EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
4.1 Common Stock Purchase Warrant Provisions.
5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality of the
securities being registered.
23.1 Consent of PricewaterhouseCoopers LLP, Independent Accountants.
24.1 Powers of Attorney (included on page 5 of this registration
statement).
Exhibit 4.1
COMMON STOCK PURCHASE WARRANT PROVISIONS
TABLE OF CONTENTS
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Page
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ARTICLE I
WARRANT CERTIFICATES......................................................1
Section 1.1 Form of Warrant Certificates.................................1
Section 1.2 Execution of Warrant Certificates............................1
Section 1.3 Registration of Warrant Certificates.........................1
Section 1.4 Exchange and Transfer of Warrant Certificates................1
Section 1.5 Lost, Stolen, Mutilated or Destroyed Warrant Certificates....2
Section 1.6 Cancellation of Warrant Certificates.........................2
ARTICLE II
WARRANT EXERCISE PRICE AND EXERCISE OF WARRANTS...........................2
Section 2.1 Exercise Price...............................................2
Section 2.2 Reservation of Common Stock..................................3
Section 2.3 Exercise of Warrants.........................................3
Section 2.4 Issuance of Common Stock.....................................3
Section 2.5 Certificates for Unexercised Warrants........................3
Section 2.6 Registration of Warrant Shares...............................3
Section 2.7 No Impairment................................................4
ARTICLE III
ADJUSTMENTS AND NOTICE PROVISIONS.........................................4
Section 3.1 Adjustment of Exercise Price.................................4
Section 3.2 No Adjustments to Exercise Price.............................6
Section 3.3 Adjustment of Number of Shares...............................6
Section 3.4 Reorganizations..............................................6
Section 3.5 Notice of Certain Actions....................................7
Section 3.6 Certificate of Adjustments...................................7
Section 3.7 Warrant Certificate Amendments...............................8
Section 3.8 Fractional Shares............................................8
Section 3.9 Liquidating Dividends........................................8
ARTICLE IV
MISCELLANEOUS.............................................................8
Section 4.1 Changes to Agreement.........................................8
Section 4.2 Assignment...................................................8
Section 4.3 Successor to Company.........................................8
Section 4.4 Notices......................................................8
Section 4.5 Defects in Notice............................................9
Section 4.6 Governing Law................................................9
Section 4.7 Standing.....................................................9
Section 4.8 Headings.....................................................9
Section 4.9 Counterparts.................................................9
Section 4.10 Availability of the Agreement...............................10
Section 4.11 Entire Agreement............................................10
Signature pages.............................................................12
(i)
Page
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Exhibit A - Form of Common Stock Purchase Warrant Certificate...............A-1
(ii)
T CELL SCIENCES, INC.
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THESE COMMON STOCK PURCHASE WARRANT PROVISIONS (this "Agreement"), relate
to certain Warrants (as defined below) to be issued by T Cell Sciences, Inc., a
corporation organized under the laws of Delaware (the "Company"), pursuant to
the Merger Agreement (as defined below).
W I T N E S S E T H:
WHEREAS, the Company and Virus Research Institute, Inc., a corporation
organized under the laws of Delaware ("VRI"), have entered into an Agreement and
Plan of Merger dated as of May 12, 1998 (the "Merger Agreement") pursuant to
which a wholly-owned subsidiary of the Company will merge with and into VRI,
with VRI as the surviving entity; and
WHEREAS, the Merger Agreement provides that the Company will issue to the
stockholders of VRI shares of the Company's common stock, par value $.001 per
share ("Common Stock"), and warrants (each, a "Warrant", and collectively, the
"Warrants") to purchase shares of Common Stock (the Common Stock issuable upon
exercise of the Warrants being referred to herein as the "Warrant Shares") as
consideration, subject to the terms and conditions of the Merger Agreement and
this Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
WARRANT CERTIFICATES
Section 1.1 Form of Warrant Certificates. The warrant certificates
representing the Warrants issued under this Agreement (the "Warrant
Certificates") shall be issued in registered form only and, together with the
form of the election to purchase (the "Election to Purchase") and assignment to
be attached thereto, shall be substantially in the form of Exhibit A attached
hereto and, in addition, may have such letters, numbers or other marks of
identification or designation and such legends, summaries, or endorsements
stamped, printed, lithographed or engraved thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as, in any particular case, may be required in the opinion of counsel for the
Company, to comply with any law or with any rule or regulation of any regulatory
authority or agency, or to conform to customary usage.
Section 1.2 Execution of Warrant Certificates. The Warrant Certificates
shall be executed on behalf of the Company by its President and Chief Executive
Officer and attested to by its Treasurer, either manually or by facsimile
signature printed thereon. In the event that any authorized officer of the
Company who shall have signed any of the Warrant Certificates shall cease to be
an officer of the Company either before or after delivery of such Warrant
Certificates by the Company, the signature of such person on such Warrant
Certificates shall be valid nevertheless and such Warrant Certificates may be
issued and delivered to those persons entitled to receive the Warrants
represented thereby with the same force and effect as though the person who
signed such Warrant Certificates had not ceased to be an officer of the Company.
Section 1.3 Registration of Warrant Certificates. The Company shall number
and register the Warrant Certificates in a warrant register maintained by the
Company. The Company may deem and treat the registered holder(s) of the Warrant
Certificates (the "Holders") as the absolute owner(s) thereof for all purposes.
Section 1.4 Exchange and Transfer of Warrant Certificates. The Warrants
(and any Warrant Shares issued upon exercise of the Warrants) shall bear such
restrictive legend or legends as may be
required by law or by this Agreement and shall be transferable only in
accordance with the terms of this Agreement.
The Company shall from time to time register the transfer of any
outstanding Warrant Certificates in the warrant register upon surrender thereof
accompanied by a written instrument or instruments of transfer in form
reasonably satisfactory to the Company duly executed by the Holder or Holders
thereof or by the duly appointed legal representative thereof or by a duly
authorized attorney. Upon any such registration of transfer, the Company shall
issue as promptly as practicable and in any event within three (3) business days
after receipt of such notice of transfer a new Warrant Certificate to the
transferee(s).
Warrant Certificates and all rights thereunder may be exchanged, in whole
or in part, at the option of the Holder(s) thereof when surrendered to the
Company at the address set forth in Section 4.5 hereof for another Warrant
Certificate or Warrant Certificates of like tenor and representing the right to
purchase in the aggregate a like number of Warrant Shares; provided that the
Company shall not be required to issue any Warrant Certificate representing any
fractional Warrant Shares.
The Company shall pay all expenses, taxes and other charges payable in
connection with the preparation, issuance and delivery of new Warrant
Certificates, including, without limitation, any transfer or stamp taxes.
Section 1.5 Lost, Stolen, Mutilated or Destroyed Warrant Certificates. If
any Warrant Certificate shall be mutilated, lost, stolen or destroyed, the
Company shall issue, execute and deliver, in exchange and substitution for and
upon cancellation of such mutilated Warrant Certificate, or in lieu of or in
substitution for such lost, stolen or destroyed Warrant Certificate, a new
Warrant Certificate representing the right to purchase an equivalent number of
Warrant Shares. If required by the Company, the Holder of the lost, stolen or
destroyed Warrant Certificate must agree to indemnify and protect the Company
from any loss which it may suffer if the Warrant Certificate is replaced. Any
new Warrant Certificate shall constitute an original contractual obligation of
the Company, whether or not the allegedly lost, stolen, mutilated or destroyed
Warrant Certificate shall be at any time enforceable by anyone.
Section 1.6 Cancellation of Warrant Certificates. Any Warrant Certificate
surrendered upon the exercise of Warrants or for exchange or transfer, or
purchased or otherwise acquired by the Company, shall be canceled and shall not
be reissued by the Company; and, except as provided in Section 2.5 with respect
to the exercise of less than all of the Warrants evidenced by a Warrant
Certificate or in Section 1.4 with respect to an exchange or transfer, no
Warrant Certificate shall be issued hereunder in lieu of such canceled Warrant
Certificate. Any Warrant Certificate so canceled shall be destroyed by the
Company.
ARTICLE II
WARRANT EXERCISE PRICE AND EXERCISE OF WARRANTS
Section 2.1 Exercise Price. Each Warrant Certificate shall, when duly
issued by the Company, entitle the Holder thereof to purchase from the Company,
subject to the terms and conditions of this Agreement, the number of fully paid
and nonassessable Warrant Shares evidenced thereby at a purchase price of Six
Dollars and no/cents ($6.00) per share (the "Exercise Price") or such adjusted
purchase price as may be established from time to time pursuant to the
provisions of Article III hereof, payable in full in accordance with Section
2.3, at the time of exercise of the Warrant. Except as the context otherwise
requires, the term "Exercise Price" as used in this Agreement shall mean the
purchase price of one share of Common Stock, reflecting all appropriate
adjustments made in accordance with the provisions of Article III hereof.
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Section 2.2 Reservation of Common Stock. The Company shall at all times
reserve and keep available, free from preemptive rights, for issuance upon the
exercise of Warrants, the maximum number of its authorized but unissued shares
of Common Stock which may then be issuable upon the exercise in full of all
outstanding Warrants. If the Common Stock is listed on any national securities
exchange or quoted on Nasdaq at the time of any issuance of Warrant Shares, then
such maximum number of shares of Common Stock shall be approved for listing or
quotation, the case may be, subject to notice of issuance if applicable.
Section 2.3 Exercise of Warrants.
(a) Procedure. The Warrants may be exercised prior to the Expiration Date
(as hereinafter defined) at the Exercise Price at any time following the date
hereof. The Warrants shall expire at 5:00 p.m., New York City time, on August
21, 2003 (the "Expiration Date"). The Warrants may be exercised by surrendering
the Warrant Certificates representing such Warrants to the Company at its
address set forth in Section 4.5, together with the Election to Purchase duly
completed and executed, accompanied by payment in full, as set forth below, to
the Company of the Exercise Price for each Warrant Share in respect of which
such Warrants are being exercised. Such Exercise Price shall be paid in full by
cash or a certified check or a wire transfer in same day funds in an amount
equal to the Exercise Price multiplied by the number of Warrant Shares then
being purchased.
Section 2.4 Issuance of Common Stock. As promptly as practicable after the
Date of Exercise of any Warrants and in any event within three (3) business days
after receipt of the Election to Purchase, the Company shall issue, or cause its
transfer agent to issue, a certificate or certificates for the number of
non-fractional Warrant Shares (the "Common Stock Certificate"), registered in
accordance with the instructions set forth in the Election to Purchase, together
with cash for fractional Warrant Shares exercised as provided in Section 3.9.
All Warrant Shares issued upon the exercise of any Warrants shall be validly
authorized and issued, fully paid, non-assessable, free of preemptive rights and
free from all taxes, liens, charges and security interests in respect of the
issuance thereof. Each person in whose name any such Common Stock Certificate is
issued shall be deemed for all purposes to have become the holder of record of
the Common Stock represented thereby on the Date of Exercise of the Warrants
resulting in the issuance of such shares, irrespective of the date of issuance
or delivery of such Common Stock Certificate. The Company shall pay all
expenses, taxes and other charges payable in connection with the preparation,
issuance and delivery of new Common Stock Certificates, including, without
limitation, any transfer or stamp taxes. Upon exercise of the Warrant, the
Holder shall also receive, in addition to the Warrant Shares, the associated
rights to purchase shares of the Company's Class C-1 Junior Participating
Cumulative Preferred Stock, par value $.01 per share (the "Preferred Stock
Rights"), pursuant to the Rights Agreement dated November 10, 1994 between the
Company and State Street Bank and Trust Company, as Rights Agent, if then in
effect.
Section 2.5 Certificates for Unexercised Warrants. In the event that, prior
to the Expiration Date, a Warrant Certificate is exercised in respect of fewer
than all of the Warrant Shares issuable on such exercise a new Warrant
Certificate representing the remaining Warrant Shares shall be issued and
delivered pursuant to the provisions hereof; provided that the Company shall not
be required to issue any Warrant Certificate representing any fractional Warrant
Shares.
Section 2.6 Registration of Warrant Shares. The Company shall use its
reasonable best efforts to make such filings and obtain such authorizations,
exemptions or consents from any public regulatory body having jurisdiction
thereof as may be necessary to enable the Company to perform its obligations
under the Warrants, including without limitation registering under the
Securities Act of 1933, as amended
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(the "Securities Act") the issuance of the Warrant Shares upon exercise of the
Warrants and the Preferred Stock Rights and maintaining the effectiveness of the
registration statement filed for such purpose.
Section 2.7 No Impairment. The Company will not, by amendment of its
charter or through reorganization consolidation, merger, dissolution, sale of
assets or any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of the Warrants, but will at all times in good
faith assist in the carrying out of all such terms and in the taking of all such
action as may be necessary or appropriate in order to protect the rights of the
Holders of the Warrants against impairment.
ARTICLE III
ADJUSTMENTS AND NOTICE PROVISIONS
Section 3.1 Adjustment of Exercise Price. Subject to the provisions of this
Article III, the Exercise Price in effect from time to time shall be subject to
adjustment, as follows:
(a) In the event that the Company shall (i) declare a dividend payable
in or make a distribution on the outstanding Common Stock of additional shares
of Common Stock, (ii) subdivide or reclassify the outstanding Common Stock into
a greater number of shares of Common Stock, or (iii) combine or reclassify the
outstanding shares of Common Stock into a fewer number of shares of Common
Stock, the Exercise Price in effect immediately after the record date for such
dividend or distribution or the effective date of such subdivision, combination
or reclassification, as the case may be, shall be adjusted so that it shall
equal the price determined by multiplying the Exercise Price in effect
immediately prior thereto by a fraction, of which the numerator shall be the
number of shares of Common Stock outstanding immediately before such dividend,
distribution, subdivision, combination or reclassification, and of which the
denominator shall be the number of shares of Common Stock outstanding
immediately after such dividend, distribution, subdivision, combination or
reclassification. Any shares of Common Stock issuable in payment of a dividend
shall be deemed to have been issued immediately prior to the record date for
such dividend for the purpose of calculating the number of outstanding shares of
Common Stock under Sections 3.l(b), 3.l(c) and 3.2(a) hereof. Such adjustment
shall be made successively whenever any event specified above shall occur.
(b) In the event that the Company shall fix a record date for the
issuance of rights, options, warrants or convertible or exchangeable securities
to all holders of its Common Stock entitling them (for a period which, by its
express terms, expires within forty-five (45) days after such record date) to
subscribe for or purchase shares of Common Stock at a price per share less than
the Fair Market Value (as defined below) of a share of Common Stock on such
record date, the Exercise Price shall be adjusted immediately thereafter so that
it shall equal the price determined by multiplying the Exercise Price in effect
immediately prior thereto by a fraction, of which the numerator shall be the
number of shares of Common Stock outstanding on such record date plus the
maximum number of shares of Common Stock which the aggregate subscription or
purchase price for the total number of shares of Common Stock so offered for
subscription or purchase pursuant to such rights, options, warrants or
convertible or exchangeable securities would purchase at the Fair Market Value
(as defined below) per share, and of which the denominator shall be the number
of shares of Common Stock outstanding on such record date plus the number of
additional shares of Common Stock issuable pursuant to such rights, options,
warrants or convertible or exchangeable securities offered for subscription or
purchase. Such adjustment shall be made successively whenever such a record date
is fixed. To the extent that any such rights, options, warrants or convertible
or exchangeable securities are not so issued or expire unexercised, the Exercise
Price then in effect shall be readjusted to the Exercise Price which would then
be in effect if such unissued or unexercised rights, options, warrants or
convertible or exchangeable securities had not been issuable in the first place.
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(c) In the event that the Company shall fix a record date for the
making of a distribution to all holders of shares of Common Stock (i) of shares
of any class of its capital stock other than Common Stock, or (ii) of evidences
of its indebtedness, or (iii) of assets (excluding cash dividends or
distributions and dividends or distributions referred to in Section 3.1(a)), or
(iv) of rights, options, warrants or convertible or exchangeable securities
(excluding those rights, options, warrants convertible or exchangeable
securities referred to Section 3.1(b)), then in each such case the Exercise
Price in effect immediately thereafter shall be determined by multiplying the
Exercise Price in effect immediately prior thereto by a fraction, of which the
numerator shall be the total number of shares of Common Stock outstanding on
such record date multiplied by the Fair Market Value per share of Common Stock
on such record date, less the aggregate Fair Market Value of said other shares
of capital stock or evidences of indebtedness or assets or rights, options,
warrants or convertible or exchangeable securities so distributed, and of which
the denominator shall be the total number of shares of Common Stock outstanding
on such record date multiplied by such Fair Market Value per share of Common
Stock. Such adjustment shall be made successively whenever such a record date is
fixed; provided, however, that in no event shall the Exercise Price be less than
zero. In the event that such distribution is not so made, or that such
distribution, by its express terms, is intended to be made, and is in fact made,
with respect to any Warrant Shares issued after the record date for such
distribution upon exercise of Warrants, the Exercise Price then in effect shall
be readjusted to (or remain as) the Exercise Price which would then be in effect
if such record date had not been fixed.
(d) As used herein:
(i) the term "Fair Market Value" means:
(x) with respect to the Common Stock, on a per share basis,
the average of the daily Closing Prices (as hereinafter
defined) of the Common Stock for the five (5) consecutive
Trading Days (as hereinafter defined) ending on the Trading
Day immediately preceding a Computation Date (the "Fair Market
Value Measurement Period"), or, if the Closing Price of the
Common Stock cannot be determined pursuant to Section
2.3(b)(iv), the fair value thereof determined in good faith by
the Company's Board of Directors as of a date which is within
15 days of the date as of which the determination is to be
made; and
(y) with respect to any other securities or property, the fair
value thereof determined in good faith by the Company's Board
of Directors as of a date which is within 15 days of the date
as of which the determination is to be made;
(ii) the term "Computation Date" means any date on which a
calculation of the Fair Market Value of the Common Stock is
contemplated by this Agreement;
(iv) the term "Closing Price" for any date shall mean the last sale
price reported in The Wall Street Journal regular way or, in
case no such reported sale takes place on such date, the
average of the last reported bid and asked prices regular way
on the principal U.S. national securities exchange on which
the Common Stock is admitted to trading or listed if that is
the principal market for the Common Stock or, if not listed or
admitted to trading on any national securities exchange or if
such national securities exchange is not the principal market
for the Common Stock, the last sale price as reported on The
Nasdaq Stock Market, Inc.'s National Market ("Nasdaq") or its
successor, if any, or if the Common Stock is not so reported,
the
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average of the reported bid and asked prices in the
over-the-counter market, as furnished by the National
Quotation Bureau, Inc., or if such firm is not then engaged in
the business of reporting such prices, as furnished by any
similar firm then engaged in such business and reasonably
selected by the Company or, if there is no such firm, as
furnished by any member of the National Association of
Securities Dealers, Inc. reasonably selected by the Company;
and
(v) the term "Trading Days" with respect to the Common Stock
means (i) if the Common Stock is quoted on Nasdaq, or any
similar system of automated dissemination of quotations of
securities prices, days on which trades may be made on such
system or (ii) if the Common Stock is listed or admitted for
trading on any national securities exchange, days on which
such national securities exchange is open for business.
(e) In the event that there shall have occurred prior to the
Computation Date any event described in Section 3.l(a), 3.l(b) or 3.1(c) which
shall have become effective with respect to market transactions at any time (the
"Market-Effect Date") within the Fair Market Value Measurement Period, the
Closing Price for each Trading Day preceding the Market-Effect Date shall be
adjusted, for purposes of calculating such average, by multiplying such Closing
Price by a fraction, of which the numerator shall be the Exercise Price as in
effect immediately prior to the Computation Date and the denominator of which
shall be the Exercise Price as in effect immediately prior to the Market-Effect
Date, it being understood that the purpose of this proviso is to ensure that the
effect of such event on the market price of the Common Stock shall, as nearly as
possible, be eliminated in order that the distortion in the calculation of the
Fair Market Value per share may be minimized.
Section 3.2 No Adjustments to Exercise Price. No adjustment in the Exercise
Price in accordance with the provisions of Section 3.1(a), 3.1(b) or 3.1(c)
hereof need be made unless such adjustment would amount to a change of at least
1.0% in such Exercise Price, provided, however, that the amount by which any
adjustment is not made by reason of the provisions of this Section 3.2 shall be
carried forward and taken into account at the time of any subsequent adjustment
in the Exercise Price.
Section 3.3 Adjustment of Number of Shares. Upon each adjustment of the
Exercise Price pursuant to Section 3.l(a), 3.1(b) or 3.1(c), each Warrant shall
thereupon evidence the right to purchase that number of Warrant Shares
(calculated to the nearest hundredth of a share) obtained by multiplying the
number of Warrant Shares purchasable immediately prior to such adjustment upon
exercise of the Warrant by the Exercise Price in effect immediately prior to
such adjustment and dividing the product so obtained by the Exercise Price in
effect immediately after such adjustment.
Section 3.4 Reorganizations. In the event of any capital reorganization,
other than in the cases referred to in Section 3.1, or the consolidation or
merger of the Company with or into another corporation (other than a merger or
consolidation in which the Company is the continuing corporation and which does
not result in any reclassification of the outstanding Common Stock or the
conversion of such outstanding Common Stock into shares of other capital stock
or other securities or property), or the sale or conveyance of the property of
the Company as an entirety or substantially as an entirety (collectively such
actions being hereinafter referred to as "Reorganizations"), there shall
thereafter be deliverable upon exercise of any Warrant (in lieu of the number of
Warrant Shares theretofore deliverable) the number of shares of stock or other
securities or property to which a holder of the number of Warrant Shares which
would otherwise have been deliverable upon the exercise of such Warrant would
have been entitled upon such Reorganization if such Warrant had been exercised
in full immediately prior to such Reorganization. In the event of any
Reorganization, appropriate adjustment, as determined in good faith by the
Company's Board of Directors, shall be made in the application of the provisions
herein set forth with respect to the
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rights and interests of Holders so that the provisions set forth herein shall
thereafter be applicable, as nearly as possible, in relation to any shares or
other property thereafter deliverable upon exercise of Warrants. Any such
adjustment shall be made by and set forth in a supplemental agreement prepared
by the Company or any successor thereto, between the Company and any successor
thereto, and shall for all purposes hereof conclusively be deemed to be an
appropriate adjustment. The Company shall not effect any such Reorganization,
unless upon or prior to the consummation thereof the successor corporation, or
if the Company shall be the surviving corporation in any such Reorganization and
is not the issuer of the shares of stock or other securities or property to be
delivered to holders of shares of Common Stock outstanding at the effective time
thereof, then such issuer, shall assume the obligation to deliver to the Holder
of any Warrant Certificate such shares of stock, securities, cash or other
property as such holder shall be entitled to purchase in accordance with the
foregoing provisions.
Section 3.5 Notice of Certain Actions. In the event the Company shall (a)
declare any dividend payable in stock to the holders of its Common Stock or make
any other distribution in property other than cash to the holders of its Common
Stock, (b) offer to the holders of its Common Stock rights to subscribe for or
purchase any shares of any class of stock or any other rights, options, warrants
or other convertible or exchangeable securities, (c) effect any reclassification
of its Common Stock (other than a reclassification involving merely the
subdivision or combination of outstanding shares of Common Stock) or any capital
reorganization or any consolidation or merger (other than a merger in which the
Company is the continuing corporation and which does not result in any
reclassification of the outstanding Common Stock or the conversion of such
outstanding Common Stock into shares of other capital stock or other securities
or property), or any sale, transfer or other disposition of its property, assets
and business substantially as an entirety, or the liquidation, dissolution or
winding up of the Company, or (d) take any other action specified in Sections
3.1(a), 3.1(b) or 3.1(c); then, in each such case, the Company shall cause
notice of such proposed action to be mailed to each Holder at least twenty (20)
days prior to the record date for such action, or if no record is taken for such
action, twenty (20) days before such action. Such notice shall specify the date
on which the books of the Company shall close, or a record be taken, for
determining holders of Common Stock entitled to receive such stock dividend or
other distribution or such rights or options, or the date on which such
reclassification, reorganization, consolidation, merger, sale, transfer, other
disposition, liquidation, dissolution, winding up or exchange shall take place
or commence, as the case may be, and the date as of which it is expected that
holders of record of Common Stock shall be entitled to receive securities or
other property deliverable upon such action, if any such date has been fixed.
Section 3.6 Certificate of Adjustments. The Company shall perform any
computations and determine any adjustments required to be made under this
Article III (the "Adjustments") and as promptly as practicable after determining
any Adjustment, the Company shall prepare a certificate executed by the Chief
Financial Officer of the Company setting forth such Adjustment and mail such
certificate to each Holder (an "Adjustment Notice") within five (5) business
days after the event resulting in adjustment. The Adjustment Notice shall
include in reasonable detail (a) the events precipitating the Adjustment, (b)
the computations relating to such Adjustment, and (c) the Exercise Price and the
securities or other property purchasable upon exercise of each Warrant after
giving effect to such Adjustment. In the event that the Holders of Warrants
entitling such Holders to purchase 20% of the Warrant Shares subject to purchase
upon exercise of Warrants at the time outstanding (the "Required Interest")
shall disagree with any Adjustment, the Holders of the Required Interest shall
give notice thereof (the "Dispute Notice") to the Company within fifteen (15)
days after the Adjustment Notice. Upon receipt of the Dispute Notice, the
Company shall promptly engage a third party independent public accounting firm
acceptable to the Required Interest to make an independent determination of such
disputed Adjustment (the "Independent Adjustment"). The Independent Adjustment
shall be final and binding on the Company and all Holders.
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Section 3.7 Warrant Certificate Amendments. Irrespective of any adjustments
pursuant to this Article III, Warrant Certificates theretofore or thereafter
issued need not be amended or replaced, but certificates thereafter issued shall
bear an appropriate legend or other notice of any adjustments; provided the
Company may, at its option, issue new Warrant Certificates evidencing Warrants
in such form as may be approved by its Board of Directors to reflect any
adjustment in the Exercise Price and number of Warrant Shares purchasable under
the Warrants.
Section 3.8 Fractional Shares. The Company shall not be required upon the
exercise of any Warrant to issue fractional Warrant Shares. If more than one
Warrant is exercised at one time by the same Holder, the number of full Warrant
Shares which shall be issuable upon the exercise thereof shall be computed based
on the aggregate number of Warrant Shares purchasable upon exercise of such
Warrants. With respect to any final fraction of a share called for upon the
exercise of any Warrant or Warrants, the Company shall pay an amount in cash to
the Holder of the Warrants in respect of such final fraction in an amount equal
to the Fair Market Value of a share of Common Stock as of the date of exercise
of such Warrants, multiplied by such fraction. All calculations under this
Section 3.8 shall be made to the nearest hundredth of a share.
Section 3.9 Liquidating Dividends. If the Company pays a dividend or makes
a distribution on the Common Stock payable otherwise than in cash out of
earnings or earned surplus (determined in accordance with generally accepted
accounting principles) except for stock dividend payable in shares of Common
Stock (a "Liquidating Dividend"), then the Company will pay or distribute to the
Holders of the Warrants, upon the exercise thereof, in addition to the Warrant
Shares purchased upon such exercise, the Liquidating Dividend which would have
been paid to such Holders if they had been the owner of record of such Warrant
Shares immediately prior to the date on which a record is taken for such
Liquidating Dividend or, if no record is taken, the date as of which the record
holders of Common Stock entitled to such dividends or distribution are to be
determined.
ARTICLE IV
MISCELLANEOUS
Section 4.1 Changes to Agreement. The Company, when authorized by its Board
of Directors, with the written consent of Holders of at least a majority of the
outstanding Warrants may amend or supplement this Agreement, except that no
amendment which increases the Exercise Price or reduces the number of Warrant
Shares shall be enforceable against a Holder who has not consented in writing to
such amendment.
Section 4.2 Assignment. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Holders shall bind and inure to the
benefit of their respective successors and assigns.
Section 4.3 Successor to Company. In the event that the Company merges or
consolidates with or into any other corporation or sells or otherwise transfers
its property, assets and business substantially as an entirety to a successor
corporation or other entity, the Company shall use its best efforts to have such
successor corporation or other entity to assume in writing each and every
covenant and condition of this Agreement to be performed and observed by the
Company, and such successor corporation or other entity shall be deemed, upon
the closing of such merger, consolidation, transfer or sale, to have so assumed
such liabilities whether or not such assumption is made in writing.
Section 4.4 Notices. Any notice or demand required by this Agreement to be
given or made by any Holder to or on the Company shall be sufficiently given or
made if sent by first-class or registered mail, postage prepaid, addressed as
follows:
8
T Cell Sciences, Inc.
119 Fourth Avenue
Needham, Massachusetts 02494
Attention: Chief Financial Officer
Telephone: (781) 433-0771
Facsimile: (781) 433-0262
With a copy to:
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, Massachusetts 02109
Attention: Stuart M. Cable, Esq.
Telephone: (617) 570-1322
Facsimile: (617) 523-1231
Any notice or demand required by this Agreement to be given or made by the
Company to or on any Holder shall be sufficiently given or made if sent by
first-class or registered mail, postage prepaid, addressed to such Holder and
sent to the address of such Holder on the Company's warrant register.
Any notice or demand required by this Agreement to be given or made by the
Company to or on any Holder shall be sufficiently given or made, whether or not
such Holder receives the notice, five (5) days after mailing, if sent by
first-class or registered mail, postage prepaid, addressed to such Holder at its
last address as shown on the books of the Company. Otherwise, such notice or
demand shall be deemed given when received by the party entitled thereto.
Section 4.5 Defects in Notice. Failure to file any certificate or notice or
to mail any notice, or any defect in any certificate or notice pursuant to this
Agreement shall not affect in any way the rights of any Holder or the legality
or validity of any adjustment made pursuant to Section 3.1 or 3.2 hereof.
Section 4.6 Governing Law. This Agreement and each Warrant Certificate
issued hereunder shall be governed by the laws of the State of Delaware without
regard to principles of conflicts of laws thereof.
Section 4.7 Standing. Nothing in this Agreement expressed and nothing that
may be implied from any of the provisions hereof is intended, or shall be
construed, to confer upon, or give to, any person or corporation other than the
Company and the Holders any right, remedy or claim under or by reason of this
Agreement or of any covenant, condition, stipulation, promise or agreement
contained herein; and all covenants, conditions, stipulations, promises and
agreements contained in this Agreement shall be for the sole and exclusive
benefit of the Company and its successors and the Holders.
Section 4.8 Headings. The descriptive headings of the articles and sections
of this Agreement are inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.
Section 4.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, and
all of which together shall constitute one and the same instrument.
9
Section 4.10 Availability of the Agreement. The Company shall keep copies
of this Agreement available for inspection by Holders during normal business
hours. Copies of this Agreement may be obtained upon written request addressed
to the Company at the address set forth in Section 4.5.
Section 4.11 Entire Agreement. This Agreement, including the Exhibits
referred to herein and the other agreements and writings specifically identified
herein or contemplated hereby, is complete, reflects the entire agreement of the
parties with respect to its subject matter, and supersedes all previous written
or oral negotiations, commitments and writings.
[Remainder of page intentionally left blank]
10
EXHIBIT A
---------
FORM OF COMMON STOCK PURCHASE WARRANT CERTIFICATE
THE RIGHTS OF THE HOLDER OF THIS WARRANT ARE SUBJECT TO THE TERMS AND CONDITIONS
CONTAINED IN, THE COMMON STOCK PURCHASE WARRANT PROVISIONS (THE "WARRANT
PROVISIONS"), A COMPLETE AND CORRECT COPY OF THE FORM OF WHICH WILL BE FURNISHED
BY THE ISSUER TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE.
No. ___________
Certificate for ________ Warrants
NOT EXERCISABLE AFTER 5:00 P.M.,
NEW YORK CITY TIME, ON ______ ___, 2003 [FIFTH ANNIVERSARY OF CLOSING DATE]
T CELL SCIENCES, INC.
COMMON STOCK PURCHASE WARRANT CERTIFICATE
THIS CERTIFIES that _______________________________, a
__________________________, or its registered assigns is the registered holder
(the "Registered Holder") of the number of Warrants set forth above, each of
which represents the right to purchase one fully paid and non-assessable share
of the common stock, par value $.001 per share (the "Common Stock"), of T Cell
Sciences, Inc., a corporation organized under the laws of Delaware (the
"Company"), at the Exercise Price (as defined in and determined from time to
time in accordance with the Warrant Provisions), by surrendering this Warrant
Certificate, with the form of Election to Purchase attached hereto duly executed
and by paying in full the Exercise Price (the shares of Common Stock issuable
upon exercise of the Warrants being referred to herein as the "Warrant Shares").
Payment of the Exercise Price shall be made as set forth in the Warrant
Provisions. No Warrant may be exercised after 5:00 P.M., New York City time, on
_________ __, 2003 [Fifth Anniversary of Closing Date] (the "Expiration Date").
All Warrants evidenced hereby shall thereafter become void, subject to the terms
of the Warrant Provisions hereinafter referred to.
Prior to the Expiration Date, subject to any applicable laws, rules or
regulations restricting transferability and to any restriction on
transferability that may appear on this Warrant Certificate and in accordance
with the terms of the Warrant Provisions hereinafter referred to, the Registered
Holder shall be entitled to transfer this Warrant Certificate, in whole or in
part, upon surrender of this Warrant Certificate at the principal office of the
Company with the form of assignment set forth hereon duly executed. Upon any
such transfer, a new Warrant Certificate or Warrant Certificates representing
the same aggregate number of Warrant Shares will be issued in accordance with
instructions in the form of assignment.
Upon the exercise of less than all of the Warrants to purchase the shares
of Common Stock evidenced by this Warrant Certificate, there shall be issued to
the Registered Holder a new Warrant Certificate in respect of the Warrants not
exercised.
Prior to the Expiration Date, the Registered Holder shall be entitled to
exchange this Warrant Certificate, with or without other Warrant Certificates,
for another Warrant Certificate or Warrant Certificates for the same aggregate
number of Warrant Shares, upon surrender of this Warrant Certificate at the
principal office of the Company.
Upon certain events provided for in Section 3.1 and 3.3 of the Warrant
Provisions, the Exercise Price and/or the number of Warrant Shares is required
to be adjusted.
No fractional shares will be issued upon the exercise of Warrants. As to
any final fraction of a share of Common Stock which the Registered Holder of one
or more Warrant Certificates, the rights under which are exercised in the same
transaction, would otherwise be entitled to purchase upon such exercise, the
Company shall pay the cash value thereof determined as provided in the Warrant
Provisions. No Warrant Certificate representing any fractional Warrant Shares
will be issued.
This Warrant Certificate is issued under and in accordance with the Warrant
Provisions and is subject to the terms and conditions contained in the Warrant
Provisions. All capitalized terms not defined herein shall have the meanings
given such terms as set forth in the Warrant Provisions.
Except as provided in Section 3.9 of the Warrant Provisions, this Warrant
Certificate shall not entitle the Registered Holder to any of the rights of a
stockholder of the Company, including, without limitation, the right to vote, to
receive
A-1
dividends and other distributions, or to attend or receive any notice of
meetings of stockholders or any other proceedings of the Company.
[Remainder of page intentionally left blank]
A-2
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed under its facsimile corporate seal.
T CELL SCIENCES, INC.
By: ___________________________________
Name:
Title:
[Seal] Attest:
By: ___________________________________
Name:
Title:
A-3
[Form of Assignment]
FOR VALUE RECEIVED, the undersigned hereby irrevocably sells, assigns and
transfers unto the Assignee named below all of the rights of the undersigned
represented by the within Warrant Certificate, with respect to the number of
Warrants to purchase the Common Stock set forth below:
Name of Assignee Address No. of Warrants
---------------- ------- ---------------
and does hereby irrevocably constitute and appoint _____________________ true
and lawful Attorney, to make such transfer on the books of T Cell Sciences,
Inc., maintained for that purpose, with full power of substitution in the
premises.
Dated: __________ ___, _____
Signature
--------------------------------------------
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant Certificate.)
A-4
[Form of Election To Purchase]
The undersigned hereby irrevocably elects to exercise ____________ of the
Warrants represented by this Warrant Certificate and to purchase the Common
Stock issuable upon the exercise of said Warrants, and requests that
certificates for such shares be issued and delivered as follows:
ISSUE TO: ______________________________________________________________________
(NAME)
________________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
________________________________________________________________________________
(SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER)
DELIVER TO: ____________________________________________________________________
(NAME)
at _____________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
If the number of Warrants to purchase the Common Stock hereby exercised
is less than all the Warrants represented by this Warrant Certificate, the
undersigned requests that a new Warrant Certificate representing the number of
such full Warrants not exercised be issued and delivered as follows:
ISSUE TO: ______________________________________________________________________
(NAME)
________________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
________________________________________________________________________________
(SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER)
DELIVER TO: ____________________________________________________________________
(NAME)
at _____________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
Date: __________ ___, ______ ___________________________________
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of the
Warrant Certificate.)
PLEASE INSERT SOCIAL SECURITY OR TAX I.D. NUMBER OF HOLDER: ____________________
A-5
Exhibit 5.1
August 21, 1998
T Cell Sciences, Inc.
119 Fourth Avenue
Needham, Massachusetts 02494
Ladies and Gentlemen:
This opinion is furnished in connection with the registration, pursuant to
the Securities Act of 1933, as amended (the "Securities Act"), of 1,600,000
shares (the "Shares") of common stock, par value $.01 per share ("Common
Stock"), and 25,000 warrants to purchase shares of Common Stock of T Cell
Sciences, Inc. a Delaware corporation (the "Company").
In connection with rendering this opinion, we have examined the Amended and
Restated Certificate of Incorporation and the Amended and Restated Bylaws of the
Company; such records of the corporate proceedings of the Company as we deemed
material; a registration statement on Form S-8 under the Securities Act relating
to the Shares (the "Registration Statement"), the Virus Research Institute, Inc.
1992 Equity Incentive Plan (the "Plan"), the Common Stock Purchase Warrant
Provisions and such other certificates, receipts, records and documents as we
considered necessary for the purposes of this opinion.
We are attorneys admitted to practice in The Commonwealth of Massachusetts.
We express no opinion concerning the laws of any jurisdictions other than the
laws of the United States of America, The Commonwealth of Massachusetts and the
Delaware General Corporation Law.
Based upon the foregoing, we are of the opinion that when the Shares have
been issued and paid for in accordance with the terms of the Plan and all
applicable resolutions of the Board of Directors, the Shares will be legally
issued, fully paid and nonassessable shares of the Company's Common Stock.
T Cell Sciences, Inc.
August 21, 1998
Page 2
The foregoing assumes that all requisite steps will be taken to comply with
the requirements of the Securities Act and applicable requirements of state laws
regulating the offer and sale of securities.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Goodwin, Procter & Hoar LLP
GOODWIN, PROCTER & HOAR LLP
Exhibit 23.1
Consent of Independent Accountants
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of T Cell Sciences, Inc. of our report dated March 25,
1998 appearing in the Annual Report on Form 10-K for the year ended December 31,
1997.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
August 21, 1998
