EXHIBIT 10.4
$325,000,000
CELGENE CORPORATION
1 3/4% CONVERTIBLE NOTES DUE 2008
PURCHASE AGREEMENT
May 28, 2003
May 28, 2003
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Dear Sirs and Madames:
Celgene Corporation, a Delaware corporation (the "COMPANY"), proposes
to issue and sell to Morgan Stanley & Co. Incorporated (the "INITIAL PURCHASER")
$325,000,000 principal amount of its 1 3/4% Convertible Notes due 2008 (the
"FIRM SECURITIES") to be issued pursuant to the provisions of an Indenture dated
as of June 3, 2003 (the "INDENTURE") between the Company and The Bank of New
York, as Trustee (the "TRUSTEE"). The Company also proposes to issue and sell to
the Initial Purchaser not more than an additional $75,000,000 principal amount
of its 1 3/4% Convertible Notes due 2008 (the "ADDITIONAL SECURITIES") if and to
the extent that the Initial Purchaser shall have determined to exercise the
right to purchase such 1 3/4% Convertible Notes due 2008 granted to the Initial
Purchaser in Section 2 hereof. The Firm Securities and the Additional Securities
are hereinafter collectively referred to as the "SECURITIES". The Securities
will be convertible into shares of common stock, par value $0.01 per share, of
the Company together with the rights evidenced by such common stock to the
extent provided in the Rights Agreement, dated as of September 16, 1996, as
amended, between the Company and American Stock Transfer and Trust Company
(unless such rights shall have been redeemed or terminated previously) (the
"UNDERLYING SECURITIES").
The Securities and the Underlying Securities will be offered without
being registered under the Securities Act of 1933, as amended (the "SECURITIES
ACT"), to qualified institutional buyers in compliance with the exemption from
registration provided by Rule 144A under the Securities Act.
The Initial Purchaser and its direct and indirect transferees will be
entitled to the benefits of a Registration Rights Agreement dated the Closing
Date (as defined herein) between the Company and the Initial Purchaser (the
"REGISTRATION RIGHTS AGREEMENT").
In connection with the sale of the Securities, the Company has prepared
an offering memorandum (the "MEMORANDUM") including or incorporating by
reference a description of the terms of the Securities and the Underlying
Securities, the terms of the offering and a description of the Company. As used
herein, the term "Memorandum" shall include the documents incorporated by
reference therein. The terms "SUPPLEMENT", "AMENDMENT" and "AMEND" as used
herein with respect to the Memorandum shall include all documents deemed to be
incorporated by reference in the Memorandum that are filed subsequent to the
date of the Memorandum with the Securities and Exchange Commission (the
"COMMISSION") pursuant to the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT").
1. Representations and Warranties. The Company represents and warrants
to, and agrees with, you that:
(a) (i) Each document, if any, filed or to be filed pursuant to
the Exchange Act and incorporated by reference in the Memorandum
complied or will comply when so filed in all material respects with the
Exchange Act and the applicable rules and regulations of the Commission
thereunder and (ii) the Memorandum, in the form used by the Initial
Purchaser to confirm sales and on the Closing Date (as defined in
Section 4), will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in
this paragraph do not apply to statements or omissions in the
Memorandum based upon information relating to the Initial Purchaser
furnished to the Company in writing by the Initial Purchaser expressly
for use therein.
(b) The Company has been duly incorporated, is validly existing as
a corporation in good standing under the laws of the jurisdiction of
its incorporation, has the corporate power and authority to own its
property and to conduct its business as described in the Memorandum and
is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(c) Each subsidiary of the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Memorandum and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole; all of the issued shares of capital
stock of each subsidiary of the Company have been duly and validly
authorized and
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issued, are fully paid and non-assessable and are owned directly by the
Company, free and clear of all liens, encumbrances, equities or claims.
(d) This Agreement has been duly authorized, executed and
delivered by the Company.
(e) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Memorandum.
(f) The shares of common stock of the Company outstanding prior to
the issuance of the Securities have been duly authorized and are
validly issued, fully paid and non-assessable.
(g) The Securities have been duly authorized and, when executed
and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Initial Purchaser in accordance
with the terms of this Agreement, will be valid and binding obligations
of the Company, enforceable in accordance with their terms, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors'
rights generally and equitable principles of general applicability, and
will be entitled to the benefits of the Indenture and the Registration
Rights Agreement pursuant to which such Securities are to be issued.
(h) The Underlying Securities issuable upon conversion of the
Securities have been duly authorized and reserved and, when issued upon
conversion of the Securities in accordance with the terms of the
Securities, will be validly issued, fully paid and non-assessable, and
the issuance of the Underlying Securities will not be subject to any
preemptive or similar rights.
(i) Each of the Indenture and the Registration Rights Agreement
has been duly authorized, executed and delivered by, and (assuming the
due authorization, execution and delivery thereof by the other parties
thereto) is a valid and binding agreement of, the Company, enforceable
in accordance with its terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally and
equitable principles of general applicability and except as rights to
indemnification and contribution under the Registration Rights
Agreement may be limited under applicable law.
(j) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement,
the Indenture, the Registration Rights Agreement and the Securities
will not contravene any provision of applicable law or the certificate
of incorporation or by-laws of the Company or any agreement or other
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instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole, or any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any subsidiary, and no consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, the Indenture, the
Registration Rights Agreement or the Securities, except such as may be
required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Securities and by Federal and
state securities laws with respect to the Company's obligations under
the Registration Rights Agreement.
(k) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Memorandum provided to prospective purchasers of
the Securities.
(l) Neither the Company nor any of its subsidiaries is in
violation of its respective charter or by-laws or in default in the
performance of any obligation, agreement, covenant or condition
contained in any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and its
subsidiaries, taken as a whole, to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective property is bound, except for such
defaults that would not, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(m) There are no legal or governmental proceedings pending or, to
the knowledge of the Company, threatened to which the Company or any of
its subsidiaries is a party or to which any of the properties of the
Company or any of its subsidiaries is subject other than proceedings
accurately described in all material respects in the Memorandum and
proceedings that would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole, or on the power or
ability of the Company to perform its obligations under this Agreement,
the Indenture, the Registration Rights Agreement or the Securities or
to consummate the transactions contemplated by the Memorandum.
(n) The Company and its subsidiaries (i) are in compliance with
any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
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contaminants ("ENVIRONMENTAL LAWS"), (ii) have received all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses, (iii) are in
compliance with all terms and conditions of any such permit, license or
approval, (iv) are in compliance with any provisions of the employee
Retirement Income Security Act of 1974, as amended, ("ERISA") or the
rules and regulations promulgated thereunder and (v) are in compliance
with any provisions of the Foreign Corrupt Practice Act or the rules
and regulations promulgated thereunder, except where such noncompliance
with Environmental Laws, failure to receive required permits, licenses
or other approvals, or noncompliance with ERISA or the Foreign Corrupt
Practices Act or failure to comply with the terms and conditions of
such permits, licenses or approvals would not, singly or in the
aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(o) There are no costs or liabilities associated with compliance
by the Company and its subsidiaries with Environmental Laws (including,
without limitation, any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental Laws
or any permit, license or approval, any related constraints on
operating activities and any potential liabilities to third parties)
which would, singly or in the aggregate, have a material adverse effect
on the Company and its subsidiaries, taken as a whole.
(p) The Company is not, and after giving effect to the offering
and sale of the Securities and the application of the proceeds thereof
as described in the Memorandum will not be, required to register as an
"investment company" as such term is defined in the Investment Company
Act of 1940, as amended.
(q) Neither the Company nor any affiliate (as defined in Rule
501(b) of Regulation D under the Securities Act, an "AFFILIATE") of the
Company has directly, or through any agent, (i) sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any
security (as defined in the Securities Act) which is or will be
integrated with the sale of the Securities in a manner that would
require the registration under the Securities Act of the Securities or
(ii) offered, solicited offers to buy or sold the Securities by any
form of general solicitation or general advertising (as those terms are
used in Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the
Securities Act.
(r) It is not necessary in connection with the offer, sale and
delivery of the Securities to the Initial Purchaser in the manner
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contemplated by this Agreement to register the Securities under the
Securities Act or to qualify the Indenture under the Trust Indenture
Act of 1939, as amended.
(s) The Securities satisfy the requirements set forth in Rule
144A(d)(3) under the Securities Act.
(t) The Company has established and maintained disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14)
that are adequate and effective and designed to ensure that material
information relating to the Company, including its consolidated
subsidiaries, is made known to its chief executive officer and chief
financial officer by others within those entities.
(u) The Company maintains a system of accounting controls
sufficient to provide reasonable assurances that (a) transactions are
executed in accordance with management's general or specific
authorization, (b) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets, (c) access to assets is permitted only in accordance with
management's general or specific authorization and (d) the recorded
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(v) Except as described in the Memorandum, the Company and its
subsidiaries own or possess all material patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and
trade names currently employed or required by them in connection with
the business currently conducted by them, or as currently proposed to
be conducted, as described in the Memorandum, except such as the
failure to so own or possess would not have, singly or in the
aggregate, a material adverse affect on the Company and its
subsidiaries, taken as a whole. To the best of the Company's knowledge,
there are no valid and enforceable United States patents that are
infringed by the business currently conducted by the Company, or as
currently proposed to be conducted by the Company, as described in the
Memorandum and which would have a material adverse effect on the
Company, taken as a whole. The Company is not aware of any basis for a
finding that the Company and its subsidiaries do not have clear title
or valid license rights to the patents and patent applications
referenced in the Memorandum as owned or licensed by the Company.
Except as described in the Memorandum, the Company and its subsidiaries
are not subject to any judgment, order, writ, injunction or
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decree of any court or any Federal, state, local, foreign or other
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, or any arbitrator, nor have they
entered into or are a party to any contract, which restricts or impairs
the use of any of the foregoing which would have a material adverse
effect on the Company and its subsidiaries, taken as a whole. The
Company is not aware of any prior art that may render any patent
application owned by the Company and its subsidiaries anticipated which
has not been disclosed to the United States Patent and Trademark Office
and which would have a material adverse effect on the Company and its
subsidiaries, taken as a whole. Except for such matters that have been
resolved as described in the Memorandum, neither the Company nor any of
its subsidiaries has received any written notice of infringement of or
conflict with asserted rights of any third party with respect to the
business currently conducted by them as described in the Memorandum and
which would have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(w) Each of the Company and its subsidiaries has such permits,
licenses, consents, exemptions, franchises, authorizations and other
approvals (each, an "AUTHORIZATION") of, and has made all filings with
and notices to, all governmental or regulatory authorities and
self-regulatory organizations and all courts and other tribunals,
including, without limitation, under any applicable Environmental Laws,
as are necessary to own, lease, license and operate its respective
properties and to conduct its business, except to the extent the
failure to have any such Authorization or to make any such filing or
notice would not, singly or in the aggregate, have a material adverse
effect on the Company and its subsidiaries, taken as a whole. Each such
Authorization is valid and in full force and effect and each of the
Company and its subsidiaries is in compliance with all the terms and
conditions thereof and with the rules and regulations of the
authorities and governing bodies having jurisdiction with respect
thereto; and no event has occurred (including, without limitation, the
receipt of any notice from any authority or governing body) which
allows or, after notice or lapse of time or both, would allow,
revocation, suspension or termination of any such Authorization or
results or, after notice or lapse of time or both, would result in any
other impairment of the rights of the holder of any such Authorization;
and such Authorizations contain no restrictions that are burdensome to
the Company or any of its subsidiaries; except to the extent such
failure to be valid and in full force and effect or to be in
compliance, the occurrence of any such event or the presence of any
such restriction would not, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
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(x) There are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or liens
granted or issued by the Company or any of its subsidiaries relating to
or entitling any person to purchase or otherwise to acquire any shares
of the capital stock of the Company or any of its subsidiaries, except
as otherwise disclosed in the Memorandum and except for options granted
to directors and employees of the Company and its subsidiaries in the
ordinary course of business since December 31, 2002.
(y) The consolidated financial statements included or incorporated
by reference in the Memorandum, together with related schedules and
notes, present fairly the consolidated financial position, results of
operations and changes in financial position of the Company and its
subsidiaries on the basis stated therein at the respective dates or for
the respective periods to which they apply; such statements and related
schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the
periods involved, except as disclosed therein; and the other financial
and statistical information and data set forth in the Memorandum are,
in all material respects, accurately presented and prepared on a basis
consistent with such financial statements and the books and records of
the Company.
(z) Since the date as of which information is given in the
Memorandum, the studies, tests and preclinical and clinical trials
conducted by or on behalf of the Company that are described in the
Memorandum were and, if still pending, are being conducted in
accordance with experimental protocols, procedures and controls
pursuant to, where applicable, accepted professional scientific
standards, except where the failure to so conduct would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole; the descriptions of the results of such studies, tests and
trials contained in the Memorandum are accurate and complete in all
material respects; and the Company has not received any notices or
correspondence from the U.S. Food and Drug Administration or any state,
local or foreign governmental body exercising comparable authority
requiring the termination, suspension or material modification of any
studies, tests or preclinical or clinical trials conducted by or on
behalf of the Company which termination, suspension or material
modification would have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(aa) There are no existing or, to the knowledge of the Company,
threatened labor disputes with the employees of the Company or its
subsidiaries which would have a material adverse effect on the Company
and its subsidiaries, taken as a whole.
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2. Agreements to Sell and Purchase. The Company hereby agrees to sell
to the Initial Purchaser, and the Initial Purchaser, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees to purchase from the Company $325,000,000 principal
amount of Firm Securities at a purchase price of 97% of the principal amount
thereof (the "PURCHASE PRICE") plus accrued interest, if any, to the Closing
Date.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the Initial Purchaser the Additional Securities, and the Initial Purchaser
shall have the right to purchase up to $75,000,000 principal amount of
Additional Securities at the Purchase Price plus accrued interest, if any, to
the date of payment and delivery. The Initial Purchaser may exercise this right
in whole or from time to time in part by giving written notice not later than 30
days after the date of this Agreement. Any exercise notice shall specify the
principal amount of Additional Securities to be purchased by the Initial
Purchaser and the date on which such Additional Securities are to be purchased.
Each purchase date must be at least one business day after the written notice is
given and may not be earlier than the closing date for the Firm Securities nor
later than ten business days after the date of such notice. Additional
Securities may be purchased as provided in Section 4 solely for the purpose of
covering over-allotments made in connection with the offering of the Firm
Securities.
The Company hereby agrees that, without the prior written consent of
Morgan Stanley & Co. Incorporated, it will not, during the period ending 90 days
after the date of the Memorandum, (i) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any shares of common stock of
the Company or any securities convertible into or exercisable or exchangeable
for common stock of the Company or (ii) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the common stock of the Company, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of common
stock or such other securities, in cash or otherwise. The foregoing sentence
shall not apply to (A) the sale of the Securities under this Agreement, (B) the
issuance by the Company of any shares of common stock upon the exercise of an
option or warrant or the conversion of the Securities or of a security
outstanding on the date hereof or (C) the grant by the Company of options to
directors and employees of the Company and its subsidiaries in the ordinary
course of business; provided that any such options are either not exercisable
during the period ending 90 days after the date of the Memorandum or are issued
to directors or employees who have agreed to be bound by the terms of the
lock-up agreement described in the Memorandum in the section entitled "Plan of
Distribution."
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3. Terms of Offering. You have advised the Company that the Initial
Purchaser will make an offering of the Securities purchased by the Initial
Purchaser hereunder on the terms to be set forth in the Memorandum, as soon as
practicable after this Agreement is entered into as in your judgment is
advisable.
4. Payment and Delivery. Payment for the Firm Securities shall be made
to the Company in Federal or other funds immediately available in New York City
against delivery of such Firm Securities for the account of the Initial
Purchaser at 10:00 a.m., New York City time, on June 3, 2003, or at such other
time on the same or such other date, not later than June 10, 2003, as shall be
designated in writing by you. The time and date of such payment are hereinafter
referred to as the "CLOSING DATE."
Payment for any Additional Securities shall be made to the Company in
Federal or other funds immediately available in New York City against delivery
of such Additional Securities for the account of the Initial Purchaser at 10:00
a.m., New York City time, on the date specified in the corresponding notice
described in Section 2 or at such other time on the same or on such other date,
in any event not later than July 14, 2003, as shall be designated in writing by
you. The time and date of such payment is hereinafter referred to as the "OPTION
CLOSING DATE".
The Securities shall be in definitive form or global form, as specified
by you, and registered in such names and in such denominations as you shall
request in writing not later than one full business day prior to the Closing
Date or the applicable Option Closing Date, as the case may be. The Securities
shall be delivered to you on the Closing Date or an Option Closing Date, as the
case may be, for the account of the Initial Purchaser, with any transfer taxes
payable in connection with the transfer of the Securities to the Initial
Purchaser duly paid, against payment of the Purchase Price therefor plus accrued
interest, if any, to the date of payment and delivery.
5. Conditions to the Initial Purchaser's Obligation. The obligation of
the Initial Purchaser to purchase and pay for the Firm Securities on the Closing
Date are subject to the following conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating
accorded the Company or any of the Company's securities or in the
rating outlook for the Company by any "nationally recognized
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statistical rating organization," as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations
of the Company and its subsidiaries, taken as a whole, from that
set forth in the Memorandum provided to prospective purchasers of
the Securities that, in your judgment, is material and adverse and
that makes it, in your judgment, impracticable to market the
Securities on the terms and in the manner contemplated in the
Memorandum.
(b) The Initial Purchaser shall have received on the Closing Date
a certificate, dated the Closing Date and signed by an executive
officer of the Company, to the effect set forth in Section 5(a)(i) and
to the effect that the representations and warranties of the Company
contained in this Agreement are true and correct as of the Closing Date
and that the Company has complied in all material respects with all of
the agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely
upon the best of his or her knowledge as to proceedings threatened.
(c) The Initial Purchaser shall have received on the Closing Date
an opinion of (i) Proskauer Rose LLP, outside counsel for the Company,
(ii) Pennie & Edmonds, LLP, special patent counsel for the Company,
(iii) Mathews, Collins, Shepherd & McKay, P.A., special U.S. patent
counsel for the Company, and (iv) Kleinfeld, Kaplan & Becker, special
pharmaceutical regulatory counsel for the Company, in each case dated
the Closing Date, to the effect set forth in Exhibit A-1, A-2, A-3 and
A-4, respectively. Such opinions shall be rendered to the Initial
Purchaser at the request of the Company and shall so state therein.
(d) The Initial Purchaser shall have received on the Closing Date
an opinion of Davis Polk & Wardwell, counsel for the Initial Purchaser,
dated the Closing Date, to the effect set forth in Exhibit B.
(e) The Initial Purchaser shall have received on the Closing Date
a letter, dated the Closing Date, in form and substance satisfactory to
the Initial Purchaser, from KPMG LLP, independent public accountants,
containing statements and information of the type ordinarily included
in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in or
incorporated
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by reference into the Memorandum; provided that the letter shall use a
"cut-off date" not earlier than the date hereof.
(f) The "lock-up" agreements, each substantially in the form of
Exhibit C hereto, between you and the executive officers and directors
of the Company relating to sales and certain other dispositions of
shares of common stock or certain other securities, delivered to you on
or before the date hereof, shall be in full force and effect on the
Closing Date.
The obligation of the Initial Purchaser to purchase Additional
Securities hereunder is subject to the delivery to you on the applicable Option
Closing Date of such documents as you may reasonably request with respect to the
good standing of the Company, the due authorization, execution and
authentication of the Additional Securities to be sold on such Option Closing
Date and other matters related to the execution and authentication of such
Additional Securities.
6. Covenants of the Company. In further consideration of the agreements
of the Initial Purchaser contained in this Agreement, the Company covenants with
the Initial Purchaser as follows:
(a) To furnish to you in New York City, without charge, prior to
10:00 a.m. New York City time on the business day next succeeding the
date of this Agreement and during the period mentioned in Section 6(c),
as many copies of the Memorandum, any documents incorporated by
reference therein and any supplements and amendments thereto as you may
reasonably request.
(b) Before amending or supplementing the Memorandum, to furnish to
you a copy of each such proposed amendment or supplement and not to use
any such proposed amendment or supplement to which you reasonably
object.
(c) If, during such period after the date hereof and prior to the
date on which all of the Securities shall have been sold by the Initial
Purchaser, any event shall occur or condition exist as a result of
which it is necessary to amend or supplement the Memorandum in order to
make the statements therein, in the light of the circumstances when the
Memorandum is delivered to a purchaser, not misleading, or if, in the
opinion of counsel for the Initial Purchaser, it is necessary to amend
or supplement the Memorandum to comply with applicable law, forthwith
to prepare and furnish, at its own expense, to the Initial Purchaser,
either amendments or supplements to the Memorandum so that the
statements in the Memorandum as so amended or supplemented will not, in
the light of the circumstances when the Memorandum is delivered to a
purchaser, be
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misleading or so that the Memorandum, as amended or supplemented, will
comply with applicable law.
(d) To endeavor to qualify the Securities for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request; provided, however, that the Company will not be
required to qualify to do business in any jurisdiction in which it is
not then so qualified, to file any general consent to service of
process or to take any other action that would subject it to general
service of process or to taxation in any such jurisdiction where it is
not then so subject.
(e) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be
paid all expenses, if any, incident to the performance of its
obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the issuance and sale of the Securities
and all other fees or expenses in connection with the preparation of
the Memorandum and all amendments and supplements thereto, including
all printing costs associated therewith, and the delivering of copies
thereof to the Initial Purchaser, in the quantities herein above
specified, (ii) all costs and expenses related to the transfer and
delivery of the Securities to the Initial Purchaser, including any
transfer or other taxes payable thereon, (iii) the cost of printing or
producing any Blue Sky memorandum in connection with the offer and sale
of the Securities under state securities laws and all expenses in
connection with the qualification of the Securities for offer and sale
under state securities laws as provided in Section 6(d) hereof,
including filing fees and the reasonable fees and disbursements of
counsel for the Initial Purchaser in connection with such qualification
and in connection with the Blue Sky memorandum, (iv) any fees charged
by rating agencies for the rating of the Securities, (v) the fees and
expenses, if any, incurred in connection with the admission of the
Securities for trading in PORTAL or any appropriate market system, (vi)
the costs and charges of the Trustee and any transfer agent, registrar
or depositary, (vii) the cost of the preparation, issuance and delivery
of the Securities, (viii) the costs and expenses of the Company
relating to investor presentations on any "road show" undertaken in
connection with the marketing of the offering of the Securities,
including, without limitation, expenses associated with the production
of road show slides and graphics, fees and expenses of any consultants
engaged in connection with the road show presentations with the prior
approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants,
and the cost of any aircraft chartered in connection with the road
show, (ix) the document production charges and expenses associated with
printing this Agreement and (x) all other cost and expenses incident to
the performance
13
of the obligations of the Company hereunder for which provision is not
otherwise made in this Section. It is understood, however, that except
as provided in this Section, Section 8, and the last paragraph of
Section 10, the Initial Purchaser will pay all of its costs and
expenses, including fees and disbursements of its counsel, transfer
taxes payable on resale of any of the Securities by it and any
advertising expenses connected with any offers it may make.
(f) Neither the Company nor any Affiliate will sell, offer for
sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in the Securities Act) which could be integrated
with the sale of the Securities in a manner which would require the
registration under the Securities Act of the Securities.
(g) Not to solicit any offer to buy, or offer or sell, the
Securities or the Underlying Securities by means of any form of general
solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) or in any manner involving a
public offering within the meaning of Section 4(2) of the Securities
Act.
(h) While any of the Securities or the Underlying Securities
remain "restricted securities" within the meaning of the Securities
Act, to make available, upon request, to any seller of such Securities
the information specified in Rule 144A(d)(4) under the Securities Act,
unless the Company is then subject to Section 13 or 15(d) of the
Exchange Act.
(i) If requested by you, to use its reasonable best efforts to
permit the Securities to be designated PORTAL securities in accordance
with the rules and regulations adopted by the National Association of
Securities Dealers, Inc. relating to trading in the PORTAL Market.
(j) During the period of two years after the Closing Date or any
Option Closing Date, if later, the Company will not, and will not
permit any of its affiliates (as defined in Rule 144 under the
Securities Act) to resell any of the Securities or the Underlying
Securities which constitute "restricted securities" under Rule 144 that
have been reacquired by any of them.
(k) Not to take any action prohibited by Regulation M under the
Exchange Act in connection with the distribution of the Securities
contemplated hereby.
7. Offering of Securities; Restrictions on Transfer. The Initial
Purchaser represents and warrants that it is a qualified institutional buyer as
defined in Rule 144A under the Securities Act (a "QIB"). The Initial Purchaser,
14
agrees with the Company that (i) it will not solicit offers for, or offer or
sell, such Securities by any form of general solicitation or general advertising
(as those terms are used in Regulation D under the Securities Act) or in any
manner involving a public offering within the meaning of Section 4(2) of the
Securities Act and (ii) it will solicit offers for such Securities only from,
and will offer such Securities only to, persons that it reasonably believes to
be QIBs that in purchasing such Securities are deemed to have represented and
agreed as provided in the Memorandum under the caption "Transfer Restrictions".
8. Indemnity and Contribution. The Company agrees to indemnify and hold
harmless the Initial Purchaser, each person, if any, who controls the Initial
Purchaser within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, and each affiliate of the Initial Purchaser
within the meaning of Rule 405 under the Securities Act from and against any and
all losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Memorandum (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to state
therein a material fact necessary to make the statements therein in the light of
the circumstances under which they were made not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to the Initial Purchaser furnished to the Company in
writing by the Initial Purchaser expressly for use therein.
(b) The Initial Purchaser agrees to indemnify and hold harmless the
Company, its directors, its officers and each person, if any, who controls the
Company within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act to the same extent as the foregoing indemnity from the
Company to the Initial Purchaser, but only with reference to information
relating to such Initial Purchaser furnished to the Company in writing by the
Initial Purchaser expressly for use in the Memorandum or any amendments or
supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section 8(a) or 8(b), such person (the "INDEMNIFIED PARTY")
shall promptly notify the person against whom such indemnity may be sought (the
"INDEMNIFYING PARTY") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified
15
party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel at its standard
non-premium rates) for all such indemnified parties and that all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be designated
in writing by Morgan Stanley & Co. Incorporated, in the case of parties
indemnified pursuant to Section 8(a), and by the Company, in the case of parties
indemnified pursuant to Section 8(b). The indemnifying party shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment that is
indemnifiable pursuant to Section 8(a) or 8(b), as the case may be. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in Section 8(a) or
8(b) is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Initial Purchaser on
the other hand from the offering of the Securities or (ii) if the allocation
provided by clause 8(d)(i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause 8(d)(i) above but also the relative fault of the Company on the one
hand and of the Initial Purchaser on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Initial
Purchaser on the other hand in connection with the offering of the Securities
shall
16
be deemed to be in the same respective proportions as the net proceeds
from the offering of the Securities (before deducting expenses) received by the
Company and the total discounts and commissions received by the Initial
Purchaser bear to the aggregate offering price of the Securities. The relative
fault of the Company on the one hand and of the Initial Purchaser on the other
hand shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or by the Initial Purchaser and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
(e) The Company and the Initial Purchaser agree that it would not be
just or equitable if contribution pursuant to this Section 8(d) were determined
by pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in Section 8(d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages and liabilities referred to in Section 8(d) shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 8, the Initial Purchaser shall not be required to contribute any amount
in excess of the amount by which the total price at which the Securities resold
by it in the initial placement of such Securities were offered to investors
exceeds the amount of any damages that the Initial Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 8 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this Section
8 and the representations, warranties and other statements of the Company and
the Initial Purchaser contained in this Agreement shall remain operative and in
full force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of the Initial Purchaser, any person
controlling the Initial Purchaser or any affiliate of the Initial Purchaser or
by or on behalf of the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of the
Securities.
9. Termination. The Initial Purchaser may terminate this Agreement by
notice given to the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on, or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the Nasdaq National
17
Market, the Chicago Board of Options Exchange, the Chicago Mercantile Exchange
or the Chicago Board of Trade, (ii) trading of any securities of the Company
shall have been suspended on any exchange or in any over-the-counter market,
(iii) a material disruption in securities settlement, payment or clearance
services in the United States shall have occurred, (iv) any moratorium on
commercial banking activities shall have been declared by Federal or New York
State authorities or (v) there shall have occurred any outbreak or escalation of
hostilities, or any change in financial markets or any calamity or crisis that,
in your judgment, is material and adverse and which, singly or together with any
other event specified in this clause (v), makes it, in your judgment,
impracticable or inadvisable to proceed with the offer, sale or delivery of the
Securities on the terms and in the manner contemplated in the Memorandum.
10. Effectiveness. This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto.
If this Agreement shall be terminated by the Initial Purchaser because
of any failure or refusal on the part of the Company to comply with the terms or
to fulfill any of the conditions of this Agreement, or if for any reason the
Company shall be unable to perform its obligations under this Agreement, the
Company will reimburse the Initial Purchaser for all out-of-pocket expenses
(including the fees and disbursements of their counsel) reasonably incurred by
the Initial Purchaser in connection with this Agreement or the offering
contemplated hereunder.
11. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
12. Applicable Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York.
18
13. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
Very truly yours,
CELGENE CORPORATION
By: /s/ Robert J. Hugin
----------------------------------
Name: Robert J. Hugin
Title: Senior Vice President and
Chief Financial Officer
19
Accepted as of the date hereof
Morgan Stanley & Co. Incorporated
By: Morgan Stanley & Co. Incorporated
By: /s/ Bryan Andrzejewski
-------------------------------------------
Name: Bryan Andrzejewski
Title: Executive Director
20
EXHIBIT A-1
OPINION OF PROSKAUER ROSE LLP
The opinion of Proskauer Rose LLP, to be delivered pursuant to Section
5(c) of the Purchase Agreement shall be to the effect that:
A. The Company is validly existing as a corporation in good standing
under the laws of the State of Delaware.
B. The Company has the corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Memorandum and to enter into and perform its obligations under each of the
Purchase Agreement, the Registration Rights Agreement, the Indenture and the
Securities.
C. The shares of common stock of the Company issuable upon conversion
of the Securities have been duly authorized and, when issued in accordance with
the terms of the Indenture, will be validly issued, fully paid and
nonassessable.
D. The Purchase Agreement has been duly authorized, executed and
delivered by, and is a valid and binding agreement of, the Company, enforceable
against the Company in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the rights and remedies of creditors
or by general equitable principles and except as rights to indemnification may
be limited by applicable law or public policy.
E. The Registration Rights Agreement has been duly authorized, executed
and delivered by, and is a valid and binding agreement of, the Company,
enforceable in accordance with its terms, except as the enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of creditors or by
general equitable principles and except as rights to indemnification may be
limited by applicable law or public policy.
F. The Indenture has been duly authorized, executed and delivered by,
and is a valid and binding agreement of, the Company, enforceable against the
Company in accordance with its terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights and remedies of creditors or by general
equitable principles.
G. The Securities are in the form contemplated by the Indenture, have
been duly authorized by the Company for issuance and sale pursuant to the
Purchase Agreement and the Indenture and, when executed by the Company and
authenticated by the Trustee in the manner provided in the Indenture, and
delivered against payment of the purchase price therefor, will constitute valid
and binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting enforcement of the rights and remedies of creditors or
by general equitable principles.
H. The statements in the Memorandum under the captions "Description of
the Notes" and "U.S. Federal Income Tax Considerations" (insofar as such
statements constitute matters of law), summaries of legal matters, the charter
or by-law provisions of the Company, documents or legal proceedings, or legal
conclusions, have been reviewed by us and fairly present and summarize, in all
material respects, the matters referred to therein.
I. No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental or regulatory
authority or agency is required for the Company's execution, delivery and
performance of the Purchase Agreement, the Registration Rights Agreement or the
Indenture, or the issuance and delivery of the Securities, or consummation of
the transactions contemplated thereby, except such as have been obtained or may
be made by the Company after the Closing Date under the Securities Act, except
such as may be required under applicable state securities or blue sky laws, and
except such as may be required by federal and state securities laws with respect
to the Company's obligations under the Registration Rights Agreement.
J. The execution and delivery of the Purchase Agreement, the
Registration Rights Agreement, the Securities and the Indenture by the Company
and the performance by the Company of its obligations thereunder, and
consummation of the transactions contemplated thereby: (i) will not result in
any violation of the provisions of the charter or by-laws of the Company; (ii)
will not conflict with or constitute a breach of any material contract filed as
an exhibit to the Company's most recent Annual Report on Form 10-K filed on
March 31, 2003, except for such conflicts or breaches as would not, individually
or in the aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole; and (iii) will not result in any violation of
any law, administrative regulation or administrative or court decree known to us
applicable to the Company or any of its subsidiaries.
K. The Company is not, and after receipt of payment for the Securities
will not be, an "investment company" within the meaning of the Investment
Company Act.
A-1-2
L. To our knowledge, there is no pending or threatened action, suit or
proceeding before any court or governmental agency, authority or body involving
the Company except for actions, suits or proceedings which are either disclosed
in the Memorandum or, if not so disclosed, would not, individually or in the
aggregate with all such other actions, suits and proceedings, have, if adversely
determined, a material adverse effect on the Company and its subsidiaries, taken
as a whole.
M. Assuming the accuracy of the representations, warranties and
covenants of the Company and the Initial Purchaser contained in the Purchase
Agreement, no registration of the Securities under the Securities Act, and no
qualification of an indenture under the Trust Indenture Act with respect
thereto, is required in connection with the purchase of the Securities by the
Initial Purchaser or the initial resale of the Securities by the Initial
Purchaser to QIBs in the manner contemplated by the Purchase Agreement and the
Memorandum other than any registration or qualification that may be required in
connection with the Registration Rights Agreement.
N. Nothing has come to our attention which would lead us to believe
that the Memorandum, as of its date or at the Closing Date, contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading (it being
understood that we express no statement of belief as to the financial statements
and schedules or other financial and statistical data derived therefrom,
included or incorporated by reference in the Memorandum).
With respect to the matters referred to in paragraph N above, counsel
may state that his or her beliefs are based upon his or her participation in the
preparation of the Memorandum (and any amendments or supplements thereto) and
review and discussion of the contents thereof and review of the documents
incorporated by reference therein, but are without independent check or
verification except as specified.
O. Nothing has come to our attention which would lead us to believe
that each document incorporated by reference in the Memorandum did not comply as
to form when filed with the Commission in all material respects with the
Exchange Act and the rules and regulations of the Commission thereunder (it
being understood that we express no statement of belief as to the financial
statements and schedules or other financial and statistical data derived
therefrom, included or incorporated by reference therein).
With respect to the matters referred to in paragraph O above, counsel
may state that his or her beliefs are based upon his or her participation in the
preparation of the Memorandum (and any amendments or supplements thereto)
A-1-3
and review and discussion of the contents thereof and review of the documents
incorporated by reference therein, but are without independent check or
verification except as specified.
P. The Company is duly qualified to transact business and is in good
standing in New Jersey.
Q. The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Memorandum.
A-1-4
EXHIBIT A-2
OPINION OF PENNIE & EDMONDS, LLP
The opinion of Pennie & Edmonds, LLP to be delivered pursuant to
Section 5(c) of the Purchase Agreement shall be to the effect that:
A. To the best of our knowledge, the statements relating to patent
rights licensed from the Rockefeller University and Children's Medical Center
Corporation, and related agreements with EntreMed, included in the Memorandum
under the caption "Risk Factors - we may not be able to protect our intellectual
property" and in the Company's Annual Report on Form 10-K for the year ended
December 31, 2002 under the caption "Patents and Proprietary Technology" do not
contain any untrue statement of material fact, or admit to state a material
fact, necessary to make the statements herein, in light of the circumstances
under which such statements were made, not misleading.
B. To the best of our knowledge, and based on the information brought
to our attention by the Company and its subsidiaries, the published literature
and patent references relating to the inventions claimed in their patent
applications prosecuted by such counsel, we have disclosed or will timely
disclose if required to be disclosed all material references known to us, to the
Patent and Trademark Office in accordance with 37 C.F.R. Section 1.56; neither
we, nor to the best of our knowledge, the Company and its subsidiaries, made any
misrepresentation or concealed any material information from the Patent and
Trademark Office in any of such applications or in connection with the
prosecution of such applications in violation of 37 C.F.R. Section 1.56.
C. To the best of our knowledge, and with respect to patents and patent
applications referenced in the Memorandum for which we are responsible, we are
unaware of any basis for a finding that the Company and its subsidiaries do not
have clear title or valid license rights.
D. To the best of our knowledge and without having made any
investigation for the purpose of rendering this opinion, we are not aware of any
valid basis for a finding, by a properly informed court of proper jurisdiction,
of unenforceability of any of the patents or patent applications referenced in
the Memorandum as owned by the Company or its subsidiaries for which we are
responsible.
E. To the best of our knowledge and without having made any
investigation for the purpose of rendering this opinion, we are not aware of any
valid basis for a finding, by a properly informed court of proper jurisdiction,
of invalidity under 35 U.S.C. ss. 102 or 35 U.S.C. ss. 112 of any of the patents
referenced in the Memorandum as owned by the Company or its subsidiaries for
which we are responsible.
F. To the best of our knowledge, other than disclosed in the
Memorandum, the Company or its subsidiaries has not received any written
communication or notice, relating to the infringement of any third party
patents.
G. To the best of our knowledge, other than disclosed in the
Memorandum, no interference proceeding has been declared in the United States
Patent and Trademark Office with respect to any of the patents or patent
applications referenced in the Memorandum as owned by the Company or its
subsidiaries for which we are responsible.
H. To the best of our knowledge, and with respect to patents and patent
applications referenced in the Memorandum for which we are responsible, there
are no legal or governmental proceedings pending (other than patent applications
pending) relating to patents to which the Company and its subsidiaries are a
party or of which any such property of the Company and its subsidiaries is
subject.
A-2-2
EXHIBIT A-3
OPINION OF MATHEWS, COLLINS, SHEPHERD & MCKAY
The opinion of Mathews, Collins, Shepherd & McKay to be delivered
pursuant to Section 5(c) of the Purchase Agreement shall be to the effect that:
A. The statements relating to legal matters, documents or proceedings
included in the Memorandum under the caption "Risk factors - we may not be able
to protect our intellectual property" and the Company's Annual Report on Form
10-K for the year ended December 31, 2002 under the caption "Patents and
Proprietary Technology" fairly summarize in all material respects such matters,
documents or proceedings.
B. The statements relating to third party patents that may relate to
the NF-(Kappa Beta) pathway, included in the Company's Annual Report on Form
10-K for the year ended December 31, 2002 under the caption "Patents and
Proprietary Technology" fairly summarize such matters.
C. To the best of our knowledge, other than as disclosed in the
Memorandum, the Company has not received any written communication or notice,
relating to the infringement of any third party patents.
EXHIBIT A-4
OPINION OF KLEINFELD, KAPLAN & BECKER
The opinion of Kleinfeld, Kaplan & Becker to be deliver pursuant to
Section 5(c) of the Purchase Agreement shall be to the effect that:
A. The statements summarizing the legal/regulatory requirements
applicable to the development, testing, marketing, manufacturing and labeling of
pharmaceutical products included in the Memorandum under the caption "Risk
factors- the pharmaceutical industry is subject to extensive government
regulations which presents numerous risks to us" and in the Company's Annual
Report on Form 10-K for the year ended December 31, 2002 under the caption
"Governmental Regulation" fairly summarize in all material respects the
applicable legal/regulatory requirements.
EXHIBIT B
OPINION OF DAVIS POLK & WARDWELL
The opinion of Davis Polk & Wardwell to be delivered pursuant to
Section 5(d) of the Purchase Agreement shall be to the effect that:
A. The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
B. The Securities have been duly authorized by the Company and, when
executed and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Initial Purchaser in accordance with the
terms of the Purchase Agreement, will be valid and binding obligations of the
Company, enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights generally
and equitable principles of general applicability, and will be entitled to the
benefits of the Indenture and the Registration Rights Agreement pursuant to
which such Securities are to be issued.
C. The Underlying Securities issuable upon conversion of the Securities
have been duly authorized and reserved and, when issued upon conversion of the
Securities in accordance with the terms of the Securities, will be validly
issued, fully paid and non-assessable, and the issuance of the Underlying
Securities will not be subject to any preemptive or similar rights.
D. Each of the Indenture and the Registration Rights Agreement has been
duly authorized, executed and delivered by, and is a valid and binding agreement
of, the Company, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights generally
and equitable principles of general applicability, and except as rights to
indemnification and contribution under the Registration Rights Agreement may be
limited under applicable law.
E. The statements relating to legal matters or documents included in
the Memorandum under the captions "Description of Notes", "Plan of Distribution"
and "Transfer Restrictions", fairly summarize in all material respects such
matters or documents.
F. Nothing has come to the attention of such counsel to cause such
counsel to believe that (except for the financial statements and financial
schedules and other financial and statistical data, as to which such counsel
need not express any belief) the Memorandum when issued contained, or as of the
date such opinion is delivered contains, any untrue statement of a material fact
or omitted or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
With respect to the matters referred to in the paragraph above, Davis
Polk & Wardwell may state that their beliefs are based upon their participation
in the preparation of the Memorandum (and any amendments or supplements thereto)
and review and discussion of the contents thereof (including the review of, but
not participation in the preparation of, the incorporated documents), but are
without independent check or verification except as specified.
G. Based upon the representations, warranties and agreements of the
Company in Sections 1(q), 1(s), 6(f) and 6(g) of the Purchase Agreement and of
the Initial Purchaser in Section 7 of the Purchase Agreement, it is not
necessary in connection with the offer, sale and delivery of the Securities to
the Initial Purchaser under the Purchase Agreement or in connection with the
initial resale of such Securities by the Initial Purchaser in accordance with
Section 7 of the Purchase Agreement to register the Securities under the
Securities Act of 1933 or to qualify the Indenture under the Trust Indenture Act
of 1939, it being understood that no opinion is expressed as to any subsequent
resale of any Security or Underlying Security.
B-2
EXHIBIT C
[FORM OF LOCK-UP LETTER]
May __, 2003
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036
Dear Sirs and Madames:
The undersigned understands that Morgan Stanley & Co. Incorporated
("MORGAN STANLEY") proposes to enter into a Purchase Agreement (the "PURCHASE
AGREEMENT") with Celgene Corporation, a Delaware corporation (the "COMPANY"),
providing for the offering (the "OFFERING") by Morgan Stanley (the "INITIAL
PURCHASER"), of $325,000,000 principal amount of 1 3/4% Convertible Notes due
2008 (the "SECURITIES"). The Securities will be convertible into shares of
common stock, par value $0.01 per share, of the Company (the "COMMON STOCK").
To induce the Initial Purchaser to continue its efforts in connection
with the Offering, the undersigned hereby agrees that, without the prior written
consent of Morgan Stanley, it will not, during the period commencing on the date
hereof and ending 90 days after the date of the offering memorandum relating to
the Offering (the "MEMORANDUM"), (1) offer, pledge, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, lend, or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or (2) enter
into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of the Common Stock, whether
any such transaction described in clause (1) or (2) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (a) the sale of any Securities to the
Initial Purchaser pursuant to the Purchase Agreement, (b) transactions relating
to shares of Common Stock or other securities acquired in open market
transactions after the completion of the Offering, (c) the exercise of stock
options outstanding on the
date hereof or (d) transfers of shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock to a trust
where the beneficiaries of the trust are drawn solely from a group consisting of
the undersigned and immediate family members of the undersigned or by will or
intestacy to the undersigned's immediate family members provided that (i) the
trust or the beneficiaries under the will or by intestacy agrees to enter into a
lock-up letter substantially in the form of this letter and (ii) the undersigned
shall not be required to, and shall not voluntarily, file a report on Form 4
under Section 16(a) of the Securities Exchange Act of 1934 reporting a reduction
in beneficial ownership of shares of Common Stock during the restricted period
referred in the foregoing sentence. Immediate family member of a person means
the spouse, lineal descendants, father, mother, brother, sister, father-in-law,
mother-in-law, brother-in-law and sister-in-law of such person. In addition, the
undersigned agrees that, without the prior written consent of Morgan Stanley, it
will not, during the period commencing on the date hereof and ending 90 days
after the date of the Memorandum, make any demand for or exercise any right with
respect to, the registration of any shares of Common Stock or any security
convertible into or exercisable or exchangeable for Common Stock. The
undersigned also agrees and consents to the entry of stop transfer instructions
with the Company's transfer agent and registrar against the transfer of the
undersigned's shares of Common Stock except in compliance with the foregoing
restrictions.
The undersigned understands that the Company and the Initial Purchaser
are relying upon this Lock-Up Agreement in proceeding toward consummation of the
Offering. The undersigned further understands that this Lock-Up Agreement is
irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns.
Whether or not the Offering actually occurs depends on a number of
factors, including market conditions. Any Offering will only be made pursuant to
a Purchase Agreement, the terms of which are subject to negotiation between the
Company and the Initial Purchaser.
This Lock-Up Agreement will terminate automatically in the event the
Offering is not consummated prior to June 10, 2003.
Very truly yours,
_____________________________
(Name)
_____________________________
(Address)
C-2