1
As filed with the Securities and Exchange Commission on November 7, 1995
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
_________________
T CELL SCIENCES, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 13-3191702
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
115 FOURTH AVENUE, NEEDHAM, MASSACHUSETTS 02194 (617) 433-0771
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
_________________
ALAN W. TUCK, PRESIDENT AND CHIEF EXECUTIVE OFFICER
T CELL SCIENCES, INC.
115 FOURTH AVENUE
NEEDHAM, MASSACHUSETTS 02194 (617) 433-0771
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
_________________
Copies of all communications should be sent to:
STUART M. CABLE, ESQ.
GOODWIN, PROCTER & HOAR
EXCHANGE PLACE, 24TH FLOOR
BOSTON MASSACHUSETTS 02109-2881
(617) 570-1000
Approximate date of commencement of proposed sale 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, check the following box. [ ]
2
CALCULATION OF REGISTRATION FEE
============================================================================================================
TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
REGISTERED REGISTERED SHARE (1) PRICE (1) REGISTRATION FEE (2)
- ------------------------------------------------------------------------------------------------------------
Common Stock, par 2,761,816 $3.00 $8,285,448 $2,857
value $.001 per share
============================================================================================================
(1) Estimated solely for the purpose of calculating the registration fee.
(2) Pursuant to Rule 457(c) under the Securities Act of 1933, the
registration fee has been calculated based upon the average of the high
and low prices per share of Common Stock on the Nasdaq National Market
System on November 3, 1995.
================================================================================
3
SUBJECT TO COMPLETION, DATED NOVEMBER 7, 1995
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.
PROSPECTUS
T CELL SCIENCES
2,761,816 Shares Common Stock
This Prospectus relates to 2,761,816 shares ("Shares") of common
stock, $.001 par value per share of T Cell Sciences, Inc. (the "Common Stock")
to be sold by certain stockholders of the Company (the "Selling Stockholders")
from time to time. The Selling Stockholders may sell the Shares from time to
time in transactions on the Nasdaq National Market System, in negotiated
transactions, or by a combination of these methods, at fixed prices that may be
changed, at market prices at the time of sale, at prices related to market
prices or at negotiated prices. The Selling Stockholders may effect these
transactions by selling the Shares to or through broker-dealers, who may
receive compensation in the form of discounts or commissions from the Selling
Stockholders or from the purchasers of the Shares for whom the broker- dealers
may act as an agent or to whom they may sell as a principal, or both. See
"Selling Stockholders" and "Plan of Distribution." The Common Stock of the
Company is traded under the symbol "TCEL" on the National Association of
Securities Dealers Automated Quotation System ("Nasdaq"), National Market
System. On November 3, 1995, the reported closing price for the Common Stock
on the Nasdaq National Market System was $3.125.
The Company will not receive any of the proceeds from the sale of the
Shares. The Company has agreed to bear all of the expenses in connection with
the registration and sale of the Shares (other than underwriting discounts and
selling commissions and the fees and expenses of counsel or other advisors to
the Selling Stockholders).
____________________
SEE "RISK FACTORS" FOR A DISCUSSION OF CERTAIN SPECIAL FACTORS WHICH
SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SHARES OFFERED HEREBY.
____________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
____________________
NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THE SALE OF ANY
SHARES PURSUANT TO THIS PROSPECTUS TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN AS CONTAINED IN THIS PROSPECTUS, AND IF GIVEN OR
MADE, ANY SUCH INFORMATION OR REPRESENTATION MAY NOT BE RELIED ON AS HAVING
BEEN AUTHORIZED BY THE COMPANY.
____________________
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE PURSUANT TO
THIS PROSPECTUS SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE
HAS BEEN NO CHANGE IN THE COMPANY'S AFFAIRS SINCE THE DATE OF THIS PROSPECTUS.
____________________
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE SECURITIES COVERED BY THIS
PROSPECTUS, NOR DOES IT CONSTITUTE AN OFFER TO OR SOLICITATION OF ANY PERSON IN
ANY JURISDICTION IN WHICH AN OFFER OR SOLICITATION MAY NOT BE LAWFULLY MADE.
THE DATE OF THIS PROSPECTUS IS NOVEMBER ___, 1995.
4
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files proxy statements, reports and other information
with the Securities and Exchange Commission (the "Commission"). Such proxy
statements, reports and other information filed by the Company may be inspected
and copied at the public reference facilities maintained by the Commission at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 or
at the Regional Offices of the Commission at Room 3190, John C. Kluczynski
Building, 230 South Dearborn Street, Chicago, Illinois 60604, and Room 1400, 75
Park Place, New York, New York 10007. Copies of such material can be obtained
at prescribed rates from the Public Reference Section of the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. The
Common Stock of the Company is traded on the Nasdaq National Market System.
Reports and other information concerning the Company may be inspected at the
National Association of Securities Dealers, Inc., 1735 K Street, N.W.,
Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on
Form S-3 under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the securities offered hereby. This Prospectus does not contain
all the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. For further information with respect to the Company and the
securities covered hereby, reference is made to the Registration Statement and
to the exhibits thereto filed as a part thereof.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon request, a copy of
any or all of the documents that have been incorporated by reference to the
Registration Statement of which this Prospectus is a part, other than exhibits
to such documents. Requests should be addressed to: T Cell Sciences, Inc., 115
Fourth Avenue, Needham, Massachusetts 02194, Attention: Investor Relations
(telephone number (617) 433-0771).
The following documents filed by the Company with the Commission are
incorporated in, and made a part of, this Prospectus by reference as of their
respective dates: (1) the Company's Annual Report to Stockholders on Form 10-K
for the fiscal year ended December 31, 1994; (2) the Company's Quarterly
Reports on Form 10-Q for the fiscal quarters ended March 31, 1995 and June 30,
1995; (3) the Company's Current Reports on Form 8-K, filed on May 18, 1995 and
April 7, 1995; and (4) the definitive Proxy Statement of the Company for the
Annual Meeting of Stockholders held May 18, 1995.
Each document filed subsequent to the date of this Prospectus pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the
termination of this offering shall be deemed to be incorporated by reference in
this Prospectus and shall be a part hereof from the date of filing of such
document.
2
5
RISK FACTORS
In addition to the other information in this Prospectus, the following
factors should be considered carefully in evaluating an investment in the
shares of Common Stock offered by this Prospectus.
Early Stage of Product Development. All of the Company's therapeutic
products are in various stages of research and development, and no revenues
have been generated from the commercialization of those products. The Company
currently sells products to the laboratory reagent and medical diagnostic
markets. The Company's therapeutic and new diagnostic products will require
substantial additional development, including in the areas of preclinical and
clinical testing, regulatory approvals and manufacturing processes prior to
their commercialization. There can be no assurance that any of the Company's
therapeutic and diagnostic products which are under development will prove to
be safe or effective in clinical trials, will be approved by regulatory
authorities, can be manufactured at acceptable cost with appropriate quality,
or can be successfully marketed.
History of Losses; Uncertainty of Future Profitability. The Company
has incurred operating losses since its inception and had accumulated net
losses of approximately $43.1 million as of June 30, 1995. The continued
development of the Company's products will require the commitment of
substantial resources to conduct research and preclinical and clinical
programs, to establish manufacturing capabilities and sales and marketing
capabilities, and to establish additional quality control, regulatory and
administrative capabilities. The Company may incur substantial and increasing
operating losses over the next several years as its product development
programs and clinical testing expand. The amount of net losses and the time
required by the Company to reach sustained profitability are highly uncertain
and to achieve profitability the Company must, among other things, successfully
complete development of its products, obtain regulatory approvals and establish
manufacturing and marketing capabilities. There can be no assurance that the
Company will be able to achieve profitability at all or on a sustained basis.
Need for Additional Funds. The Company has funded its operations and
capital expenditures to date primarily through equity financing, strategic
alliances with commercial partners, and sales of reagent and diagnostic
products. Since inception, the Company has raised proceeds, net of expenses, of
approximately $57 million through equity financings. The Company anticipates
that it will need to raise substantial additional funds, through additional
equity or debt financings, research and development financings, collaborative
relationships or otherwise, prior to the commercialization of its products.
There can be no assurance that any such additional funding will be available to
the Company or, if available, that it will be on reasonable terms. Any such
additional funding may result in significant dilution to existing stockholders.
If adequate funds are not available, the Company may be required to
significantly curtail its research and development programs or obtain funds
through arrangements with collaborative partners that may require the Company
to relinquish certain material rights to its products.
Dependence on Third Parties for Clinical Supplies. The Company is
dependent on its former commercial partner, SmithKline Beecham p.l.c., to
produce quantities of its first therapeutic product candidate, sCR1, suitable
for Phase II clinical trials, and is dependent on sourcing from a third party
manufacturer for additional suitable quantities of sCR1 for additional clinical
trials. There can be no assurance at this time that the Company will be able
to utilize any of the material produced by its former partner or new
manufacturing source in the clinical trials. The inability to have suitable
quality and quantities of material produced would result in significant delays
in the clinical development of sCR1.
No Assurance of FDA Approval; Comprehensive Government Regulation.
The Company's research, development and clinical programs, as well as its
manufacturing and marketing operations, are subject to extensive regulation by
numerous governmental authorities in the United States and other countries.
Most of the Company's products require governmental approvals for
commercialization which have not yet been obtained and are not expected to be
obtained for several years. Preclinical and clinical trials and manufacturing
and marketing of many of the Company's products will be subject to the rigorous
testing and approval processes of the FDA and corresponding foreign regulatory
authorities. The regulatory process, which includes preclinical, clinical and
post-clinical testing of many of the Company's products to establish their
safety and efficacy, can take many years and requires the expenditure of
substantial resources. Data obtained from preclinical and clinical activities
are susceptible to varying interpretations which could delay, limit or prevent
regulatory approval. In addition, delays or rejection may be
3
6
encountered based upon changes in, or additions to, regulatory policies for
drug approval during the period of product development and regulatory review.
Delays in obtaining such approvals could adversely affect the marketing of
products developed by the Company and the Company's ability to generate
commercial product revenues. There can be no assurance that requisite
regulatory approvals will be obtained within a reasonable period of time, if at
all. Moreover, if regulatory approval of a product is granted, such approval
may impose limitations on the indicated uses for which such product may be
marketed. Further, even if such regulatory approval is obtained, a marketed
product, its manufacturer and its manufacturing facilities are subject to
continual review and periodic inspections, and later discovery of previously
unknown problems with a product, manufacturer or facility may result in
restrictions on such product or manufacturer, including withdrawal of the
product from the market. Failure to comply with the applicable regulatory
requirements can, among other things, result in fines, suspensions of
regulatory approvals, product recalls, operating restrictions and criminal
prosecution.
Lack of Commercial Manufacturing Capability. To be successful, the
Company's diagnostic and therapeutic products must be manufactured in
commercial quantities, within regulatory requirements and at competitive costs.
The Company's experience in commercial manufacturing is limited to the
manufacturing of certain reagents and medical diagnostic test kits and there
can be no assurance that the Company will be able to successfully continue to
scale-up its diagnostic manufacturing operations to meet future market demands
or to obtain access to suitable therapeutic manufacturing facilities.
Lack of Commercial Sales and Marketing Experience. Except for
research reagents and certain diagnostic products, the Company has limited
experience in sales, marketing and distribution of commercial products. To
market any of its products directly, the Company must develop a substantial
marketing and sales force with technical expertise and a supporting
distribution capability. Alternatively, the Company may seek to obtain the
assistance of a strategic partner with the necessary sales and distribution
capabilities and expertise. There can be no assurance that the Company will be
able to establish sales and distribution capabilities without undue delays or
expenditures or that it will be successful in gaining market acceptance for its
products.
Competition and Risk of Technological Obsolescence. Biotechnology,
pharmaceuticals and medical diagnostics are rapidly evolving fields in which
developments are expected to continue at a rapid pace. Competitors of the
Company in the United States and abroad are numerous and include, among others,
pharmaceuticals, medical diagnostics, biotechnology companies, universities and
other research institutions. The Company's success depends upon developing and
maintaining a competitive position in the development of products and
technologies in its area of focus. Competition from other biotechnology,
pharmaceuticals and medical diagnostics companies is intense and expected to
increase as new products enter the market and new technologies become
available. The Company's competitors may also succeed in developing
technologies and products that are more effective than any which have been or
are being developed by the Company or that render the Company's technologies or
products obsolete or noncompetitive. The Company's competitors may also
succeed in obtaining patent protection or other intellectual property rights
that would block the Company's ability to develop its potential products, or in
obtaining regulatory approval for the commercialization of their products more
rapidly or effectively than the Company. Finally, many of these competitors
have substantially greater research and development capabilities, clinical,
manufacturing, regulatory and marketing experience and financial and managerial
resources than the Company.
Dependence on Patents and Proprietary Technology. The biotechnology,
medical diagnostics and pharmaceutical industries place considerable importance
on the Company's obtaining patent and trade secret protection for new
technologies, products and processes, and the Company's success will depend, in
part, on its ability to obtain patent protection for its products and
manufacturing processes, preserve its trade secrets and operate without
infringing the proprietary rights of third parties. In addition to the
Company's own patents and patent applications, a number of institutions have
exclusively licensed rights to certain patents and patent applications to the
Company.
The Company is conducting research and expects to seek additional
patents in the future, but there can be no assurance as to its success or the
timeliness in obtaining any such patents or as to the breadth or degree of
protection which any such patents will afford the Company or not be challenged,
invalidated or infringed. Furthermore, there can be no assurance that others
will not independently develop similar products and processes, duplicate any of
the Company's products or, if patents are issued to the Company, design around
such patents. In
4
7
addition, the Company could incur substantial costs in defending itself in
suits brought against it or in suits in which the Company may assert its
patents against others. If the outcome of any such litigation is adverse to
the Company, the Company's business could be adversely affected.
In addition, the Company may be required to obtain licenses to patents
or other proprietary rights of third parties. No assurance can be given that
any licenses required under any such patents or proprietary rights would be
made available on terms acceptable to the Company, if at all. If the Company
does not obtain such licenses, it could encounter delays in product market
introductions while it attempts to design around such patents or other rights,
or be unable to develop, manufacture or sell such products.
The Company also seeks to protect its proprietary technology,
including technology which may not be patented or patentable, in part by
confidentiality agreements and, if applicable, inventors' rights agreements
with its collaborators, advisors, employees and consultants. 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 be disclosed to, or discovered by, competitors. Moreover, the
Company conducts a significant amount of research through academic advisors and
collaborators who are prohibited from entering into confidentiality or
inventors' rights agreements by their academic institutions.
Dependence on Reimbursement. In both the United States and elsewhere,
sales of most of the Company's products, if any, will be dependent in part on
the availability of reimbursement from third party payors, such as government
and private insurance plans. Third party payors are increasingly challenging
the prices charged for medical products and services. Moreover, the federal
government of the United States has made the containment of health care costs a
top priority. If the Company succeeds in bringing one or more products to
market, there can be no assurance that these products will be considered
cost-effective, that reimbursement will be available or, if available, that the
level of reimbursement will be sufficient to allow the Company to sell its
products on a profitable basis.
Exposure to Product Liability Claims. The Company's business exposes
it to potential product liability claims which are inherent in the testing,
manufacturing, marketing and sale of human therapeutic products. The Company
currently has liability insurance of limited coverage. There can be no
assurance that it will be able to maintain such insurance or obtain general
product liability insurance on acceptable terms or at reasonable costs or that
such insurance will be in sufficient amounts to provide the Company with
adequate coverage against potential liabilities.
Dependence Upon Key Personnel. The Company is dependent on the
members of its management and scientific staff, the loss of one or more of whom
could have a material adverse effect on the Company. The Company also depends
on its scientific collaborators and advisors, all of whom have commitments that
may limit their availability to the Company. In addition, the Company believes
that its future success will depend in large part upon its ability to attract
and retain highly skilled scientific, managerial and marketing personnel,
particularly as the Company expands its activities in clinical trials, the
regulatory approval process and sales and manufacturing. The Company faces
significant competition for such personnel and from other companies, research
and academic institutions, government entities and other organizations. There
can be no assurance that the Company will be successful in hiring or retaining
the personnel it requires for continued growth. The failure to hire and retain
such personnel could materially and adversely affect the Company's prospects.
Shares Eligible for Future Sale. Future sales of Common Stock in the
public market by existing stockholders could have an adverse effect on the
price of the Common Stock. In addition, the Company has registered the shares
of Common Stock issued under its Amended and Restated 1991 Stock Compensation
Plan and approximately 2.3 million shares of Common Stock are presently
eligible for sale upon exercise of currently outstanding options.
Volatility of Stock Price. The market price of the shares of Common
Stock, like that of the common stock of many other early-stage biotechnology
companies, may be highly volatile. Factors such as announcements of
technological innovations or new commercial products by the Company or its
competitors, disclosure of results of clinical testing or regulatory
proceedings, governmental regulation and approvals, developments in patent or
other proprietary rights, public concern as to the safety of products developed
by the Company and general market conditions may have a significant effect on
the market price of the Common Stock. In addition, the stock market has
5
8
experienced and continues to experience extreme price and volume fluctuations
which have effected the market price of many biotechnology companies and which
have often been unrelated to the operating performance of these companies.
These broad market fluctuations, as well as general economic and political
conditions, may adversely effect the market price of Common Stock.
THE COMPANY
T Cell Sciences, Inc. ("T Cell Sciences" or "TCS" or the "Company") is
an emerging biopharmaceutical company developing treatments for diseases caused
by misregulation of the body's natural defense systems. TCS is developing
products for diseases of inflammation, and autoimmunity. TCS has completed a
Phase I clinical trial of its first complement inhibitor therapeutic, sCR1, in
patients at risk of developing adult respiratory distress syndrome ("ARDS") and
is conducting a second Phase I trial for reperfusion injury following a heart
attack. TCS, with its partner AB Astra ("Astra"), is also developing products
based on the T Cell antigen receptor for the treatment of autoimmune diseases.
The initial product candidates being developed with Astra are now in the
research and preclinical stage of development. T Cell Sciences' wholly owned
subsidiary, T Cell Diagnostics, Inc. ("T Cell Diagnostics" or "TCD") is
developing, manufacturing and marketing new classes of diagnostic products to
be used for the detection and monitoring of immune-related disorders such as
organ transplant rejection, autoimmune conditions and cancers and infections
such as HIV. TCD recently received marketing clearance from the U.S. Food and
Drug Administration ("FDA") to market TRAx(R) CD4 for CD4 T cell enumeration.
THERAPEUTICS:
One of the Company's major programs is the development of products
which inhibit a part of the immune system called the complement system. The
complement cascade is a major initiator of the body's defense system and in
certain situations triggers harmful inflammatory responses resulting in the
death of viable tissue. No treatment currently exists to inhibit the harmful
effects of complement mediated inflammation and other treatments for
inflammatory diseases do not directly address inflammation caused by complement
activation.
The Company's lead complement product is soluble complement receptor B
or sCR1 (product name, TP10). TCS recently completed a Phase I clinical trial
for TP10 in patients with acute lung injury at risk of developing ARDS. A
Phase II trial is now being planned to evaluate TP10 in ARDS patients. A
second Phase I trial is ongoing with the indication of reperfusion injury
following heart attacks. A Phase II trial in reperfusion injury is being
planned for early 1996. All development, marketing and manufacturing rights,
outside of Japan and Taiwan, to TP10 are owned by T Cell Sciences.
In addition to TP10, T Cell Sciences is developing several other
complement inhibitors, including sLex CR1, which combines complement inhibition
with cell adhesion inhibition. These product candidates, which are in
preclinical development, are proprietary to the Company.
T Cell Sciences' second major program therapeutic is focused on using
the Company's proprietary T cell antigen receptor (TCAR) technology to develop
treatments for autoimmune diseases such as rheumatoid arthritis, multiple
sclerosis, Crohn's disease and T cell cancers. The Company believes that use
of this technology will result in a new generation of immunosuppressive drugs
that selectively eliminate the function of specific T cell subgroups which are
thought to cause the disease while leaving the majority of T cells to perform
their normal function in the immune system.
In January 1992, T Cell Sciences entered into a joint development and
distribution agreement with Astra, to develop jointly TCS's TCAR technology and
products for the treatment of autoimmune diseases and T cell cancers. TCS and
Astra amended and restated this agreement in December 1993 to provide that TCS
will continue to develop TP12, a peptide, and Astra will assume development
responsibility for TM27, a humanized monoclonal antibody. Astra has worldwide
marketing rights to the products developed from the joint program and T Cell
Sciences will receive a percentage of net sales of the products.
6
9
DIAGNOSTICS:
T Cell Diagnostics is developing new human immuno-diagnostic products,
which would provide earlier warning of disease and more effective ways to
monitor and direct therapy. TCD's lead product, TRAx(R) CD4, received marketing
clearance from the FDA in May 1995 and is now being launched through direct
sales efforts in the U.S. and distributors outside the U.S. TRAx CD4 is used for
enumerating the CD4+ T Cells in patients with infectious diseases, including
HIV. TCD plans to submit TRAx CD8, a companion product to TRAx CD4, to the FDA
as a 510(k) submission before the end of 1995. The potential market for TRAx
CD4 is approximately $75 million in the U.S. and Europe. In clinical trials
conducted to support the Company's submission for clearance, TRAx CD4 provided
substantially equivalent results to those obtained from flow cytometry, the
method currently used to enumerate CD4 T cells. However, TRAx CD4 is a less
expensive alternative to flow cytometry, is more accessible to laboratories with
cell enumeration needs, has sample handling benefits and is more precise. For
these reasons, T Cell Diagnostics believes TRAx CD4 has distinct marketing
advantages over flow cytometry. Yamanouchi Pharmaceutical Co., Ltd. has rights
to market TRAx products in Japan and Taiwan. T Cell Diagnostics is evaluating
different types of relationships with distributors and automated equipment
partners to maximize the penetration of different markets for the TRAx products.
In addition to the TRAx product line, T Cell Diagnostics presently
sells approximately 40 products in the preclinical research market through
direct sales and distributors.
PATENTS:
T Cell Sciences has an extensive patent portfolio supporting its
therapeutic and diagnostic efforts. The Company is the owner or licensee of
over 200 patents and pending applications around the world, including 25 United
States patents. Patent rights in the area of complement molecules include an
issued United States patent which claims the nucleic acid sequences of
recombinant soluble CR1 (TP10) and its fragments. T Cell Sciences also owns
rights to a number of other patent applications relating to TP10, sCR1/SLex and
other complement inhibitor molecules. Issued and pending T cell receptor
patent rights cover the DNA, protein, and antibodies relating to the alpha,
beta, gamma and delta chains of the T cell antigen receptor. T Cell
Diagnostics is the owner of a number of patent rights relating to TRAx CD4 and
CD8, other applications of the TRAx product technologies, and new diagnostic
methods and products.
The Company is a Delaware corporation founded in 1983. The Company's
principal offices and laboratories are located at 115 Fourth Avenue, Needham,
Massachusetts 02194 and its telephone number is 617-433-0771.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares
by the Selling Stockholders.
RECENT DEVELOPMENTS
Certain Shares covered by this Prospectus were acquired by the Selling
Stockholders from the Company in private placement transactions. Certain
shares of Common Stock were purchased in a private placement transaction
pursuant to the Stock Purchase Agreements, dated as of October 27, 1995 (the
"October Stock Purchase Agreements") at a price per share of 20% below the
average of the high and low trading prices of the Common Stock on the Nasdaq
National Market on the five trading days preceding the Commitment Date (as
defined therein) of the October Stock Purchase Agreements, which price per share
as of the date of the October Stock Purchase Agreement was $2.825. In the
October Stock Purchase Agreements, the Company agreed to bear all expenses in
connection with the registration and sale of Shares and up to $2,500 of the
outside counsel fees and expenses of the Selling Stockholders who acquired
Shares pursuant to the October Stock Purchase Agreements (the "October Selling
Stockholders").
7
10
Certain Shares covered by this Prospectus were acquired by the
Selling Shareholders from the Company in a separate private placement
transaction pursuant to the Stock Purchase Agreements, dated as of November
6, 1995 (the "November Stock Purchase Agreements") at a price per share of
$2.50. In the November Stock Purchase Agreements, the Company agreed to bear
all expenses in connection with the registration and sale of Shares (other than
underwriting discounts and selling commissions and the fees and expenses of
counsel and other advisors to the Selling Stockholders). The Company entered
into a Placement Agency Agreement dated as of November 2, 1995 with Allen &
Company Incorporated ("Allen & Company") pursuant to which the Company will pay
Allen & Company a commission of $0.10 per share of Common Stock purchased
by certain investors pursuant to the November Stock Purchase Agreements. In
connection with the Placement Agency Agreement, the Company has also agreed to
pay up to $5,000 of Allen & Company's outside counsel fees and expenses. See
"Plan of Distribution."
Because certain Selling Stockholders have purchased shares of Common
Stock pursuant to the November Stock Purchase Agreements (the "November Selling
Stockholders") prior to the Closing Date (as defined therein) of the October
Stock Purchase Agreements at a lower price per share than the $2.825 price per
share reflected in the October Stock Purchase Agreements, the October Selling
Stockholders will receive additional shares of Common Stock at no additional
cost. This issuance of additional shares of Common Stock to the October
Selling Stockholders is designed to result in the October Selling Shareholders
receiving the same price per share as the November Selling Stockholders.
Certain Shares covered by this Prospectus will be acquired by the
Selling Stockholders from the Company through the exercise of warrants for
shares of Common Stock (the "Warrantholders"). These warrants were issued to
these Selling Stockholders in connection with a private placement of Class B
Preferred Stock in December 1985. As consideration for the Company's
agreement to register shares of Common Stock issuable upon the exercise of
these warrants, the Warrantholders have expressed their intent to exercise
their warrants at the exercise price of $1.65 per share prior to the December
13, 1995 expiration date of such warrants.
Each Selling Stockholder represented in its respective Stock Purchase
Agreement or in its agreement with the Company that it was purchasing its
Shares from the Company or exercising its warrants for Shares of the Company
without any present intention of effecting a distribution of those Shares. In
recognition of the fact, however, that investors may desire to sell their
Shares when they consider appropriate, and in accordance with its agreement
in the respective Stock Purchase Agreements and its agreement with the
Warrantholders, the Company has filed with the Commission a registration
statement on Form S-3 (of which this Prospectus is a part, the "Registration
Statement") with respect to the sale of the Shares by the Selling Stockholders
from time to time on the Nasdaq National Market System or in negotiated
transactions. The Company will prepare and file such amendments and
supplements to the Registration Statement as may be necessary to keep it
effective for a period not exceeding three years or such shorter period which
will terminate when all the Shares covered by such Registration Statement
have been sold pursuant to such Registration Statement or withdrawn. The
Selling Shareholders (with the exception of the Selling Shareholders who have
acquired Shares through the exercise of warrants) agree to hold their Shares
for a period of thirty (30) days following the closing date of the transactions
contemplated by the respective Stock Purchase Agreements, which is the filing
date of the Registration Statement of which this Prospectus is a part.
SELLING STOCKHOLDERS
The Shares are to be offered by and for the respective accounts of the
Selling Stockholders. The following table sets forth the name and the number
of shares of Company Common Stock to be offered by each Selling Stockholder.
Number of Shares of Number of Shares Percentage of Shares
Common Stock Beneficially of Common Stock of Common Stock
Selling Stockholder Owned Prior to the Offering offered hereby after the Offering
- ------------------- --------------------------- ---------------------- ------------------------
Allen & Company Incorporated(1) 359,928 300,000 1.51%
GFL Advantage Fund Limited -- 500,000 2.51%
GFL Performance Fund Limited -- 400,000 2.01%
Bruce Allen -- 100,000 *
American Diversified
Enterprises Inc. -- 100,000 *
Donald R. Keough -- 50,000 *
SMALLCAP World Fund, Inc. -- 800,000 4.02%
Cook & CIE, S.A. 300,000 1.51%
Aetna Life & Casualty Co.(2) 71,776 151,297 *
F. Daniel Frost (2) -- 40,346 *
Allenwood Ventures, Inc.(2) -- 20,173 *
_______
* Denotes less than 1%.
(1) Allen & Company has acted as a placement agent with respect to some of the
shares of Common Stock purchased by certain of the November Selling
Stockholders. John Simon, a member of the Company's Board of Directors, is
a Managing Director and Executive Vice President of Allen & Company.
(2) Denotes Selling Shareholders who may acquire shares of Common Stock upon the
exercise of warrants at an exercise price of $1.65 per share.
8
11
Except as set forth above, the Selling Stockholders have not held any
position or office with, been employed by, or otherwise had a material
relationship with the Company or any of its predecessors or affiliates.
PLAN OF DISTRIBUTION
Shares of Common Stock covered hereby may be offered and sold from
time to time by the Selling Stockholders. The Selling Stockholders will act
independently of the Company in making decisions with respect to the timing,
manner and size of each sale. Such sales may be made in transactions in the
Nasdaq National Market System or otherwise at prices related to the then
current market price or in negotiated transactions. The Shares may be sold by
one or more of the following methods: (a) purchases by the broker-dealer as
principal and resale by such broker or dealer for its account pursuant to this
Prospectus; (b) ordinary brokerage transactions and transactions in which the
broker solicits purchasers; and (c) block trades in which the broker-dealer so
engaged will attempt to sell the Shares as agent but may position and resell a
portion of the block as principal to facilitate the transaction. The Company
has been advised by the Selling Stockholders that they have not, as of the date
hereof, made any arrangements relating to the distribution of the Shares
covered by this Prospectus. In effecting sales, broker-dealers engaged by the
Selling Stockholders may arrange for other broker-dealers to participate.
Broker-dealers will receive commissions or discounts from the Selling
Stockholders in amounts to be negotiated immediately prior to the sale.
In offering the Shares of Common Stock covered hereby, the Selling
Stockholders and any broker-dealers who execute sales for the Selling
Stockholders may be deemed to be "underwriters" within the meaning of the
Securities Act in connection with such sales, and any profits realized by the
Selling Stockholders and the compensation of such broker-dealer may be deemed
to be underwriting discounts and commissions under the Securities Act.
The Company has agreed to indemnify each Selling Stockholder against
any liabilities, under the Securities Act or otherwise, arising out of or based
upon any untrue or alleged untrue statement of a material fact in the
Registration Statement or this Prospectus or by any omission of a material fact
required to be stated therein except to the extent that such liabilities arise
out of or are based upon any untrue or alleged untrue statement or omission in
any information furnished in writing to the Company by the Selling Stockholder
expressly for use in the Registration Statement.
LEGAL MATTERS
The validity of the issuance of the Shares offered hereby will be
passed upon for the Company by its counsel, Goodwin, Procter & Hoar, Exchange
Place, 24th Floor, Boston, Massachusetts 02109.
EXPERTS
The consolidated financial statements and schedule of T Cell Sciences,
Inc. and subsidiary included in the Company's Annual Report to Stockholders on
Form 10-K for the year ended December 31, 1993 and the eight months ended
December 31, 1992, have been incorporated by reference herein and in the
registration statement in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein and
upon the authority of said firm as experts in accounting and auditing.
The consolidated financial statements incorporated in this Prospectus
by reference to the Annual Report to Stockholders on Form 10-K of T Cell
Sciences, Inc. for the year ended December 31, 1994 have been so incorporated
in reliance on the report of Price Waterhouse LLP, independent accountants,
given on the authority of said firm as experts in auditing and accounting.
9
12
================================================================================
NO DEALER, SALESMAN OR OTHER PERSON IS AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFER MADE HEREBY, 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 SECURITIES OFFERED HEREBY TO ANY
PERSON IN ANY STATE OR OTHER JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
WOULD BE UNLAWFUL. THE DELIVERY OF THIS PROSPECTUS AT ANY TIME DOES NOT IMPLY
THAT INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS
DATE.
_________________
TABLE OF CONTENTS
PAGE
----
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . 7
Selling Stockholders . . . . . . . . . . . . . . . . . . . . . . . . 8
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . 8
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
================================================================================
================================================================================
2,761,816 Shares
T CELL SCIENCES
COMMON STOCK
_________________
PROSPECTUS
_________________
November __, 1995
================================================================================
10
13
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. (1)
The following are the estimated expenses of issuance and distribution of the
shares registered hereunder on Form S-3:
SEC Registration fee . . . . . . . . . . . . . . . . . . . . $ 2,857
NASDAQ listing fee . . . . . . . . . . . . . . . . . . . . . $ 17,500
Legal fees and expenses . . . . . . . . . . . . . . . . . . $ 50,000
Miscellaneous(2) . . . . . . . . . . . . . . . . . . . . . . $175,000
Total . . . . . . . . . . . . . . . . . . . . . . . .
=$245,357
- ----------
(1) The amounts set forth above, except for the SEC Registration Fee and the
Nasdaq Listing Fee, are estimated.
(2) Includes $165,000 commission paid to Allen & Company pursuant to the
Placement Agency Agreement, dated as of November 2, 1995.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
SECURITIES AND EXCHANGE COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES
ACT LIABILITIES
Section 145 of the General Corporation Law of Delaware permits
indemnification of directors, officers and employees of a corporation under
certain conditions and subject to certain limitations. Article FIFTH of the
registrant's Amended and Restated By-Laws contains provisions for the
indemnification of directors, officers and employees within the limitations
permitted by Section 145.
The registrant carries a directors' and officers' liability insurance
policy which provides for payment of expenses of the registrant's directors and
officers in connection with threatened, pending or completed actions, suits or
proceedings against them in their capacities as directors and officers, in
accordance with the registrant's Amended and Restated By-Laws and the Delaware
General Corporation Law. In addition, Article SIXTH of the Third Restated
Certificate of Incorporation of the registrant protects a director of the
registrant against any personal liability to the registrant or its stockholders
for monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the
registrant 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 Delaware General Corporation Law, or (iv) for any
transaction from which the director derived any improper benefit.
ITEM 16. EXHIBITS.
EXHIBIT
NO. DESCRIPTION
- ------- -----------
5 Opinion of Goodwin, Procter & Hoar.
10.1 Form of Stock Purchase Agreement dated as of October 27, 1995
between the Company and the Purchasers.
10.2 Form of Stock Purchase Agreement dated as of November 3,
1995, between the Company and the Purchasers.
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of KPMG Peat Marwick LLP.
23.3 Consent of Goodwin, Procter & Hoar (included in Exhibit 5).
24 Power of Attorney (included on signature page).
1
14
ITEM 17. UNDERTAKINGS.
A. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement. To include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each post- effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
B. The undersigned registrant hereby undertakes 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
15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to
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.
C. 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 under Item 15 above, 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.
2
15
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the Town of Needham, Commonwealth of Massachusetts, on the
6th day of November, 1995.
T CELL SCIENCES, INC.
By: /s/ Alan W. Tuck
-------------------------------------
Alan W. Tuck
President and Chief Executive Officer
3
16
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Alan W. Tuck, Stuart M. Cable and
Pamela A. Hay his true and lawful attorneys-in-fact and agents, each acting
alone, with full powers of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all
amendments to this Registration Statement, including post-effective amendments,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he might or could
do in person, and hereby ratifies and confirms all his said attorneys-in-fact
and agent, each acting alone, or his substitute or substitutes, may lawfully do
or cause to be done by virtue thereof.
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 Title Date
--------- ----- ----
/s/ Alan W. Tuck President, Chief Executive Officer
- ------------------------------- & Chief Financial Officer & Director
(Alan W. Tuck)
/s/ James D. Grant Chairman of the Board
- ------------------------------- & Director
(James D. Grant)
/s/ Patrick C. Kung Vice Chairman of the Board &
- ------------------------------- Director
(Patrick C. Kung)
/s/ John P. Munson Director
- -------------------------------
(John P. Munson)
/s/ John Simon Director
- -------------------------------
(John Simon)
/s/ Thomas R. Ostermueller Director
- -------------------------------
(Thomas R. Ostermueller)
4
17
EXHIBIT INDEX
Sequentially
Description Numbered Page
- ----------- -------------
Opinion of Goodwin, Procter & Hoar
Form of Stock Purchase Agreement, dated as of October 27, 1995
Form of Stock Purchase Agreement, dated as of November 3, 1995
Consent of Price Waterhouse LLP
Consent of KPMG Peat Marwick LLP
5
1
Exhibit 5
November 7, 1995
T Cell Sciences, Inc.
115 Fourth Street
Needham, MA 02194
Ladies and Gentlemen:
Re: Registration Statement on Form S-3
This opinion is delivered in our capacity as counsel to T Cell
Sciences, Inc. (the "Company") in connection with the sale by certain
stockholders of the Company (the "Selling Stockholders") of 2,761,816 shares
of the Company's Common Stock (the "Offered Shares"). The Offered Shares were
received by the Selling Stockholders pursuant to Stock Purchase Agreements,
dated as of either October 27, 1995 or November 6, 1995, by and between
the Selling Stockholders and the Company (the "Stock Purchase Agreements").
The Offered Shares are the subject of the Company's registration statement on
Form S-3 (the "Registration Statement") filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended.
As counsel for the Company, we have examined the Registration
Statement, the Certificate of Incorporation and Bylaws of the Company each as
amended to date, certificates of action of the Company's Board of Directors,
the Stock Purchase Agreements, and such other records, certificates and
documents of the Company as we have deemed appropriate for the purposes of this
opinion.
Based on and subject to the foregoing, we are of the opinion that when
the Offered Shares are sold by the Selling Stockholders as described in the
Registration Statement, the Offered Shares will be duly authorized, validly
issued, fully paid and non-assessable.
2
T Cell Sciences, Inc.
November 6, 1995
Page 2
We hereby consent to being named as counsel to the Company in the
Registration Statement, to the reference therein to our firm, and to the
inclusion of this opinion as an exhibit to the Registration Statement.
Very truly yours,
GOODWIN, PROCTER & HOAR
1
Exhibit 10.1
FORM OF OCTOBER
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made as of the 27th day of October, 1995, between T
Cell Sciences, Inc. (the "Company"), a corporation organized under the laws of
the State of Delaware with its principal offices at 115 Fourth Avenue, Needham,
Massachusetts 02194, and the purchaser whose name and address is set forth on
the signature page hereof (the "Purchaser").
IN CONSIDERATION of the mutual covenants contained in this Stock
Purchase Agreement, the Company and the Purchaser agree as follows:
SECTION 1. Authorization of Sale of the Shares. Subject to the terms
and conditions of this Stock Purchase Agreement, the Company has authorized the
sale of up to 2,500,000 shares of common stock, par value $.001 per share of
the Company (the "Common Stock"). The Company reserves the right to sell more
than 2,500,000 shares of Common Stock prior to the date of the filing of the
Registration Statement (as defined in Section 3). The shares of Common Stock
referred to in Section 2(a), the Supplemental Shares (as defined in Section 2)
and the Additional Shares (as defined in Section 7.2) are referred herein
collectively as the "Shares".
SECTION 2. Agreement to Sell and Purchase Shares.
(a) At the Closing Date (as defined in Section 3), the
Company will sell to the Purchaser, and the Purchaser will buy from the
Company, upon the terms and conditions hereinafter set forth,______________
shares of Common Stock at the purchase price per Share equal to 20% below the
average of the daily high and low trading prices of the Common Stock on the
Nasdaq National Market on the five (5) trading days preceding the Commitment
Date (as defined in Section 3) (the "Stock Purchase Price"). As of the date
hereof such Stock Purchase Price is equal to $ _______ per share of Common
Stock, for an aggregate stock purchase price of $ _________________ (the
"Aggregate Stock Purchase Price").
(b) The Company proposes to enter into a similar form of
Stock Purchase Agreement ("Other Stock Purchase Agreements") with certain other
investors (the "Other Purchasers"). The Purchaser and the Other Purchasers are
hereinafter sometimes collectively referred to as the "Purchasers," and this
Stock Purchase Agreement and the Other Stock Purchase Agreements are
hereinafter sometimes collectively referred to as the "Agreements." The
Company may enter into Other Stock Purchase Agreements with Other Purchasers
prior to the Closing Date which may differ from this Stock Purchase Agreement
with respect to pricing or other terms. If such material differences are
present in the Other Stock Purchase Agreements executed by Other Purchasers
prior to the Closing Date, the Company will notify the Purchaser by
distributing a supplemental Private Placement Memorandum disclosing such terms.
(c) In the event the Other Stock Purchase Agreements
executed with Other Purchasers prior to the Closing Date include a price per
share of Common Stock which is less than $______ per share (the "Lower Share
Price"), upon the Closing Date, the Purchaser shall be granted additional
shares of Common Stock equal to the Aggregate Purchase Price divided by the
Lower
2
Share Price, less the number of shares of Common Stock purchased by the
Purchaser (the "Supplemental Shares").
SECTION 3. Delivery of Shares on the Closing Date.
(a) The commitment for the purchase and sale of the
shares of Common Stock (the "Commitment Date") shall occur on approximately
October 27, 1995 at a time and place specified by the Company. On or prior to
the Commitment Date, the Purchaser shall have executed both the Stock Purchase
Agreement and the Registration Statement Questionnaire. The Commitment Date
shall be prior to the time that the registration statement to be filed by the
Company pursuant to Section 7.1 (the "Registration Statement") is declared
effective. The completion of the transaction contemplated hereby (the "Closing
Date") shall take place when the following have occurred: (i) the Company has
prepared and filed a Registration Statement on Form S-3 within ten (10)
business days of the Commitment Date relating to the Shares, (ii) the Purchaser
has placed the Aggregate Stock Purchase Price for the number of shares of
Common Stock, set forth in Section 2 above, pursuant to the Joint Escrow
Instructions in the form of Exhibit 3 attached hereto (the "Escrow Account");
and (iii) the Company shall have delivered to the Escrow Account one or more
certificates for the shares of Common Stock to be issued to the Purchaser on
the Closing Date. On the Closing Date, there shall be released from the
Escrow Account to the Purchaser one or more stock certificates registered in
the name of the Purchaser representing the number of shares of Common Stock as
provided in Section 2 above, and all funds in the Escrow Account shall be
released to the Company pursuant to the Company's instructions attached hereto
as Exhibit 1. Stock certificates evidencing the shares of Common Stock will be
delivered to the Escrow Account and released to the Purchaser on the Closing
Date with a legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR
HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT PURSUANT TO (I) A REGISTRATION
STATEMENT WITH RESPECT TO SUCH SECURITIES WHICH IS EFFECTIVE UNDER SUCH ACT OR
(II) RULE 144 OR 144A UNDER SUCH ACT OR ANY OTHER AVAILABLE EXEMPTION FROM
REGISTRATION UNDER SUCH ACT RELATING TO DISPOSITION OF SECURITIES."
The name(s) in which the stock certificates are to be registered are set forth
in the Stock Certificate Questionnaire attached hereto as part of Appendix I.
(b) The Company's obligation to complete the purchase and
sale of the shares of Common Stock and deliver such stock certificate(s) to the
Purchaser on the Closing Date shall be subject to the following conditions, any
one or more of which may be waived by the Company: (i) execution by the
Purchaser of a Stock Purchase Agreement (including the Stock Certificate
Questionnaire in Appendix I) and the Registration Statement Questionnaire, (ii)
delivery by the Purchaser of the Aggregate Stock Purchase Price for the number
of shares of Common Stock purchased as set forth in Section 2 above, to the
Escrow Account; (iii) release to the Company of such funds held in the Escrow
Account in the full amount of the Aggregate Stock Purchase Price for the number
of shares of Common Stock set forth in Section 2; and (iv) the accuracy of the
representations and warranties made by the Purchasers and the fulfillment of
those undertakings of the Purchasers to be fulfilled prior to the Closing Date.
3
(c) The Purchaser's obligation to accept delivery of such
stock certificates(s) and to pay for the shares of Common Stock evidenced
thereby on the Closing Date shall be subject to the following conditions, any
of which may be waived by the Purchaser: (i) the preparation and filing by the
Company of the Registration Statement on Form S-3 as required by Section 7.1
hereto, (ii) the accuracy in all material respects as of the Closing Date of
the representations and warranties made by the Company herein as if made on the
Closing Date; (iii) the fulfillment in all material respects of those
undertakings of the Company to be fulfilled prior to the Closing Date; (iv)
release from the Escrow Account to the Purchaser, against receipt by the
Company of the Aggregate Stock Purchase Price simultaneously released from the
Escrow Account, of the certificates for the number of shares of Common Stock as
provided in Section 2; and (v) receipt by the Purchasers of an opinion of
counsel to the Company, dated as of the Closing Date and addressed to the
Purchaser, in substantially the form attached hereto as Exhibit 2. The
Purchaser's obligations hereunder are expressly not conditioned on the purchase
by any or all of the Other Purchasers of the shares of Common Stock that they
have agreed to purchase from the Company.
SECTION 4. Representations, Warranties and Covenants. The Company
hereby represents and warrants to, and covenants with, the Purchaser as
follows:
4.1 Organization and Qualification. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite corporate power and authority to
conduct its business as currently conducted.
4.2 Authorized Capital Stock. As of October 18, 1995, the
authorized capital stock of the Company consisted of (a) 50,000,000 shares of
Common Stock, $.001 par value per share, of which 17,142,890 shares were
validly issued and outstanding, fully paid and non-assessable and with respect
to which warrants to purchase 211,816 shares were outstanding; (b) 1,163,102
shares of Class B Preferred Stock, $2.00 par value per share, of which no
shares were issued and outstanding; and (c) 3,000,000 shares of Class C
Preferred Stock, $.01 par value per share, of which no shares were issued and
outstanding. As of October 18, 1995, 8,446 shares of Common Stock were held in
the treasury of the Company. When issued and delivered to the Purchaser by the
Company against payment of the consideration set forth herein, the shares of
Common Stock, the Supplemental Shares, if any, and the Additional Shares (as
defined herein), if any, will be validly issued, fully paid and non-assessable.
There are no preemptive rights of any stockholder of the Company, as
such, to acquire the Shares. The Common Stock is authorized for trading on the
Nasdaq National Market and no suspension of trading in the Common Stock is in
effect.
4.3 Due Execution, Delivery and Performance of the Agreements.
The Company's execution, delivery and performance of the Agreements (a) have
been duly authorized under Delaware law by all requisite corporate action by
the Company, (b) will not violate any law or the Certificate of Incorporation
or By-laws of the Company or any provision of any material indenture, mortgage,
agreement, contract or other material instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its subsidiaries
or any of their properties or assets is bound as of the date hereof, and (c)
will not result in a breach of or constitute (upon notice or lapse of time or
both) a default under any such indenture, mortgage, agreement, contract or
other material instrument or the creation or imposition of any lien, security
interest, mortgage, pledge, charge or other encumbrance, of any material nature
whatsoever upon
4
any properties or assets of the Company or any of its subsidiaries. Upon their
execution and delivery, and assuming the valid execution thereof by the
respective Purchasers, the Agreements will constitute valid and binding
obligations of the Company, enforceable in accordance with their respective
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors' and
contracting parties' rights generally and except as enforceability may be
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and except as
the indemnification and contribution agreements of the Company in Section 7.5
hereof may be legally unenforceable.
4.4 Additional Information. The Company represents and warrants
that the information contained in the following documents, which the Company
has furnished to the Purchaser, taken as a whole, does not contain any untrue
statement of material fact or omit to state any material fact necessary in
order to make the statements therein not misleading as of the respective final
dates of the documents.
(a) the Company's Annual Report to Stockholders on Form
10-K for the fiscal year ended December 31, 1994
(without exhibits);
(b) the Company's Quarterly Reports on Form 10-Q for the
three-month periods ended March 31, 1995 and June 30,
1995;
(c) Notice to Shareholders and Proxy Statement for its
Annual Meeting of Shareholders held May 18, 1995;
(d) the Company's Current Reports on Form 8-K dated April
7, 1995 and May 18, 1995; and
(e) the Private Placement Memorandum dated September 20,
1995, as amended.
4.5 No Material Change. There has been no material adverse change
in the financial condition or business or results of operations of the Company
since June 30, 1995.
4.6 Approvals. No authorization, approval or consent of any
governmental body or the stockholders of the Company is required to be obtained
by the Company for the issuance and sale of the Shares as contemplated by this
Stock Purchase Agreement.
4.7 Absence of Litigation. Except as disclosed in the documents
referred to in Section 4.4, there is no action, suit, proceeding, inquiry or
investigation before or by any court, public board or body pending or, to the
knowledge of the Company or any of its subsidiaries, threatened against or
affecting the Company or any of its subsidiaries, wherein an unfavorable
decision, ruling or finding would have a material adverse effect on the
properties, business, condition (financial or other), results of operations or
prospects of the Company and its subsidiaries taken as a whole or the
transaction contemplated by this Stock Purchase Agreement or any of the
documents contemplated hereby or which would adversely affect the validity or
enforceability of, or the authority or ability of the Company to perform its
obligations under this Stock Purchase Agreement or any of such other documents.
5
SECTION 5. Representations, Warranties and Covenants of the Purchaser.
(a) The Purchaser represents and warrants to, and
covenants with, the Company that: (i) the Purchaser, taking into account the
personnel and resources it can practically bring to bear on the purchase of the
shares of Common Stock contemplated hereby, is knowledgeable, sophisticated and
experienced in making, and is qualified to make decisions with respect to
investments in securities presenting an investment decision like that involved
in the purchase of shares of Common Stock, including investments in securities
issued by the Company and investments in development stage companies, and has
requested, received, reviewed and considered all information it deems relevant
in making an informed decision to purchase the shares of Common Stock; (ii) the
Purchaser is acquiring the Shares pursuant to this Stock Purchase Agreement in
the ordinary course of its business and for its own account for investment only
and with no present intention of distributing any of such Shares in violation
of the Securities Act of 1933, as amended (the "Securities Act") or in any
arrangement or understanding with any other persons regarding the distribution
of such Shares in violation of the Securities Act (this representation and
warranty not limiting the Purchaser's right to sell pursuant to the
Registration Statement or in a transaction not in violation of Section
5(a)(iii) hereof or, other than with respect to any claims arising out of a
breach of this representation and warranty, the Purchaser's right to
indemnification under Section 7.5); (iii) the Purchaser will not, directly or
indirectly, offer, sell, pledge, transfer or otherwise dispose of (or solicit
any offers to buy, purchase or otherwise acquire or take a pledge of) any of
the Shares except in compliance with the Securities Act and the rules and
regulations promulgated thereunder; (iv) the Purchaser has completed or caused
to be completed the Registration Statement Questionnaire and the Stock
Certificate Questionnaire, both attached hereto as Appendix I, for use in
preparation of the Registration Statement and the answers thereto are true and
correct as of the date hereof and will be true and correct as of the effective
date of the Registration Statement; (v) the Purchaser has, in connection with
its decision to purchase the number of shares of Common Stock set forth in
Section 2 above, relied solely upon the representations and warranties of the
Company contained herein; (vi) the Purchaser is an "accredited investor" within
the meaning of Rule 501 of Regulation D promulgated under the Securities Act;
and (vii) that the Purchaser will hold the shares of Common Stock and the
Supplemental Shares for a period of thirty (30) days following the Closing
Date.
(b) The Purchaser hereby covenants with the Company not
to make any sale of the Shares without effectively causing the prospectus
delivery requirement under the Securities Act to be satisfied or otherwise
complying with the Securities Act, and the Purchaser acknowledges and agrees
that the Shares are not transferable on the books of the Company unless the
certificate submitted to the transfer agent evidencing the Shares is
accompanied by (1) a separate certificate (i) in the form of Appendix II
hereto, (ii) executed by an officer of, or other authorized person designated
by, the Purchaser, and (iii) to the effect that (A) the Shares have been sold
in accordance with the Registration Statement and (B) the requirement of
delivering a current prospectus has been satisfied; or (2) an opinion of
counsel reasonably satisfactory to the Company stating that registration is not
required under the Securities Act. The Purchaser acknowledges that there may
occasionally be times when the Company must suspend the use of the prospectus
forming a part of the Registration Statement until such time as an amendment to
the Registration Statement has been filed by the Company and declared effective
by the Commission, or until such time as the Company has filed an appropriate
report with the Commission pursuant to the Securities Exchange Act of 1934, as
amended; provided, however, that such suspension shall not be for a period of
more than two (2) trading days at any time or more than ten (10) trading days
in any one (1) year period. The Purchaser hereby covenants that
6
it will not sell any Shares pursuant to said prospectus during the period
commencing at the time at which the Company gives the Purchaser written notice
of the suspension of the use of said prospectus and ending the earlier of two
(2) trading days after such notice or occurrence or the date on which the
Company gives the Purchaser written notice that the Purchaser may thereafter
effect sales pursuant to said prospectus.
(c) The Purchaser further represents and warrants to, and
covenants with, the Company that (i) the Purchaser has full right, power,
authority and capacity to enter into this Stock Purchase Agreement and to
consummate the transactions contemplated hereby and has taken all necessary
action to authorize the execution, delivery and performance of this Stock
Purchase Agreement, and (ii) upon the execution and delivery hereof, this Stock
Purchase Agreement shall constitute a valid and binding obligation of the
Purchaser enforceable in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' and contracting parties' rights generally
and except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and except as the indemnification and contribution agreements
of the Purchaser in Section 7.5 hereof may be legally unenforceable.
SECTION 6. Survival of Representations, Warranties and Agreements.
Notwithstanding any investigation made by any party to this Stock Purchase
Agreement, all covenants, agreements, representations and warranties made by
the Company and the Purchaser herein and in the certificates for the shares of
Common Stock delivered pursuant hereto shall survive the execution of this
Stock Purchase Agreement, the delivery to the Purchaser of the shares of Common
Stock being purchased and the payment therefor.
SECTION 7. Registration of the Shares; Compliance with the Securities
Act.
7.1 Registration Procedures and Expenses. The Company shall:
(a) prepare and file with the Commission within ten (10)
business days of the Commitment Date a Registration
Statement on Form S-3 (the "Registration Statement")
to enable the sale of the Shares by the Purchaser
from time to time through the automated quotation
system of the Nasdaq National Market System or in
privately-negotiated transactions;
(b) use its best efforts, subject to receipt of necessary
information from the Purchaser, to cause the
Registration Statement to become effective as soon as
possible after filing thereof;
(c) promptly prepare and file with the Commission such
amendments and supplements to the Registration
Statement and the prospectus used in connection
therewith as may be necessary to keep the
Registration Statement effective for a period not
exceeding the third anniversary of the Closing Date
as is required for the intended method of
distribution, or such shorter period which will
terminate when all the Shares covered by such
Registration Statement have been sold pursuant to
such Registration Statement or withdrawn;
7
(d) promptly furnish to the Purchaser with respect to the
Shares registered under the Registration Statement
(and to each underwriter, if any, of such Shares)
such number of copies of the Registration Statement
and any amendment thereof and of prospectuses and
preliminary prospectuses in conformity with the
requirements of the Securities Act and such other
documents as the Purchaser may reasonably request, in
order to keep the Purchaser apprised of the progress
of the registration process and to facilitate the
public sale or other disposition of all or any of the
Shares by the Purchaser;
(e) promptly file documents required of the Company for
normal blue sky clearance in states specified in
writing by the Purchaser and reasonably required by
the Purchaser in order to resell its Shares,
provided, however, that the Company shall not be
required to qualify to do business or consent to
service of process in any jurisdiction in which it is
not now so qualified or has not so consented;
(f) promptly inform the Purchaser when any stop order by
the Commission has been issued with respect to the
Purchaser's Shares and use its best efforts to
promptly cause such stop order to be withdrawn; and
(g) bear all expenses in connection with the procedures
in paragraphs (a) through (f) of this Section 7.1 and
the registration of the Shares pursuant to the
Registration Statement and pay up to $2,500 of
reasonable fees and expenses of outside counsel to
the Purchaser.
A questionnaire related to the Registration Statement to be completed
by the Purchaser is attached hereto as part of Appendix I.
7.2 Penalty for Delay of Registration Statement's Effective Date.
In the event the Registration Statement has not become effective by January 1,
1996, for each thirty (30) day period during which the shares of Common Stock
and the Supplemental Shares, if any, remain unregistered, the Company shall
issue to the Purchaser within three (3) trading days of the end of each such
thirty (30) day period, additional shares of Common Stock equal to 3% of the
total number of shares purchased by such Purchaser (the "Additional Shares") or
a cash payment equal to the average of the high and low sales prices of the
Common Stock on the Nasdaq National Market on the last trading day in such
30-day period multiplied by the number of Additional Shares which would
otherwise be issuable; provided, however, that in no event will the number of
Shares issued pursuant to the Agreements in the aggregate exceed 19.9% of the
total number of shares of Common Stock outstanding on the Closing Date (the
"Maximum Percentage"), and if such number of Shares to be issued pursuant to
the Agreements in the aggregate does exceed the Maximum Percentage, the Company
shall pay the Purchaser a cash payment equal to the aggregate market price of
the Additional Shares which would have resulted in exceeding the Maximum
Percentage.
7.3 Exchange of Legended Certificates. Following the effective
date of the Registration Statement, unless at such time a stop order is imposed
by the Commission or the effectiveness of the Registration Statement is for any
other reason suspended as permitted by Section 5(b) herein, all requirements
with respect to legends on the certificates evidencing the Shares will cease to
8
apply on the sale thereof, and certificated Shares without legends will be
available to the Purchaser within three (3) trading days after the Company's
receipt of a request for such unlegended certificates and Purchaser's surrender
of the legend certificate to the Company's transfer agent.
7.4 Transfer of Shares. The Purchaser agrees that it will not
effect any disposition of the Shares or its right to purchase the Shares that
would constitute a sale within the meaning of the Securities Act except as
contemplated in the Registration Statement referred to in Section 7.1 or
pursuant to an exemption from registration under the Securities Act. The
Purchaser agrees that it will promptly notify the Company of any changes in the
information set forth in the Registration Statement regarding the Purchaser or
its Plan of Distribution.
7.5 Indemnification and Contribution. For the purpose of this
Section 7.5:
(a) the term "Selling Shareholder" shall include the
Purchaser, its officers, directors, trustees, any
affiliate of such Purchaser and each person, if any,
who controls the Selling Shareholder within the
meaning of the Securities Act;
(b) the term "Registration Statement" shall include any
final prospectus, exhibit, supplement or amendment
included in or relating to the Registration Statement
referred to in Section 7.1;
(c) the term "untrue statement" shall include any untrue
statement or alleged untrue statement, or any
omission or alleged omission to state in the
Registration Statement a material fact required to be
stated therein or necessary to make the statements
therein, in the light of the circumstances under
which they were made, not misleading.
The Company agrees to indemnify and hold harmless each Selling
Shareholder from and against any losses, claims, damages or liabilities to
which such Selling Shareholder may become subject (under the Securities Act or
otherwise) insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of, or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading or arise out of any failure by the Company to fulfill
any undertaking included in the Registration Statement and the Company will
reimburse such Selling Shareholder for any reasonable legal or other expenses
reasonably incurred in investigating, defending or preparing to defend any such
action, proceeding or claim, provided, however, that the Company shall not be
liable in any such case to the extent that such loss, claim, damage or
liability arises out of, or is based upon, any such untrue statement or
omission made in such Registration Statement in reliance upon and in conformity
with written information furnished to the Company by or on behalf of such
Selling Shareholder specifically for use in preparation of the Registration
Statement, or the failure of such Selling Shareholder to comply with the
covenants and agreements contained in Sections 5(b) or 7.4 hereof respecting
sale of the Shares or any statement or omission in any Prospectus that is
corrected in any subsequent Prospectus that was delivered to the Purchaser
prior to the pertinent sale or sales by the Purchaser.
9
The Purchaser agrees to indemnify and hold harmless the Company (and
each person, if any, who controls the Company within the meaning of Section 15
of the Securities Act, each officer of the Company who signs the Registration
Statement and each director of the Company) from and against any losses,
claims, damages or liabilities to which the Company (or any such officer,
director or controlling person) may become subject (under the Securities Act or
otherwise), insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of, or are based upon, any failure
to comply with the covenants and agreements contained in Sections 5(b) or 7.4
hereof respecting sale of the Shares, or any untrue statement of a material
fact contained in the Registration Statement on the effective date thereof if
such untrue statement was made in reliance upon and in conformity with written
information furnished by or on behalf of the Purchaser specifically for use in
preparation of the Registration Statement, provided, however, that such
Purchaser shall not be liable in any such case to the extent that the Purchaser
has furnished in writing to the Company information expressly for use in such
Registration Statement or any amendment thereof or supplement thereto which
corrected or made not misleading, information previously furnished to the
Company prior to the filing of the Registration Statement, and if thereafter,
has notified the Company of such information immediately upon its occurrence or
the Purchaser's knowledge of its occurrence. The Purchaser will reimburse the
Company (or such officer, director or controlling person), as the case may be,
for any legal or other expenses reasonably incurred in investigating, defending
or preparing to defend any such action, proceeding or claim. In no event shall
the liability of the Purchaser hereunder be greater in amount than the dollar
amount of the proceeds received by such holder upon the sale of the Shares
giving rise to such indemnification obligation.
Promptly after receipt by any indemnified person of a notice of a
claim or the beginning of any action in respect of which indemnity is to be
sought against an indemnifying person pursuant to this Section 7.5, such
indemnified person shall notify the indemnifying person in writing of such
claim or of the commencement of such action, and, subject to the provisions
hereinafter stated, in case any such action shall be brought against an
indemnified person and such indemnifying person shall be entitled to
participate therein, and, to the extent it shall wish, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified person.
After notice from the indemnifying person to such indemnified person of its
election to assume the defense thereof, such indemnifying person shall not be
liable to such indemnified person for any legal expenses subsequently incurred
by such indemnified person in connection with the defense thereof, provided,
however, that if there exists or shall exist a conflict of interest that would
make it inappropriate, in the opinion of counsel to the indemnified person, for
the same counsel to represent both the indemnified person and such indemnifying
person or any affiliate or associate thereof, the indemnified person shall be
entitled to retain its own counsel at the expense of such indemnifying person;
provided, however, that no indemnifying person shall be responsible for the
fees and expenses of more than one separate counsel for all indemnified
parties.
If the indemnification provided for in this Section 7.5 from the
indemnifying person is unavailable to an indemnified person hereunder in
respect of any losses, claims, damages, liabilities or expenses referred to
herein, then the indemnifying person, in lieu of indemnifying such indemnified
person, shall contribute to the amount paid or payable by such indemnified
person as a result of such losses, claims, damages, liabilities or expenses in
such proportion as is appropriate to reflect the relative fault of the
indemnifying person and indemnified persons in connection with the actions
which resulted in such losses, claims, damages, liabilities or expenses, as
well as any other relevant equitable considerations. The relative fault of
such indemnifying
10
person and indemnified persons shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact, has been made by, or relates to information
supplied by, such indemnifying person or indemnified persons, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such action. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in this Section 7.5,
any reasonable legal or other fees or expenses reasonably incurred by such
party in connection with any investigation or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 7.5 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 7.5, no Purchaser
shall be required to contribute any amount in excess of the dollar amount of
the proceeds received by such Purchaser upon the sale of the Shares giving rise
to such contribution obligation. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
7.6 Termination of Conditions and Obligations. The conditions
precedent imposed by Section 5 or this Section 7 upon the transferability of
the Shares shall cease and terminate as to any particular number of the Shares
when such Shares shall have been effectively registered under the Securities
Act and sold or otherwise disposed of in accordance with the intended method of
disposition set forth in the Registration Statement covering such Shares or at
such time as an opinion of counsel satisfactory to the Company shall have been
rendered to the effect that such conditions are not reasonably necessary in
order to comply with the Securities Act.
7.7 Information Available. So long as the Registration Statement
is effective covering the resale of Shares owned by the Purchaser, the Company
will furnish to the Purchaser:
(a) as soon as practicable after available (but in the
case of the Company's Annual Report to Shareholders,
within one hundred twenty (120) days after the end of
each fiscal year of the Company), one copy of (i) its
Annual Report to Shareholders (which Annual Report
shall contain financial statements audited in
accordance with generally accepted accounting
principles by a national firm of certified public
accountants), (ii) if not included in substance in
the Annual Report to Shareholders, its Annual Report
on Form 10-K, (iii) its Quarterly Reports to
Shareholders, (iv) if not included in substance in
its Quarterly Reports to Shareholders, its quarterly
reports on Form 10-Q, and (v) a full copy of the
particular Registration Statement covering the Shares
(the foregoing, in each case, excluding exhibits);
(b) upon the reasonable request of the Purchaser, all
exhibits excluded by the parenthetical to
subparagraph (a)(v) of this Section 7.7 and all other
information that is made available to shareholders;
and
(c) upon the reasonable request of the Purchaser, an
adequate number of copies of the prospectuses to
supply to any other party requiring such
prospectuses;
11
and the Company, upon the reasonable request of the Purchaser, will meet with
the Purchaser or a representative thereof at the Company's headquarters to
discuss all information relevant for disclosure in the Registration Statement
covering the Shares and will otherwise cooperate with any Purchaser conducting
an investigation for the purpose of reducing or eliminating such Purchaser's
exposure to liability under the Securities Act, including the reasonable
production of information at the Company's headquarters.
SECTION 8. Notices. All notices, requests, consents and other
communications hereunder shall be in writing, shall be mailed by first-class
registered or certified airmail, or nationally recognized overnight express
courier postage prepaid, and shall be deemed given when so mailed and shall be
delivered as addressed as follows:
(a) if to the Company, to:
T Cell Sciences, Inc.
115 Fourth Avenue
Needham, Massachusetts 02194
Attn: Pamela A. Hay, Esq.
(b) with a copy mailed to:
Goodwin, Procter & Hoar
Exchange Place
Boston, Massachusetts 02109
Attn: Stuart M. Cable, Esq.
or to such other person at such other place as the
Company shall designate to the Purchaser in writing;
and
(c) if to the Purchaser, at its address as set forth at the
end of this Stock Purchase Agreement, or at such other
address or addresses as may have been furnished to the
Company in writing.
SECTION 9. Changes. This Stock Purchase Agreement may not be modified
or amended except pursuant to an instrument in writing signed by the Company
and the Purchaser.
SECTION 10. Headings. The headings of the various sections of this
Stock Purchase Agreement have been inserted for convenience of reference only
and shall not be deemed to be part of this Stock Purchase Agreement.
SECTION 11. Severability. In case any provision contained in this
Stock Purchase Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby.
SECTION 12. Governing Law. This Stock Purchase Agreement shall be
governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts and the federal law of the United States of America.
12
SECTION 13. Counterparts. This Stock Purchase Agreement may be
executed in two or more counterparts, each of which shall constitute an
original, but all of which, when taken together, shall constitute but one
instrument, and shall become effective when one or more counterparts have been
signed by each party hereto and delivered to the other parties.
13
IN WITNESS WHEREOF, the parties hereto have caused this Stock Purchase
Agreement to be executed by their duly authorized representatives as of the day
and year first above written.
T CELL SCIENCES, INC.
By:_____________________________________
Print or Type: Alan W. Tuck, President and
Chief Executive Officer
PURCHASER.:
________________________________________
Name of Individual representing
Purchaser (if an Institution):
________________________________________
Title of Individual representing
Purchaser (if an Institution):
________________________________________
Signature by:
Individual Purchaser or Individual
representing Purchaser:
________________________________________
Address:________________________________
Telephone:______________________________
Fax:____________________________________
14
APPENDIX I
(one of two)
T CELL SCIENCES, INC.
STOCK CERTIFICATE QUESTIONNAIRE
Pursuant to Section 3 of the Stock Purchase Agreement, please provide
us with the following information:
1. The exact name that your Shares are
to be registered in (this is the name
that will appear on your stock
certificate(s)). You may use a
nominee name if appropriate: _____________
2. The relationship between the Purchaser
of the Shares and the Registered Holder
listed in response to item 1 above: _____________
3. The mailing address of the Registered
Holder listed in response to item 1 above: _____________
_____________
_____________
_____________
4. The Social Security Number or Tax
Identification Number of the Registered
Holder listed in response to item 1 above: _____________
5. The address, telephone and fax number of
your escrow agent, and the name of a
contact person: _____________
A-1
15
APPENDIX I
(two of two)
T CELL SCIENCES, INC.
REGISTRATION STATEMENT QUESTIONNAIRE
In connection with the preparation of the Registration Statement,
please provide us with the following information:
1. Pursuant to the "Selling Shareholder" section of the
Registration Statement, please state your or your organization's name exactly
as it should appear in the Registration Statement:
2. Please provide the following information, as of _____________
1995:
(1) (2)
Number of Shares Number of shares
which are being if any, which will
included in the be owned after
Registration completion of sale
Statement (if all of Shares included
purchased, put all) in the Registration
Statement
3. Have you or your organization had any position, office or other
material relationship within the past three (3) years with the Company or its
affiliates other than as disclosed in the Prospectus included in the
Registration Statement?
______ Yes ______ No
If yes, please indicate the nature of any such relationship below:
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
A-2
16
APPENDIX II
Attention:
PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE
THE UNDERSIGNED, [an officer of, or other person duly authorized by]
_________________________ [fill in official name of individual or institution]
hereby certifies that he/she [said institution] is the Purchaser of the shares
evidenced by the attached certificate, and as such, sold such shares on
______________ [date] in accordance with registration statement number
______________ [fill in the number of or otherwise identify registration
statement] and the requirement of delivering a current prospectus and current
annual and quarterly reports by the Company has been complied with in
connection with such sale.
Print or Type:
Name of Purchaser
(Individual or
Institution) _____________________________
Name of Individual
representing
Purchaser (if an
Institution): _____________________________
Title of Individual
representing
Purchaser (if an
Institution): ____________________________
Signature by:
Individual Purchaser or
Individual representing
Purchaser: ____________________________
A-3
17
Exhibit 1
WIRE INSTRUCTIONS
Mellon Bank Pittsburgh
ABA: 043000261
Account #: 1011730
Account name: Merrill Lynch
For further credit: T Cell Sciences, Inc.
Sub account #: 64M-07P26
18
EXHIBIT 2
______________, 1995
PURCHASER
Purchaser:
This opinion is furnished to you pursuant to Section ___ of that certain
Stock Purchase Agreement (the "Stock Purchase Agreements") dated as of
____________, 1995 by and between the purchasers (the "Purchaser") named therein
and T Cell Sciences, Inc. (the "Company"), relating to the offering and sale to
the Purchaser, subject to the terms and conditions set forth in the Stock
Purchase Agreement, of an aggregate of up to ______ shares of the Common Stock,
par value $.001 per share, of the Company (the "shares of Common Stock").
We have acted as counsel for the Company in connection with the
offering and sale of the shares of Common Stock. In such capacity, we have
examined the Private Placement Memorandum dated September 20, 1995, as amended
October 27, 1995 (the "Private Placement Memorandum"); signed copies of the
Registration Statement of the Company on Form S-3 (Registration No. 33-______)
and all exhibits thereto (the "Registration Statement"), as filed with the
Securities and Exchange Commission (the "Commission") on ____________, 1995
pursuant to the Securities Act of 1933, as amended (the "Securities Act"); the
Prospectus dated ____________, 1995 (the "Prospectus"); and signed copies of
the Stock Purchase Agreement.
We also have examined originals or copies of the following with respect
to the Company:
(a) the Company's Certificate of Incorporation (the "Certificate of
Incorporation"), certified by the Secretary of State of the State of
Delaware as of a recent date;
(b) the Company's By-Laws, as amended, certified by the Secretary of
the Company as in effect as of the date hereof;
(c) a certificate of the Secretary of State of the State of
Delaware, dated as of a recent date, certifying as to the Company's
legal existence and good standing;
(d) such records of the Company's corporate proceedings as we have
deemed relevant;
(e) a certificate of certain officers of the Company concerning the
outstanding capital stock of the Company and the payment therefor and
other matters; and
19
(f) a certificate of the Company's transfer agent concerning the
outstanding capital stock of the Company.
We have also examined and relied upon such other contracts, documents,
certificates and records as we deemed necessary for the purpose of this
opinion, including those delivered today at the closing of the sale of the
shares of Common Stock. In such examination, we have assumed the genuineness
of all signatures, the capacity, power and authority of all parties other than
the Company to execute and deliver all applicable documents, the authenticity
of all documents submitted to us as originals, the conformity to originals of
all documents submitted to us as certified or attested copies or photocopies
and the authenticity of the originals of such latter documents.
We express no opinion herein as to the accuracy, completeness,
fairness or compliance as to form of the statements contained in the Private
Placement Memorandum or the Stock Purchase Agreement. We are not passing in any
way on any financial statements or data, including the schedules or the notes
thereto, or any related statistics or computations referred to in the Private
Placement Memorandum, the Registration Statement or the Prospectus, and we
have not reviewed the financial records or books of account of the Company.
Whenever our opinion is indicated to be based on "the best of our
knowledge" or contains a similar qualification, it should be understood that
during the course of our representation of the Company we have not undertaken
any independent investigation to determine the existence or absence of facts.
The words "the best of our knowledge" and similar language used in certain of
the opinions expressed below are limited to the knowledge of the lawyers
within our firm who have had primary responsibility for the legal services
performed for the Company.
We are members of the Bar of the Commonwealth of Massachusetts, and we
express no opinion herein with respect to any law other than the laws of the
Commonwealth of Massachusetts and the United States of America and the
corporate laws of the State of Delaware as in effect on the date hereof.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Company is a corporation duly organized, validly existing
and in corporate good standing under the laws of the State of Delaware, with
full corporate power and authority to conduct its business as currently
conducted.
2. As of October 18, 1995, the authorized capital stock of the
Company consisted of (a) 50,000,000 shares of Common Stock, $.001 par value per
share, of which 17,142,890 shares were validly issued and outstanding, fully
paid and non-assessable and with respect to which warrants to purchase 211,816
shares were outstanding; (b) 1,163,102 shares of Class B Preferred Stock,
$2.00 par value per share, of which no shares were issued and outstanding; and
(c) 3,000,000 shares of Class C Preferred Stock, $.01 par value per share, of
which no shares were issued and outstanding. As of October 18, 1995, 8,446
shares of Common Stock were held in the treasury of the Company. The authorized
shares of the Company's Common
20
Stock have been duly authorized; the outstanding shares of its Common Stock
have been duly authorized and validly issued and are fully paid and
nonassessable; the shares of Common Stock to be sold by the Company pursuant to
the Stock Purchase Agreement have been duly authorized and will be validly
issued, fully paid and nonassessable when issued and paid for as contemplated
by the Stock Purchase Agreement; and no preemptive rights arising under the
Company's Certificate of Incorporation, and to the best of our knowledge, no
preemptive rights, registration rights, rights of first refusal or other
similar rights of stockholders arising under any agreement or instrument to
which the Company is a party or by which the Company may be bound, exist with
respect to any of the shares or the issue and sale thereof, other than those
that have been complied with or expressly waived prior to the date hereof by
the holders thereof.
3. All corporate action on the part of the Company, its directors and
shareholders necessary for the authorization, execution, delivery and
performance by the Company of the Stock Purchase Agreements, the consummation
by the Company of the transactions contemplated therein and the authorization
and issuance of the shares of Common Stock has been taken. The Stock Purchase
Agreement and the other documents to be delivered by the Company thereunder
constitute the valid and binding obligations of the Company, enforceable
against it in accordance with their terms, except (i) as such enforceability
may be limited by any principles of public policy with respect to enforcement
of any indemnification provisions contained therein or by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or affecting
generally the enforcement of creditors' rights, and (ii) to the extent that
availability of the remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any proceeding therefor may
be brought.
4. The execution, delivery and performance by the Company of the Stock
Purchase Agreements and the issuance of the shares of Common Stock will not (i)
result in any violation of or be in conflict with or constitute a default (or
an event which, with the lapse of time, or the giving of notice, or both will
constitute a default) under any term of the Company's Certificate of
Incorporation or By-Laws, or (ii) to the best of our knowledge, result in any
violation of or be in conflict with or constitute a default (or an event which,
with the lapse of time or the giving of notice, or both, will constitute a
default) under any term of any existing material mortgage, indenture, contract,
agreement, instrument, law, regulation, judgment, decree or order applicable to
the Company or to which the Company is subject, or (iii) to the best of our
knowledge, result in the creation of any mortgage, pledge, lien, encumbrance or
charge upon any of the properties or assets of the Company.
5. Assuming the accuracy of the representations and warranties made by
the Purchaser in the Stock Purchase Agreement, the Private Placement
Memorandum, the exhibits and appendices thereto (except for the financial
statements and schedules and statistical data, including the schedules and
notes to the financial statements included therein, as to which no statement is
made) comply as to form in all material respects with the requirements of
Regulation D promulgated by the Commission pursuant to the Securities Act, and
no registration under the Securities Act is required in connection with the
issuance and sale of the shares of Common Stock in accordance with the
exemption from registration provided under Regulation D.
21
6. No authorization, approval or consent of any governmental body,
regulatory agency, self-regulatory body or the stockholders of the Company is
required to be obtained by the Company for the issuance and sale of the Shares
as contemplated by the Stock Purchase Agreement; and
7. Except as disclosed in the documents referred to in Section 4.4
of the Stock Purchase Agreement, there is no action, suit, proceeding, inquiry
or investigation before or by any court, public board or body pending or, to
the best of our knowledge, threatened against or affecting the Company or any
of its subsidiaries, wherein an unfavorable decision, ruling or finding would
have a material adverse effect on the properties, business, condition
(financial or other), results of operations or prospects of the Company and its
subsidiaries taken as a whole or the transactions contemplated by the Stock
Purchase Agreement or any of the documents contemplated thereby or which would
adversely affect the validity or enforceability of, or the authority or ability
of the Company to perform its obligations under, the Stock Purchase Agreement
or any of such other documents.
Prior to ____________, 1995, we participated in conferences with
officers and other representatives of the Company at which the contents of the
Private Placement Memorandum, and related matters were discussed. There can be
no assurance that all possible material facts as to the Company were disclosed
in such conferences. We have not undertaken to verify independently the
statements made in the documents and conferences referred to above and
therefore are not passing upon or assuming any responsibility for the accuracy,
completeness or fairness of the statements contained in the Private Placement
Memorandum but we hereby confirm to you, on the basis of the foregoing, that no
facts have come to our attention which lead us to believe that the Private
Placement Memorandum and the exhibits thereto (except for the financial
statements and schedules and statistical data, including the schedules and
notes to the financial statements included therein, as to which no statement is
made), as of its date and as of the date hereof, contained any untrue statement
of a material fact or omitted 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.
This opinion is rendered to you and is solely for your benefit in your capacity
as placement agent for the shares of Common Stock, and may not be relied upon
by you for any other purpose, or furnished to, quoted to or relied upon by any
other person for any purpose without our prior written consent.
Very truly yours,
GOODWIN, PROCTER & HOAR
1
Exhibit 10.2
FORM OF NOVEMBER
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made as of the 3rd day of November, 1995, between
T Cell Sciences, Inc. (the "Company"), a corporation organized under the laws
of the State of Delaware with its principal offices at 115 Fourth Avenue,
Needham, Massachusetts 02194, and the purchaser whose name and address is set
forth on the signature page hereof (the "Purchaser").
IN CONSIDERATION of the mutual covenants contained in this Stock
Purchase Agreement, the Company and the Purchaser agree as follows:
SECTION 1. Authorization of Sale of the Shares. Subject to the terms
and conditions of this Stock Purchase Agreement, the Company has authorized the
sale of up to 2,500,000 shares of common stock, par value $.001 per share of
the Company (the "Common Stock"). The Company reserves the right to sell more
than 2,500,000 shares of Common Stock prior to the date of the filing of the
Registration Statement (as defined in Section 3). The shares of Common Stock,
and the Additional Shares (as defined in Section 7.2) are referred herein
collectively as the "Shares".
SECTION 2. Agreement to Sell and Purchase Shares.
(a) At the Closing Date (as defined in Section 3), the Company will
sell to the Purchaser, and the Purchaser will buy from the Company, upon the
terms and conditions hereinafter set forth, ________ shares of Common Stock at
the purchase price per Share (the "Stock Purchase Price") equal to $2.50, for
an aggregate stock purchase price of $__________ (the "Aggregate Stock Purchase
Price")
(b) The Company proposes to enter into a similar form of Stock
Purchase Agreement ("Other Stock Purchase Agreements") with certain other
investors (the "Other Purchasers"). The Purchaser and the Other Purchasers are
hereinafter sometimes collectively referred to as the "Purchasers," and this
Stock Purchase Agreement and the Other Stock Purchase Agreements are
hereinafter sometimes collectively referred to as the "Agreements." The
Company may enter into Other Stock Purchase Agreements with Other Purchasers
prior to the Closing Date which may differ from this Stock Purchase Agreement
with respect to pricing or other terms. If such material differences are
present in the Other Stock Purchase Agreements executed by Other Purchasers
prior to the Closing Date, the Company will notify the Purchaser by
distributing a supplemental Private Placement Memorandum disclosing such terms.
SECTION 3. Delivery of Shares on the Closing Date.
(a) The commitment for the purchase and sale of the
shares of Common Stock (the "Commitment Date") shall occur on approximately
November 3, 1995 at a time and place specified by the Company. On or prior to
the Commitment Date, the Purchaser shall have executed both the Stock Purchase
Agreement and the Registration Statement Questionnaire. The Commitment Date
shall be prior to the time that the registration statement to be filed by the
Company pursuant to Section 7.1 (the "Registration Statement") is declared
effective. The completion of the transaction contemplated hereby (the "Closing
Date") shall be when the
2
following have occurred: (i) the Company has prepared and filed a Registration
Statement on Form S-3 within five (5) business days of the Commitment Date
relating to the Shares; (ii) the Purchaser has placed the Aggregate Stock
Purchase Price for the number of shares of Common Stock, as set forth in
Section 2 above, in a mutually agreeable escrow account (the "Escrow Account");
and (iii) the Company shall have delivered to the Escrow Account one or more
certificates for the shares of Common Stock to be issued to the Purchaser on
the Closing Date. On the Closing Date, there shall be released from the Escrow
Account to the Purchaser one or more certificates registered in the name of the
Purchaser representing the number of shares of Common Stock as provided in
Section 2 above, and all funds in the Escrow Account shall be released to the
Company, pursuant to the Company's instructions attached hereto as Exhibit 1.
Stock certificates evidencing the shares of Common Stock will be delivered to
each Purchaser on the Closing Date with a legend in substantially the following
form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR
HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT PURSUANT TO (I) A REGISTRATION
STATEMENT WITH RESPECT TO SUCH SECURITIES WHICH IS EFFECTIVE UNDER SUCH ACT OR
(II) RULE 144 OR 144A UNDER SUCH ACT OR ANY OTHER AVAILABLE EXEMPTION FROM
REGISTRATION UNDER SUCH ACT RELATING TO DISPOSITION OF SECURITIES."
The name(s) in which the stock certificates are to be registered are set forth
in the Stock Certificate Questionnaire attached hereto as part of Appendix I.
(b) The Company's obligation to complete the purchase and
sale of the shares of Common Stock and deliver such stock certificate(s) to the
Purchaser on the Closing Date shall be subject to the following conditions, any
one or more of which may be waived by the Company: (i) execution by the
Purchaser of a Stock Purchase Agreement (including the Stock Certificate
Questionnaire in Appendix I) and the Registration Statement Questionnaire, (ii)
delivery by the Purchaser of the Aggregate Stock Purchase Price for the number
of shares of Common Stock purchased as set forth in Section 2 above, to the
Escrow Account; (iii) release to the Company of such funds held in the Escrow
Account in the full amount of the Aggregate Stock Purchase Price for number of
shares of Common Stock set forth in Section 2; and (iv) the accuracy of the
representations and warranties made by the Purchasers and the fulfillment of
those undertakings of the Purchasers to be fulfilled prior to the Closing Date.
(c) The Purchaser's obligation to accept delivery of such
stock certificates(s) and to pay for the shares of Common Stock evidenced
thereby on the Closing Date shall be subject to the following conditions, any
of which may be waived by the Purchaser: (i) the preparation and filing by the
Company of the Registration Statement on Form S-3 as required by Section 7.1
hereto, (ii) the accuracy in all material respects as of the Closing Date of
the representations and warranties made by the Company herein as if made on the
Closing Date; (iii) the fulfillment in all material respects of those
undertakings of the Company to be fulfilled prior to the Closing Date; (iv)
release from the Escrow Account to the Purchaser, against receipt by the
Company of the Aggregate Stock Purchase Price simultaneously released from the
Escrow Account, of the certificates for the number of shares of Common Stock as
provided in Section 2; and (v) receipt by the Purchasers of an opinion of
counsel to the Company, dated as of the Closing Date and addressed to the
Purchaser, in substantially the form attached hereto as Exhibit 2. The
Purchaser's obligations hereunder are expressly not conditioned on the purchase
by any or all of
3
the Other Purchasers of the shares of Common Stock that they have agreed to
purchase from the Company.
SECTION 4. Representations, Warranties and Covenants. The Company
hereby represents and warrants to, and covenants with, the Purchaser as
follows:
4.1 Organization and Qualification. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite corporate power and authority to
conduct its business as currently conducted.
4.2 Authorized Capital Stock. As of October 18, 1995, the
authorized capital stock of the Company consisted of (a) 50,000,000 shares of
Common Stock, $.001 par value per share, of which 17,142,890 shares were
validly issued and outstanding, fully paid and non-assessable and with respect
to which warrants to purchase 211,816 shares were outstanding; (b) 1,163,102
shares of Class B Preferred Stock, $2.00 par value per share, of which no
shares were issued and outstanding; and (c) 3,000,000 shares of Class C
Preferred Stock, $.01 par value per share, of which no shares were issued and
outstanding. As of October 18, 1995, 8,446 shares of Common Stock were held in
the treasury of the Company. When issued and delivered to the Purchaser by the
Company against payment of the consideration set forth herein, the shares of
Common Stock and the Additional Shares (as defined herein), if any, will be
validly issued, fully paid and non-assessable.
There are no preemptive rights of any stockholder of the Company, as
such, to acquire the Shares. The Common Stock is authorized for trading on the
Nasdaq National Market and no suspension of trading in the Common Stock is in
effect.
4.3 Due Execution, Delivery and Performance of the Agreements.
The Company's execution, delivery and performance of the Agreements (a) have
been duly authorized under Delaware law by all requisite corporate action by
the Company, (b) will not violate any law or the Certificate of Incorporation
or By-laws of the Company or any provision of any material indenture, mortgage,
agreement, contract or other material instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its subsidiaries
or any of their properties or assets is bound as of the date hereof, and (c)
will not result in a breach of or constitute (upon notice or lapse of time or
both) a default under any such indenture, mortgage, agreement, contract or
other material instrument or the creation or imposition of any lien, security
interest, mortgage, pledge, charge or other encumbrance, of any material nature
whatsoever upon any properties or assets of the Company or any of its
subsidiaries. Upon their execution and delivery, and assuming the valid
execution thereof by the respective Purchasers, the Agreements will constitute
valid and binding obligations of the Company, enforceable in accordance with
their respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' and contracting parties' rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
and except as the indemnification and contribution agreements of the Company in
Section 7.5 hereof may be legally unenforceable.
4.4 Additional Information. The Company represents and warrants
that the information contained in the following documents, which the Company
has furnished to the Purchaser, taken as a whole, does not contain any untrue
statement of material fact or omit to state any material
4
fact necessary in order to make the statements therein not misleading as of the
respective final dates of the documents.
(a) the Company's Annual Report to Stockholders on Form
10-K for the fiscal year ended December 31, 1994
(without exhibits);
(b) the Company's Quarterly Reports on Form 10-Q for the
three-month periods ended March 31, 1995 and June 30,
1995;
(c) Notice to Shareholders and Proxy Statement for its
Annual Meeting of Shareholders held May 18, 1995; and
(d) the Company's Current Reports on Form 8-K dated April
7, 1995 and May 18, 1995.
4.5 No Material Change. There has been no material adverse change
in the financial condition or business or results of operations of the Company
since June 30, 1995.
4.6 Approvals. No authorization, approval or consent of any
governmental body or the stockholders of the Company is required to be obtained
by the Company for the issuance and sale of the Shares as contemplated by this
Stock Purchase Agreement.
4.7 Absence of Litigation. Except as disclosed in the documents
referred to in Section 4.4, there is no action, suit, proceeding, inquiry or
investigation before or by any court, public board or body pending or, to the
knowledge of the Company or any of its subsidiaries, threatened against or
affecting the Company or any of its subsidiaries, wherein an unfavorable
decision, ruling or finding would have a material adverse effect on the
properties, business, condition (financial or other), results of operations or
prospects of the Company and its subsidiaries taken as a whole or the
transaction contemplated by this Stock Purchase Agreement or any of the
documents contemplated hereby or which would adversely affect the validity or
enforceability of, or the authority or ability of the Company to perform its
obligations under this Stock Purchase Agreement or any of such other documents.
SECTION 5. Representations, Warranties and Covenants of the Purchaser.
(a) The Purchaser represents and warrants to, and
covenants with, the Company that: (i) the Purchaser, taking into account the
personnel and resources it can practically bring to bear on the purchase of the
shares of Common Stock contemplated hereby, is knowledgeable, sophisticated and
experienced in making, and is qualified to make decisions with respect to
investments in securities presenting an investment decision like that involved
in the purchase of shares of Common Stock, including investments in securities
issued by the Company and investments in development stage companies, and has
requested, received, reviewed and considered all information it deems relevant
in making an informed decision to purchase the shares of Common Stock; (ii) the
Purchaser is acquiring the Shares pursuant to this Stock Purchase Agreement in
the ordinary course of its business and for its own account for investment only
and with no present intention of distributing any of such Shares in violation
of the Securities Act of 1933, as amended (the "Securities Act") or in any
arrangement or understanding with any other persons regarding the distribution
of such Shares in violation of the Securities Act (this representation and
warranty not limiting the Purchaser's right to sell pursuant to the
Registration
5
Statement or in a transaction not in violation of Section 5(a)(iii) hereof or,
other than with respect to any claims arising out of a breach of this
representation and warranty, the Purchaser's right to indemnification under
Section 7.5); (iii) the Purchaser will not, directly or indirectly, offer,
sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy,
purchase or otherwise acquire or take a pledge of) any of the Shares except in
compliance with the Securities Act and the rules and regulations promulgated
thereunder; (iv) the Purchaser has completed or caused to be completed the
Registration Statement Questionnaire and the Stock Certificate Questionnaire,
both attached hereto as Appendix I, for use in preparation of the Registration
Statement and the answers thereto are true and correct as of the date hereof
and will be true and correct as of the effective date of the Registration
Statement; (v) the Purchaser has, in connection with its decision to purchase
the number of shares of Common Stock set forth in Section 2 above, relied
solely upon the representations and warranties of the Company contained herein;
(vi) the Purchaser is an "accredited investor" within the meaning of Rule 501
of Regulation D promulgated under the Securities Act; and (vii) that the
Purchaser will hold the Shares for a period of thirty (30) days following the
Closing Date.
(b) The Purchaser hereby covenants with the Company not
to make any sale of the Shares without effectively causing the prospectus
delivery requirement under the Securities Act to be satisfied or otherwise
complying with the Securities Act, and the Purchaser acknowledges and agrees
that the Shares are not transferable on the books of the Company unless the
certificate submitted to the transfer agent evidencing the Shares is
accompanied by (1) a separate certificate (i) in the form of Appendix II
hereto, (ii) executed by an officer of, or other authorized person designated
by, the Purchaser, and (iii) to the effect that (A) the Shares have been sold
in accordance with the Registration Statement and (B) the requirement of
delivering a current prospectus has been satisfied; or (2) an opinion of
counsel reasonably satisfactory to the Company stating that registration is not
required under the Securities Act. The Purchaser acknowledges that there may
occasionally be times when the Company must suspend the use of the prospectus
forming a part of the Registration Statement until such time as an amendment to
the Registration Statement has been filed by the Company and declared effective
by the Commission, or until such time as the Company has filed an appropriate
report with the Commission pursuant to the Securities Exchange Act of 1934, as
amended; provided, however, that such suspension shall not be for a period of
more than two (2) trading days at any time or more than ten (10) trading days
in any one (1) year period. The Purchaser hereby covenants that it will not
sell any Shares pursuant to said prospectus during the period commencing at the
time at which the Company gives the Purchaser written notice of the suspension
of the use of said prospectus and ending the earlier of two (2) trading days
after such notice or occurrence or the date on which the Company gives the
Purchaser written notice that the Purchaser may thereafter effect sales
pursuant to said prospectus.
(c) The Purchaser further represents and warrants to, and
covenants with, the Company that (i) the Purchaser has full right, power,
authority and capacity to enter into this Stock Purchase Agreement and to
consummate the transactions contemplated hereby and has taken all necessary
action to authorize the execution, delivery and performance of this Stock
Purchase Agreement, and (ii) upon the execution and delivery hereof, this Stock
Purchase Agreement shall constitute a valid and binding obligation of the
Purchaser enforceable in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' and contracting parties' rights generally
and except as enforceability may be subject to general principles of equity
(regardless of whether such
6
enforceability is considered in a proceeding in equity or at law) and except as
the indemnification and contribution agreements of the Purchaser in Section 7.5
hereof may be legally unenforceable.
SECTION 6. Survival of Representations, Warranties and Agreements.
Notwithstanding any investigation made by any party to this Stock Purchase
Agreement, all covenants, agreements, representations and warranties made by
the Company and the Purchaser herein and in the certificates for the shares of
Common Stock delivered pursuant hereto shall survive the execution of this
Stock Purchase Agreement, the delivery to the Purchaser of the shares of Common
Stock being purchased and the payment therefor.
SECTION 7. Registration of the Shares; Compliance with the Securities
Act.
7.1 Registration Procedures and Expenses. The Company shall:
(a) prepare and file with the Commission within five (5)
business days of the Commitment Date a Registration
Statement on Form S-3 (the "Registration Statement")
to enable the sale of the Shares by the Purchaser
from time to time through the automated quotation
system of the Nasdaq National Market System or in
privately-negotiated transactions;
(b) use its best efforts, subject to receipt of necessary
information from the Purchaser, to cause the
Registration Statement to become effective as soon as
possible after filing thereof;
(c) promptly prepare and file with the Commission such
amendments and supplements to the Registration
Statement and the prospectus used in connection
therewith as may be necessary to keep the
Registration Statement effective for a period not
exceeding the third anniversary of the Closing Date
as is required for the intended method of
distribution, or such shorter period which will
terminate when all the Shares covered by such
Registration Statement have been sold pursuant to
such Registration Statement or withdrawn;
(d) promptly furnish to the Purchaser with respect to the
Shares registered under the Registration Statement
(and to each underwriter, if any, of such Shares)
such number of copies of the Registration Statement
and any amendment thereof and of prospectuses and
preliminary prospectuses in conformity with the
requirements of the Securities Act and such other
documents as the Purchaser may reasonably request, in
order to keep the Purchaser apprised of the progress
of the registration process and to facilitate the
public sale or other disposition of all or any of the
Shares by the Purchaser;
(e) promptly file documents required of the Company for
normal blue sky clearance in states specified in
writing by the Purchaser and reasonably required by
the Purchaser in order to resell its Shares,
provided, however, that the Company shall not be
required to qualify to do business or consent to
service of process in any jurisdiction in which it is
not now so qualified or has not so consented;
7
(f) promptly inform the Purchaser when any stop order by
the Commission has been issued with respect to the
Purchaser's Shares and use its best efforts to
promptly cause such stop order to be withdrawn; and
(g) bear all expenses in connection with the procedures
in paragraphs (a) through (f) of this Section 7.1 and
the registration of the Shares pursuant to the
Registration Statement, other than fees and expenses,
if any, of counsel or other advisors to the
Purchaser.
A questionnaire related to the Registration Statement to be completed
by the Purchaser is attached hereto as part of Appendix I.
7.2 Penalty for Delay of Registration Statement's Effective Date.
In the event the Registration Statement has not become effective by January 1,
1996, for each thirty (30) day period during which the Shares remain
unregistered, the Company shall issue to the Purchaser within three (3) trading
days of the end of each such 30-day period, additional shares of Common Stock
equal to 3% of the total number of shares purchased by such Purchaser (the
"Additional Shares") or a cash payment equal to the average high and low sales
prices of the Common Stock on the Nasdaq National Market on the last trading
day in such 30-day period multiplied by the number of Additional Shares
issuable; provided, however, that in no event will the number of Shares issued
pursuant to the Agreements in the aggregate exceed 19.9% of the total number of
shares of Common Stock outstanding on the Closing Date (the "Maximum
Percentage"), and if such number of Shares to be issued pursuant to the
Agreements in the aggregate does exceed the Maximum Percentage, the Company
shall pay the Purchaser a cash payment equal to the average high and low sales
prices of the Common Stock on the Nasdaq National Market on the last trading
day in such 30-day period multiplied by the number of Additional Shares which
would have resulted in exceeding the Maximum Percentage.
7.3 Exchange of Legended Certificates. Following the effective
date of the Registration Statement, unless at such time a stop order is imposed
by the Commission or the effectiveness of the Registration Statement is for any
other reason suspended as permitted by Section 5(b) herein, all requirements
with respect to legends on the certificates evidencing the Shares will cease to
apply on the sale thereof, and certificated Shares without legends will be
available to the Purchaser within three (3) trading days after the Company's
receipt of a request for such unlegended certificates and Purchaser's surrender
of the legend certificate to the Company's transfer agent.
7.4 Transfer of Shares. The Purchaser agrees that it will not
effect any disposition of the Shares or its right to purchase the Shares that
would constitute a sale within the meaning of the Securities Act except as
contemplated in the Registration Statement referred to in Section 7.1 or
pursuant to an exemption from registration under the Securities Act. The
Purchaser agrees that it will promptly notify the Company of any changes in the
information set forth in the Registration Statement regarding the Purchaser or
its Plan of Distribution.
7.5 Indemnification and Contribution. For the purpose of this
Section 7.5:
(a) the term "Selling Shareholder" shall include the
Purchaser, its officers, directors, trustees, any
affiliate of such Purchaser and each person, if any,
8
who controls the Selling Shareholder within the
meaning of the Securities Act;
(b) the term "Registration Statement" shall include any
final prospectus, exhibit, supplement or amendment
included in or relating to the Registration Statement
referred to in Section 7.1;
(c) the term "untrue statement" shall include any untrue
statement or alleged untrue statement, or any
omission or alleged omission to state in the
Registration Statement a material fact required to be
stated therein or necessary to make the statements
therein, in the light of the circumstances under
which they were made, not misleading.
The Company agrees to indemnify and hold harmless each Selling
Shareholder from and against any losses, claims, damages or liabilities to
which such Selling Shareholder may become subject (under the Securities Act or
otherwise) insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of, or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading or arise out of any failure by the Company to fulfill
any undertaking included in the Registration Statement and the Company will
reimburse such Selling Shareholder for any reasonable legal or other expenses
reasonably incurred in investigating, defending or preparing to defend any such
action, proceeding or claim, provided, however, that the Company shall not be
liable in any such case to the extent that such loss, claim, damage or
liability arises out of, or is based upon, any such untrue statement or
omission made in such Registration Statement in reliance upon and in conformity
with written information furnished to the Company by or on behalf of such
Selling Shareholder specifically for use in preparation of the Registration
Statement, or the failure of such Selling Shareholder to comply with the
covenants and agreements contained in Sections 5(b) or 7.4 hereof respecting
sale of the Shares or any statement or omission in any Prospectus that is
corrected in any subsequent Prospectus that was delivered to the Purchaser
prior to the pertinent sale or sales by the Purchaser.
The Purchaser agrees to indemnify and hold harmless the Company (and
each person, if any, who controls the Company within the meaning of Section 15
of the Securities Act, each officer of the Company who signs the Registration
Statement and each director of the Company) from and against any losses,
claims, damages or liabilities to which the Company (or any such officer,
director or controlling person) may become subject (under the Securities Act or
otherwise), insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of, or are based upon, any failure
to comply with the covenants and agreements contained in Sections 5(b) or 7.4
hereof respecting sale of the Shares, or any untrue statement of a material
fact contained in the Registration Statement on the effective date thereof if
such untrue statement was made in reliance upon and in conformity with written
information furnished by or on behalf of the Purchaser specifically for use in
preparation of the Registration Statement, provided, however, that such
Purchaser shall not be liable in any such case to the extent that the Purchaser
has furnished in writing to the Company information expressly for use in such
Registration Statement or any amendment thereof or supplement thereto which
corrected or made not misleading, information previously furnished to the
Company prior to the filing of the Registration Statement, and if thereafter,
has notified the Company of such information
9
immediately upon its occurrence or the Purchaser's knowledge of its occurrence.
The Purchaser will reimburse the Company (or such officer, director or
controlling person), as the case may be, for any legal or other expenses
reasonably incurred in investigating, defending or preparing to defend any such
action, proceeding or claim. In no event shall the liability of the Purchaser
hereunder be greater in amount than the dollar amount of the proceeds received
by such holder upon the sale of the Shares giving rise to such indemnification
obligation.
Promptly after receipt by any indemnified person of a notice of a
claim or the beginning of any action in respect of which indemnity is to be
sought against an indemnifying person pursuant to this Section 7.5, such
indemnified person shall notify the indemnifying person in writing of such
claim or of the commencement of such action, and, subject to the provisions
hereinafter stated, in case any such action shall be brought against an
indemnified person and such indemnifying person shall be entitled to
participate therein, and, to the extent it shall wish, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified person.
After notice from the indemnifying person to such indemnified person of its
election to assume the defense thereof, such indemnifying person shall not be
liable to such indemnified person for any legal expenses subsequently incurred
by such indemnified person in connection with the defense thereof, provided,
however, that if there exists or shall exist a conflict of interest that would
make it inappropriate, in the opinion of counsel to the indemnified person, for
the same counsel to represent both the indemnified person and such indemnifying
person or any affiliate or associate thereof, the indemnified person shall be
entitled to retain its own counsel at the expense of such indemnifying person;
provided, however, that no indemnifying person shall be responsible for the
fees and expenses of more than one separate counsel for all indemnified
parties.
If the indemnification provided for in this Section 7.5 from the
indemnifying person is unavailable to an indemnified person hereunder in
respect of any losses, claims, damages, liabilities or expenses referred to
herein, then the indemnifying person, in lieu of indemnifying such indemnified
person, shall contribute to the amount paid or payable by such indemnified
person as a result of such losses, claims, damages, liabilities or expenses in
such proportion as is appropriate to reflect the relative fault of the
indemnifying person and indemnified persons in connection with the actions
which resulted in such losses, claims, damages, liabilities or expenses, as
well as any other relevant equitable considerations. The relative fault of
such indemnifying person and indemnified persons shall be determined by
reference to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact, has been made by, or
relates to information supplied by, such indemnifying person or indemnified
persons, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such action. The amount paid or payable by a
party as a result of the losses, claims, damages, liabilities and expenses
referred to above shall be deemed to include, subject to the limitations set
forth in this Section 7.5, any reasonable legal or other fees or expenses
reasonably incurred by such party in connection with any investigation or
proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 7.5 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 7.5, no Purchaser
shall be required to contribute any amount in excess of the dollar amount of
the proceeds received by such Purchaser upon the sale of the Shares giving rise
to such contribution obligation. No person guilty of
10
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
7.6 Termination of Conditions and Obligations. The conditions
precedent imposed by Section 5 or this Section 7 upon the transferability of
the Shares shall cease and terminate as to any particular number of the Shares
when such Shares shall have been effectively registered under the Securities
Act and sold or otherwise disposed of in accordance with the intended method of
disposition set forth in the Registration Statement covering such Shares or at
such time as an opinion of counsel satisfactory to the Company shall have been
rendered to the effect that such conditions are not reasonably necessary in
order to comply with the Securities Act.
7.7 Information Available. So long as the Registration Statement
is effective covering the resale of Shares owned by the Purchaser, the Company
will furnish to the Purchaser:
(a) as soon as practicable after available (but in the
case of the Company's Annual Report to Shareholders,
within one hundred twenty (120) days after the end of
each fiscal year of the Company), one copy of (i) its
Annual Report to Shareholders (which Annual Report
shall contain financial statements audited in
accordance with generally accepted accounting
principles by a national firm of certified public
accountants), (ii) if not included in substance in
the Annual Report to Shareholders, its Annual Report
on Form 10-K, (iii) its Quarterly Reports to
Shareholders, (iv) if not included in substance in
its Quarterly Reports to Shareholders, its quarterly
reports on Form 10-Q, and (v) a full copy of the
particular Registration Statement covering the Shares
(the foregoing, in each case, excluding exhibits);
(b) upon the reasonable request of the Purchaser, all
exhibits excluded by the parenthetical to
subparagraph (a)(v) of this Section 7.7 and all other
information that is made available to shareholders;
and
(c) upon the reasonable request of the Purchaser, an
adequate number of copies of the prospectuses to
supply to any other party requiring such
prospectuses;
and the Company, upon the reasonable request of the Purchaser, will meet with
the Purchaser or a representative thereof at the Company's headquarters to
discuss all information relevant for disclosure in the Registration Statement
covering the Shares and will otherwise cooperate with any Purchaser conducting
an investigation for the purpose of reducing or eliminating such Purchaser's
exposure to liability under the Securities Act, including the reasonable
production of information at the Company's headquarters.
SECTION 8. Notices. All notices, requests, consents and other
communications hereunder shall be in writing, shall be mailed by first-class
registered or certified airmail, or nationally recognized overnight express
courier postage prepaid, and shall be deemed given when so mailed and shall be
delivered as addressed as follows:
11
(a) if to the Company, to:
T Cell Sciences, Inc.
115 Fourth Avenue
Needham, Massachusetts 02194
Attn: Pamela A. Hay, Esq.
(b) with a copy mailed to:
Goodwin, Procter & Hoar
Exchange Place
Boston, Massachusetts 02109
Attn: Stuart M. Cable, Esq.
or to such other person at such other place as the
Company shall designate to the Purchaser in writing;
and
(c) if to the Purchaser, at its address as set forth at the
end of this Stock Purchase Agreement, or at such other
address or addresses as may have been furnished to the
Company in writing.
SECTION 9. Changes. This Stock Purchase Agreement may not be modified
or amended except pursuant to an instrument in writing signed by the Company
and the Purchaser.
SECTION 10. Headings. The headings of the various sections of this
Stock Purchase Agreement have been inserted for convenience of reference only
and shall not be deemed to be part of this Stock Purchase Agreement.
SECTION 11. Severability. In case any provision contained in this
Stock Purchase Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby.
SECTION 12. Governing Law. This Stock Purchase Agreement shall be
governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts and the federal law of the United States of America.
SECTION 13. Counterparts. This Stock Purchase Agreement may be
executed in two or more counterparts, each of which shall constitute an
original, but all of which, when taken together, shall constitute but one
instrument, and shall become effective when one or more counterparts have been
signed by each party hereto and delivered to the other parties.
12
IN WITNESS WHEREOF, the parties hereto have caused this Stock Purchase
Agreement to be executed by their duly authorized representatives as of the day
and year first above written.
T CELL SCIENCES, INC.
By:_____________________________________
Print or Type: Alan W. Tuck, President and
Chief Executive Officer
PURCHASER.:
________________________________________
Name of Individual representing
Purchaser (if an Institution):
________________________________________
Title of Individual representing
Purchaser (if an Institution):
________________________________________
Signature by:
Individual Purchaser or Individual
representing Purchaser:
________________________________________
Address:________________________________
Telephone:______________________________
Fax:____________________________________
13
APPENDIX I
(one of two)
T CELL SCIENCES, INC.
STOCK CERTIFICATE QUESTIONNAIRE
Pursuant to Section 3 of the Stock Purchase Agreement, please provide
us with the following information:
1. The exact name that your Shares are
to be registered in (this is the name
that will appear on your stock
certificate(s)). You may use a
nominee name if appropriate: _____________
2. The relationship between the Purchaser
of the Shares and the Registered Holder
listed in response to item 1 above: _____________
3. The mailing address of the Registered
Holder listed in response to item 1 above: _____________
_____________
_____________
_____________
4. The Social Security Number or Tax
Identification Number of the Registered
Holder listed in response to item 1 above: _____________
5. The address, telephone and fax number of
your escrow agent, and the name of a
contact person: _____________
A-1
14
APPENDIX I
(two of two)
T CELL SCIENCES, INC.
REGISTRATION STATEMENT QUESTIONNAIRE
In connection with the preparation of the Registration Statement,
please provide us with the following information:
1. Pursuant to the "Selling Shareholder" section of the
Registration Statement, please state your or your organization's name exactly
as it should appear in the Registration Statement:
2. Please provide the following information, as of _____________
1995:
(1) (2)
Number of Shares Number of shares
which are being if any, which will
included in the be owned after
Registration completion of sale
Statement (if all of Shares included
purchased, put all) in the Registration
Statement
3. Have you or your organization had any position, office or other
material relationship within the past three (3) years with the Company or its
affiliates other than as disclosed in the Prospectus included in the
Registration Statement?
______ Yes ______ No
If yes, please indicate the nature of any such relationship below:
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
A-2
15
APPENDIX II
Attention:
PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE
THE UNDERSIGNED, [an officer of, or other person duly authorized by]
_________________________ [fill in official name of individual or institution]
hereby certifies that he/she [said institution] is the Purchaser of the shares
evidenced by the attached certificate, and as such, sold such shares on
______________ [date] in accordance with registration statement number
______________ [fill in the number of or otherwise identify registration
statement] and the requirement of delivering a current prospectus and current
annual and quarterly reports by the Company has been complied with in
connection with such sale.
Print or Type:
Name of Purchaser
(Individual or
Institution) _____________________________
Name of Individual
representing
Purchaser (if an
Institution): _____________________________
Title of Individual
representing
Purchaser (if an
Institution): ____________________________
Signature by:
Individual Purchaser or
Individual representing
Purchaser: ____________________________
A-3
16
Exhibit 1
WIRE INSTRUCTIONS
Mellon Bank Pittsburgh
ABA: 043000261
Account #: 1011730
Account name: Merrill Lynch
For further credit: T Cell Sciences, Inc.
Sub account #: 64M-07P26
17
EXHIBIT 2
______________, 1995
PURCHASER
Purchaser:
This opinion is furnished to you pursuant to Section ___ of that certain
Stock Purchase Agreement (the "Stock Purchase Agreements") dated as of
____________, 1995 by and between the purchasers (the "Purchaser") named therein
and T Cell Sciences, Inc. (the "Company"), relating to the offering and sale to
the Purchaser, subject to the terms and conditions set forth in the Stock
Purchase Agreement, of an aggregate of up to ______ shares of the Common Stock,
par value $.001 per share, of the Company (the "shares of Common Stock").
We have acted as counsel for the Company in connection with the
offering and sale of the shares of Common Stock. In such capacity, we have
examined the Private Placement Memorandum dated September 20, 1995, as amended
October 27, 1995 (the "Private Placement Memorandum"); signed copies of the
Registration Statement of the Company on Form S-3 (Registration No. 33-______)
and all exhibits thereto (the "Registration Statement"), as filed with the
Securities and Exchange Commission (the "Commission") on ____________, 1995
pursuant to the Securities Act of 1933, as amended (the "Securities Act"); the
Prospectus dated ____________, 1995 (the "Prospectus"); and signed copies of
the Stock Purchase Agreement.
We also have examined originals or copies of the following with respect
to the Company:
(a) the Company's Certificate of Incorporation (the "Certificate of
Incorporation"), certified by the Secretary of State of the State of
Delaware as of a recent date;
(b) the Company's By-Laws, as amended, certified by the Secretary of
the Company as in effect as of the date hereof;
(c) a certificate of the Secretary of State of the State of
Delaware, dated as of a recent date, certifying as to the Company's
legal existence and good standing;
(d) such records of the Company's corporate proceedings as we have
deemed relevant;
(e) a certificate of certain officers of the Company concerning the
outstanding capital stock of the Company and the payment therefor and
other matters; and
18
(f) a certificate of the Company's transfer agent concerning the
outstanding capital stock of the Company.
We have also examined and relied upon such other contracts, documents,
certificates and records as we deemed necessary for the purpose of this
opinion, including those delivered today at the closing of the sale of the
shares of Common Stock. In such examination, we have assumed the genuineness
of all signatures, the capacity, power and authority of all parties other than
the Company to execute and deliver all applicable documents, the authenticity
of all documents submitted to us as originals, the conformity to originals of
all documents submitted to us as certified or attested copies or photocopies
and the authenticity of the originals of such latter documents.
We express no opinion herein as to the accuracy, completeness,
fairness or compliance as to form of the statements contained in the Private
Placement Memorandum or the Stock Purchase Agreement. We are not passing in any
way on any financial statements or data, including the schedules or the notes
thereto, or any related statistics or computations referred to in the Private
Placement Memorandum, the Registration Statement or the Prospectus, and we
have not reviewed the financial records or books of account of the Company.
Whenever our opinion is indicated to be based on "the best of our
knowledge" or contains a similar qualification, it should be understood that
during the course of our representation of the Company we have not undertaken
any independent investigation to determine the existence or absence of facts.
The words "the best of our knowledge" and similar language used in certain of
the opinions expressed below are limited to the knowledge of the lawyers
within our firm who have had primary responsibility for the legal services
performed for the Company.
We are members of the Bar of the Commonwealth of Massachusetts, and we
express no opinion herein with respect to any law other than the laws of the
Commonwealth of Massachusetts and the United States of America and the
corporate laws of the State of Delaware as in effect on the date hereof.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Company is a corporation duly organized, validly existing
and in corporate good standing under the laws of the State of Delaware, with
full corporate power and authority to conduct its business as currently
conducted.
2. As of October 18, 1995, the authorized capital stock of the
Company consisted of (a) 50,000,000 shares of Common Stock, $.001 par value per
share, of which 17,142,890 shares were validly issued and outstanding, fully
paid and non-assessable and with respect to which warrants to purchase 211,816
shares were outstanding; (b) 1,163,102 shares of Class B Preferred Stock,
$2.00 par value per share, of which no shares were issued and outstanding; and
(c) 3,000,000 shares of Class C Preferred Stock, $.01 par value per share, of
which no shares were issued and outstanding. As of October 18, 1995, 8,446
shares of Common Stock were held in the treasury of the Company. The authorized
shares of the Company's Common
19
Stock have been duly authorized; the outstanding shares of its Common Stock
have been duly authorized and validly issued and are fully paid and
nonassessable; the shares of Common Stock to be sold by the Company pursuant to
the Stock Purchase Agreement have been duly authorized and will be validly
issued, fully paid and nonassessable when issued and paid for as contemplated
by the Stock Purchase Agreement; and no preemptive rights arising under the
Company's Certificate of Incorporation, and to the best of our knowledge, no
preemptive rights, registration rights, rights of first refusal or other
similar rights of stockholders arising under any agreement or instrument to
which the Company is a party or by which the Company may be bound, exist with
respect to any of the shares or the issue and sale thereof, other than those
that have been complied with or expressly waived prior to the date hereof by
the holders thereof.
3. All corporate action on the part of the Company, its directors and
shareholders necessary for the authorization, execution, delivery and
performance by the Company of the Stock Purchase Agreements, the consummation
by the Company of the transactions contemplated therein and the authorization
and issuance of the shares of Common Stock has been taken. The Stock Purchase
Agreement and the other documents to be delivered by the Company thereunder
constitute the valid and binding obligations of the Company, enforceable
against it in accordance with their terms, except (i) as such enforceability
may be limited by any principles of public policy with respect to enforcement
of any indemnification provisions contained therein or by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or affecting
generally the enforcement of creditors' rights, and (ii) to the extent that
availability of the remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any proceeding therefor may
be brought.
4. The execution, delivery and performance by the Company of the Stock
Purchase Agreements and the issuance of the shares of Common Stock will not (i)
result in any violation of or be in conflict with or constitute a default (or
an event which, with the lapse of time, or the giving of notice, or both will
constitute a default) under any term of the Company's Certificate of
Incorporation or By-Laws, or (ii) to the best of our knowledge, result in any
violation of or be in conflict with or constitute a default (or an event which,
with the lapse of time or the giving of notice, or both, will constitute a
default) under any term of any existing material mortgage, indenture, contract,
agreement, instrument, law, regulation, judgment, decree or order applicable to
the Company or to which the Company is subject, or (iii) to the best of our
knowledge, result in the creation of any mortgage, pledge, lien, encumbrance or
charge upon any of the properties or assets of the Company.
5. Assuming the accuracy of the representations and warranties made by
the Purchaser in the Stock Purchase Agreement, the Private Placement
Memorandum, the exhibits and appendices thereto (except for the financial
statements and schedules and statistical data, including the schedules and
notes to the financial statements included therein, as to which no statement is
made) comply as to form in all material respects with the requirements of
Regulation D promulgated by the Commission pursuant to the Securities Act, and
no registration under the Securities Act is required in connection with the
issuance and sale of the shares of Common Stock in accordance with the
exemption from registration provided under Regulation D.
20
6. No authorization, approval or consent of any governmental body,
regulatory agency, self-regulatory body or the stockholders of the Company is
required to be obtained by the Company for the issuance and sale of the Shares
as contemplated by the Stock Purchase Agreement; and
7. Except as disclosed in the documents referred to in Section 4.4
of the Stock Purchase Agreement, there is no action, suit, proceeding, inquiry
or investigation before or by any court, public board or body pending or, to
the best of our knowledge, threatened against or affecting the Company or any
of its subsidiaries, wherein an unfavorable decision, ruling or finding would
have a material adverse effect on the properties, business, condition
(financial or other), results of operations or prospects of the Company and its
subsidiaries taken as a whole or the transactions contemplated by the Stock
Purchase Agreement or any of the documents contemplated thereby or which would
adversely affect the validity or enforceability of, or the authority or ability
of the Company to perform its obligations under, the Stock Purchase Agreement
or any of such other documents.
Prior to ____________, 1995, we participated in conferences with
officers and other representatives of the Company at which the contents of the
Private Placement Memorandum, and related matters were discussed. There can be
no assurance that all possible material facts as to the Company were disclosed
in such conferences. We have not undertaken to verify independently the
statements made in the documents and conferences referred to above and
therefore are not passing upon or assuming any responsibility for the accuracy,
completeness or fairness of the statements contained in the Private Placement
Memorandum but we hereby confirm to you, on the basis of the foregoing, that no
facts have come to our attention which lead us to believe that the Private
Placement Memorandum and the exhibits thereto (except for the financial
statements and schedules and statistical data, including the schedules and
notes to the financial statements included therein, as to which no statement is
made), as of its date and as of the date hereof, contained any untrue statement
of a material fact or omitted 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.
This opinion is rendered to you and is solely for your benefit in your capacity
as placement agent for the shares of Common Stock, and may not be relied upon
by you for any other purpose, or furnished to, quoted to or relied upon by any
other person for any purpose without our prior written consent.
Very truly yours,
GOODWIN, PROCTER & HOAR
1
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report
dated February 7, 1995 appearing on page 12 of T Cell Sciences, Inc.'s Form
10-K for the year ended December 31, 1994. We also consent to the references to
us under the heading "Experts" in such Prospectus.
PRICE WATERHOUSE LLP
Boston, Massachusetts
November 6, 1995
1
Exhibit 23.2
The Board of Directors
T Cell Sciences, Inc.
We consent to the use of our reports incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the prospectus.
KPMG PEAT MARWICK LLP
Boston, Massachusetts
November 3, 1995
