UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
LEUKOSITE, INC.
(Name of Issuer)
Common Stock, par value $.01 per share
(Title of Class of Securities)
52728R 102
(CUSIP Number)
Kenneth M. Socha, Esq.
Perseus Capital, LLC
The Army and Navy Club Building
1627 I Street, N.W., Suite 610
Washington D.C. 20006
Tel. No.: (202) 452-0101
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
with a copy to
Bruce A. Gutenplan, Esq.
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
July 20, 1999
(Date of Event which Requires Filing of
this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject to this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purposes of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes.)
Continued on the following page(s)
Page 1 of 21 Pages
Exhibit Index: Page 21
<PAGE>
CUSIP No. 52728R 102 Page 2 of 21 Pages
SCHEDULE 13D
1 NAME OF REPORTING PERSON
Perseus Capital, LLC
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E) [ ]
6 CITIZENSHIP OR PLACE OR ORGANIZATION
Delaware
7 SOLE VOTING POWER
NUMBER OF 1,447,595(1)
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 1,447,595(1)
PERSON
WITH 10 SHARED DISPOSITIVE POWER
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,447,595(1)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.4%
14 TYPE OF REPORTING PERSON*
OO
- ---------------
(1) Please see Item 5 for a description of each of the Reporting Persons
(as defined herein) interest in the Company (as defined herein).
* SEE INSTRUCTIONS BEFORE FILLING OUT
<PAGE>
CUSIP No. 52728R 102 Page 3 of 21 Pages
SCHEDULE 13D
1 NAME OF REPORTING PERSON
Perseus Management, LLC
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not Applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E) [ ]
6 CITIZENSHIP OR PLACE OR ORGANIZATION
Delaware
7 SOLE VOTING POWER
NUMBER OF 1,447,595(1)
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 1,447,595(1)
WITH
10 SHARED DISPOSITIVE POWER
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,447,595(1)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.4%
14 TYPE OF REPORTING PERSON*
OO
- ---------------
(1) Please see Item 5 for a description of each of the Reporting Persons
(as defined herein) interest in the Company (as defined herein).
* SEE INSTRUCTIONS BEFORE FILLING OUT
<PAGE>
CUSIP No. 52728R 102 Page 4 of 21 Pages
SCHEDULE 13D
1 NAME OF REPORTING PERSON
Perseus, LLC
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not Applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E) [ ]
6 CITIZENSHIP OR PLACE OR ORGANIZATION
Delaware
7 SOLE VOTING POWER
NUMBER OF 1,447,595(1)
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 1,447,595(1)
WITH
10 SHARED DISPOSITIVE POWER
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,447,595(1)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.4%
14 TYPE OF REPORTING PERSON*
OO
- ---------------
(1) Please see Item 5 for a description of each of the Reporting Persons
(as defined herein) interest in the Company (as defined herein).
* SEE INSTRUCTIONS BEFORE FILLING OUT
<PAGE>
CUSIP No. 52728R 102 Page 5 of 21 Pages
SCHEDULE 13D
1 NAME OF REPORTING PERSON
Rappahannock Investment Company
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not Applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E) [ ]
6 CITIZENSHIP OR PLACE OR ORGANIZATION
Delaware
7 SOLE VOTING POWER
NUMBER OF 1,447,595(1)
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 1,447,595(1)
WITH
10 SHARED DISPOSITIVE POWER
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,447,595(1)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.4%
14 TYPE OF REPORTING PERSON*
CO
- ---------------
(1) Please see Item 5 for a description of each of the Reporting Persons
(as defined herein) interest in the Company (as defined herein).
* SEE INSTRUCTIONS BEFORE FILLING OUT
<PAGE>
CUSIP No. 52728R 102 Page 6 of 21 Pages
SCHEDULE 13D
1 NAME OF REPORTING PERSON
Frank H. Pearl (in the capacity described herein)
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not Applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E) [ ]
6 CITIZENSHIP OR PLACE OR ORGANIZATION
Delaware
7 SOLE VOTING POWER
NUMBER OF 1,447,595(1)
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 1,447,595(1)
WITH
10 SHARED DISPOSITIVE POWER
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,447,595(1)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.4%
14 TYPE OF REPORTING PERSON*
IN
- ---------------
(1) Please see Item 5 for a description of each of the Reporting Persons
(as defined herein) interest in the Company (as defined herein).
* SEE INSTRUCTIONS BEFORE FILLING OUT
<PAGE>
CUSIP No. 52728R 102 Page 7 of 21 Pages
Item 1. Security and Issuer.
This Statement on Schedule 13D relates to the Common Stock, par value
$.01 (the "Common Stock"), of LeukoSite, Inc., a Delaware corporation (the
"Company"), whose principal executive office is located at 215 First Street,
Cambridge, MA 02142. This statement on Schedule 13D is being filed by the
Reporting Persons (as defined below) to report the acquisition by Perseus
Capital, LLC of more than 5% of the outstanding shares of the Company, as a
result of which each of the Reporting Persons may be deemed the beneficial owner
of more than 5% of the outstanding shares of the Company. Item 2. Identity and
Background.
(a), (b), (c) and (f). This Statement on Schedule 13D is being filed on
behalf of each of the following persons (collectively, the "Reporting Persons"):
(i) Perseus Capital, LLC, a Delaware limited liability company (the
"Purchaser");
(ii) Perseus Management, LLC, a Delaware limited liability company
("Perseus Management");
(iii) Perseus, LLC, a Delaware limited liability company ("Perseus");
(iv) Rappahannock Investment Company, a Delaware corporation
("Rappahannock"); and
(v) Mr. Frank H. Pearl ("Mr. Pearl").
The Purchaser was formed in order to make, manage and sell or otherwise
dispose of investments in various companies selected by Perseus Management and
to fulfill such other purposes as may be determined by Perseus
<PAGE>
CUSIP No. 52728R 102 Page 8 of 21 Pages
Management from time to time. Set forth on Annex A hereto and incorporated by
reference in response to this Item 2 and elsewhere in this Schedule 13D as
applicable is a list of executive officers of the Purchaser.
Perseus Management is the sole manager of the Purchaser. Perseus
Management, in its capacity as the sole manager of the Purchaser, has discretion
to direct the investment and voting decisions of the Purchaser and as such
Perseus Management may be deemed a beneficial owner of the Common Stock held for
the account of the Purchaser. Perseus Management was formed in order to manage
the Purchaser and to make investments through the Purchaser and to fulfill such
other purposes as may be determined by Perseus from time to time. Set forth on
Annex B hereto and incorporated by reference in response to this Item 2 and
elsewhere in this Schedule 13D as applicable is a list of executive officers of
Perseus Management.
Perseus is the sole manager of Perseus Management. Perseus, in its
capacity as the sole manager of Perseus Management, has discretion to direct the
investment and voting decisions of Perseus Management and as such Perseus may be
deemed a beneficial owner of the Common Stock held for the account of the
Purchaser. Perseus was formed in order to engage in the acquiring, holding and
disposing of investments in various companies for investment purposes. Set forth
on Annex C hereto and incorporated by reference in response to this Item 2 and
elsewhere in this Schedule 13D as applicable is a list of executive officers of
Perseus.
Rappahannock is the sole member of Perseus. Rappahannock, in its
capacity as the sole member of Perseus, has discretion to direct the investment
and voting decisions of Perseus and as such Rappahannock may be deemed a
beneficial owner of the Common Stock held for the account of the Purchaser.
Rappahannock
<PAGE>
CUSIP No. 52728R 102 Page 9 of 21 Pages
was formed in order to engage in the acquiring, holding and disposing of
investments in various companies for investment purposes.
Mr. Pearl is the sole shareholder and sole director of Rappahannock.
Mr. Pearl, by virtue of his capacity as the sole shareholder and sole director
of Rappahannock, has discretion to direct the investment and voting decisions of
Rappahannock and as such may be deemed a beneficial owner of the Common Stock
held for the account of the Purchaser.
Accordingly, pursuant to the regulations promulgated under Section
13(d) of the Securities Exchange Act of 1934, (i) Perseus Management, (ii)
Perseus, (iii) Rappahannock and (iv) Mr. Pearl each may be deemed a beneficial
owner of the Common Stock held for the account of the Purchaser.
The address of the principal business and principal offices of (i) the
Purchaser, (ii) Perseus Management, (iii) Perseus, (iv) Rappahannock and (v) Mr.
Pearl is The Army and Navy Club Building, 1627 I Street, N.W., Suite 610,
Washington D.C. 20006. The present principal occupation or employment of Mr.
Pearl is as an executive officer of Perseus and its related entities. Mr. Pearl
is a United States citizen.
The executive officers of Rappahannock are Mr. Pearl, Chairman, Mr.
Kenneth M. Socha ("Mr. Socha"), Senior Vice President, and Mr. Rodd Macklin
("Mr. Macklin"), Controller and Secretary. The address of the principal business
and principal offices of Messrs. Socha and Macklin is The Army and Navy Club
Building, 1627 I Street, N.W., Suite 610, Washington D.C. 20006. The present
principal occupation or employment of each of Messrs. Socha and Macklin is as
executive
<PAGE>
CUSIP No. 52728R 102 Page 10 of 21 Pages
officers of Perseus and its related entities. Each of Messrs. Socha and Macklin
is a United States citizen.
(d) and (e). Except as otherwise disclosed below, during the past five
years, neither any Reporting Person nor, to the best knowledge of each Reporting
Person, any individual otherwise identified in response to Item 2, has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of which any such
person was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws. Item
3. Source and Amount of Funds or Other Consideration.
Pursuant to a Stock Purchase Agreement, dated as of June 22, 1999 (the
"Stock Purchase Agreement"), between the Company and the Purchaser, the Company
issued, and the Purchaser acquired from the Company, 1,030,928 shares of the
Company's Common Stock for an aggregate purchase price of $10,000,000 (the
"Purchase Price") and the source of which was capital contributions from the
members of the Purchaser. The closing of the transaction contemplated by the
Stock Purchase Agreement took place on July 20, 1999 (the "Closing Date").
The Common Stock (or securities derivative thereof) held for the
account of the Purchaser may be held through margin accounts maintained with
brokers, which extend margin credit as and when required to open or carry
positions in their margin accounts, subject to applicable federal margin
regulations, stock exchange rules and such firms' credit policies. The positions
which may be held in
<PAGE>
CUSIP No. 52728R 102 Page 11 of 21 Pages
the margin accounts, including the Common Stock (or securities derivative
thereof), are pledged as collateral security for the repayment of debit balances
in the respective accounts.
Item 4. Purpose of Transaction.
Except as disclosed herein, the Reporting Persons have acquired the
shares of Common Stock for investment purposes.
A copy of the Stock Purchase Agreement is attached hereto as Exhibit 1
and incorporated by reference herein and a copy of the Registration Rights
Agreement (the "Rights Agreement") is attached hereto as Exhibit 2 and
incorporated herein by reference. Set forth below is a summary of the material
terms of the Stock Purchase Agreement and Rights Agreement.
The following summary is qualified in its entirety by reference to the
Stock Purchase Agreement and Rights Agreement.
Terms of the Stock Purchase Agreement
Pursuant to the terms of the Stock Purchase Agreement, during the six
(6) month period following the Closing Date, (a) the respective chief executive
officers of the Company and the Purchaser shall, in good faith, discuss the
identities of persons who shall be potential nominees (as a representative of
the Purchaser) for a seat on the Board of Directors of the Company, (b) after
such discussions in good faith the Purchaser shall, at its sole discretion,
provide to the Company a list of the names of three to five persons who shall be
such potential nominees and, (c) after such list shall have been provided by the
Purchaser to the Company, the Company shall select one (1) person from such list
and such person's name shall be brought to the next meeting of the full Board of
the Company for consideration as a potential
<PAGE>
CUSIP No. 52728R 102 Page 12 of 21 Pages
member of the Board; provided, that in the event that such person brought to the
full Board is not approved as a member of the Board, then the parties agree that
they shall be obligated to repeat the process set forth herein a second time.
Terms of the Rights Agreement
Pursuant to the Rights Agreement, the Company granted the Purchaser
certain demand registration rights as described more fully in the Rights
Agreement in connection with shares of Common Stock issued or issuable pursuant
to the Stock Purchase Agreement ("Registrable Securities"). The purpose of such
registration rights is to facilitate the Purchaser's ability to dispose of its
Registrable Securities in a public sale and the grant of such registration
rights to the Purchaser under the Rights Agreement does not represent any
present intention on behalf of the Purchaser to dispose of any Registrable
Securities to be covered by such a registration statement, although such rights
may be exercised in the future. Additional Disclosure
The Reporting Persons may from time to time acquire additional shares
of Common Stock in the open market or in privately negotiated transactions,
subject to availability of Common Stock at prices deemed favorable, the
Company's business or financial condition and other factors and conditions the
Reporting Persons deem appropriate. Alternatively, the Reporting Persons may
sell all or a portion of the Common Stock issued pursuant to the Stock Purchase
Agreement in privately negotiated transactions or in the open market pursuant to
the exercise of certain registration rights granted pursuant to the Stock
Purchase Agreement as described above, in each case subject to the factors and
conditions referred to above and to the terms of the Stock Purchase Agreement
and Rights Agreement, as the case may be.
<PAGE>
CUSIP No. 52728R 102 Page 13 of 21 Pages
In addition, the Reporting Persons may formulate other purposes, plans or
proposals regarding the Company or any of its securities to the extent deemed
advisable in light of general investment and trading policies, market conditions
or other factors.
Except as described in the Stock Purchase Agreement, or the Rights
Agreement, and as otherwise set forth in this Schedule 13D, no Reporting Person
or any individual otherwise identified in Item 2 has any present plans or
proposals which relate to or would result in: (a) the acquisition by any person
of additional securities of the Company, or the disposition of securities of the
Company; (b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any of its subsidiaries;
(c) a sale or transfer or a material amount of assets of the Company or of any
of its subsidiaries; (d) any change in the present board of directors or
management of the Company, including any plans or proposals to change the number
or term of directors or to fill any existing vacancies on the board; (e) any
material change in the present capitalization or dividend policy of the Company;
(f) any other material change in the Company's business or corporate structure;
(g) changes in the Company's charter, bylaws or instruments corresponding
thereto or other actions which may impede the acquisition of control of the
Company by any person; (h) causing a class of securities of the Company to be
delisted from a national securities exchange or to cease to be authorized to be
quoted in an inter-dealer quotation system of a registered national securities
association; (i) a class of equity securities of the Company becoming eligible
for termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934; or (j) any action similar to any of those enumerated
above.
<PAGE>
CUSIP No. 52728R 102 Page 14 of 21 Pages
Item 5. Interest in Securities of the Issuer.
(a) As set forth above, on July 20, 1999, the Company issued to the
Purchaser, and the Purchaser acquired, 1,030,928 shares of Common Stock. On July
1, 1998, the Company issued to the Purchaser, and the Purchaser acquired,
416,667 shares of Common Stock.
Accordingly, as of July 20, 1999, each of the Reporting Persons may be
deemed to beneficially own an aggregate of 1,447,595 shares of Common Stock
which, based on calculations made in accordance with Rule 13d-3(d) and there
being 12,918,306 shares of Common Stock outstanding on June 16, 1999 as
disclosed by the Company to the Purchaser in the Stock Purchase Agreement,
represents approximately 10.4% of the outstanding shares of Common Stock on a
diluted basis in accordance with Rule 13d-3(d).
(b) By virtue of the relationships between and among the Reporting
Persons described in Item 2 of this Statement on Schedule 13D, each of the
Reporting Persons may be deemed to have sole power to direct the voting and
disposition of the 1,447,595 shares of Common Stock beneficially owned by the
Purchaser.
(c) Except as set forth above, no Reporting Person nor, to the best
knowledge of each Reporting Person, any person identified in Item 2 hereof,
beneficially owns any shares of Common Stock or has effected any transaction in
shares of Common Stock during the preceding 60 days.
(d) The partners of the Purchaser have the right to participate in the
receipt of dividends from, or proceeds from the sale of, the Securities held for
the account of the Purchaser in accordance with their ownership interests in the
Purchaser.
<PAGE>
CUSIP No. 52728R 102 Page 15 of 21 Pages
Paragraph (e) of Item 5 of Schedule 13D is not applicable to this
filing.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to the Common Stock of the Issuer.
Pursuant to the Rights Agreement, which is attached hereto as Exhibit 2
and incorporated herein by reference, the Company has granted the Purchaser,
among other things, the right, on the terms and conditions set forth therein, to
require the Company to register for sale to the public the shares of Common
Stock issued pursuant to the Stock Purchase Agreement.
From time to time, each of the Reporting Persons may lend portfolio
securities to brokers, banks or other financial institutions. These loans
typically obligate the borrower to return the securities, or an equal amount of
securities of the same class, to the lender and typically provide that the
borrower is entitled to exercise voting rights and to retain dividends during
the term of the loan. From time to time, to the extent permitted by applicable
laws, each of the Reporting Persons may borrow securities, including the Common
Stock (or securities derivative thereof), for the purpose of effecting, and may
effect, short sale transactions, and may purchase securities for the purpose of
closing out short positions in such securities.
Except as described elsewhere in this Schedule 13D and as set forth in
the Stock Purchase Agreement and Rights Agreement, copies of which are attached
hereto as Exhibits 1 and 2, respectively, and are incorporated herein by
reference, to the best knowledge of the Reporting Persons, there exist no
contracts, arrangements, understandings or relationships (legal or otherwise)
among the persons named in Item 2 and between such persons and any person with
respect to any securities of the Company, including but not limited to transfer
or voting of any securities of the
<PAGE>
CUSIP No. 52728R 102 Page 16 of 21 Pages
Company, finder's fees, joint ventures, loan or option arrangements, puts or
calls, guarantees of profits, division of profits or loss, or the giving or
withholding of proxies. Item 7. Material To Be Filed as Exhibits.
1. Stock Purchase Agreement, dated as of June 22, 1999, among the
Company and Perseus Capital, LLC, a Delaware limited partnership.
2. Registration Rights Agreement, dated July 20, 1999, among the
Company and Perseus Capital, LLC, a Delaware limited partnership.
3. Joint Filing Agreement, dated July 30, 1999, among (i) Perseus
Capital, LLC, (ii) Perseus Management, LLC, (iii) Perseus, LLC, (iv)
Rappahannock Investment Company and (v) Mr. Frank H. Pearl.
<PAGE>
CUSIP No. 52728R 102 Page 17 of 21 Pages
SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief,
each of the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: July 30, 1999
PERSEUS CAPITAL, LLC
By: /s/ KENNETH M. SOCHA
--------------------
Name: Kenneth M. Socha
Title: Executive Vice President
PERSEUS MANAGEMENT, LLC
By: /s/ KENNETH M. SOCHA
--------------------
Name: Kenneth M. Socha
Title: Executive Vice President
PERSEUS, LLC
By: /s/ KENNETH M. SOCHA
--------------------
Name: Kenneth M. Socha
Title: Executive Vice President
RAPPAHANNOCK INVESTMENT COMPANY
By: /s/ KENNETH M. SOCHA
--------------------
Name: Kenneth M. Socha
Title: Senior Vice President
MR. FRANK H. PEARL
By: /s/ FRANK H. PEARL
------------------
Name: Frank H. Pearl
<PAGE>
CUSIP No. 52728R 102 Page 18 of 21 Pages
ANNEX A
Executive Officers of Perseus Capital, LLC
<TABLE>
<CAPTION>
Name/Title/Citizenship Principal Occupation Business Address
- ---------------------- -------------------- ----------------
<S> <C> <C>
Frank H. Pearl Executive officer of Perseus, The Army and Navy Club
Chairman, President and Chief LLC and its related entities Building
Executive Officer 1627 I Street, N.W., Suite 610
United States Washington D.C. 20006
Kenneth M. Socha Executive officer of Perseus, The Army and Navy Club
Executive Vice President LLC and its related entities Building
United States 1627 I Street, N.W., Suite 610
Washington D.C. 20006
Rodd Macklin Executive officer of Perseus, The Army and Navy Club
Secretary and Treasurer LLC and its related entities Building
United States 1627 I Street, N.W., Suite 610
Washington D.C. 20006
</TABLE>
Except as otherwise disclosed elsewhere in this Schedule 13D, to the
best of the Reporting Persons' knowledge:
(a) None of the above persons hold any Common Stock or securities
derivative thereof.
(b) None of the above persons has any contracts, arrangements,
understandings or relationships with respect to the Common Stock or securities
derivative thereof.
<PAGE>
CUSIP No. 52728R 102 Page 19 of 21 Pages
ANNEX B
Executive Officers of Perseus Management, LLC
<TABLE>
<CAPTION>
Name/Title/Citizenship Principal Occupation Business Address
- ---------------------- -------------------- ----------------
<S> <C> <C>
Frank H. Pearl Executive officer of Perseus, The Army and Navy Club
Chairman, President and Chief LLC and its related entities Building
Executive Officer 1627 I Street, N.W., Suite 610
United States Washington D.C. 20006
Kenneth M. Socha Executive officer of Perseus, The Army and Navy Club
Executive Vice President LLC and its related entities Building
United States 1627 I Street, N.W., Suite 610
Washington D.C. 20006
Rodd Macklin Executive officer of Perseus, The Army and Navy Club
Secretary and Treasurer LLC and its related entities Building
United States 1627 I Street, N.W., Suite 610
Washington D.C. 20006
</TABLE>
Except as otherwise disclosed elsewhere in this Schedule 13D, to the
best of the Reporting Persons' knowledge:
(a) None of the above persons hold any Common Stock or securities
derivative thereof.
(b) None of the above persons has any contracts, arrangements,
understandings or relationships with respect to the Common Stock or securities
derivative thereof.
<PAGE>
CUSIP No. 52728R 102 Page 20 of 21 Pages
ANNEX C
Executive Officers of Perseus, LLC
<TABLE>
<CAPTION>
Name/Title/Citizenship Principal Occupation Business Address
- ---------------------- -------------------- ----------------
<S> <C> <C>
Frank H. Pearl Executive officer of Perseus, The Army and Navy Club
Chairman, President and Chief LLC and its related entities Building
Executive Officer 1627 I Street, N.W., Suite 610
United States Washington D.C. 20006
Kenneth M. Socha Executive officer of Perseus, The Army and Navy Club
Executive Vice President LLC and its related entities Building
United States 1627 I Street, N.W., Suite 610
Washington D.C. 20006
Rodd Macklin Executive officer of Perseus, The Army and Navy Club
Secretary and Treasurer LLC and its related entities Building
United States 1627 I Street, N.W., Suite 610
Washington D.C. 20006
</TABLE>
Except as otherwise disclosed elsewhere in this Schedule 13D, to the
best of the Reporting Persons' knowledge:
(a) None of the above persons hold any Common Stock or securities
derivative thereof.
(b) None of the above persons has any contracts, arrangements,
understandings or relationships with respect to the Common Stock or securities
derivative thereof.
<PAGE>
CUSIP No. 52728R 102 Page 21 of 21 Pages
EXHIBIT INDEX
1. Stock Purchase Agreement, dated as of June 22, 1999, among the
Company and Perseus Capital, LLC, a Delaware limited partnership.
2. Registration Rights Agreement, dated July 20, 1999, among the
Company and Perseus Capital, LLC, a Delaware limited partnership.
3. Joint Filing Agreement, dated July 30, 1999, among (i) Perseus
Capital, LLC, (ii) Perseus Management, LLC, (iii) Perseus, LLC, (iv)
Rappahannock Investment Company and (v) Mr. Frank H. Pearl.
EXHIBIT 1
LEUKOSITE, INC.
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT is dated as of June 22, 1999 by and
between (i) LEUKOSITE, INC., a Delaware corporation with its principal office at
215 First Street, Cambridge, Massachusetts 02142 (the "Company"), (ii) Perseus
Capital LLC, a Delaware limited liability company, with its principal office at
1627 I N.W., Suite 610, Washington, D.C. 20006 (the "Purchaser") and (iii) any
permitted assignee pursuant to Section 10.9(a) hereof.
WHEREAS, the Company desires to issue and sell to the Purchaser, and
the Purchaser desires to purchase from the Company, an aggregate of 1,030,928
shares (the "Shares") of the authorized but unissued shares of common stock,
$.01 par value per share, of the Company (the "Common Stock"), at an aggregate
purchase price of $10,000,000, all upon the terms and subject to the conditions
set forth in this Agreement.
NOW THEREFORE, in consideration of the mutual agreements,
representations, warranties and covenants herein contained, the parties hereto
agree as follows:
1. Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
(a) "Affiliate" of a party means any corporation or other
business entity controlled by, controlling or under common control with, such
party. For this purpose "control" shall include direct or indirect beneficial
ownership of more than fifty percent (50%) of the voting power or economic
interest in such corporation or other business entity.
(b) "Closing" shall have the meaning set forth in Section 2.2
of this Agreement.
(c) "Closing Date" means the date of the Closing.
(d) "Exchange Act" means the Securities Exchange Act of 1934,
as amended, and all of the rules and regulations promulgated thereunder.
(e) "Person" (whether or not capitalized) shall mean an
individual, partnership, limited liability company, corporation, association,
trust, joint venture, unincorporated organization, and any government,
governmental department or agency or political subdivision thereof.
(f) "Registration Rights Agreement" shall mean that certain
Registration Rights Agreement, dated as of the date hereof, between the Company
and the Purchaser, in the form attached hereto as Exhibit A.
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(g) "SEC" shall mean the Securities and Exchange Commission.
(h) "Securities" shall mean the Shares, any shares of Common
Stock of the Company, any securities convertible into, exercisable for or
exchangeable for shares of Common Stock or preferred stock of the Company, or
any direct or indirect beneficial ownership in any rights, warrants or options
to acquire, or in any securities convertible into or exchangeable for, any
securities (voting or non-voting) of the Company.
(i) "Securities Act" shall mean the Securities Act of 1933, as
amended, and all of the rules and regulations promulgated thereunder.
(j) "Voting Securities" shall mean any Securities which
entitle the holder thereof to vote (whether at a meeting of stockholders, by
written consent without a meeting or otherwise), directly or indirectly, alone
or in concert with others on any matters for which the holder of such Securities
is entitled to vote thereon.
2. Purchase and Sale of Shares.
2.1 Purchase and Sale. Subject to and upon the terms and
conditions set forth in this Agreement, the Company agrees to issue and sell to
the Purchaser, and the Purchaser hereby agrees to purchase from the Company, at
the Closing, the Shares at a purchase price of $9.70 per share. The aggregate
purchase price payable by the Purchaser to the Company for all of the Shares
shall be $10,000,000.
2.2 Closing. The closing of the transactions contemplated
under this Agreement (the "Closing") shall take place at the Boston offices of
Bingham Dana LLP, 150 Federal Street, Boston, Massachusetts 02110 on such date
and at such time as may be agreed upon between the Purchaser and the Company;
provided, that the Closing Date shall be no earlier than the date on which the
Company consummates its proposed acquisition (the "ProScript Acquisition") of
ProScript, Inc., a Delaware corporation ("ProScript"), and no later than the
date which is one (1) business day after the Company consummates the ProScript
Acquisition. At the Closing, the Company shall deliver to the Purchaser a single
stock certificate, registered in the name of the Purchaser, representing the
number of shares of Common Stock purchased by the Purchaser, against payment of
the purchase price therefor by wire transfer of immediately available funds to
such account or accounts as the Company shall designate in writing.
2.3 Perseus-Soros Management, LLC Fee. At the Closing, subject
to and upon the terms and conditions set forth in this Agreement, the Company
shall pay to Perseus, LLC, a Delaware limited liability company, a fee in an
aggregate amount equal to $200,000, by wire transfer of immediately available
funds to such account or accounts as Perseus, LLC shall designate in writing.
3. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Purchaser as follows:
3.1 Incorporation. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and is qualified to do business in each jurisdiction in which the
character of its properties or the nature of its business requires such
qualification, except where the failure to so qualify would not have a material
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adverse effect upon the Company. The Company has all requisite corporate power
and authority to carry on its business as now conducted and to carry out the
transactions contemplated hereby.
3.2 Capitalization. The authorized capital stock of the
Company consists of (i) 25,000,000 shares of Common Stock, of which 12,918,306
shares were outstanding as of June 16, 1999, and (ii) 5,000,000 shares of
preferred stock, of which no shares are outstanding on the date hereof. Except
as set forth in Schedule 3.2 hereto, there are no existing options, warrants,
calls, preemptive (or similar) rights, subscriptions or other rights,
agreements, arrangements or commitments of any character obligating the Company
to issue, transfer or sell, or cause to be issued, transferred or sold, any
shares of the capital stock of the Company or other equity interests in the
Company or any securities convertible into or exchangeable for such shares of
capital stock or other equity interests, and there are no outstanding
contractual obligations of the Company to repurchase, redeem or otherwise
acquire any shares of its capital stock or other equity interests.
3.3 Authorization. All corporate action on the part of the
Company, its officers, directors and stockholders necessary for the
authorization, execution, delivery and performance of this Agreement and the
Registration Rights Agreement and the consummation of the transactions
contemplated herein and therein has been taken. When executed and delivered by
the Company, each of this Agreement and the Registration Rights Agreement shall
constitute the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as such may be limited
by bankruptcy, insolvency, reorganization or other laws affecting creditors'
rights generally and by general equitable principles, and except as the same may
be limited by the indemnification obligations of the Company under the
Registration Rights Agreement. The Company has all requisite corporate power to
enter into this Agreement and the Registration Rights Agreement and to carry out
and perform its obligations under the terms of this Agreement and the
Registration Rights Agreement.
3.4 Valid Issuance of the Shares. The Shares will, upon
issuance pursuant to the terms hereof, be duly authorized and validly issued,
fully paid and nonassessable and not subject to any encumbrances, preemptive
rights or any other similar contractual rights of the stockholders of the
Company or others.
3.5 Financial Statements. The Company has furnished to the
Purchaser its audited Statements of Income, Stockholders' Equity and Cash Flows
for each of the fiscal years ended December 31, 1997 and 1998, its audited
Consolidated Balance Sheet as of December 31, 1998, its unaudited Statements of
Income, Stockholders' Equity and Cash Flows for the period from January 1, 1999
to March 31, 1999, and its unaudited Balance Sheet as of March 31, 1999. All
such financial statements are hereinafter referred to collectively as the
"Financial Statements". The Financial Statements have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis during the periods involved, and fairly present, in all material respects,
the financial position of the Company and the results of its operations as of
the date and for the periods indicated thereon, except that the unaudited
financial statements referred to above may not be in accordance with generally
accepted accounting principles because of the absence of footnotes normally
contained therein and are subject to normal year-end audit adjustments which,
individually and in the aggregate, will not be material. Since March 31, 1999,
there has been no material adverse change (actual or threatened) in the assets,
liabilities (contingent or other), affairs, operations, prospects or condition
(financial or other) of the Company.
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3.6 SEC Documents. The Company has furnished to the Purchaser,
a true and complete copy of the Company's Annual Report on Form 10-K for the
year ended December 31, 1998 (the "Annual Report"), the Company's Quarterly
Report on Form 10-Q for the three months ended March 31, 1999, and any other
statement, report, registration statement (other than registration statements on
Form S-8) or definitive proxy statement filed by the Company with the SEC during
the period commencing March 31, 1999 and ending on the date hereof. The Company
will, promptly upon the filing thereof, also furnish to the Purchaser all
statements, reports (including, without limitation, Quarterly Reports on Form
10-Q and Current Reports on Form 8-K), registration statements and definitive
proxy statements filed by the Company with the SEC during the period commencing
on the date hereof and ending on the Closing Date (all such materials required
to be furnished to the Purchaser pursuant to this sentence or pursuant to the
next preceding sentence of this Section 3.6 being called, collectively, the "SEC
Documents"). As of their respective filing dates, the SEC Documents complied in
all material respects with the requirements of the Exchange Act or the
Securities Act, as applicable, and none of the SEC Documents contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading, as of
their respective filing dates.
3.7 Consents. Except for (i) the filing and effectiveness of
any registration required to be filed by the Company under the Securities Act in
connection with the exercise by the Purchaser of its rights under the
Registration Rights Agreement and (ii) any required state "blue sky" law filings
in connection with the transactions contemplated under such registration
statement, all consents, approvals, orders and authorizations required on the
part of the Company in connection with the execution, delivery or performance of
this Agreement and the Registration Rights Agreement and the consummation of the
transactions contemplated herein and therein have been obtained and will be
effective as of the Closing Date.
3.8 No Conflict. The execution and delivery of this Agreement
and the Registration Rights Agreement by the Company and the consummation of the
transactions contemplated hereby and thereby will not conflict with or result in
any violation of or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or to a loss of a material benefit under (i) any provision of the
Certificate of Incorporation or By-laws of the Company or (ii) any agreement or
instrument, permit, franchise, license, judgment, order, statute, law,
ordinance, rule or regulation, applicable to the Company or its properties or
assets.
3.9 Brokers or Finders. The Company has not dealt with any
broker or finder in connection with the transactions contemplated by this
Agreement, and the Company has not incurred, and shall not incur, directly or
indirectly, any liability for any brokerage or finders' fees or agents
commissions or any similar charges in connection with this Agreement or any
transaction contemplated hereby.
3.10 Nasdaq National Market. The Common Stock is listed on the
Nasdaq National Market System, and there are no proceedings to revoke or suspend
such listing.
3.11 Absence of Litigation. There is no pending (or to the
best of the Company's knowledge, threatened) action, suit, proceeding or
investigation against the Company or any of its direct or indirect subsidiaries.
<PAGE>
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3.12 No Undisclosed Liabilities. Other than as disclosed on
the Financial Statements delivered to Purchaser, since March 31, 1999, the
Company has incurred no material liabilities or obligations, fixed or
contingent, matured or unmatured or otherwise, except for liabilities or
obligations that, individually or in the aggregate, do not or would not have a
material adverse effect on the financial condition or business of the Company
and its subsidiaries other than (a) liabilities and obligations arising in the
ordinary course of business and (b) other liabilities disclosed in the schedules
to this Agreement.
3.13 Contracts. All contracts, agreements and instruments
required to be filed as an exhibit to the Annual Report are legal, valid,
binding and in full force and effect and, to the knowledge of the Company, are
enforceable by the Company in accordance with their respective terms, subject to
(a) laws of general application relating to bankruptcy, insolvency and the
relief of debtors, (b) rules of law governing specific performance, injunctive
relief or other equitable remedies, and (c) actions or omissions of Persons
other than the Company, provided, however, that the Company has no knowledge of
any material actions or omissions by such other Persons. Except as disclosed in
the Annual Report and other than contracts or agreements relating exclusively to
the Company's pre-clinical and clinical development and manufacturing
activities, the Company has not granted rights to manufacture, produce,
assemble, license, market or sell its products to any other person and is not
bound by any contract or agreement that materially restricts the Company's
exclusive right to develop, manufacture, assemble, distribute or sell its
products.
3.14 Subsidiaries; Joint Ventures. The Company has no
subsidiaries other than LeukoSite (U.K.) Limited, a company organized under the
laws of England and Wales, and CytoMed, Inc., a Delaware corporation, each of
which are wholly-owned subsidiaries of the Company, and does not otherwise own
or control, directly or indirectly, any other Person, other than L&I Partners
L.P., a Delaware limited partnership. Except as described in the Annual Report
(including the Joint Venture Agreement (as defined below) as incorporated by
reference thereto), the Company is not a participant in any joint venture,
partnership, or similar arrangement material to its business. The Company is a
party to a joint venture agreement (the "Joint Venture Agreement") with Ilex
Oncology, Inc ("Ilex"). In the Company's judgement, and in the context of the
Joint Venture Agreement, the Company's commercial working relationship with Ilex
is satisfactory and, to the knowledge of the Company, (i) Ilex has not within
the last twelve months threatened to cancel or otherwise terminate the Joint
Venture Agreement with the Company in accordance with its terms, (ii) Ilex has
not notified the Company of Ilex's intention to materially modify or amend the
terms of the Joint Venture Agreement, and (iii) the consummation of the
transactions contemplated by this Agreement and the Registration Rights
Agreement will not materially adversely affect the relationship of the Company
with Ilex.
3.15 Taxes. Each of the Company and any subsidiary of the
Company has filed (or has had filed on its behalf) or will timely file or will
cause to be timely filed, all material Tax Returns (as defined below) required
by applicable law to be filed by it prior to or as of the date of the Closing,
and such Tax Returns are, or will be at the time of filing, true, correct and
complete in all material respects. Each of the Company and any subsidiary of the
Company has paid (or has had paid on its behalf) or, where payment is not yet
due, has established (or has had established on its behalf and for its sole
benefit and recourse) or will establish or cause to be established in accordance
with generally accepted accounting principles on or before the date of the
Closing an adequate accrual for the payment of, all material Taxes (as defined
below) due with respect to any period ending prior to or as of the date of the
Closing. "Taxes" shall mean any and all taxes, charges, fees, levies or other
assessments, including income, gross receipts,
<PAGE>
-6-
excise, real or personal property, sales, withholding, social security,
retirement, unemployment, occupation, use, goods and services, license, value
added, capital, net worth, payroll, profits, franchise, transfer and recording
taxes, fees and charges, and any other taxes, assessment or similar charges
imposed by the Internal Revenue Service or any taxing authority (whether state,
county, local or foreign) (each, a "Taxing Authority"), including any interest,
fines, penalties or additional amounts attributable to or imposed upon any such
taxes or other assessments. "Tax Return" shall mean any report, return,
document, declaration or other information or filing required to be supplied to
any Taxing Authority, including information returns, any documents with respect
to accompanying payments of estimated Taxes, or with respect to or accompanying
requests for extensions of time in which to file any such return, report,
document, declaration or other information. There are no claims or assessments
pending against the Company or any subsidiary of the Company for any material
alleged deficiency in any Tax, and neither the Company nor any subsidiary of the
Company has been notified in writing of any material proposed Tax claims or
assessments against the Company or any subsidiary of the Company. To the
Company's knowledge, no Tax Return of the Company or any subsidiary of the
Company is or has been the subject of an examination by a Taxing Authority. Each
of the Company and any subsidiary of the Company has withheld from each payment
made to any of its past or present employees, officers and directors, and any
other person, the amount of all material Taxes and other deductions required to
be withheld therefrom and paid the same to the proper Taxing Authority within
the time required by law.
3.16 Pricing. The Company has not granted to, or agreed to
give, HealthCare Ventures V, L.P. (or any other entity through which it chooses
to invest in the Company) ("HealthCare"), in connection with the sale of shares
of Common Stock by the Company to HealthCare pursuant to that certain Stock
Purchase Agreement, dated of even date herewith, the right to purchase such
shares of Common Stock on economic terms better than the economic terms granted
by the Company to the Purchaser hereunder.
4. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants to the Company as follows:
4.1 Authorization. All action on the part of the Purchaser
and, if applicable, its officers, directors, managers, members, shareholders
and/or partners necessary for the authorization, execution, delivery and
performance of this Agreement and the Registration Rights Agreement and the
consummation of the transactions contemplated herein and therein has been taken.
When executed and delivered, each of this Agreement and the Registration Rights
Agreement will constitute the legal, valid and binding obligation of the
Purchaser, enforceable against the Purchaser in accordance with its terms,
except as such may be limited by bankruptcy, insolvency, reorganization or other
laws affecting creditors' rights generally and by general equitable principles.
The Purchaser has all requisite power and authority to enter into each of this
Agreement and the Registration Rights Agreement and to carry out and perform its
obligations under the terms of this Agreement and the Registration Rights
Agreement.
4.2 Purchase Entirely for Own Account. The Purchaser is
acquiring the Shares for its own account for investment and not for resale or
with a view to distribution thereof in violation of the Securities Act.
4.3 Investor Status; Etc. The Purchaser certifies and
represents to the Company that it is an "Accredited Investor" as defined in Rule
501 of Regulation D promulgated under the Securities Act and was not organized
for the purpose of acquiring any of the Shares.
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The Purchaser's financial condition is such that it is able to bear the risk of
holding the Shares for an indefinite period of time and the risk of loss of its
entire investment. The Purchaser has been afforded the opportunity to ask
questions of and receive answers from the management of the Company concerning
this investment and has sufficient knowledge and experience in investing in
companies similar to the Company in terms of the Company's stage of development
so as to be able to evaluate the risks and merits of its investment in the
Company.
4.4 Shares Not Registered. The Purchaser understands that the
Shares have not been registered under the Securities Act, by reason of their
issuance by the Company in a transaction exempt from the registration
requirements of the Securities Act, and that the Shares must continue to be held
by the Purchaser unless a subsequent disposition thereof is registered under the
Securities Act or is exempt from such registration. The Purchaser understands
that the exemptions from registration afforded by Rule 144 (the provisions of
which are known to it) promulgated under the Securities Act depend on the
satisfaction of various conditions, and that, if applicable, Rule 144 may afford
the basis for sales only in limited amounts.
4.5 No Conflict. The execution and delivery of this Agreement
and the Registration Rights Agreement by the Purchaser and the consummation of
the transactions contemplated hereby and thereby will not conflict with or
result in any violation of or default by the Purchaser (with or without notice
or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to a loss of a material
benefit under (i) any provision of the organizational documents of the Purchaser
or (ii) any agreement or instrument, permit, franchise, license, judgment,
order, statute, law, ordinance, rule or regulations, applicable to the Purchaser
or its respective properties or assets.
4.6 Brokers. The Purchaser has not retained, utilized or been
represented by any broker or finder in connection with the transactions
contemplated by this Agreement.
4.7 Consents. All consents, approvals, orders and
authorizations required on the part of the Purchaser in connection with the
execution, delivery or performance of this Agreement and the consummation of the
transactions contemplated herein have been obtained and are effective as of the
Closing Date.
4.8 Investment Representations.
The Purchaser represents and warrants to the Company that: (i)
it is a Delaware limited liability company, (ii) each of its constituent members
is an "accredited investor" as such term is defined in Rule 501(a) promulgated
under the Securities Act, (iii) its principal office is located in Washington,
DC, and (iv) the principal office of its general partner is located in
Washington, DC.
4.9 Purchaser and Affiliates. The total number of shares of
Common Stock currently owned by the Purchaser and all Affiliates of the
Purchaser is, in the aggregate, 416,667. There are no other Affiliates of the
Purchaser that own Common Stock or other securities of the Company.
5. Conditions Precedent.
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5.1. Conditions to the Obligation of the Purchaser to
Consummate the Closing. The obligation of the Purchaser to consummate the
Closing and to purchase and pay for the Shares is subject to the satisfaction of
the following conditions precedent:
(a) The representations and warranties contained herein of the
Company shall be true and correct in all material respects on and as of the
Closing Date with the same force and effect as though made on and as of the
Closing Date.
(b) The Registration Rights Agreement shall have been executed
and delivered by the Company.
(c) There shall have been no material adverse change (actual
or threatened) in the assets, liabilities (contingent or other), affairs,
operations, or condition (financial or other) of the Company prior to the
Closing Date; and the Company shall have performed all obligations and
conditions herein required to be performed or observed by the Company on or
prior to the Closing Date.
(d) No proceeding challenging this Agreement or the
transactions contemplated hereby, or seeking to prohibit, alter, prevent or
materially delay the Closing, shall have been instituted before any court,
arbitrator or governmental body, agency or official and shall be pending.
(e) The purchase of and payment for the Shares by the
Purchaser shall not be prohibited by any law or governmental order or
regulation. All necessary consents, approvals, licenses, permits, orders and
authorizations of, or registrations, declarations and filings with, any
governmental or administrative agency or of any other person with respect to any
of the transactions contemplated hereby shall have been duly obtained or made
and shall be in full force and effect.
(f) All instruments and corporate proceedings of the Company
in connection with the transactions contemplated by this Agreement to be
consummated at the Closing shall be satisfactory in form and substance to the
Purchaser, and the Purchaser shall have received copies (executed or certified,
as may be appropriate) of all documents which the Purchaser may have reasonably
requested in connection with such transactions.
(g) The Purchaser shall have received from Bingham Dana LLP,
counsel to the Company, an opinion addressed to it, dated the Closing Date and
substantially in the form of Exhibit B hereto.
(h) The Purchaser shall have received true, complete and
correct copies of the final material agreement(s) between the Company and
ProScript relating to the ProScript Acquisition and the ProScript Acquisition
shall have been consummated.
(i) The Purchaser shall have received a certificate from the
Company, in form and substance satisfactory to the Purchaser, dated the Closing
Date and signed by a secretary or an assistant secretary of the Company,
certifying (i) that attached copies of the Restated Certificate of Incorporation
(the "Charter"), the Amended and Restated By-Laws (the "By-Laws") and
resolutions of the Board of Directors of the Company approving this Agreement,
the Registration Rights Agreement and the transactions contemplated hereby and
thereby, are all true, complete and correct and remain in full force and effect
as of the Closing Date, and (ii) as to
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the incumbency and specimen signature of each officer of the Company executing
this Agreement, the Registration Rights Agreement and any other document
delivered in connection herewith on behalf of the Company.
(j) The Purchaser shall have received a certificate from the
Company, in form and substance satisfactory to the Purchaser, dated the Closing
Date and signed by the Company's chief financial officer, certifying that (i)
the representations and warranties of the Company contained in Section 3 hereof
are true and correct in all material respects on the Closing Date and (ii) the
Company has performed and complied with in all material respects all of the
agreements and conditions set forth or contemplated herein that are required to
be performed or complied with by the Company on or before the Closing Date.
5.2. Conditions to the Obligation of the Company to Consummate
the Closing. The obligation of the Company to consummate the Closing and to
issue and sell the Shares to the Purchaser at the Closing is subject to the
satisfaction of the following conditions precedent:
(a) The representations and warranties contained herein of the
Purchaser shall be true and correct in all material respects on and as of the
Closing Date with the same force and effect as though made on and as of the
Closing Date.
(b) The Registration Rights Agreement shall have been executed
and delivered by the Purchaser.
(c) The Purchaser shall have performed all obligations and
conditions herein required to be performed or observed by the Purchaser on or
prior to the Closing Date.
(d) No proceeding challenging this Agreement or the
transactions contemplated hereby, or seeking to prohibit, alter, prevent or
materially delay the Closing, shall have been instituted before any court,
arbitrator or governmental body, agency or official and shall be pending.
(e) The sale of the Shares by the Company shall not be
prohibited by any law or governmental order or regulation. All necessary
consents, approvals, licenses, permits, orders and authorizations of, or
registrations, declarations and filings with, any governmental or administrative
agency or of any other person with respect to any of the transactions
contemplated hereby shall have been duly obtained or made and shall be in full
force and effect.
(f) All instruments and corporate proceedings in connection
with the transactions contemplated by this Agreement to be consummated at the
Closing shall be satisfactory in form and substance to the Company, and the
Company shall have received counterpart originals, or certified or other copies
of all documents, including without limitation records of corporate or other
proceedings, which it may have reasonably requested in connection therewith.
(g) The Company shall have received a certificate from the
Purchaser, in form and substance satisfactory to the Company, dated the Closing
Date and signed by an authorized person in the name, and on behalf, of the
Purchaser, certifying that (i) the representations and warranties of the
Purchaser contained in Section 4 hereof are true and correct in all material
respects on the Closing Date and (ii) the Purchaser has performed and complied
<PAGE>
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with in all material respects all of the agreements and conditions set forth or
contemplated herein that are required to be performed or complied with by the
Purchaser on or before the Closing Date.
(h) Evidence reasonably satisfactory to the Company that any
assignee (other than the Joint Fund (as defined below)) to whom the Purchaser
transfers rights under Section 7.4 hereof (pursuant to Section 10.9(a) hereof),
any such transfer having been made, is an entity which is intended to qualify as
a "venture capital operating company" under the Department of Labor plan asset
regulation.
6. Standstill Obligations.
(a) The Purchaser hereby agrees with the Company and covenants
that, so long as it or any of its Affiliates is the record or beneficial owner
of any Securities, neither it nor its Affiliates will directly or indirectly,
without the prior written consent of the Company, in any manner:
(i) acquire, offer or propose to acquire, solicit an
offer to sell or agree to acquire, directly or indirectly, alone or in concert
with others, by purchase or otherwise, any direct or indirect "beneficial
ownership" (such term, for purposes of this Agreement, shall have the meaning
provided therefor under the rules and regulations promulgated by the SEC under
Section 13(d) of the Exchange Act) in any Securities, such that the aggregate
ownership (whether direct or indirect, of record or beneficial) of the Purchaser
(and all permitted assignees) and the Affiliates of the Purchaser (and all
Affiliates of the permitted assignees) in the Company shall increase, after the
Closing Date, beyond an additional three percent (3%) of the total number of
outstanding shares of Common Stock on a fully diluted basis as of the Closing
Date (provided, however, that, notwithstanding the foregoing provisions of this
clause (i), the Purchaser may acquire the Shares pursuant to, and in accordance
with, the provisions of this Agreement);
(ii) make, or in any way participate in, directly or
indirectly, alone or in concert with others, any "solicitation" of "proxies" or
"consents" (as such terms are used in the proxy rules of the SEC promulgated
pursuant to Section 14 of the Exchange Act) to vote for the election or removal
of directors of the Company;
(iii) otherwise act, directly or indirectly, alone or
in concert with others, to seek to propose to any of the Company's stockholders
any merger, business combination, restructuring, recapitalization or other
transaction to or with the Company that, in each case, would involve or result
in a Change of Control (as defined below) of the Company; or
(iv) otherwise seek, directly or indirectly, alone or
in concert with others, to nominate any person for election as a director of the
Company who is not nominated by the then incumbent directors of the Company.
(b) None of the Purchaser and any Affiliate of the Purchaser
shall form, become a member of, or otherwise participate in any way in, any
"group" (as such term is defined under the rules and regulations promulgated by
the SEC under Section 13(d) of the Exchange Act) that engages in any of the
activities that are prohibited under Section 6(a) hereof.
<PAGE>
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(c) Notwithstanding anything expressed or implied in this
Section 6 to the contrary, the Purchaser hereby agrees that it and its
Affiliates will take any and all steps reasonably requested by the Company in
writing (including, without limitation, granting proxies) to ensure that any and
all of Voting Securities beneficially owned by the Purchaser or any of the
Affiliates of the Purchaser are present or represented (whether in person or by
proxy) at each meeting of stockholders of the Company for the sole purpose of
establishing a valid quorum to transact business at such meeting.
(d) In the event that the Purchaser or any Affiliate of the
Purchaser breaches any of its obligations under this Section 6 and such breach
is not cured within ten (10) business days, then (i) the Company, in addition to
any other legal or equitable remedies which it may have, may enforce its rights
under this Section 6 by action for specific performance and (ii) to the extent
that such breach arises as a result of any vote cast or proxy given by the
Purchaser or any Affiliate of the Purchaser, in violation of the provisions of
this Section 6, such vote or proxy, as the case may be, shall be null and void
and the Company shall refuse to recognize and shall not give effect to such vote
or proxy.
(e) For purposes of this Section 6, "Change of Control" shall
mean any event, transaction or occurrence (whether alone or as a result of a
series of related events, transactions or occurrence) which either (i) results
in a change of beneficial ownership of the Company of greater than
twenty-percent (20%) or (ii) results in the Purchaser (and any permitted
assignee) and all Affiliates of the Purchaser (and all Affiliates of any
permitted assignee) owning or holding, whether beneficially or of record,
directly or indirectly, in the aggregate twenty percent (20%) or greater of the
Securities of the Company.
Notwithstanding Section 10.9(b) hereof, the obligations, covenants and
duties under this Section 6 shall not be assignable by the Purchaser.
7. Certain Covenants and Agreements.
7.1. Transfer of Securities. The Purchaser shall not sell,
assign, pledge, transfer or otherwise dispose or encumber any of the Shares,
except (i) pursuant to an effective registration statement under the Securities
Act, (ii) to an Affiliate (so long as such affiliate agrees to be bound by the
terms and provisions of this Agreement as if, and to the fullest extent as, the
Purchaser) or to the Joint Fund or the Soros Entity pursuant to Section 10.9(a)
below, or (iii) pursuant to an available exemption from registration under the
Securities Act and applicable state securities laws and, if requested by the
Company, upon delivery by the Purchaser of either an opinion of counsel of the
Purchaser reasonably satisfactory to the Company to the effect that the proposed
transfer is exempt from registration under the Securities Act and applicable
state securities laws or a representation letter of the Purchaser reasonably
satisfactory to the Company setting forth a factual basis for concluding that
such proposed transfer is exempt from registration under the Securities Act and
applicable state securities laws. Any transfer or purported transfer of the
Shares in violation of this Section 7.1 shall be void. The Company shall not
register any transfer of the Shares in violation of this Section 7.1. The
Company may, and may instruct any transfer agent for the Company, to place such
stop transfer orders as may be required on the transfer books of the Company in
order to ensure compliance with the provisions of this Section 7.1.
7.2. Legends. To the extent applicable, each certificate or
other document evidencing any of the Shares shall be endorsed with the legend
set forth below, and the Purchaser
<PAGE>
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covenants that, except to the extent such restrictions are waived by the
Company, it shall not transfer the shares represented by any such certificate
without complying with the restrictions on transfer described in this Agreement
and the legends endorsed on such certificate:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED,
SOLD, ASSIGNED, PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER SAID ACT
AND, IF REQUESTED BY THE COMPANY, UPON DELIVERY OF EITHER AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT THE PROPOSED
TRANSFER IS EXEMPT FROM SAID ACT OR OF A REPRESENTATION LETTER SETTING
FORTH A FACTUAL BASIS FOR CONCLUDING THAT THE PROPOSED TRANSFER IS
EXEMPT FROM SAID ACT."
7.3 Publicity. From and after the date of this Agreement,
except to the extent required by applicable laws, rules, regulations or stock
exchange requirements, neither (i) the Company or any of its Affiliates nor (ii)
the Purchaser or any of its Affiliates shall, without the written consent of the
other, make any public announcement or issue any press release with respect to
the transactions contemplated by this Agreement. In no event will either (i) the
Company or any of its Affiliates or (ii) the Purchaser or any of its Affiliates
make any public announcement or issue any press release with respect to the
transactions contemplated by this Agreement without consulting with the other
party, to the extent feasible, as to the content of such public announcement or
press release.
7.4 Management Rights. Subject to the limitations set forth in
the last paragraph of this Section 7.4, from and after the Closing Date, if the
Purchaser (or other permitted assignee) is not represented on the Company's
Board of Directors and so long as the Purchaser (and any permitted assignee) and
any Affiliates of the Purchaser (and all Affiliates of any permitted assignee)
own or hold, in the aggregate, not less than 257,000 shares of the Common Stock
(subject to adjustment made for any stock dividend, split-up or subdivision or
any combination or reclassification affecting the Common Stock after the Closing
Date), then the Purchaser shall have the following rights:
(a) The Company shall provide the Purchaser with a
copy of any materials to be distributed or discussed at meetings of the Board of
Directors at the same time as provided to members of the Board of Directors,
except that the Purchaser may be excluded from access to any material or meeting
or portion thereof (i) if the Company believes, upon advice of counsel, that
such exclusion is reasonably necessary to preserve the attorney-client privilege
for matters with respect to which the loss of such privilege could be meaningful
for the Company's business, operations or prospects, or (ii) to protect highly
confidential or proprietary information, the disclosure of which conflicts with,
breaches or could cause a default under any agreement, contract, arrangement or
other legally binding obligation of the Company to a third party.
Notwithstanding the foregoing, if the Purchaser is excluded from access to any
material as a result of clause (ii) in the preceding sentence and the Purchaser
determines in any particular case that access to such material or meeting or
portion thereof may be important to its having appropriate management rights as
a "venture capital operating company" under the Department of Labor's plan asset
regulation, then the Purchaser shall have the right to request that the Company,
<PAGE>
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and the Company shall be obligated to, use reasonable efforts to obtain the
consent or waiver of such third party to permit disclosure to, or permit
attendance by, the Purchaser hereunder.
(b) The Purchaser shall be entitled, from time to
time, to make proposals, recommendations and suggestions to the Company relating
to the business and affairs of the Company.
(c) The Purchaser shall be entitled, at the
Purchaser's expense and with reasonable prior notice to the Company, to discuss
the Company's business and affairs with its officers, directors and independent
accountants.
(d) The Purchaser shall be entitled, at all
reasonable times, in reasonable intervals and at the Purchaser's expense, to
examine such books, records, documents and other written information in the
possession of the Company relating to its affairs as the Purchaser may
reasonably request, provided that access to highly confidential or proprietary
information and facilities need not be provided to the Purchaser for the same
reasons set forth in subparagraph (a)(ii) above, subject to the last sentence of
subparagraph (a) above.
(e) The Company shall permit the Purchaser, at all
reasonable times, in reasonable intervals and at the Purchaser's expense, to
visit and inspect the Company's properties, provided that the Company shall not
be obligated to provide access to highly confidential or proprietary information
and properties for the same reasons set forth in subparagraph (a)(ii) above,
subject to the last sentence of subparagraph (a) above, and provided, further,
that such inspection by the Purchaser does not disrupt or cause a disruption in
the Company's ordinary course of business.
Notwithstanding Section 10.9(b) hereof, the rights contained
under this Section 7.4 shall not be assignable by the Purchaser (except to a
permitted assignee pursuant to Section 10.9(a) and provided that, such transfer
having been made, each such assignee is intended to qualify as "venture capital
operating company" under the Department of Labor plan asset regulation) and
shall automatically and without further action terminate at such time as the
Purchaser (and its permitted assignees) and the Affiliates of the Purchaser (and
all Affiliates of any permitted assignees) shall cease to own or hold, in the
aggregate, at least 257,000 shares of Common Stock (subject to adjustment made
for any stock dividend, split-up or subdivision or any combination or
reclassification affecting the Common Stock after the Closing Date) or shall
attempt to transfer such rights in violation of the foregoing prohibition. The
Purchaser (and any representative of the Purchaser) shall hold in confidence and
trust, and not use or disclose, any confidential information provided to or
learned by it (or him/her) in connection with the rights granted to the
Purchaser by the Company under this Section 7.4. The Purchaser shall execute and
deliver a confidentiality and non-disclosure agreement to the Company in the
event that the Purchaser is entitled to any of the rights set forth in this
Section 7.4, which agreement shall remain in effect for so long as the Purchaser
is entitled to, and for five (5) years after the Purchaser ceases to be entitled
to, any of the rights set forth in this Section 7.4.
7.5. Board Representative. During the six (6) month period
following the Closing Date, (a) the respective chief executive officers of the
Company and the Purchaser shall, in good faith, discuss the identities of
persons who shall be potential nominees (as a representative of the Purchaser)
for a seat on the Board of Directors of the Company, (b) after such discussions
in good faith the Purchaser shall, at its sole discretion, provide to the
Company a list of the names of three to five persons who shall be such potential
nominees and, (c) after such
<PAGE>
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list shall have been provided by the Purchaser to the Company, the Company shall
select one (1) person from such list and such person's name shall be brought to
the next meeting of the full Board of the Company for consideration as a
potential member of the Board; provided, that in the event that such person
brought to the full Board is not approved as a member of the Board, then the
parties agree that they shall be obligated to repeat the process set forth
herein a second time. Notwithstanding Section 10.9(b) hereof, the rights
contained under this Section 7.5 shall not be assignable by the Purchaser
(except to a permitted assignee pursuant to Section 10.9(a)).
8. Termination.
8.1 Termination. Subject to Section 8.2, this Agreement may be
terminated at any time prior to the Closing as follows:
(a) by the Purchaser if there has been a material
breach by the Company of any representation, warranty, covenant or agreement of
the Company contained in this Agreement, which has not been cured by the Company
within 10 days after written notice from the Purchaser;
(b) by the Company if there has been a material
breach by the Purchaser of any representation, warranty, covenant or agreement
of the Purchaser contained in this Agreement, which has not been cured by the
Purchaser within 10 days after written notice from the Company;
(c) by the Company or the Purchaser, if the Closing
shall not have occurred on or before August 6, 1999; provided, however, that the
right to terminate this Agreement under this Section 8.1(c) shall not be
available to any party whose failure to fulfill any obligation or condition
under this Agreement has been the cause of, or resulted in, the failure of the
Closing to occur on or before such date;
(d) by the Company or the Purchaser if (i) there
shall be a final nonappealable order of a federal or state court in effect
preventing consummation of the transactions contemplated by this Agreement or
(ii) there shall be any action taken, or any statute, rule, regulation or order
enacted, promulgated or issued or deemed applicable to the transactions
contemplated by this Agreement by any governmental entity which would make
consummation of the transactions contemplated by this Agreement illegal;
provided, however, that the party seeking to terminate this Agreement must use
all reasonable efforts to remove such judgment, injunction, order or decree; or
(e) by mutual written consent of the Company and the
Purchaser.
8.2 Effect of Termination. If this Agreement is terminated
pursuant to Section 8.1, this Agreement shall become void and of no effect with
no liability on the part of any party hereto, except that Sections 7.4
(Publicity), 8.2 (Effect of Termination), and 10 (Miscellaneous Provisions)
shall survive the termination hereof for a period of one year, and each party
hereto shall hold in confidence and trust, and not use or disclose to any third
parties, the terms and conditions of this Agreement and any confidential
information provided to or learned by such party in connection with the
negotiation, execution and delivery of this Agreement.
9. Indemnification.
<PAGE>
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9.1 General.
(a) By the Company. The Company agrees to indemnify,
defend and hold harmless the Purchaser and its Affiliates and their respective
officers, directors, agents, employees, subsidiaries, partners, members and
controlling persons (collectively, the "Purchaser Indemnitees") to the fullest
extent permitted by law from and against any and all claims, losses,
liabilities, damages, deficiencies, judgements, assessments, fines, settlements,
costs or expenses (including interest, penalties and reasonable fees,
disbursements and other charges of counsel) (collectively, "Losses") based upon,
arising out of or otherwise in respect of any breach by the Company or its
Affiliates of any representation, warranty, covenant or agreement of the Company
contained in this Agreement.
(b) By the Purchaser. The Purchaser agrees to
indemnify, defend and hold harmless the Company and its Affiliates and their
respective officers, directors, agents, employees, subsidiaries, partners,
members and controlling persons (the "Company Indemnitees") to the fullest
extent permitted by law from and against any and all Losses based upon, arising
out of or otherwise in respect of any breach by the Purchaser or any Affiliate
of the Purchaser of any representation, warranty, covenant or agreement of the
Purchaser or any Affiliate of the Purchaser contained in this Agreement.
9.2 Claims
All claims for indemnification by a Company Indemnitee or a
Purchaser Indemnitee pursuant to this Section 9 shall be made as
follows:
(a) If a Company Indemnitee or a Purchaser Indemnitee has
incurred or suffered Losses for which it is entitled to indemnification
under this Section 9, such Company Indemnitee or Purchaser Indemnitee,
as the case may be, shall give prompt written notice of such claim (a
"Claim Notice") to the Purchaser or the Company, as applicable. Each
Claim Notice shall state the amount of claimed Losses (the "Claimed
Amount"), if known, and the basis for such claim.
(b) Within 20 days after delivery of a Claim Notice, the
indemnifying party under this Section 9 (the "Indemnifying Party")
shall provide to the Company Indemnitee or the Purchaser Indemnitee, as
the case may be (the "Indemnified Party"), a written response (the
"Response Notice") in which the Indemnifying Party shall: (i) agree
that all of the Claimed Amount is owed to the Indemnified Party, (ii)
agree that part, but not all, of the Claimed Amount (the "Agreed
Amount") is owed to the Indemnified Party, or (iii) contest that any of
the Claimed Amount is owed to the Indemnified Party. The Indemnifying
Party may contest the payment of all or a portion of the Claimed Amount
only based upon a good faith belief that all or such portion of the
Claimed Amount does not constitute Losses for which the Indemnified
Party is entitled to indemnification under this Section 9. If no
Response Notice is delivered by the Indemnifying Party within such
20-day period, the Indemnifying Party shall be deemed to have agreed
that all of the Claimed Amount is owed to the Indemnified Party.
(c) If the Indemnifying Party in the Response Notice agrees
(or is deemed to have agreed) that all of the Claimed Amount is owed to
the Indemnified Party, the Indemnifying Party shall owe to the
Indemnified Party an amount equal to the Claimed Amount to be paid in
the manner set forth in this Section 9. If the Indemnifying Party in
<PAGE>
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the Response Notice agrees that part, but not all, of the Claimed
Amount is owed to the Indemnified Party, the Indemnifying Party shall
owe to the Indemnified Party an amount equal to the agreed amount set
forth in such Response Notice to be paid in the manner set forth in
this Section 9.
(d) No delay on the part of the Indemnified Party in notifying
the Indemnifying Party shall relieve the Indemnifying Party of any
liability or obligation hereunder except to the extent of any actual
damage, liability or prejudice caused by or arising out of such delay.
9.3. Payment of Claims. An Indemnifying Party shall make payment of
any portion of any Claimed Amount that such Indemnifying Party has agreed in a
Response Notice that it owes to an Indemnified Party or that such Indemnifying
Party is deemed to have agreed it owes to such Indemnifying Party, said payment
to be made within thirty (30) days after such Response Notice is delivered by
such Indemnifying Party or should have been delivered by such Indemnifying
Party, as the case may be.
9.4. Limitations.
(a) Time for Claims. No Indemnifying Party will be liable for
any Losses hereunder unless a written claim for indemnification is given by the
Indemnified Party to the Indemnifying Party on or prior to (i) with respect to a
breach of a representation or warranty, the expiration of such representation or
warranty, and (ii) with respect to a breach of a covenant or agreement
(including without limitation the covenants and agreements set forth in Sections
7.4, 7.5 and 6), one year after the expiration (in accordance with its terms and
conditions) of such covenant or agreement.
(b) Maximum Amount. No Indemnifying Party will be liable for
any Losses hereunder in excess of $10,000,000 with respect to claims for
breaches of representations and warranties.
9.5 Applicability; Exclusivity. Notwithstanding any term to the
contrary in this Section 9, the indemnification and contribution provisions of
the Registration Rights Agreement shall govern any claim made with respect to
registration statements filed pursuant thereto or sales made thereunder. The
parties hereby acknowledge and agree that the sole and exclusive remedies of the
parties hereto in respect of any and all claims relating to any breach or
purported breach of any representation, warranty, covenant or agreement that is
contained in this Agreement will be pursuant to the indemnification provisions
of this Section 9, except that all parties shall always retain the right to
pursue and obtain injunctive relief in addition to any other rights or remedies
hereunder.
10. Miscellaneous Provisions.
10.1 Rights Cumulative. Each and all of the various rights,
powers and remedies of the parties shall be considered to be cumulative with and
in addition to any other rights, powers and remedies which such parties may have
at law or in equity in the event of the breach of any of the terms of this
Agreement. The exercise or partial exercise of any right, power or remedy shall
neither constitute the exclusive election thereof nor the waiver of any other
right, power or remedy available to such party.
<PAGE>
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10.2 Pronouns. All pronouns or any variation thereof shall be
deemed to refer to the masculine, feminine or neuter, singular or plural, as the
identity of the person, persons, entity or entities may require.
10.3 Notices.
(a) Any notices, reports or other correspondence (hereinafter
collectively referred to as "correspondence") required or permitted to be given
hereunder shall be sent by postage prepaid first class mail, courier or telecopy
or delivered by hand to the party to whom such correspondence is required or
permitted to be given hereunder. The date of giving any notice shall be the date
of its actual receipt.
(b) All correspondence to the Company shall be addressed as
follows:
LeukoSite, Inc.
215 First Street
Cambridge, MA 02142
Attention: Christopher K. Mirabelli,
President and Chief Executive Officer
Telecopier: (617) 278-3399
with a copy to:
Bingham Dana LLP
150 Federal Street
Boston, Massachusetts 02110
Attention: Julio E. Vega, Esq.
Telecopier: (617) 951-8736
(c) All correspondence to the Purchaser shall be
addressed as follows:
Perseus Capital, LLC
The Army and Navy Club Building
1627 I Street, N.W., Suite 610
Washington, D.C. 20006
Telecopy: (202) 463-6215
Attention: Kenneth M. Socha, Esq.
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Telecopy: (212) 757-3990
Attention: Bruce A. Gutenplan, Esq.
(d) Any entity may change the address to which correspondence
to it is to be addressed by notification as provided for herein.
<PAGE>
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10.4 Captions. The captions and paragraph headings of this
Agreement are solely for the convenience of reference and shall not affect its
interpretation.
10.5 Severability. Should any part or provision of this
Agreement be held unenforceable or in conflict with the applicable laws or
regulations of any jurisdiction, the invalid or unenforceable part or provisions
shall be replaced with a provision which accomplishes, to the extent possible,
the original business purpose of such part or provision in a valid and
enforceable manner, and the remainder of this Agreement shall remain binding
upon the parties hereto.
10.6 Governing Law. This Agreement shall be governed by and
construed in accordance with the internal and substantive laws of the
Commonwealth of Massachusetts and without regard to any conflicts of laws
concepts which would apply the substantive law of some other jurisdiction.
10.7 Waiver. No waiver of any term, provision or condition of
this Agreement, whether by conduct or otherwise, in any one or more instances,
shall be deemed to be, or be construed as, a further or continuing waiver of any
such term, provision or condition or as a waiver of any other term, provision or
condition of this Agreement.
10.8 Expenses. Each party shall pay its own expenses in
connection with the preparation, execution and delivery of this Agreement and
the Registration Rights Agreement.
10.9 Assignment.
(a) Joint Fund and Soros Entity. Subject to the limitations
contained below and in Sections 6, 7.4 and 7.5 hereof, the Purchaser may assign,
in whole or in part, the rights and obligations hereunder to either (i)
Perseus-Soros BioPharmaceutical Fund, LP, a Delaware limited partnership (the
"Joint Fund"), or (ii) Soros Fund Management LLC, a Delaware limited liability
company, or a controlled investment fund or affiliate thereof (the "Soros
Entity"); provided, that the Purchaser may assign the rights and obligations
under Section 7.5 hereunder only in whole (and not in part) and only to the
Joint Fund. As conditions precedent to the Purchaser assigning the rights and
obligations hereunder pursuant to the foregoing sentence, such assignee (whether
the Joint Fund or the Soros Entity) (a) shall agree to be bound by and become
subject to all of the rights, obligations, terms and conditions of this
Agreement applicable to, and to the same extent as the Purchaser, including
without limitation Sections 6 (Standstill), 7.4 (Management Rights) (to the
extent applicable), and 9.1 (Indemnification), (b) shall sign any and all
documents, agreements and certificates requested by the Company to effect such
agreement to be bound by the rights, obligations, terms and conditions of this
Agreement, including an assumption agreement and/or instrument of adherence
reasonable requested by the Company, and (c) shall certify that the
representations and warranties set forth in Section 4 hereof are true and
correct, as of the date of the assignment or transfer, as if made by such
assignee (except that with respect to Section 4.9, such representation and
warranty shall be modified so as to be true and correct as to such particular
assignee). In the event that the Purchaser assigns its rights and obligations
hereunder in accordance with this Section 10.9(a) in whole (and not in part) to
a permitted transferee, then the Purchaser shall continue to be bound only by
the covenants, obligations and agreements of the Purchaser and its Affiliates
contained in Sections 6 (Standstill) and 9.1 (Indemnification) (it being
understood that the Purchaser shall be obligated to indemnify the Company only
with respect to breaches by itself and its Affiliates and that such obligation
shall be several and not joint with respect to permitted transferees who shall
become "Purchasers" hereunder)).
<PAGE>
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(b) General. The rights and obligations of any party hereto
shall inure to the benefit of and shall be binding upon the authorized
successors and permitted assigns of such party. Subject to paragraph (a) above
and the limitations set forth in Sections 6, 7.4 and 7.5 hereof, this Agreement
and the rights and duties of the Purchaser set forth herein may be freely
assigned or delegated, as the case may be, in whole or in part, by the Purchaser
to any person (other than the Joint Fund and the Soros Entity which shall be
governed by Section 10.1(a) above) to whom the Purchaser may transfer any of the
Shares purchased or acquired by the Purchaser; provided that the transfer
complies with the terms of Sections 7.1 and 7.2 of this Agreement and the
assigning party shall promptly notify the Company in writing of such assignment
and shall remain liable (both directly and as guarantor) with respect to all
obligations so assigned. In the event of any assignment, the assignee shall
specifically assume and be bound by the provisions of the Agreement by executing
and agreeing to an assumption agreement and/or instrument of adherence
reasonably acceptable to the Company.
10.10 Survival. The respective representations and warranties
given by the parties hereto shall survive the Closing Date and the consummation
of the transactions contemplated herein for a period of one year, without regard
to any investigation made by any party. The respective covenants and agreements
agreed to by a party hereto shall survive the Closing Date and the consummation
of the transactions contemplated herein in accordance with their respective
terms and conditions.
10.11 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto respecting the subject matter hereof and
supersedes all prior agreements, negotiations, understandings, representations
and statements respecting the subject matter hereof, whether written or oral. No
modification, alteration, waiver or change in any of the terms of this Agreement
shall be valid or binding upon the parties hereto unless made in writing and
duly executed by the parties hereto.
10.12 Amendments. Any amendment, supplement or modification of
or to any provision of this Agreement, any waiver of any provisions of this
Agreement shall be effective only if made or given in writing and signed by the
Company and the Purchaser.
10.13 No Third Party Rights. Except as contemplated by Section
9 hereof, this Agreement is intended solely for the benefit of the parties
hereto and is not intended to confer any benefits upon, or create any rights in
favor of, any Person (including, without limitation, any stockholder or debt
holder of the Company) other than the parties hereto.
10.14 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same document. The parties hereto
confirm that any facsimile copy of another party's executed counterpart of this
Agreement (or its signature page thereof) will be deemed to be an executed
original thereof.
[signature pages to follow]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Stock
Purchase Agreement under seal as of the day and year first above written.
LEUKOSITE, INC.
By: /s/ Augustine Lawlor
--------------------
Name: Augustine Lawlor
Title: Vice President, Corporate
Development and Chief Financial
Officer
PERSEUS CAPITAL LLC
By: /s/ Frank H. Pearl
------------------
Name: Frank H. Pearl
Title: Chairman and Chief Executive Officer
<PAGE>
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Exhibit A - Registration Rights Agreement
Exhibit B - Form of Company Counsel Legal Opinion
EXHIBIT 2
LEUKOSITE, INC.
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of
July 20, 1999 by and among (i) LeukoSite, Inc., a Delaware corporation (the
"Company"), (ii) Perseus Capital LLC., a Delaware limited liability company (the
"Initial Investor"), and (iii) each person who becomes an Investor pursuant to
Section 10 hereof (together with the Initial Investor, the "Investors" and each
individually, an "Investor").
WHEREAS, the Company has agreed to issue and sell to the Initial
Investor, and the Initial Investor has agreed to purchase from the Company, an
aggregate of 1,030,928 shares (the "Shares") of the Company's common stock,
$0.01 par value per share (the "Common Stock"), all upon the terms and
conditions set forth in the Stock Purchase Agreement, dated as of June 22, 1999,
between the Company and the Initial Investor (the "Stock Purchase Agreement");
and
WHEREAS, the terms of the Stock Purchase Agreements provide that it
shall be a condition precedent to the closing of the transactions thereunder,
for the Company and the Initial Investor to execute and deliver this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto hereby agree as follows:
1. DEFINITIONS. The following terms shall have the meanings provided
therefor below or elsewhere in this Agreement as described below:
"Board" shall mean the board of directors of the Company.
"Closing Date" shall mean the date on which the transactions
contemplated by the Stock Purchase Agreements are consummated (or, if the
transactions are not consummated on the same date, the first date by which the
transactions contemplated by the Stock Purchase Agreements have been
consummated).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Mandatory Registration Termination Date" shall mean the first day
after the effective date of the Mandatory S-3 Registration Statement on which
the Mandatory S-3 Registration Statement (as defined in Section 2 hereof) shall
not be in effect.
"Person" (whether or not capitalized) shall mean an individual,
partnership, limited liability company, corporation, association, trust, joint
venture, unincorporated organization, and any government, governmental
department or agency or political subdivision thereof.
<PAGE>
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"Qualifying Investor" shall have the meaning ascribed thereto in
Section 11 hereof.
"Registrable Shares" shall mean, at the relevant time of reference
thereto, the Shares then held by the Investors (including any shares of capital
stock that were issued in respect thereof pursuant to a stock split, stock
dividend, recombination, reclassification or the like), provided, however, that
the term "Registrable Shares" shall not include any of the Shares that (i)
become eligible for resale without volume limitations pursuant to Rule 144, or
(ii) are sold pursuant to a registration statement that has been declared
effective under the Securities Act by the SEC.
"Rule 144" shall mean Rule 144 promulgated under the Securities Act and
any successor or substitute rule, law or provision.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
2. MANDATORY FORM S-3 REGISTRATION.
(a) Within twenty (20) business days after the Closing Date, the
Company will prepare and file with the SEC a registration statement on Form S-3
for the purpose of registering under the Securities Act all of the Registrable
Shares for resale by, and for the account of, the Initial Investor as the
selling stockholder thereunder (the "Mandatory S-3 Registration Statement"). The
Mandatory S-3 Registration Statement shall permit the Initial Investor to offer
and sell, on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act, any or all of the Registrable Shares. The Company agrees to use
reasonable best efforts to cause the Mandatory S-3 Registration Statement to
become effective as soon as practicable. The Company shall only be required to
keep the Mandatory S-3 Registration Statement effective until the earlier to
occur of (i) the date when all of the Registrable Shares registered thereunder
shall have been sold and (ii) July 1, 2000; provided, that in either case such
date shall be extended by the amount of time of any Suspension Period (if any).
Thereafter, the Company shall be entitled to withdraw the Mandatory S-3
Registration Statement and the Investors shall have no further right to offer or
sell any of the Registrable Shares pursuant to the Mandatory S-3 Registration
Statement (or any prospectus relating thereto).
(b) The Mandatory S-3 Registration Statement shall not be underwritten
unless the Company shall otherwise elect in its sole and absolute discretion. In
addition, the Company shall not require that the Mandatory S-3 Registration
Statement be underwritten without the written consent of the Investors.
(c) Notwithstanding anything in this Section 2 to the contrary, if the
Company shall furnish to the Investors a certificate signed by the President or
Chief Executive Officer of the Company stating that the Board of Directors of
the Company has made the good faith determination (i) that continued use by the
Investors of the registration statement filed by the Company pursuant to this
Section 2 for purposes of effecting offers or sales of Registrable Shares
pursuant hereto would require, under the Securities Act and the rules and
regulations promulgated thereunder, premature disclosure in the registration
statement (or the prospectus relating thereto) of material, nonpublic
information concerning the Company, its business or prospects or any proposed
material transaction involving the Company, (ii) that such premature disclosure
would be materially adverse to the Company, its business or prospects or any
such proposed material transaction or would make the successful consummation by
the Company of any such material transaction significantly less likely and (iii)
that it is therefore essential to suspend the use by the
<PAGE>
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Investors of such registration statement (and the prospectus relating thereto)
for purposes of effecting offers or sales of Registrable Shares pursuant
thereto, then the right of the Investors to use such registration statement (and
the prospectus relating thereto) for purposes of effecting offers or sales of
Registrable Shares pursuant thereto shall be suspended for a period (the
"Suspension Period") of not more than 90 days after delivery by the Company of
the certificate referred to above in this Section 2(c). During the Suspension
Period, the Investors shall not offer or sell any Registrable Shares pursuant to
or in reliance upon such registration statement (or the prospectus relating
thereto). The Company agrees that, as promptly as practicable after the
consummation, abandonment or public disclosure of the event or transaction that
caused the Company to suspend the use of the registration statement (and the
prospectus relating thereto) pursuant to this Section 2(c), the Company will
provide the Investors with revised prospectuses, if required, and will notify
the Investors of their ability to effect offers or sales of Registrable Shares
pursuant to or in reliance upon such registration statement.
2A. DEMAND FORM S-3 REGISTRATION.
(a) Registration Upon Request; Limitations. In the event that, at any
time or from time to time after the Mandatory Registration Termination Date, the
Company shall receive from any Investor who holds at least twenty-five percent
(25%) of the Registrable Shares a written request or requests (a "Demand
Notice") that the Company effect a registration on Form S-3 (a "Demand
Registration"), or any successor or substitute form, with respect to all or a
part of the Registrable Shares owned by such Investor, then the Company will
promptly give written notice of the proposed registration and the Investor's or
Investors' request therefor to all other Investors, and, as soon as practicable,
use reasonable best efforts to effect such registration of all or such portion
of such Investor's or Registrable Shares as are specified in such request,
together with all or such portion of the Registrable Shares of any other
Investor or Investors joining in such request as are specified in a written
request given within ten (10) business days after receipt of such written notice
from the Company; provided, however, that the Company's obligation under this
Section 2A(a) shall be temporarily suspended if the Company has previously given
a notice of the type specified in Section 3 hereof or this Section 2A(a)
("Registration Notice") from the date the Registration Notice is received until
the date the registration statement referred to in the Registration Notice is
declared effective (the "Temporary Suspension Period"), so long as (i) the
Temporary Suspension Period is no longer than sixty-five (65) days, and (ii) the
Investors are informed in writing that the Company's obligation under this
Section 2A(a) have been temporarily suspended in accordance with this provision;
and provided, further, that the obligations of the Company under this Section
2A(a) shall be subject to the limitations set forth in Sections 2A(c), 2A(d) and
2A(e) below. The Company may include in any registration pursuant to Section
2A(a) hereof additional shares of Common Stock for sale for its own account or
for the account of any other person who has been granted piggy-back registration
rights. No registration under this Section 2A(a) shall be underwritten unless
the Company shall otherwise elect in its sole and absolute discretion.
If the Company receives conflicting instructions, notices or elections
from two or more persons with respect to the same Registrable Shares, then the
Company may act upon the basis of the instructions, notice or election received
from the registered owner of such Registrable Shares.
(b) Selection of Underwriters. If a registration pursuant to Section
2A(a) hereof involves an underwritten offering, the underwriter or underwriters
thereof shall be selected by the Company, provided that the underwriter or
underwriters so selected shall be a nationally recognized investment banking
firm or firms.
(c) Limitation on Number of Registrations. The Company shall not be
required to effect (i) more than two (2) registrations pursuant to Section 2A(a)
and (ii)
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more than one registration pursuant to Section 2A(a) during any consecutive nine
(9) month period.
(d) Limitation on Company's Obligation. Notwithstanding anything in
this Section 2A to the contrary, but in all events subject to the provisions of
Section 2A(f) hereof, the Company shall not be obligated to effect any
registration pursuant to Sections 2A and 3:
(1) if Form S-3, or any successor or substitute form, is not
then available for the registration of such Registrable Shares proposed to be
sold and distributed by such Investor or Investors;
(2) if such Investor or Investors, together with the holders
of any other securities of the Company entitled to inclusion in such
registration, propose to sell Registrable Shares and such other securities (if
any) at an aggregate price to the public of less than $750,000; or
(3) if the Company shall furnish to the Investors a
certificate signed by the President and Chief Executive Officer of the Company
stating that the Board has made the good faith determination that a registration
would require premature disclosure of material, nonpublic information concerning
the Company, its business or prospects, that such premature disclosure would be
materially adverse to the Company and that it is therefore essential to suspend
or defer such registration, then the Company shall have the right either to
suspend the use of an effective registration statement or defer the filing of a
registration statement for a period of not more than ninety (90) days (the
"Deferral Period"); provided, however, that the Company may not utilize this
right more than once with respect to each registration request (or registration
statement filed as a result of a request) made pursuant to, and in accordance
with, Section 2A(a) hereof. If the Board makes the determination described in
the preceding sentence, the Company shall give written notice of such
determination to the holders of Registrable Shares. The Company shall notify the
holders of the expiration of the Deferral Period and shall, if such registration
statement requested pursuant to Section 2A(a) hereof has not yet been filed,
cause the registration statement with respect to the Demand Registration to be
filed on the fifth (5th) business day following the expiration of the Deferral
Period (the "Withdrawal Period") (or, if registration on such date is not
practicable, as promptly as possible thereafter) unless, prior to the expiration
of the Withdrawal Period, the holders holding a majority of Registrable Shares
to be included in any such Demand Registration not yet filed, by written notice
to the Company, withdraws the request made under Section 2(a), in which case,
such request shall not count as one of the Demand Registrations permitted
hereunder and the Company shall pay all expenses in connection with such
registration theretofor incurred in accordance with Section 6 herein.
(e) Limitation on Requests. Notwithstanding anything in this Section 2A
to the contrary, (1) no Investor may request a registration pursuant to this
Section 2A within one hundred and eighty (180) days of the effective date of any
other registration statement filed by the Company with the SEC pursuant to
Sections 2A and 3; and (2) no Investor may request a registration pursuant to
Section 2A(a) at any time after the seventh (7th) anniversary of the Closing
Date.
(f) Unavailability of Form S-3. Notwithstanding anything to the
contrary expressed or implied in this Agreement, if Form S-3 or any substitute
form is not then available for the registration of such Registrable Shares that
would otherwise have been proposed to be sold and distributed by such Investor
or Investors pursuant to this Section 2A, the Company shall be obligated to
prepare and file a registration statement on Form S-1 at the written request or
requests from any Investor or
<PAGE>
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Investors given in accordance with Section 2A(a) and the provisions of this
Section 2A (other than Section 2A(d)(2)) shall govern and apply to such request
or requests and such registration on Form S-1.
3. "PIGGYBACK REGISTRATION".
(a) If, at any time after the Mandatory Registration
Termination Date, the Company proposes to register any of its Common Stock under
the Securities Act, whether as a result of a primary or secondary offering of
Common Stock or pursuant to registration rights granted to holders of other
securities of the Company (but excluding in all cases any registration pursuant
to Section 2A hereof or any registrations to be effected on Forms S-4 or S-8 or
other applicable successor Forms), the Company shall, each such time, give to
the Investors twenty (20) days' prior written notice of its intent to do so, and
such notice shall describe the proposed registration and offer such holders the
opportunity to register such number of Registrable Shares as each such holder
may request. Upon the written request of any Investor given within ten (10) days
after the giving of any such notice by the Company, the Company shall use its
reasonable best efforts to cause to be included in such registration the
Registrable Shares of such selling Investor, to the extent requested to be
registered, among all holders of Registrable Shares and other persons entitled
to the inclusion of their shares in such registration, pro rata on the basis of
the number of shares of Common Stock that owned or held by such selling Investor
to all of the shares of Common Stock owned or held by all holders and other
persons entitled to be included within such registration; provided that (i) the
number of Registrable Shares proposed to be sold by such selling Investor is
equal to at least twenty-five percent (25%) of the total number of Registrable
Shares then held by such selling Investor, (ii) such selling Investor agrees to
sell those of its Registrable Shares to be included in such registration in the
same manner and on the same terms and conditions as the other shares of Common
Stock which the Company proposes to register, and (iii) if the registration is
to include shares of Common Stock to be sold for the account of the Company or
any party exercising demand registration rights pursuant to any other agreement
with the Company, the proposed managing underwriter does not advise the Company
that in its opinion the inclusion of such selling Registrable Shares (without
any reduction in the number of shares to be sold for the account of the Company
or such party exercising demand registration rights) is likely to affect
materially and adversely the success of the offering or the price that would be
received for any shares of Common Stock offered, in which case the rights of
such selling Investor shall be as provided in Section 3(b) hereof.
(b) If a registration pursuant to Section 3 hereof involves an
underwritten offering and the managing underwriter shall advise the Company in
writing that, in its opinion, the number of shares of Common Stock requested by
the Investors to be included in such registration is likely to affect materially
and adversely the success of the offering or the price that would be received
for any shares of Common Stock offered in such offering, then, notwithstanding
anything in this Section 3 to the contrary, the Company shall only be required
to include in such registration, to the extent of the number of shares of Common
Stock which the Company is so advised can be sold in such offering, (i) first,
the number of shares of Common Stock proposed to be included in such
registration for the
<PAGE>
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account of the Company and/or any stockholders of the Company (other than the
Investors) that have exercised demand registration rights, in accordance with
the priorities, if any, then existing among the Company and/or such stockholders
of the Company with registration rights (other than the Investors), and (ii)
second, the shares of Common Stock requested to be included in such registration
by all other stockholders of the Company (including, without limitation, the
Investors), pro rata among such other stockholders (including, without
limitation, the Investors) on the basis of the number of shares of Common Stock
that each of them requested to be included in such registration.
(c) In connection with any offering involving an underwriting
of shares, the Company shall not be required under this Section 3 or otherwise
to include the Registrable Shares of any Investor therein unless such Investor
accepts and agrees to the terms of the underwriting, which shall be reasonable
and customary, as agreed upon between the Company and the underwriters selected
by the Company.
4. OBLIGATIONS OF THE COMPANY. Whenever the Company is required under
Sections 2A or 3 hereof to use its reasonable best efforts to effect the
registration of any of the Registrable Shares of the Investors, the Company
shall, as expeditiously as practicable:
(a) Prepare and file with the SEC (not later than forty-five
(45) days after receipt of a request to file a registration statement with
respect to Registrable Shares pursuant to Section 3A hereof) a registration
statement with respect to such Registrable Shares and use its reasonable best
efforts to cause such registration statement to become and remain effective;
provided, however that, except to the extent otherwise provided in Section 2A
hereof, the Company shall in no event be obligated to cause any such
registration to remain effective for more than ninety (90) days; provided
further, that before filing a registration statement or prospectus or any
amendments or supplements thereto, the Company shall (i) use reasonable efforts
to provide counsel selected by the holders of a majority of the Registrable
Shares being registered in such registration ("Holders' Counsel") with an
opportunity to participate in the preparation of such registration statement and
each prospectus included therein (and each amendment or supplement thereto) to
be filed with the SEC, and (ii) notify the Holders' Counsel of any stop order
issued or threatened by the SEC and to take all reasonable action required to
prevent the entry of such stop order or to remove it if entered;
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to comply with the provisions of the Securities
Act with respect to the disposition of all Registrable Shares covered by such
registration statement;
(c) Notify the Investors and Holders' Counsel (if any)
promptly and, if requested by any Investor, confirm such advice in writing (i)
when a registration statement has become effective and when any post-effective
amendments and supplements thereto become effective, and (ii) of the issuance by
the SEC or any state securities commission of any stop order suspending the
effectiveness of a registration statement.
<PAGE>
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(d) Furnish to the selling Investors such number of copies of
a prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents (including, without
limitation, prospectus amendments and supplements as are prepared by the Company
in accordance with Section 4(e) below) as the selling Investors may reasonably
request in order to facilitate the disposition of such Registrable Shares;
(e) Notify the Investors and Holders' Counsel (if any), at any
time when a prospectus relating to such registration statement is required to be
delivered under the Securities Act, of the happening of any event as a result of
which the prospectus included in or relating to such registration statement
contains an untrue statement of a material fact or omits any fact necessary to
make the statements therein not misleading; and, thereafter, the Company will
promptly prepare (and, when completed, give notice to each Investor) a
supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of such Registrable Shares, such prospectus will not contain an
untrue statement of a material fact or omit to state any fact necessary to make
the statements therein not misleading; provided that upon such notification by
the Company, the Investors will not offer or sell Registrable Shares until the
Company has notified the Investors that it has prepared a supplement or
amendment to such prospectus and delivered copies of such supplement or
amendment to the Investors (it being understood and agreed by the Company that
the foregoing proviso shall in no way diminish or otherwise impair the Company's
obligation to promptly prepare a prospectus amendment or supplement as above
provided in this Section 4(e) and deliver copies of same as above provided in
Section 4(d) hereof);
(f) Use its reasonable best efforts to register and qualify
such Registrable Shares under such other securities or Blue Sky laws of such
jurisdictions as each selling Investor shall be reasonably request and do any
and all other acts or things which may be reasonably necessary or advisable to
enable each selling Investor to consummate the public sale or other disposition
in such jurisdiction of Registrable Shares, provided that the Company shall not
be required in connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any such states
or jurisdictions where it is not then qualified or subject to process;
(g) Use its reasonable best efforts to cause all Registrable
Shares to be listed on the Nasdaq National Stock Market; and
(h) Make available for inspection by any seller of Registrable
Shares, any managing underwriter participating in any disposition pursuant to
such registration statement, Holders' Counsel (if any) and any attorney,
accountant or other agent retained by any such seller or any managing
underwriter (each, an "Inspector" and collectively, the "Inspectors"), during
regular business hours and upon reasonable advance notice, all financial and
other records, pertinent corporate documents and properties of the Company
(collectively, the "Records") as shall be reasonably necessary to enable them to
exercise their due diligence responsibility, and cause the Company's officers,
directors and employees, and the independent public accountants of the Company,
to supply all information reasonably requested by any such Inspector in
connection with such registration statement, subject to obligations of
confidentiality.
<PAGE>
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5. FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement that
the selling Investors shall furnish to the Company such information regarding
them and the Shares held by them as the Company shall reasonably request and as
shall be required in order to effect any registration by the Company pursuant to
this Agreement.
6. EXPENSES OF REGISTRATION. All expenses incurred in connection with a
registration pursuant to this Agreement (excluding underwriting commissions and
discounts of the selling Investors), including without limitation all
registration and qualification fees, printing expenses, and fees and
disbursements of counsel for the Company and one counsel for the selling
Investors, shall be borne by the Company.
7. DELAY OF REGISTRATION. Subject to Section 13(d) hereof, the
Investors and the Company (other than with respect to Section 4(e)) shall not
take any action to restrain, enjoin or otherwise delay any registration as the
result of any controversy which might arise with respect to the interpretation
or implementation of this Agreement.
8. INDEMNIFICATION. In the event that any Registrable Shares of the
Investors are included in a registration statement pursuant to this Agreement:
(a) To the fullest extent permitted by law, the Company will
indemnify and hold harmless each selling Investor, any underwriter (as defined
in the Securities Act) for the Company, and each officer, director, fiduciary,
employee, member, general partner and limited partner (and affiliates thereof)
of such selling Investor or such underwriter, each broker or other person acting
on behalf of such selling Investor and each person, if any, who controls such
selling Investor or such underwriter within the meaning of the Securities Act,
against any losses, claims, damages or liabilities, joint or several, to which
they may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue or alleged untrue statement of any material fact
contained in such registration statement, including any preliminary prospectus
or final prospectus contained therein or any amendments or supplements thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein, or necessary to make the
statements therein not misleading, or any violation by the Company of the
Securities Act or state securities or blue sky laws applicable to the Company
and leading to action or inaction required of the Company in connection with
such registration or qualification under such Securities Act or state securities
or blue sky laws; and, subject to the provisions of Section 8(c), the Company
will reimburse on demand such selling Investor, such underwriter, such broker or
other person acting on behalf of such selling Investor or such officer,
director, fiduciary, employee, member, general partner, limited partner,
affiliate or controlling person for any legal or other expenses reasonably
incurred by any of them in connection with investigating or defending any such
loss, claim, damage,
<PAGE>
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liability or action; provided, however, that the indemnity agreement contained
in this Section 8(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Company (which consent shall not be unreasonably withheld),
nor shall the Company be liable in any such case for any such loss, damage,
liability or action to the extent that it arises out of or is based upon an
untrue statement or alleged untrue statement or omission made in connection with
such registration statement, preliminary prospectus, final prospectus, or
amendments or supplements thereto, in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by the selling Investors, any underwriter for them or controlling
person with respect to them.
(b) To the fullest extent permitted by law, each selling
Investor will indemnify and hold harmless the Company, each of its directors,
each of its officers who have signed such registration statement, each person,
if any, who controls the Company within the meaning of the Securities Act, any
underwriter for the Company (within the meaning of the Securities Act), and all
other selling Investors against any losses, claims, damages or liabilities to
which the Company or any such director, officer, controlling person, or
underwriter may become subject to, under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereto) arise out of or are based upon any untrue or alleged untrue statement
of any material fact contained in such registration statement, including any
preliminary prospectus contained therein or any amendments or supplements
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in such registration statement, preliminary prospectus, final prospectus,
or amendments or supplements thereto, in reliance upon and in conformity with
written information furnished by the selling Investor expressly for use in
connection with such registration; and, subject to the provisions of Section
8(c), such selling Investor will reimburse on demand any legal or other expenses
reasonably incurred by the Company or any such director, officer, controlling
person, underwriter or other selling Investor in connection with investigating
or defending any such loss, claim, damage, liability or action, provided,
however, that the maximum amount of liability of each selling Investor hereunder
shall be limited to the proceeds (net of underwriting discounts and commissions,
if any) actually received by such selling Investor from the sale of Registrable
Shares covered by such registration statement; and provided, further, however,
that the indemnity agreement contained in this Section 8(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of those selling Investor(s)
against which the request for indemnity is being made (which consent shall not
be unreasonably withheld).
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against any indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof and the indemnifying party shall have the right to
participate in and, to the extent the indemnifying party desires, jointly with
any other indemnifying party similarly noticed, to assume at its expense the
<PAGE>
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defense thereof with counsel mutually satisfactory to the parties; provided,
however, that, if any indemnified party shall have reasonably concluded that
there may be one or more legal defenses available to such indemnified party
which are different from or additional to those available to the indemnifying
party, or that such claim or litigation involves or could have an effect upon
matters beyond the scope of the indemnity agreement provided in this Section 8,
the indemnifying party shall not have the right to assume the defense of such
action on behalf of such indemnified party, and such indemnifying party shall
reimburse such indemnified party and any person controlling such indemnified
party for the fees and expenses of counsel retained by the indemnified party
which are reasonably related to the matters covered by the indemnity agreement
provided in this Section 8. Subject to the foregoing, an indemnified party shall
have the right to employ separate counsel in any such action and to participate
in the defense thereof but the fees and expenses of such counsel shall not be at
the expense of the Company. The failure to notify an indemnifying party promptly
of the commencement of any such action, if materially prejudicial to his ability
to defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 8, but the omission so to notify the
indemnifying party will not relieve him of any liability which he may have to
any indemnified party otherwise other than under this Section 8.
(d) If the indemnification provided for in this Section 8 from
the indemnifying party is applicable by its terms but unavailable to an
indemnified party hereunder in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then the indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities or expenses in such proportion as is appropriate to reflect
the relative fault of the indemnifying party and indemnified party in connection
with the actions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
faults of such indemnifying party and indemnified party shall be determined by
reference to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact, has been made by, or relates to information
supplied by, such indemnifying party or indemnified party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such action. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in Sections 8(a), 8(b)
and 8(c), any legal or other fees, charges or expenses reasonably incurred by
such party in connection with any investigation or proceeding. 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. The parties
hereto agree that it would not be just and equitable if contribution pursuant to
this Section 8(d) were determined by pro rata allocation or by any other method
of allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph.
(e) Notwithstanding anything in this Section 8 to the
contrary, if, in connection with an underwritten public offering, the Company,
the Investors and the underwriters enter into an underwriting or purchase
agreement relating to such offering which contains provisions covering
indemnification among the parties, then the indemnification provision of this
Section 8 shall be deemed inoperative for purposes of such offering.
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9. REPORTS UNDER THE EXCHANGE ACT. With a view to making available to
the Investors the use of Section 2A hereof and the benefits of Rule 144 and any
other rule or regulation of the SEC that may at any time permit the Investors to
sell the Shares to the public without registration, the Company agrees to use
reasonable best efforts to: (i) make and keep public information available, as
those terms are understood and defined in the General Instructions to Form S-3,
or any successor or substitute form, and in Rule 144, (ii) file with the SEC in
a timely manner all reports and other documents required to be filed by an
issuer of securities registered under the Securities Act or the Exchange Act,
(iii) as long as any Investor owns any Shares, to furnish in writing upon such
Investor's request a written statement by the Company that it has complied with
the reporting requirements of Rule 144 and of the Securities Act and the
Exchange Act, and to furnish to such Investor a copy of the most recent annual
or quarterly report of the Company, and such other reports and documents so
filed by the Company as may be reasonably requested in availing such Investor of
any rule or regulation of the SEC permitting the selling of any such Shares
without registration and (iv) undertake any additional actions reasonably
necessary to maintain the availability of a registration statement on Form S-3,
including any successor or substitute forms, or the use of Rule 144.
10. TRANSFER OF REGISTRATION RIGHTS.
(a) In the event that, pursuant to Section 10.9(a) of the Stock
Purchase Agreement, the Initial Investor shall assign, in whole or in part, its
right to purchase Shares to any permitted assignee in accordance with the terms
of the Stock Purchase Agreement, then the Initial Investor shall have the right
to assign to such permitted assignee the Initial Investor's rights under this
Agreement, to the extent of the interest assigned to such permitted assignee by
the Initial Investor; provided, however, that no rights may be assigned to any
such permitted assignee unless such permitted assignee shall execute and deliver
to the Company such permitted assignee's written agreement to become a party to
this Agreement and to become bound and subject to all of the terms and
provisions of this Agreement to the same extent as the Initial Investor. Upon
any such assignment to any such permitted assignee in accordance with the terms
of this Section 10(a), such permitted assignee shall be deemed to be an "Initial
Investor" for purposes of this Agreement.
(b) Except to the extent otherwise provided in Section 10(a) hereof,
none of the rights of any Investor under this Agreement shall be transferred or
assigned to any person unless (i) such person is a Qualifying Investor (as
defined below), and (ii) such person agrees to become a party to, and bound by,
all of the terms and conditions of, this Agreement. For purposes of this Section
10(b), the term "Qualifying Investor" shall mean, with respect to any Investor,
(i) any partner, member or shareholder thereof, (ii) any person, corporation or
partnership controlling, controlled by, or under common control with, such
Investor or any partner thereof, or (iii) any other direct transferee from such
Investor of at least 257,000 shares of Common Stock (subject to adjustment in
the event of stock splits, stock dividends, recombinations, recapitalizations
and the like). None of the rights of any Investor under this Agreement shall be
transferred or assigned to any transferee of Shares pursuant to a "brokers
transaction" within the meaning of Rule 144 under the Securities Act or an
effective registration statement under the Securities Act. Upon transfer of
Shares and rights in accordance with this Section 10(b), such Qualified Investor
shall be deemed an "Investor" hereunder.
<PAGE>
-12-
11. LOCKUP AGREEMENT.
(a) Each Investor which holds or owns (at the time of the written
request of the Company or managing underwriter referred to below in Section
11(b) or at any time during the ninety (90) day period commencing on the
effective date of the registration statement relating to such underwritten
public offering of the Company's securities) of record or beneficially (within
the meaning of Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder) five percent (5%) or more of the then issued and
outstanding shares of common stock of the Company (including, for this purpose,
shares held or owned by any and all affiliates of such Investor) hereby agrees
that, at the written request of the Company or any managing underwriter of any
underwritten public offering of securities of the Company, such Investor (and
its affiliates) shall not, without the prior written consent of the Company or
such managing underwriter, sell, make any short sale of, loan, grant any option
for the purchase of, pledge, encumber, or otherwise dispose of, or exercise any
registration rights with respect to, any Securities during the ninety (90) day
period commencing on the effective date of the registration statement relating
to such underwritten public offering of the Company's securities. If an Investor
is unable to sell, make any short sale of, loan, grant any option for the
purchase of, pledge, encumber, or otherwise dispose of, or exercise any
registration rights with respect to, any Securities pursuant to an effective
registration statement as a result of the foregoing sentence, and such effective
registration statement was filed pursuant to a request made under Section 2A
hereof, then such request shall not count as one of the Demand Registrations
permitted under Section 2A hereof.
(b) The Company shall use reasonable best efforts to cause each officer
and director of the Company who holds or owns (at the time of the written
request of the Company or managing underwriter referred to below in this Section
11 or at any time during the ninety (90) day period commencing on the effective
date of the registration statement relating to such underwriter public offering
of the Company's securities) of record or beneficially (within the meaning of
Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder) five percent (5%) or more of the then issued and outstanding shares
of common stock of the Company, at the written request of the Company or any
managing underwriter of any underwritten public offering of securities of the
Company, not to, without the prior written consent of the Company or such
managing underwriter, sell, make any short sale of, loan, grant any option for
the purchase of, pledge, encumber, or otherwise dispose of, or exercise any
registration rights with respect to, any Securities during the ninety (90) day
period commencing on the effective date of the registration statement relating
to such underwritten public offering of the Company's securities.
12. ENTIRE AGREEMENT. This Agreement constitutes and contains the
entire agreement and understanding of the parties with respect to the subject
matter hereof, and it also supersedes any and all prior negotiations,
correspondence, agreements or understandings with respect to the subject matter
hereof.
13. MISCELLANEOUS.
<PAGE>
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(a) This Agreement may not be amended, modified or terminated,
and no rights or provisions may be waived, except with the written consent of
the Majority Holders and the Company.
(b) This Agreement shall be governed by and construed and
enforced in accordance with the laws of the Commonwealth of Massachusetts, and
shall be binding upon the parties hereto and their respective heirs, personal
representatives, successors and permitted assigns and transferees, provided that
the terms and conditions of Section 10 hereof are satisfied. Notwithstanding
anything in this Agreement to the contrary, if at any time any Investor shall
cease to own any Shares, all of such Investor's rights under this Agreement
shall immediately terminate.
(c) Any notices to be given pursuant to this Agreement shall
be in writing and shall be given by certified or registered mail, return receipt
request. Notices shall be deemed given when personally delivered or when mailed
to the addresses of the respective parties as set forth on Exhibit A hereto, or
to such changed address of which any party may notify the others pursuant
hereto, except that a notice of change of address shall be deemed given when
received.
(d) The parties acknowledge and agree that in the event of any
breach of this Agreement, remedies at law will be inadequate, and each of the
parties hereto shall be entitled to specific performance of the obligations of
the other parties hereto and to such appropriate injunctive relief as may be
granted by a court of competent jurisdiction. All remedies, either under this
Agreement or by law or otherwise afforded to any of the parties, shall be
cumulative and not alternative.
(e) This Agreement may be executed in a number of
counterparts. All such counterparts together shall constitute one Agreement, and
shall be binding on all the parties hereto notwithstanding that all such parties
have not signed the same counterpart. The parties hereto confirm that any
facsimile copy of another party's executed counterpart of this Agreement (or its
signature page thereof) will be deemed to be an executed original thereof.
(f) Except as contemplated in Section 8 hereof, this Agreement
is intended solely for the benefit of the parties hereto and is not intended to
confer any benefits upon, or create any rights in favor of, any Person
(including, without limitation, any stockholder or debt holder of the Company)
other than the parties hereto.
(g) If any provision of this Agreement is invalid, illegal or
unenforceable, such provision shall be ineffective to the extent, but only to
the extent of, such invalidity, illegality or unenforceability, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement, unless such a construction would be unreasonable.
(h) This Agreement shall be binding upon, and inure to the
benefit of, the parties hereto and their permitted successors and assigns.
<PAGE>
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IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the date and year first above written.
LEUKOSITE, INC.
By: /s/ Christopher K. Mirabelli
----------------------------
Name: Christopher K. Mirabelli
Title: President and Chief Executive Officer
INITIAL INVESTOR:
PERSEUS CAPITAL LLC
By: /s/ Kenneth M. Socha
--------------------
Name: Kenneth M. Socha
Title: Executive Vice President
<PAGE>
Exhibit A
All correspondence to the Company shall be addressed as follows:
LeukoSite, Inc.
215 First Street
Cambridge, MA 02142
Attention: Christopher K. Mirabelli,
President and Chief Executive Officer
Telecopier: (617) 278-3399
with a copy to:
Bingham Dana LLP
150 Federal Street
Boston, Massachusetts 02110
Attention: Julio E. Vega, Esq.
Telecopier: (617) 951-8736
All correspondence to the Initial Investor shall be addressed as follows:
Perseus Capital, LLC
The Army and Navy Club Building
1627 I Street, N.W., Suite 610
Washington D.C. 20006
Telecopy: (202) 463-6215
Attention: Christopher D. Earl, Ph.D.
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Telecopy: (212) 757-3990
Attention: Bruce A. Gutenplan, Esq.
EXHIBIT 3
JOINT FILING AGREEMENT
Each of the undersigned hereby acknowledges and agrees, in compliance
with the provisions of Rule 13d-1(k)(1) promulgated under the Securities
Exchange Act of 1934, as amended, that the Schedule 13D to which this Agreement
is attached as an Exhibit (the "Schedule 13D"), and any amendments thereto, will
be filed with the Securities and Exchange Commission jointly on behalf of the
undersigned.
This Agreement may be executed in one or more counterparts.
Dated: July 30, 1999
PERSEUS CAPITAL, LLC
By: /s/ KENNETH M. SOCHA
--------------------
Name: Kenneth M. Socha
Title: Executive Vice President
PERSEUS MANAGEMENT, LLC
By: /s/ KENNETH M. SOCHA
--------------------
Name: Kenneth M. Socha
Title: Executive Vice President
PERSEUS, LLC
By: /s/ KENNETH M. SOCHA
--------------------
Name: Kenneth M. Socha
Title: Executive Vice President
RAPPAHANNOCK INVESTMENT COMPANY
By: /s/ KENNETH M. SOCHA
--------------------
Name: Kenneth M. Socha
Title: Senior Vice President
<PAGE>
CUSIP No. 52728R 102 Page 2 of 2
MR. FRANK H. PEARL
By: /s/ FRANK H. PEARL
------------------
Name: Frank H. Pearl
