EXHIBIT 10.19
CONVERTIBLE NOTE PURCHASE AGREEMENT
September 16, 1998
Warburg Dillon Read LLC
677 Washington Blvd.
Stamford, CT 06901
Dear Sirs:
CELGENE CORPORATION (the "Company") wishes to confirm its arrangement with
you in connection with the issuance to you today, against payment in immediately
available funds of the purchase price of 100% of the principal amount thereof,
of a convertible note in the form attached hereto as Annex I (the "Convertible
Note") in an aggregate principal amount of $8,750,000 and convertible initially
into 795,463 fully paid and non-assessable shares (each a "Share") of the
Company's Common Stock, par value $.01 per share (the "Common Stock"), subject
to adjustment as set forth in the Convertible Note. In consideration of your
purchase of the Convertible Note, the Company will pay to you, in immediately
available funds, a fee of 5% of the principal amount thereof, which shall be
netted against the purchase price of the Convertible Note.
Simultaneously with the issuance of the Convertible Note pursuant to this
Agreement, you and the Company have entered into a Registration Rights
Agreement, dated as of the date hereof (the "Registration Rights Agreement"),
pursuant to which the Company has agreed to register the Shares under certain
circumstances. All capitalized terms not defined herein shall have the meaning
ascribed in the Convertible Note.
1. AGREEMENT TO ISSUE AND ACCEPT. On the basis of the representations and
warranties and subject to the terms and conditions set forth herein, the Company
agrees to issue to you, and you agree to accept from the Company, the
Convertible Note against payment of the above-specified purchase price therefor,
The closing of the issuance and acceptance of the Convertible Note against such
payment shall take place on the date hereof, at which time the Company shall
deliver to you the
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Convertible Note, against delivery by you of a wire transfer of the purchase
price to the Company's account at PNC Bank New Jersey Trust, ABA No. 031000053,
benefit Account No. 8511074024, for further credit to Account No.
42432012020943, Celgene Corporation, Attn: Lisa Goldhammer, Telephone No. (732)
220-3112.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby makes
the representations and warranties to you set forth on Annex II hereto.
3. AGREEMENTS OF PURCHASER. You covenant and agree with the Company that:
(a) You will not offer, sell, assign, hypothecate or otherwise
transfer the Convertible Note except (i) pursuant to an effective
registration statement under the Securities Act of 1933 (the "Act"), (ii)
to a person you reasonably believe to be an "accredited investor" within
the meaning of Rule 501 under the Act, pursuant to an available exemption
under the Act or (iii) in offshore transactions within the meaning and
meeting the requirements of Rule 903 under the Act.
(b) You will not offer, sell, assign, hypothecate or otherwise
transfer any Shares issued upon conversion of the Convertible Note except
(i) pursuant to an effective registration statement under the Act; (ii) to
a person you reasonably believe to be an "accredited investor" within the
meaning of Rule 501 under the Act, pursuant to an available exemption under
the Act or (iii) in an offshore transaction within the meaning and meeting
the requirements of Rule 903 under the Act.
(c) You are an "accredited investor" within the meaning of Rule 501
under the Act.
(d) You will not, in hedging transactions effected in connection with
your purchase and holding of the Convertible Note, effect sales of Common
Stock (other than "blocks" of Common Stock, as defined in Rule 10b-18 under
the Securities Exchange Act of 1934) in an amount that exceeds, for any
trading day, 25% of the "trading volume" of the Common Stock (as defined in
Rule 10b-18).
4. CONDITIONS. Your obligations under this Agreement shall be subject to
the condition that all representations and warranties and other statements of
the Company herein are true and correct at and as of the closing of the purchase
and sale of the Convertible Note, the condition that the Company shall have
performed all of its obligations hereunder theretofore to be performed, and the
following additional conditions:
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(a) Counsel for the Company specified in Annex III hereto shall have
furnished to you their respective written opinions, dated the date of such
closing, in form and substance satisfactory to you, to the effect set forth
in Annex III hereto.
(b) On the date of such closing, the Company shall have furnished to
you such appropriate further information, certificates and documents as you
may reasonably request.
5. MISCELLANEOUS.
(a) This Agreement shall be binding upon, and inure solely to the benefit
of, you and the Company and the respective successors and assigns thereof, and
no other person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of the Convertible Note from you shall be deemed a
successor or assign by reason merely of such purchase.
(b) Any notice or other communication required or permitted to be given
hereunder shall be deemed effectively given when personally delivered, telexed,
transmitted by facsimile or mailed by pre-paid certified mail, return receipt
requested, or by telephone when confirmed in writing by one of the preceding
methods addressed as follows (as applicable):
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If to the Company, to:
Celgene Corporation
7 Powder Horn Drive
Warren, NJ 07059
Attention: John W. Jackson
Telephone Number: (732) 271-1001
Facsimile Transmission Number: (732) 805-3931
with a copy to:
Proskauer Rose LLP
1585 Broadway
New York, NY 10036
Attention: Robert A. Cantone, Esq.
Telephone Number: (212) 969-3000
Facsimile Transmission Number: (212) 969-2900
If to Warburg Dillon Read LLC, to:
Warburg Dillon Read LLC
677 Washington Blvd.
Stamford, CT 06901
Attention: General Counsel
Capital Markets '
Telephone Number: (203) 719-3000
Facsimile Transmission Number: (201) 719-6097
or to such other address or number and to the attention of such other person as
either party may designate by written notice to the other party. Notice shall be
effective upon actual receipt.
(c) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
(d) Time shall be of the essence in the performance of this Agreement.
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(e) This Agreement may be executed by the parties hereto in any number of
counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same instrument.
Very truly yours,
CELGENE CORPORATION
By:
-------------------------------
Name:
Title:
Accepted as of the date hereof:
WARBURG DILLON READ LLC
By:
-------------------------------
Name:
Title:
ANNEX II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
(a) Each of the Company's Annual Report on Form 10-K for the year ended
December 31, 1997, and each report filed by the Company pursuant to the Exchange
Act after the filing of such Annual Report on Form 10-K (collectively, the
"Exchange Act Reports") conforms in all material respects with the requirements
of the Exchange Act and the rules and regulations of the Securities and Exchange
Commission thereunder; and no such document, when it was filed (or, if an
amendment with respect to any such document was filed, when such amendment was
filed), contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading,
(b) All the outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid, non-assessable and not
subject to any preemptive or similar rights; the Shares initially issuable upon
conversion of the Convertible Note have been duly and validly authorized and
reserved for issuance out of the Company's authorized and unissued shares of
Common Stock and, when issued and delivered in accordance with the provisions of
the Convertible Note will be duly and validly issued, fully paid and
non-assessable and will conform to the description of the Common Stock contained
in the Company's Registration Statement on Form 8-A, File No. 0-16132.
(c) The Convertible Note has been duly authorized and, when issued and
delivered pursuant to this Agreement, will have been duly executed, issued and
delivered and will constitute a valid and legally binding obligation of the
Company; and the Registration Rights Agreement has been duly authorized and,
when executed and delivered by the parties thereto, will constitute a valid and
legally binding obligation of the Company, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
(d) The execution, delivery and performance of this Agreement, the
Registration Rights Agreement and the Convertible Note, compliance by the
Company with all provisions hereof and thereof and the consummation of the
transactions contemplated hereby and the issuance and delivery of the
Convertible Note will not conflict with or constitute a breach of any of the
terms or provisions of, or a default under, the charter or by-laws of the
Company or any of its subsidiaries, or any agreement, indenture or other
instrument to which it or any of its subsidiaries is a party or by which it or
any of its subsidiaries or their respective properties are bound, or violate or
conflict with any laws, administrative regulations or rulings or court decrees
applicable to the Company, any of its subsidiaries or their respective property;
and, except (i) as required pursuant to the Registration Rights Agreement, or
(ii) for the disclosure required to be included in the Company's next Quarterly
Report on Form 10-Q, when filed, pursuant to Item 2(c) of Form 10-Q, no consent,
approval, authorization or order of or filing or registration with, any such
court or governmental agency or body is required for the execution, delivery and
performance of this Agreement, the Registration Rights Agreement and the
Convertible Note by the Company and the consummation of the transactions
contemplated hereby and thereby.
(e) Except as otherwise set forth in the Exchange Act Reports, there are no
material legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any of their respective property is
the subject which, if determined adversely to the Company or its subsidiaries,
might have a material adverse effect on the business, condition (financial or
otherwise), stockholders' equity, properties, business prospects or results of
operations of the Company and its subsidiaries, taken as a whole (a "Material
Adverse Effect"), and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated.
(f) The Company is not, and the Company covenants that at any time when the
Convertible Note is outstanding it will not be, an open-end investment company,
unit investment trust or face-amount certificate company that is or is required
to be registered under Section 8 of the United States Investment Company Act of
1940, as amended.
(g) When the Convertible Note is issued and delivered pursuant to this
Agreement, the Convertible Note will not be of the same class (within the
meaning of Rule 144A under the Securities Act of 1933) as securities which are
listed on a national securities exchange registered under Section 6 of the
Exchange Act or quoted in a U.S. automated inter-dealer quotation system.
(h) The Company is, and the Company covenants that while the Convertible
Note is outstanding it will remain, subject to Section 13 or 15(d) of the
Exchange Act.
(i) Neither the Company nor any person acting on its behalf has offered or
sold the Convertible Note by means of any general solicitation or general
advertising within the meaning of Rule 502(c) under the Act.
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ANNEX III
OPINION OF COMPANY COUNSEL
(a) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of its jurisdiction of incorporation
and has the corporate power and authority required to carry on its business as
described in the Exchange Act Reports and to own, lease and operate its
properties.
(b) All the outstanding shares of Common Stock have been duly authorized
and validly issued and are fully paid, non-assessable and not subject to any
preemptive or similar rights.
(c) The Shares initially issuable upon conversion of the Convertible Note
have been duly authorized and reserved for issuance and when issued and
delivered upon conversion in accordance with the provisions of the Convertible
Note, will have been validly issued and will be fully paid and non-assessable,
and the issuance of such Shares is not subject to any preemptive or similar
rights.
(d) This Agreement has been duly authorized, executed and delivered by the
Company.
(e) The Convertible Note has been duly authorized, executed, issued and
delivered, and constitutes the valid and legally binding obligation of the
Company enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
(f) The Registration Rights Agreement has been duly authorized, executed
and delivered by the Company and constitutes a valid and legally binding
agreement of the Company, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles; provided that such counsel need express no
opinion with respect to Section 6 of such Agreement.
(g) The authorized capital stock of the Company, including the Common
Stock, conforms as to legal matters to the description thereof contained in the
Company's Registration Statement on Form 8-A, File No. 0-16132.
(h) Except (i) as required pursuant to the Registration Rights Agreement,
or (ii) for the disclosure required to be included in the Company's next
Quarterly Report on Form 10-Q, when filed, pursuant to Item 2(c) of Form 10-Q,
no consent, approval, authorization or order of or filing or registration with,
any court or governmental
agency or body is required for the execution, delivery and performance of this
Agreement, the Registration Rights Agreement and the Convertible Note by the
Company and the consummation of the transactions contemplated by this Agreement
and thereby,
(i) The execution, delivery and performance of this Agreement, the
Registration Rights Agreement and the Convertible Note by the Company,
compliance by the Company with all the provisions hereof and thereof and the
consummation of the transactions contemplated hereby and thereby will not
conflict with or constitute a breach of any of the terms or provisions of, or a
default under, the charter or by-laws of the Company or any agreement, indenture
or other instrument to which the Company is a party or by which the Company or
its properties are bound, or violate or conflict with any laws, administrative
regulations or rulings or court decrees applicable to the Company or its
properties in any case which is reasonably likely to have a Material Adverse
Effect.
(j) The Company is not an open-end investment company, unit investment
trust or face-amount certificate company that is or is required to be registered
under Section 8 of the United States Investment Company Act of 1940, as amended.
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