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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 30, 1998.
REGISTRATION NO.
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
IGEN INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 2835 94-2852843
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification
incorporation or organization) Number)
</TABLE>
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16020 INDUSTRIAL DRIVE
GAITHERSBURG, MARYLAND 20877
(301) 984-6000
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
SAMUEL J. WOHLSTADTER
CHIEF EXECUTIVE OFFICER
IGEN INTERNATIONAL, INC.
16020 INDUSTRIAL DRIVE
GAITHERSBURG, MARYLAND 20877
(301) 984-8000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------------
WITH A COPY TO:
STEPHEN P. DOYLE, ESQ.
WILMER, CUTLER & PICKERING
2445 M STREET, N.W.
WASHINGTON, D.C. 20037
(202) 663-8000
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF SECURITIES TO THE
PUBLIC: From time to time after the effective date of this Registration
Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /______
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /______
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
--------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED BE REGISTERED (1) PER SHARE (2) OFFERING PRICE REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock, par value $0.001 per share.......... 5,202,004 $16.50 $85,833,066 $25,321
</TABLE>
(1) Pursuant to Rule 416 under the Securities Act, this Registration Statement
also relates to an indeterminate number of additional shares of Common Stock
issuable to prevent dilution resulting from stock splits, stock dividends or
similar transactions.
(2) Estimated pursuant to Rule 457(c) solely for the purpose of calculating the
registration fee, based upon the average of the high and low prices per
share of IGEN International, Inc. common stock, par value $.001 per share,
on [within 5 business days prior to filing date], as reported on the Nasdaq
Stock Market's National Market.
--------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE>
SUBJECT TO COMPLETION, DATED , 1998
PROSPECTUS
IGEN INTERNATIONAL, INC.
5,202,004 SHARES OF COMMON STOCK
------------------
This Prospectus relates to the offering by the Selling Securityholders named
herein (the "Selling Securityholders") of up to an aggregate of 5,202,004 shares
of common stock, $.001 par value per share (the "Shares" or "Common Stock") of
IGEN International, Inc. ("IGEN" or the "Company") issuable upon conversion of
the Series B Convertible Preferred Stock of the Company. Of the 5,202,004
shares, 1,790,830 shares are issuable to the Selling Securityholders upon
conversion of the 25,000 shares of Series B Convertible Preferred Stock ("Series
B Preferred Stock") issued by the Company to the Selling Securityholders. Up to
810,172 shares are issuable to the Selling Securityholders, at the option of the
Company, as payment of the dividends due on the Series B Preferred Stock. The
Prospectus also covers pursuant to Rule 416 under the Securities Act of 1993, as
amended, such indeterminate number of Shares as may be required to effect
conversion of the Series B Convertible Preferred Stock to prevent dilution
resulting from stock splits, stock dividends or similar transactions. The Shares
may be sold from time to time by the Selling Securityholders, or by pledgees or
transferees of, or certain successors in interest to Selling Securityholders, in
privately negotiated transactions, in brokers' transactions, to market makers or
in block placements, at market prices prevailing at the time of sale or at
prices otherwise negotiated. See "Selling Securityholders" and "Plan of
Distribution."
The Company will not receive any of the proceeds from the sale of the shares
being sold by the Selling Securityholders. The Company has agreed to bear the
expenses incurred in connection with the registration of the Shares, other than
underwriting discounts and commissions, fees and expenses of counsel to each
Selling Securityholder.
The Company's Common Stock is traded on the Nasdaq National Market (the
"NNM") under the symbol "IGEN." On January 23, 1998, the last reported sale
price of the Common Stock was $16.625 per share, as reported by the NNM.
------------------------
THE SECURITIES TO BE SOLD PURSUANT TO THIS PROSPECTUS HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
SEE "RISK FACTORS," BEGINNING ON PAGE 4, FOR INFORMATION
THAT SHOULD BE CONSIDERED REGARDING THE SECURITIES OFFERED HEREBY.
------------------------
The date of this Prospectus is .
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and at the following
Regional Offices of the Commission: Chicago Regional Office, Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511; and New York
Regional Office, 7 World Trade Center, Suite 1300, New York, New York 10048.
Copies of such material can be obtained at prescribed rates from the Public
Reference Section of the Commission at 450 Fifth Street, N.W. Judiciary Plaza,
Washington, D.C. 20549. Such reports and other information can also be reviewed
through the Commission's Electronic Data Gathering, Analysis and Retrieval
System ("EDGAR") which is publicly available through the Commission's Web site
(http://www.sec.gov). In addition, the Company's Common Stock is listed on the
Nasdaq Stock Market's National Market System, and material filed by the Company
can be inspected at the offices of the National Association of Securities
Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
Additional information regarding the Company and the shares offered hereby
is contained in the Registration Statement on Form S-3 and the exhibits thereto
filed with the Commission under the Securities Act of 1933, as amended (the
"Securities Act"). As permitted by the rules and regulations of the Commission,
this Prospectus does not contain all of the information contained in such
Registration Statement and the exhibits and schedules thereto. Statements
contained in the Prospectus regarding the contents of any document or contract
may be incomplete and, in each instance, reference is made to the copy of such
contract or document filed as an exhibit to the Registration Statement. For
further information pertaining to the Company and the shares, reference is made
to the Registration Statement and the exhibits thereto, which may be inspected
without charge at the offices of the Commission or on EDGAR, and copies thereof
may be obtained at prescribed rates from the Public Reference Section of the
Commission at the address set forth above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission pursuant to
the Exchange Act are incorporated by reference in and made a part of this
Prospectus: (1) the Annual Report on Form 10-K for the fiscal year ended March
31, 1997; (2) the Amendment to the Annual Report on Form 10-K/A for the fiscal
year ended March 31, 1997; (3) the Quarterly Reports on Form 10-Q for the
quarterly periods ended December 31, 1996, June 30, 1997 and September 30, 1997;
and (4) the description of the Company's Common Stock set forth in the Company's
Registration Statement on Form 8-A filed with the Commission on January 20,
1994.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering shall be deemed to be incorporated by reference
herein and to be a part of this Prospectus from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
Copies of all documents which are incorporated herein by reference (not
including the exhibits to such documents, unless such exhibits are specifically
incorporated by reference into such documents or into this Prospectus) will be
provided without charge to each person, including any beneficial owner, to whom
this Prospectus is delivered, upon a written or oral request to IGEN
International, Inc., Attention: George V. Migausky, Chief Financial Officer,
16020 Industrial Drive, Gaithersburg, MD 20877, telephone number (301) 984-8000.
2
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RISK FACTORS
In evaluating an investment in the Common Stock, prospective purchasers
should carefully consider the following factors as well as the other matters
discussed in this Prospectus and the documents incorporated herein by reference.
RELIANCE ON COLLABORATIONS AND LICENSE AGREEMENTS
The Company has entered into collaborative research or licensing agreements
with Boehringer Mannheim, Organon Teknika and Eisai pursuant to which these
companies are entitled to certain product manufacturing and marketing rights.
Some of these companies have the responsibility for additional development and,
where required, the submission of applications for the regulatory approval of
any products to the U.S. Food and Drug Administration ("FDA") and corresponding
regulatory agencies in other countries. Although the Company believes that its
partners in these collaborations have an economic motivation to succeed in
performing their contractual responsibilities, the amount and timing of
resources to be devoted to these activities are not within the control of the
Company. There can be no assurance that such collaborators will perform their
obligations as expected or that the company will derive any additional revenue
from such arrangements. The Company is currently involved in litigation against
Boehringer Mannheim. Moreover, the collaboration agreements may be terminated
under certain circumstances. See "Recent Developments."
The Company also expects to rely on additional collaboration or license
agreements to develop and commercialize certain future products. There can be no
assurance that the Company will be able to negotiate acceptable collaboration or
license agreements in the future, or that such new agreements or existing
agreements will be successful. In addition, there can be no assurance that the
parties to collaboration or license agreements will not pursue alternative
technologies as a means for developing diagnostic products targeted by the
collaborations or licenses.
EARLY STAGE OF DEVELOPMENT; ACCUMULATED LOSSES
The Company is at an early stage of development and is subject to all of the
risks inherent in the establishment of a new business enterprise, including the
need for substantial capital to support the expenses of developing new
technologies, the need to attract and retain qualified management and scientific
staff and other risks as outlined in the following risk factors. Since
inception, the Company has been engaged in the research and development of
products based on new technologies, and at September 30, 1997, the Company had
an accumulated deficit of approximately $61 million. The Company's operations
may be affected by problems frequently encountered in connection with the
development and utilization of new technologies and by the competitive
environment in which the Company operates. Although certain ORIGEN-based
products have been developed and introduced to the market, there can be no
assurance that the ORIGEN technology will be successfully applied to the
development of additional commercial products for the clinical diagnostic or
other markets. Diagnostic products resulting from the development of the
Company's technology will require significant additional development and
investment prior to their commercialization. There can be no assurance that
products will be successfully developed by the Company or its licensees, meet
applicable regulatory standards, be capable of being manufactured in commercial
quantities at reasonable costs or be marketed successfully.
TECHNOLOGICAL CHANGE AND COMPETITION
The diagnostic industry is subject to technological change. Competition from
diagnostic and pharmaceutical companies and research and academic institutions
is intense and expected to increase. There can be no assurance that the
Company's competitors will not succeed in developing products that are more
effective than any which are being developed by the Company and its
collaborators or which would render the ORIGEN technology and products obsolete
and non-competitive.
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Many of the Company's competitors in the diagnostic field have substantially
greater financial, technical and human resources than the Company. In addition,
many of these competitors have significantly greater experience than the Company
in obtaining regulatory approvals of new diagnostic products. Accordingly, the
Company's competitors may succeed in obtaining FDA approval for products more
rapidly than the Company. Furthermore, as the Company expands commercial sales
of products, it will have to become competitive with respect to manufacturing
efficiency and marketing capabilities, areas in which it has limited experience.
COMPLIANCE WITH GOVERNMENT REGULATIONS
The production and marketing of the Company's products and its ongoing
research and development activities are subject to regulation by governmental
authorities in the United States and other countries. Diagnostic systems
utilizing the Company's ORIGEN technology will require government clearance
before being marketed in the United States and in certain foreign countries. In
the United States, the Company or its marketing collaborators may be required to
submit test data from clinical trials to establish "substantial equivalence" of
the ORIGEN diagnostic system with previously approved systems. In such case, the
Company or its collaborators may commence sales only after the FDA has issued a
written order finding such substantial equivalence, which may take longer than
the 90-day period generally provided for FDA review. There can be no assurance
that the Company or its collaborators will be able to establish substantial
equivalence for the ORIGEN diagnostic systems, or that the FDA or certain
corresponding government agencies will permit marketing of such systems in their
respective jurisdictions. Should the Company fail to demonstrate substantial
equivalence, the Company would need to perform extensive clinical testing to
demonstrate safety and efficacy, incurring substantial costs and delays.
Even if regulatory approval is obtained, a marketed product, its
manufacturer and its manufacturing facilities are subject to continual review
and periodic inspections. The regulatory standards for manufacturing are
currently being applied stringently by the FDA. Discovery of previously unknown
problems with a product, manufacturer or facility may result in restrictions on
such product or manufacturer, including costly recalls or even withdrawal of the
product from the market. The Company is also subject to numerous environmental
and safety laws and regulations, including those governing use of hazardous
materials. Any violation of, and the cost of compliance with, these regulations
could adversely impact the Company's operations.
RELIANCE ON PATENTS AND PROPRIETARY RIGHTS
The Company's success will depend in part on its ability to obtain and
maintain patent protection for its products, both in the United States and other
countries. The patent position of diagnostic companies is highly uncertain and
involves complex legal and factual questions. There is no consistent policy
regarding the breadth of claims allowed in medical patents. The Company owns or
co-owns and has been granted exclusive rights to 18 issued U.S. patents and 69
pending U.S. applications in the diagnostics field. Worldwide, the Company owns
or co-owns and has been granted exclusive rights to an additional 54 issued
patents, and 150 pending patent applications covering the same technology. There
can be no assurance that patents will issue from any present or future
applications or that, as to existing patents or patents which may issue, claims
are or will be sufficiently broad to protect the Company's technology. In
addition, there can be no assurance that the patents issued to the Company will
not be challenged, invalidated or circumvented, or that the rights granted
thereunder will provide proprietary protection to the Company.
The commercial success of the Company will also depend in part on its
neither infringing patents issued to competitors nor breaching the technology
licenses upon which the Company's products might be based. The Company is a
licensee under certain patents and patent applications that it considers
necessary for its business. While the Company is aware of additional third-party
patents and patent applications relating to specific reagents, it is uncertain
whether any of these will require the Company to alter any products or
processes, obtain licenses or cease certain development activities with respect
to these
4
<PAGE>
reagents. There can be no assurance that the Company will be able to obtain
necessary licenses at reasonable cost. Failure by the Company to obtain a
license to any technology that it requires to commercialize its products may
have a material adverse impact on the Company. Litigation, which could result in
substantial costs to the Company, may also be necessary to enforce any of its
patent rights or to determine the scope and validity of others' proprietary
rights. In addition, the Company may have to participate in interference
proceedings declared by the U.S. Patent and Trademark Office, which could result
in substantial costs to the Company to determine the priority of inventions.
IGEN also protects its proprietary technology and processes in part by
confidentiality agreements with its collaborative partners, employees,
consultants and other advisors. There can be no assurance that these agreements
will not be breached, that the Company will have adequate remedies for any
breach or that the Company's trade secrets will not otherwise become known or be
independently discovered by competitors.
UNCERTAINTY OF PRICING, THIRD-PARTY REIMBURSEMENT AND RELATED MATTERS
The Company's business, financial condition and results of operations may be
materially adversely affected by the continuing efforts of government and third
party payors to contain or reduce the costs of health care through various
means. For example, in certain foreign markets pricing and profitability of
diagnostic products are subject to government control. In the United States, the
Company expects that there will continue to be a number of federal and state
proposals to implement similar government control. In addition, increasing
emphasis on managed care in the United States will continue to put pressure on
the pricing of diagnostic tests. Cost control initiatives could decrease the
price that the Company or any of its strategic partners receives for any
products in the future and have a material adverse effect on the Company's
business, financial condition and results of operations. Further, to the extent
that cost control initiatives have a material adverse effect on the Company's
strategic partners, the Company's ability to commercialize its products and to
realize royalties may be adversely affected.
The ability of the Company and any strategic partner to commercialize
diagnostic products may depend in part on the extent to which reimbursement for
the products will be available from government and health administration
authorities, private health insurers and other third party payors. Significant
uncertainty exists as to the reimbursement status of newly approved health care
products. Third party payors, including Medicare, increasingly are challenging
the prices charged for medical products and services. Government and other third
party payors are increasingly attempting to contain health care costs by
limiting both coverage and the level of reimbursement for new products. There
can be no assurance that any third party insurance coverage will be available to
patients for any products developed by the Company or its strategic partners. If
adequate coverage and reimbursement levels are not provided by government and
other third party payors for the Company's products, the market acceptance of
these products may be reduced, which may have a material adverse effect on the
Company's business, financial condition and results of operations.
LIMITED MANUFACTURING, SALES, MARKETING AND DISTRIBUTION EXPERIENCE
The Company's clinical diagnostic products must be manufactured in
commercial quantities in compliance with regulatory requirements and at
acceptable costs. The Company has no experience in large scale manufacturing and
currently lacks the capability to manufacture its diagnostic products in
accordance with regulatory requirements. If the Company is unable to develop or
contract for manufacturing capabilities on acceptable terms, the Company's
ability to manufacture products will be adversely affected, resulting in the
delay of submission of products for regulatory approval, which in turn could
adversely affect the Company's competitive position and financial condition. The
Company also has limited experience in sales, marketing and distribution. To
market any of its clinical diagnostic products directly, the Company must
develop a substantial marketing and sales force with technical expertise and
supporting distribution capability. Alternatively, the Company may obtain the
assistance of established companies, as
5
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it has done with certain of its diagnostic products. There can be no assurance
that the Company will be able to establish sales and distribution capabilities
or that it or its collaborators will be successful in gaining market acceptance
for its clinical diagnostics products.
FUTURE CAPITAL NEEDS; UNCERTAINTY OF ADDITIONAL FUNDING
The Company may require substantial additional funds to conduct the research
and development and regulatory testing of its products, to establish commercial
scale manufacturing facilities and to market its products. The Company's future
capital requirements will depend on many factors, including, but not limited to:
continued progress in the development of diagnostic products; the time and costs
involved in obtaining regulatory approvals; the costs involved in filing,
prosecuting and enforcing patent claims; competing technological and market
developments; the ability of the Company to maintain its existing, and to
establish new, collaborative and licensing arrangements; the cost of
manufacturing scale-up; and effective commercialization activities and
arrangements. The Company may be required to seek additional funding either
through collaborative and licensing arrangements or through public or private
debt or equity financings. There can be no assurance that additional financing
will be available in a timely manner or on acceptable terms. If additional funds
are raised by issuing equity securities, further dilution to existing
shareholders may result. If adequate funds are not available, the Company may be
required to delay, scale back or eliminate one or more of its programs or obtain
funds through arrangements with collaborative partners or others that may
require the Company to relinquish rights to certain of its technologies, product
candidates or products that the Company would not otherwise relinquish.
NEED TO ATTRACT AND RETAIN KEY EMPLOYEES AND CONSULTANTS
The Company is highly dependent on the principal members of its scientific
and management staff, the loss of whose services might impede the achievement of
its research and development or strategic objectives. Recruiting and retaining
qualified scientific personnel to perform research and development work in the
future will also be critical to the Company's success. There can be no assurance
that the Company will be able to attract and retain such personnel given the
competition between numerous diagnostic and biotechnology companies and research
and academic institutions for experienced scientists.
The Company's anticipated growth and expansion into areas and activities
requiring additional expertise, such as clinical trials, government approvals,
manufacturing and marketing, are expected to place increased demands on the
Company's resources. These demands are expected to require the addition of new
management personnel and the development of additional expertise by existing
management personnel. The failure to acquire needed personnel or to develop
needed expertise could have a material adverse effect on the Company's prospects
for success. In addition, the Company relies on consultants and advisors to
assist in formulating its research and development strategy. All of the
Company's consultants and advisors are employed by entities other than the
Company and may have commitments to or consulting or advisory contracts with
other entities that may affect their ability to contribute to the Company.
RISK OF PRODUCT LIABILITY; AVAILABILITY OF INSURANCE
The Company's business will in the future expose it to potential liability
risks that are inherent in the testing, manufacturing and marketing of
diagnostic products. The Company presently has only limited product liability
insurance, and there can be no assurance that it will be able to maintain such
insurance or obtain additional insurance on acceptable terms or that insurance
will provide adequate coverage against potential liabilities.
6
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ANTI-TAKEOVER PROVISIONS
The Company's Certificate of Incorporation and Bylaws require that any
action required or permitted to be taken by stockholders of the Company must be
effected at a duly called annual or special meeting of stockholders and may not
be effected by written consent. Special meetings of the stockholders of the
Company may be called only by the Board of Directors, the Chairman of the Board
or the President of the Company. These and other charter provisions may
discourage certain types of transactions involving an
actual or potential change in control of the Company, including transactions in
which the stockholders might otherwise receive a premium for their shares over
then current prices, and may limit the ability of the stockholders to approve
transactions they may deem to be in their best interests. In addition, the Board
of Directors has the authority, without action by the stockholders, to fix the
rights and preferences of and to issue shares of Preferred Stock, which also my
have the effect of delaying or preventing a change in control of the Company.
PRICE VOLATILITY IN PUBLIC MARKET
The Company's Common Stock currently trades on the NASDAQ National Market.
The securities markets have from time-to-time experienced significant price and
volume fluctuations that may be unrelated to the operating performance of
particular companies. In addition, the market prices of the common stock of many
publicly traded technology companies have in the past been, and can in the
future be expected to be, especially volatile. Announcements of technological
innovations or new products of the Company or its competitors, developments or
disputes concerning patents or proprietary rights, publicity regarding actual or
potential medical results relating to products under development by the Company
or its competitors, regulatory developments in both the U.S. and foreign
countries, and economic and other external factors, as well as period-to-period
fluctuations in the Company's operating and product development results, may
have a significant impact on the market price of the Company's Common Stock.
CONTROL BY EXISTING SHAREHOLDERS
The Company's directors, officers and their affiliates own beneficially
approximately 36% of the outstanding shares of Common Stock, of which
approximately 27% is held by the Company's Chief Executive Officer. Accordingly,
the Company's officers and directors, if they act in concert, will have the
ability to influence significantly the election of the Company's directors and
most other shareholder actions.
ABSENCE OF DIVIDENDS, DILUTION
The Company has not paid any cash dividends since its inception and does not
intend to pay any cash dividends in the foreseeable future. Dilution will occur
upon the exercise of outstanding stock options of the Company and may occur upon
future equity financings of the Company.
7
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THE COMPANY
IGEN develops, manufactures and markets diagnostic systems utilizing its
patented ORIGEN-Registered Trademark- technology, which is based on
electrochemiluminescence. This proprietary technology utilizes labels that, when
attached to a biological substance and electrochemically stimulated, emit light
at a particular wavelength to signal the presence of an analyte. The light
emission then can be measured with a high degree of accuracy to detect and
quantify the analyte. The ORIGEN technology thus provides a uniform assay format
for conducting a multitude of diagnostic tests, including immunoassays, nucleic
acid probe and clinical chemistry tests. The Company believes that ORIGEN-based
diagnostic systems offer significant advantages over existing systems in terms
of speed, sensitivity, flexibility, throughput and cost effectiveness. The
Company is designing its diagnostic systems to become the industry standard for
all segments of the diagnostic market, from large central laboratories to
patient point-of-care, industrial and in-home testing.
The Company's business strategy is to commercialize certain products in
collaboration with established healthcare and information technology companies
and to develop and market other products either independently or with corporate
partners in the patient point-of-care, life science research, animal health and
industrial markets. Collaborations with established diagnostic and
pharmaceutical companies have provided the Company with revenues from licensing
agreements, as well as access to large marketing organizations that it believes
are well positioned to maximize market penetration of ORIGEN-based products. The
Company has entered into several strategic alliances, including:
- Boehringer Mannheim GmbH ("Boehringer Mannheim")--the second largest
worldwide manufacturer of diagnostic equipment and supplies that is
part of Corange Limited ("Corange"), a multinational corporation with
annual revenues exceeding $4 billion--to commercialize ORIGEN-based
clinical immunodiagnostic and nucleic acid probe systems that are
marketed worldwide to clinical references laboratories. IGEN received
$50 million in license fees from Boehringer Mannheim and receives
royalties on all product sales. Boehringer Mannheim presently markets
two ORIGEN-based systems under the Elecsys product line. In May 1997,
F. Hoffman-LaRoche AG ("Roche") and Corange announced that Roche would
acquire all shares of Corange. The merger, when completed, will create
a $15 billion global company that will be the world's largest
diagnostic supplier.
- Organon Teknika B.V. ("Organon Teknika")--a company specializing in
hospital and blood bank products, which is a business unit of Akzo
Nobel N.V., a multinational corporation with annual revenues of
approximately $10 billion--to develop and commercialize ORIGEN-based
nucleic acid probe systems that will be marketed worldwide to clinical
diagnostic and life science research markets. The Company received $20
million under its agreements with Organon Teknika and receives
royalties on product sales. Organon Teknika markets the NASBA QR System
together with test kits for the detection of HIV-1 RNA.
- Eisai Co., Ltd. ("Eisai")--the fourth largest Japanese pharmaceutical
company--to market in Japan an ORIGEN-based diagnostic system for
agreed-upon diagnostic tests. During 1997, Eisai began marketing an
ORIGEN-based immunoassay system under the name Picolumi and the Company
receives royalties on product sales.
The Company currently sells the ORIGEN Detection System and related reagents
and services for life science research applications. The Company believes that
its ORIGEN Detection System can replace many of the complex and less sensitive
immunoassay methods presently in use, including radioimmunoassays. The Company
believes that applications of the ORIGEN technology include point-of-care
diagnostic systems for use outside the central laboratory because of speed,
simplicity and cost effectiveness and anticipates that applications will exist
in the field of in-home testing (patient self-testing), in which the
8
<PAGE>
Company's technology may enable the creation of compact, inexpensive diagnostic
products. The Company is currently monitoring the development of healthcare
communication networks and intends to design its point-of-care and in-home
testing systems for integration into such networks.
IGEN, Inc. was incorporated in California in 1982 and reincorporated in
Delaware during 1996 as IGEN International, Inc. IGEN's executive offices,
laboratory and manufacturing operations are located at 16020 Industrial Drive,
Gaithersburg, Maryland 20877, (301) 984-8000.
RECENT DEVELOPMENTS
On September 15, 1997, the Company filed a lawsuit in Maryland against
Boehringer Mannheim GmbH ("BMG"), a German company to which the Company has
licensed certain rights to develop and commercialize diagnostic products based
on ORIGEN technology. That lawsuit is pending in the Southern Division of the
United States District Court for the District of Maryland. The Company's dispute
with BMG arises out of a 1992 License and Technology Development Agreement (the
"Agreement"), pursuant to which BMG developed and launched its "Elecsys" line of
diagnostic products, which is based on the Company's ORIGEN technology. The
Company alleges that BMG has failed to perform certain material obligations
under the Agreement, including development and commercialization of ORIGEN
technology according to the contractual timetable; exploitation of the license
to the extent contemplated by the parties; phase out of certain
non-royalty-bearing product lines; exploitation of ORIGEN technology only within
BMG's licensed fields; proper treatment of intellectual property rights
regarding ORIGEN technology; maintenance of records essential to the computation
of royalties; and proper computation of royalties. In its lawsuit, the Company
seeks damages as well as injunctive and declaratory relief, including a judicial
determination of its entitlement to terminate the Agreement. On September 15,
1997, shortly after the Company filed its lawsuit in Maryland, BMG filed a
lawsuit in the United States District Court for the Southern District of Indiana
seeking a declaration that it did not breach the Agreement and a preliminary
injunction precluding the Company from terminating the Agreement pending the
judicial resolution of the dispute between the parties. In addition, BMG sought
and obtained a temporary restraining order that precluded the Company from
terminating the Agreement; IGEN has agreed to the continuation of the temporary
restraining order until BMG's motion for preliminary injunction can be
adjudicated. On January 26, 1998, the United States District Court for the
District of Maryland ruled that the litigation between the Company and BMG will
go forward in Maryland. The Company expects that BMG's Indiana action will be
dismissed or consolidated with the Maryland action.
In December 1997, IGEN International K.K., a Japanese subsidiary of the
Company, filed a lawsuit in Tokyo District Court against Hitachi Ltd.
("Hitachi"). This lawsuit seeks to enjoin Hitachi from manufacturing, using or
selling the Elecsys 2010 immunoassay instrument in Japan. The lawsuit also seeks
to enjoin Hitachi from infringing the subsidiary's license registration, known
in Japan as a "senyo-jisshi-ken," in connection with the development of the
Mosys instrument. Hitachi is the sole manufacturer for Boehringer Mannheim of
the Elecsys 2010 immunoassay instrument. Boehringer Mannheim sells the Elecsys
2010 worldwide to hospitals and clinical reference laboratories. Hitachi is also
developing for Boehringer Mannheim the Mosys instrument. The Company's Japanese
subsidiary alleges that both the Elecsys 2010 and the Mosys are based on ORIGEN
technology. The Company's ORIGEN technology is licensed to its Japanese
subsidiary and to Eisai K.K. pursuant to a "senyo-jisshi-ken." The Company's
Japanese subsidiary further alleges that Hitachi's manufacturing and selling of
the Elecsys 2010 and the development of Mosys violate the "senyo-jisshi-ken."
The lawsuit requests injunctive relief against Hitachi and destruction of the
Elecsys 2010 and Mosys instruments in Hitachi's possession.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the Shares
by the Selling Securityholders.
9
<PAGE>
SELLING SECURITYHOLDERS
The Selling Securityholders collectively purchased 25,000 shares of Series B
Convertible Preferred Stock, stated value $1,000 per share, from the Company on
December 19, 1997. The Series B Convertible Preferred Stock entitles its holders
to a dividend payment of 7.75% compounded annually on the stated value of the
stock. Based on the stated value, the Series B Convertible Preferred Stock is
convertible into Common Stock of the Company in accordance with the terms of the
Certificate of Designation, Powers, Preferences and Rights at a rate of $13.96
per Share, for a total of 1,790,830 Shares. In addition, the Company may elect
to make the dividends payable upon the Series B Convertible Preferred Stock in
Shares at a rate of $13.96 per Share, rather than making the dividend payment in
cash. If the Company elects to pay such dividends in Shares, the Company may
issue up to 810,172 Shares to the Selling Securityholders. The Prospectus also
covers, pursuant to Rule 416 under the Securities Act, such indeterminate number
of Shares as may be required to prevent dilution resulting from stock splits,
stock dividends or similar transactions.
The following table sets forth certain information regarding ownership of
Shares by the Selling Securityholders as of December 31, 1997 and the number of
Shares which may be offered for the accounts of the Selling Securityholders or
their transferees or distributees from time to time. Because the Selling
Securityholders may sell all or any part of their shares registered pursuant to
this Prospectus, no estimate can be given as to the number of share that will be
held by the Selling Securityholders upon termination of this Offering. None of
the Selling Securityholders has, or within the past three years, has had, any
position, office or other material relationship with the Company or any of its
predecessors or affiliates except as set forth below.
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES
OWNED WHICH MAY BE SOLD
PRIOR TO IN THIS
SELLING STOCKHOLDER OFFERING(1) OFFERING(2)
- --------------------------------------------------------------------------- ------------------ -----------------
<S> <C> <C>
The Robertson Stephens Black Bear Fund, L.P................................ 266,342
The Robertson Stephens Black Bear Offshore Fund, L.P....................... 68,943
The Robertson Stephens Black Bear Pacific Master Fund Unit Trust........... 33,812
Credit Suisse First Boston Corporation..................................... 208,079
Permal Noscal, Ltd......................................................... 312,099 312,099
Zaxis Partners, L.P........................................................ 39,014 39,014
Sidney Kimmel.............................................................. 25,489 25,489
Pollat, Evans & Co. Inc.................................................... 8,842 8,842
Quadra Appreciation Fund, Inc.............................................. 3,641 3,641
Peter W. Branagh & Ramona Y. Branagh Trustee for the Peter W. Branagh &
Ramona Y. Branagh Revocable Trust, dated March 8, 1993................... 1,040 1,040
KA Investments LDC......................................................... 208,079
Gleneagles................................................................. 13,004 13,004
Colonial Penn.............................................................. 13,004 13,004
Putnam Health Sciences Trust............................................... 416,159
Porter Partners, L.P....................................................... 130,049 130,049
EDJ Limited................................................................ 26,009 26,009
White Rock Capital Offshore, Ltd........................................... 62,423 62,423
Quantum Partners LDC....................................................... 873,600 260,100
Collins Capital Diversified Fund, L.P...................................... 132,115 41,615
White Rock Capital Partners, L.P........................................... 194,539 104,039
Prism Partners I........................................................... 156,059
GPZ Trading................................................................ 52,019 52,019
Triton Capital Investments................................................. 78,029
JMG Capital Partners, L.P.................................................. 78,029 78,029
</TABLE>
10
<PAGE>
- ------------------------
(1) The number of shares of Common Stock owned by each Selling Securityholder
prior to the Offering includes the shares which may be sold in this
Offering, together with all other shares of Common Stock owned by each such
Selling Securityholder on December 31, 1997.
(2) The number of shares for each Selling Securityholder is based on the
conversion of the Series B Convertible Preferred Stock owned by such Selling
Securityholder on December 31, 1997 and the payment of dividends in the form
of Shares by the Company for the full term of the Series B Convertible
Preferred Stock at a rate of $13.96 per Share of Common Stock. The actual
rate of conversion and dividend payment may vary in accordance with the
terms and conditions of the Series B Convertible Preferred Stock.
PLAN OF DISTRIBUTION
The Selling Securityholders have advised the Company that the Shares may be
sold or distributed from time to time by the Selling Securityholders, or by
pledgees, donees or transferees of, or other successors in interest to, the
Selling Securityholders, directly to one or more purchasers (including pledgees)
or through brokers, dealers or underwriters who may act solely as agents or may
acquire Shares as principals, at market prices prevailing at the time of sale,
at prices related to such prevailing market prices, at negotiated prices, or at
fixed prices, which may be changed. The distribution of the Shares may be
effected by one or more of the following methods: (i) ordinary brokers'
transactions, which may include long or short sales; (ii) transactions involving
cross or block trades or otherwise on the Nasdaq National Market; (iii)
purchases by brokers, dealers or underwriters as principals and resale by such
purchasers for their own accounts pursuant to this Prospectus; (iv) "at the
market" to or through market makers or into an existing market for the Common
Stock; (v) in other ways not involving market makers or established trading
markets, including direct sales to purchasers or sales effected through agents;
(vi) through transactions in options, swaps or other derivatives (whether
exchange-listed or otherwise); or (vii) any combination of the foregoing, or by
any other legally available means. In addition, the Selling Securityholders or
their successors in interest may enter into hedging transactions with
broker-dealers who may engage in short sales of Common Stock in the course of
hedging the positions they assume with the Selling Securityholders. The Selling
Securityholders or their successors in interest may also enter into option or
other transactions with broker-dealers that require the delivery to such
broker-dealers of the Shares, which Shares may be resold thereafter pursuant to
this Prospectus.
Brokers, dealers, underwriters or agents participating in the distribution
of the Shares as agent may receive compensation in the form of discounts,
concessions or commissions from the Selling Securityholders (and, if they act as
agent for the purchaser of such Shares, from such purchaser). Such discounts,
concessions or commissions as to a particular broker, dealer, underwriter or
agent might be greater or less than those customary in the type of transaction
involved.
The Selling Securityholders and any brokers, dealers, underwriters or agents
that participate in the distribution of the Shares may be deemed to be
"underwriters" within the meaning of the Securities Act, and any discounts,
commissions or concessions received by any such persons might be deemed to be
underwriting discounts and commissions under the Securities Act. Neither the
Company nor the Selling Securityholders can presently estimate the amount of
such compensation. The Company knows of no existing arrangements between any
Selling Securityholder and any other Securityholder, broker, dealer, underwriter
or agent relating to the sale or distribution of the Shares.
To the extent required, the Company will file, during any period in which
offers or sales are being made, a supplement to this Prospectus which sets
forth, with respect to a particular offering, the specific number of Shares to
be sold, the name of the Selling Securityholder, the sales price, the name of
any participating broker, dealer, underwriter or agent, any applicable
commission or discount and any other material information with respect to the
plan of distribution not previously disclosed.
11
<PAGE>
The Company will not receive any of the proceeds from the sale of the Shares
offered hereby. The Company will pay substantially all of the expenses incident
to this Offering of the Shares by the Selling Securityholders to the public
other than commissions and discounts of brokers, dealers, underwriters or
agents. The Company has agreed to indemnify the Selling Securityholders and
certain related persons against certain liabilities, including certain
liabilities under the Securities Act.
In order to comply with certain states' securities laws, if applicable, the
Shares will be sold in such jurisdictions only through registered or licensed
brokers or dealers. In addition, in certain states the Common Stock may not be
sold unless the Common Stock has been registered or qualified for sale in such
state or an exemption from registration or qualification is available and is
satisfied.
Pursuant to the Registration Rights Agreement between the Company and the
Selling Securityholders, the Company has agreed to file with the Commission a
Registration Statement on Form S-3 under Rule 415 covering the resale of at
least 200% of the Shares issuable to the Selling Securityholders upon conversion
of and payment of dividends upon the Series B Convertible Preferred Stock. The
Company has agreed to use its best efforts to cause the Registration Statement
to become effective as soon as practicable following the filing of the
Registration Statement, but in any event not later than March 16, 1998.
LEGAL MATTERS
The legality of issuance of the shares will be passed upon for the Company
by Wilmer, Cutler & Pickering, Washington, D.C.
EXPERTS
The financial statements incorporated in this Prospectus by reference from
the Company's Annual Report on Form 10-K for the year ended March 31, 1997 have
been audited by Deloitte & Touche, LLP, independent auditors, as stated in their
report, which is incorporated herein by reference, and has been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
12
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY THE SHARES OF COMMON STOCK BY ANYONE IN ANY JURISDICTION IN WHICH THE OFFER
OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING THE OFFER OR TO
DO SO, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL CREATE ANY IMPLICATION THAT INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THIS DATE HEREOF.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Available Information........................... 2
Incorporation of Certain Information by
Reference..................................... 2
Risk Factors.................................... 3
The Company..................................... 8
Use of Proceeds................................. 9
Selling Stockholder............................. 10
Plan of Distribution............................ 11
Legal Matters................................... 11
Experts......................................... 11
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
5,202,004 SHARES
IGEN INTERNATIONAL, INC.
COMMON STOCK
---------------------
PROSPECTUS
---------------------
[INSERT DATE]
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Estimated expenses (other than underwriting discounts and commissions, fees
and expenses of counsel to each Selling Securityholder) payable in connection
with the resale of the Common Stock offered hereby are as follows:
<TABLE>
<S> <C>
SEC Registration.................................................................... $25,321
Nasdaq Listing Fee.................................................................. $17,500
Legal Fees and Expenses............................................................. $[insert]
Accounting Fees and Expenses........................................................ $[insert]
Printing Fees and Expenses.......................................................... $[insert]
Miscellaneous....................................................................... $[insert]
Total........................................................................... $[insert]
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Bylaws provide that the Company shall indemnify its directors
and officers to the fullest extent not prohibited by the General Corporation Law
of the State of Delaware; provided, however, that the Company may modify the
extent of such indemnification by individual contracts with its directors and
officers; and, provided, further, that the Company shall not be required to
indemnify and director or officer in connection with any proceeding (or part
thereof) initiated by such person unless (i) such indemnification is expressly
required to be made by law, (ii) the proceeding was authorized by the Board of
Directors of the Company, (iii) such indemnification is provided by the Company,
in its sole discretion, pursuant to the powers vested in the Company by the
General Corporation Law of the State of Delaware, or (iv) such indemnification
is otherwise required by law, by agreement, or by vote of the stockholders or
disinterested directors.
Section 145 of the General Corporation Law of the State of Delaware permits
a corporation, under specified circumstances, to indemnify its directors,
officers, employees or agents against expenses (including attorney's fees),
judgments, fines and amounts paid in settlements actually and reasonably
incurred by them in connection with any action, suit or proceeding brought by
third parties by reason of the fact that they were or are directors, officers,
employees or agents of the corporation, if such directors, officers, employees
or agents acted in good faith and in a manner they reasonably believed to be in
or not opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reason to believe their conduct was
unlawful. In a derivative action, i.e., one by or in the right of the
corporation, indemnification may be made only for expenses actually and
reasonably incurred by directors, officers, employees or agents in connection
with the defense or settlement of an action or suit, and only with respect to a
matter as to which they shall have acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification shall be made if such person shall
have been adjudged liable to the corporation, unless and only to the extent that
the court in which the action or suit was brought shall determine upon
application that the defendant directors, officers, employees or agents are
fairly and reasonably entitled to indemnity for such expenses despite such
adjudication of liability.
Article VI of the Company's Certificate of Incorporation states that
directors of the Company will not be personally liable to the Company or its
stockholders for monetary damages for any breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the Company or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the General Corporation Law of the state of
Delaware,
II-1
<PAGE>
which makes directors liable for unlawful dividends or unlawful stock
repurchases or redemptions or (iv) for any transaction from which the director
derived an improper personal benefit. The Company's Certificate of Incorporation
further provides that if the General Corporation Law of the State of Delaware is
amended to authorize corporate action further eliminating or limiting the
personal liability of directs, then the liability of the Company's directors
shall be eliminated or limited to the fullest extent permitted by the General
Corporation Law of the State of Delaware, as so amended.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
<TABLE>
<S> <C>
4.1 Certificate of Designation, Powers, Preferences and Rights of the Series B Convertible
Preferred Stock of the Company dated December 18, 1997.
4.2 Purchase Agreement dated as of December 16, 1997 by and among the Company and the
Selling Securityholders.
4.3 Registration Rights Agreement dated as of December 16, 1997 by and among the Company
and the Selling Securityholders.
4.4 Bylaws of the Company, Article VII.(1)
5.1 Opinion of Wilmer, Cutler & Pickering as to the legality of the securities being
registered.
23.1 Consent of Wilmer, Cutler & Pickering (included in Exhibit 5.1).
23.2 Consent of Deloitte & Touche, LLP, as independent public accountants for the Company.
</TABLE>
- ------------------------
(1) Incorporated by reference to IGEN's Quarterly Report on Form 10-Q for the
quarterly period ended December 31, 1996 filed with the Commission on
February 13, 1997.
ITEM 17. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 14, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which any offers or sales are being made,
a post-effective amendment to the registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20 percent
change in the maximum aggregate
II-2
<PAGE>
offering price set forth int the "Calculation of Registration Fee"
table in the effective registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any other material change to such information in the
registration statement.
PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) do not apply, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(2) That for the purpose of determining any liability under the Act each
such post-effective amendment may be deemed to be a new registration statement
relating to the securities being offered therein and the offering of such
securities at the time may be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities which are being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe the it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Gaithersburg, Montgomery County, State of Maryland, on
January 29, 1998.
IGEN INTERNATIONAL, INC.
By: /s/ SAMUEL J. WOHLSTADTER
-----------------------------------------
Name: Samuel J. Wohlstadter
Title: CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE CAPACITY DATE
- ------------------------------ --------------------------- -------------------
Chief Executive Officer
/s/ SAMUEL J. WOHLSTADTER (Principal Executive
- ------------------------------ Officer); 01/29/98
Samuel J. Wohlstadter Director
Vice President and Chief
/s/ GEORGE V. MIGAUSKY Financial
- ------------------------------ Officer (Principal 01/29/98
George V. Migausky Financial and
Accounting Officer
/s/ RICHARD J. MASSEY President (Chief Operating
- ------------------------------ Officer); Director 01/29/98
Richard J. Massey
/s/ EDWARD LURIER Director
- ------------------------------ 01/29/98
Edward Lurier
II-4
<PAGE>
Exhibit 4.1
SERIES B CONVERTIBLE PREFERRED STOCK
The designation, powers, preferences and rights of the Series B Convertible
Preferred Stock of IGEN International, Inc. (the "Company") are as follows:
I. DESIGNATION AND AMOUNT.
The designation of this series, which consists of twenty-five thousand
(25,000) shares of preferred stock, par value $.001 (the "Preferred Shares"), is
the Series B Convertible Preferred Stock (the "Series B Preferred Stock") and
the face amount shall be One Thousand Dollars ($1,000) per share (the "Stated
Value").
II. CONVERSION.
A. Right to Convert. Subject to the limitations contained in paragraph G
below, a holder of Preferred Shares (a "Holder") shall have the right to convert
such Preferred Shares at any time and from time to time on or after the Initial
Conversion Date (as defined below) into fully paid and non-assessable shares
(the "Conversion Shares") of the Company's Common Stock, $.001 par value (the
"Common Stock"), in accordance with the terms hereof (a "Conversion"). As used
herein, "Initial Conversion Date" means the ninetieth (90th) day following the
Issue Date and "Issue Date" means the date on which the Preferred Shares are
issued pursuant to the Purchase Agreement by and among the Company and the
purchasers (the "Purchasers") named therein (the "Purchase Agreement").
B. Conversion Notice. In order to convert Preferred Shares, the Holder
thereof shall send by facsimile transmission, at any time prior to 11:59 p.m.,
eastern time, on the date on which the Holder wishes to effect such Conversion
(the "Conversion Date"), to the Company and to its designated transfer agent for
the Common Stock (the "Transfer Agent") (i) a notice of conversion stating the
number of Preferred Shares to be converted (a "Conversion Notice") and (ii) a
copy of the certificate or certificates representing the Preferred Shares being
converted. The Holder shall thereafter send the original of the Conversion
Notice and of such certificate or certificates to the Company. The Company shall
issue a new certificate for Preferred Shares in the event that less than all of
the Preferred Shares represented by a certificate delivered to the Company in
connection with a Conversion are converted. Upon receipt of a Conversion
Notice, the Company shall calculate the amount of dividends which have accrued
on such Preferred Shares as provided herein up to and including the Conversion
Date, the applicable Conversion Price and a calculation of the number of shares
of Common Stock issuable upon such Conversion, and shall promptly submit such
information to the Transfer Agent. In the case of a dispute as to the
calculation of the Conversion Price or the number of Conversion Shares issuable
upon a Conversion, the Company shall promptly issue to the Holder the number of
Conversion Shares that are not disputed and shall submit the disputed
calculations to its independent accountants within two (2) business days of
receipt of such Holder's Conversion Notice. The Company shall cause such
accountant to calculate the Conversion Price as provided herein and to notify
the Company and the Holder of the results in writing no later than two (2)
business days following the day on which it received the disputed calculations.
Such accountant's
<PAGE>
calculation shall be deemed conclusive absent manifest error. The fees of any
such accountant shall be borne by the party whose calculations are most at
variance with those of such accountant.
C. Number of Conversion Shares; Conversion Price. The number of
Conversion Shares to be delivered by the Company pursuant to a Conversion shall
be equal to (A) the aggregate Stated Value of the Preferred Shares being
converted divided by (B) the Conversion Price. Subject to adjustment as provided
in Section III below, the "Conversion Price" shall be equal to $13.96.
D. Delivery of Common Stock Upon Conversion. Upon receipt of a
Conversion Notice pursuant to paragraph B above, the Company shall, no later
than the close of business on the third (3rd) business day following the
Conversion Date set forth in such Conversion Notice (the "Delivery Date"), issue
and deliver or cause to be delivered to the Holder certificates representing the
number of Conversion Shares as shall be determined as provided in paragraph C
above. If any Conversion would create a fractional Conversion Share, such
fractional Conversion Share shall be disregarded and the number of Conversion
Shares issuable upon such Conversion, in the aggregate, shall be rounded up or
down to the nearest whole number of Conversion Shares. Conversion Shares
delivered to the Holder shall not contain any restrictive legend as long as the
sale of such Conversion Shares by the Holder is covered by a registration
statement which has been filed and declared effective pursuant to the terms of
the Registration Rights Agreement by and among the Company and the Purchasers
(the "Registration Rights Agreement") or may be made pursuant to Rule 144(k)
under the Securities Act or any successor rule or provision.
E. Failure to Deliver Conversion Shares. In the event that the Company
fails for any reason to deliver to a Holder the number of Conversion Shares
issuable upon conversion of the Preferred Shares specified in the applicable
Conversion Notice on or before the Delivery Date therefor (a "Conversion
Default"), and such Conversion Default continues for longer than five (5)
business days, the Company shall pay to the Holder cash payments ("Conversion
Default Payments") in the amount of (i) (N/365) multiplied by (ii) the Stated
Value of the Preferred Shares represented by the Conversion Shares which remain
the subject of such Conversion Default multiplied by (iii) the lower of
twenty-four percent (24%) and the maximum rate permitted by applicable law,
where "N" equals the number of days elapsed between the original Delivery Date
of such Conversion Shares and the earlier to occur of (A) the date on which all
of such Conversion Shares are issued and delivered to such Holder and (B) the
date on which such Preferred Shares are redeemed pursuant to the terms hereof.
Cash amounts payable hereunder shall be paid on or before the fifth (5th)
business day of the calendar month following the calendar month in which such
amount has accrued. Nothing herein shall limit a Holder's right to pursue
actual damages for the Company's failure to issue and deliver Conversion Shares
on the applicable Delivery Date (including, without limitation, damages relating
to any purchase of shares of Common Stock by such Holder to make delivery on a
sale effected in anticipation of receiving Conversion Shares upon Conversion),
and such Holder shall have the right to pursue all remedies available to it at
law or in equity (including, without limitation, a decree of specific
performance and/or injunctive relief).
F. Mandatory Conversion. On the date which is five (5) years following
the Issue Date (the "Maturity Date"), so long as the Common Stock shall be
designated for quotation on the Nasdaq
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National Market system or listed on the New York Stock Exchange or American
Stock Exchange, and actively traded thereon, all Preferred Shares then
outstanding shall be automatically converted into the number of shares of Common
Stock equal to the Stated Value of such shares divided by the Conversion Price
then in effect (a "Mandatory Conversion"), and the Maturity Date shall be deemed
the Conversion Date with respect to such Mandatory Conversion. If a Mandatory
Conversion occurs, the Company and the Holder shall follow the procedures for
Conversion set forth in this Section II; provided, however, that the Holder
shall not be required to send the Conversion Notice contemplated by paragraph B
above.
G. Limitations on Right to Convert.
1. In no event shall a Holder be permitted to convert any Preferred
Shares in excess of that number of such shares upon the Conversion of which the
number of Conversion Shares to be issued pursuant to such Conversion, when added
to the number of shares of Common Stock issued pursuant to all prior Conversions
of Preferred Shares and issuances of Dividend Payment Shares, would exceed
19.99% of the number of outstanding shares of Common Stock on the Issue Date
(subject to equitable adjustments from time to time for the events described in
Section III below) (the "Cap Amount"), except that such limitation shall not
apply in the event that the Company obtains the approval of its stockholders as
required by NASD Rule 4460 (or any other similar rule or regulation) for
issuances of Common Stock in excess of such amount; provided, however that it is
understood and agreed that any Holder which has converted Preferred Shares into
a number of Conversion Shares that equals or exceeds such Holder's Allocation
Amount (as defined below) shall have the right to require the Company, upon
written notice to such effect, to seek such stockholder approval as soon as
practicable (but in no event later than forty-five (45) days) following the
Company's receipt of such notice. Until such approval is obtained, no Purchaser
(as defined in the Purchase Agreement) shall be issued, upon Conversion of
Preferred Shares, Conversion Shares in an amount greater than the product of (A)
the Cap Amount times (B) a fraction, the numerator of which is the number of
Preferred Shares purchased by such Purchaser pursuant to the Purchase Agreement
and the denominator of which is the aggregate number of Preferred Shares
purchased by all of the Purchasers pursuant to the Purchase Agreement (the
"Allocation Amount"). In the event that any Purchaser shall sell or otherwise
transfer all or any of its Preferred Shares, the transferee shall be allocated a
pro rata portion of such Purchaser's Allocation Amount and shall be similarly
bound. In the event that any Holder shall convert all of the Preferred Shares
held by it into a number of Conversion Shares which, in the aggregate, is less
than such Holder's Allocation Amount, then the difference between such Holder's
Allocation Amount and the number of Conversion Shares actually issued to such
Holder shall be allocated to the respective Allocation Amounts of the remaining
Holders of Preferred Shares on a pro rata basis in proportion to the number of
Preferred Shares then held by each such Holder relative to the aggregate number
of Preferred Shares then outstanding.
2. Except with respect to a Holder which indicates that it elects
not to be bound by the provisions of this subparagraph 2 on the signature page
of the Purchase Agreement executed by such Holder, in no event shall any Holder
be permitted to convert Preferred Shares in excess of that number of such shares
upon the Conversion of which (x) the number of shares of Common Stock
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beneficially owned by such Holder (other than shares of Common Stock which may
be deemed beneficially owned except for being subject to a limitation on
conversion or exercise analogous to the limitation contained in this
subparagraph 2) plus (y) the number of shares of Common Stock issuable upon the
Conversion of such Preferred Shares is equal to or exceeds (z) 4.99% of the
number of shares of Common Stock then issued and outstanding. Nothing contained
herein shall be deemed to restrict the right of a Holder to convert such excess
number of Preferred Shares at such time as such Conversion will not violate the
provisions of this subparagraph (2). To the extent that the limitation
contained in this subparagraph 2 applies, the determination of whether Preferred
Shares are convertible shall be in the sole discretion of the Holder, and the
submission of a Conversion Notice shall be deemed to be such Holder's
determination that the Preferred Shares described therein are convertible
hereunder.
H. "Trading Day" shall mean any day on which the Common Stock is traded
for any period on the Nasdaq National Market or on the principal securities
exchange or market on which the Common Stock is then traded.
III. ADJUSTMENTS TO CONVERSION PRICE.
A. Adjustment to Conversion Price Due to Stock Split, Stock Dividend,
Etc. If prior to the Conversion of all of the Preferred Shares, (i) the number
of outstanding shares of Common Stock is increased by a stock split, stock
dividend, reclassification, the distribution to holders of Common Stock of
rights or warrants entitling them to subscribe for or purchase Common Stock at
less than the then Current Market Price (as defined below) thereof or other
similar event, the Conversion Price shall be proportionately reduced, or (ii)
the number of outstanding shares of Common Stock is decreased by a reverse stock
split, combination or reclassification of shares or other similar event, the
Conversion Price shall be proportionately increased. In such event, the Company
shall notify the Transfer Agent of such change on or before the effective date
thereof. The "Current Market Price" per share of Common Stock on any date shall
be the average of the closing sale prices for the Common Stock as reported by
Nasdaq, or by the principal securities market on which the Common Stock is then
traded, on the five (5) consecutive Trading Days selected by the Company not
later than the earlier of the date in question and the Trading Day immediately
prior to the "ex" date, if any, with respect to the issuance or distribution
requiring such computation. The term "'ex' date", when used with respect to any
issuance or distribution, means the first Trading Day on which the Common Stock
trades regular way in the market from which such average closing price is then
to be determined without the right to receive such issuance or distribution. In
the absence of one or more such quotations, the Company shall determine the
current market price on the basis of such quotations as it considers
appropriate.
B. Adjustment Due to Merger, Consolidation, Etc. If, prior to the
Conversion of all of the Preferred Shares, there shall be any merger,
consolidation, exchange of shares, recapitalization, reorganization, redemption
or other similar event, as a result of which shares of Common Stock shall be
changed into the same or a different number of shares of the same or another
class or classes of stock or securities of the Company or another entity or
there is a sale of all or substantially all the Company's assets, then each such
Holder shall thereafter have the right to receive upon Conversion
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of the Preferred Shares held by it and in lieu of the shares of Common Stock
immediately theretofore issuable upon conversion, such stock, securities and/or
other assets (the "Change of Control Consideration"), if any, which such Holder
would have been entitled to receive in such transaction had such Preferred
Shares been converted immediately prior to such transaction, and in any such
case appropriate provisions shall be made with respect to the rights and
interests of such Holder to the end that the provisions hereof (including,
without limitation, provisions for the adjustment of the Conversion Price and of
the number of shares issuable upon a Conversion) shall thereafter be applicable
as nearly as may be practicable in relation to any securities thereafter
deliverable upon the exercise hereof. The Company shall not effect any
transaction described in this paragraph B unless (i) it first gives to the
Holder no less than twenty (20) days' prior written notice of such merger,
consolidation, exchange of shares, recapitalization, reorganization, redemption
or other similar event, and makes a public announcement of such event at the
same time that it gives such notice and (ii) the resulting successor or
acquiring entity (if not the Company) assumes by written instrument the
obligations of the Company under this Certificate, including the terms of this
paragraph B. Notwithstanding the provisions of paragraph II.A. above, in the
event that the Company delivers a notice of a merger, consolidation, exchange of
shares, recapitalization, reorganization, redemption or other similar event to
each Holder which specifies an effective date therefor which is prior to the
Initial Conversion Date, each Holder shall have the right to convert, from time
to time following the delivery of such notice to such Holder, any or all of the
Preferred Shares held by it, so that such Holder shall be entitled to receive
the Change of Control Consideration with respect to any Conversion Shares which
it received pursuant to a Conversion occurring prior to such effective date.
C. Distribution of Assets. If, prior to the Conversion of all of the
Preferred Shares, the Company shall declare or pay any dividends to holders of
Common Stock, or declare or make any distribution of its assets (or rights to
acquire its assets) to holders of Common Stock as a partial liquidating
dividend, by way of return of capital or otherwise, including any dividend or
distribution in cash or shares of capital stock of a subsidiary of the Company
(collectively, a "Distribution"), then, upon a Conversion by the Holder
occurring after the record date for determining shareholders entitled to such
Distribution but prior to the effective date of such Distribution, each Holder
shall be entitled to receive the amount of such assets which would have been
payable to such Holder had such Holder been the holder of such shares of Common
Stock on the record date for the determination of shareholders entitled to such
Distribution. The Company shall deliver written notice of any Distribution to
each Holder no less than twenty (20) business days prior to the effective date
thereof. Notwithstanding the provisions of paragraph II.A. above, in the event
that the Company delivers a notice of a Distribution to the Holders which
specifies an effective date therefor which is prior to the Initial Conversion
Date, each Holder shall have the right to convert, from time to time following
the delivery of such notice to such Holder, any or all of the Preferred Shares
held by it, so that such Holder shall be entitled to receive such Distribution
with respect to any Conversion Shares which it received pursuant to a Conversion
occurring prior to such effective date.
D. No Fractional Shares. If any adjustment under this Section III would
create a fractional share of Common Stock or a right to acquire a fractional
share of Common Stock, such fractional share shall be disregarded and the number
of shares of Common Stock issuable upon Conversion shall be rounded up or down
to the nearest whole number of shares.
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IV. DIVIDENDS.
A. Dividends; Stock Payment Option. Each Holder of Preferred Shares
shall be entitled to receive, to the extent permitted by applicable law, subject
to the prior, full payment of any accumulated and unpaid dividends on any class
or series of Senior Securities (as defined below) and in preference to the
payment of any dividend on any class or series of Junior Securities (as defined
below), cumulative dividends ("Dividends") on each Preferred Share in an amount
equal to, on an annualized basis, the Stated Value of such Preferred Share times
7.75%, compounded annually. Dividends shall accrue and be payable, whether or
not earned or declared, on each Preferred Share from the Issue Date through the
earlier to occur of (A) the Maturity Date (as defined below) and (B) the
redemption or conversion thereof in accordance with the terms hereof. Accrued
Dividends on a Preferred Share shall be payable on each Conversion Date (as
defined below), on the Maturity Date (as defined below) and on any Mandatory
Redemption Date or Optional Redemption Date (as defined below) (each, a
"Dividend Payment Date"). If, on any date, Dividends on any outstanding
Preferred Shares have not been paid with respect to all Dividend Payment Dates
preceding such date, the aggregate amount of such Dividends shall be fully paid
before any distribution, whether by way of dividend or otherwise, shall be
declared, paid or set apart with respect to any Junior Securities on or after
such date. Dividends shall be paid either in cash or, at the option of the
Company (the "Stock Payment Option"), and subject to the satisfaction of the
conditions set forth in paragraph B below (the "Stock Payment Conditions"), in
shares (the "Dividend Payment Shares") of the Common Stock. Cash Dividends shall
be paid to each Holder within five (5) Business Days following the applicable
Dividend Payment Date by delivering immediately available funds to such Holder
in accordance with such Holder's wiring instructions. Any amount of Dividends
payable in cash which is not paid within five (5) Business Days of the
applicable Dividend Payment Date shall bear interest at an annual rate equal to
the lower of (x) the "prime" rate (as published in the Wall Street Journal) on
such fifth Business Day plus three percent (3%) and (y) the highest rate
permitted by applicable law, for the number of days elapsed from such Dividend
Payment Date until such amount is paid in full (the "Default Interest Rate").
B. Conditions to Stock Payment Option. If the Company wishes to exercise
the Stock Payment Option, it may do so only if each of the following conditions
has been satisfied as of the relevant Conversion Date:
1. the number of shares of Common Stock authorized, unissued and
unreserved for all other purposes, or held in the Company's treasury, is
sufficient to pay 125% of the aggregate number of (x) Conversion Shares issuable
upon the conversion in full of the Preferred Shares and (y) the number of
Dividend Payment Shares issuable pursuant to such option;
2. the Dividend Payment Shares are authorized for quotation on the
Nasdaq National Market or for listing or quotation on any other national
securities exchange or market on which the Common Stock may be listed;
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3. the Registration Statement (as defined in the Registration Rights
Agreement) is effective and available for the sale of the Dividend Payment
Shares by the Holder or such shares may be sold to the public pursuant to Rule
144(k);
4. a Mandatory Redemption Event (as defined herein) has not occurred
or be continuing; and
5. the Company has delivered to each Holder a certificate, signed by
an executive officer of the Company, setting forth:
- the amount of the Dividend to which such Holder is
entitled and, if not the same, the amount of such payment
to be made in Dividend Payment Shares;
- the number of Dividend Payment Shares to be delivered in
payment of such Dividends, and the calculation therefor;
and
- a statement to the effect that all of the conditions set
forth in sub-paragraphs 1-4 above have been satisfied.
C. Delivery of Dividend Payment Shares. Upon exercise of the Stock
Payment Option, the Company shall deliver to each Holder, on or before the third
(3rd) Business Day following the applicable Dividend Payment Date (the "Dividend
Payment Share Delivery Date"), the aggregate number of whole Dividend Payment
Shares that is determined by dividing (x) the amount of the Dividend to which
such Holder is entitled as of such Dividend Payment Date with respect to all of
such Holder's Preferred Shares by (y) the applicable Conversion Price on such
Dividend Payment Date. No fractional Dividend Payment Shares shall be issued;
the Company shall, in lieu thereof, either issue a number of Dividend Payment
Shares which reflects a rounding up to the next whole number of shares or pay
such amount in cash. Dividend Payment Shares shall be fully paid and
non-assessable, free and clear of any liens, claims, preemptive rights or
encumbrances imposed by or through the Company.
D. Failure to Deliver Dividend Payment Shares. In the event that the
Company fails for any reason to deliver to a Holder the appropriate number of
Dividend Payment Shares on or before the third (3rd) Business Day following the
applicable Dividend Payment Share Delivery Date, the Company shall, upon written
notice by such Holder, immediately pay the amount of the Dividend in cash,
together with interest at an annual rate equal to the Default Interest Rate on
such unpaid amount accruing daily from the applicable Dividend Payment Date
until the date on which such amount is paid. Each Holder shall have the right
to pursue actual damages for the Company's failure to issue and deliver Dividend
Payment Shares on the Dividend Payment Share Delivery Date for a Dividend,
including, without limitation, damages relating to any purchase of shares of
Common Stock by such Holder to make delivery on a sale effected in anticipation
of receiving Dividend Payment Shares, such damages to be in an amount equal to
(A) the aggregate amount paid by such Holder for the shares of Common Stock so
purchased minus (B) (i) the aggregate amount of net
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proceeds, if any, received by such Holder from the sale of the Dividend Payment
Shares issued by the Company with respect to such Dividend and (ii) the amount
of any cash received in lieu of such Dividend Payment Shares pursuant to the
immediately preceding sentence (excluding any interest accrued thereon), and
such Holder shall have the right to pursue all remedies available to it at law
or in equity (including, without limitation, a decree of specific performance
and/or injunctive relief with respect to the Company's failure to deliver
Dividend Payment Shares).
E. Exercise of Stock Payment Option. In order for the Company to
exercise the Stock Payment Option, it must deliver written notice thereof (a
"Stock Payment Exercise Notice") to each Holder on or before the tenth (10th)
Business Day prior to the Initial Conversion Date (as defined below) and prior
to the first day of each calendar quarter thereafter specifying whether the
Company intends to pay Dividends during such calendar quarter (or shorter period
in the case of the notice delivered prior to the Initial Conversion Date) in
Dividend Payment Shares or cash. Upon delivering a Stock Payment Exercise Notice
to a Holder, the Company thereafter shall be irrevocably bound by its election
made therein to deliver Dividend Payment Shares or cash, as the case may be,
during the period to which such notice relates.
V. PAYMENT UPON DISSOLUTION.
(a) Upon the occurrence of (x) any insolvency or bankruptcy
proceedings, or any receivership, liquidation, reorganization or other similar
proceedings in connection therewith, commenced by the Company or by its
creditors, as such, or relating to its assets or (y) the dissolution or other
winding up of the Company whether total or partial, whether voluntary or
involuntary and whether or not involving insolvency or bankruptcy proceedings,
or (z) any assignment for the benefit of creditors or any marshaling of the
material assets or material liabilities of the Company (each, a "Liquidation
Event"), no distribution shall be made to the holders of any shares of Junior
Securities (as defined below) unless, following the payment of preferential
amounts on all Senior Securities (as defined below), each Holder shall have
received the Liquidation Preference (as defined below) with respect to each
Preferred Share then held by such Holder. In the event that upon the occurrence
of a Liquidation Event, and following the payment of preferential amounts on all
Senior Securities (as defined below), the assets available for distribution to
the Holders and the holders of Pari Passu Securities (as defined below) are
insufficient to pay the Liquidation Preference with respect to all of the
outstanding Preferred Shares and the preferential amounts payable to such
holders, the entire assets of the Company shall be distributed ratably among the
Preferred Shares and the shares of Pari Passu Securities in proportion to the
ratio that the preferential amount payable on each such share (which shall be
the Liquidation Preference in the case of a Preferred Share) bears to the
aggregate preferential amount payable on all such shares. If, after the payment
of all preferential amounts to the holders of Senior Securities, the Holders and
the holders of Pari Passu Securities, there are assets of the Company remaining,
the holders of Junior Securities shall share in such assets ratably in
accordance with the respective terms of such Junior Securities.
(b) The "Liquidation Preference" with respect to a Preferred Share
shall mean an amount equal to the Stated Value of such Preferred Share plus any
accrued and unpaid Dividends thereon. "Junior Securities" shall mean the Common
Stock and all other capital stock of the
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Company that are not Pari Passu Securities or do not have a preference over the
Preferred Stock in respect of dividends, redemption or distribution upon
liquidation. "Senior Securities" shall mean any securities of the Company which
by their terms have a preference over the Preferred Stock in respect of
dividends, redemption or distribution upon liquidation. "Pari Passu Securities"
shall mean any securities ranking pari passu with the Preferred Stock in respect
of dividends, redemption and distribution upon liquidation.
VI. OPTIONAL REDEMPTION BY THE COMPANY.
A. Optional Redemption. The Company shall have the right, at any time
commencing on the date which is thirty-six (36) months after the Issue Date (the
"Initial Optional Redemption Date"), to redeem (an "Optional Redemption") all of
the Preferred Shares then outstanding at the Optional Redemption Price (as
defined herein); provided, however, that in order to effect an Optional
Redemption, the Company shall have provided to each Holder thirty (30) Trading
Days' prior written notice of the effective date of the Optional Redemption (the
"Optional Redemption Date"). Nothing contained herein shall prevent a Holder
from converting any or all of its Preferred Shares at any time or from time to
time prior to the Optional Redemption Date.
B. Optional Redemption Price. The "Optional Redemption Price" shall mean
the Stated Value of the Preferred Shares being redeemed multiplied by (A) 103%
if the Optional Redemption Date occurs during the twelve (12) month period
beginning on the Initial Optional Redemption Date and (B) 100% if the Optional
Redemption Date occurs after the last day of such twelve (12) month period.
C. Payment of Optional Redemption Price. The Company shall pay the
Optional Redemption Price to each Holder within five (5) business days of the
Optional Redemption Date. If the Company fails to pay the Optional Redemption
Price on or before such fifth business day, interest at an annual rate equal to
the Default Interest Rate (calculated as of such fifth business day) shall
accrue on such unpaid amount on a daily basis calculated from the Optional
Redemption Date until the date on which such amount is paid in full.
VII. MANDATORY REDEMPTION BY THE HOLDER.
A. Mandatory Redemption. Subject to the provisions of paragraph F
below, in the event that a Mandatory Redemption Event (as defined herein)
occurs, each Holder shall have the right, upon written notice to the Company, to
have all or any portion of the Preferred Shares then held by such Holder
redeemed by the Company (a "Mandatory Redemption") at the Mandatory Redemption
Price (as defined herein) in same day funds. Such notice shall specify the
effective date of such Mandatory Redemption (the "Mandatory Redemption Date")
and the number of Preferred Shares to be redeemed. The Optional Redemption Date
and the Mandatory Redemption Date are sometimes each referred to herein as a
"Redemption Date".
B. Mandatory Redemption Price. The "Mandatory Redemption Price" shall be
equal to the Stated Value of the Preferred Shares being redeemed multiplied by
(i) during the twelve-month
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period following the Issue Date (the "Initial Redemption Period"), one hundred
and nine percent (109%), (ii) during the twelve-month period following the end
of the Initial Redemption Period, one hundred and six percent (106%), and (iii)
thereafter, one hundred and three percent (103%).
C. Payment of Mandatory Redemption Price.
The Company shall pay the Mandatory Redemption Price to each Holder
who has requested a Mandatory Redemption within five (5) business days of the
Mandatory Redemption Date. If the Company fails to pay the Mandatory Redemption
Price to a Holder within five (5) business days of the Mandatory Redemption
Date, such Holder shall be entitled to interest at an annual rate equal to the
Default Interest Rate (calculated as of such 5th business day) from the
Mandatory Redemption Date until the Mandatory Redemption Price has been paid in
full.
D. Mandatory Redemption Event. Each of the following events shall be
deemed a "Mandatory Redemption Event":
1. the Company fails for any reason (including without limitation
(x) as a result of not having a sufficient number of shares of Common Stock
authorized and reserved for issuance, or (y) due to the listing requirements of
any quotation system or exchange on which the Common Stock is quoted or listed
with which the Company is unable to comply as a result of voluntary action
undertaken by the Company or a failure by the Company to take action) to issue
shares of Common Stock to a Holder and deliver certificates representing such
shares to such Holder as and when required by the provisions hereof upon
Conversion of any Preferred Shares, and such failure continues for twenty (20)
Business Days;
2. any material representation or warranty made by the Company in
the Purchase Agreement, the Registration Rights Agreement, or any other
agreement, document, certificate or other instrument delivered in connection
with the transactions contemplated hereby or thereby is inaccurate or misleading
in any material respect as of the date such representation or warranty was made;
3. if following the declaration of effectiveness of the Registration
Statement (as defined in the Registration Rights Agreement) and while the
effectiveness of the Registration Statement is required to be maintained
pursuant to the terms of the Registration Rights Agreement, the effectiveness of
the Registration Statement lapses for any reason (including without limitation,
the issuance of a stop order) or is unavailable to the Holder for the sale of
Conversion Shares in accordance with the terms of the Registration Rights
Agreement, and such lapse or unavailability continues for a period of ten (10)
Business Days, provided that the cause of such lapse or unavailability results
from voluntary action undertaken by the Company or its failure to take action;
and
4. the Common Stock is not quoted on the Nasdaq National Market or
listed on the New York Stock Exchange or American Stock Exchange due to any
voluntary action or the failure to take action on the part of the Company.
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Notwithstanding the foregoing, to the extent that the Company uses its best
efforts to take action to avoid a Mandatory Redemption Event and such action is
unsuccessful, such failed attempt, in and of itself, will not be deemed to
trigger a Mandatory Redemption Event.
E. Failure to Pay Redemption Amounts. If the Company fails to pay the
Mandatory Redemption Price within ten (10) business days of the payable date
therefor, and has not exercised the Penalty Option (as defined below) in
accordance with paragraph F below, then the Holder shall have the right at any
time, so long as the Company remains in default, to require the Company, upon
written notice, to immediately issue, in lieu of the Mandatory Redemption Price,
the number of shares of Common Stock of the Company equal to the Mandatory
Redemption Price divided by the Conversion Price in effect on such Conversion
Date as is specified by the Holder in writing to the Company.
F. Penalty Option. In the event that a Mandatory Redemption Event
described in paragraph D.3 or D.4 above occurs and is continuing, the Company
may, in lieu of redeeming Preferred Shares as provided herein, elect (i) to
increase the rate at which Dividends will accrue on the Preferred Shares and be
payable hereunder to fourteen percent (14)%, such increase to be effective as of
the related Mandatory Redemption Date and (ii) to pay such Dividends in cash
within five business days of the end of each calendar month in which such
increased Dividends have accrued (the "Penalty Option"). Upon the termination of
the applicable Mandatory Redemption Event, such increased Dividend rate and
payment frequency will revert back to the Dividend rate and payment frequency
otherwise provided in this Certificate. The Company shall give written notice to
each Holder of its intention to exercise the Penalty Option within five (5)
business days of receiving notice of a Mandatory Redemption from a Holder.
VIII. MISCELLANEOUS.
A. Notices. Except as otherwise provided herein, any notice, demand or
request required or permitted to be given by the Company or a Holder pursuant to
the terms of this Certificate shall be in writing and shall be deemed given (i)
when delivered personally or by verifiable facsimile transmission (with a hard
copy to follow), (ii) on the next business day after timely delivery to an
overnight courier and (iii) on the third business day after deposit in the U.S.
mail (certified or registered mail, return receipt requested, postage prepaid),
addressed as follows:
If to the Company:
IGEN International, Inc.
16020 Industrial Drive
Gaithersburg, MD 20817
Attn: Messrs. Samuel J. Wohlstadter
George V. Migausky
Dr. Richard J. Massey
Fax:
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with a copy to:
Wilmer, Cutler & Pickering
2445 M Street, N.W.
Washington, DC 20037
Attn: Stephen P. Doyle, Esq.
Fax: 202-663-6363
and if to a Holder, at such address as such Holder shall have furnished the
Company in writing.
B. Transfer of Preferred Shares. A Holder may sell or transfer all or
any portion of the Preferred Shares to any person or entity as long as such sale
or transfer is the subject of an effective registration statement under the
Securities Act or is exempt from registration thereunder and otherwise is made
in accordance with the terms of the Purchase Agreement. From and after the date
of such sale or transfer, the transferee hereof shall be deemed to be a Holder.
Upon any such sale or transfer, the Company shall, promptly following the return
of the certificate or certificates representing the Preferred Shares that are
the subject of such sale or transfer, issue and deliver to such transferee a new
certificate in the name of such transferee.
C. Lost or Stolen Certificate. Upon receipt by the Company of evidence
of the loss, theft, destruction or mutilation of a certificate representing
Preferred Shares, and (in the case of loss, theft or destruction) of indemnity
or security reasonably satisfactory to the Company, and upon surrender and
cancellation of such certificate if mutilated, the Company shall execute and
deliver to the Holder a new certificate identical in all respects to the
original certificate.
D. No Voting Rights. Except as provided by applicable law and paragraph
G below, the Holders of the Preferred Shares shall have no voting rights with
respect to the business, management or affairs of the Company; provided that the
Company shall provide each Holder with prior notification of each meeting of
stockholders (and copies of proxy statements and other information sent to such
stockholders).
E. Remedies, Characterization, Other Obligations, Breaches and Injunctive
Relief. The remedies provided to a Holder in this Certificate shall be
cumulative and in addition to all other remedies available to such Holder under
this Certificate, at law or in equity (including without limitation a decree of
specific performance and/or other injunctive relief), no remedy contained herein
shall be deemed a waiver of compliance with the provisions giving rise to such
remedy and nothing contained herein shall limit such Holder's right to pursue
actual damages for any failure by the Company to comply with the terms of this
Certificate. The Company agrees with each Holder that there shall be no
characterization concerning this instrument other than as specifically provided
herein. Amounts set forth or provided for herein with respect to payments,
conversion and the like (and the computation thereof) shall be the amounts to be
received by the Holder hereof and shall not, except as expressly provided
herein, be subject to any other obligation of the Company (or the performance
thereof).
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F. Failure or Delay not Waiver. No failure or delay on the part of a
Holder in the exercise of any power, right or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such power,
right or privilege preclude other or further exercise thereof or of any other
right, power or privilege.
G. Protective Provisions.
So long as Preferred Shares are outstanding, the Company shall not,
without first obtaining the approval of the Holders of at least two-thirds (2/3)
of the then outstanding Preferred Shares:
1. alter or change (x) the rights, preferences or privileges of the
Series B Preferred Stock or (y) any other capital stock of the Company so as to
affect adversely the Series B Preferred Stock;
2. create any new class or series of capital stock having a
preference over or ranking pari passu with the Series B Preferred Stock as to
redemption, the payment of dividends or distribution of assets upon a
Liquidation Event or any other liquidation, dissolution or winding up of the
Company;
3. increase the authorized number of shares of Series B Preferred
Stock; or
4. re-issue any shares of Series B Preferred Stock which have been
converted in accordance with the terms hereof.
In the event that Holders of at least two-thirds (2/3) of the then
outstanding shares of Series B Preferred Stock agree to allow the Company to
alter or change the rights, preferences or privileges of the Series B Preferred
Stock, pursuant to the terms hereof, then the Company will deliver notice of
such approved change, no later than the twentieth (20th) day prior to the
effective date of such approved change, to the holders of the Series B Preferred
Stock that did not agree to such alteration or change (the "Dissenting Holders")
and the Dissenting Holders shall have the right to convert their Preferred
Shares at any time and from time to time following delivery of such notice. No
such change shall be effective to the extent that, by its terms, it applies to
less than all of the Holders of Preferred Shares then outstanding.
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Exhibit 4.2
PURCHASE AGREEMENT
PURCHASE AGREEMENT (this "Agreement"), dated as of December 16, 1997,
by and among IGEN International, Inc., a Delaware corporation (the "Company"),
and the entities whose names appear on the signature pages hereof. Such entities
are each referred to herein as a "Purchaser" and, collectively, as the
"Purchasers".
The Company wishes to sell and each Purchaser wishes to buy, subject to the
terms and conditions set forth in this Agreement, shares (the "Preferred
Shares") of the Company's Series B Convertible Preferred Stock (the "Preferred
Stock"), in reliance on the exemption from securities registration afforded by
the provisions of Regulation D under the Securities Act of 1933, as amended (the
"Securities Act").
The Preferred Shares are convertible pursuant to the terms of a Certificate
of Designation relating to the Preferred Stock, the form of which is attached
hereto as Exhibit A (the "Certificate"), into shares of the Company's Common
Stock, $.001 par value (the "Common Stock"). The term (i) "Conversion Shares"
shall mean, at any time, the shares of Common Stock that are issued or issuable
upon conversion of the Preferred Shares, (ii) "Dividend Payment Shares" shall
mean the shares of Common Stock issued by the Company in payment of dividends on
the Preferred Shares in accordance with the terms of the Certificate and (iii)
"Securities" shall mean the Preferred Shares, the Conversion Shares and the
Dividend Payment Shares.
The parties hereto agree as follows:
1. PURCHASE AND SALE OF PREFERRED STOCK.
1.1 Agreement to Purchase and Sell. Upon the terms and subject to the
conditions set forth herein, the Company agrees to sell at the Closing (as
defined below), and each Purchaser agrees to purchase, the number of Preferred
Shares set forth on the signature page hereof executed by such Purchaser, at a
purchase price equal to one thousand dollars ($1,000) times the number of
Preferred Shares purchased by such Purchaser (the "Purchase Price").
1.2 Closing. Subject to the satisfaction of the conditions set forth
herein, the closing of the purchase and sale of the Preferred Shares (the
"Closing") will be deemed to occur when this Agreement, and the other
Transaction Documents (as defined below), have been executed and delivered by
the Company and each Purchaser, and full payment of the amount of the Purchase
Price payable by each Purchaser has been made by such Purchaser by wire transfer
of same day funds to an account designated by the Company against delivery by
the Company of duly executed certificates representing the Preferred Shares
purchased by such Purchaser hereunder. The date on which the Closing is deemed
to occur is referred to herein as the "Closing Date".
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1.3 Certain Definitions. When used herein, (A) "business day" shall mean
any day on which the New York Stock Exchange and commercial banks in the city of
New York are open for business and (B) an "affiliate" of a party shall mean any
person or entity controlling, controlled by or under common control with that
party.
2. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
Each Purchaser, solely with respect to it, hereby makes the following
representations and warranties to the Company (which shall be true as of the
date hereof and as of the Closing Date) and agrees with the Company that:
2.1 Authorization; Enforceability. Such Purchaser is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization with full power and authority to purchase the Preferred Shares and
to execute and deliver this Agreement. Such Purchaser has taken all action
necessary for the authorization, execution, delivery and performance of this
Agreement and the other Transaction Documents to which it is a party, and its
obligations hereunder and thereunder, and, upon execution and delivery thereof
by the Company, this Agreement and the other Transaction Documents to which it
is a party constitute such Purchaser's valid and legally binding obligations,
enforceable in accordance with their respective terms, except as such
enforcement may be limited by (i) applicable bankruptcy, insolvency,
reorganization or other laws of general application relating to or affecting the
enforcement of creditors' rights generally and (ii) general principles of
equity.
2.2 Accredited Investor; Investment Intent. Such Purchaser is an
accredited investor, as defined in Rule 501 of Regulation D under the Securities
Act. Such Purchaser is acquiring the Preferred Shares solely for its own account
for investment purposes as a principal and not with a view to the public resale
or distribution of all or any part thereof; provided, however that in making
such representation, such Purchaser does not agree to hold the Securities for
any minimum or specific term and reserves the right to sell, transfer or
otherwise dispose of the Securities at any time in accordance with the
provisions of this Agreement and with Federal and state securities laws
applicable to such sale, transfer or disposition.
2.3 Information. The Company has provided such Purchaser with certain
written information regarding the Company and has granted to such Purchaser the
opportunity to ask questions of and receive answers from representatives of the
Company, its officers, directors, employees and agents concerning the terms and
conditions of the purchase and sale of the Preferred Shares hereunder, and the
Company and its business and prospects.
2.4 Limitations on Disposition. Such Purchaser acknowledges that the
Preferred Shares are "restricted securities" under the Securities Act and that
under the Securities Act and applicable rules and regulations neither the
Preferred Shares nor any interest therein may be offered for sale or resold
absent registration under the Securities Act or unless pursuant to an exemption
therefrom.
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2.5 Legend. Such Purchaser understands that the Preferred Shares shall
bear at issuance the following legend:
"The security represented by this certificate has not been registered
under the Securities Act of 1933, as amended (the "Securities Act"),
or the securities laws of any state, and may not be offered or sold
unless a registration statement under the Securities Act and
applicable state securities laws shall have become effective with
regard thereto, or an exemption from registration under the Securities
Act and applicable state securities laws is available in connection
with such offer or sale. Such security is issued subject to the
provisions of (i) a Purchase Agreement, dated December , 1997, by
and among IGEN International, Inc. (the "Company") and the purchasers
named therein, and (ii) a Registration Rights Agreement, dated
December , 1997, by and among the Company and such purchasers."
Notwithstanding the foregoing, it is agreed that, as long as (A) the
resale or transfer (including without limitation a pledge) of any Security is
registered pursuant to an effective registration statement, (B) the holder
thereof provides the Company with an opinion of counsel, in form, substance and
scope customary for opinions of counsel in comparable transactions (the cost of
which shall be borne by such holder) to the effect that such Security can be
sold publicly without registration under the Securities Act, (C) such Security
can be sold pursuant to Rule 144 under the Securities Act ("Rule 144") and a
registered broker dealer provides to the Company a customary broker's Rule 144
letter and such holder delivers to the Company a customary seller's
representation letter, or (D) such Security is eligible for resale under Rule
144(k), such Security shall be issued without any legend or other restrictive
language and, with respect to any Security upon which such legend is stamped,
the Company shall issue new certificates without such legend to the holder
thereof upon request.
2.6 Fees. Such Purchaser is not obligated to pay any compensation or
other fee, cost or related expenditure to any underwriter, broker, agent or
other representative in connection with the transactions contemplated hereby.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby makes the following representations and warranties to
each Purchaser (which shall be true as of the date hereof and as of the Closing
Date) and agrees with such Purchaser that:
3.1 Organization, Good Standing and Qualification. Each of the Company
and its subsidiaries is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation and has
all requisite corporate power and authority to carry on its business as now
conducted. Each of the Company and its subsidiaries is duly qualified to
transact business and is in good standing in each jurisdiction in which the
failure so to qualify would have a material adverse effect on the consolidated
business or financial condition of the
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Company and its subsidiaries taken as a whole. The term "subsidiaries" means
corporations in which the Company has an equity interest of greater than 50%.
3.2 Authorization; Consents. The Company has the requisite corporate
power and authority to enter into and perform its obligations under (i) this
Agreement, (ii) the Registration Rights Agreement and (iii) all other
agreements, documents, certificates or other instruments delivered by the
Company at the Closing (the instruments described in (i), (ii) and (iii) being
collectively referred to herein as the "Transaction Documents"), to execute and
perform its obligations under the Certificate, to issue and sell the Preferred
Shares to such Purchaser in accordance with the terms of the Certificate, to
issue the Conversion Shares upon conversion of the Preferred Shares in
accordance with the terms thereof and to issue the Dividend Payment Shares in
accordance with the terms of the Certificate. All corporate action on the part
of the Company by its officers, directors and stockholders necessary for (A) the
authorization, execution and delivery of, and the performance by the Company of
its obligations under, the Transaction Documents and (B) the authorization,
execution and filing of, and performance by the Company of its obligations under
the Certificate has been taken, and no further consent or authorization of the
Company, its Board of Directors, its stockholders, or any governmental agency or
organization or any other person or entity is required (pursuant to any rule of
the National Association of Securities Dealers, Inc. or otherwise).
3.3 Enforcement. The Transaction Documents and the Certificate constitute
valid and legally binding obligations of the Company, enforceable in accordance
with their respective terms, except as such enforcement may be limited by (i)
applicable bankruptcy, insolvency, reorganization or other laws of general
application relating to or affecting the enforcement of creditors' rights
generally and (ii) general principles of equity.
3.4 Disclosure Documents; Material Agreements; Other Information. The
Company has filed with the Commission: (i) the Company's Annual Report on Form
10-K for the year ended March 31, 1997, (ii) Quarterly Reports on Form 10-Q for
the quarters ended June 30, 1997 and September 30, 1997, (iii) all Current
Reports on Form 8-K required to be filed with the Commission since March 31,
1997 and (iv) the Company's definitive Proxy Statement for its 199[7] Annual
Meeting of Stockholders (collectively, the "Disclosure Documents"). The Company
is not aware of any event that would require the filing of, or with respect to
which the Company intends to file, a Form 8-K after the Closing. Each
Disclosure Document, as of the date of the filing thereof with the Commission,
conformed in all material respects to the requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations thereunder, and, as of the date of such filing, such Disclosure
Document did not contain an untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. All material agreements required to be filed as exhibits to the
Disclosure Documents have been filed as required. To the best of the Company's
knowledge, neither the Company nor any of its subsidiaries is in breach of any
agreement to which it is a party or by which it is bound where such breach is
reasonably likely to have a material adverse effect on the consolidated
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business or financial condition of the Company and its subsidiaries taken as a
whole. To the best of the Company's knowledge, except as set forth in the
Disclosure Documents or any schedule or exhibit attached hereto, the Company has
no liabilities, contingent or otherwise, other than liabilities incurred in the
ordinary course of business which, under generally accepted accounting
principles, which are not required to be reflected in the Company's financial
statements and which, individually or in the aggregate, are not material to the
consolidated business or financial condition of the Company and its subsidiaries
taken as a whole. The financial statements of the Company included in the
Disclosure Documents, as of their respective dates (A) complied as to form in
all material respects with applicable accounting requirements and the published
rules and regulations of the Commission with respect thereto and (B) have been
prepared in accordance with generally accepted accounting principles
consistently applied at the times and during the periods involved (except (i) as
may be otherwise indicated in such financial statements or the notes thereto, or
(ii) in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end adjustments).
The written information provided to the Purchaser as described in paragraph 2.3
above does not contain an untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein,in light of the circumstances under which they were made, not misleading
and does not include any material, non-public information.
3.5 Capitalization. The capitalization of the Company as of the date
hereof, including its authorized capital stock, the number of shares issued and
outstanding, the number of shares issuable and reserved for issuance pursuant to
the Company's stock option plans, the number of shares issuable and reserved for
issuance pursuant to securities (other than the Preferred Shares) exercisable
for, or convertible into or exchangeable for any shares of Common Stock and the
number of shares initially to be reserved for issuance upon conversion of the
Preferred Shares is set forth on Schedule 3.5 hereto. All of such outstanding
shares of capital stock have been, or upon issuance will be, validly issued,
fully paid and non-assessable. No shares of the capital stock of the Company
are subject to preemptive rights or any other similar rights of the stockholders
of the Company or any liens or encumbrances created by or through the Company.
Except as disclosed on Schedule 3.5, or as contemplated herein, as of the date
of this Agreement and as of the Closing, there are no outstanding options,
warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into or exercisable
or exchangeable for, any shares of capital stock of the Company or any of its
subsidiaries, or arrangements by which the Company or any of its subsidiaries is
or may become bound to issue additional shares of capital stock of the Company
or any of its subsidiaries.
3.6 Valid Issuance. The Preferred Shares are duly authorized and, when
issued, sold and delivered in accordance with the terms hereof, (i) will be duly
and validly issued, fully paid and nonassessable, free and clear of any taxes,
liens, claims, preemptive or similar rights or encumbrances imposed by or
through the Company, (ii) based in part upon the representations of
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<PAGE>
such Purchaser in this Agreement, will be issued, sold and delivered in
compliance with all applicable Federal and state securities laws and (iii) will
be entitled to all of the rights, preferences and privileges set forth in the
Certificate. The Conversion Shares are duly authorized and reserved for
issuance and, when issued upon conversion of the Preferred Shares in accordance
with the terms thereof, will be duly and validly issued, fully paid and
nonassessable, free and clear of any taxes, liens, claims, preemptive or similar
rights or encumbrances imposed by or through the Company. The Dividend Payment
Shares are duly authorized and, upon the issuance thereof in accordance with the
terms of the Certificate, will be duly and validly issued, fully paid and
nonassessable, free and clear of any taxes, liens, claims, preemptive or similar
rights or encumbrances imposed by or through the Company.
3.7 No Conflict with Other Instruments. Except as set forth on Schedule
3.7, neither the Company nor any of its subsidiaries is in violation of any
provisions of its Certificate of Incorporation, Bylaws or any other governing
document as amended and in effect on and as of the date hereof or, to the best
of the Company's knowledge, in default (and no event has occurred which, with
notice or lapse of time or both, would constitute a default) under any provision
of any instrument or contract to which it is a party or by which it is bound, or
of any provision of any Federal or state judgment, writ, decree, order, statute,
rule or governmental regulation applicable to the Company, which would have a
material adverse effect on the consolidated business or financial condition of
the Company and its subsidiaries taken as a whole. The execution, delivery and
performance of the Transaction Documents, the execution and filing of the
Certificate, and the consummation of the transactions contemplated hereby and
thereby (including without limitation, the issuance of the Preferred Shares and
the reservation for issuance and issuance of the Conversion Shares and the
Dividend Payment Shares) will not result in any such violation or be in conflict
with or constitute, with or without the passage of time and giving of notice,
either a default under any such provision, instrument or contract or an event
which results in the creation of any lien, charge or encumbrance upon any assets
of the Company or of any of its subsidiaries or the triggering of any preemptive
or anti-dilution rights or rights of first refusal or first offer on the part of
holders of the Company's securities.
3.8 Financial Condition; Taxes; Litigation.
3.8.1 The Company's financial condition is, in all material respects,
as described in the Disclosure Documents, except for changes in the ordinary
course of business and normal year-end adjustments that are not, in the
aggregate, materially adverse to consolidated business or financial condition of
the Company or its subsidiaries taken as a whole. Except as otherwise described
in the Disclosure Documents, there have been no material adverse changes to the
Company's business, operations, properties, financial condition, prospects or
results of operations since the date of the Company's most recent audited
financial statements contained in the Disclosure Documents.
3.8.2 The Company has filed all tax returns required to be filed by it
or obtained extensions of the due date for such returns and paid all taxes
which are due, except for taxes
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which it reasonably disputes or which could not reasonably be expected to
have a material adverse effect on the consolidated business or financial
condition of the Company and its subsidiaries taken as a whole.
3.8.3 Except as set forth in Schedule 3.8.3, each of the Company and
its subsidiaries is not the subject of any pending or, to the Company's
knowledge, threatened inquiry, investigation or administrative or legal
proceeding by the Internal Revenue Service, the taxing authorities of any state
or local jurisdiction, the Commission or any state securities commission or
other governmental or regulatory entity which could reasonably be expected to
have a material adverse effect on the consolidated business or financial
condition of the Company and its subsidiaries taken as a whole.
3.8.4 Except as set forth in Schedule 3.8.4, there is no material
claim, litigation or administrative proceeding or inquiry pending, or, to the
best of the Company's knowledge, threatened, against the Company or any of its
subsidiaries, or against any officer, director or employee of the Company or any
such subsidiary in connection with such person's employment therewith. Neither
the Company nor any of its subsidiaries is a party to or subject to the
provisions of, any order, writ, injunction, judgment or decree of any court or
government agency or instrumentality which could reasonably be expected to have
a material adverse effect on the consolidated business or financial condition of
the Company and its subsidiaries.
3.9 Reporting Company; Form S-3. The Company is subject to the reporting
requirements of the Exchange Act, has a class of securities registered under
Section 12 of the Exchange Act, and has filed all reports required thereby. The
Company is eligible to register the Conversion Shares and the Dividend Payment
Shares for resale on a registration statement on Form S-3 under the Securities
Act.
3.10 Acknowledgement of Dilution. The Company acknowledges that the
issuance of (i) the Conversion Shares upon conversion of the Preferred Shares in
accordance with the terms of the Certificate and (ii) the Dividend Payment
Shares in accordance with the terms of the Certificate may result in dilution of
the outstanding shares of Common Stock, which dilution may be substantial under
certain market conditions. The Company further acknowledges that its obligation
(x) to issue Conversion Shares upon conversion of the Preferred Shares and (y)
to issue Dividend Payment Shares in accordance with the terms of the Certificate
is unconditional and absolute regardless of the effect of any such dilution.
The Board of Directors of the Company has reviewed the Transaction Documents,
and has determined that the transactions contemplated thereby are in the best
interests of the Company and its stockholders.
3.11 Intellectual Property. The Company owns or possesses adequate rights
to inventions, know-how, patents, copyrights, confidential information and other
intellectual property rights necessary to conduct the business now operated by
them, or presently employed by them, and have not received any notice of
infringement of or conflict with asserted rights of others with respect to any
such rights that, if determined adversely to the Company or any of its
subsidiaries,
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would individually or in the aggregate have a material adverse effect on the
consolidated business or financial condition of the Company and its subsidiaries
taken as a whole.
3.12 Registration Rights; Rights of Participation. Except as described on
Schedule 3.12 hereto, (A) the Company has not granted or agreed to grant to any
person or entity any rights (including "piggy-back" registration rights) to have
any securities of the Company registered with the Commission or any other
governmental authority and (B) no person or entity, including, but not limited
to, current or former stockholders of the Company, underwriters, brokers, agents
or other third parties, has any right of first refusal, preemptive right, right
of participation, or any similar right to participate in the transactions
contemplated by the Certificate, this Agreement or any other Transaction
Document which has not been waived.
3.13 Trading on Nasdaq. The Common Stock is authorized for quotation on
the Nasdaq National Market system, and trading in the Common Stock on Nasdaq has
not been suspended. The Company is (or will be at the Closing) in full
compliance with the designation criteria of the Nasdaq National Market, and does
not reasonably anticipate that the Common Stock will lose its designation as a
Nasdaq National Market security, whether by reason of the transactions
contemplated by this Agreement or the other Transaction Documents or otherwise.
Stockholder approval for the issuance of the Preferred Shares is not required
under NASD Rule 4460.
3.14 Solicitation. Neither the Company nor any of its subsidiaries or
affiliates, nor any person acting on its or their behalf, (i) has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D under the Securities Act) in connection with the offer or sale of
the Preferred Shares or (ii) has, directly or indirectly, made any offers or
sales of any security or solicited any offers to buy any security, under any
circumstances that would require registration of the Preferred Shares under the
Securities Act.
3.15 Fees. Except as described on Schedule 3.15 hereto, the Company is not
obligated to pay any compensation or other fee, cost or related expenditure to
any underwriter, broker, agent or other representative in connection with the
transactions contemplated hereby.
3.16 Foreign Corrupt Practices. To the knowledge of the Company, neither
the Company, nor any of its subsidiaries nor any director, officer, agent,
employee or other person acting on behalf of the Company or any subsidiary, has
(i) used any corporate funds for any unlawful contribution, gift, entertainment
or other unlawful expenses relating to political activity, (ii) made any direct
or indirect unlawful payment to any foreign or domestic government official or
employee, or (iii) violated any provision of the Foreign Corrupt Practices Act
of 1977, as amended, or made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment to any foreign or domestic government
official or employee.
3.17 Other Issuances of Securities. The Company has not issued (and will
not issue) any shares of Common Stock or shares of any series of preferred stock
(other than the Preferred Shares) or other securities or instruments convertible
into, exchangeable for or otherwise entitling
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the holder thereof to acquire shares of Common Stock which would be integrated
with the sale of the Preferred Shares, or the issuance of the Conversion Shares
upon conversion thereof, for purposes of determining whether stockholder
approval is required under the designation criteria of the Nasdaq National
Market.
4. COVENANTS OF THE COMPANY.
4.1 Corporate Existence. The Company shall, so long as any Purchaser or
any affiliate of such Purchaser beneficially owns any Securities, maintain its
corporate existence in good standing and shall pay all taxes when due except for
taxes which the Company reasonably disputes or which could not reasonably be
expected to have a materially adverse change on the consolidated business or
financial condition of the Company and its subsidiaries.
4.2 Provision of Information. The Company shall provide each Purchaser
with copies of its annual reports on Form 10-K, quarterly reports on Form 10-Q,
current reports on Form 8-K and proxy statements and other materials sent to
stockholders, in each such case promptly after filing thereof with the
Commission, until the conversion or redemption of all of the Preferred Shares
held by such Purchaser.
4.3 Form D; Blue-Sky Qualification. The Company agrees to file a Form D
with respect to the Securities as required under Regulation D and to provide a
copy thereof to each Purchaser promptly upon filing. The Company shall, on or
before the Closing, take such action as is necessary to qualify the Securities
for sale under applicable state or "blue-sky" laws or obtain an exemption
therefrom, and shall provide evidence of any such action to such Purchaser.
4.4 Reporting Status. As long as such Purchaser or any affiliate of such
Purchaser beneficially owns any Securities, and until the date on which any of
the foregoing may be sold to the public pursuant to Rule 144(k) (or any
successor rule or regulation), (i) the Company shall timely file with the
Commission all reports required to be so filed pursuant to the Exchange Act and
(ii) the Company shall not terminate its status as an issuer required by the
Exchange Act to file reports thereunder even if the Exchange Act or the rules or
regulations thereunder would permit such termination.
4.5 Use of Proceeds. The Company shall use the proceeds from the sale of
the Preferred Shares for general corporate purposes.
4.6 Listing. The Company shall, as soon as practicable following the
Closing, secure the designation and quotation of the Conversion Shares and
Dividend Payment Shares on the Nasdaq National Market and shall use its best
efforts to maintain the designation of the Common Stock on the Nasdaq National
Market, the New York Stock Exchange or the American Stock Exchange.
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4.7 Reservation of Common Stock. The Company shall at all times have
authorized and reserved for issuance, free from any preemptive rights, solely
for the purpose of effecting conversions of the Preferred Shares hereunder, such
number of shares of Common Stock as shall from time to time be sufficient to
effect the conversion of all of the Preferred Shares then outstanding (the
"Reserved Amount"). As of the Closing Date, the Reserved Amount shall be equal
to no less than 175% of the number of shares of Common Stock issuable upon
conversion of all of the Preferred Shares purchased by the Purchasers at the
Closing (assuming for such purpose that the Preferred Shares are convertible in
full at such time). If at any time the Reserved Amount is less than 125% of the
number of Conversion Shares issuable upon conversion of all of the Preferred
Shares then outstanding, the Company shall take immediate action (including
seeking stockholder authorization) to increase the Reserved Amount to no less
than 175% of the number of Conversion Shares into which such outstanding
Preferred Shares are then convertible. No Purchaser shall be issued, upon
conversion of a Preferred Shares of Common Stock in an amount greater than the
product of (A) the Reserved Amount in effect on the date on which notice of such
conversion or exercise is delivered to the Company pursuant to the terms of the
Certificate times (B) a fraction, the numerator of which is the number of
Preferred Shares purchased by such Purchaser hereunder and the denominator of
which is the number of Preferred Shares purchased by the Purchasers hereunder.
The Company shall not reduce the number of shares reserved for issuance
hereunder without the written consent of the holders of at least 66% of the then
outstanding number of Preferred Shares.
4.8 Use of Purchaser Name. The Company shall not use, directly or
indirectly, any Purchaser's name in any advertisement, announcement, press
release or other similar communication unless it has received the prior written
consent of such Purchaser for the specific use contemplated; provided, however,
that the Company may respond to inquiries regarding the identity of the
Purchasers from securities analysts or the media.
4.9 Company's Instructions to Transfer Agent. On or prior to the Closing,
the Company shall execute and deliver irrevocable instructions to its transfer
agent (the "Transfer Agent") (i) to issue certificates representing Conversion
Shares upon conversion of Preferred Shares in accordance with the terms thereof
and receipt of (x) a valid Conversion Notice (as defined in the Certificate)
from a Purchaser, and (y) instructions from the Company pursuant to the
Certificate regarding the number of Conversion Shares and Dividend Payment
Shares (if any) to be issued in the name of such Purchaser or its nominee, (ii)
to issue certificates representing the Dividend Payment Shares upon the issuance
thereof in accordance with the Certificate and (iii) to deliver such
certificates to such Purchaser no later than the close of business on the third
(3rd) business day following the related Conversion Date or the Dividend Payment
Date (each as defined in the Certificate). The Company represents to and agrees
with each Purchaser that it will not give any instruction to the Transfer Agent
that will conflict with the foregoing instruction or otherwise restrict such
Purchaser's right to convert the Preferred Shares held by such Purchaser or to
receive Conversion Shares or Dividend Payment Shares in accordance with the
terms of the Certificate. In the event that the Company's relationship with the
Transfer Agent should be terminated for any reason, the Transfer Agent shall
continue acting as transfer agent pursuant to
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<PAGE>
the terms hereof until such time that a successor transfer agent is appointed by
the Company and agrees to be bound by the terms hereof.
5. CONDITIONS TO CLOSING.
5.1 Conditions to Purchaser's Obligations at Closing. Each Purchaser's
obligations at the Closing, including without limitation its obligation to
purchase the Preferred Shares to be purchased by it hereunder, are conditioned
upon the fulfillment of each of the following events:
(a) the representations and warranties of the Company set forth in
this Agreement shall be true and correct in all material respects
as of the Closing Date of as if made on such date;
(b) the Company shall have complied with or performed all of the
agreements, obligations and conditions set forth in this
Agreement that are required to be complied with or performed by
the Company on or before the Closing;
(c) the Company shall have delivered to such Purchaser a
certificate, signed by an officer of the Company, certifying
that the conditions specified in paragraphs (a) and (b)
above have been fulfilled;
(d) the Company shall have delivered to such Purchaser an opinion of
counsel for the Company, dated as of the date of the Closing, in
the form attached as Exhibit 5.1;
(e) The Company shall have filed the Certificate with the Secretary
of State of the State of Delaware and furnished such Purchaser
with a file-stamped copy thereof;
(f) the Company shall have executed and delivered the Registration
Rights Agreement;
(g) there shall have been no material adverse changes in the
Company's consolidated business or financial condition since the
date of the Company's most recent financial statements contained
in the Disclosure Documents;
(h) the Common Stock shall be designated for quotation and actively
traded on the Nasdaq National Market; and
(j) the Company shall have authorized and reserved for issuance upon
conversion of the Preferred Shares 175% of the number of shares
of Common Stock issuable upon conversion all of the Preferred
Shares issuable at the Closing.
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<PAGE>
5.2 Conditions to Company's Obligations at Closing. The Company's
obligation at the Closing to issue and sell Preferred Shares to a Purchaser
hereunder is subject to the satisfaction, at or before the Closing Date, of each
of the following conditions. The obligation of the Company to issue and sell
Preferred Shares to any Purchaser hereunder is distinct and separate from its
obligation to issue and sell Preferred Shares to any other Purchaser hereunder
and the failure by one or more Purchasers to fulfill the conditions set forth
herein or to consummate the purchase of Preferred Shares hereunder will not
relieve the Company of its obligations with respect to any other Purchaser.
(a) the representations and warranties of the applicable Purchaser
shall be true and correct in all material respects as of the
Closing Date as if made on such date; and
(b) the applicable Purchaser shall have complied with or performed
all of the agreements, obligations and conditions set forth in
this Agreement that are required to be complied with or performed
by such Purchaser on or before the Closing.
6. INDEMNIFICATION.
The Company agrees to indemnify and hold harmless each Purchaser and its
officers, directors, employees and agents, and each person who controls the
Purchaser within the meaning of the Securities Act or the Exchange Act (each, a
"Purchaser Indemnified Party") against any losses, claims, damages, liabilities
or reasonable out-of-pocket expenses (including the reasonable fees and
disbursements of counsel) as incurred, joint or several, to which it, they or
any of them, may become subject and not otherwise reimbursed, arising out of or
in connection with the breach by the Company of any of its representations,
warranties or covenants made herein; provided, that the Company shall not have
any obligation to any Purchaser Indemnified Party with respect to any liability
to the extent such liability arises from the gross negligence or willful
misconduct on the part of such Purchaser Indemnified Party as determined by a
court of competent jurisdiction.
Each Purchaser agrees to indemnify and hold harmless the Company and its
officers, directors, employees and agents, and each person who controls the
Company within the meaning of the Securities Act or the Exchange Act (each, a
"Company Indemnified Party") (a Purchaser Indemnified Party and a Company
Indemnified Party are each hereinafter referred to as an "Indemnified Party")
against any losses, claims, damages, liabilities or expenses (including the fees
and disbursements of counsel) as incurred, joint or several, to which it, they
or any of them, may become subject and not otherwise reimbursed, arising out of
or in connection with the breach by such Purchaser of any of its
representations, warranties or covenants made herein; provided, that such
Purchaser shall not have any obligation to any Company Indemnified Party with
respect to any liability to the extent such liability arises from the gross
negligence or willful misconduct on the part of such Company Indemnified Party
as determined by a court of competent jurisdiction.
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<PAGE>
Promptly after receipt by an Indemnified Party of notice of the
commencement of any action pursuant to which indemnification may be sought
hereunder, such Indemnified Party will, if a claim in respect thereof is to be
made against the other party (the "Indemnifying Party"), deliver to the
Indemnifying Party a written notice of the commencement thereof and the
Indemnifying Party shall have the right to participate in and to assume the
defense thereof with counsel reasonably selected by the Indemnifying Party,
provided, however, that an Indemnified Party shall have the right to retain its
own counsel, with the reasonably incurred fees and expenses of such counsel to
be paid by the Indemnifying Party, if representation of such Indemnified Party
by the counsel retained by the Indemnifying Party would be inappropriate due to
actual or potential conflicts of interest under applicable standards of
professional conduct between such Indemnified Party and any other party
represented by such counsel in such proceeding. The failure to deliver written
notice to the Indemnifying Party within a reasonable time of the commencement of
any such action will not relieve the Indemnifying Party of any of its
obligations hereunder with respect to such action except to the extent such
failure is prejudicial to the Indemnifying Party's ability to defend any such
action.
No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of pending or threatened action in
respect of which an Indemnified Party is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Party unless such
settlement includes an unconditional release of such Indemnified Party from all
liability on any claims that are the subject matter of such action. An
Indemnifying Party will not be liable for any settlement of any action or claim
effected without its written consent.
7. MISCELLANEOUS.
7.1 Survival; Severability. The representations, warranties,
covenants and indemnities made by the parties herein shall survive the Closing
notwithstanding any due diligence investigation made by or on behalf of the
party seeking to rely thereon. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision; provided that in such case the parties shall
negotiate in good faith to replace such provision with a new provision which is
not illegal, unenforceable or void, as long as such new provision does not
materially change the economic benefits of this Agreement to the parties.
7.2 Successors and Assigns. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement. Each Purchaser may assign its rights hereunder, in
connection with any private sale or transfer of Preferred Shares, as long as, as
a condition precedent to such transfer, the transferee executes an
acknowledgment agreeing to be bound by the applicable provisions of this
Agreement, in which case the term "Purchaser" shall be deemed to refer to such
transferee as though such transferee were an original signatory hereto.
-13-
<PAGE>
7.3 Independent Nature of Purchasers' Obligations and Rights. The
obligations of each Purchaser hereunder are several and not joint with the
obligations of the other Purchasers hereunder, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser hereunder. Nothing contained herein or in any other agreement or
document delivered at the Closing, and no action taken by any Purchaser pursuant
hereto or thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert with
respect to such obligations or the transactions contemplated by this Agreement.
Each Purchaser shall be entitled to protect and enforce its rights, including
without limitation the rights arising out of the Certificate, this Agreement or
out of the other Transaction Documents, and it shall not be necessary for any
other Purchaser to be joined as an additional party in any proceeding for such
purpose.
7.4 No Reliance. Each party acknowledges that (i) it has such
knowledge in business and financial matters as to be fully capable of evaluating
the Certificate, this Agreement, the other Transaction Documents and the
transactions contemplated hereby and thereby, (ii) it is not relying on any
advice or representation of any other party (other than those contained or
described in this Agreement or the other Transaction Documents) in connection
with entering into this Agreement, the other Transaction Documents or such
transactions, (iii) it has not received from any such party any assurance or
guarantee as to the merits (whether legal, regulatory, tax, financial or
otherwise) of entering into this Agreement or the other Transaction Documents or
the performance of its obligations hereunder and thereunder, and (iv) it has
consulted with its own legal, regulatory, tax, business, investment, financial
and accounting advisors to the extent that it has deemed necessary, and has
entered into this Agreement and the other Transaction Documents based on its own
independent judgment and on the advice of its advisors as it has deemed
necessary, and not on any view (whether written or oral) expressed by any such
party.
7.5 Remedies. The remedies provided to a Purchaser in this Agreement
shall be cumulative and in addition to all other remedies available to such
Holder hereunder, at law or in equity (including without limitation a decree of
specific performance and/or other injunctive relief), no remedy contained herein
shall be deemed a waiver of compliance with the provisions giving rise to such
remedy and nothing contained herein shall limit such Purchaser's right to pursue
actual damages for any failure by the Company to comply with the terms of this
Agreement.
7.6 Governing Law. This Agreement shall be governed by and construed
under the laws of the State of New York without regard to the conflict of laws
provisions thereof. Each party hereby irrevocably submits to the non-exclusive
jurisdiction of the state and federal courts sitting in the City of New York,
borough of Manhattan, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit,
-14-
<PAGE>
action or proceeding is brought in an inconvenient forum or that the venue of
such suit, action or proceeding is improper. Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the
address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law.
7.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
7.8 Headings. The headings used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.
7.9 Notices. Any notice, demand or request required or permitted to
be given by the Company or a Purchaser pursuant to the terms of this Agreement
shall be in writing and shall be deemed given (i) when delivered personally or
by verifiable facsimile transmission (with a hard copy to follow) on or before
5:00 p.m., eastern time, on a business day or, if such day is not a business
day, on the next succeeding business day, (ii) on the next business day after
timely delivery to an overnight courier and (iii) on the third business day
after deposit in the U.S. mail (certified or registered mail, return receipt
requested, postage prepaid), addressed to the parties as follows:
If to the Company:
IGEN International, Inc.
16020 Industrial Drive
Gaithersburg, MD 20817
Attn: Messrs. Samuel J. Wohlstadter
George V. Migausky
Dr. Richard J. Massey
Fax:
with a copy to:
Wilmer, Cutler & Pickering
2445 M Street, N.W.
Washington, DC 20037
Attn: Stephen P. Doyle, Esq.
Fax: 202-663-6363
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<PAGE>
and if to any Purchaser, to such address for such Purchaser as shall appear on
the signature page hereof executed by such Purchaser, or as shall be designated
by such Purchaser in writing to the Company.
7.10 Expenses. Except as otherwise provided herein, each of the
Company and the Purchasers shall pay all costs and expenses that it incurs in
connection with the negotiation, execution, delivery and performance of this
Agreement.
7.11 Entire Agreement; Amendments. This Agreement and the other
Transaction Documents (together with the Certificate) constitute the entire
agreement between the parties with regard to the subject matter hereof and
thereof, superseding all prior agreements or understandings, whether written or
oral, between the parties. Except as expressly provided herein, neither this
Agreement nor any term hereof may be amended except pursuant to a written
instrument executed by the Company and the holders of at least 2/3 of the
Preferred Shares then outstanding, and no provision hereof may be waived other
than by a written instrument signed by the party against whom enforcement of any
such waiver is sought.
[Remainder of Page Intentionally Left Blank]
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<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first-above written.
IGEN INTERNATIONAL, INC.
By: /s/ George Migausky
-----------------------
Name: George Migausky
Title: CFO
PURCHASER NAME: The Robertson Stephens Black Bear Fund, L.P.
By: /s/ Paul H. Stephens
-----------------------
Name: Paul H. Stephens
Title: General Partner
ADDRESS:
c/o Robertson Stephens Funds
555 California St., Ste. 2600
San Francisco, CA 94104
Attn: Rick Barry
Tel: 415-693-3320
Fax: 415-248-4213
WITH COPIES OF NOTICES SENT TO:
c/o Paine Webber
1283 Avenue of Americas, 10th Floor
New York, NY 10019
Attn: Jose Rosales- Prime Broker Dept.
Tel: 212-713-3200
Fax: 212-713-3217
NUMBER OF PREFERRED SHARES
TO BE PURCHASED: 2,560
/ / Check here if Purchaser does not intend to be bound by the 4.9%
limitation contained in subparagraph II.G.2 of Certificate..
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<PAGE>
PURCHASER NAME: The Robertson Stephens Black Bear Offshore Fund, L.P.
By: /s/ Paul H. Stephens
-----------------------
Name: Paul H. Stephens
Title: General Partner
ADDRESS:
c/o Robertson Stephens Funds
555 California St., Ste. 2600
San Francisco, CA 94104
Attn: Rick Barry
Tel: 415-693-3320
Fax: 415-248-4213
WITH COPIES OF NOTICES SENT TO:
c/o Paine Webber
1283 Avenue of Americas, 10th Floor
New York, NY 10019
Attn: Jose Rosales- Prime Broker Dept.
Tel: 212-713-3200
Fax: 212-713-3217
NUMBER OF PREFERRED SHARES
TO BE PURCHASED: 615
/ / Check here if Purchaser does not intend to be bound by the 4.9%
limitation contained in subparagraph II.G.2 of Certificate..
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<PAGE>
PURCHASER NAME: The Robertson Stephens Black Bear Pacific Master Fund Unit
Trust
By: /s/ Paul H. Stephens
--------------------------
Name: Paul H. Stephens
Title: General Partner
ADDRESS:
c/o Robertson Stephens Funds
555 California St., Ste. 2600
San Francisco, CA 94104
Attn: Rick Barry
Tel: 415-693-3320
Fax: 415-248-4213
WITH COPIES OF NOTICES SENT TO:
c/o Paine Webber
1283 Avenue of Americas, 10th Floor
New York, NY 10019
Attn: Jose Rosales- Prime Broker Dept.
Tel: 212-713-3200
Fax: 212-713-3217
NUMBER OF PREFERRED SHARES
TO BE PURCHASED: 325
/ / Check here if Purchaser does not intend to be bound by the 4.9%
limitation contained in subparagraph II.G.2 of Certificate..
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<PAGE>
PURCHASER NAME: Credit Suisse First Boston Corporation
By: /s/ Thomas F.X. O'Mara
-----------------------------
Name: Thomas F.X. O'Mara
Title: Managing Director
ADDRESS:
Michael [Illegible], Thomas F.X. O'Mara
Credit Suisse First Boston Corp.
11 Madison Avenue, 3rd Floor
New York, NY 10010
Tel: 212-325-3399
Fax: 212-325-8077
WITH COPIES OF NOTICES SENT TO:
Raymond J. Dorado, Esq.
Credit Suisse First Boston Corp.
11 Madison Avenue, 3rd Floor
New York, NY 10010
Tel: 212-325-7258
Fax: 212-325-8102
NUMBER OF PREFERRED SHARES
TO BE PURCHASED: 2,000
/ / Check here if Purchaser does not intend to be bound by the 4.9%
limitation contained in subparagraph II.G.2 of Certificate..
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<PAGE>
PURCHASER NAME: Permal Noscal, Ltd.
By: /s/ Sanford J. Colen
-----------------------
Name: Sanford J. Colen
Title: Manager & Principal Apex Capital, LLC
ADDRESS:
Apex Capital, LLC
Pine Grove & Orinda Way, Suite 240-B
Orinda, CA 94563
Tel: 510-253-1800
Fax: 510-253-1809
WITH COPIES OF NOTICES SENT TO:
Tel:
Fax:
NUMBER OF PREFERRED SHARES
TO BE PURCHASED: 3,000,000
/ / Check here if Purchaser does not intend to be bound by the 4.9%
limitation contained in subparagraph II.G.2 of Certificate..
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<PAGE>
PURCHASER NAME: Zaxis Partners, L.P.
By: /s/ Sanford J. Colen
-----------------------
Name: Sanford J. Colen
Title: Manager & Principal Apex Capital, LLC-General Partner
ADDRESS:
Apex Capital, LLC
Pine Grove & Orinda Way, Suite 240-B
Orinda, CA 94563
Tel: 510-253-1800
Fax: 510-253-1809
WITH COPIES OF NOTICES SENT TO:
Tel:
Fax:
NUMBER OF PREFERRED SHARES
TO BE PURCHASED: 375,000
/ / Check here if Purchaser does not intend to be bound by the 4.9%
limitation contained in subparagraph II.G.2 of Certificate..
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<PAGE>
PURCHASER NAME: Sidney Kimmel
By: /s/ Sanford J. Colen
-----------------------
Name: Sanford J. Colen
Title: Manager & Principal Apex Capital, LLC
ADDRESS:
Apex Capital, LLC
Pine Grove & Orinda Way, Suite 240-B
Orinda, CA 94563
Tel: 510-253-1800
Fax: 510-253-1809
WITH COPIES OF NOTICES SENT TO:
Tel:
Fax:
NUMBER OF PREFERRED SHARES
TO BE PURCHASED: 245,000
/ / Check here if Purchaser does not intend to be bound by the 4.9%
limitation contained in subparagraph II.G.2 of Certificate..
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<PAGE>
PURCHASER NAME: Pollat, Evans & Co. Inc.
By: /s/ Sanford J. Colen
------------------------
Name: Sanford J. Colen
Title: Manager & Principal Apex Capital, LLC
ADDRESS:
Apex Capital, LLC
Pine Grove & Orinda Way, Suite 240-B
Orinda, CA 94563
Tel: 510-253-1800
Fax: 510-253-1809
WITH COPIES OF NOTICES SENT TO:
Tel:
Fax:
NUMBER OF PREFERRED SHARES
TO BE PURCHASED: 85,000
/ / Check here if Purchaser does not intend to be bound by the 4.9%
limitation contained in subparagraph II.G.2 of Certificate..
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<PAGE>
PURCHASER NAME: Quadra Appreciation Fund, Inc.
By: /s/ Sanford J. Colen
-----------------------
Name: Sanford J. Colen
Title: Manager & Principal Apex Capital, LLC
ADDRESS:
Apex Capital, LLC
Pine Grove & Orinda Way, Suite 240-B
Orinda, CA 94563
Tel: 510-253-1800
Fax: 510-253-1809
WITH COPIES OF NOTICES SENT TO:
Tel:
Fax:
NUMBER OF PREFERRED SHARES
TO BE PURCHASED: 35,000
/ / Check here if Purchaser does not intend to be bound by the 4.9%
limitation contained in subparagraph II.G.2 of Certificate..
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<PAGE>
PURCHASER NAME: Peter W. Branagh and Ramona Y. Branagh Trustee for the Peter
W. Branagh and Ramona Y. Branagh Revocable Trust, dated
March 8, 1993
By: /s/ Sanford J. Colen
-----------------------
Name: Sanford J. Colen
Title: Manager and Principal
Apex Capital, LLC
ADDRESS:
Apex Capital, LLP
Pine Grove & Orinda Way
Suite 240-B
Orinda, CA 94563
Tel: 510-253-1800
Fax: 510-253-1809
WITH COPIES OF NOTICES SENT TO:
NUMBER OF PREFERRED SHARES
TO BE PURCHASED: 10,000
/ / Check here if Purchaser does not intend to be bound by the 4.9% limitation
contained in subparagraph II.G.2 of the Certificate.
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<PAGE>
PURCHASER NAME: KA Investments LDC
By: /s/ [Authorized Investment Advisor] By: /s/ Kelly Ireland
----------------------------------- --------------------
Name: [Illegible] Name: Kelly Ireland
Title: Title:
ADDRESS:
KA Investments LDC
Butterfield House, Fort Street
P.O. Box 705
Georgetown, Grand Cayman
Cayman Islands, B.W.I.
Tel: 345-969-7055
Fax: 345-969-7006
WITH COPIES OF NOTICES SENT TO:
NUMBER OF PREFERRED SHARES
TO BE PURCHASED: 2,000
/ / Check here if Purchaser does not intend to be bound by the 4.9% limitation
contained in subparagraph II.G.2 of the Certificate.
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<PAGE>
PURCHASER NAME: Gleneagles
By: The Palladin Group, L.P.
Title: Investment Advisor
By: /s/ Brian A. Swain
----------------------
Name: Brian A. Swain
Title: Managing Director
ADDRESS:
40 West 57th Street, 15th Floor
New York, NY 10019
Tel: 212-698-0570
Fax: 212-698-0599
WITH COPIES OF NOTICES SENT TO:
NUMBER OF PREFERRED SHARES
TO BE PURCHASED: 125
/ / Check here if Purchaser does not intend to be bound by the 4.9% limitation
contained in subparagraph II.G.2 of the Certificate.
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<PAGE>
PURCHASER NAME: Colonial Penn
By: The Palladin Group, L.P.
Title: Investment Advisor
By: /s/ Brian A. Swain
----------------------
Name: Brian A. Swain
Title: Managing Director
ADDRESS:
40 West 57th Street, 15th Floor
New York, NY 10019
Tel: 212-698-0570
Fax: 212-698-0599
WITH COPIES OF NOTICES SENT TO:
NUMBER OF PREFERRED SHARES
TO BE PURCHASED: 125
/ / Check here if Purchaser does not intend to be bound by the 4.9% limitation
contained in subparagraph II.G.2 of the Certificate.
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<PAGE>
PURCHASER NAME: Putnam Health Sciences Trust
By: /s/ John Verani
----------------------
Name: John Verani
Title: Vice President
ADDRESS:
One Post Office Square
Boston, Massachusetts 02109
Tel: 1-800-225-2465
Fax: (617) 760-8349
WITH COPIES OF NOTICES SENT TO:
David Carlson
One Post Office Square
Boston, MA 02109
Tel: 1-800-225-2465
Fax: (617) 292-1784
NUMBER OF PREFERRED SHARES
TO BE PURCHASED: 4000
/ / Check here if Purchaser does not intend to be bound by the 4.9% limitation
contained in subparagraph II.G.2 of the Certificate.
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<PAGE>
PURCHASER NAME: Porter Partners, L.P.
By: /s/ Jeff Porter
----------------------
Name: Jeff Porter
Title: General Partner
ADDRESS:
100 Shoreline Hwy., Suite 211B
Mill Valley, CA 94941
Tel: (415) 332-4466
Fax: (415) 332-8223
WITH COPIES OF NOTICES SENT TO:
NUMBER OF PREFERRED SHARES
TO BE PURCHASED: 1,250
/ / Check here if Purchaser does not intend to be bound by the 4.9% limitation
contained in subparagraph II.G.2 of the Certificate.
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<PAGE>
PURCHASER NAME: EDJ Limited
By: /s/ Jeff Porter
----------------------
Name: Jeff Porter
Title: Investment Advisor
ADDRESS:
Deltec Panamerica Trust Co.
Deltec House, Lyford Cay
P.O. Box N-3229
Nassau
The Bahamas
Tel: (242) 362-4549
Fax: (242) 362-4623
WITH COPIES OF NOTICES SENT TO:
Jeff Porter
Porter Capital Management Co.
100 Shoreline Hwy., Suite 211B
Mill Valley, CA 94941
Tel: (415) 332-4466
Fax: (415) 332-8223
NUMBER OF PREFERRED SHARES
TO BE PURCHASED: 250
/ / Check here if Purchaser does not intend to be bound by the 4.9% limitation
contained in subparagraph II.G.2 of the Certificate.
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<PAGE>
PURCHASER NAME: White Rock Capital Offshore, Ltd.
By: /s/ Timothy U. Barton
----------------------
Name: Timothy U. Barton
Title:
ADDRESS:
3131 Turtle Creek Blvd.
Suite 800
Dallas, TX 75219
Tel: 214-526-1465
Fax: 214-526-0856
WITH COPIES OF NOTICES SENT TO:
Moore Stephens International (BVI) Limited
Main Street, Abbott Building
P.O. Box 3186
Road Town, Tortle
British Virgin Islands
Tel: 284-494-3503
Fax: 284-494-3592
NUMBER OF PREFERRED SHARES
TO BE PURCHASED: 600
/ / Check here if Purchaser does not intend to be bound by the 4.9% limitation
contained in subparagraph II.G.2 of the Certificate.
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<PAGE>
PURCHASER NAME: Quantum Partners LDC
By: /s/ Timothy U. Barton
----------------------
Name: Timothy U. Barton
Title:
ADDRESS:
3131 Turtle Creek Blvd.
Suite 800
Dallas, TX 75219
Tel: 214-526-1465
Fax: 214-526-0856
WITH COPIES OF NOTICES SENT TO:
Soros Fund Management LLC
Attn: Mike Tufano
888 Seventh Avenue
New York, NY 10106
Tel: 212-397-5571
Fax: 212-399-0569
NUMBER OF PREFERRED SHARES
TO BE PURCHASED: 2,500
/ / Check here if Purchaser does not intend to be bound by the 4.9% limitation
contained in subparagraph II.G.2 of the Certificate.
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<PAGE>
PURCHASER NAME: Collins Capital Diversified Fund, L.P.
By: /s/ Timothy U. Barton
----------------------
Name: Timothy U. Barton
Title:
ADDRESS:
c/o White Rock Capital
3131 Turtle Creek Blvd.
Suite 800
Dallas, TX 75219
Tel: 214-526-1465
Fax: 214-526-0856
WITH COPIES OF NOTICES SENT TO:
NUMBER OF PREFERRED SHARES
TO BE PURCHASED: 400
/ / Check here if Purchaser does not intend to be bound by the 4.9% limitation
contained in subparagraph II.G.2 of the Certificate.
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<PAGE>
PURCHASER NAME: White Rock Capital Partners, L.P.
By: /s/ White Rock Capital Management, L.P.
---------------------------------------
Name: White Rock Capital Management
By: /s/ White Rock Capital, Inc.
-----------------------------
Name: White Rock Capital, Inc.
By: /s/ Timothy U. Barton
----------------------
Name: Timothy U. Barton
Title: President
ADDRESS:
3131 Turtle Creek Blvd.
Suite 800
Dallas, TX 75219
Tel: 214-526-1465
Fax: 214-526-0856
WITH COPIES OF NOTICES SENT TO:
NUMBER OF PREFERRED SHARES
TO BE PURCHASED: 1,000
/ / Check here if Purchaser does not intend to be bound by the 4.9% limitation
contained in subparagraph II.G.2 of the Certificate.
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<PAGE>
PURCHASER NAME: Prism Partners I
By: /s/ Jerald M. Weintraub
-------------------------
Name: Jerald M. Weintraub
Title: Managing General Partner of Prism Partners I
ADDRESS:
909 Montgomery Street
Suite 400
San Francisco, CA 94133
Tel: 415-705-8787
Fax: 415-705-8736
WITH COPIES OF NOTICES SENT TO:
NUMBER OF PREFERRED SHARES
TO BE PURCHASED: 1,500
/ / Check here if Purchaser does not intend to be bound by the 4.9% limitation
contained in subparagraph II.G.2 of the Certificate.
-17-
<PAGE>
PURCHASER NAME: GPZ Trading
By: /s/ John S. Stafford III
---------------------------
Name: John S. Stafford III
Title: Member
ADDRESS:
230 S. LaSalle Street
Suite 688
Chicago, IL 60604-1408
Tel: 312-294-2721
Fax: 312-294-4450
WITH COPIES OF NOTICES SENT TO:
NUMBER OF PREFERRED SHARES
TO BE PURCHASED: 500
/ / Check here if Purchaser does not intend to be bound by the 4.9% limitation
contained in subparagraph II.G.2 of the Certificate.
-17-
<PAGE>
PURCHASER NAME: Triton Capital Investments
By: Inter Caribbean Services Limited
By: /s/ [Authorized Officer]
------------------------
Name: [Illegible]
Title: Secretary
ADDRESS:
1999 Avenue of the Stars
Suite 1950
Los Angeles, CA 90067
Tel: 310-201-2614
Fax: 310-201-2759
WITH COPIES OF NOTICES SENT TO:
NUMBER OF PREFERRED SHARES
TO BE PURCHASED: 750
/ / Check here if Purchaser does not intend to be bound by the 4.9% limitation
contained in subparagraph II.G.2 of the Certificate.
-17-
<PAGE>
PURCHASER NAME: JMG Capital Partners, L.P.
By: /s/ Jonathan Glaser
----------------------
Name: Jonathan Glaser
Title: General Partner
ADDRESS:
1999 Avenue of the Stars
Suite 1950
Los Angeles, CA 90067
Tel: 310-201-2619
Fax: 310-201-2759
WITH COPIES OF NOTICES SENT TO:
NUMBER OF PREFERRED SHARES
TO BE PURCHASED: 750
/ / Check here if Purchaser does not intend to be bound by the 4.9% limitation
contained in subparagraph II.G.2 of the Certificate.
-17-
<PAGE>
Exhibit 4.3
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of December 16,
1997, by and among IGEN International, Inc., a Delaware corporation (the
"Company"), and each of the entities whose names appear on the signature pages
hereof. Such entities are each referred to herein as a "Purchaser" and,
collectively, as the "Purchasers".
The Company has agreed, on the terms and subject to the conditions set
forth in the Purchase Agreement of even date herewith (the "Purchase
Agreement"), to issue and sell to each Purchaser shares (the "Preferred Shares")
of the Company's Series B Convertible Preferred Stock (the "Preferred Stock").
The Preferred Shares are convertible pursuant to the Company's Certificate of
Designation (the "Certificate") into shares (the "Conversion Shares") of the
Company's Common Stock (the "Common Stock"). In order to induce the Purchasers
to enter into the Purchase Agreement, the Company has agreed to provide certain
registration rights under the Securities Act of 1933, as amended (the
"Securities Act"), and under applicable state securities laws. Capitalized
terms used herein and not otherwise defined shall have the respective meanings
set forth in the Purchase Agreement.
In consideration of each Purchaser entering into the Purchase Agreement,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. DEFINITIONS.
For purposes of this Agreement, the following terms shall have the meanings
specified:
(a) "Closing" shall have the meaning specified in the Purchase
Agreement;
(b) "Registration Deadline" means the ninetieth (90th) day following
Closing;
(c) "Holder" means any person owning or having the right to acquire,
through conversion of Preferred Shares or otherwise, Registrable
Securities, including initially each Purchaser and thereafter any
permitted assignee thereof;
(d) "Register", "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement
or statements in compliance with the Securities Act and pursuant to
Rule 415 under the Securities Act ("Rule 415") or any successor rule
providing for the offering of securities on a continuous basis
<PAGE>
("Registration Statement"), and the declaration or ordering of
effectiveness of the Registration Statement by the Securities and
Exchange Commission (the "Commission"); and
(e) "Registrable Securities" means the Conversion Shares and the
Dividend Payment Shares (as defined in the Certificate), and any other
shares of Common Stock issuable pursuant to the terms of the
Certificate, whether as payment of a redemption price or otherwise,
and any shares of capital stock issued or issuable from time to time
(with any adjustments) in replacement of, in exchange for or otherwise
in respect of the Conversion Shares or the Dividend Payment Shares.
2. MANDATORY REGISTRATION.
(a) On or before the forty-fifth (45th) day following Closing, the
Company shall prepare and file with the Commission a Registration Statement
on Form S-3 as a "shelf" registration statement under Rule 415 covering the
resale of at least 200% of the number of shares of Registrable Securities
then issuable on conversion of all of the Preferred Shares issued at the
Closing. The Registration Statement shall state, to the extent permitted by
Rule 416 under the Securities Act, that it also covers such indeterminate
number of shares of Common Stock as may be required to effect conversion of
the Preferred Shares to prevent dilution resulting from stock splits, stock
dividends or similar events, or by reason of changes in the Conversion Price
in accordance with the terms of the Certificate.
(b) The Company shall use its best efforts to cause the Registration
Statement to become effective as soon as practicable following the filing
thereof, but in no event later than the Registration Deadline, and shall submit
to the Commission, within five (5) business days after the Company learns that
no review of the Registration Statement will be made by the staff of the
Commission or that the staff of the Commission has no further comments on the
Registration Statement, as the case may be, a request for acceleration of the
effectiveness of the Registration Statement to a time and date not later than
forty-eight (48) hours after the submission of such request, and maintain the
effectiveness of the Registration Statement until the earlier to occur of (i)
the date on which all of the Registrable Securities have been sold pursuant to
the Registration Statement and (ii) the date on which all of the remaining
Registrable Securities (in the reasonable opinion of counsel to the Purchaser)
may be immediately sold to the public without registration and without regard to
the amount of Registrable Securities which may be sold by a Holder thereof at a
given time (the "Registration Period").
(c) If (A) the Registration Statement is not declared effective by
the Commission on or before the Registration Deadline, (B) after the
Registration Statement has been declared effective by the Commission, sales
of Registrable Securities cannot be made by a Holder under the Registration
Statement for any reason not within the exclusive control of such Holder
(other than such Registrable Securities as are then freely saleable pursuant
to Rule 144(k) under the Securities Act), (C) the Common Stock is not
included for quotation on the Nasdaq Stock
-2-
<PAGE>
Market ("Nasdaq") or listed on the New York Stock Exchange or other national
securities exchange at any time after the Registration Deadline, the Company
shall pay to each Holder an amount (a "Registration Default Payment") equal
to the lesser of (x) two percent (2%) per month and (y) the highest rate
permitted by applicable law, times the Liquidation Preference (as defined in
the Certificate) of the Preferred Shares held by such Holder, accruing daily
and compounded monthly, from the Registration Deadline or, where the
Registration Statement has become effective, from the date on which the
Registration Statement lapses or is otherwise unavailable, or the from the
date on which Common Stock is no longer so quoted or listed, until the date
on which the Registration Statement is declared effective or becomes
available for sales of Registrable Securities or the date on which the Common
Stock is included for quotation on Nasdaq or such other national securities
exchange, as the case may be; provided, however, that if the Registration
Statement is not declared effective by the Registration Deadline, and such
delay is not due to a failure by the Company to use its best efforts to cause
the Registration Statement to become effective, including without limitation
a failure to respond promptly to comments by the Commission on the
Registration Statement, the Registration Deadline shall be extended for an
additional thirty (30) days; and provided, further, that in no event shall
the aggregate of all Registration Default Payments made by the Company
hereunder exceed three million dollars ($3,000,000). The Registration
Default Payments paid or payable by the Company hereunder shall be in
addition to any other remedies available to a Holder at law or in equity or
pursuant to the terms of the Certificate or any other Transaction Document.
Registration Default Payments shall be made within five (5) days after the
end of each period that gives rise to such obligation, provided that, if any
such period extends for more than thirty (30) days, payments shall be made at
the end of each thirty-day period.
3. PIGGYBACK REGISTRATION.
If at any time prior to the expiration of the Registration Period, (i)
the Company proposes to register shares of Common Stock under the Securities Act
in connection with the public offering of such shares for cash (other than a
registration relating solely to the sale of securities to participants in a
Company stock plan or employee stock award or a registration on Form S-4 under
the Securities Act or any successor or similar form registering stock issuable
upon a reclassification, a business combination involving an exchange of
securities or an exchange offer for securities of the issuer or another entity)
(a "Proposed Registration") and (ii) a registration statement covering the sale
of all of the Registrable Securities is not then effective and available for
sales thereof by the Holders, the Company shall, at such time, promptly give
each Holder written notice of such Proposed Registration. Each Holder shall
have thirty (30) days from its receipt of such notice to deliver to the Company
a written request specifying the amount of Registrable Securities that such
Holder intends to sell and such Holder's intended method of distribution. Upon
receipt of such request, the Company shall use its best efforts to cause all
Registrable Securities which the Company has been requested to register to be
registered under the Securities Act to the extent necessary to permit their sale
or other disposition in accordance with the intended methods of distribution
specified in the request of such Holder; provided, however, that the Company
shall have the right to postpone or withdraw any registration effected
-3-
<PAGE>
pursuant to this Section 3 without obligation to the Holder. If, in connection
with any underwritten public offering for the account of the Company, the
managing underwriter(s) thereof shall impose a limitation on the number of
shares of Common Stock which may be included in the Registration Statement
because, in such underwriter(s)' judgment, marketing or other factors dictate
such limitation is necessary to facilitate public distributions, then the
Company shall be obligated to include in such Registration Statement only such
limited portion of the Registrable Securities with respect to which each Holder
has requested inclusion hereunder as such underwriter(s) shall permit. Any
exclusion of Registrable Securities shall be made pro rata among the Holders
seeking to include Registrable Securities in the Registration Statement, in
proportion to the number of Registrable Securities sought to be included by such
Holders; provided, however, that the Company shall not exclude any Registrable
Securities unless the Company has first excluded all outstanding securities, the
holders of which are not entitled to inclusion of such securities in such
Registration Statement or are not entitled to pro rata inclusion with the
Registrable Securities; and provided, further, however, that, after giving
effect to the immediately preceding proviso, any exclusion of Registrable
Securities shall be made pro rata with holders of other securities having the
right to include such securities in the Registration Statement.
4. OBLIGATIONS OF THE COMPANY.
In addition to performing its obligations hereunder, including those
pursuant to paragraphs 2(a) and 2(b) above, the Company shall:
(a) prepare and file with the Commission such amendments and
supplements to the Registration Statement and the prospectus used in connection
with the Registration Statement as may be necessary to comply with the
provisions of the Securities Act or to maintain the effectiveness of the
Registration Statement during the Registration Period, or as may be reasonably
requested by a Holder in order to incorporate information concerning such Holder
or such Holder's intended method of distribution;
(b) in the event that the number of shares available under the
Registration Statement filed by the Company hereunder is insufficient during any
period of three consecutive trading days to cover 150% of the Registrable
Securities then issued or issuable, the Company shall promptly amend the
Registration Statement, or file a new Registration Statement, or both, so as to
cover 200% of such Registrable Securities, in any event as soon as practicable,
but not later than the tenth business day following the last day of such three
day period. Any Registration Statement filed pursuant to this Section 4 shall
state that, to the extent permitted by Rule 416 under the Securities Act, such
Registration Statement also covers such indeterminate number of additional
shares of Common Stock as may become issuable upon conversion of the Debentures.
Unless and until such amendment or new Registration Statement becomes effective,
each Holder shall have the rights described in paragraph 2(c) above;
-4-
<PAGE>
(c) secure the designation and quotation of the Registrable
Securities on the Nasdaq Stock Market or the listing thereof on the New York
Stock Exchange or the American Stock Exchange;
(d) furnish to each Holder such number of copies of the prospectus
included in such Registration Statement, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other documents
as such Holder may reasonably request in order to facilitate the disposition of
such Holder's Registrable Securities;
(e) use all commercially reasonable efforts to register or qualify
the Registrable Securities under the securities or "blue sky" laws of such
jurisdictions within the United States as shall be reasonably requested from
time to time by a Holder, and do any and all other acts or things which may be
necessary or advisable to enable such Holder to consummate the public sale or
other disposition of the Registrable Securities in such jurisdictions; 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 jurisdiction;
(f) in the event of an underwritten public offering of the
Registrable Securities pursuant to Sections 2 or 3 hereof, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form reasonably acceptable to the Company, with the managing underwriter of such
offering;
(g) notify each Holder immediately upon the occurrence of any event
as a result of which the prospectus included in such Registration Statement, as
then in effect, contains an untrue statement of material fact or omits to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing,
and as promptly as practicable, prepare, file and furnish to each Holder a
reasonable number of copies of a supplement or an amendment to such prospectus
as may be necessary so that such prospectus does not contain an untrue statement
of material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances then existing;
(h) use all commercially reasonable efforts to prevent the issuance
of any stop order or other order suspending the effectiveness of such
Registration Statement and, if such an order is issued, to obtain the withdrawal
thereof at the earliest possible time and to notify each Holder of the issuance
of such order and the resolution thereof;
(i) furnish to each Holder, on the date that such Registration
Statement becomes effective, (x) an opinion, dated such date, of outside counsel
representing the Company (and reasonably acceptable to such Holder) addressed to
such Holder, regarding the effectiveness of the Registration Statement and the
absence of any stop order, and (y) in the case of an underwriting pursuant to
Sections 2 or 3 hereof, (A) an opinion, dated such date, of such outside
counsel, in form and substance as is customarily given to underwriters in an
underwritten public
-5-
<PAGE>
offering, and (B) a letter, dated such date, from the Company's independent
certified public accountants, in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and to each Holder;
(j) provide each Holder and its representatives the opportunity to
conduct a reasonable inquiry of the Company's financial and other records during
normal business hours and make available its officers, directors and employees
for questions regarding information which such Holder may reasonably request in
order to fulfill any due diligence obligation on its part; and
(k) permit counsel for each Holder (at such Holder's expense) to
review such Registration Statement and all amendments and supplements thereto a
reasonable period of time prior to the filing thereof with the Commission.
5. OBLIGATIONS OF EACH HOLDER.
In connection with the registration of the Registrable Securities pursuant
to the Registration Statement, each Holder shall:
(a) furnish to the Company in writing such information regarding
itself and the intended method of disposition of Registrable Securities as the
Company shall reasonably request in order to effect the registration thereof;
(b) upon receipt of any notice from the Company of the happening of
any event of the kind described in paragraph 4(g) or 4(h), immediately
discontinue disposition of Registrable Securities pursuant to the Registration
Statement until the filing of the supplement or amendment referred to in
paragraph 4(g) or withdrawal of the stop order referred to in paragraph 4(h);
and
(c) in the event of an underwritten offering of the Registrable
Securities pursuant to Sections 2 or 3 hereof, enter into a customary and
reasonable underwriting agreement and execute such other documents as the
managing underwriter for such offering may reasonably request.
6. INDEMNIFICATION.
In the event that any Registrable Securities are included in a Registration
Statement under this Agreement:
(a) To the extent permitted by law, the Company shall indemnify and
hold harmless each Holder, the officers, directors, employees, agents and
representatives of such Holder, and each person, if any, who controls such
Holder within the meaning of the Securities Act or the Securities Exchange Act
of 1934, as amended (the "1934 Act"), against any losses, claims, damages,
liabilities or reasonable out-of-pocket expenses (whether joint or several)
-6-
<PAGE>
(collectively, including legal or other expenses reasonably incurred in
connection with investigating or defending same, "Losses"), insofar as any such
Losses arise out of or are based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in such Registration Statement, including
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The Company will reimburse such Holder, and each such
officer, director, employee, agent, representative or controlling person for any
legal or other expenses as reasonably incurred by any such entity or person in
connection with investigating or defending any Loss; provided, however, that the
foregoing indemnity shall not apply to amounts paid in settlement of any Loss if
such settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld), nor shall the Company be obligated to
indemnify any person for any Loss to the extent that such Loss arises out of or
is based upon and in conformity with written information furnished by such
person expressly for use in such Registration Statement; and provided, further,
that the Company shall not be required to indemnify any person to the extent
that any Loss results from such person selling Registrable Securities (i) to a
person to whom there was not sent or given, at or prior to the written
confirmation of the sale of such shares, a copy of the prospectus, as most
recently amended or supplemented, if the Company has previously furnished or
made available copies thereof or (ii) during any period following written notice
by the Company to such Holder of an event described in Section 4(g) or 4(h).
(b) To the extent permitted by law, each Holder, acting severally and
not jointly, shall indemnify and hold harmless the Company, the officers,
directors, employees, agents and representatives of the Company, and each
person, if any, who controls the Company within the meaning of the Securities
Act or the 1934 Act, against any Losses to the extent (and only to the extent)
that any such Losses arise out of or are based upon and in conformity with
written information furnished by such Holder expressly for use in such
Registration Statement; and such Holder will reimburse any legal or other
expenses as reasonably incurred by the Company and any such officer, director,
employee, agent, representative, or controlling person, in connection with
investigating or defending any such Loss; provided, however, that the foregoing
indemnity shall not apply to amounts paid in settlement of any such Loss if such
settlement is effected without the consent of such Holder, which consent shall
not be unreasonably withheld; provided, that, in no event shall any indemnity
under this subsection 6(b) exceed the net purchase price of securities sold by
such Holder under the Registration Statement.
(c) Promptly after receipt by an indemnified party under this Section
6 of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 6, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in and to assume the
defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party shall have the right to retain its own
counsel, with the reasonably incurred fees and expenses of one
-7-
<PAGE>
such counsel to be paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the indemnifying party would be
inappropriate under applicable standards of professional conduct due to actual
or potential conflicting interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, to the extent prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 6 with respect to such action, but the
omission so to deliver written notice to the indemnifying party will not relieve
it of any liability that it may have to any indemnified party otherwise than
under this Section 6 or with respect to any other action.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 6 is unavailable or insufficient to hold harmless an indemnified
party for any reason, the Company and each Holder agree, severally and not
jointly, to contribute to the aggregate Losses to which the Company or such
Holder may be subject in such proportion as is appropriate to reflect the
relative fault of the Company and such Holder in connection with the statements
or omissions which resulted in such Losses; provided, however, that in no case
shall such Holder be responsible for any amount in excess of the net purchase
price of securities sold by it under the Registration Statement. Relative fault
shall be determined by reference to whether any alleged untrue statement or
omission relates to information provided by the Company or by such Holder. The
Company and each Holder agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (d), no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who is not
guilty of such fraudulent misrepresentation. For purposes of this Section 6,
each person who controls a Holder within the meaning of either the Securities
Act or the Exchange Act and each officer, director, employee, agent or
representative of such Holder shall have the same rights to contribution as such
Holder, and each person who controls the Company within the meaning of either
the Securities Act or the Exchange Act and each officer, director, employee,
agent or representative of the Company shall have the same rights to
contribution as the Company, subject in each case to the applicable terms and
conditions of this paragraph (d).
(e) The obligations of the Company and each Holder under this
Section 6 shall survive the conversion or redemption, if any, of the Preferred
Shares, the completion of any offering of Registrable Securities pursuant to a
Registration Statement under this Agreement, or otherwise.
-8-
<PAGE>
7. REPORTS.
With a view to making available to each Holder the benefits of Rule
144 under the Securities Act ("Rule 144") and any other similar rule or
regulation of the Commission that may at any time permit such Holder to sell
securities of the Company to the public without registration, the Company agrees
to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144;
(b) file with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the 1934 Act; and
(c) furnish to such Holder, so long as such Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company, if true, that it has complied with the reporting requirements of Rule
144, the Securities Act and the 1934 Act, (ii) a copy of the most recent annual
or quarterly report of the Company and such other reports and documents so filed
by the Company, and (iii) such other information as may be reasonably requested
in availing such Holder of any rule or regulation of the Commission which
permits the selling of any such securities without registration.
8. MISCELLANEOUS.
(a) Expenses of Registration. All expenses, other than underwriting
discounts and commissions and fees and expenses of counsel to each Holder,
incurred in connection with the registrations, filings or qualifications
described herein, including (without limitation) all registration, filing and
qualification fees, printers' and accounting fees, the fees and disbursements of
counsel for the Company, and the fees and disbursements incurred in connection
with the opinion and letter described in paragraph 4(i) hereof, shall be borne
by the Company.
(b) Amendment; Waiver. Any provision of this Agreement may be
amended only pursuant to a written instrument executed by the Company and
Holders of two-thirds (2/3) of the outstanding Registrable Securities. Any
waiver of the provisions of this Agreement may be made only pursuant to a
written instrument executed by the party against whom enforcement is sought.
Any amendment or waiver effected in accordance with this paragraph shall be
binding upon each Holder, each future Holder, and the Company. The failure of
any party to exercise any right or remedy under this Agreement or otherwise, or
the delay by any party in exercising such right or remedy, shall not operate as
a waiver thereof.
(c) Notices. Any notice, demand or request required or permitted to
be given by any party to any other party pursuant to the terms of this Agreement
shall be in writing and shall be deemed given (i) when delivered personally or
by verifiable facsimile transmission (with an original to follow) on or before
5:00 p.m., eastern time, on a business day or, if such day is
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<PAGE>
not a business day, on the next succeeding business day, (ii) on the next
business day after timely delivery to a nationally-recognized overnight courier
and (iii) on the third business day after deposit in the U.S. mail (certified or
registered mail, return receipt requested, postage prepaid), addressed to the
parties as follows:
If to the Company:
IGEN International, Inc.
16020 Industrial Drive
Gaithersburg, MD 20817
Attn: Messrs. Samuel J. Wohlstadter
George V. Migausky
Dr. Richard J. Massey
Fax:
with a copy to:
Wilmer, Cutler & Pickering
2445 M Street, N.W.
Washington, DC 20037
Attn: Stephen P. Doyle, Esq.
Fax: 202-663-6363
and if to any Holder, to such address as shall be designated by such Holder in
writing to the Company.
(d) Termination. This Agreement shall terminate on the earlier to
occur of (a) the end of the Registration Period and (b) the date on which all of
the Registrable Securities have been publicly distributed; but any such
termination shall be without prejudice to (i) the parties' rights and
obligations arising from breaches of this Agreement occurring prior to such
termination and (ii) the indemnification and contribution obligations under this
Agreement.
(e) Assignment. The rights of a Holder hereunder shall be assigned
automatically to any transferee of the Preferred Shares or Registrable
Securities from such Holder as long as: (i) the Company is, within a reasonable
period of time following such transfer, furnished with written notice of the
name and address of such transferee, (ii) the transferee agrees in writing with
the Company to be bound by all of the provisions hereof and (iii) such transfer
is made in accordance with the applicable requirements of the Purchase Agreement
and the Certificate.
(f) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed
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<PAGE>
one and the same instrument. This Agreement, once executed by a party, may
be delivered to any other party hereto by facsimile transmission.
(g) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without regard to the
conflict of laws provisions thereof.
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<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first-above written.
IGEN INTERNATIONAL, INC.
By: /s/ George Migausky
-------------------------
Name: George Migausky
Title: CFO
PURCHASER NAME: The Robertson Stephens Black Bear Fund, L.P.
By: /s/ Paul H. Stephens
-------------------------
Name: Paul H. Stephens
Title: General Partner
PURCHASER NAME: The Robertson Stephens Black Bear Offshore Fund, L.P.
By: /s/ Paul H. Stephens
-------------------------
Name: Paul H. Stephens
Title: General Partner
PURCHASER NAME: The Robertson Stephens Black Bear Pacific Master Fund Unit
Trust
By: /s/ Paul H. Stephens
--------------------------
Name: Paul H. Stephens
Title: General Partner
PURCHASER NAME: Credit Suisse First Boston Corporation
By: /s/ Thomas F.X. O'Mara
----------------------------
Name: Thomas F.X. O'Mara
Title: Managing Director
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<PAGE>
PURCHASER NAME: Permal Noscal, Ltd.
By: /s/ Sanford J. Colen
--------------------------
Name: Sanford J. Colen
Title: Manager and Principal
Apex Capital, LLC
PURCHASER NAME: Zaxis Partners, L.P.
By: /s/ Sanford J. Colen
-------------------------
Name: Sanford J. Colen
Title: Manager and Principal
Apex Capital, LLC - General Partner
PURCHASER NAME: Sidney Kimmel
By: /s/ Sanford J. Colen
-------------------------
Name: Sanford J. Colen
Title: Manager and Principal
Apex Capital, LLC
PURCHASER NAME: Pollat, Evans & Co., Inc.
By: /s/ Sanford J. Colen
-------------------------
Name: Sanford J. Colen
Title: Manager and Principal
Apex Capital, LLC
PURCHASER NAME: Quadra Appreciation Fund, Inc.
By: /s/ Sanford J. Colen
-------------------------
Name: Sanford J. Colen
Title: Manager and Principal
Apex Capital, LLC
-11-
<PAGE>
PURCHASER NAME: Peter W. Branagh & Ramona Y. Branagh Trustee for the Peter
W. Branagh & Ramona Y. Branagh Revocable Trust, dated March
8, 1993
By: /s/ Sanford J. Colen
-------------------------
Name: Sanford J. Colen
Title: Manager and Principal
Apex Capital, LLC
PURCHASER NAME: KA Investments LDC
By: /s/ [Authorized Investment Advisor] /s/ Kelly Ireland
----------------------------------- -------------------------
Name: [Illegible] Name: Kelly Ireland
Title: Title:
PURCHASER NAME: Gleneagles Fund
By: Palladin Group L.P.
Title: Investment Advisor
By: /s/ Brian A. Swain
---------------------------
Name: Brian A. Swain
Title: Managing Director
PURCHASER NAME: Colonial Penn Life
By: Palladin Group L.P.
Title: Investment Advisor
By: /s/ Brian A. Swain
----------------------
Name: Brian A. Swain
Title: Managing Director
PURCHASER NAME: Putnam Health Sciences Trust
By: /s/ John Verani
-------------------------
Name: John Verani
Title: Vice President
-11-
<PAGE>
PURCHASER NAME: Porter Partners, L.P.
By: /s/ Jeff Porter
-------------------------
Name: Jeff Porter
Title: General Partner
PURCHASER NAME: EDJ Limited
By: /s/ Jeff Porter
-------------------------
Name: Jeff Porter
Title: Investment Advisor
PURCHASER NAME: White Rock Capital Offshore, Ltd.
By: /s/ Timothy U. Barton
-------------------------
Name: Timothy U. Barton
Title:
PURCHASER NAME: Quantum Partners LDC
By: /s/ Timothy U. Barton
-------------------------
Name: Timothy U. Barton
Title:
PURCHASER NAME: Collins Capital Diversified Fund, L.P.
By: /s/ Timothy U. Barton
-------------------------
Name: Timothy U. Barton
Title:
PURCHASER NAME: White Rock Capital Partners, L.P.
By: /s/ Timothy U. Barton
-------------------------
Name: Timothy U. Barton
Title:
-11-
<PAGE>
PURCHASER NAME: Prism Partners I
By: /s/ Jerald M. Weintraub
------------------------
Name: Jerald M. Weintraub
Title: Managing General Partner
PURCHASER NAME: GPZ Trading
By: /s/ John S. Stafford III
-------------------------
Name: John S. Stafford III
Title: Member
PURCHASER NAME: Triton Capital Investments, Ltd.
By: Inter Caribbean Services Limited
By: /s/ [Authorized Officer]
-------------------------
Name: [Illegible]
Title: Secretary
PURCHASER NAME: JMG Capital Partners, L.P.
By: /s/ Jonathan Glaser
-------------------------
Name: Jonathan Glaser
Title: General Partner
-11-
<PAGE>
Exhibit 5.1
WILMER, CUTLER & PICKERING
2445 M STREET, N.W.
WASHINGTON, D.C. 20037-1420
Telephone (202) 663-6000
Facsimile (202) 663-6363
January 30, 1998
IGEN International, Inc.
16020 Industrial Drive
Gaithersburg, MD 20877
Re: IGEN International, Inc. Registration Statement on Form S-3
Dear Ladies and Gentlemen:
We have acted as counsel to IGEN International, Inc., a Delaware
corporation (the "Company"), in connection with a Registration Statement (the
"Registration Statement") on Form S-3 initially filed with the Securities and
Exchange Commission (the "Commission") on January __, 1998 under the Securities
Act of 1933, as amended. The Registration Statement registers the resale of the
shares of Common Stock of the Company, par value $0.001 per share (the
"Shares"), issued in connection with the conversion of and/or payment of
dividends on the Company's Series B Convertible Preferred Stock. The Series B
Convertible Preferred Stock was issued by the Company on December 19, 1997
pursuant to a Purchase Agreement dated December 16, 1997 by and among the
Company and the Purchasers identified therein. For the purposes of this
opinion, we have examined and relied upon such documents, records, certificates
and other instruments as we have deemed necessary.
Based solely upon the foregoing, and upon our examination of such questions
of law and statutes as we have considered necessary or appropriate, and subject
to the assumptions, qualifications, limitations and exceptions set forth herein,
we are of the opinion that (i) the Shares have been lawfully and duly
authorized; and (ii) when issued upon conversion of or as a dividend upon the
Series B Preferred Stock in accordance with the Certificate of Designation,
Powers, Preferences and Rights of the Series B Convertible Preferred Stock dated
December 18, 1998, the Shares will be validly issued, fully paid and
nonassessable.
We are members of the bar of the District of Columbia and do not hold
ourselves out as being experts in the law of any other jurisdiction. This
opinion is limited to the laws of
<PAGE>
IGEN International, Inc.
January 30, 1998
Page 2
the United States and the General Corporation Law of the State of Delaware.
Although we do not hold ourselves out as being experts in the laws of the State
of Delaware, we have made an investigation of such laws to the extent necessary
to render our opinion. Our opinion is rendered only with respect to the laws
and the rules, regulations and orders thereunder that are currently in effect.
We assume no obligations to advise you of any changes in the foregoing
subsequent to the delivery of this opinion. This opinion has been prepared
solely for your use in connection with the filing of the Registration Statement
on January 30, 1998, and should not be quoted in whole or in part or otherwise
be referred to, nor otherwise be filed with or furnished to any governmental
agency or other person or entity, without our express prior written consent.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name therein under the caption
"Legal Matters."
Sincerely,
Wilmer, Cutler & Pickering
By: /s/ Stephen P. Doyle
---------------------------------
Stephen P. Doyle, a partner
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of IGEN International, Inc. on Form S-3 of our report dated May 9, 1997,
appearing in the Annual Report on Form 10-K of IGEN International, Inc. for
the year ended March 31, 1997 and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.
/s/ Deloitte & Touche LLP
- -------------------------
Deloitte & Touche LLP
Washington, DC
January 30, 1998
