of and operating in compliance with all
authorizations, licenses, certificates, consents, orders and permits from state,
federal and other regulatory authorities that are material to the conduct of its
business, all of which are valid and in full force and effect to the extent that
the failure of such would have a material adverse effect on the Company's
business or results from operations; and each of the Company and its
subsidiaries is not in violation of its respective charter or bylaws.
3.10 Outstanding Stock. All outstanding shares of capital stock of
-----------------
the Company have been duly authorized and validly issued and are fully paid and
nonassessable; all issued and
I-4
<PAGE>
outstanding shares of capital stock of each subsidiary of the Company have been
duly authorized and validly issued and are fully paid and nonassessable.
3.11 Intellectual Property. Except as set forth in the SEC
---------------------
Documents, to the best of the Company's knowledge, each of the Company and its
subsidiaries owns or possesses adequate rights to use all material patents,
patent rights, inventions, trade secrets, know-how, trademarks, service marks,
trade names and copyrights which are described in the SEC Documents; except as
set forth in the SEC Documents, the Company has not received any notice of, and
has no knowledge of, any infringement of or conflict with asserted rights of the
Company by others with respect to any patent, patent rights, inventions, trade
secrets, know-how, trademarks, service marks, trade names and copyrights which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a material adverse effect on the condition (financial or
otherwise), earnings, operations, business of the Company and its subsidiaries,
taken as a whole, as presently conducted; and, except as set forth in the SEC
Documents, the Company has not received any notice of, and has no knowledge of,
any infringement of or conflict with the asserted rights of others with respect
to any patent, patent rights, inventions, trade secrets, know-how, trademarks,
service marks, trade names and copyrights which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would have a material
adverse effect on the condition (financial or otherwise), earnings, operations,
business of the Company and its subsidiaries, taken as a whole, as presently
conducted.
3.12 Common Stock Registration. The Common Stock is registered
-------------------------
pursuant to Section 12(g) of the Exchange Act and is listed on The Nasdaq
National Market, and the Company has taken no action designed to, or, to the
Company's knowledge, likely to have the effect of, terminating the registration
of the Common Stock under the Exchange Act or removing the Common Stock from
quotation on The Nasdaq National Market, nor has the Company received
notification that the Commission or the National Association of Securities
Dealers, Inc. (the "NASD") is contemplating terminating such registration or
quotation.
3.13 Private Placement. The Company has not taken any action
-----------------
inconsistent with the treatment of the sale of the Units pursuant to the
Purchase Agreement as a private placement exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act")
pursuant to the provisions of Section 4(2) thereof and Regulation D thereunder.
Assuming the accuracy of the purchasers' representations and warranties in the
Purchase Agreement and the compliance by each purchaser with all of its
covenants and agreements, the offer, sale, and issuance by the Company of the
Units to the purchasers
I-5
<PAGE>
as contemplated herein constitute transactions exempt from the registration
requirements of Section 5 of the Securities Act.
4. Representations and Warranties of the Purchaser; Access to
----------------------------------------------------------
Information; Independent Investigation. The Purchaser hereby represents and
- --------------------------------------
warrants to the Company as follows:
4.1 Investment Intent. The Purchaser is purchasing the Units for
-----------------
investment for its own account only and not with a view to, or for resale in
connection with, any "distribution" thereof within the meaning of the Securities
Act. The Purchaser understands that the Securities have not been registered
under the Securities Act or registered or qualified under any state securities
law in reliance on specific exemptions therefrom, which exemptions may depend
upon, among other things, the bona fide nature of Purchaser's investment intent
as expressed herein.
4.2 Investment Experience. The Purchaser is an "accredited investor"
---------------------
within the meaning of Rule 501 of the Commission, and was not organized for the
specific purpose of acquiring the Units. The Purchaser is aware of the
Company's business affairs and financial condition and has acquired sufficient
information about the Company to reach an informed and knowledgeable decision to
acquire the Units. The Purchaser has such business and financial experience as
is required to give it the capacity to protect its own interests in connection
with the purchase of the Securities.
4.3 Authorization. This Purchase Agreement has been duly and validly
-------------
authorized, executed and delivered on behalf of the Purchaser and is a valid and
binding agreement of the Purchaser 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.
4.4 Compliance with Securities Laws and Regulations. All subsequent
-----------------------------------------------
offers and sales of the Securities by the Purchaser shall be made pursuant to
registration under the Securities Act and qualification under the applicable
state securities laws or pursuant to exemptions from registration and
qualification.
4.5 Reliance by Company. The Purchaser understands that the Units
-------------------
are being offered and sold to it in reliance on specific exemptions from the
registration and qualification requirements of United States federal and state
securities laws and that the Company is relying upon the truth and accuracy of,
and the Purchaser's compliance with the representations, warranties, agreements,
acknowledgments and understandings of the Purchaser set forth herein in order to
determine the availability of such exemptions and the eligibility of the
Purchaser to acquire the Securities.
I-6
<PAGE>
4.6 No Government Approval. The Purchaser 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 Units.
4.7 No Legal, Tax or Investment Advice. The Purchaser understands
----------------------------------
that nothing in the Purchase Agreement or any other materials presented to the
Purchaser in connection with the purchase and sale of the Units constitutes
legal, tax or investment advice. The Purchaser has consulted such legal, tax
and investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with its purchase of the Units.
4.8 Access to Information. The Purchaser acknowledges that it has
---------------------
had the opportunity to ask questions, to receive answers concerning the terms
and conditions of this offering from the Company and to obtain any additional
information from the Company that the Company possesses or can acquire without
unreasonable effort or expense regarding this offering.
4.9 Individual Investor. If Purchaser is a natural person, Purchaser
-------------------
makes the additional representations and warranties set forth on Exhibit 4.9
attached hereto
5. Restrictions on Transfer, Information and Registration Rights.
-------------------------------------------------------------
5.1 Restrictions on Transferability. The Securities shall not be
-------------------------------
transferable in the absence of a registration under the Securities Act or an
exemption therefrom, or in the absence of compliance with any term of the
Purchase Agreement. Without limiting the foregoing, (i) the Securities may be
offered, resold, pledged or otherwise transferred only (A) in a transaction
meeting the requirements of Rule 144 of the Commission ("Rule 144"), or in
accordance with another exemption from the registration requirements of the
Securities Act (and based upon an opinion of counsel if the Company so requests)
or (B) pursuant to an effective registration statement under the Securities Act,
in each case in accordance with the applicable securities laws of any state of
the United States or any other applicable jurisdiction and (ii) Purchaser will
be required to notify any subsequent purchaser of the resale restrictions set
forth above. The Company shall be entitled to give stop transfer instructions
to the transfer agent with respect to the Securities in order to enforce the
foregoing restrictions.
5.2 Restrictive Legends. Each certificate representing any of the
-------------------
Securities shall bear substantially the following legends (in addition to any
legends required under applicable securities laws):
I-7
<PAGE>
In the Case of All Securities:
-----------------------------
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "1933 ACT"). THE SECURITIES MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED UNLESS REGISTERED UNDER THE 1933 ACT AND QUALIFIED
UNDER APPLICABLE STATE SECURITIES LAWS OR UNLESS SUCH SALE, TRANSFER,
ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
THE 1933 ACT AND THE QUALIFICATION REQUIREMENTS OF APPLICABLE STATE
SECURITIES LAWS OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION AND QUALIFICATION ARE
NOT REQUIRED. THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE
RIGHTS OF HOLDERS THEREOF ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER
AND OTHER RESTRICTIONS, AND THE HOLDER OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE (INCLUDING ANY FUTURE HOLDERS) IS BOUND BY THE TERMS OF A
UNIT PURCHASE AGREEMENT BETWEEN THE ORIGINAL PURCHASER AND THE COMPANY
(COPIES OF WHICH MAY BE OBTAINED FROM THE COMPANY).
5.3 Registration on Form S-3.
------------------------
5.3.1 Filing of Registration Statement. The Company shall use its
--------------------------------
best efforts to secure effectiveness of, as soon as practicable, and shall file
no later than sixty (60) days after the Closing Date (unless such registration
is not permitted under the applicable rules and regulations of the Commission),
a registration statement on Form S-3 (the "Registration Statement") with the
Commission under the Securities Act to register the resale of the Initial Shares
and Warrant Shares (the "Registrable Securities"); provided however, that in the
event the Company fails (due to an action or inaction of the Company) to be
eligible to file a registration statement on Form S-3, the Company shall file a
registration statement on Form S-1.
5.3.2 Registration Expenses. The Company shall pay all
---------------------
Registration Expenses (as defined below) in connection with any registration,
qualification or compliance hereunder, and each holder of Registrable Securities
(the "Holders") shall pay all Selling Expenses (as defined below) and other
expenses that are not Registration Expenses relating to the Registrable
Securities resold by such Holder. "Registration Expenses" shall mean all
expenses, except for Selling Expenses, incurred by the Company in complying with
the registration provisions herein described, including, without limitation, all
registration, qualification and filing fees, printing expenses, fees and
disbursements of counsel for the Company, blue sky fees and expenses and the
expense of any special audits incident to or required by any such registration.
"Selling Expenses" shall mean all selling commissions, underwriting fees and
stock
I-8
<PAGE>
transfer taxes applicable to the Registrable Securities and all fees and
disbursements of counsel for any Holder.
5.3.3 Additional Company Obligations. In the case of any
------------------------------
registration effected by the Company pursuant to these registration provisions,
the Company will use its best efforts to: (i) keep such registration effective
until December 31, 2005 (or such earlier date as all of the Registrable
Securities have been sold or may be sold under Rule 144(k)); (ii) prepare and
file with the SEC such amendments and supplements to the Registration Statement
and the prospectus used in connection with the Registration Statement as may be
necessary to comply with the provisions of the Securities Act with respect to
the disposition of the Registrable Securities; (iii) furnish such number of
prospectuses and other documents incident thereto, including any amendment of or
supplement to the prospectus, as a Holder from time to time may reasonably
request; (iv) cause all such Registerable Securities registered as described
herein to be listed on each securities exchange and quoted on each quotation
service on which similar securities issued by the Company are then listed or
quoted; (v) provide a transfer agent and registrar for all Registrable
Securities registered pursuant to the Registration Statement and a CUSIP number
for all such Registrable Securities; (vi) use its best efforts to comply with
all applicable rules and regulations of the Commission, and make available to
its security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months, but not more than eighteen
months, beginning with the first month after the effective date of the
Registration Statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act; and (vii) advise Holders of the issuance of
any stop order by the SEC with respect to the Registration Statement or any
request by the SEC for an amendment to the Registration Statement, and notify
Holders of the happening of any event 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 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; (viii) file the documents required of
the Company and otherwise use its best efforts to maintain requisite blue sky
clearance in (A) all jurisdictions in which any of the Registrable Securities
are originally sold and (B) all other states specified in writing by a Holder as
may reasonably be required to sell such Holder's Registrable Securities,
provided as to clause (B), however, that the Company shall not be required to
qualify to do business or consent to service of process in any state in which it
is not now so qualified or has not so consented.
I-9
<PAGE>
5.4 Indemnification and Contribution.
--------------------------------
5.4.1 Indemnification by the Company. The Company agrees to
------------------------------
indemnify and hold harmless each Holder from and against any losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) to which
such Holder may become subject (under the Securities Act or otherwise) insofar
as such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of, or are based upon, any claim by a third party
asserting any untrue statement of a material fact contained in the Registration
Statement, on the effective date thereof, or arise out of any failure by the
Company to fulfill any undertaking included in the Registration Statement, and
the Company will, as incurred, reimburse such Holder for any legal or other
expenses reasonably incurred in investigating, defending or preparing to defend
any such action, proceeding or claim; provided, however, that the Company shall
-------- -------
not be liable in any such case to the extent that such loss, claim, damages or
liability arises out of, or is based upon (i) an untrue statement or alleged
untrue statement made in such Registration Statement in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Holder specifically for use in preparation of the Registration Statement or
(ii)) any untrue statement in any prospectus that is corrected in any subsequent
prospectus that was delivered to the Holder prior to the pertinent sale or sales
by the Holder.
5.4.2 Indemnification by Holder. Each Holder, severally and not
-------------------------
jointly, agrees to indemnify and hold harmless the Company from and against any
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) to which the Company may become subject (under the Securities Act or
otherwise) insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon any claim by a
third party asserting (i) an untrue statement made in such Registration
Statement in reliance upon and in conformity with written information furnished
to the Company by or on behalf of such Holder specifically for use in
preparation of the Registration Statement, provided, however, that no Holder
-------- -------
shall be liable in any such case for any untrue statement included in any
Prospectus which statement has been corrected, in writing, by such Holder and
delivered to the Company at least three business days before the sale from which
such loss occurred or (ii) any untrue statement in any prospectus that is
corrected in any subsequent prospectus that was delivered to the Holder prior to
the pertinent sale or sales by the Holder, and each Holder, severally and not
jointly, will, as incurred, reimburse the Company for any legal or other
expenses reasonably incurred in investigating, defending or preparing to defend
any such action, proceeding or claim.
I-10
<PAGE>
5.4.3 Indemnification Procedures. Promptly after receipt by any
--------------------------
indemnified person of a notice of a claim or the beginning of any action in
respect of which indemnity is to be sought against an indemnifying person
pursuant to this Section 5.4, such indemnified person shall notify the
indemnifying person in writing of such claim or of the commencement of such
action, and, subject to the provisions hereinafter stated, in case any such
action shall be brought against an indemnified person and the indemnifying
person shall have been notified thereof, the indemnifying person shall be
entitled to participate therein, and, to the extent that it shall wish, to
assume the defense thereof, with counsel reasonably satisfactory to the
indemnified person. After notice from the indemnifying person to such
indemnified person of the indemnifying person's election to assume the defense
thereof, the indemnifying person shall not be liable to such indemnified person
for any legal expenses subsequently incurred by such indemnified person in
connection with the defense thereof; provided, however, that if there exists or
-------- -------
shall exist a conflict of interest that would make it inappropriate in the
reasonable opinion of counsel for the indemnified person for the same counsel to
represent both the indemnified person and such indemnifying person or any
affiliate or associate thereof, the indemnified person shall be entitled to
retain its own counsel at the expense of such indemnifying person; provided,
--------
however, that in the case of the immediately preceding proviso the indemnifying
- -------
person shall not be responsible for the legal expenses of more than one counsel
for all indemnified persons.
5.4.4 Contribution in Lieu of Indemnity. If the indemnification
---------------------------------
provided for in this Section 5.4 is unavailable to or insufficient to hold
harmless an indemnified party under Section 5.4.1 or 5.4.2 above in respect of
any losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) referred to therein, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as result of such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the one hand or
a Holder on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Holders agree that it would not be just and equitable if
contribution pursuant to this Section 5.4.4 were determined by pro rata
allocation (even if the Holders were treated as one entity for such purpose) or
by any other method of allocation which does not take account of the equitable
considerations referred to above in this Section 5.4.4. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions
I-11
<PAGE>
in respect thereof) referred to above in this Section 5.4.4 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 5.4.4, no Holder shall be
required to contribute any amount in excess of the net amount received by the
Holder from the sale of the Registrable Securities to which such loss relates.
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 Holders'
obligations in this Section 5.4.4 to contribute are several in proportion to
their respective sales of Registrable Securities to which such loss relates and
not joint.
5.4.5 Controlling Persons Indemnified. The obligations of the
-------------------------------
Company and the Holders under this Section 5.4 shall be in addition to any
liability which the Company and the respective Holders may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls the Company or any Holder within the meaning of the Securities Act.
5.5 Transfer of Registration Rights. The right to sell Registrable
-------------------------------
Securities pursuant to the registration statement described herein will
automatically be assigned to each transferee of at least 50,000 Initial Shares
or Warrant Shares. In the event that it is necessary, in order to permit a
Holder to sell Registrable Securities pursuant to the Registration Statement, to
amend the Registration Statement to name such Holder, such Holder shall, upon
written notice to the Company, be entitled to have the Company make such
amendment as soon as reasonably practicable. Notwithstanding the above
provisions relating to Registration Expenses, in the event that such an
amendment is requested, the Holder shall, at the request of the Company, be
obligated to reimburse the Company for reasonable Registration Expenses incurred
by it in connection with such amendment.
5.6 Reports Under the Exchange Act. With a view to make available to the
------------------------------
Purchasers or 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
Purchaser or Holder to sell Securities to the public without registration or
pursuant to a registration on Form S-3, the Company will covenant and agree to:
(i) make and keep public information available, as those terms are understood
and defined in Rule 144, at all times after the Closing; (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 any Purchaser or
Holder, so long as the Purchaser or Holder owns any Securities forthwith upon
request, (A) a written
I-12
<PAGE>
statement by the Company that it has complied with the reporting requirements of
Rule 144, the Securities Act and the Exchange Act, (B) a copy of the most recent
annual or quarterly report of the Company, and (C) such other information as may
be reasonably requested in order to avail any Purchaser or Holder of any rule or
regulation of the SEC that permits the selling of any such Securities without
registration or pursuant to such Form S-3.
6. Miscellaneous.
-------------
6.1 Waivers and Amendments. Without the written consent of (i) the
----------------------
Company, (ii) the record holders of more than fifty percent (50%) of the
Securities (on a converted-to-Common Stock basis) then outstanding that have not
previously been sold in a public offering, and, (iii) all holders of 500,000 or
more Units, the terms of the Purchase Agreement may not be waived or amended.
6.2 Governing Law. The Purchase Agreement shall be governed in all
-------------
respects by the laws of the State of California as such laws are applied to
agreements between California residents entered into and to be performed
entirely within California.
6.3 Survival. The representations, warranties, covenants and
--------
agreements made herein shall survive any investigation made by the Company or
the Purchaser and the Closing.
6.4 Successors and Assigns. Subject to Section 5.5, the provisions
----------------------
hereof shall inure to the benefit of, and be binding upon, the successors,
assigns, heirs, executors and administrators of the parties hereto (specifically
including successors in interest to the Shares).
6.5 Entire Agreement. The Purchase Agreement (including all Exhibits
----------------
thereto) constitutes the full and entire understanding and agreement between the
parties with regard to the subject hereof.
6.6 Notices, etc. All notices and other communications required or
-------------
permitted hereunder shall be effective upon receipt and shall be in writing and
may be delivered in person, by facsimile, or express delivery service, addressed
(a) if to the Purchaser, at the address set forth on the signature page hereof
or at such other address as the Purchaser shall have furnished the Company in
writing, or (b) if to the Company, at its address set forth at the beginning of
the Purchase Agreement, or at such other address as the Company shall have
furnished to the Purchaser in writing.
6.7 Severability. If any provision of the Purchase Agreement shall
------------
be judicially determined to be invalid, illegal
I-13
<PAGE>
or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
6.8 Titles and Subtitles. The titles of the paragraphs and
--------------------
subparagraphs of the Purchase Agreement are for convenience of reference and
shall not, by themselves, determine the construction of the Purchase Agreement.
6.9 Counterparts. The Purchase Agreement may be executed in any
------------
number of counterparts, each of which be an original, but all of which together
shall constitute one instrument.
I-14
<PAGE>
Exhibit 1.1
-----------
Warrant No. GS -
---------
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "1933 ACT"). THE SECURITIES MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED UNLESS REGISTERED UNDER THE 1933 ACT AND QUALIFIED
UNDER APPLICABLE STATE SECURITIES LAWS OR UNLESS SUCH SALE, TRANSFER,
ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
THE 1933 ACT AND THE QUALIFICATION REQUIREMENTS OF APPLICABLE STATE
SECURITIES LAWS OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION AND QUALIFICATION ARE
NOT REQUIRED. THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE
RIGHTS OF HOLDERS THEREOF ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER
AND OTHER RESTRICTIONS, AND THE HOLDER OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE (INCLUDING ANY FUTURE HOLDERS) IS BOUND BY THE TERMS OF A
UNIT PURCHASE AGREEMENT BETWEEN THE ORIGINAL PURCHASER AND THE COMPANY
(COPIES OF WHICH MAY BE OBTAINED FROM THE COMPANY).
WARRANT TO PURCHASE SHARES OF COMMON STOCK
OF GENSIA SICOR INC.
This certifies that ________ (the "Holder"), for value received is entitled
to purchase from Gensia Sicor Inc., a Delaware corporation (the "Company"),
________________ (________) fully paid and nonassessable shares of the Company's
Common Stock (the "Warrant Shares") at a price of $7.34 per share (the "Stock
Purchase Price") at any time or from time to time on or after the Commencement
Date (as defined below) up to and including 5:00 p.m. (Pacific time) on the
Expiration Date (as defined below), upon surrender to the Company at its
principal office at 9360 Towne Centre Drive, San Diego, California 92121 (or at
such other location as the Company may advise Holder in writing) of this Warrant
properly endorsed with the Form of Subscription attached hereto duly filled in
and signed and upon payment by cash, cashier's check or wire transfer of
immediately available funds of the aggregate Stock Purchase Price for the number
of shares for which this Warrant is being exercised determined in accordance
with the provisions hereof, such exercise to be conditioned upon the accuracy of
all representations and warranties contained in such Form of Subscription. The
Stock Purchase Price and the number of shares purchasable hereunder are subject
to adjustment as provided in Section 3 of this Warrant. "Commencement Date"
means June 30, 1998 (the date of issuance of this Warrant) and "Expiration Date"
means the earlier of (i) June 30, 2003 (five
1.1-1
<PAGE>
years from the Commencement Date) or (ii) the occurrence of an event, proposal
of which is described in subsection (d) of Section 3.4 which causes termination
of this Warrant under Section 3.4. This Warrant is issued pursuant to the Unit
Purchase Agreement between the Company and Holder dated as of the date hereof
(the "Purchase Agreement").
This Warrant is subject to the following terms and conditions:
1. Exercise of Warrant
-------------------
1.1 Issuance of Certificates. This Warrant is exercisable at the option
------------------------
of Holder at any time or from time to time on or after the Commencement Date and
prior to or on the Expiration Date for all or a portion of the shares of Warrant
Shares which may be purchased hereunder. The Company agrees that the Warrant
Shares purchased under this Warrant shall be and are deemed to be issued to
Holder as the record owner of such shares as of the close of business on the
date on which this Warrant shall have been surrendered and payment made for such
shares. Subject to the provisions of Section 2, certificates for the Warrant
Shares so purchased, together with any other securities or property to which
Holder is entitled upon such exercise, shall be delivered to Holder by the
Company's transfer agent at the Company's expense within a reasonable time after
this Warrant has been exercised. Each stock certificate so delivered shall be
in such denominations of Warrant Shares as may be requested by Holder and shall
be registered in the name of Holder or such other name as shall be designated by
Holder, subject to the limitations contained in Section 2. If, upon exercise of
this Warrant, fewer than all of the Warrant Shares evidenced by this Warrant are
purchased prior to the date of expiration of this Warrant, one or more new
warrants substantially in the form of, and on the terms in, this Warrant will be
issued for the remaining number of Warrant Shares not purchased upon exercise of
this Warrant.
1.2 Payment. Payment of the Stock Purchase Price shall be made at the
-------
option of Holder by surrender to the Company of this Warrant properly endorsed
with the Form of Subscription attached hereto duly filled in and signed and (i)
payment by cash, cashier's check or wire transfer of immediately available funds
or (ii) by surrender of this Warrant to the Company, with a duly executed
exercise notice marked to reflect "Net Issue Exercise," and, in either case,
specifying the number of Warrant Shares to be purchased, during normal business
hours on any day that is not a Saturday or Sunday or a day on which banks are
required or permitted to be closed in the State of California. Upon a Net Issue
Exercise, Holder shall be entitled to receive Warrant Shares equal to the value
of this Warrant (or the portion thereof being exercised by Net Issue Exercise)
by surrender of this Warrant to the Company together with notice of such
1.1-2
<PAGE>
election, in which event the Company shall issue to Holder a number of Warrant
Shares computed as of the date of surrender of this Warrant to the Company using
the following formula:
X = Y x (A-B)
---------
A
Where X = the number of Warrant Shares to be issued to Holder pursuant
to this Section 1.2;
Y = the number of Warrant Shares otherwise purchasable under
this Warrant, or any lesser number of Warrant Shares as to
which this Warrant is being exercised (at the date of such
calculation);
A = the fair market value of one share of the Company's Common
Stock (at the date of such calculation);
B = the Stock Purchase Price (as adjusted to the date of such
calculation).
2. Shares to be Fully Paid; Reservation of Shares. The Company covenants
----------------------------------------------
and agrees that all Warrant Shares which may be issued upon the exercise of the
rights represented by this Warrant will, upon issuance, be duly authorized,
validly issued, fully paid and nonassessable and free from all preemptive rights
of any stockholder and free of all taxes, liens and charges with respect to the
issue thereof. The Company further covenants and agrees that during the period
within which the rights represented by this Warrant may be exercised, the
Company will use its best efforts to at all times have authorized and reserved,
for the purpose of issue or transfer upon exercise of this Warrant, a sufficient
number of shares of authorized but unissued Common Stock. When and as required
to provide for the exercise of the rights represented by this Warrant, the
Company will take all such action as may be necessary to assure that such shares
of Common Stock may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of any domestic securities
exchange or automated quotation system upon which the Common Stock may be
listed. If for any reason the Company does not have available sufficient
authorized but unissued shares to permit full exercise of this Warrant at any
time, then it may, in its discretion, pay to the Holder an amount in cash equal
to the fair market value of the Warrant Shares the Holder has elected to
purchase by exercise of this Warrant, instead of issuing Warrant Shares to the
Holder. For purposes of this Warrant, the fair market value of one Warrant
Share shall mean, to the extent it applies to the Company's Common Stock, the
average of the daily high and low trading prices of the Company's Common Stock
on the Nasdaq
1.1-3
<PAGE>
National Market (or other exchange or market that is the primary trading market
for the Company's Common Stock at that time, as determined by the Company's
Board of Directors in good faith) on the ten trading days prior to the date the
Warrant is exercised and, to the extent it applies to other securities or
property, as determined by the Company's Board of Directors in good faith.
3. Adjustment of Stock Purchase Price; Number of Shares. The Stock
----------------------------------------------------
Purchase Price and the number of shares of Warrant Shares purchasable upon the
exercise of this Warrant shall be subject to adjustment from time to time upon
the occurrence of certain events described in this Section 3.
3.1 Adjustment of Purchase Price. In the event that the Company at
----------------------------
any time or from time to time after the issuance of this Warrant shall declare
or pay, without consideration, any dividend on the Common Stock payable in
Common Stock or in any right to acquire Common Stock for no consideration, or
shall effect a subdivision of the outstanding shares of Common Stock into a
greater number of shares of Common Stock (by stock split, reclassification or
otherwise than by payment of a dividend in Common Stock or in any right to
acquire Common Stock), or in the event the outstanding shares of Common Stock
shall be combined or consolidated, by reclassification or otherwise, into a
lesser number of shares of Common Stock, then the Stock Purchase Price in effect
immediately prior to such event shall, concurrently with the effectiveness of
such event, be proportionately decreased or increased, as appropriate. In the
event that the Company shall declare or pay, without consideration, any dividend
on the Common Stock payable in any right to acquire Common Stock for no
consideration, then the Company shall be deemed to have made a dividend payable
in Common Stock in an amount of shares equal to the maximum number of shares
issuable upon exercise of such rights to acquire Common Stock. Upon each
adjustment of the Stock Purchase Price pursuant to this Section 3.1, the holder
of this Warrant shall thereafter be entitled to purchase, at the Stock Purchase
Price resulting from such adjustment, the number of shares of Common Stock
obtained by multiplying the Stock Purchase Price in effect immediately prior to
such adjustment by the number of shares of Common Stock purchasable pursuant
hereto immediately prior to such adjustment, and dividing the product thereof by
the Stock Purchase Price resulting from such adjustment.
3.2 Adjustments for Reclassification and Reorganization. If the
---------------------------------------------------
Common Stock shall be changed into the same or a different number of shares of
any other class or classes of stock, whether by capital reorganization,
reclassification or otherwise (other than a subdivision or combination of shares
provided for in Section 3.1), the Stock Purchase Price then in effect shall,
concurrently with the effectiveness of such reorganization or reclassification,
be proportionately adjusted so that this Warrant shall represent
1.1-4
<PAGE>
the right to purchase, in lieu of the number of shares of Common Stock which
this Warrant would otherwise represent the right to purchase, a number of shares
of such other class or classes of stock equivalent to the number of shares of
Common Stock which this Warrant would have otherwise entitled the holder to
purchase immediately before that change.
3.3 Notice of Adjustment. Upon any adjustment of the Stock Purchase
--------------------
Price or any increase or decrease in the number of shares of Common Stock
purchasable upon the exercise of this Warrant, the Company shall within five
business days give written notice thereof, by first class mail, postage prepaid,
(or by international delivery service, for international addresses) addressed to
the registered holder of this Warrant at the address of such holder as shown on
the books of the Company. The notice shall be signed by the Company's chief
financial officer and shall state the Stock Purchase Price resulting from such
adjustment and the increase or decrease, if any, in the number of shares
purchasable at such price upon the exercise of this Warrant, setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based.
3.4 Other Notices. If at any time:
-------------
(a) the Company shall propose to declare any cash dividend upon
its Common Stock;
(b) the Company shall propose to declare or make any dividend or
other distribution to the holders of its Common Stock, whether in cash, property
or other securities;
(c) the Company shall propose to effect any reorganization or
reclassification of the capital stock of the Company or any consolidation or
merger of the Company with or into another corporation or any sale, lease or
conveyance of all or substantially all of the property of the Company; or
(d) the Company shall propose to effect a voluntary or
involuntary dissolution, liquidation or winding-up of the Company;
then, in any one or more of said cases, the Company shall give, by certified or
registered mail, postage prepaid, or international delivery service for
international deliveries, addressed to the holder of this Warrant at the address
of such holder as shown on the books of the Company, (i) at least fifteen (15)
business days' prior written notice of the date on which the books of the
Company shall close or a record shall be taken for such dividend or distribution
or for determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, lease, conveyance, dissolution,
liquidation or winding-up, and (ii) in the case of any such reorganization,
reclassification,
1.1-5
<PAGE>
consolidation, merger, sale, lease, conveyance, dissolution, liquidation or
winding-up, at least fifteen (15) business days' written notice of the date when
the same shall take place. Any notice given in accordance with clause (i) above
shall also specify, in the case of any such dividend or distribution, the record
date for such dividend or distribution, if after the Commencement Date. Any
notice given in accordance with clause (ii) above shall also specify the date on
which the holders of Common Stock shall be entitled to exchange their Common
Stock for securities or other property, if any, deliverable upon such
reorganization, reclassification, consolidation/merger, sale, lease, conveyance,
dissolution, liquidation or winding-up, as the case may be. In the event that
the Holder of the Warrant does not exercise this Warrant prior to the occurrence
of an event described in clause (a) or (b) above, the Holder shall not be
entitled to receive the benefits accruing to existing holders of the Common
Stock in such event. Upon the occurrence of an event described in clause (c),
the Holder shall be entitled thereafter, upon payment of the Stock Purchase
Price in effect immediately prior to such action, to receive upon exercise of
this Warrant the class and number of shares which the Holder would have been
entitled to receive after the occurrence of such event had this Warrant been
exercised immediately prior to such event. In connection with the transactions
described in clause (c), the Company will require each person (other than the
Company) that may be required to deliver any cash, stock, securities or other
property upon the exercise of this Warrant as provided herein to assume, by
written instrument delivered to, and reasonably satisfactory to, the holder of
this Warrant (x) the obligations of the Company under this Warrant and (y) the
obligation to deliver to such holder such cash, stock, securities or other
property as such holder may be entitled to receive in accordance with the
provisions of this Section 3. Upon the occurrence of an event the proposal of
which is described in clause (d), this Warrant shall terminate. Notwithstanding
any other provision hereof, no Holder shall have the right to obtain an
injunction or restraining order or otherwise interfere with or prevent the
occurrence of any of the actions described in (a) - (d) above.
4. Issue Tax. The issuance of certificates for the Warrant Shares upon
---------
the exercise of the Warrant shall be made without charge to the holder of the
Warrant for any issue tax in respect thereof; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than that of the then holder of the Warrant being exercised.
5. No Voting or Dividend Rights; Limitation of Liability. Nothing
-----------------------------------------------------
contained in this Warrant shall be construed as conferring upon the holder
hereof the right to vote or to consent or to receive notice as a stockholder in
respect of
1.1-6
<PAGE>
meetings of stockholders for the election of directors of the Company or any
other matters or any rights whatsoever as a stockholder of the Company. Except
for the adjustment to the Stock Purchase Price pursuant to Section 3.2 in the
event of a dividend on the Common Stock payable in shares of Common Stock, no
dividends or interest shall be payable or accrued in respect of this Warrant or
the interest represented hereby or the shares purchasable hereunder until, and
only to the extent that, this Warrant shall have been exercised. No provisions
hereof, in the absence of affirmative action by the holder to purchase shares of
Warrant Shares, and no mere enumeration herein of the rights or privileges of
the holder hereof, shall give rise to any liability of such holder for the Stock
Purchase Price or as a stockholder of the Company whether such liability is
asserted by the Company or by its creditors.
6. Restrictions on Transferability of Securities: Compliance With
--------------------------------------------------------------
Securities Act.
- --------------
6.1 Restrictions on Transferability. The Warrant and the Warrant
-------------------------------
Shares (collectively, the "Securities") shall not be transferable except upon
the conditions specified in the Purchase Agreement, which conditions are
intended to insure compliance with the provisions of the Securities Act and
applicable "blue sky" law (the "Law").
6.2 Restrictive Legend. Each certificate representing the Securities
------------------
or any other securities issued in respect of the Securities upon any stock
split, stock dividend, recapitalization, merger, consolidation or similar event,
shall (unless otherwise permitted by the provisions of the Purchase Agreement)
be stamped or otherwise imprinted with a legend substantially in the following
form (in addition to any legend required under applicable state securities
laws):
In the Case of Warrant and Warrant Shares:
-----------------------------------------
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "1933 ACT"). THE SECURITIES MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED UNLESS REGISTERED UNDER THE 1933 ACT AND QUALIFIED
UNDER APPLICABLE STATE SECURITIES LAWS OR UNLESS SUCH SALE, TRANSFER,
ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
THE 1933 ACT AND THE QUALIFICATION REQUIREMENTS OF APPLICABLE STATE
SECURITIES LAWS OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION AND QUALIFICATION ARE
NOT REQUIRED. THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE
RIGHTS OF HOLDERS THEREOF ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER
AND OTHER RESTRICTIONS, AND THE HOLDER OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE (INCLUDING ANY FUTURE HOLDERS) IS BOUND
1.1-7
<PAGE>
BY THE TERMS OF A UNIT PURCHASE AGREEMENT BETWEEN THE ORIGINAL PURCHASER
AND THE COMPANY (COPIES OF WHICH MAY BE OBTAINED FROM THE COMPANY).
6.3 Exchange of Warrant. Subject to the terms and conditions hereof,
-------------------
including the restrictions on transfer in this Section 6 and in the Purchase
Agreement, upon surrender of this Warrant to the Company with a duly executed
Assignment Form in the form attached hereto and funds sufficient to pay any
transfer tax, the Company shall, without charge, execute and deliver a new
Warrant or Warrants of like tenor in the name of the assignee named in such
Assignment Form and this Warrant shall promptly be canceled. The term "Warrant"
as used herein shall be deemed to include any Warrants issued in exchange for
this Warrant.
6.4 Ownership of Warrant. The Company may deem and treat the person
--------------------
in whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by anyone
other than the Company) for all purposes and shall not be affected by any notice
to the contrary, until presentation of this Warrant for registration of transfer
as provided in Section 6.3.
7. Modification and Waiver. Except as otherwise provided herein, this
-----------------------
Warrant and any provision hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which
enforcement of the same is sought.
8. Notices. Except as otherwise provided herein, any notice, request or
-------
other document required or permitted to be given or delivered to the holder
hereof or the Company shall be delivered or shall be sent by United States
certified or registered mail, postage prepaid, (or international delivery
service for international deliveries) to Holder at its address as shown on the
books of the Company or to the Company at the address indicated therefor in the
first paragraph of this Warrant.
9. Descriptive Headings and Governing Law. The descriptive headings of
--------------------------------------
the several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the laws of the State of California (without regard to its
conflicts of law provisions).
10. Lost Warrants or Stock Certificates. The Company represents and
-----------------------------------
warrants to Holder that upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction, or mutilation of any Warrant or stock
certificate and, in the case of any such loss, theft or destruction, upon
1.1-8
<PAGE>
receipt of an indemnity and, if requested, bond reasonably satisfactory to the
Company, or, in the case of any such mutilation, upon surrender and cancellation
of such Warrant or stock certificate, the Company at its expense will make and
deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost,
stolen, destroyed or mutilated Warrant or stock certificate.
11. Amendment. This Warrant may be amended only with the written approval
---------
of the Company and the Holder of this Warrant.
12. Binding Effect; Benefits. This Warrant shall inure to the benefit of
------------------------
and shall be binding upon the Company and the Warrantholder and their respective
heirs, legal representatives, successors and assigns. Nothing in this Warrant,
expressed or implied, is intended to or shall confer on any person other than
the Company and the Warrantholder, or their respective heirs, legal
representatives, successors or assigns, any rights, remedies, obligations or
liabilities under or by reason of this Warrant.
13. Fractional Shares. No fractional shares shall be issued upon exercise
-----------------
of this Warrant. The Company shall, in lieu of issuing any fractional share,
pay the Holder entitled to such fraction a sum in cash equal to such fraction
multiplied by the market price of the Common Stock, which shall be, on any date,
the closing price for the Common Stock or the closing bid if no sales were
reported, as quoted on the Nasdaq National Market.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its officers, thereunto duly authorized this 30th day of June, 1998.
Gensia Sicor Inc.
By:_____________________________
Name:
Title:
1.1-9
<PAGE>
FORM OF SUBSCRIPTION
--------------------
(To be signed only upon exercise of Warrant)
To: Gensia Sicor Inc.
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise such Warrant for, and to purchase thereunder,
________________ (________) shares of Common Stock of Gensia Sicor Inc. (the
"Company"), and herewith makes payment in the amount of $________ therefore.
The certificates for such shares should be issued in the name of, and delivered
to, ________________ whose address is ________________.
The undersigned represents, unless the exercise of this Warrant has
been registered under the Securities Act of 1933, as amended (the "Securities
Act"), that (i) the undersigned is acquiring such Common Stock for his or its
own account for investment and not with a view to or for sale in connection with
any distribution thereof (except for any resale pursuant to a registration
statement under the Securities Act), (ii) the undersigned has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of the undersigned's investment in the shares of Common Stock,
(iii) the undersigned has received all of the information the undersigned
requested from the Company and the undersigned considers necessary or
appropriate for deciding whether to purchase the shares, (iv) the undersigned
has the ability to bear the economic risks of the undersigned's prospective
investment and (v) the undersigned is able, without materially impairing his
financial condition, to hold the shares of Common Stock for an indefinite period
of time and to suffer complete loss on the undersigned's investment.
The undersigned is an "accredited investor" as defined in Regulation D
of the Securities and Exchange Commission on the date hereof.
DATED: ____________________
_______________________________________________
(Signature must conform in all respects to name
of holder as specified on the face of the
Warrant)
_______________________________________________
_______________________________________________
(Address)
1.1-10
<PAGE>
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT.
ASSIGNMENT FORM
---------------
(To be executed only upon transfer of this Warrant)
For value received, the undersigned registered holder of the within
Warrant hereby sells, assigns and transfers unto ____________________ (the
"Assignee") the right represented by such Warrant to purchase __________ Warrant
Shares and all other rights of the Warrantholder with respect thereto under the
within Warrant, and appoints _________________ as Attorney to make such transfer
on the books of Gensia Sicor Inc. maintained for such purpose, with full power
of substitution in the premises.
The undersigned also represents that, by assignment hereof, the
Assignee acknowledges that this Warrant and the Warrant Shares to be issued upon
exercise hereof are being acquired for investment and that the Assignee will not
offer, sell or otherwise dispose of this Warrant or any Warrant Shares to be
issued upon exercise hereof except under circumstances that will not result in a
violation of the Securities Act of 1933, as amended, or any state securities
laws. Further, the Assignee has acknowledged that upon exercise of this
Warrant, the Assignee shall, if requested by the Company, confirm in writing, in
a form satisfactory to the Company, that the Warrant Shares so purchased are
being acquired for investment and not with a view toward distribution or resale.
Dated: ____________________.
Signature ________________________________
________________________________
(Print Name)
________________________________
(Street Address)
________________________________
(City) (State) (Zip Code)
1.1-11
<PAGE>
Exhibit 2.1(a)
--------------
WIRE TRANSFER INSTRUCTIONS
Bank: Bank of New York
IOC565 Institutional Custody
New York, NY
ABA #: 021-000-018
Credit: 131375
Name of: Gensia Sicor Inc.
2.1(a)-1
<PAGE>
Exhibit 4.9
-----------
INVESTMENT REPRESENTATION STATEMENT
1. Acquisition Entirely for Own Account. Purchaser represents and
------------------------------------
warrants that Purchaser is acquiring the Securities solely for Purchaser's own
account for investment and not with a view to sale or distribution of the
Securities or any portion or component thereof, and Purchaser will not sell,
offer to sell or otherwise dispose of or distribute the Securities or any
portion or component thereof in any transaction other than a transaction
complying with the registration requirements of the Securities Act, and
applicable state securities or "Blue Sky" laws, or pursuant to an exemption
therefrom. Purchaser also represents that the entire legal and beneficial
interest of the Securities that Purchaser is acquiring is being acquired for,
and will be held for Purchaser's account only, and neither in whole nor in part
for any other person or entity.
2. Information Concerning the Company. Purchaser represents and
----------------------------------
warrants that Purchaser has been provided with such information concerning the
Company that Purchaser deems necessary and appropriate to enable Purchaser to
evaluate the financial risk inherent in making an investment in the Securities.
Purchaser further acknowledges that Purchaser has received satisfactory and
complete information concerning the business and financial condition of the
Company in response to all inquiries in respect thereof.
3. Economic Risk and Suitability. Purchaser represents and
-----------------------------
warrants as follows:
3.1 Purchaser realizes that Purchaser's purchase of the Securities
involves a high degree of risk and will be a highly speculative investment and
that Purchaser is able, without impairing Purchaser's financial condition, to
hold the Securities for an indefinite period of time and to suffer a complete
loss of Purchaser's investment.
3.2 Purchaser has carefully considered and has, to the extent
Purchaser believes such discussions necessary, discussed with Purchaser's
professional, legal, tax and financial advisors the suitability of an investment
in the Securities for the particular legal, tax and financial situation of
Purchaser and that Purchaser and/or Purchaser's advisors have determined that
the Securities are a suitable investment for Purchaser.
3.3 Purchaser has such knowledge and experience in business and
financial matters as will enable Purchaser to evaluate the merits and risks of
an investment in the Securities and to make an informed investment decision.
4.9-1
<PAGE>
3.4 Purchaser has carefully read this Agreement and the Company
has made available to Purchaser or Purchaser's advisors all information and
documents requested by Purchaser relating to investment in the Securities, and
has provided answers to Purchaser's satisfaction to all of Purchaser's questions
concerning the Company and the Securities to be acquired.
3.5 Purchaser understands that neither the Company nor any of its
officers/directors, has any obligation to register the Securities under any
federal or state securities act or law except as otherwise expressly set forth
in Section 5 of the Purchase Agreement.
3.6 All information that Purchaser has provided concerning himself
or herself, his or her financial position and (each of) his/her Purchaser
Representative(s), if any, is correct and complete as of the date set forth
below, and if there should be any material change in such information, Purchaser
will provide such information to the Company as soon as practicable thereafter.
3.7 Purchaser understands that the Company is relying on the truth
and accuracy of the declarations, representations, warranties and agreements
made by Purchaser to the Company herein in transferring the Securities to
Purchaser.
3.8 Purchaser confirms that Purchaser has received no general
solicitation or general advertisement and has attended no seminar or meeting
(whose attendees have been invited by any general solicitation or general
advertisement) and has received no advertisement, article, notice or other
communication published in any newspaper, magazine, or similar media or
broadcast or television or radio regarding the offering of the Securities.
4. Status of Purchaser. Purchaser represents and warrants that
-------------------
Purchaser is an "Accredited Investor", as defined in Rule 501 of the Commission
because Purchaser is either:
(a) A natural person whose individual net worth, or joint net
worth with that person's spouse, at the time of his/her
purchase, exceeds $1 million; or
(b) A natural person who had individual income in excess of
$200,000 in each of the two most recent years or joint income
with that person's spouse in excess of $300,000 in each of
those years and has a reasonable expectation of reaching the
same income level in the current year.
5. Residency. The undersigned is a bona fide resident of ________.
---------
4.9-2
<PAGE>
Exhibit 5.1
PILLSBURY MADISON & SUTRO LLP
2550 Hanover Street
Palo Alto, California 94304
January 16, 1998
Gensia Sicor Inc.
19 Hughes
Irvine, California 92618
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We are acting as counsel for Gensia Sicor Inc., a Delaware corporation (the
"Company"), in connection with the registration under the Securities Act of
1933, as amended, of 11,618,277 shares of Common Stock, par value $.01 per share
(the "Common Stock"), of the Company to be offered and sold by certain
stockholders of the Company (the "Selling Stockholders"), of which (i) 2,454,512
shares are currently issued and outstanding (the "Issued Shares"), (ii)
5,291,006 shares are issuable upon conversion of $20,000,000 in principal amount
of the Company's 2.675% Subordinated Convertible Notes due May 1, 2004 (the
"Note Shares") and (iii) up to 3,872,759 shares are potentially issuable upon
the issuance and exercise of Warrants (the "Warrant Shares"). In this regard we
have participated in the preparation of a Registration Statement on Form S-3
relating to such shares of Common Stock. Such Registration Statement, as
amended, is herein referred to as the "Registration Statement."
We are of the opinion that (i) the Issued Shares to be offered and sold by
the Selling Stockholders have been duly authorized and legally issued, fully
paid and nonassessable, (ii) that the Note Shares to be offered and sold by the
Selling Stockholders have been duly authorized and, when issued to the Selling
Stockholders by the Company in accordance with the terms of the Notes referenced
above, will be legally issued, fully paid and nonassessable and (iii) that the
Warrant Shares to be offered and sold by the Selling Stockholders have been duly
authorized and, when issued and sold to the Selling Stockholders by the Company
in accordance with the terms of the Warrants referenced above, will be legally
issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the use of our name under the caption "Legal
Matters" in the Registration Statement and in the Prospectus included therein.
Very truly yours,
/s/ Pillsbury Madison & Sutro LLP
[01885]
<PAGE>
EXHIBIT 23.1
------------
CONSENT OF ERNST & YOUNG, LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Gensia Sicor Inc.
for the registration of shares of its common stock and to the incorporation by
reference therein of our report dated February 21, 1997, except for Note 11 as
to which the date is March 27, 1997, with respect to the consolidated financial
statements of Gensia Sicor Inc. included in its Annual Report (Form 10-K/A) for
the year ended December 31, 1996, filed with the Securities and Exchange
Commission.
/s/ Ernst & Young LLP
San Diego, California
January 13, 1998
<PAGE>
EXHIBIT 23.2
------------
CONSENT OF KPMG ACCOUNTANTS N.V. INDEPENDENT AUDITORS
The Board of Directors
Gensia Sicor Inc.
We consent to the incorporation by reference of our report dated April 28, 1997,
with respect to the consolidated balance sheet of Rakepoll Holding B.V. and
subsidiaries as of December 31, 1996 and 1995, and the related consolidated
statements of operations, stockholders' equity and cash flows for each of the
years in the three years period ended December 31, 1996, which report is
incorporated by reference in the Form S-3 of Gensia Sicor Inc. expected to be
filed on or about January 15, 1998 and to the reference to our firm under the
heading "Experts" in the prospectus.
Rotterdam, January 15, 1998
/s/ KPMG Accountants NV
Ref: A. Vermaas
