SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this "Agreement") is dated as of May
2, 2003, among Genelabs Technologies, Inc., a California corporation (the
"Company"), and the purchasers identified on the signature pages hereto (each,
a "Purchaser" and collectively, the "Purchasers").
WHEREAS, subject to the terms and conditions set forth in this Agreement
and pursuant to Section 4(2) of the Securities Act (as defined below) and Rule
506 promulgated thereunder, the Company desires to issue and sell to the
Purchasers, and the Purchasers, severally and not jointly, desire to purchase
from the Company certain securities of the Company, as more fully described in
this Agreement.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and the Purchasers
agree as follows:
ARTICLE I.
DEFINITIONS
1.1 Definitions. In addition to the terms defined elsewhere in this
Agreement, for all purposes of this Agreement, the following terms shall have
the meanings indicated in this Section 1.1:
"Action" means any action, suit, inquiry, notice of violation,
proceeding (including any partial proceeding such as a deposition) or
investigation pending or threatened in writing against or affecting the
Company, any Subsidiary or any of their respective properties before or by any
court, arbitrator, governmental or administrative agency, regulatory authority
(federal, state, county, local or foreign), stock market, stock exchange or
trading facility.
"Affiliate" means any Person that, directly or indirectly through
one or more intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed under Rule 144.
"Business Day" means any day except Saturday, Sunday and any day
which shall be a federal legal holiday or a day on which banking institutions
in the State of New York are authorized or required by law or other
governmental action to close.
"Closing" means the closing of the purchase and sale of the
Securities pursuant to Section 2.
"Closing Date" means the date of the Closing.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the common stock of the Company, no par value
per share, and any securities into which such common stock may hereafter be
reclassified.
"Common Stock Equivalents" means any securities of the Company or
any Subsidiary which entitle the holder thereof to acquire Common Stock at any
time, including without limitation, any debt, preferred stock, rights,
options, warrants or other instrument that is at any time convertible into or
exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock or other securities that entitle the holder to receive, directly or
indirectly, Common Stock.
"Company Counsel" means Skadden, Arps, Slate, Meagher & Flom, LLP,
special counsel to the Company.
"Effective Date" means the date that the initial Registration
Statement required by the Registration Rights Agreement is first declared
effective by the Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Investment Amount" means, with respect to each Purchaser, the
investment amount indicated below such Purchaser's name on the signature page
of this Agreement.
"Lien" means any lien, charge, encumbrance, security interest, right
of first refusal or other restrictions of any kind.
"Per Unit Purchase Price" equals $1.00.
"Person" means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof)
or other entity of any kind.
"Proceeding" means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
"Purchaser Percentage" means, with respect to a Purchaser, the
percentage equal to the product of (x) a fraction, the numerator of which
shall be the Investment Amount paid by such Purchaser on the Closing Date and
the denominator of which shall be the aggregate Investment Amount paid by all
Purchasers on the Closing Date times (y) 100.
"Registration Statement" means a registration statement meeting the
requirements set forth in the Registration Rights Agreement and covering the
resale by the Purchasers of the Shares and the Warrant Shares.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date of this Agreement, among the Company and the
Purchasers, in the form of Exhibit B hereto.
"Rule 144" means Rule 144 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Securities" means the Shares, the Warrants and the Warrant Shares.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" means the shares of Common Stock issued or issuable to the
Purchasers at the Closing pursuant to this Agreement.
"Subsidiary" means any subsidiary of the Company that is required to
be listed in Section 3.1(a) of the Disclosure Schedules, it being understood
that, for such purposes, Genelabs Asia Pte. Ltd., a Singapore corporation and
a wholly-owned subsidiary of Genelabs Diagnostic, Inc., a Delaware
corporation, and the subsidiaries of Genelabs Asia are not "Subsidiaries."
"Trading Day" means (i) a day on which the Common Stock is traded on
a Trading Market, or (ii) if the Common Stock is not listed on a Trading
Market, a day on which the Common Stock is traded in the over-the-counter
market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is
not quoted on the OTC Bulletin Board, a day on which the Common Stock is
quoted in the over-the-counter market as reported by the National Quotation
Bureau Incorporated (or any similar organization or agency succeeding to its
functions of reporting prices); provided, that in the event that the Common
Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then
Trading Day shall mean a Business Day.
"Trading Market" means whichever of the New York Stock Exchange, the
American Stock Exchange, the Nasdaq National Market or the Nasdaq SmallCap
Market that the Common Stock is listed or quoted for trading on the date in
question.
"Transaction Documents" means this Agreement, the Warrants, the
Registration Rights Agreement, and any other documents or agreements executed
in connection with the transactions contemplated hereunder.
"Warrants" means the Common Stock purchase warrants, each in the
form of Exhibit A, which are issuable to the Purchasers at the Closing.
"Warrant Shares" means the shares of Common Stock issuable upon
exercise of the Warrants.
ARTICLE II.
PURCHASE AND SALE
2.1 Closing. Subject to the terms and conditions set forth in this
Agreement, at the Closing the Company shall issue and sell to each Purchaser,
and each Purchaser shall, severally and not jointly, purchase from the
Company, the Shares and the Warrants representing such Purchaser's Investment
Amount. The Closing shall take place at the offices of Bryan Cave LLP, 1290
Avenue of the Americas, New York, NY 10104 on the date this Agreement is
executed and delivered by the parties or at such other location or time as the
parties may agree.
2.2 Closing Deliveries. (a) At the Closing, the Company shall deliver or
cause to be delivered to each Purchaser the following:
(i) a certificate evidencing a number of Shares equal to such
Purchaser's Investment Amount divided by the Per Unit Purchase Price,
registered in the name of such Purchaser, or as otherwise directed by the
Purchaser;
(ii) a Warrant, registered in the name of such Purchaser,
pursuant to which such Purchaser shall have the right to acquire the number of
shares of Common Stock equal to 30% of the quotient obtained by dividing the
Investment Amount of such Purchaser by the Per Unit Purchase Price;
(iii) the legal opinion of Company Counsel, in agreed form,
addressed to the Purchasers; and
(iv) the Registration Rights Agreement duly executed by the
Company.
(b) At the Closing, each Purchaser shall deliver or cause to be
delivered to the Company the following:
(i) such Purchaser's Investment Amount, in United States
dollars and in immediately available funds, by wire transfer to an account
designated in writing by the Company for such purpose; and
(ii) the Registration Rights Agreement duly executed by such
Purchaser.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Company. Except as set forth on
the Disclosure Schedules attached hereto (the parties hereto agree that the
particular sections of the Disclosure Schedules qualify only representations
and warranties so specifically mentioned therein), the Company hereby makes
the following representations and warranties to each Purchaser:
(a) Subsidiaries. The Company has no direct or indirect
Subsidiaries. The Company owns, directly or indirectly, all of the capital
stock of each Subsidiary free and clear of any and all Liens, and all the
issued and outstanding shares of capital stock of each Subsidiary are validly
issued and are fully paid, non-assessable and free of preemptive and similar
rights. The Company has no liability or obligation in respect of the business
or activities of Genelabs Asia, except for such liabilities and obligations
as, individually or in the aggregate, would have or would reasonably be
expected to result in, a Material Adverse Effect.
(b) Organization and Qualification. Each of the Company and each
Subsidiary is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization (as applicable), with the requisite power and
authority to own and use its properties and assets and to carry on its
business as currently conducted. Neither the Company nor any Subsidiary is in
violation of any of the provisions of its respective certificate or articles
of incorporation, bylaws or other organizational or charter documents that
could have or could reasonably be expected to result in a Material Adverse
Effect (as defined below). Each of the Company and each Subsidiary is duly
qualified to conduct business and is in good standing as a foreign corporation
or other entity in each jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary, except
where the failure to be so qualified or in good standing, as the case may be,
could not, individually or in the aggregate, have or reasonably be expected to
result in (i) an adverse effect on the legality, validity or enforceability of
any Transaction Document, (ii) a material and adverse effect on the results of
operations, assets, prospects, business or condition (financial or otherwise)
of the Company and the Subsidiaries, taken as a whole, or (iii) an adverse
impairment to the Company's ability to perform on a timely basis its
obligations under any Transaction Document (any of (i), (ii) or (iii), a
"Material Adverse Effect").
(c) Authorization; Enforcement. The Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents and otherwise to carry out
its obligations thereunder. The execution and delivery of each of the
Transaction Documents by the Company and the consummation by it of the
transactions contemplated thereby have been duly authorized by all necessary
action on the part of the Company and no further action is required by the
Company in connection therewith. Each Transaction Document has been (or upon
delivery will have been) duly executed by the Company and, when delivered in
accordance with the terms hereof, will constitute the valid and binding
obligation of the Company enforceable against the Company in accordance with
its terms.
(d) No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of
the transactions contemplated thereby do not: (i) conflict with or violate any
provision of the Company's or any Subsidiary's certificate or articles of
incorporation, bylaws or other organizational or charter documents, or (ii)
conflict with, or constitute a default (or an event that with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or by which
any property or asset of the Company or any Subsidiary is bound or affected,
or (iii) result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority
to which the Company or a Subsidiary is subject (including federal and state
securities laws and regulations), or by which any property or asset of the
Company or a Subsidiary is bound or affected; except in the case of each of
clauses (ii) and (iii), such as could not, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse Effect.
(e) Filings, Consents and Approvals. The Company is not required to
obtain any consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal, state, local
or other governmental authority or other Person in connection with the
execution, delivery and performance by the Company of the Transaction
Documents, other than (i) the filing with the Commission of one or more
Registration Statements in accordance with the requirements Registration
Rights Agreement and (ii) the application(s) to the Nasdaq National Market for
the listing of the Shares and Warrant Shares for trading thereon in the time
and manner required thereby.
(f) Issuance of the Securities. The Securities have been duly
authorized and, when issued and paid for in accordance with the Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free
and clear of all Liens. The Company has reserved from its duly authorized
capital stock the maximum number of shares of Common Stock issuable pursuant
to this Agreement and the Warrants in order to issue the full number of
Warrant Shares as are or may become issuable in accordance with the Warrants.
(g) Capitalization. The number of shares and type of all authorized,
issued and outstanding capital stock of the Company, including shares of
Common Stock reserved for issuance under the Company's various option and
incentive plans, is set forth in Section 3.1(g) of the Disclosure Schedules.
No securities of the Company are entitled to preemptive or similar rights, and
no Person has any right of first refusal, preemptive right, right of
participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents. Except as a result of the purchase
and sale of the Securities and there are no outstanding options, warrants,
scrip rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities, rights or obligations convertible into or
exchangeable for, or giving any Person any right to subscribe for or acquire,
any shares of Common Stock, or contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may become bound to
issue additional shares of Common Stock, or securities or rights convertible
or exchangeable into shares of Common Stock. The issue and sale of the
Securities will not, immediately or with the passage of time, obligate the
Company to issue shares of Common Stock or other securities to any Person
(other than the Purchasers) and will not result in a right of any holder of
Company securities to adjust the exercise, conversion, exchange or reset price
under such securities.
(h) SEC Reports; Financial Statements. The Company has filed all
reports required to be filed by it under the Securities Act and the Exchange
Act, including pursuant to Section 13(a) or 15(d) thereof, for the twelve
months preceding the date hereof (or such shorter period as the Company was
required by law to file such reports) (the foregoing materials being
collectively referred to herein as the "SEC Reports" and, together with the
Schedules to this Agreement, the "Disclosure Materials") on a timely basis or
has timely filed an extension of such time of filing and has filed any such
SEC Reports prior to the expiration of any such extension. The Company has
delivered to the Purchasers a copy of all SEC Reports filed within the 10 days
preceding the date hereof. As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Securities Act
and the Exchange Act and the rules and regulations of the Commission
promulgated thereunder, and none of the SEC Reports, when filed, contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the SEC
Reports comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial statements have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved ("GAAP"), except as
may be otherwise specified in such financial statements or the notes thereto,
and fairly present in all material respects the financial position of the
Company and its consolidated Subsidiaries as of and for the dates thereof and
the results of operations and cash flows for the periods then ended.
(i) Press Releases. The press releases disseminated by the Company
during the three (3) years preceding the date of this Agreement taken as a
whole do not contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
(j) Material Changes. Since the date of the latest audited financial
statements included within the SEC Reports, except as specifically disclosed
in the SEC Reports, (i) there has been no event, occurrence or development
that has had or that could reasonably be expected to result in a Material
Adverse Effect, (ii) the Company has not incurred any liabilities (contingent
or otherwise) other than (A) trade payables and accrued expenses incurred in
the ordinary course of business consistent with past practice and (B)
liabilities not required to be reflected in the Company's financial statements
pursuant to GAAP or required to be disclosed in filings made with the
Commission, (iii) the Company has not altered its method of accounting or the
identity of its auditors, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or redeem any shares of
its capital stock, and (v) the Company has not issued any equity securities to
any officer, director or Affiliate, except pursuant to existing Company stock
option plans. The Company does not have pending before the Commission any
request for confidential treatment of information.
(k) Litigation. There is no Action which (i) adversely affects or
challenges the legality, validity or enforceability of any of the Transaction
Documents or the Securities or (ii) could, if there were an unfavorable
decision, individually or in the aggregate, have or reasonably be expected to
result in a Material Adverse Effect. Neither the Company nor any Subsidiary,
nor any director or officer thereof, is or has been the subject of any Action
involving a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty. There has not been,
and to the knowledge of the Company, there is not pending or contemplated, any
investigation by the Commission involving the Company or any current or former
director or officer of the Company. The Commission has not issued any stop
order or other order suspending the effectiveness of any registration
statement filed by the Company or any Subsidiary under the Exchange Act or the
Securities Act.
(l) Labor Relations. No material labor dispute exists or, to the
knowledge of the Company, is imminent with respect to any of the employees of
the Company.
(m) Compliance. Neither the Company nor any Subsidiary (i) is in
default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default
by the Company or any Subsidiary under), nor has the Company or any Subsidiary
received notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other agreement
or instrument to which it is a party or by which it or any of its properties
is bound (whether or not such default or violation has been waived), (ii) is
in violation of any order of any court, arbitrator or governmental body, or
(iii) is or has been in violation of any statute, rule or regulation of any
governmental authority, including without limitation all foreign, federal,
state and local laws relating to taxes, environmental protection, occupational
health and safety, product quality and safety and employment and labor
matters, except in each of (i), (ii) and (iii) as could not, individually or
in the aggregate, have or reasonably be expected to result in a Material
Adverse Effect. The Company is in compliance with the applicable requirements
of the Sarbanes-Oxley Act of 2002, and the applicable rules and regulations
promulgated thereunder, except where such noncompliance could not have or
reasonably be expected to result in a Material Adverse Effect. The Company and
the manufacture, marketing and sales of its products comply with any and all
applicable requirements of the Federal Food, Drug and Cosmetic Act, 21 U.S.C.
ss. 301, et seq., any applicable rules and regulations of the Food and Drug
Administration promulgated thereunder, and any similar laws outside of the
United States to which the Company is subject, except where such noncompliance
could not have or reasonably be expected to result in a Material Adverse
Effect.
(n) Regulatory Permits. The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses as described in the SEC Reports, except where the
failure to possess such permits would not, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse Effect
("Material Permits"), and neither the Company nor any Subsidiary has received
any notice of proceedings relating to the revocation or modification of any
Material Permit.
(o) Title to Assets. The Company and the Subsidiaries have good and
marketable title in fee simple to all real property owned by them that is
material to their respective businesses and good and marketable title in all
personal property owned by them that is material to their respective
businesses, in each case free and clear of all Liens, except for Liens as do
not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the
Company and the Subsidiaries. Any real property and facilities held under
lease by the Company and the Subsidiaries are held by them under valid,
subsisting and enforceable leases of which the Company and the Subsidiaries
are in compliance.
(p) Patents and Trademarks. The Company and the Subsidiaries have,
or have rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, licenses and other
similar rights that are necessary or material for use in connection with their
respective businesses as described in the SEC Reports and which the failure to
so have would reasonably be expected to result in a Material Adverse Effect
(collectively, the "Intellectual Property Rights"). Except as disclosed in the
Company's Annual Report on Form 10K for the fiscal year ended December 31,
2002 (the "Form 10-K"), neither the Company nor any Subsidiary has received a
written notice that the Intellectual Property Rights used by the Company or
any Subsidiary violates or infringes upon the rights of any Person. Except as
set forth in the SEC Reports, to the knowledge of the Company, all such
Intellectual Property Rights are enforceable and there is no existing
infringement by another Person of any of the Intellectual Property Rights.
(q) Insurance. The Company and the Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which
the Company and the Subsidiaries are engaged. The Company has no reason to
believe that it will not be able to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business without a significant
increase in cost.
(r) Transactions With Affiliates and Employees. Except as set forth
in the SEC Reports, none of the officers or directors of the Company and, to
the knowledge of the Company, none of the employees of the Company is a party
to any transaction with the Company or any Subsidiary (other than for services
as employees, officers and directors), including any contract, agreement or
other arrangement providing for the furnishing of services to or by, providing
for rental of real or personal property to or from, or otherwise requiring
payments to or from any officer, director or such employee or, to the
knowledge of the Company, any entity in which any officer, director, or any
such employee has a substantial interest or is an officer, director, trustee
or partner.
(s) Internal Accounting Controls. The Company and the Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with
management's general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(t) Solvency. Based on the financial condition of the Company as of
the Closing Date and assuming the Closing has occurred, (i) the Company's fair
saleable value of its assets exceeds the amount that will be required to be
paid on or in respect of the Company's existing debts and other liabilities
(including known contingent liabilities) as they mature; (ii) the Company's
assets do not constitute unreasonably small capital to carry on its business
for the current fiscal year as now conducted and as proposed to be conducted
as disclosed in the Form 10-K including its capital needs taking into account
the particular capital requirements of the business conducted by the Company,
and projected capital requirements and capital availability thereof; and (iii)
the current cash flow of the Company, together with the proceeds the Company
would receive, were it to liquidate all of its assets, after taking into
account all anticipated uses of the cash, would be sufficient to pay all
amounts on or in respect of its debt when such amounts are required to be
paid. The Company does not intend to incur debts beyond its ability to pay
such debts as they mature (taking into account the timing and amounts of cash
to be payable on or in respect of its debt).
(u) Certain Fees. Except as described in Section 3.1(u) of the
Disclosure Schedules, no brokerage or finder's fees or commissions are or will
be payable by the Company to any broker, financial advisor or consultant,
finder, placement agent, investment banker, bank or other Person with respect
to the transactions contemplated by this Agreement. The Purchasers shall have
no obligation with respect to any fees or with respect to any claims (other
than such fees or commissions owed by a Purchaser pursuant to written
agreements executed by such Purchaser which fees or commissions shall be the
sole responsibility of such Purchaser) made by or on behalf of other Persons
for fees of a type contemplated in this Section that may be due in connection
with the transactions contemplated by this Agreement.
(v) Certain Registration Matters. Assuming the accuracy of the
Purchasers' representations and warranties set forth in Section 3.2(b)-(e), no
registration under the Securities Act is required for the offer and sale of
the Shares and Warrant Shares by the Company to the Purchasers under the
Transaction Documents. The Company is eligible to register the resale of its
Common Stock for resale by the Purchasers under Form S-3 promulgated under the
Securities Act. The Company has not granted or agreed to grant to any Person
any rights (including "piggy-back" registration rights) to have any securities
of the Company registered with the Commission or any other governmental
authority that have not been satisfied.
(w) Listing and Maintenance Requirements. The Company has not, in
the two years preceding the date hereof, received notice (written or oral)
from the Nasdaq National Market to the effect that the Company is not in
compliance with the listing or maintenance requirements thereof. The Company
is, and has no reason to believe that it will not in the foreseeable future
continue to be, in compliance with the listing and maintenance requirements
for continued trading of the Common Stock on the Nasdaq National Market. The
issuance and sale of the Securities hereunder does not contravene the rules
and regulations of the Nasdaq National Market and no approval of the
shareholders of the Company is required for the Company to issue and deliver
to the Purchasers the maximum number of Securities contemplated by Transaction
Documents.
(x) Investment Company. The Company is not, and is not an Affiliate
of, an "investment company" within the meaning of the Investment Company Act
of 1940, as amended.
(y) Application of Takeover Protections. The Company has taken all
necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution
under a rights agreement) or other similar anti-takeover provision under the
Company's Certificate of Incorporation (or similar charter documents) or the
laws of its state of incorporation that is or could become applicable to the
Purchasers as a result of the Purchasers and the Company fulfilling their
obligations or exercising their rights under the Transaction Documents,
including without limitation the Company's issuance of the Securities and the
Purchasers' ownership of the Securities.
(z) No Additional Agreements. The Company that does not have any
agreement or understanding with any Purchaser with respect to the transactions
contemplated by the Transaction Documents other than as specified in this
Agreement.
(aa) Disclosure. The Company confirms that neither it nor any Person
acting on its behalf has provided any of the Purchasers or their agents or
counsel with any information that the Company believes constitutes material,
non-public information. The Company understands and confirms that the
Purchasers will rely on the foregoing representations and covenants in
effecting transactions in securities of the Company. All disclosure provided
to the Purchasers regarding the Company, its business and the transactions
contemplated hereby, furnished by or on behalf of the Company (including the
Company's representations and warranties set forth in this Agreement) are true
and correct and do not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading.
3.2 Representations and Warranties of the Purchasers. Each Purchaser
hereby, for itself and for no other Purchaser, represents and warrants to the
Company as follows:
(a) Organization; Authority. Such Purchaser is an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with the requisite corporate or partnership
power and authority to enter into and to consummate the transactions
contemplated by the applicable Transaction Documents and otherwise to carry
out its obligations thereunder. The execution, delivery and performance by
such Purchaser of the transactions contemplated by this Agreement has been
duly authorized by all necessary corporate or, if such Purchaser is not a
corporation, such partnership, limited liability company or other applicable
like action, on the part of such Purchaser. Each of this Agreement and the
Registration Rights Agreement has been duly executed by such Purchaser, and
when delivered by such Purchaser in accordance with terms hereof, will
constitute the valid and legally binding obligation of such Purchaser,
enforceable against it in accordance with its terms.
(b) Investment Intent. Such Purchaser is acquiring the Securities as
principal for its own account for investment purposes only and not with a view
to or for distributing or reselling such Securities or any part thereof,
without prejudice, however, to such Purchaser's right at all times to sell or
otherwise dispose of all or any part of such Securities in compliance with
applicable federal and state securities laws. Subject to the immediately
preceding sentence, nothing contained herein shall be deemed a representation
or warranty by such Purchaser to hold the Securities for any period of time.
Such Purchaser is acquiring the Securities hereunder in the ordinary course of
its business. Such Purchaser does not have any agreement or understanding,
directly or indirectly, with any Person to distribute any of the Securities.
(c) Purchaser Status. At the time such Purchaser was offered the
Securities, it was, and at the date hereof it is, and on each date on which it
exercises the Warrants it will be, an "accredited investor" as defined in Rule
501(a) under the Securities Act. Such Purchaser is not a registered
broker-dealer under Section 15 of the Exchange Act.
(d) General Solicitation. Such Purchaser is not purchasing the
Securities as a result of any advertisement, article, notice or other
communication regarding the Securities published in any newspaper, magazine or
similar media or broadcast over television or radio or presented at any
seminar or any other general solicitation or general advertisement.
(e) Access to Information. Such Purchaser acknowledges that it has
reviewed the Disclosure Materials and has been afforded (i) the opportunity to
ask such questions as it has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of the
offering of the Shares and the merits and risks of investing in the
Securities; (ii) access to information about the Company and the Subsidiaries
and their respective financial condition, results of operations, business,
properties, management and prospects sufficient to enable it to evaluate its
investment; and (iii) the opportunity to obtain such additional information
that the Company possesses or can acquire without unreasonable effort or
expense that is necessary to make an informed investment decision with respect
to the investment. Neither such inquiries nor any other investigation
conducted by or on behalf of such Purchaser or its representatives or counsel
shall modify, amend or affect such Purchaser's right to rely on the truth,
accuracy and completeness of the Disclosure Materials and the Company's
representations and warranties contained in the Transaction Documents.
(f) The Company acknowledges and agrees that each Purchaser does not
make or has not made any representations or warranties with respect to the
transactions contemplated hereby other than those specifically set forth in
this Section 3.2.
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
4.1 (a) Each Purchaser agrees that it will not effect any
disposition of the Securities that would constitute a sale within the meaning
of the Securities Act or pursuant to any applicable state securities or blue
sky laws, except sales effected pursuant to the Registration Statement or
pursuant to Rule 144 (in which case the Purchaser will provide the Company
with reasonable evidence of such Purchaser's compliance therewith) or pursuant
to a written opinion of legal counsel reasonably satisfactory to the Company
and addressed to the Company to the effect that registration is not required
in connection with the proposed transfer. None of the Securities shall be
transferable except upon the conditions specified in this paragraph, which are
intended to ensure compliance with the provisions of the Securities Act. Each
Purchaser will cause any transferee of the Securities held by such Purchaser
to agree to take and hold such Securities subject to the provisions and upon
the conditions specified in this paragraph if and to the extent such
Securities continue to be restricted securities in the hands of the
transferee.
(b) Such Purchaser understands and agrees that each certificate or
other document evidencing any of the Securities shall be endorsed with the
legend in the form set forth below for so long as is required by Section
4.1(c), and such Purchaser covenants that such Purchaser will not transfer the
Securities represented by such certificate without complying with the
restrictions on transfer described in the legend endorsed on such certificate,
and understands that the Company will refuse to register a transfer of any
Securities unless the conditions specified in the following legend are
satisfied:
[NEITHER] THESE SECURITIES [NOR THE SECURITIES ISSUABLE UPON
EXERCISE OF THESE SECURITIES HAVE BEEN] HAVE NOT BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT
TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS
AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY. THESE SECURITIES AND THE
SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WHERE
THE PLEDGEE IS AN ACCREDITED INVESTOR.
The Company acknowledges and agrees that a Purchaser may from time
to time pledge pursuant to a bona fide margin account where the pledgee is an
accredited investor and, if required under the terms of such account, such
Purchaser may transfer possession of the pledged or secured Securities to the
pledgees or secured parties. Such pledge or transfer would not be subject to
approval or consent of the Company and no legal opinion of legal counsel to
the pledgee, secured party or pledgor shall be required in connection with the
pledge, but the legend shall remain on the pledged Securities and such legal
opinion may be required in connection with a subsequent transfer following
default by the Purchaser transferee of the pledge. Further, no notice shall be
required of such pledge. At the appropriate Purchaser's expense, the Company
will execute and deliver such reasonable documentation as a pledgee or secured
party of Securities may reasonably request in connection with a pledge or
transfer of the Securities including the preparation and filing of any
required prospectus supplement under Rule 424(b)(3) of the Securities Act or
other applicable provision of the Securities Act to appropriately amend the
list of Selling Stockholders thereunder.
(c) Certificates evidencing the Shares and Warrant Shares shall not
contain any legend (including the legend set forth in Section 4.1(b)): (i)
following the sale of such Shares or Warrant Shares under the Registration
Statement, or (ii) following any sale of such Shares or Warrant Shares
pursuant to Rule 144, or (iii) if such Shares or Warrant Shares are eligible
for sale under Rule 144(k), or (iv) if such legend is not required under
applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the Staff of the Commission). The
Company may not make any notation on its records or give instructions to any
transfer agent of the Company that enlarge the restrictions on transfer set
forth in this Section. Upon receipt of a notice of sale under 4.1(c)(i), (ii)
or (iii), the Company shall take such action, including without limitation,
rendering required legal opinions to the transfer agent for the Common Stock,
as may be required in order to cause the Shares or Warrant Shares (as the case
may be) subject to such notice to be issued and delivered free of all
restrictive and other legends to or as directed in the notice of such sale (or
if no such direction is therein provided, to the Purchaser tendering the same)
by the third Trading Day following the receipt of such notice.
4.2 Furnishing of Information. As long as any Purchaser owns the
Securities and the Company is subject to the filing requirements of the
Exchange Act, the Company covenants to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to the
Exchange Act. Upon the request of any such Person, the Company shall deliver
to such Person a written certification of a duly authorized officer as to
whether it has complied with the preceding sentence. As long as any Purchaser
owns Securities, if the Company is not required to file reports pursuant to
such laws, it will prepare and furnish to the Purchasers and make publicly
available in accordance with Rule 144(c) such information as is required for
the Purchasers to sell the Shares and Warrant Shares under Rule 144. The
Company further covenants that it will take such further action as any holder
of Securities may reasonably request, all to the extent required from time to
time to enable such Person to sell such Shares and Warrant Shares without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144.
4.3 Integration. The Company shall not, and shall use its best efforts to
ensure that no Affiliate of the Company shall, sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the offer or
sale of the Securities in a manner that would require the registration under
the Securities Act of the sale of the Securities to the Purchasers, or that
would be integrated with the offer or sale of the Securities for purposes of
the rules and regulations of any Trading Market.
4.4 Subsequent Registrations. Other than the Registration Statement,
prior to the Effective Date, the Company may not file any registration
statement (other than on Form S-8 or pursuant to the Registration Rights
Agreement) with the Commission with respect to any securities of the Company.
4.5 Securities Laws Disclosure; Publicity. Within one Business Day
following the Closing Date, the Company shall issue a press release reasonably
acceptable to the Purchasers disclosing the material terms of the transactions
contemplated hereby and file a Current Report on Form 8-K disclosing the
transactions contemplated hereby. In addition, the Company will make such
other filings and notices in the manner and time required by the Commission
and the Trading Market on which the Common Stock is listed. Notwithstanding
the foregoing, the Company shall not publicly disclose the name of any
Purchaser, or include the name of any Purchaser in any filing with the
Commission or any regulatory agency or Trading Market, without the prior
written consent of such Purchaser, except to the extent such disclosure is
required by law or Trading Market regulations, in which case the Company shall
provide the Purchasers with prior notice of such disclosure.
4.6 Indemnification of Purchasers. The Company will indemnify and hold
the Purchasers and their directors, officers, shareholders, partners,
employees and agents (each, a "Purchaser Party") harmless from any and all
losses, liabilities, obligations, claims, contingencies, damages, costs and
expenses, including all judgments, amounts paid in settlements, court costs
and reasonable attorneys' fees and costs of investigation (collectively,
"Losses") that any such Purchaser Party may suffer or incur as a result of or
relating to any misrepresentation, breach or inaccuracy of any representation,
warranty, covenant or agreement made by the Company in any Transaction
Document. In addition to the indemnity contained herein, the Company will
reimburse each Purchaser Party for its reasonable legal and other expenses
(including the cost of any investigation, preparation and travel in connection
therewith) incurred in connection therewith, as such expenses are incurred.
4.7 Non-Public Information. The Company covenants and agrees that neither
it nor any other Person acting on its behalf will provide any Purchaser or its
agents or counsel with any information that the Company believes constitutes
material non-public information, unless prior thereto such Purchaser shall
have executed a written agreement regarding the confidentiality and use of
such information. The Company understands and confirms that each Purchaser
shall be relying on the foregoing representations in effecting transactions in
securities of the Company.
4.8 Use of Proceeds. The Company shall use the net proceeds from the sale
of the Securities hereunder for working capital purposes and not for the
satisfaction of any portion of the Company's debt (other than payment of trade
payables and accrued expenses in the ordinary course of the Company's business
and prior practices), to redeem any Company equity or equity-equivalent
securities, to pay any obligations or business expenses of Genelabs Asia Pte.
Ltd. or any of its subsidiaries, or to settle any outstanding Action.
4.9 Nasdaq. The Company shall use commercially reasonable efforts to
maintain the listing of the Shares, Warrant Shares and the Common Stock on the
Nasdaq National Market.
4.10 Limitation on Issuance of Future Priced Securities. During the six
months following the Closing Date, the Company shall not issue any "Future
Priced Securities" as such term is described by NASD IM-4350-1, provided, that
the Company may issue warrants with customary price protection or
anti-dilution terms (which shall not include any type of exercise price
resetting or ratchets to match or mirror or inconsequential issuances).
4.11 Lock-Up. The Company shall take such actions as is required to
ensure that none of its executive officers shall sell more than five percent
(5%) of the total number of shares of Common Stock that such executive officer
beneficially owns as of the Closing Date during the period that begins on the
Closing Date and continues for six months following the date that the
Registration Statement (as defined in the Registration Rights Agreement) is
declared effective by the Commission. The foregoing limitation shall expire
with respect to any officer, upon the termination of employment with the
Company.
4.12 Eligibility to Use Form S-3. The Company shall use commercially
reasonable efforts to continue to meet the "registrant eligibility"
requirements for a secondary offering as set forth in the general instructions
in Form S-3 to enable the registration of the Registrable Securities (as
defined in the Registration Rights Agreement).
ARTICLE V.
MISCELLANEOUS
5.1 Fees and Expenses. At the Closing, the Company shall pay to Bryan
Cave LLP $30,000 in connection with the preparation of the Transaction
Documents, it being understood that Bryan Cave LLP has not rendered any legal
advice to the Company in connection with the transactions contemplated hereby
and that the Company has relied for such matters on the advice of its own
counsel. In addition, the Company will reimburse each Purchaser for up to
$5,000 of its actual and documented legal expenses incurred in connection with
its review and negotiation of the Transaction Documents. Except as specified
in the immediately preceding sentences and as contemplated in the Registration
Rights Agreement, each party shall pay the fees and expenses of its advisers,
counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement. The Company shall pay all stamp
and other taxes and duties levied in connection with the initial sale of the
Securities to the Purchasers.
5.2 Entire Agreement. The Transaction Documents, together with the
Exhibits and Schedules thereto, contain the entire understanding of the
parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, oral or written, with respect to such matters,
which the parties acknowledge have been merged into such documents, exhibits
and schedules.
5.3 Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of (a) the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
number specified in this Section prior to 6:30 p.m. (New York City time) on a
Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number
specified in this Section on a day that is not a Trading Day or later than
6:30 p.m. (New York City time) on any Trading Day, (c) the Trading Day
following the date of mailing, if sent by U.S. nationally recognized overnight
courier service, or (d) upon actual receipt by the party to whom such notice
is required to be given. The address for such notices and communications shall
be as follows:
If to the Company: Genelabs Technologies, Inc.
505 Penobscot Drive
Redwood City, California 94063
Attn: Chief Financial Officer
Facsimile No.: (650) 368-0709
With a copy to: Skadden, Arps, Slate, Meagher & Flom LLP
525 University Avenue
Palo Alto, California 94301
Attn: Gregory C. Smith, Esq.
Facsimile No.: (650) 470-4570
If to a Purchaser: To the address set forth under such
Purchaser's name on the signature
pages hereof;
or such other address as may be designated in writing hereafter, in the same
manner, by such Person.
5.4 Amendments; Waivers. Any term of this Agreement may be amended and
the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of the Company and the Purchasers holding at least
80% in interest of the Shares and Warrant Shares issued and issuable under
this Agreement, provided, that no such amendment shall be effective to the
extent any such amendment affects any rights specifically granted to a
particular Purchaser and not to the other Purchasers, provided, however, that
any amendment that directly affects the economic terms of the transactions
contemplated by this Agreement shall require the unanimous consent of the
Purchasers holding an interest in the Shares and the Warrant Shares. No waiver
of any default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver
of any subsequent default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of either party to
exercise any right hereunder in any manner impair the exercise of any such
right.
5.5 Construction. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.
This Agreement shall be construed as if drafted jointly by the parties, and no
presumption or burden of proof shall arise favoring or disfavoring any party
by virtue of the authorship of any provisions of this Agreement or any of the
Transaction Documents.
5.6 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted
assigns. The Company may not assign this Agreement or any rights or
obligations hereunder without the prior written consent of the Purchasers. Any
Purchaser may assign any or all of its rights under this Agreement to any
Person to whom such Purchaser assigns or transfers any Securities, provided
such transferee agrees in writing to be bound, with respect to the transferred
Securities, by the provisions hereof that apply to the "Purchasers."
5.7 No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be
enforced by, any other Person, except as otherwise set forth in Section 4.6.
5.8 Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof. Each
party agrees that all Proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other
Transaction Documents (whether brought against a party hereto or its
respective Affiliates, employees or agents) shall be commenced exclusively in
the state and federal courts sitting in the City of New York, Borough of
Manhattan (the "New York Courts"). Each party hereto hereby irrevocably
submits to the exclusive jurisdiction of the New York Courts for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of the any of the Transaction Documents), and hereby
irrevocably waives, and agrees not to assert in any Proceeding, any claim that
it is not personally subject to the jurisdiction of any such court, or that
such Proceeding has been commenced in an improper or inconvenient forum. Each
party hereto hereby irrevocably waives personal service of process and
consents to process being served in any such Proceeding by mailing a copy
thereof via registered or certified mail or overnight delivery (with evidence
of delivery) to such party at the address in effect for notices to it under
this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner
permitted by law. Each party hereto hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any
legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby. If either party shall commence a Proceeding
to enforce any provisions of a Transaction Document, then the prevailing party
in such Proceeding shall be reimbursed by the other party for its attorney's
fees and other costs and expenses incurred with the investigation, preparation
and prosecution of such Proceeding.
5.9 Survival. The representations, warranties, agreements and covenants
contained herein shall survive the Closing and the delivery of the Shares and
Warrant Shares, as applicable.
5.10 Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed
by each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature
is executed) with the same force and effect as if such facsimile signature
page were an original thereof.
5.11 Severability. If any provision of this Agreement is held to be
invalid or unenforceable in any respect, the validity and enforceability of
the remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a
valid and enforceable provision that is a reasonable substitute therefor, and
upon so agreeing, shall incorporate such substitute provision in this
Agreement.
5.12 Rescission and Withdrawal Right. Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions of) the
Transaction Documents, whenever any Purchaser exercises a right, election,
demand or option under a Transaction Document and the Company does not timely
perform its related obligations within the periods therein provided, then such
Purchaser may rescind or withdraw, in its sole discretion from time to time
upon written notice to the Company, any relevant notice, demand or election in
whole or in part without prejudice to its future actions and rights.
5.13 Replacement of Securities. If any certificate or instrument
evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon
cancellation thereof, or in lieu of and substitution therefor, a new
certificate or instrument, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction and customary
and reasonable indemnity, if requested. The applicants for a new certificate
or instrument under such circumstances shall also pay any reasonable
third-party costs associated with the issuance of such replacement Securities.
If a replacement certificate or instrument evidencing any Securities is
requested due to a mutilation thereof, the Company may require delivery of
such mutilated certificate or instrument as a condition precedent to any
issuance of a replacement.
5.14 Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Purchasers and the Company will be entitled to specific performance under the
Transaction Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agrees to waive in
any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.
5.15 Payment Set Aside. To the extent that the Company makes a payment or
payments to any Purchaser pursuant to any Transaction Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or
the proceeds of such enforcement or exercise or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set
aside, recovered from, disgorged by or are required to be refunded, repaid or
otherwise restored to the Company, a trustee, receiver or any other person
under any law (including, without limitation, any bankruptcy law, state or
federal law, common law or equitable cause of action), then to the extent of
any such restoration the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.
5.16 Independent Nature of Purchasers' Obligations and Rights. The
obligations of each Purchaser under any Transaction Document are several and
not joint with the obligations of any other Purchaser, and no Purchaser shall
be responsible in any way for the performance of the obligations of any other
Purchaser under any Transaction Document. Nothing contained herein or in any
Transaction Document, and no action taken by any Purchaser pursuant thereto,
shall be deemed to constitute the Purchasers as a partnership, an association,
a joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Document. Each
Purchaser shall be entitled to independently protect and enforce its rights,
including without limitation the rights arising out of this Agreement or out
of the other Transaction Documents, and it shall not be necessary for any
other Purchaser to be joined as an additional party in any proceeding for such
purpose.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
GENELABS TECHNOLOGIES, INC.
/s/ Irene A. Chow, Ph.D.
_________________________________________
Name: Irene A. Chow, Ph.D.
Title: Chairman and Chief Executive Officer
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES FOR PURCHASERS FOLLOW]
IN WITNESS WHEREOF, the parties have executed this Securities
Purchase Agreement as of the date first written above.
[ ]
By: /s/
_____________________________________
Name:
Title:
Investment Amount: $[ ]
Address for Notice:
[ ]
Facsimile No.: [ ]
Attn: [ ]
EXHIBIT A
NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WHERE
THE PLEDGEE IS AN ACCREDITED INVESTOR.
GENELABS TECHNOLOGIES, INC.
WARRANT
Warrant No. [ ] Date of Original Issuance: May 2, 2003
Genelabs Technologies, Inc., a California corporation (the
"COMPANY"), hereby certifies that, for value received, [ ] or its registered
assigns (the "HOLDER"), is entitled to purchase from the Company up to a total
of [ ]1 shares of common stock, no par value (the "COMMON STOCK"), of the
Company (each such share, a "WARRANT SHARE" and all such shares, the "WARRANT
SHARES") at an exercise price equal to $1.50 per share (as adjusted from time
to time as provided in Section 9, the "EXERCISE PRICE"), at any time and from
time to time from and after the date hereof and through and including May 2,
2008 (the "EXPIRATION DATE"), and subject to the following terms and
conditions:
1. Definitions. In addition to the terms defined elsewhere in this
Warrant, capitalized terms that are not otherwise defined herein shall have
the meanings given to such terms in the Securities Purchase Agreement of even
date herewith to which the Company and the original Holder are parties (the
"PURCHASE AGREEMENT").
2. Registration of Warrant. The Company shall register this Warrant,
upon records to be maintained by the Company for that purpose (the "WARRANT
REGISTER"), in the name of the record Holder hereof from time to time. The
Company may deem and treat the registered Holder of this Warrant as the
absolute owner hereof for the purpose of any exercise hereof or any
distribution to the Holder, and for all other purposes, absent actual notice
to the contrary.
3. Registration of Transfers. The Company shall register the transfer
of any portion of this Warrant in the Warrant Register, upon surrender of this
Warrant, with the Form of Assignment attached hereto duly completed and
signed, to the Company at its address specified herein. Upon any such
registration or transfer, a new Warrant to purchase Common Stock, in
substantially the form of this Warrant (any such new Warrant, a "NEW
WARRANT"), evidencing the portion of this Warrant so transferred shall be
issued to the transferee and a New Warrant evidencing the remaining portion of
this Warrant not so transferred, if any, shall be issued to the transferring
Holder. The acceptance of the New Warrant by the transferee thereof shall be
deemed the acceptance by such transferee of all of the rights and obligations
of a holder of a Warrant.
4. Exercise and Duration of Warrants. This Warrant shall be
exercisable by the registered Holder at any time and from time to time on or
after the date hereof to and including the Expiration Date. At 6:30 p.m., New
York City time on the Expiration Date, the portion of this Warrant not
exercised prior thereto shall be and become void and of no value, provided,
that if the closing sales price of the Common Stock on the Expiration Date is
greater than 102% of the Exercise Price on the Expiration Date, then this
Warrant shall be deemed to have been exercised in full (to the extent not
previously exercised) on a "cashless exercise" basis at 6:30 P.M. New York
City time on the Expiration Date. The Company may not call or redeem all or
any portion of this Warrant without the prior written consent of the Holder.
5. Delivery of Warrant Shares.
(a) To effect conversions hereunder, the Holder shall not be
required to physically surrender this Warrant unless the aggregate Warrant
Shares represented by this Warrant is being exercised. Upon delivery of the
Exercise Notice to the Company (with the attached Warrant Shares Exercise Log)
at its address for notice set forth herein and upon payment of the Exercise
Price multiplied by the number of Warrant Shares that the Holder intends to
purchase hereunder, the Company shall promptly (but in no event later than
three Trading Days after the Date of Exercise (as defined herein)) issue and
deliver to the Holder, a certificate for the Warrant Shares issuable upon such
exercise, which, unless otherwise required by the Purchase Agreement, shall be
free of restrictive legends. The Company shall, upon request of the Holder and
subsequent to the date on which a registration statement covering the resale
of the Warrant Shares has been declared effective by the Securities and
Exchange Commission, use its best efforts to deliver Warrant Shares hereunder
electronically through the Depository Trust Corporation or another established
clearing corporation performing similar functions, if available, provided,
that, the Company may, but will not be required to change its transfer agent
if its current transfer agent cannot deliver Warrant Shares electronically
through the Depository Trust Corporation. A "DATE OF EXERCISE" means the date
on which the Holder shall have delivered to Company: (i) the Exercise Notice
(with the Warrant Exercise Log attached to it), appropriately completed and
duly signed and (ii) if such Holder is not utilizing the cashless exercise
provisions set forth in this Warrant, payment of the Exercise Price for the
number of Warrant Shares so indicated by the Holder to be purchased.
(b) If by the third Trading Day after a Date of Exercise the
Company fails to deliver the required number of Warrant Shares in the manner
required pursuant to Section 5(a), then the Holder will have the right to
rescind such exercise.
(c) If by the third Trading Day after a Date of Exercise the
Company fails to deliver the required number of Warrant Shares in the manner
required pursuant to Section 5(a), and if after such third Trading Day and
prior to the receipt of such Warrant Shares, the Holder purchases (in an open
market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Warrant Shares which the Holder
anticipated receiving upon such exercise (a "Buy-In"), then the Company shall
(1) pay in cash to the Holder the amount by which (x) the Holder's total
purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased exceeds (y) the amount obtained by multiplying (A)
the number of Warrant Shares that the Company was required to deliver to the
Holder in connection with the exercise at issue by (B) the closing bid price
of the Common Stock at the time of the obligation giving rise to such purchase
obligation and (2) at the option of the Holder, either reinstate the portion
of the Warrant and equivalent number of Warrant Shares for which such exercise
was not honored or deliver to the Holder the number of shares of Common Stock
that would have been issued had the Company timely complied with its exercise
and delivery obligations hereunder. The Holder shall provide the Company
written notice indicating the amounts payable to the Holder in respect of the
Buy-In.
(d) The Company's obligations to issue and deliver Warrant
Shares in accordance with the terms hereof are absolute and unconditional,
irrespective of any action or inaction by the Holder to enforce the same, any
waiver or consent with respect to any provision hereof, the recovery of any
judgment against any Person or any action to enforce the same, or any setoff,
counterclaim, recoupment, limitation or termination, or any breach or alleged
breach by the Holder or any other Person of any obligation to the Company or
any violation or alleged violation of law by the Holder or any other Person,
and irrespective of any other circumstance which might otherwise limit such
obligation of the Company to the Holder in connection with the issuance of
Warrant Shares. Nothing herein shall limit a Holder's right to pursue any
other remedies available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief
with respect to the Company's failure to timely deliver certificates
representing shares of Common Stock upon exercise of the Warrant as required
pursuant to the terms hereof.
6. Charges, Taxes and Expenses. Issuance and delivery of certificates
for shares of Common Stock upon exercise of this Warrant shall be made without
charge to the Holder for any issue or transfer tax, withholding tax, transfer
agent fee or other incidental tax or expense in respect of the issuance of
such certificates, all of which taxes and expenses shall be paid by the
Company; provided, however, that the Company shall not be required to pay any
tax which may be payable in respect of any transfer involved in the
registration of any certificates for Warrant Shares or Warrants in a name
other than that of the Holder. The Holder shall be responsible for all other
tax liability that may arise as a result of holding or transferring this
Warrant or receiving Warrant Shares upon exercise hereof.
7. Replacement of Warrant. If this Warrant is mutilated, lost, stolen
or destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof, or in lieu of and substitution
for this Warrant, a New Warrant, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction and customary
and reasonable indemnity (which shall not include a surety bond), if
requested. Applicants for a New Warrant under such circumstances shall also
comply with such other reasonable regulations and procedures and pay such
other reasonable third-party costs as the Company may prescribe. If a New
Warrant is requested as a result of a mutilation of this Warrant, then the
Holder shall deliver such mutilated Warrant to the Company as a condition
precedent to the Company's obligation to issue the New Warrant.
8. Reservation of Warrant Shares. The Company covenants that it will
at all times reserve and keep available out of the aggregate of its authorized
but unissued and otherwise unreserved Common Stock, solely for the purpose of
enabling it to issue Warrant Shares upon exercise of this Warrant as herein
provided, the number of Warrant Shares which are then issuable and deliverable
upon the exercise of this entire Warrant, free from preemptive rights or any
other contingent purchase rights of persons other than the Holder (taking into
account the adjustments and restrictions of Section 9). The Company covenants
that all Warrant Shares so issuable and deliverable shall, upon issuance and
the payment of the applicable Exercise Price in accordance with the terms
hereof, be duly and validly authorized, issued and fully paid and
nonassessable.
9. Certain Adjustments. The Exercise Price and number of Warrant
Shares issuable upon exercise of this Warrant are subject to adjustment from
time to time as set forth in this Section 9.
(a) Stock Dividends and Splits. If the Company, at any time
while this Warrant is outstanding, (i) pays a stock dividend on its Common
Stock or otherwise makes a distribution on any class of capital stock that is
payable in shares of Common Stock, (ii) subdivides outstanding shares of
Common Stock into a larger number of shares, or (iii) combines outstanding
shares of Common Stock into a smaller number of shares, then in each such case
the Exercise Price shall be multiplied by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding immediately before
such event and of which the denominator shall be the number of shares of
Common Stock outstanding immediately after such event. Any adjustment made
pursuant to clause (i) of this paragraph shall become effective immediately
after the record date for the determination of stockholders entitled to
receive such dividend or distribution, and any adjustment pursuant to clause
(ii) or (iii) of this paragraph shall become effective immediately after the
effective date of such subdivision or combination. If any event requiring an
adjustment under this paragraph occurs during the period that an Exercise
Price is calculated hereunder, then the calculation of such Exercise Price
shall be adjusted appropriately to reflect such event.
(b) Pro Rata Distributions. If the Company, at any time
while this Warrant is outstanding, distributes to all holders of Common Stock
(i) evidences of its indebtedness, (ii) any security (other than a
distribution of Common Stock covered by the preceding paragraph), (iii) rights
or warrants to subscribe for or purchase any security, or (iv) any other asset
(in each case, "DISTRIBUTED PROPERTY"), then, at the request of any Holder
delivered before the 90th day after the record date fixed for determination of
stockholders entitled to receive such distribution, the Company will deliver
to such Holder, within five Trading Days after such request (or, if later, on
the effective date of such distribution), the Distributed Property that such
Holder would have been entitled to receive in respect of the Warrant Shares
for which such Holder's Warrant could have been exercised immediately prior to
such record date. If such Distributed Property is not delivered to a Holder
pursuant to the preceding sentence, then upon any exercise of the Warrant that
occurs after such record date, such Holder shall be entitled to receive, in
addition to the Warrant Shares otherwise issuable upon such conversion, the
Distributed Property that such Holder would have been entitled to receive in
respect of such number of Warrant Shares had the Holder been the record holder
of such Warrant Shares immediately prior to such record date.
(c) Fundamental Transactions. If, at any time while this
Warrant is outstanding, (1) the Company effects any merger or consolidation of
the Company with or into another Person, (2) the Company effects any sale of
all or substantially all of its assets in one or a series of related
transactions, (3) any tender offer or exchange offer (whether by the Company
or another Person) is completed pursuant to which holders of Common Stock are
permitted to tender or exchange their shares for other securities, cash or
property, or (4) the Company effects any reclassification of the Common Stock
or any compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash or property
(in any such case, a "FUNDAMENTAL TRANSACTION"), then the Holder shall have
the right thereafter to receive, upon exercise of this Warrant, the same
amount and kind of securities, cash or property as it would have been entitled
to receive upon the occurrence of such Fundamental Transaction if it had been,
immediately prior to such Fundamental Transaction, the holder of the number of
Warrant Shares then issuable upon exercise in full of this Warrant (the
"ALTERNATE CONSIDERATION"). For purposes of any such exercise, the
determination of the Exercise Price shall be appropriately adjusted to apply
to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental
Transaction, and the Company shall apportion the Exercise Price among the
Alternate Consideration in a reasonable manner reflecting the relative value
of any different components of the Alternate Consideration. If holders of
Common Stock are given any choice as to the securities, cash or property to be
received in a Fundamental Transaction, then the Holder shall be given the same
choice as to the Alternate Consideration it receives upon any exercise of this
Warrant following such Fundamental Transaction. At the Holder's option and
request, any successor to the Company or surviving entity in such Fundamental
Transaction shall, either (1) issue to the Holder a new warrant substantially
in the form of this Warrant and consistent with the foregoing provisions and
evidencing the Holder's right to purchase the Alternate Consideration for the
aggregate Exercise Price upon exercise thereof, or (2) purchase the Warrant
from the Holder for a purchase price, payable in cash within five Trading Days
after such request (or, if later, on the effective date of the Fundamental
Transaction), equal to the Black Scholes value of the remaining unexercised
portion of this Warrant on the date of such request. The terms of any
agreement pursuant to which a Fundamental Transaction is effected shall
include terms requiring any such successor or surviving entity to comply with
the provisions of this paragraph (c) and insuring that the Warrant (or any
such replacement security) will be similarly adjusted upon any subsequent
transaction analogous to a Fundamental Transaction.
(d) Future Issuances. (1) If the Company or any subsidiary
thereof, as applicable with respect to Common Stock Equivalents (as defined
below), at any time while this Warrant is outstanding, shall issue shares of
Common Stock or rights, warrants, options or other securities or debt that are
convertible into or exchangeable for shares of Common Stock ("COMMON STOCK
EQUIVALENTS"), entitling any Person to acquire shares of Common Stock at a
price per share less than the Exercise Price (subject to equitable adjustment
for stock splits, recombinations and similar transactions) (if the holder of
the Common Stock or Common Stock Equivalent so issued shall at any time,
whether by operation of purchase price adjustments, reset provisions, floating
conversion, exercise or exchange prices or otherwise, or due to warrants,
options or rights issued in connection with such issuance, be entitled to
receive shares of Common Stock at a price less than the Exercise Price, such
issuance shall be deemed to have occurred for less than the Exercise Price),
then, the Exercise Price shall be multiplied by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to the issuance of such shares of Common Stock or such Common Stock
Equivalents plus the number of shares of Common Stock which the offering price
for such shares of Common Stock or Common Stock Equivalents would purchase at
the Exercise Price, and the denominator of which shall be the sum of the
number of shares of Common Stock outstanding immediately prior to such
issuance plus the number of shares of Common Stock so issued or issuable. For
purposes hereof, all shares of Common Stock that are issuable upon conversion,
exercise or exchange of Common Stock Equivalents shall be deemed outstanding
immediately after the issuance of such Common Stock Equivalents. Such
adjustment shall be made whenever such shares of Common Stock or Common Stock
Equivalents are issued. The Company shall notify the Holder in writing, no
later than the Trading Day following the issuance of any Common Stock or
Common Stock Equivalent subject to this section, indicating therein the
applicable issuance price, or of applicable reset price, exchange price,
conversion price and other pricing terms.
(2) The adjustment of the Exercise Price described in Section 9(d)(1)
above shall not apply to: (i) the issuance of securities upon the exercise or
conversion of any Common Stock Equivalents issued by the Company prior to the
original issuance date of this Warrant (but will apply to any amendments or
modifications thereto), (ii) the grant of options or warrants, or the issuance
of additional securities, under any duly authorized Company stock option,
restricted stock plan or stock purchase plan.
(e) Number of Warrant Shares. Simultaneously with any
adjustment to the Exercise Price pursuant to paragraph (a) of this Section,
the number of Warrant Shares that may be purchased upon exercise of this
Warrant shall be increased or decreased proportionately, so that after such
adjustment the aggregate Exercise Price payable hereunder for the adjusted
number of Warrant Shares shall be the same as the aggregate Exercise Price in
effect immediately prior to such adjustment.
(f) Calculations. All calculations under this Section 9
shall be made to the nearest cent or the nearest 1/100th of a share, as
applicable. The number of shares of Common Stock outstanding at any given time
shall not include shares owned or held by or for the account of the Company,
and the disposition of any such shares shall be considered an issue or sale of
Common Stock.
(g) Notice of Adjustments. Upon the occurrence of each
adjustment pursuant to this Section 9, the Company at its expense will
promptly compute such adjustment in accordance with the terms of this Warrant
and prepare a certificate setting forth such adjustment, including a statement
of the adjusted Exercise Price and adjusted number or type of Warrant Shares
or other securities issuable upon exercise of this Warrant (as applicable),
describing the transactions giving rise to such adjustments and showing in
detail the facts upon which such adjustment is based. Upon written request,
the Company will promptly deliver a copy of each such certificate to the
Holder and to the Company's Transfer Agent.
(h) Notice of Corporate Events. If the Company (i) declares
a dividend or any other distribution of cash, securities or other property in
respect of its Common Stock, including without limitation any granting of
rights or warrants to subscribe for or purchase any capital stock of the
Company or any Subsidiary, (ii) authorizes or approves, enters into any
agreement contemplating or solicits stockholder approval for any Fundamental
Transaction or (iii) authorizes the voluntary dissolution, liquidation or
winding up of the affairs of the Company, then the Company shall deliver to
the Holder a notice describing the material terms and conditions of such
transaction, at least 20 calendar days prior to the applicable record or
effective date on which a Person would need to hold Common Stock in order to
participate in or vote with respect to such transaction, and the Company will
take all steps reasonably necessary in order to insure that the Holder is
given the practical opportunity to exercise this Warrant prior to such time so
as to participate in or vote with respect to such transaction; provided,
however, that the failure to deliver such notice or any defect therein shall
not affect the validity of the corporate action required to be described in
such notice.
10. Payment of Exercise Price. The Holder may pay the Exercise Price
in one of the following manners:
(a) Cash Exercise. The Holder may deliver immediately
available funds; or
(b) Cashless Exercise. The Holder may notify the Company in
an Exercise Notice of its election to utilize cashless exercise, in which
event the Company shall issue to the Holder the number of Warrant Shares
determined as follows:
X = Y [(A-B)/A]
where:
X = the number of Warrant Shares to be issued to the Holder.
Y = the number of Warrant Shares with respect
to which this Warrant is being exercised.
A = the average of the closing
prices for the five Trading Days
immediately prior to (but not
including) the Exercise Date.
B = the Exercise Price.
For purposes of Rule 144 promulgated under the Securities Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction shall be deemed to have been acquired by the Holder, and
the holding period for the Warrant Shares shall be deemed to have commenced,
on the date this Warrant was originally issued.
11. Limitation on Exercise.
(a) Notwithstanding anything to the contrary contained
herein, the number of shares of Common Stock that may be acquired by the
Holder upon any exercise of this Warrant (or otherwise in respect hereof)
shall be limited to the extent necessary to insure that, following such
exercise (or other issuance), the total number of shares of Common Stock then
beneficially owned by such Holder and its Affiliates and any other Persons
whose beneficial ownership of Common Stock would be aggregated with the
Holder's for purposes of Section 13(d) of the Exchange Act, does not exceed
4.999% of the total number of issued and outstanding shares of Common Stock
(including for such purpose the shares of Common Stock issuable upon such
exercise). For such purposes, beneficial ownership shall be determined in
accordance with Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder. Each delivery of an Exercise Notice
hereunder will constitute a representation by the Holder that it has evaluated
the limitation set forth in this paragraph and determined that issuance of the
full number of Warrant Shares requested in such Exercise Notice is permitted
under this paragraph. By written notice to the Company, the Holder may waive
the provisions of this Section but (i) any such waiver will not be effective
until the 61st day after such notice is delivered to the Company, and (ii) any
such waiver will apply only to the Holder and not to any other holder of
Warrants. This provision shall not restrict the number of shares of Common
Stock which a Holder may receive or beneficially own in order to determine the
amount of securities or other consideration that such Holder may receive in
the event of a merger or other business combination or reclassification
involving the Company as contemplated in Section 9 of this Warrant.
(b) Notwithstanding anything to the contrary contained
herein, the number of shares of Common Stock that may be acquired by the
Holder upon any exercise of this Warrant (or otherwise in respect hereof)
shall be limited to the extent necessary to insure that, following such
exercise (or other issuance), the total number of shares of Common Stock then
beneficially owned by such Holder and its Affiliates and any other Persons
whose beneficial ownership of Common Stock would be aggregated with the
Holder's for purposes of Section 13(d) of the Exchange Act, does not exceed
9.999% of the total number of issued and outstanding shares of Common Stock
(including for such purpose the shares of Common Stock issuable upon such
exercise). For such purposes, beneficial ownership shall be determined in
accordance with Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder. Each delivery of an Exercise Notice
hereunder will constitute a representation by the Holder that it has evaluated
the limitation set forth in this paragraph and determined that issuance of the
full number of Warrant Shares requested in such Exercise Notice is permitted
under this paragraph. This provision shall not restrict the number of shares
of Common Stock which a Holder may receive or beneficially own in order to
determine the amount of securities or other consideration that such Holder may
receive in the event of a merger or other business combination or
reclassification involving the Company as contemplated in Section 9 of this
Warrant.
12. No Fractional Shares. No fractional shares of Warrant Shares will
be issued in connection with any exercise of this Warrant. In lieu of any
fractional shares which would, otherwise be issuable, the Company shall pay
cash equal to the product of such fraction multiplied by the closing price of
one Warrant Share as reported on the Nasdaq National Market on the date of
exercise.
13. Notices. Any and all notices or other communications or
deliveries hereunder (including, without limitation, any Exercise Notice)
shall be in writing and shall be deemed given and effective on the earliest of
(i) the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number specified in this Section prior to 6:30 p.m.
(New York City time) on a Trading Day, (ii) the next Trading Day after the
date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number specified in this Section on a day that is
not a Trading Day or later than 6:30 p.m. (New York City time) on any Trading
Day, (iii) the Trading Day following the date of mailing, if sent by
nationally recognized overnight courier service, or (iv) upon actual receipt
by the party to whom such notice is required to be given. The addresses for
such communications shall be: (i) if to the Company, to Genelabs Technologies,
Inc., 505 Penobscot Drive, Redwood City, California 94063, Facsimile No. (650)
368-0709, Attn: Chief Financial Officer, or (ii) if to the Holder, to the
address or facsimile number appearing on the Warrant Register or such other
address or facsimile number as the Holder may provide to the Company in
accordance with this Section.
14. Warrant Agent. The Company shall serve as warrant agent under
this Warrant. Upon 30 days' notice to the Holder, the Company may appoint a
new warrant agent. Any corporation into which the Company or any new warrant
agent may be merged or any corporation resulting from any consolidation to
which the Company or any new warrant agent shall be a party or any corporation
to which the Company or any new warrant agent transfers substantially all of
its corporate trust or shareholders services business shall be a successor
warrant agent under this Warrant without any further act. Any such successor
warrant agent shall promptly cause notice of its succession as warrant agent
to be mailed (by first class mail, postage prepaid) to the Holder at the
Holder's last address as shown on the Warrant Register.
15. Miscellaneous.
(a) This Warrant shall be binding on and inure to the
benefit of the parties hereto and their respective successors and assigns.
Subject to the preceding sentence, nothing in this Warrant shall be construed
to give to any Person other than the Company and the Holder any legal or
equitable right, remedy or cause of action under this Warrant. This Warrant
may be amended only in writing signed by the Company and the Holder and their
successors and assigns.
(b) All questions concerning the construction, validity,
enforcement and interpretation of this Warrant shall be governed by and
construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof. Each
party agrees that all legal proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Warrant
(whether brought against a party hereto or its respective affiliates,
directors, officers, shareholders, employees or agents) shall be commenced in
the state and federal courts sitting in the City of New York, Borough of
Manhattan (the "NEW YORK COURTS"). Each party hereto hereby irrevocably
submits to the exclusive jurisdiction of the New York Courts for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of this Warrant), and hereby irrevocably waives, and agrees
not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit,
action or proceeding is improper. Each party hereto hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Warrant and agrees that
such service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law. Each party hereto
(including its affiliates, agents, officers, directors and employees) hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating
to this Warrant or the transactions contemplated hereby. If either party shall
commence an action or proceeding to enforce any provisions of this Warrant,
then the prevailing party in such action or proceeding shall be reimbursed by
the other party for its attorneys fees and other costs and expenses incurred
with the investigation, preparation and prosecution of such action or
proceeding.
(c) The headings herein are for convenience only, do not
constitute a part of this Warrant and shall not be deemed to limit or affect
any of the provisions hereof.
(d) In case any one or more of the provisions of this
Warrant shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Warrant shall not
in any way be affected or impaired thereby and the parties will attempt in
good faith to agree upon a valid and enforceable provision which shall be a
commercially reasonable substitute therefor, and upon so agreeing, shall
incorporate such substitute provision in this Warrant.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its authorized officer as of the date first indicated above.
GENELABS TECHNOLOGIES, INC.
By: /s/ Irene A. Chow, Ph.D.
Name: Irene A. Chow, Ph.D.
Title: Chairman and
Chief Executive Officer
EXERCISE NOTICE
To Genelabs Technologies, Inc.:
The undersigned hereby irrevocably elects to purchase _____________
shares of common stock, no par value per share, of Genelabs Technologies, Inc.
("COMMON STOCK"), pursuant to Warrant No. [ ], originally issued May 2, 2003
(the "WARRANT"), and, if such Holder is not utilizing the cashless exercise
provisions set forth in the Warrant, encloses herewith $________ in cash,
certified or official bank check or checks or other immediately available
funds, which sum represents the aggregate Exercise Price (as defined in the
Warrant) for the number of shares of Common Stock to which this Exercise
Notice relates, together with any applicable taxes payable by the undersigned
pursuant to the Warrant.
By its delivery of this Exercise Notice, the undersigned represents
and warrants to the Company that in giving effect to the exercise evidenced
hereby the Holder will not beneficially own in excess of the number of shares
of Common Stock (determined in accordance with Section 13(d) of the Securities
Exchange Act of 1934) permitted to be owned under Section 11 of this Warrant
to which this notice relates.
The undersigned requests that certificates for the shares of Common
Stock issuable upon this exercise be issued in the name of
PLEASE INSERT SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER
(Please print name and address)
Warrant Shares Exercise Log
- -------------------------- --------------------------------- ---------------------------------------- -------------------------
Date Number of Warrant Shares Number of Warrant Shares Exercised Number of Warrant
Available to be Exercised Shares Remaining to be
Exercised
- -------------------------- --------------------------------- ---------------------------------------- -------------------------
- -------------------------- --------------------------------- ---------------------------------------- -------------------------
FORM OF ASSIGNMENT
[To be completed and signed only upon transfer of Warrant]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ________________________________ the right represented by the
within Warrant to purchase ____________ shares of Common Stock of Genelabs
Technologies, Inc. to which the within Warrant relates and appoints
________________ attorney to transfer said right on the books of Genelabs
Technologies, Inc. with full power of substitution in the premises.
Dated: _______________, ____
_______________________________________
(Signature must conform in all
respects to name of holder as
specified on the face of the Warrant)
_______________________________________
Address of Transferee
_______________________________________
_______________________________________
In the presence of:
__________________________
- --------
1 The number of shares of Common Stock equal to 30% of the
quotient obtained by dividing the Investment Amount of such
Purchaser by the Per Unit Purchase Price.
EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "AGREEMENT") is made and
entered into as of May 2, 2003, by and among Genelabs Technologies, Inc., a
California corporation (the "COMPANY"), and the investors signatory hereto
(each, a "PURCHASER" and collectively, the "PURCHASERS").
This Agreement is made pursuant to the Securities Purchase Agreement,
dated as of the date hereof among the Company and the Purchasers (the
"PURCHASE AGREEMENT").
The Company and the Purchasers hereby agree as follows:
1. Definitions. Capitalized terms used and not otherwise defined
herein that are defined in the Purchase Agreement shall have the meanings
given such terms in the Purchase Agreement. As used in this Agreement, the
following terms shall have the following meanings:
"EFFECTIVE DATE" means with respect to the Registration Statement,
the date that such Registration Statement is first declared effective by the
Commission.
"EFFECTIVENESS DATE" means the earlier of (1) the 90th day following
the Closing Date and (2) the fifth Trading Day following the date on which the
Company is notified by the Commission that such Registration Statement will
not be reviewed or is no longer subject to further review and comments.
"EFFECTIVENESS PERIOD" shall have the meaning set forth in Section
2(a).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FILING DATE" means the 30th day following the Closing Date.
"HOLDER" or "HOLDERS" means the holder or holders, as the case may
be, from time to time of Registrable Securities.
"INDEMNIFIED PARTY" shall have the meaning set forth in Section 5(c).
"INDEMNIFYING PARTY" shall have the meaning set forth in Section
5(c).
"LOSSES" shall have the meaning set forth in Section 5(a).
"PROCEEDING" means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
"PROSPECTUS" means the prospectus included in the Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by the Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference
in such Prospectus.
"REGISTRABLE SECURITIES" means (i) the Shares, and (ii) the shares of
Common Stock issued and issuable upon exercise of the Warrants.
"REGISTRATION STATEMENT" means the registration statement required to
be filed hereunder, including the Prospectus, amendments and supplements to
such registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference
or deemed to be incorporated by reference in such registration statement.
"RULE 144" means Rule 144 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"RULE 415" means Rule 415 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"RULE 424" means Rule 424 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHARES" means the shares of Common Stock issued or issuable to the
Purchasers pursuant to the Purchase Agreement.
"WARRANTS" means the Warrants issued or issuable under the Purchase
Agreement (including any New Warrants (as defined in the Warrants) issuable in
replacement or upon transfer thereof.
2. Registration.
(a) On or prior to the Filing Date, the Company shall prepare and
file with the Commission a Registration Statement covering the resale of all
Registrable Securities for an offering to be made on a continuous basis
pursuant to Rule 415. The Registration Statement shall be on Form S-3 (except
if the Company is not then eligible to register for resale the Registrable
Securities on Form S-3, in which case such registration shall be on another
appropriate form in accordance herewith) and shall contain the "Plan of
Distribution" in the form attached hereto as Annex A, subject to revisions
required to comply with written comments from the Commission to the
Registration Statement. The Company shall cause the Registration Statement to
be declared effective under the Securities Act as soon as possible but, in any
event, no later than the Effectiveness Date, and shall use its best efforts to
keep the Registration Statement continuously effective under the Securities
Act until the date which is two years after the date that it is declared
effective by the Commission or such earlier date when all Registrable
Securities covered by the Registration Statement have been sold or may be sold
without volume restrictions pursuant to Rule 144(k) as determined by the
counsel to the Company pursuant to an opinion letter to such effect, addressed
and acceptable to the Company's transfer agent and the affected Holders (the
"EFFECTIVENESS PERIOD").
(b) If: (i) the Registration Statement is not declared effective
by the Commission on or prior to the required Effectiveness Date, or (ii)
after the Effective Date, the Registration Statement ceases to be effective
and available to the Holders as to all Registrable Securities at any time
prior to the expiration of the Effectiveness Period for an aggregate of more
than 20 Trading Days, or (iii) the Common Stock is not listed or quoted, or is
suspended from trading on the Nasdaq National Market or another Trading Market
for a period of three Trading Days (which need not be consecutive Trading
Days), or (iv) the exercise rights of the Holders pursuant to the Warrants are
suspended for any reason (any such failure or breach being referred to as an
"EVENT," and for purposes of clause (i) or (iv) the date on which such Event
occurs, or for purposes of clause (ii) the date which such 20 Trading
Day-period is exceeded, or for purposes of clause (iii) the date on which such
three Trading Day period is exceeded, being referred to as "EVENT DATE"),
then, in addition to any other rights available to the Holders: (x) on each
such Event Date the Company shall pay to each Holder an amount in cash, as
liquidated damages and not as a penalty, equal to 1% of the aggregate
Investment Amount of such Holder pursuant to the Purchase Agreement; and (y)
on each monthly anniversary of each such Event Date thereof (if the applicable
Event shall not have been cured by such date) until the applicable Event is
cured, the Company shall pay to each Holder an amount in cash, as liquidated
damages and not as a penalty, equal to 2% of the aggregate Investment Amount
paid by such Holder pursuant to the Purchase Agreement; provided, that the
Company shall not be liable to a Holder on account of multiple Events in a
single monthly period, except in the first month of any Event (in which case
it will not be liable to a particular Holder in such monthly period on account
of multiple Events for damages in excess of 2% of such Holder's aggregate
Investment Amount). If the Company fails to pay any liquidated damages
pursuant to this Section in full within seven days after the date payable, the
Company will pay interest thereon at a rate of 12% per annum (or such lesser
maximum amount that is permitted to be paid by applicable law) to the Holder,
accruing daily from the date such liquidated damages are due until such
amounts, plus all such interest thereon, are paid in full. The liquidated
damages pursuant to the terms hereof shall apply on a pro rata basis for any
portion of a month prior to the cure of an Event.
(c) Notwithstanding anything herein to the contrary, the Company
shall prepare and file a supplement to the appropriate Registration Statement
(if permitted for such purpose under the Securities Act) within 5 Trading Days
following the issuance of a New Warrant, or (if such supplement is not
permitted for such purposes under the Securities Act), a new Registration
Statement within 15 Trading Days following the issuance of a New Warrant. Any
such new registration statement shall be deemed an additional Registration
Statement under this Agreement, entitled to all of the benefits and subjecting
each of the Company and the Holder of such New Warrant to the obligations
hereunder applicable to a Registration Statement.
3. Registration Procedures
In connection with the Company's registration obligations hereunder,
the Company shall:
(a) Not less than four Trading Days prior to the filing of the
Registration Statement or any related Prospectus or any amendment or
supplement thereto, the Company shall, (i) furnish to the Holders copies of
the portions of the Registration Statement containing the disclosure relating
to the Selling Security holders and the description of the transactions
contemplated by the Purchase Agreement, and the Plan of Distribution, which
documents will be subject to the review and comment of such Holders, and (ii)
cause its officers and directors, counsel and independent certified public
accountants to respond to such inquiries as shall be necessary, in the
reasonable opinion of respective counsel to conduct a reasonable investigation
within the meaning of the Securities Act. The Holders will use their best
efforts to deliver to the Company any comments they may have to the disclosure
delivered to them under Section 3(a)(i) within two Trading Days following the
day such disclosure is received; it being agreed that the "Effectiveness Date"
will be subject to extension for one additional day for each Trading Day
beyond three that the Holders fail to respond to such disclosure. The Company
shall not file the Registration Statement or any such Prospectus or any
amendments or supplements thereto to which the Holders of a majority of the
Registrable Securities shall reasonably object in good faith.
(b) (i) Prepare and file with the Commission such amendments,
including post-effective amendments, to the Registration Statement and the
Prospectus used in connection therewith as may be necessary to keep the
Registration Statement continuously effective as to the applicable Registrable
Securities for the Effectiveness Period and prepare and file with the
Commission such additional Registration Statements in order to register for
resale under the Securities Act all of the Registrable Securities; (ii) cause
the related Prospectus to be amended or supplemented by any required
Prospectus supplement, and as so supplemented or amended to be filed pursuant
to Rule 424; (iii) respond as promptly as reasonably possible, and in any
event within ten days, to any comments received from the Commission with
respect to the Registration Statement or any amendment thereto and, as
promptly as reasonably possible provide the Holders true and complete copies
of all correspondence from and to the Commission in connection with the
Registration Statement that pertains to a Holder as a Selling Stockholder or
to the Plan of Distribution (but not other information which in the opinion of
the Company would constitute material and nonpublic information); and (iv)
comply in all material respects with the provisions of the Securities Act and
the Exchange Act with respect to the disposition of all Registrable Securities
covered by the Registration Statement during the applicable period in
accordance with the intended methods of disposition by the Holders thereof set
forth in the Registration Statement as so amended or in such Prospectus as so
supplemented.
(c) Notify the Holders of Registrable Securities to be sold as
promptly as reasonably possible (and, in the case of (i)(A) below, not less
than three Trading Days prior to such filing) and (if requested by any such
Person) confirm such notice in writing no later than one Trading Day following
the day (i)(A) when a Prospectus or any Prospectus supplement or
post-effective amendment to the Registration Statement is proposed to be
filed; (B) when the Commission notifies the Company whether there will be a
"review" of such Registration Statement and whenever the Commission comments
in writing on such Registration Statement (the Company shall provide copies
thereof and the written responses thereto to each of the Holders that pertain
to such Holder as a Selling Stockholder or to the Plan of Distribution, but
not other information which in the opinion of the Company would constitute
material and nonpublic information); and (C) with respect to the Registration
Statement or any post-effective amendment, when the same has become effective;
(ii) of any request by the Commission or any other Federal or state
governmental authority for amendments or supplements to the Registration
Statement or Prospectus or for additional information; (iii) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement covering any or all of the Registrable Securities or
the initiation of any Proceedings for that purpose; (iv) of the receipt by the
Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of
any Proceeding for such purpose; and (v) of the occurrence of any event or
passage of time that makes the financial statements included in the
Registration Statement ineligible for inclusion therein or any statement made
in the Registration Statement or Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect
or that requires any revisions to the Registration Statement, Prospectus or
other documents so that, in the case of the Registration Statement or the
Prospectus, as the case may be, it will not contain any untrue statement of a
material fact or omit to state any 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.
(d) Use its best efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of (i) any order suspending the effectiveness of the
Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, at the earliest practicable moment.
(e) [Intentionally Deleted]
(f) Promptly deliver to each Holder, without charge, as many
copies of the Prospectus or Prospectuses (including each form of prospectus)
and each amendment or supplement thereto as such Persons may reasonably
request. The Company hereby consents to the use of such Prospectus and each
amendment or supplement thereto by each of the selling Holders in connection
with the offering and sale of the Registrable Securities covered by such
Prospectus and any amendment or supplement thereto.
(g) Prior to any public offering of Registrable Securities, use
its best efforts to register or qualify or cooperate with the selling Holders
in connection with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Securities for offer and
sale under the securities or Blue Sky laws of such jurisdictions within the
United States as any Holder requests in writing, to keep each such
registration or qualification (or exemption therefrom) effective during the
Effectiveness Period and to do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Registrable
Securities covered by a Registration Statement; provided, that the Company
shall not be required to qualify generally to do business in any jurisdiction
where it is not then so qualified or subject the Company to any material tax
in any such jurisdiction where it is not then so subject.
(h) Cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities
to be delivered to a transferee pursuant to a Registration Statement, which
certificates shall be free, to the extent permitted by the Purchase Agreement,
of all restrictive legends, and to enable such Registrable Securities to be in
such denominations and registered in such names as any such Holders may
request.
(i) Upon the occurrence of any event contemplated by Section
3(c)(v), as promptly as reasonably possible, prepare a supplement or
amendment, including a post-effective amendment, to the Registration Statement
or a supplement to the related Prospectus or any document incorporated or
deemed to be incorporated therein by reference, and file any other required
document so that, as thereafter delivered, neither the Registration Statement
nor such Prospectus will contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading.
(j) Comply with all applicable rules and regulations of the
Commission.
(k) The Company may require each selling Holder to furnish to the
Company a certified statement as to the number of shares of Common Stock
beneficially owned by such Holder and, if requested by the Commission, the
controlling person thereof.
4. Registration Expenses. All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to
the Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing
fees (including, without limitation, fees and expenses (A) with respect to
filings required to be made with Nasdaq National Market or any other Trading
Market, and (B) in compliance with applicable state securities or Blue Sky
laws), (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities and of printing prospectuses
if the printing of prospectuses is reasonably requested by the holders of a
majority of the Registrable Securities included in the Registration
Statement), (iii) messenger, telephone and delivery expenses, (iv) fees and
disbursements of counsel for the Company, (v) Securities Act liability
insurance, if the Company so desires such insurance, and (vi) fees and
expenses of all other Persons retained by the Company in connection with the
consummation of the transactions contemplated by this Agreement. In addition,
the Company shall be responsible for all of its internal expenses incurred in
connection with the consummation of the transactions contemplated by this
Agreement (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any annual audit and the fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities exchange as required
hereunder.
5. Indemnification
(a) Indemnification by the Company. The Company shall,
notwithstanding any termination of this Agreement, indemnify and hold harmless
each Holder, the officers, directors, agents, investment advisors and
employees of each of them, each Person who controls any such Holder (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act) and the officers, directors, agents and employees of each such
controlling Person, to the fullest extent permitted by applicable law, from
and against any and all losses, claims, damages, liabilities, costs
(including, without limitation, reasonable costs of preparation and reasonable
attorneys' fees) and expenses (collectively, "LOSSES"), as incurred, arising
out of or relating to any untrue or alleged untrue statement of a material
fact contained in the Registration Statement, any Prospectus or any form of
prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or relating to any omission or alleged omission
of a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in light of the circumstances under which they were made)
not misleading, except to the extent, but only to the extent, that (1) such
untrue statements or omissions are based solely upon information regarding
such Holder furnished in writing to the Company by such Holder expressly for
use therein or (2) in the case of an occurrence of an event of the type
specified in Section 3(c)(ii)-(v), the use by such Holder of an outdated or
defective Prospectus after the Company has notified such Holder in writing
that the Prospectus is outdated or defective and prior to the receipt by such
Holder of the Advice contemplated in Section 5(d), but only if and to the
extent that use of the Prospectus (as so amended, if applicable) upon receipt
of such Advice would have corrected the misstatement or omission giving rise
to such Loss. The Company shall notify the Holders promptly of the
institution, threat or assertion of any Proceeding of which the Company is
aware in connection with the transactions contemplated by this Agreement.
(b) Indemnification by Holders. Each Holder shall, severally and
not jointly, indemnify and hold harmless the Company, its directors, officers,
agents and employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and
the directors, officers, agents or employees of such controlling Persons, to
the fullest extent permitted by applicable law, from and against all Losses,
as incurred, arising solely out of or based solely upon: (x) such Holder's
failure to comply with the prospectus delivery requirements of the Securities
Act to the extent that delivery of a Prospectus would have corrected the
misstatement or omission giving rise to such Loss or (y) any untrue statement
of a material fact contained in any Registration Statement, any Prospectus, or
any form of prospectus, or in any amendment or supplement thereto, or arising
solely out of or based solely upon any omission of a material fact required to
be stated therein or necessary to make the statements therein not misleading
to the extent, but only to the extent, that (1) such untrue statements or
omissions are based solely upon information regarding such Holder furnished in
writing to the Company by such Holder expressly for use therein, or (2) in the
case of an occurrence of an event of the type specified in Section
3(c)(ii)-(v), the use by such Holder of an outdated or defective Prospectus
after the Company has notified such Holder in writing that the Prospectus is
outdated or defective and prior to the receipt by such Holder of the Advice
contemplated in Section 5(d), but only if and to the extent that use of the
Prospectus (as so amended, if applicable) upon receipt of such Advice would
have corrected the misstatement or omission giving rise to such Loss. In no
event shall the liability of any selling Holder hereunder be greater in amount
than the net proceeds received by such Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. If any Proceeding
shall be brought or asserted against any Person entitled to indemnity
hereunder (an "INDEMNIFIED PARTY"), such Indemnified Party shall promptly
notify the Person from whom indemnity is sought (the "INDEMNIFYING PARTY") in
writing, and the Indemnifying Party shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to the Indemnified
Party and the payment of all fees and expenses incurred in connection with
defense thereof; provided, that the failure of any Indemnified Party to give
such notice shall not relieve the Indemnifying Party of its obligations or
liabilities pursuant to this Agreement, except (and only) to the extent that
it shall be finally determined by a court of competent jurisdiction (which
determination is not subject to appeal or further review) that such failure
shall have proximately and materially adversely prejudiced the Indemnifying
Party.
An Indemnified Party shall have the right to employ separate counsel
in any such Proceeding and to participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
or Parties unless: (1) the Indemnifying Party has agreed in writing to pay
such fees and expenses; (2) the Indemnifying Party shall have failed promptly
to assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (3) the
named parties to any such Proceeding (including any impleaded parties) include
both such Indemnified Party and the Indemnifying Party, and such Indemnified
Party shall have been advised by counsel that a conflict of interest is likely
to exist if the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and such counsel shall be at the expense
of the Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall,
without the prior written consent of the Indemnified Party, effect any
settlement of any pending Proceeding in respect of which any Indemnified Party
is a party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability on claims that are the subject matter of
such Proceeding.
All fees and expenses of the Indemnified Party (including reasonable
fees and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with this
Section) shall be paid to the Indemnified Party, as incurred, within ten
Trading Days of written notice thereof to the Indemnifying Party (regardless
of whether it is ultimately determined that an Indemnified Party is not
entitled to indemnification hereunder; provided, that the Indemnifying Party
may require such Indemnified Party to undertake to reimburse all such fees and
expenses to the extent it is finally judicially determined that such
Indemnified Party is not entitled to indemnification hereunder).
(d) Contribution. If a claim for indemnification under Section
5(a) or 5(b) is unavailable to an Indemnified Party (by reason of public
policy or otherwise), then each Indemnifying Party, in lieu of indemnifying
such Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable
considerations. The relative fault of such Indemnifying Party and Indemnified
Party shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission of a material fact, has been
taken or made by, or relates to information supplied by, such Indemnifying
Party or Indemnified Party, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such action,
statement or omission. The amount paid or payable by a party as a result of
any Losses shall be deemed to include, subject to the limitations set forth in
Section 5(c), any reasonable attorneys' or other reasonable fees or expenses
incurred by such party in connection with any Proceeding to the extent such
party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party in
accordance with its terms.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 5(d), no Holder
shall be required to contribute, in the aggregate, any amount in excess of the
amount by which the proceeds actually received by such Holder from the sale of
the Registrable Securities subject to the Proceeding exceeds the amount of any
damages that such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.
The indemnity and contribution agreements contained in this Section
are in addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.
6. Miscellaneous
(a) Remedies. In the event of a breach by the Company or by a
Holder, of any of their obligations under this Agreement, each Holder or the
Company, as the case may be, in addition to being entitled to exercise all
rights granted by law and under this Agreement, including recovery of damages,
will be entitled to specific performance of its rights under this Agreement.
The Company and each Holder agree that monetary damages would not provide
adequate compensation for any losses incurred by reason of a breach by it of
any of the provisions of this Agreement and hereby further agrees that, in the
event of any action for specific performance in respect of such breach, it
shall waive the defense that a remedy at law would be adequate.
(b) No Piggyback on Registrations. Except as and to the extent
specified in Section 3.1(v) to the Disclosure Schedule of the Purchase
Agreement, neither the Company nor any of its security holders (other than the
Holders in such capacity pursuant hereto) may include securities of the
Company in the Registration Statement other than the Registrable Securities,
and the Company shall not after the date hereof enter into any agreement
providing any such right to any of its security holders. Except as and to the
extent specified in Section 3.1(v) to the Disclosure Schedule of the Purchase
Agreement, the Company has not previously entered into any agreement granting
any registration rights with respect to any of its securities to any Person
which have not been fully satisfied.
(c) Compliance. Each Holder covenants and agrees that it will
comply with the prospectus delivery requirements of the Securities Act as
applicable to it in connection with sales of Registrable Securities pursuant
to the Registration Statement.
(d) Discontinued Disposition. Each Holder agrees by its
acquisition of such Registrable Securities that, upon receipt of a notice from
the Company of the occurrence of any event of the kind described in Section
3(c), such Holder will forthwith discontinue disposition of such Registrable
Securities under the Registration Statement until such Holder's receipt of the
copies of the supplemented Prospectus and/or amended Registration Statement or
until it is advised in writing (the "ADVICE") by the Company that the use of
the applicable Prospectus may be resumed, and, in either case, has received
copies of any additional or supplemental filings that are incorporated or
deemed to be incorporated by reference in such Prospectus or Registration
Statement. The Company may provide appropriate stop orders to enforce the
provisions of this paragraph.
(e) Piggy-Back Registrations. If at any time during the
Effectiveness Period there is not an effective Registration Statement covering
all of the Registrable Securities and the Company shall determine to prepare
and file with the Commission a registration statement relating to an offering
for its own account or the account of others under the Securities Act of any
of its equity securities, other than on Form S-4 or Form S-8 (each as
promulgated under the Securities Act) or their then equivalents relating to
equity securities to be issued solely in connection with any acquisition of
any entity or business or equity securities issuable in connection with stock
option or other employee benefit plans, then the Company shall send to each
Holder written notice of such determination and, if within fifteen days after
receipt of such notice, any such Holder shall so request in writing, the
Company shall include in such registration statement all or any part of such
Registrable Securities such holder requests to be registered, subject to
customary underwriter cutbacks applicable to all holders of registration
rights.
(f) Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and Holders
holding at least 80% in interest of the Registrable Securities; provided,
however, that no such amendment shall be effective to the extent any such
amendment affects any rights specifically granted to a particular Purchaser
and not to the other Purchasers, provided, further, however, that any
amendment that directly affects the economic terms of the transactions
contemplated by this Agreement shall require the unanimous consent of the
Purchasers.
(g) Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at
the facsimile telephone number specified in this Section prior to 6:30 p.m.
(New York City time) on a Trading Day, (ii) the Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at
the facsimile telephone number specified in this Agreement later than 6:30
p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York
City time) on such date, (iii) the Trading Day following the date of mailing,
if sent by nationally recognized overnight courier service, or (iv) upon
actual receipt by the party to whom such notice is required to be given. The
address for such notices and communications shall be as follows:
If to the Company: Genelabs Technologies, Inc.
505 Penobscot Drive
Redwood City, CA 94063
Attn: Chief Financial Officer
Fax No.: (650) 368-0709
With a copy to: Skadden, Arps, Slate, Meagher & Flom LLP
525 University Avenue,
Palo Alto, CA 93301
Attn: Gregory C. Smith, Esq.
Facsimile No.: (650) 470-4570
If to a Purchaser: To the address set forth under
such Purchaser's name on the
signature pages hereto.
If to any other Person who is then the registered Holder:
To the address of such Holder as it appears in the stock transfer
books of the Company
or such other address as may be designated in writing hereafter,
in the same manner, by such Person.
(h) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each of
the parties and shall inure to the benefit of each Holder. The Company may not
assign its rights or obligations hereunder without the prior written consent
of each Holder, except an assignment by operation of law upon the consummation
of a sale of all or substantially all of the assets of the Company or a
business combination in which the Company will not be the surviving entity;
provided, that as a condition to such transaction, the successor entity or
purchaser to such transaction shall provide a written undertaking to be bound
by all of the obligations formerly binding upon the Company under this
Agreement, as if initially a party hereto. Each Holder may assign their
respective rights hereunder in the manner and to the Persons as permitted
under the Purchase Agreement.
(i) Execution and Counterparts. This Agreement may be executed in
any number of counterparts, each of which when so executed shall be deemed to
be an original and, all of which taken together shall constitute one and the
same Agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature were the original
thereof.
(j) Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed
by and construed and enforced in accordance with the internal laws of the
State of New York, without regard to the principles of conflicts of law
thereof. Each party agrees that all Proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement (whether brought against a party hereto or its respective
Affiliates, officers, shareholders, employees or agents) shall be commenced
and heard in the state and federal courts sitting in the City of New York,
Borough of Manhattan (the "NEW YORK COURTS"). Each party hereto hereby
irrevocably submits to the exclusive jurisdiction of the New York Courts for
all such Proceedings, and hereby irrevocably waives, and agrees not to assert
in any Proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such Proceeding has been commenced in an
inconvenient or improper forum. Each party hereto (including its affiliates,
agents, officers, directors and employees) hereby irrevocably waives, to the
fullest extent permitted by applicable law, any and all right to trial by jury
in any Proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby. If either party shall commence an action or
Proceeding to enforce any provisions of this Agreement, then the prevailing
party in such action or Proceeding shall be reimbursed by the other party for
its attorneys fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or Proceeding.
(k) Cumulative Remedies. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law.
(l) Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the
parties hereto shall use their reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would
have executed the remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid, illegal,
void or unenforceable.
(m) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(n) Independent Nature of Purchasers' Obligations and Rights. The
obligations of each Purchaser hereunder is several and not joint with the
obligations of any other Purchaser hereunder, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser hereunder. Nothing contained herein or in any other agreement or
document delivered at any closing, and no action taken by any Purchaser
pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert with
respect to such obligations or the transactions contemplated by this
Agreement. Each Purchaser shall be entitled to protect and enforce its rights,
including without limitation the rights arising out of this Agreement, and it
shall not be necessary for any other Purchaser to be joined as an additional
party in any proceeding for such purpose.
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IN WITNESS WHEREOF, the parties have executed this
Registration Rights Agreement as of the date first written
above.
GENELABS TECHNOLOGIES, INC.
By:
_________________________________
Name: Irene A. Chow, Ph.D.
Title: Chairman and Chief Executive Officer
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SIGNATURE PAGES OF PURCHASER TO FOLLOW]
IN WITNESS WHEREOF, the parties have executed this
Registration Rights Agreement as of the date first written
above.
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By:/s/
_________________________________
Name:
Title:
Address for Notice:
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