Exhibit 4.1
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STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made as of the day of March, 1998, between T Cell
Sciences, Inc. (the "Company"), a corporation organized under the laws of the
State of Delaware with its principal offices at 119 Fourth Avenue, Needham,
Massachusetts 02194, and the purchaser whose name and address is set forth on
the signature page hereof (the "Purchaser").
IN CONSIDERATION of the mutual covenants contained in this Stock Purchase
Agreement, the Company and the Purchaser agree as follows:
SECTION 1. Authorization of Sale of the Shares. Subject to the terms and
conditions of this Stock Purchase Agreement, the Company has authorized the sale
of up to twenty percent (20%) of its outstanding shares of common stock, par
value $.001 per share of the Company (the "Common Stock"). The shares of Common
Stock, and the Penalty Shares (as defined in Section 7.5) are referred to herein
collectively as the "Shares."
SECTION 2. Agreement to Sell and Purchase Shares.
(a) At the Closing Date (as defined in Section 3), the Company will
sell to the Purchaser, and the Purchaser will buy from the Company, upon the
terms and conditions hereinafter set forth, ________ shares of Common Stock at
the purchase price per Share of $______(the "Stock Purchase Price").
(b) The Company proposes to enter into a similar form of Stock Purchase
Agreement ("Other Stock Purchase Agreements") with certain other investors (the
"Other Purchasers"). The Purchaser and the Other Purchasers are hereinafter
sometimes collectively referred to as the "Purchasers," and this Stock Purchase
Agreement and the Other Stock Purchase Agreements are hereinafter sometimes
collectively referred to as the "Agreements."
SECTION 3. Delivery of Shares on the Closing Date.
(a) The closing for the purchase and sale of the shares of Common Stock
(the "Closing") shall occur on approximately March 13, 1998 (the "Closing Date")
at the offices of Anisfield Investments Ltd. c/o Kenneth Sirlin, P.C., the Trump
Building, 40 Wall Street, 59th Floor, New York, New York 10005. On or prior to
the Closing Date, the Purchaser shall have executed both the Stock Purchase
Agreement and the Registration Statement Questionnaire. The Closing shall be
when the following have occurred: (i) the Purchaser has placed an amount equal
to the Stock Purchase Price multiplied by the number of shares of Common Stock,
as set forth in Section 2 above (the "Aggregate Purchase Price"), in an escrow
account established by Kenneth Sirlin, P.C. at Chase Manhattan Bank (the "Escrow
Account"); and (ii) the Company shall have delivered to the Escrow Account one
or more certificates for the shares of Common Stock to be issued to the
Purchaser on the Closing Date. On the Closing Date, there shall be released from
the Escrow Account to the Purchaser one or more certificates registered in the
name of the Purchaser representing the number of shares of Common Stock as
provided in Section 2 above, and all funds in the Escrow Account shall be
released to the Company, pursuant to the Company's instructions. Stock
certificates evidencing the shares of Common Stock will be delivered to each
Purchaser on the Closing Date with a legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR
HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT PURSUANT TO (I) A REGISTRATION
STATEMENT WITH RESPECT TO SUCH SECURITIES WHICH IS EFFECTIVE UNDER SUCH ACT OR
(II) RULE 144 OR 144A UNDER SUCH ACT OR ANY OTHER AVAILABLE EXEMPTION FROM
REGISTRATION UNDER SUCH ACT RELATING TO DISPOSITION OF SECURITIES."
The name(s) in which the stock certificates are to be registered are set forth
in the Stock Certificate Questionnaire attached hereto as part of Appendix I.
(b) The Company's obligation to complete the purchase and sale of the
shares of Common Stock and deliver such stock certificate(s) to the Purchaser on
the Closing Date shall be subject to the following conditions, any one or more
of which may be waived by the Company: (i) execution by the Purchaser of a Stock
Purchase Agreement (including the Stock Certificate Questionnaire in Appendix I)
and the Registration Statement Questionnaire, (ii) delivery by the Purchaser of
the Aggregate Stock Purchase Price for the number of shares of Common Stock
purchased as set forth in Section 2 above, to the Escrow Account; (iii) release
to the Company of such funds held in the Escrow Account in the full amount of
the Aggregate Stock Purchase Price for number of shares of Common Stock set
forth in Section 2; and (iv) the accuracy of the representations and warranties
made by the Purchasers and the fulfillment of those undertakings of the
Purchasers to be fulfilled prior to the Closing Date.
(c) The Purchaser's obligation to accept delivery of such stock
certificates(s) and to pay for the shares of Common Stock evidenced thereby on
the Closing Date shall be subject to the following conditions, any of which may
be waived by the Purchaser: (i) the accuracy in all material respects as of the
Closing Date of the representations and warranties made by the Company herein as
if made on the Closing Date; (ii) the fulfillment in all material respects of
those undertakings of the Company to be fulfilled prior to the Closing Date;
(iii) release from the Escrow Account to the Purchaser, against receipt by the
Company of the Aggregate Stock Purchase Price simultaneously released from the
Escrow Account, of the certificates for the number of shares of Common Stock as
provided in Section 2; and (iv) receipt by the Purchasers of an opinion of
counsel to the Company, dated as of the Closing Date and addressed to the
Purchaser, in substantially the form attached hereto as Exhibit 1.
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The Purchaser's obligations hereunder are expressly not conditioned on the
purchase by any or all of the Other Purchasers of the shares of Common Stock
that they have agreed to purchase from the Company.
SECTION 4. Representations, Warranties and Covenants. The Company hereby
represents and warrants to, and covenants with, the Purchaser as follows:
4.1 Organization and Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to conduct its
business as currently conducted.
4.2 Authorized Capital Stock. As of December 31, 1997, the authorized
capital stock of the Company consisted of (a) 50,000,000 shares of Common Stock,
$.001 par value per share, of which 26,478,864 shares were validly issued and
outstanding, fully paid and non-assessable; (b) 1,163,102 shares of Class B
Preferred Stock, $2.00 par value per share, of which no shares were issued and
outstanding; and (c) 3,000,000 shares of Class C Preferred Stock, $.01 par value
per share, of which no shares were issued and outstanding. As of January 1,
1998, 8,552 shares of Common Stock were held in the treasury of the Company.
When issued and delivered to the Purchaser by the Company against payment of the
consideration set forth herein, the shares of Common Stock and the Additional
Shares (as defined herein), if any, will be validly issued, fully paid and
non-assessable.
The Common Stock is authorized for trading on the Nasdaq National Market
and no suspension of trading in the Common Stock is in effect.
4.3 Due Execution, Delivery and Performance of the Agreements. The
Company's execution, delivery and performance of the Agreements (a) have been
duly authorized by all requisite corporate action by the Company, (b) will not
violate any law or the Certificate of Incorporation or By-laws of the Company or
any provision of any material indenture, mortgage, agreement, contract or other
material instrument to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries or any of their properties or
assets is bound as of the date hereof, and (c) will not result in a breach of or
constitute (upon notice or lapse of time or both) a default under any such
indenture, mortgage, agreement, contract or other material instrument or the
creation or imposition of any lien, security interest, mortgage, pledge, charge
or other encumbrance, of any material nature whatsoever upon any properties or
assets of the Company or any of its subsidiaries. Upon their execution and
delivery, and assuming the valid execution thereof by the respective Purchasers,
this Agreement will constitute the valid and binding obligation of the Company,
enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' and contracting parties' rights generally and
except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
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equity or at law) and except as the indemnification and contribution agreements
of the Company in Section 7.11 hereof may be legally unenforceable.
4.4 Additional Information. The Company represents and warrants that the
information contained in the following documents, which the Company has
furnished to the Purchaser, taken as a whole, does not contain any untrue
statement of material fact or omit to state any material fact necessary in order
to make the statements therein not misleading as of the respective final dates
of the documents.
(a) the Company's Annual Report to Stockholders on Form 10-K for the
fiscal year ended December 31, 1996 (without exhibits);
(b) the Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1997, June 30, 1997 and September 30, 1997;
(c) Notice to Shareholders and Proxy Statement for its Annual Meeting
of Shareholders held May 13, 1997;
(d) the Company's Current Report on Form 8-K dated August 26, 1997;
(e) the Company's Press Release dated October 15, 1997 (1 of 2);
(f) the Company's Press Release dated October 15, 1997 (2 of 2);
(g) the Company's Press Release dated November 3, 1997;
(h) the Company's Press Release dated January 21, 1998; and
(i) the Company's Press Release dated February 23, 1998.
4.5 No Material Change. There has been no material adverse change in the
financial condition or business or results of operations of the Company since
September 30, 1997.
4.6 Approvals. No authorization, approval or consent of any governmental
body or the stockholders of the Company is required to be obtained by the
Company for the issuance and sale of the Shares as contemplated by this Stock
Purchase Agreement.
4.7 Absence of Litigation. Except as disclosed in the documents referred to
in Section 4.4, there is no action, suit, proceeding, inquiry or investigation
before or by any court, public board or body pending or, to the knowledge of the
Company or any of its subsidiaries, threatened against or affecting the Company
or any of its subsidiaries, wherein an unfavorable decision, ruling or finding
would have a material adverse effect on the business,
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financial condition or results of operations of the Company and its subsidiaries
taken as a whole or the transaction contemplated by this Stock Purchase
Agreement or any of the documents contemplated hereby or which would adversely
affect in any material respect the validity or enforceability of, or the
authority or ability of the Company to perform its obligations under this Stock
Purchase Agreement or any of such other documents.
SECTION 5. Representations, Warranties and Covenants of the Purchaser.
(a) The Purchaser represents and warrants to, and covenants with, the
Company that: (i) the Purchaser is knowledgeable, sophisticated and experienced
in making, and is qualified to make decisions with respect to investments in
securities presenting an investment decision like that involved in the purchase
of shares of Common Stock, including investments in securities issued by the
Company and investments in development stage companies, and has requested,
received, reviewed and considered all information it deems relevant in making an
informed decision to purchase the shares of Common Stock; (ii) the Purchaser is
acquiring the Shares pursuant to this Stock Purchase Agreement in the ordinary
course of its business and for its own account for investment only and with no
present intention of distributing any of such Shares or in any arrangement or
understanding with any other persons regarding the distribution of such Shares;
(iii) the Purchaser will not, directly or indirectly, offer, sell, pledge,
transfer or otherwise dispose of (or solicit any offers to buy, purchase or
otherwise acquire or take a pledge of) any of the Shares except in compliance
with the Securities Act of 1933, as amended (the "Securities Act") and the rules
and regulations promulgated thereunder; (iv) the Purchaser has completed or
caused to be completed the Prospective Investor Questionnaire, the Registration
Statement Questionnaire and the Stock Certificate Questionnaire, each attached
hereto as Appendix I and the answers thereto are true and correct as of the date
hereof and will be true and correct as of the effective date of the Registration
Statement; (v) the Purchaser has, in connection with its decision to purchase
the number of shares of Common Stock set forth in Section 2 above, relied solely
upon the representations and warranties of the Company contained herein; and
(vi) the Purchaser is an "accredited investor" within the meaning of Rule 501 of
Regulation D promulgated under the Securities Act; and (vii) that the Purchaser
will hold the Shares for a period of thirty (30) days following the Closing
Date.
(b) The Purchaser hereby covenants with the Company not to make any
sale of the Shares without effectively causing the prospectus delivery
requirement under the Securities Act to be satisfied or otherwise complying with
the Securities Act, and the Purchaser acknowledges and agrees that the Shares
are not transferable on the books of the Company unless the certificate
submitted to the transfer agent evidencing the Shares is accompanied by (1) a
separate certificate (i) in the form of Appendix II hereto, (ii) executed by an
officer of, or other authorized person designated by, the Purchaser, and (iii)
to the effect that (A) the Shares have been sold in accordance with the
Registration Statement and (B) the requirement of delivering a current
prospectus has been satisfied; (2) an opinion of counsel reasonably satisfactory
to the Company stating that registration is not required under the Securities
Act; or
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(3) evidence reasonably satisfactory to the Company that all applicable
requirements of Rule 144 promulgated under the Securities Act with respect to
such proposed transfer have been satisfied.
(c) The Purchaser further represents and warrants to, and covenants
with, the Company that (i) the Purchaser has full right, power, authority and
capacity to enter into this Stock Purchase Agreement and to consummate the
transactions contemplated hereby and has taken all necessary action to authorize
the execution, delivery and performance of this Stock Purchase Agreement, and
(ii) upon the execution and delivery hereof, this Stock Purchase Agreement shall
constitute a valid and binding obligation of the Purchaser enforceable in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' and contracting parties' rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
and except as the indemnification and contribution agreements of the Purchaser
in Section 7.11 hereof may be legally unenforceable.
SECTION 6. Survival of Representations, Warranties and Agreements.
Notwithstanding any investigation made by any party to this Stock Purchase
Agreement, all covenants, agreements, representations and warranties made by the
Company and the Purchaser herein and in the certificates for the shares of
Common Stock delivered pursuant hereto shall survive for a period of one year
following the execution of this Stock Purchase Agreement, the delivery to the
Purchaser of the shares of Common Stock being purchased and the payment
therefor.
SECTION 7. Registration of the Shares; Compliance with the Securities Act.
7.1 Registration Procedures. The Company shall use its best efforts:
(a) subject to Section 7.5 below, to prepare and file with the
Commission within thirty (30) business days of the Closing Date a
Registration Statement on Form S-3 (the "Registration Statement")
for the resale of the Shares by the Purchaser from time to time
through the automated quotation system of the Nasdaq National
Market System or in privately-negotiated transactions;
(b) to cause the Registration Statement to become effective as soon as
possible after filing thereof, subject to receipt of necessary
information from the Purchaser;
(c) subject to Section 7.5 below, to promptly prepare and file with
the Commission such amendments and supplements to the Registration
Statement and the prospectus used in connection therewith as may
be
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necessary to keep the Registration Statement effective for a
period not exceeding the third anniversary of the Closing Date as
is required for the intended method of distribution, or such
shorter period which will terminate when all the Shares covered by
such Registration Statement have been sold pursuant to such
Registration Statement or withdrawn; provided, however, that in no
event shall the Company be obligated to keep the Registration
Statement effective once the Shares are no longer subject to
restrictions as to volume under Rule 144 of the Securities Act of
1933, as amended;
(d) to promptly furnish to the Purchaser with respect to the Shares
registered under the Registration Statement (and to each
underwriter, if any, of such Shares) such number of copies of the
Registration Statement and any amendment thereof and of
prospectuses and preliminary prospectuses in conformity with the
requirements of the Securities Act and such other documents as the
Purchaser may reasonably request, in order to keep the Purchaser
apprised of the progress of the registration process and to
facilitate the public sale or other disposition of all or any of
the Shares by the Purchaser; and
(e) to promptly inform the Purchaser when any stop order by the
Commission has been issued with respect to the Purchaser's Shares
and use its best efforts to promptly cause such stop order to be
withdrawn.
A questionnaire related to the Registration Statement to be completed by
the Purchaser is attached hereto as a part of Appendix I.
7.2 State Securities Laws. The Company shall use its best efforts to
promptly file documents required of the Company for normal blue sky clearance in
states specified in writing by the Purchaser and reasonably required by the
Purchaser in order to resell its Shares, provided, however, that the Company
shall not be required to qualify to do business or consent to service of process
in any jurisdiction in which it is not now so qualified or has not so consented.
7.3 Expenses and No Brokers.
(a) Expenses. The Company shall bear all expenses in connection with
the procedures in paragraphs (a) through (e) of this Section 7.1, Section 7.2
and the registration of the Shares pursuant to the Registration Statement, other
than fees and expenses, if any, of counsel or other advisors to the Purchaser,
provided that the Company shall pay at the Closing, all of the attorneys fees
and travel expenses incurred by Anisfield Investments Ltd. up to a maximum of
$10,000 in connection with the placement of the shares.
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(b) No Brokers. Neither the Company nor the Purchaser(s) have taken any
action which would give rise to any claim by any person(s) or brokerage
commissions, finder's fees or similar payments by the Company or the
Purchaser(s) for the transaction contemplated herein, except for dealings with
Anisfield Investments Ltd., whose fees will be paid by the Company.
7.4 Listing. The Company shall use its best efforts to take such action as
may be necessary to cause all Shares to be listed or otherwise eligible for full
trading privileges on the Nasdaq National Market ("Nasdaq") or, if the Common
Stock is not listed on Nasdaq, on such other securities exchange or quotation
system on which the Common Stock is traded. The Company shall use its best
efforts to continue the listing or trading privilege for all Shares on each such
exchange or quotation system.
7.5 Penalty for Delay of Registration Statement's Effective Date. In the
event the Registration Statement has not become effective within 90 days after
initial filing thereof, for each thirty (30) day period (a "Penalty Period")
during which the Shares remain unregistered, the Company shall issue or pay, as
applicable, to the Purchaser within three (3) trading days of the end of each
such Penalty Period, at the Company's election, either: (i) a number of
additional shares of Common Stock equal to 1 1/2% (the "Payment Amount") of the
aggregate purchase price paid for all Shares purchased by such Purchaser
hereunder, divided by the Market Value (as defined hereinafter), as of the last
trading day of the Penalty Period, of a share of Common Stock (the "Penalty
Shares") or (ii) a cash payment equal to the Payment Amount; provided, however,
that in no event will the number of Shares issued pursuant to the Agreements in
the aggregate exceed 19.9% of the total number of shares of Common Stock
outstanding on the Closing Date (the "Maximum Percentage"), and if such number
of Shares to be issued pursuant to the Agreements in the aggregate exceeds the
Maximum Percentage, the Company shall pay the Purchaser a cash payment equal to
the Market Value, as of the last trading day of the Penalty Period, of a share
of Common Stock multiplied by the number of Penalty Shares which would have
resulted in exceeding the Maximum Percentage; and provided further, however,
that in no event shall the total amount of all payments under this Section
exceed 7.5% of the aggregate purchase price paid for all shares purchased by
such Purchaser hereunder, with Penalty Shares valued as of the date of issuance
as provided herein. For purposes of this Agreement, the "Market Value" of a
share of Common Stock shall be the average high and low sales prices of the
Common Stock on the Nasdaq National Market on the last trading day in the
relevant Penalty Period.
7.6 Suspension of Registration Requirement.
(a) The Company shall promptly notify the Purchaser of, and confirm in
writing, the issuance by the SEC of any stop order suspending the effectiveness
of a Registration Statement or the initiation of any proceedings for that
purpose. The Company shall use reasonable efforts to obtain the withdrawal of
any order suspending the effectiveness of a Registration Statement at the
earliest possible moment.
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(b) Notwithstanding anything to the contrary set forth in this
Agreement, the Company's obligation under this Agreement to file a Registration
Statement and cause any filings with any state securities commission to be made
and to use reasonable efforts to cause a Registration Statement or any such
state securities commission filings to become effective or to amend or
supplement a Registration Statement shall be suspended in the event and during
such period pending negotiations relating to, or consummation of, a transaction
or the occurrence of an event that would require additional disclosure of
material information by the Company in the Registration Statement or such
filing, as to which the Company has a bona fide business purpose for preserving
confidentiality or which renders the Company unable to comply with SEC
requirements (such circumstances being hereinafter referred to as a "Suspension
Event") that would make it impractical or unadvisable to cause the Registration
Statement or such filings to be made or to become effective or to amend or
supplement the Registration Statement, but such suspension shall continue only
for so long as such event or its effect is continuing but in no event will the
total number of days of suspension exceed 120 days in any twelve month period
(the period of any suspension, a "Suspension Period"). The Company shall notify
promptly each of the Purchaser in writing of the existence of any Suspension
Event.
(c) The Purchaser agrees, if requested by the Company's underwriters or
financial advisors (the "Advisors") in an offering of the Company's securities
pursuant to a registration statement filed with the SEC (an "Offering"), not to
effect any public sale or distribution of any shares of Common Stock of the
Company, including a sale pursuant to Rule 144 or Rule 144A under the Securities
Act, during the 15-day period prior to, and during the 90-day period beginning
on, the date of pricing of each Offering.
7.7 Black-Out Period. Following the effectiveness of any Registration
Statement and the filings with any state securities commissions, the Purchaser
agrees that it will not effect any sales of any of the shares of Common Stock
pursuant to the Registration Statement or any such filings at any time after it
has received notice from the Company to suspend sales as a result of the
occurrence or existence of any Suspension Event or any Offering, or so that the
Company may correct or update the Registration Statement or such filing (a
"Black-Out Period"); provided that the total number of days of all Black-Out
Periods during any 12-month period shall not exceed 120. The Purchaser may
recommence effecting sales of the Registrable Shares pursuant to the
Registration Statement or such filings following further notice to such effect
from the Company, which notice shall be given by the Company as soon as
practicable but in no event later than five (5) business days after the
conclusion of any such Suspension Event.
7.8 Additional Shares. The Company, at its option, may register, under any
Registration Statement and any filings with any state securities commissions
filed pursuant to this Agreement, any number of unissued shares of Common Stock
or any shares of Common Stock owned by any other shareholder or shareholders of
the Company.
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7.9 Exchange of Legended Certificates. Following the effective date of the
Registration Statement, unless at such time a stop order is imposed by the
Commission or the effectiveness of the Registration Statement is for any other
reason suspended as permitted by Section 5(b) herein, all requirements with
respect to legends on the certificates evidencing the Shares will cease to apply
on the sale thereof, and certificated Shares without legends will be available
to the Purchaser within three (3) trading days after the Company's receipt of a
request for such unlegended certificates and Purchaser's surrender of the legend
certificate to the Company's transfer agent.
7.10 Transfer of Shares. The Purchaser agrees that it will not effect any
disposition of the Shares or its right to purchase the Shares that would
constitute a sale within the meaning of the Securities Act except as
contemplated in the Registration Statement referred to in Section 7.1 or
pursuant to an exemption from registration under the Securities Act. The
Purchaser agrees that it will promptly notify the Company of any changes in the
information set forth in the Registration Statement regarding the Purchaser or
its Plan of Distribution.
7.11 Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the Purchaser and
its respective officers, directors, agents, representatives and affiliates (an
"Indemnitee") from and against any losses, claims, damages or liabilities to
which such Indemnitee may become subject (under the Securities Act or otherwise)
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any prospectus contained therein or in any information
incorporated by reference therein, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading or arise out of any failure by the Company to
fulfill any undertaking included in the Registration Statement, and the Company
will reimburse such Indemnitee for any reasonable legal or other expenses
reasonably incurred in investigating, defending or preparing to defend any such
action, proceeding or claim, provided, however, that the Company shall not be
liable in any such case to the extent that such loss, claim, damage or liability
arises out of, or is based upon, any such untrue statement or omission made in
such Registration Statement, any preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance upon and in conformity
with written information furnished to the Company by or on behalf of such
Indemnitee specifically for use in preparation of the Registration Statement, or
the failure of such Indemnitee to comply with the covenants and agreements
contained in Sections 5(b) or 7.10 hereof respecting sale of the Shares or any
statement or omission in any Prospectus that is corrected in any subsequent
Prospectus that was delivered to the Purchaser prior to the pertinent sale or
sales by the Purchaser.
(b) The Purchaser agrees to indemnify and hold harmless the Company
(and each person, if any, who controls the Company within the meaning of Section
15 of the
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Securities Act, each officer of the Company who signs the Registration Statement
and each director of the Company) from and against any losses, claims, damages
or liabilities to which the Company (or any such officer, director or
controlling person) may become subject (under the Securities Act or otherwise),
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) that arise out of, or are based upon, any
failure to comply with the covenants and agreements contained in Sections 5(b)
or 7.10 hereof respecting sale of the Shares, or any untrue statement of a
material fact contained in the Registration Statement on the effective date
thereof if such untrue statement was made in reliance upon and in conformity
with written information furnished by or on behalf of the Purchaser specifically
for use in preparation of the Registration Statement, provided, however, that
such Purchaser shall not be liable in any such case to the extent that the
Purchaser has furnished in writing to the Company information expressly for use
in such Registration Statement or any amendment thereof or supplement thereto
which corrected or made not misleading, information previously furnished to the
Company prior to the filing of the Registration Statement, and if thereafter,
has notified the Company of such information immediately upon its occurrence or
the Purchaser's knowledge of its occurrence. The Purchaser will reimburse the
Company (or such officer, director or controlling person), as the case may be,
for any legal or other expenses reasonably incurred in investigating, defending
or preparing to defend any such action, proceeding or claim. In no event shall
the liability of the Purchaser hereunder be greater in amount than the dollar
amount of the proceeds received by such holder upon the sale of the Shares
giving rise to such indemnification obligation.
Promptly after receipt by any indemnified person of a notice of a claim or
the beginning of any action in respect of which indemnity is to be sought
against an indemnifying person pursuant to this Section 7.11, such indemnified
person shall notify the indemnifying person in writing of such claim or of the
commencement of such action (but the failure to so notify the indemnifying
person will not relieve the indemnifying person from any liability except to the
extent that the indemnifying person shall have been prejudiced as a result of
the failure or delay in giving such notice), and, subject to the provisions
hereinafter stated, in case any such action shall be brought against an
indemnified person and such indemnifying person shall be entitled to participate
therein, and, to the extent it shall wish, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified person. After notice from
the indemnifying person to such indemnified person of its election to assume the
defense thereof, such indemnifying person shall not be liable to such
indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof, provided, however,
that if there exists or shall exist a conflict of interest that would make it
inappropriate, in the opinion of counsel to the indemnified person, for the same
counsel to represent both the indemnified person and such indemnifying person or
any affiliate or associate thereof, the indemnified person shall be entitled to
retain its own counsel at the expense of such indemnifying person; provided,
however, that no indemnifying person shall be responsible for the fees and
expenses of more than one separate counsel for all indemnified parties.
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If the indemnification provided for in this Section 7.11 from the
indemnifying person is unavailable to an indemnified person hereunder in respect
of any losses, claims, damages, liabilities or expenses referred to herein, then
the indemnifying person, in lieu of indemnifying such indemnified person, shall
contribute to the amount paid or payable by such indemnified person as a result
of such losses, claims, damages, liabilities or expenses in such proportion as
is appropriate to reflect the relative fault of the indemnifying person and
indemnified persons in connection with the actions which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of such indemnifying person and
indemnified persons shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact, has been made by, or relates to information supplied by,
such indemnifying person or indemnified persons, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such action. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in this Section 7.11, any
reasonable legal or other fees or expenses reasonably incurred by such party in
connection with any investigation or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 7.11 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 7.11, no Purchaser shall be
required to contribute any amount in excess of the dollar amount of the proceeds
received by such Purchaser upon the sale of the Shares giving rise to such
contribution obligation. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
7.12 Termination of Conditions and Obligations. The conditions precedent
imposed by Section 5 or this Section 7 upon the transferability of the Shares
shall cease and terminate as to any particular number of the Shares when such
Shares shall have been effectively registered under the Securities Act and sold
or otherwise disposed of in accordance with the intended method of disposition
set forth in the Registration Statement covering such Shares or at such time as
an opinion of counsel satisfactory to the Company shall have been rendered to
the effect that such conditions are not reasonably necessary in order to comply
with the Securities Act.
7.13 Information Available. So long as the Registration Statement is
effective covering the resale of Shares owned by the Purchaser, the Company will
furnish to the Purchaser:
(a) as soon as practicable after available (but in the case of the
Company's Annual Report to Shareholders, within one hundred twenty
(120) days
12
after the end of each fiscal year of the Company), one copy of (i)
its Annual Report to Shareholders (which Annual Report shall
contain financial statements audited in accordance with generally
accepted accounting principles by a national firm of certified
public accountants), (ii) if not included in substance in the
Annual Report to Shareholders, its Annual Report on Form 10-K,
(iii) its Quarterly Reports to Shareholders, (iv) if not included
in substance in its Quarterly Reports to Shareholders, its
quarterly reports on Form 10-Q, and (v) a full copy of the
particular Registration Statement covering the Shares (the
foregoing, in each case, excluding exhibits);
(b) upon the reasonable request of the Purchaser, all exhibits
excluded by the parenthetical to subparagraph (a)(v) of this
Section 7.14 and all other information that is made available to
shareholders; and
(c) upon the reasonable request of the Purchaser, an adequate number
of copies of the prospectuses to supply to any other party
requiring such prospectuses.
7.14 No Other Obligation to Register. Except as otherwise expressly
provided in this Agreement, the Company shall have no obligation to the
Purchaser to register the Shares.
SECTION 8. Notices. All notices, requests, consents and other
communications hereunder shall be in writing, shall be mailed by first-class
registered or certified airmail, or nationally recognized overnight express
courier postage prepaid, and shall be deemed given when so mailed and shall be
delivered as addressed as follows:
(a) if to the Company, to:
T Cell Sciences, Inc.
119 Fourth Avenue
Needham, Massachusetts 02194
Attn: Chief Financial Officer
(b) with a copy mailed to:
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, Massachusetts 02109
Attn: Stuart M. Cable, Esq.
or to such other person at such other place as the Company shall
designate to the Purchaser in writing;
13
(c) if to the Purchaser, at its address as set forth at the end of
this Stock Purchase Agreement, or at such other address or
addresses as may have been furnished to the Company in writing;
and
(d) with a copy mailed to:
Anisfield Investments Ltd.
c/o Kenneth Sirlin, P.C.
The Trump Building
40 Wall Street
59th Floor
New York, New York 10005
SECTION 9. Changes. This Stock Purchase Agreement may not be modified or
amended except pursuant to an instrument in writing signed by the Company and
the Purchaser.
SECTION 10. Headings. The headings of the various sections of this Stock
Purchase Agreement have been inserted for convenience of reference only and
shall not be deemed to be part of this Stock Purchase Agreement.
SECTION 11. Severability. In case any provision contained in this Stock
Purchase Agreement should be invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
SECTION 12. Governing Law. This Stock Purchase Agreement shall be governed
by and construed in accordance with the laws of the Commonwealth of
Massachusetts and the federal law of the United States of America.
SECTION 13. Counterparts. This Stock Purchase Agreement may be executed in
two or more counterparts, each of which shall constitute an original, but all of
which, when taken together, shall constitute but one instrument, and shall
become effective when one or more counterparts have been signed by each party
hereto and delivered to the other parties.
[Remainder of Page Intentionally Left Blank]
14
IN WITNESS WHEREOF, the parties hereto have caused this Stock Purchase
Agreement to be executed by their duly authorized representatives as of the day
and year first above written.
T CELL SCIENCES, INC.
By:
---------------------------------------
Print or Type: Una S. Ryan, Ph.D., President and
Chief Executive Officer
[PURCHASERS]
Name of Purchaser
(Individual or Institution):
------------------------------------------
Nameof Individual representing
Purchaser (if an Institution):
------------------------------------------
Title of Individual representing Purchaser:
-------------------------------------------
Signature by: Individual Purchaser or Individual
representing Purchaser:
------------------------------------------
Address:
----------------------------------
Telephone:
--------------------------------
Fax:
--------------------------------------
APPENDIX I
(one of three)
T CELL SCIENCES, INC.
PROSPECTIVE INVESTOR QUESTIONNAIRE
----------------------------------
The Shares are being offered for sale to "accredited investors" as that
term is defined in Rule 501 under the Securities Act of 1933, as amended (the
"Act").
The undersigned entity certifies that it (and each managed account on whose
behalf Investor Shares are being purchased by it) is an "accredited investor"
because it is (check one or more items below):
- ---------- 1. a bank as defined in section 3(a)(2) of the Act whether acting
in its individual or fiduciary capacity;
- --------- 2. a savings and loan association or other institution as defined
in section 3(a)(5)(A) of the Act whether acting in its
individual or fiduciary capacity;
- --------- 3. a broker dealer registered pursuant to section 15 of the
Securities Exchange Act of 1934, as amended;
- --------- 4. an insurance company as defined in section 2(13) of the Act;
- --------- 5. an investment company registered under the Investment Company
Act of 1940, as amended (the "1940 Act");
- --------- 6. a business development company as defined in section 2(a)(48) of
the 1940 Act;
- --------- 7. a Small Business Investment Company licensed by the U.S. Small
Business Administration under section 301(c) or (d) of the Small
Business Investment Act of 1958;
- --------- 8. a plan established and maintained by a state or its political
subdivision for the benefit of its employees, provided that such
plan has total assets in excess of $5,000,000;
- --------- 9. a corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring
the Investor Shares, with total assets in excess of $5,000,000;
A-2
- --------- 10. an employee benefit plan within the meaning of Title I of the
Employee Retirement Income Security Act of 1974 ("ERISA"),
provided that the investment decision is made by a plan
fiduciary, as defined in section 3(21) of ERISA, and the plan
fiduciary is either a bank, savings and loan association,
insurance company or registered investment adviser or provided
that the employee benefit plan has total assets in excess of
$5,000,000; or if a self-directed plan, with investment
decisions made solely by persons that are accredited investors;
- --------- 11. a private business development company as defined in section
202(a)(22) of the Investment Advisers Act of 1940;
- --------- 12. an organization described in section 501(c)(3) of the Internal
Revenue Code, not formed for the specific purpose of acquiring
the Investor Shares, with total assets in excess of $5,000,000;
- --------- 13. a director or executive officer, or general partner of the
Company;
- --------- 14. a trust, with total assets in excess of $5,000,000, not formed
for the specific purpose of acquiring the Investor Shares, and
the purchase of the Investor Shares is directed by a
sophisticated person as described in Rule 506(b)(2)(ii) under
the Act;
- --------- 15. a natural person whose individual net worth, or joint net worth
with that person's spouse, at the time of his purchase exceeds
$1,000,000;
- --------- 16. a natural person who had an individual income in excess of
$200,000 in each of 1994 and 1995 or joint income with that
person's spouse in excess of $300,000 in each of those years and
has a reasonable expectation of reaching the same income level
in 1996;
- --------- 17. an entity in which all of the equity owners are accredited
investors (described in any of (a) - (p) above).
INVESTOR:
By:
----------------------------------
Name:
Title:
A-1
ANNEX II
Page 2
APPENDIX I
(two of three)
T CELL SCIENCES, INC.
STOCK CERTIFICATE QUESTIONNAIRE
-------------------------------
Pursuant to Section 3 of the Stock Purchase Agreement, please provide us
with the following information:
1. The exact name that your Shares are
to be registered in (this is the name
that will appear on your stock
certificate(s)). You may use a
nominee name if appropriate: -------------------
2. The relationship between the Purchaser
of the Shares and the Registered Holder
listed in response to item 1 above: -------------------
3. The mailing address of the Registered
Holder listed in response to item 1 above: -------------------
4. The Social Security Number or Tax -------------------
Identification Number of the Registered -------------------
Holder listed in response to item 1 above: -------------------
-------------------
5. The address, telephone and fax number of
your escrow agent, and the name of a
contact person: -------------------
A-2
ANNEX II
--------
Page 3
APPENDIX I
(three of three)
T CELL SCIENCES, INC.
REGISTRATION STATEMENT QUESTIONNAIRE
------------------------------------
In connection with the preparation of the Registration Statement, please
provide us with the following information:
1. Pursuant to the "Selling Shareholder" section of the Registration
Statement, please state your or your organization's name exactly as it should
appear in the Registration Statement:
2. Please provide the following information, as of ________________, 1998:
(1) (2)
Number of shares
Number of Shares if any, which will
which are being be owned after
included in the completion of sale
Registration of Shares included
Statement (if all in the Registration
purchased, put all) Statement
------------------- ---------
2. Have you or your organization had any position, office or other material
relationship within the past three (3) years with the Company or its affiliates
other than as disclosed in the Prospectus included in the Registration
Statement?
___ Yes ___ No
If yes, please indicate the nature of any such relationship below:
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
A-3
ANNEX II
--------
Page 4
APPENDIX II
Attention:
PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE
------------------------------------------
The undersigned, [an officer of, or other person duly authorized by]
_______________________ [fill in official name of individual or institution]
hereby certifies that he/she [said institution] is the Purchaser of the shares
evidenced by the attached certificate, and as such, sold such shares on
________________________________ [date] in accordance with registration
statement number ______________________________ [fill in the number of or
otherwise identify registration statement] and the requirement of delivering a
current prospectus and current annual and quarterly reports by the Company has
been complied with in connection with such sale.
Print or Type:
Name of Purchaser
(Individual or
Institution) __________________________
Name of Individual
representing
Purchaser (if an
Institution): __________________________
Title of Individual
representing
Purchaser (if an
Institution): __________________________
Signature by:
Individual Purchaser or
Individual representing
Purchaser: __________________________
A-4