0001125282-05-001166.txt : 20120629
0001125282-05-001166.hdr.sgml : 20120629
20050308123041
ACCESSION NUMBER: 0001125282-05-001166
CONFORMED SUBMISSION TYPE: SC 13D
PUBLIC DOCUMENT COUNT: 6
FILED AS OF DATE: 20050308
DATE AS OF CHANGE: 20050308
GROUP MEMBERS: WARBURG PINCUS LLC
GROUP MEMBERS: WARBURG PINCUS PRIVATE EQUITY VIII, L.P.
SUBJECT COMPANY:
COMPANY DATA:
COMPANY CONFORMED NAME: ALLOS THERAPEUTICS INC
CENTRAL INDEX KEY: 0001097264
STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834]
IRS NUMBER: 541655029
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: SC 13D
SEC ACT: 1934 Act
SEC FILE NUMBER: 005-60251
FILM NUMBER: 05666025
BUSINESS ADDRESS:
STREET 1: 11080 CIRCLEPOINT ROAD
STREET 2: SUITE 200
CITY: WESTMINSTER
STATE: CO
ZIP: 80020
BUSINESS PHONE: 3034266262
MAIL ADDRESS:
STREET 1: 11080 CIRCLEPOINT ROAD
STREET 2: SUITE 200
CITY: WESTMINSTER
STATE: CO
ZIP: 80020
FILED BY:
COMPANY DATA:
COMPANY CONFORMED NAME: WARBURG PINCUS PRIVATE EQUITY VIII L P
CENTRAL INDEX KEY: 0001157334
IRS NUMBER: 134161869
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: SC 13D
BUSINESS ADDRESS:
STREET 1: 466 LEXINGTON AVENUE
CITY: NEW YORK
STATE: NY
ZIP: 10017
BUSINESS PHONE: 2128780600
MAIL ADDRESS:
STREET 1: 466 LEXINGTON AVENUE
CITY: NEW YORK
STATE: NY
ZIP: 10017
SC 13D
1
b405191_13d.txt
SCHEDULE 13D
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934*
ALLOS THERAPEUTICS, INC.
-------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, $0.001 Par Value
Series A Exchangeable Preferred Stock, $0.001 Par Value
-------------------------------------------------------------------------------
(Title of Class of Securities)
01977710-1
-------------------------------------------------------------------------------
(CUSIP Number)
Scott A. Arenare, Esq.
Managing Director and General Counsel
Warburg Pincus LLC
466 Lexington Avenue
New York, New York 10017
(212) 878-0600
-------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
Copies to:
Steven J. Gartner, Esq.
Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, NY 10019-6099
(212) 728-8000
March 4, 2005
-------------------------------------------------------------------------------
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or
240.13d-1(g), check the following box: /_/
NOTE: Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See Rule 240.13d-7
for other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of
the Act (however, see the Notes).
Page 1 of 28
SCHEDULE 13D
-------------------------------------------------------------------------------
CUSIP NO. 01977710-1
-------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION
Warburg Pincus Private Equity VIII, L.P. I.R.S. #13-4161869
----------- -------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions) (a) / /
(b) /X/
----------- -------------------------------------------------------------------
3 SEC USE ONLY
----------- -------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
WC
----------- -------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) / /
----------- -------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------- --------- -----------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF --------- -----------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY EACH 22,624,430**
REPORTING --------- -----------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
0
--------- -----------------------------------------------
10 SHARED DISPOSITIVE POWER
22,624,430**
----------- -------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
22,624,430**
----------- -------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) / /
----------- -------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
42.1%
----------- -------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
PN
----------- -------------------------------------------------------------------
**Represents 22,624,430 shares of Common Stock issuable upon exchange of the
Exchangeable Preferred Stock (with the percentage ownership calculated using the
number of outstanding shares of Common Stock after giving effect to the exchange
of the outstanding shares of Exchangeable Preferred Stock).
Page 2 of 28
SCHEDULE 13D
-------------------------------------------------------------------------------
CUSIP NO. 01977710-1
-------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only)
Warburg Pincus & Co. I.R.S. #13-6358475
----------- -------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions) (a) / /
(b) /X/
----------- -------------------------------------------------------------------
3 SEC USE ONLY
----------- -------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
N/A
----------- -------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
----------- -------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
--------------------- --------- -----------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF --------- -----------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY EACH 22,624,430**
REPORTING --------- -----------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
0
--------- -----------------------------------------------
10 SHARED DISPOSITIVE POWER
22,624,430**
----------- -------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
22,624,430**
----------- -------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) / /
----------- -------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
42.1%
----------- -------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
PN
----------- -------------------------------------------------------------------
**Represents 22,624,430 shares of Common Stock issuable upon exchange of the
Exchangeable Preferred Stock (with the percentage ownership calculated using the
number of outstanding shares of Common Stock after giving effect to the exchange
of the outstanding shares of Exchangeable Preferred Stock).
Page 3 of 28
SCHEDULE 13D
-------------------------------------------------------------------------------
CUSIP NO. 01977710-1
-------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only)
Warburg Pincus LLC I.R.S. #13-3536050
---------- --------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions) (a) / /
(b) /X/
---------- --------------------------------------------------------------------
3 SEC USE ONLY
---------- --------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
N/A
---------- --------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
---------- --------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
--------------------- --------- -----------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF --------- -----------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY EACH 22,624,430**
REPORTING --------- -----------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
0
--------- -----------------------------------------------
10 SHARED DISPOSITIVE POWER
22,624,430**
---------- --------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
22,624,430**
---------- --------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) / /
---------- --------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
42.1%
---------- --------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
OO
---------- --------------------------------------------------------------------
**Represents 22,624,430 shares of Common Stock issuable upon exchange of the
Exchangeable Preferred Stock (with the percentage ownership calculated using the
number of outstanding shares of Common Stock after giving effect to the exchange
of the outstanding shares of Exchangeable Preferred Stock).
Page 4 of 28
This Schedule 13D is being filed on behalf of Warburg Pincus Private
Equity VIII, L.P., a Delaware limited partnership ("WP VIII"), Warburg Pincus
LLC, a New York limited liability company ("WP LLC"), and Warburg Pincus & Co.,
a New York general partnership ("WP," and together with WP VIII and WP LLC, the
"Reporting Persons"). The holdings of the Reporting Persons indicated in this
Schedule 13D include the holdings of Warburg Pincus Netherlands Private Equity
VIII C.V. I ("WPNPE VIII I") and Warburg Pincus Germany Private Equity VIII KG
("WPGPE VIII" and together with WP VIII and WPNPE VIII I, the "Investors"). WP,
WP LLC and the Investors are referred to in this Schedule 13D as the "Group
Members."
The Group Members are making this single, joint filing because they may
be deemed to constitute a "group" within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). The agreement
among the Group Members to file jointly (the "Joint Filing Agreement") is
attached hereto as Exhibit 1. Unless the context otherwise requires, references
herein to the "Common Stock" are to shares of common stock, par value $0.001 per
share, of Allos Therapeutics, Inc., a Delaware corporation (the "Company") and
references to the "Exchangeable Preferred Stock" are to shares of Series A
Exchangeable Preferred Stock, par value $0.001 per share, of the Company. Each
Group Member disclaims beneficial ownership of all shares of Common Stock or
Exchangeable Preferred Stock, other than those reported herein as being owned by
it.
ITEM 1. SECURITY AND ISSUER.
This statement on Schedule 13D relates to the Common Stock and
Exchangeable Preferred Stock of the Company, and is being filed pursuant to Rule
Page 5 of 28
13d-1 of the Exchange Act. The address of the principal executive offices of the
Company is 11080 CirclePoint Road, Westminster, Colorado, 80020.
ITEM 2. IDENTITY AND BACKGROUND.
(a) This statement is filed by the Group Members. The Group Members are
deemed to be a group within the meaning of Rule 13d-5. The sole general partner
of each Investor is WP. WP LLC manages each Investor. The general partners of WP
and the members of WP LLC, and their respective business addresses and principal
occupations, are set forth on Schedule I hereto.
(b) The address of the principal business and principal office of each
of the Group Members is 466 Lexington Avenue, New York, New York 10017.
(c) The principal business of each Investor is that of making private
equity and related investments. The principal business of WP is acting as
general partner of each of the Investors and certain other private equity funds.
The principal business of WP LLC is acting as manager of each of the Investors
and certain other private equity funds.
(d) None of the Group Members, nor, to the best of their knowledge, any
of the directors, executive officers, control persons, general partners or
members referred to in paragraph (a) above has, during the last five years, been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) None of the Group Members, nor, to the best of their knowledge, any
of the directors, executive officers, control persons, general partners or
members referred to in paragraphs (a) and (d) above has, during the last five
years, been a party to a civil proceeding of a judicial or administrative body
of competent jurisdiction and as a result of such proceeding was or is subject
to a judgment, decree or final order enjoining future violations of, or
Page 6 of 28
prohibiting or mandating activities subject to, federal or state securities laws
or finding any violation with respect to such laws.
(f) WPNPE VIII I is organized under the laws of the Netherlands. WPGPE
VIII is organized under the laws of Germany. Except as otherwise indicated above
or on Schedule I hereto, each of the individuals referred to in paragraphs (a)
and (d) above is a United States citizen.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Pursuant to a Securities Purchase Agreement, dated as of March 2, 2005,
by and among WP VIII and the Company (a copy of which is attached hereto as
Exhibit 2 and hereinafter referred to as the "Purchase Agreement"), the
Investors agreed to purchase an aggregate amount of $50,000,000 of Exchangeable
Preferred Stock from the Company. The Investors purchased 2,262,443 shares of
Exchangeable Preferred Stock, at a price per share of $22.10 (the "Preferred
Purchase Price"), in the aggregate principal amount of $49,999,990.30 with the
purchase price paid in cash on March 4, 2005 (the "Closing Date"). The
Exchangeable Preferred Stock is non-voting stock, except as otherwise required
by Delaware law and subject to a right of its holders to consent to any
amendment of its terms.
Pursuant to Section 5.6 of the Purchase Agreement, the Company has
agreed to call a meeting of its stockholders (the "Stockholders Meeting") to
approve, among other things, an exchange of the Exchangeable Preferred Stock for
shares of the Company's Common Stock. If stockholder approval is obtained at the
Stockholders Meeting, and upon the receipt of the necessary approval pursuant to
the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Approval"),
each share of Exchangeable Preferred Stock will be exchanged for 10 shares of
the Company's Common Stock (subject to the appropriate adjustment in the event
Page 7 of 28
of any stock dividend, stock split, stock distribution or combination,
subdivision, reclassification or other corporate actions having the similar
effect with respect to the Common Stock); provided that such approvals are
obtained by the 15 month anniversary of the Closing Date. If the stockholder
approval and HSR Approval are not obtained by the 15 month anniversary of the
Closing Date, then the Exchangeable Preferred Stock will remain outstanding
pursuant to its terms and will not be exchanged for shares of Common Stock.
Pursuant to Section 4 of the Certificate of Designations, Number,
Voting Powers, Preferences and Rights of Series A Exchangeable Preferred Stock
of Allos Therapeutics, Inc. (the "Certificate of Designations," a copy of which
is attached hereto as Exhibit 3), beginning on the first anniversary of the
Closing Date and for so long as the Exchangeable Preferred Stock remains
outstanding, the holders of the Exchangeable Preferred Stock will be entitled to
receive, in preference to all other classes of the Company's preferred and
Common Stock, cumulative dividends at an annual rate of 10%, compounded
quarterly, of the Preferred Purchase Price. Such dividends may be paid in-kind
in additional shares of Exchangeable Preferred Stock at the Company's option.
Pursuant to Section 8 of the Certificate of Designations, for so long
as the Exchangeable Preferred Stock remains outstanding, upon the later of (i)
the fourth anniversary of the Closing Date and (ii) the date that is thirty days
after the date on which the Company publicly announces the final results of its
ENRICH trial (the Phase 3 clinical trial of its investigational radiation
sensitizer EFAPROXYN (efaproxiral) in patients with brain metastases originating
from breast cancer) (the "Redemption Eligibility Date"), the holders of the
Page 8 of 28
Exchangeable Preferred Stock will have the option to cause the Company to redeem
their outstanding shares of Exchangeable Preferred Stock for cash in a per share
amount equal to the greater of (a) the Preferred Purchase Price plus all accrued
but unpaid dividends (whether or not declared) through the date of such
redemption or (b) ten times the average closing price of the Company's listed
common stock for the twenty trading days immediately preceding the date of any
such redemption (the "Redemption Price").
In addition, for so long as the Exchangeable Preferred Stock remains
outstanding, the Company will have the option to redeem the outstanding shares
of Exchangeable Preferred Stock for cash in a per share amount equal to the
Redemption Price at any time following the Redemption Eligibility Date.
Pursuant to Section 5 of the Certificate of Designations, for so long
as the Exchangeable Preferred Stock remains outstanding, upon any voluntary or
involuntary liquidation, dissolution or winding up of the Company, the holders
of the Exchangeable Preferred Stock will have the option to cause the Company to
redeem their outstanding shares of Exchangeable Preferred Stock for cash in a
per share amount equal to the Redemption Price.
Pursuant to Section 5 of the Certificate of Designations, for so long
as the Exchangeable Preferred Stock remains outstanding, upon a "change in
control" of the Company (as defined in the Certificate of Designations), the
holders of the Exchangeable Preferred Stock will have the option to cause the
Company to redeem their outstanding shares of Exchangeable Preferred Stock for
cash in a per share amount equal to the greater of (i) ten times the fair market
value of the consideration per share received by each holder of common stock in
Page 9 of 28
the change in control, or (ii) the Preferred Purchase Price plus all accrued but
unpaid dividends (whether or not declared) through the date of such change of
control.
For the purpose of this Schedule 13D, it has been assumed that the
Exchangeable Preferred Stock will be exchanged into 22,624,430 shares of Common
Stock (determined by multiplying the aggregate number of shares of Exchangeable
Preferred Stock purchased on the Closing Date by 10). This assumption, however,
does not give effect to the dividends that may accrue on the Exchangeable
Preferred Stock which may be paid in shares of Exchangeable Preferred Stock at
the option of the Company and if the exchange occurs, will be exchanged for
shares of Common Stock. When and if the Exchangeable Preferred Stock is
exchanged for shares of Common Stock, an amendment to this Schedule 13D will be
filed reflecting the actual number of shares of Common Stock acquired upon
consummation of the exchange.
The total amount of funds required to purchase the shares of
Exchangeable Preferred Stock pursuant to the Purchase Agreement was furnished
from the working capital of such Investors. No additional funds were required to
acquire beneficial ownership of the Exchangeable Preferred Stock reported on
this Schedule 13D.
ITEM 4. PURPOSE OF TRANSACTION.
The purchases by the Investors of the Securities as described herein
were effected because of the Reporting Persons' belief that the Company
represents an attractive investment based on the Company's business prospects
and strategy. Depending on prevailing market, economic and other conditions, the
Reporting Persons may from time to time acquire additional shares of the Company
or engage in discussions with the Company concerning future acquisitions of
shares of capital stock of the Company or further investments by them in the
Page 10 of 28
Company. The Reporting Persons intend to review their investment in the Company
on a continuing basis and, depending upon the price and availability of shares
of the Company's capital stock, subsequent developments affecting the Company,
the Company's business and prospects, other investment and business
opportunities available to the Reporting Persons, general stock market and
economic conditions, tax considerations and other factors considered relevant,
may decide at any time to increase or to decrease the size of their investment
in the Company.
As discussed in Item 3 above, WP VIII entered into the Purchase
Agreement pursuant to which the Company agreed to issue and sell and the
Investors agreed to purchase shares of Exchangeable Preferred Stock on the
Closing Date. The terms of the Exchangeable Preferred Stock and the exchange of
the Exchangeable Preferred Stock into shares of the Company's Common Stock are
described in Item 3 above, such summary being incorporated in this Item 4 by
reference, and qualified in its entirety by reference to the Purchase Agreement
attached hereto as Exhibit 2 and the Certificate of Designations attached hereto
as Exhibit 3. The following summarizes certain provisions of the Purchase
Agreement and is qualified in its entirety by reference to the Purchase
Agreement:
Pursuant to Section 5.4(a) of the Purchase Agreement, for so long as WP
VIII owns at least two-thirds of (i) the aggregate number of the shares of the
Exchangeable Preferred Stock acquired by WP VIII on the Closing Date, or (ii) in
the event the exchange occurs, the aggregate number of the shares of Common
Stock owned by it immediately after giving effect to the exchange (the "Exchange
Date Shares"), the Company will nominate and use its best efforts to cause to be
elected and cause to remain as directors on the Board of Directors (the "Board")
Page 11 of 28
two individuals designated by WP VIII (each, an "Investor Designee" and
collectively, the "Investor Designees"). In the event Section 5.4(a) of the
Purchase Agreement is no longer applicable, pursuant to Section 5.4(b) of the
Purchase Agreement, for as long as WP VIII owns at least 50% of (i) the
aggregate number of shares of the Exchangeable Preferred Stock acquired by it on
the Closing Date, or, (ii) in the event the Exchange occurs, the Exchange Date
Shares, the Company will nominate and use its best efforts to cause to be
elected and cause to remain as a director on the Board, one Investor Designee.
One of the Investor Designees shall be a member of each principle committee of
the Board, subject to applicable law and the rules and regulations of the
Securities and Exchange Commission and the NASDAQ Stock Market. In addition,
pursuant to Section 6.6 of the Purchase Agreement, effective as of the Closing
Date, Mr. Stewart Hen and Mr. Jonathan Leff were elected to the Board. Messrs.
Hen and Leff are members and managing directors of WP LLC and partners of WP.
Pursuant to Section 5.5 of the Purchase Agreement, if at any time the
Company proposes to issue equity securities (including, without limitation,
Common Stock, any warrants, options or other rights to acquire equity securities
convertible or exchangeable into equity securities), then subject to the several
exceptions discussed below, for so long as WP VIII beneficially owns at least
two-thirds of (i) the aggregate number of the shares of the Exchangeable
Preferred Stock acquired by it on the Closing Date, or (ii) in the event that
the exchange occurs, the Exchange Date Shares, the Company will be required to
offer to WP VIII a portion of the equity securities proposed to be issued equal
to the percentage of Common Stock owned by WP VIII multiplied by the total
number of equity securities proposed to be issued. These subscription rights
Page 12 of 28
shall not apply in the event the Company issues: (i) to the public in a firm
commitment underwriting pursuant to a registration statement filed under the
Securities Act of 1933, as amended (the "Securities Act"); (ii) the issuance of
equity securities to employees, officers or directors of, or consultants or
advisors to the Company pursuant to any employee benefit plan approved by the
Board; (iii) any equity securities issued as consideration in connection with an
acquisition, merger or consolidation by the Company provided such acquisition,
merger or consolidation has been approved by the Board; (iv) securities issued
in connection with licensing, marketing or distribution arrangements or similar
strategic transactions approved by the Board; (v) stock issued or issuable
pursuant to any rights or agreements outstanding as of the date of the Purchase
Agreement, including warrants outstanding as of the date of the Purchase
Agreement to purchase up to 1,706,893 shares of Common Stock, and stock issued
pursuant to any such rights or agreements granted after the date of the Purchase
Agreement approved by the Board; provided that the subscription rights
established by Section 5.5 of the Purchase Agreement apply with respect to the
initial sale or grant by the Company of such rights or agreements; (vi) shares
of Exchangeable Preferred Stock issued as dividends with respect to the
Exchangeable Preferred Stock purchased pursuant to the Purchase Agreement, or
(vii) shares of Common Stock issued or issuable upon exchange of the
Exchangeable Preferred Stock.
Pursuant to the Registration Rights Agreement, dated as of March 4,
2005, by and among WP VIII and the Company (a copy of which is attached hereto
as Exhibit 4), the Investors have been granted certain registration rights. The
Page 13 of 28
following summarizes certain provisions of the Registration Rights Agreement and
is qualified in its entirety by reference to the Registration Rights Agreement:
Pursuant to Section 2(a) of the Registration Rights Agreement, if the
Company receives a written request that the Company effect any registration with
respect to all or a part of the registrable securities from WP VIII, at any time
on or after the second anniversary of the Closing Date, the Company will use its
commercially reasonable efforts to effect such registration. However, WP VIII
may not request registration if the Company has already effected one such
registration. In the event that the Company registers any of its equity
securities on or after the second anniversary of the Closing Date, either for
its own account or for the account of other stockholders, subject to certain
exceptions, then the holders of Registrable Securities (as defined in the
Registration Rights Agreement) (the "Holders") will be able to request inclusion
in the registration pursuant to Section 2(b) of the Registration Rights
Agreement. However, the Holders will not be able to request inclusion in such
registration in the event that: (i) the registration is solely related to
employee benefit plans, (ii) the registration is solely related to a Rule 145
transaction under the Securities Act, or (iii) the registration is on any
registration form which does not permit secondary sales or does not include
substantially the same information as would be required to be included in a
registration statement covering the sale of Registrable Securities. In addition,
pursuant to Section 2(c) of the Registration Rights Agreement, the Company shall
use commercially reasonable efforts to maintain its qualification for
registration on Form S-3 for secondary sales and the Holders may at any time on
or after the second anniversary of the Closing Date request two registrations on
Form S-3.
Page 14 of 28
Pursuant to the letter agreement, dated as of March 4, 2005, by and
among WP VIII, WP, WP LLC (collectively the "Purchaser Group") and the Company
(a copy of which is attached hereto as Exhibit 5 and hereinafter referred to as
the "Standstill Agreement"), the Purchaser Group agreed not to pursue, for four
years, certain activities the purpose or effect of which may be to change or
influence the control of the Company. The following summarizes certain
provisions of the Standstill Agreement and is qualified in its entirety by
reference to the Standstill Agreement:
Pursuant to Section 2(a) of the Standstill Agreement, the Purchaser
Group and their Affiliates (as defined in the Standstill Agreement) agreed that
for a period of four years from the date of the Standstill Agreement, the
Purchaser Group or any of their respective Affiliates will not, without the
prior written consent of a majority of the independent directors who are not
affiliated with the Purchaser Group, in any manner acquire, agree or seek to
acquire, or make any proposal or offer (other than to a member of the Board or
senior management of the Company by means that would not cause public
dissemination thereof) to acquire, whether directly or indirectly: (i) any
material assets of the Company or (ii) beneficial ownership of any shares of
Common Stock, voting equity securities, or any securities convertible or
exchangeable into or exercisable for any such shares of Common Stock or other
securities (including derivatives), in excess of 44% of (x) the outstanding
Common Stock, plus (y) the Exchange Date Shares, calculated as if such Exchange
Date Shares had been issued pursuant to an exchange as of immediately following
the original issuance of each such share of outstanding Exchangeable Preferred
Stock (collectively, the "Permitted Shares").
Page 15 of 28
Pursuant to Section 2(b) of the Standstill Agreement, for so long as WP
VIII or its affiliates beneficially own more than (i) 580,000 shares of
Exchangeable Preferred Stock acquired pursuant to the Purchase Agreement, or
(ii) 10% of the Company's outstanding Common Stock, no member of the Purchaser
Group or any of their respective affiliates will, without the prior written
consent of a majority of the independent directors who are not affiliated with
the Purchaser Group: (a) propose to any person (other than to a member of the
Board or senior management of the Company by means that would not cause public
dissemination thereof) or effect, seek to effect or enter into, whether alone or
in concert with others, any merger, tender offer, consolidation, acquisition,
scheme, business combination or other extraordinary transaction in which the
Company or any of its subsidiaries is a constituent corporation or party (a
"Business Combination"); (b) solicit proxies or shareholder consents or
participate in any such solicitation for any purpose relating to the election or
removal of directors of the Company; (c) support, solicit proxies or shareholder
consents or participate in any such solicitation or vote in favor of any
Business Combination, or propose to any person or effect, seek to effect or
enter into, whether alone or in concert with others, any Business Combination,
in which the Purchaser Group, in the event the Exchangeable Preferred Stock has
been exchanged for Common Stock in accordance with the terms thereof, receives
or would be entitled to receive consideration on a per share basis which is
greater than the consideration to be received on a per share basis by the other
holders of Common Stock; provided, however, that in the event the Exchangeable
Preferred Stock remains outstanding at the time of a change in control, nothing
contained in the Standstill Agreement will limit or otherwise prevent the
Purchaser Group from receiving the consideration per share for their shares of
Page 16 of 28
Exchangeable Preferred Stock that they beneficially own in accordance with the
terms of such Exchangeable Preferred Stock; (d) form, join, encourage,
influence, advise or participate in a "group" (as defined in Section 13(d)(3) of
the Exchange Act) in connection with any of the foregoing; or (e) make, or take
any action (including a request to waive or amend any provision of the
Standstill Agreement) that would cause the Company to make, a public
announcement regarding any intention of the Purchaser Group or any of their
respective affiliates to take an action which would be prohibited by any of the
foregoing.
Pursuant to Section 4 of the Standstill Agreement, in the event the
Purchaser Group and their affiliates beneficially own more than 33% of the
Company's outstanding Common Stock, any shares of Common Stock entitled to vote
for the election of directors beneficially owned by the Purchaser Group and
their affiliates in excess of 33% of the shares of Common Stock then
outstanding, with respect to the election or removal of directors only, will be
voted either, solely at the Purchaser Group's election (a) as recommended by the
Board or (b)(i) in an election, in the same proportion with the votes of shares
of Common Stock voted in such election (excluding shares with respect to which
the votes were withheld, abstained or otherwise not cast) and not beneficially
owned by the Purchaser Group (excluding withheld shares and abstentions) or (ii)
in a removal vote, in the same proportions as all outstanding shares of Common
Stock not beneficially owned by the Purchaser Group (including shares with
respect to which the votes were withheld, abstained or otherwise not cast),
whether at an annual or special meeting of stockholders of the Company, by
Page 17 of 28
written consent or otherwise. The Purchaser Group retain its rights to vote (or
to withhold its vote) all of its shares on all other matters.
Pursuant to Section 6 of the Standstill Agreement, the Company agreed
to amend the Rights Agreement, dated May 6, 2003, by and between the Company and
Mellon Investor Services LLC, as rights agent (the "Rights Agreement"), to
exclude the Purchaser Group from the definition of the term "Acquiring Person"
as such term may relate to the acquisition by the Purchaser Group (including by
"affiliates" and "associates", as such terms are defined in Rule 12b-2 under the
Exchange Act, of the Purchaser Group) of beneficial ownership of the Permitted
Shares described in Section 2(a)(ii) of the Standstill Agreement.
Except as set forth above in this statement, none of the Reporting
Persons nor, to the best of their knowledge, any person listed on Schedule I
hereto or in Item 1(a) or (d) above, has any plans or proposals that relate to
or would result in: (a) the acquisition by any person of additional securities
of the Company, or the disposition of securities of the Company; (b) an
extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving the Company or any of its subsidiaries; (c) a sale or
transfer of a material amount of assets of the Company or any of its
subsidiaries; (d) any change in the present Board or management of the Company,
including any plans or proposals to change the number or term of directors or to
fill any existing vacancies on the Board; (e) any material change in the present
capitalization or dividend policy of the Company; (f) any other material change
in the Company's business or corporate structure; (g) changes in the Company's
charter, by-laws or instruments corresponding thereto or other actions which may
impede the acquisition of control of the Company by any person; (h) causing a
Page 18 of 28
class of securities of the Company to be delisted from a national securities
exchange or to cease to be authorized to be quoted in an inter-dealer quotation
system of a registered national securities association; (i) a class of equity
securities of the Company becoming eligible for termination of registration
pursuant to Section 12(g)(4) of the Exchange Act; or (j) any action similar to
any of those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of March 4, 2005, by reason of their respective relationships
with the Investors and each other, each of the Reporting Persons may be deemed
under Rule 13d-3 under the Exchange Act to beneficially own 22,624,430 shares of
Common Stock, representing 22,624,430 shares of Common Stock issuable upon
automatic exchange of the Exchangeable Preferred Stock, which is approximately
42.1% of the outstanding Common Stock, which percentage is based on 31,175,783
shares of Common Stock which were outstanding as of March 2, 2005 as reported in
the Purchase Agreement filed as Exhibit 10.41 to the Company's 8-K filed with
the Securities and Exchange Commission on March 4, 2005, and 22,624,430 shares
of Common Stock which will be issued upon exchange of the Exchangeable Preferred
Stock.
The Group Members are making this single, joint filing because they may
be deemed to constitute a "group" within the meaning of Section 13(d)(3) of the
Exchange Act. Each Group Member disclaims beneficial ownership of all shares of
Common Stock, other than those reported herein as being owned by it.
(b) Each of the Investors shares the power to vote or to direct the
vote and to dispose or to direct the disposition of the 22,624,430 shares of
Common Stock it may be deemed to beneficially own as of the Closing Date. Each
of the Reporting Persons shares with the Investors the power to vote or to
direct the vote and to dispose or to direct the disposition of the 22,624,430
Page 19 of 28
shares of Common Stock it may be deemed to beneficially own as of the Closing
Date.
(c) Other than the acquisition of the shares of Exchangeable Preferred
Stock on the Closing Date, no transactions in the Common Stock or Exchangeable
Preferred Stock were effected during the last 60 days by the Reporting Persons
or any of the persons set forth on Schedules I or in Item 2(e) hereto.
(d) Except as set forth in this Item 5, no person other than each
respective record owner referred to herein of the shares of Exchangeable
Preferred Stock is known to have the right to receive or the power to direct the
receipt of dividends from, or the proceeds from the sale of, such securities.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SECURITIES OF THE ISSUER.
Pursuant to Rule 13d-1(k) promulgated under the Exchange Act, the Group
Members have entered into an agreement, attached hereto as Exhibit 1, with
respect to the joint filing of this statement and any amendment or amendments
hereto.
The Purchase Agreement is described in Item 3, Item 4 and Item 5 above,
such summary being incorporated in this Item 6 by reference. The summary of the
Purchase Agreement in this Schedule 13D is qualified in its entirety by
reference to the Purchase Agreement, which is attached hereto, as Exhibit 2.
The Registration Rights Agreement is described in Item 4 above, such
summary being incorporated in this Item 6 by reference. The summary of the
Registration Rights Agreement in this Schedule 13D is qualified in its entirety
by reference to the Registration Rights Agreement, which is attached hereto, as
Exhibit 4.
Page 20 of 28
The Standstill Agreement is described in Item 4 above, such summary
being incorporated in this Item 6 by reference. The summary of the Standstill
Agreement in this Schedule 13D is qualified in its entirety by reference to the
Standstill Agreement, which is attached hereto, as Exhibit 5.
Except as described herein, there are no contracts, arrangements,
understandings or relationships (legal or otherwise) among the persons named in
Item 2 above or between such persons and any other person with respect to any
securities of the Company.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
1. Joint Filing Agreement.
2. Securities Purchase Agreement, dated as of March 2, 2005, by
and among the Company and the investor listed on the signature
pages thereto.
3. Certificate of Designations, Number, Voting Powers,
Preferences and Rights of Series A Exchangeable Preferred
Stock of Allos Therapeutics, Inc., dated as of March 3, 2005.
4. Registration Rights Agreement, dated as of March 4, 2005,
between the Company and the investor listed on the signature
pages thereto.
5. Letter Agreement, dated as of March 4, 2005, between the
Company and the investor listed on the signature pages
thereto.
Page 21 of 28
SIGNATURES
After reasonable inquiry and to the best of our knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: March 7, 2005 WARBURG PINCUS PRIVATE EQUITY VIII, L.P.
By: Warburg Pincus & Co.,
General Partner
By: /s/ Scott A. Arenare
-------------------------------
Name: Scott A. Arenare
Title: Partner
Dated: March 7, 2005 WARBURG PINCUS & CO.
By: /s/ Scott A. Arenare
-------------------------------
Name: Scott A. Arenare
Title: Partner
Dated: March 7, 2005 WARBURG PINCUS LLC
By: /s/ Scott A. Arenare
-------------------------------
Name: Scott A. Arenare
Title: Managing Director
Page 22 of 28
SCHEDULE I
Set forth below is the name, position and present principal occupation
of each of the general partners of Warburg Pincus & Co. ("WP") and members of
Warburg Pincus LLC ("WP LLC"). The sole general partner of Warburg Pincus
Private Equity VIII, L.P. ("WP VIII") is WP. WP VIII, WP and WP LLC are
hereinafter collectively referred to as the "Reporting Entities". Except as
otherwise indicated, the business address of each of such persons is 466
Lexington Avenue, New York, New York 10017, and each of such persons is a
citizen of the United States.
GENERAL PARTNERS OF WP
----------------------------------- --------------------------------------------------------------------------------------
NAME PRESENT PRINCIPAL OCCUPATION IN ADDITION
TO POSITION WITH WP, AND POSITIONS
WITH THE REPORTING ENTITIES
----------------------------------- --------------------------------------------------------------------------------------
Joel Ackerman Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Scott A. Arenare Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Gregory Back Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
David Barr Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Larry Bettino Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Harold Brown Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Sean D. Carney Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Mark Colodny Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Timothy J. Curt Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
W. Bowman Cutter Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Cary J. Davis Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Oliver M. Goldstein Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Michael Graff Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Patrick T. Hackett Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Jeffrey A. Harris Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Stewart J. Hen Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
William H. Janeway Partner of WP; Member and Vice Chairman of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Julie A. Johnson Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Peter R. Kagan Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Charles R. Kaye Managing General Partner of WP; Managing Member and Co-President of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Henry Kressel Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Page 23 of 28
----------------------------------- --------------------------------------------------------------------------------------
Joseph P. Landy Managing General Partner of WP; Managing Member and Co-President of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Sidney Lapidus Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Kewsong Lee Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Jonathan S. Leff Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Reuben S. Leibowitz Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Rodman W. Moorhead III Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
James Neary Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Howard H. Newman Partner of WP; Member and Vice Chairman of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Dalip Pathak Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Lionel I. Pincus Partner of WP; Member and Chairman of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Michael F. Profenius Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Stan Raatz Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Henry B. Schacht Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Steven G. Schneider Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Mimi Strouse Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Barry Taylor Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Christopher H. Turner Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
John L. Vogelstein Partner of WP; Member and Vice Chairman of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
John R. Vrolyk Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Elizabeth H. Weatherman Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
David J. Wenstrup Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Rosanne Zimmerman Partner of WP; Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Pincus & Company LLC*
----------------------------------- --------------------------------------------------------------------------------------
NL & Co.**
----------------------------------- --------------------------------------------------------------------------------------
---------------------
* New York limited liability company; primary activity is ownership interest in
WP and WP LLC
** New York limited partnership; primary activity is ownership interest in WP.
Page 24 of 28
MEMBERS OF WP LLC
----------------------------------- --------------------------------------------------------------------------------------
NAME PRESENT PRINCIPAL OCCUPATION IN ADDITION
TO POSITION WITH WP LLC, AND POSITIONS
WITH THE REPORTING ENTITIES
----------------------------------- --------------------------------------------------------------------------------------
Joel Ackerman Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Scott A. Arenare Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Gregory Back Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
David Barr Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Larry Bettino Member and Managing Director of WP LLC, Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Harold Brown Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Sean D. Carney Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Stephen John Coates (1) Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Mark Colodny Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Timothy J. Curt Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
W. Bowman Cutter Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Cary J. Davis Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Tetsuya Fukagawa (2) Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Oliver M. Goldstein Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Michael Graff Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Patrick T. Hackett Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Jeffrey A. Harris Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Stewart J. Hen Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Sung-Jin Hwang (3) Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
William H. Janeway Member and Vice Chairman of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Julie A. Johnson Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Peter R. Kagan Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Charles R. Kaye Managing Member and Co-President of WP LLC; Managing General Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Rajesh Khanna (4) Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Page 25 of 28
----------------------------------- --------------------------------------------------------------------------------------
Henry Kressel Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Joseph P. Landy Managing Member and Co-President of WP LLC; Managing General Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Sidney Lapidus Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Kewsong Lee Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Jonathan S. Leff Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Reuben S. Leibowitz Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
David Li (5) Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Nicholas J. Lowcock (1) Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
John W. MacIntosh (6) Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Rodman W. Moorhead III Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
James Neary Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Howard H. Newman Member and Vice Chairman of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Bilge Ogut (7) Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Dalip Pathak Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Lionel I. Pincus Member and Chairman of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Pulak Chandan Prasad (4) Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Michael F. Profenius Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Stan Raatz Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Henry B. Schacht Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Steven G. Schneider Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Joseph C. Schull (6) Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Mimi Strouse Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Chang Q. Sun (5) Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Barry Taylor Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Christopher H. Turner Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
John L. Vogelstein Member and Vice Chairman of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Page 26 of 28
----------------------------------- --------------------------------------------------------------------------------------
John R. Vrolyk Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Elizabeth H. Weatherman Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
David J. Wenstrup Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Jeremy S. Young (1) Member and Managing Director of WP LLC
----------------------------------- --------------------------------------------------------------------------------------
Rosanne Zimmerman Member and Managing Director of WP LLC; Partner of WP
----------------------------------- --------------------------------------------------------------------------------------
Pincus & Company LLC*
----------------------------------- --------------------------------------------------------------------------------------
(1) Citizen of United Kingdom
(2) Citizen of Japan
(3) Citizen of Korea
(4) Citizen of India
(5) Citizen of Hong Kong
(6) Citizen of Canada
(7) Citizen of Turkey
* New York limited liability company; primary activity is ownership interest in
WP and WP LLC
Page 27 of 28
EXHIBIT INDEX
-------------
Exhibit 1. Joint Filing Agreement.
Exhibit 2. Securities Purchase Agreement, dated as of March 2, 2005,
by and among the Company and the investor listed on the
signature pages thereto.
Exhibit 3. Certificate of Designations, Number, Voting Powers,
Preferences and Rights of Series A Exchangeable Preferred
Stock of Allos Therapeutics, Inc., dated as of March 3, 2005.
Exhibit 4. Registration Rights Agreement, dated as of March 4, 2005,
between the Company and the investor listed on the signature
pages thereto.
Exhibit 5. Standstill Agreement, dated as of March 4, 2005, between
the Company and the investor listed on the signature pages
thereto.
Page 28 of 28
EX-1
2
b405191_ex1.txt
JOINT FILING AGREEMENT
Exhibit 1
JOINT FILING AGREEMENT
The undersigned hereby agree that the statement on Schedule 13D filed
by the undersigned with respect to the Common Stock and Exchangeable Preferred
Stock of the Allos Therapeutics, Inc. is, and any amendment thereto signed by
each of the undersigned shall be, filed on behalf of each undersigned pursuant
to and in accordance with the provisions of Rule 13d-1(k) under the Securities
Exchange Act of 1934, as amended.
Dated: March 7, 2005 WARBURG PINCUS PRIVATE EQUITY VIII, L.P.
By: Warburg Pincus & Co.,
General Partner
By: /s/ Scott A. Arenare
-------------------------------------
Name: Scott A. Arenare
Title: Partner
Dated: March 7, 2005 WARBURG PINCUS & CO.
By: /s/ Scott A. Arenare
-------------------------------------
Name: Scott A. Arenare
Title: Partner
Dated: March 7, 2005 WARBURG PINCUS LLC
By: /s/ Scott A. Arenare
-------------------------------------
Name: Scott A. Arenare
Title: Managing Director
EX-2
3
b405191_ex2.txt
SECURITIES PURCHASE AGREEMENT
EXECUTION COPY
Exhibit 2
================================================================================
SECURITIES PURCHASE AGREEMENT
BY AND BETWEEN
THE INVESTORS LISTED ON THE SIGNATURE PAGES HERETO
AND
ALLOS THERAPEUTICS, INC.
MARCH 2, 2005
================================================================================
ALLOS THERAPEUTICS, INC.
SECURITIES PURCHASE AGREEMENT
Dated as of March 2, 2005
TO THE INVESTORS LISTED
ON THE SIGNATURE PAGES HERETO
Ladies and Gentlemen:
Allos Therapeutics, Inc., a Delaware corporation (the
"Company"), hereby agrees with each of the Investors (each an "Investor" and
collectively the "Investors") listed on the signature pages to this Securities
Purchase Agreement, dated as of March 2, 2005 (this "Agreement"), as follows:
SECTION 1. INTERPRETATION OF THIS AGREEMENT
1.1. Defined Terms
As used in this Agreement, the following terms have the
respective meanings set forth below or set forth in the Section hereof following
such term:
Additional Shares: shall have the meaning set forth in
Section 2.5.
Affiliate: shall mean any Person or entity, directly or
indirectly, controlling, controlled by or under common control with such Person
or entity.
Agreement: shall have the meaning set forth in the
Introduction hereto.
Board: shall have the meaning set forth in Section 3.3(c).
Business Day: shall mean a day other than a Saturday, Sunday
or other day on which banks in the State of New York are required or authorized
to close.
Certificate of Designations: shall mean the Certificate of
Designations, Number, Voting Powers, Preferences and Rights of Series A
Exchangeable Preferred Stock of the Company, a copy of which is attached hereto
as Exhibit B.
Closing: shall have the meaning set forth in Section 2.3.
Closing Date: shall have the meaning set forth in Section 2.3.
Code: shall mean the Internal Revenue Code of 1986, as
amended.
Common Stock: shall mean the common stock, par value $0.001
per share, of the Company.
Company: shall have the meaning set forth in the Introduction
hereto.
Company SEC Reports: shall have the meaning set forth in
Section 3.7.
Contract: shall mean any material agreement, contract,
commitment, understanding, arrangement, restriction or other instrument to which
the Company is currently a party, and which is or was required to be filed as an
exhibit to any Company SEC Report.
DGCL: shall mean the Delaware General Corporation Law.
Environmental Laws: shall mean federal, state, local and
foreign laws, regulations, and codes, as well as orders, decrees, judgments or
injunctions, issued, promulgated, approved or entered thereunder relating to
pollution, protection of the environment or public health and safety.
Exchange: shall mean the exchange of the Exchangeable
Preferred Stock for shares of Common Stock in accordance with the terms of the
Certificate of Designations.
Exchange Act: shall mean the Securities Exchange Act of 1934,
as amended.
Exchange Date Shares: shall have the meaning set forth in
Section 5.4(a).
Exchange Shares: shall mean those shares of Common Stock to be
issued upon exchange of the Exchangeable Preferred Stock.
Exchangeable Preferred Stock: shall have the meaning set forth
in Section 2.1(a).
FDA: shall mean the United States Food and Drug
Administration.
Filed Company SEC Reports: shall have the meaning set forth in
Section 3.7.
GAAP: shall have the meaning set forth in Section 3.7.
Governmental Authority: shall mean the government of any
nation, state, city, locality or other political subdivision thereof, any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, and any corporation or other entity
owned or controlled, through stock or capital ownership or otherwise, by any of
the foregoing.
HSR Act: shall mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
Initial Closing: shall have the meaning set forth in
Section 2.3.
Initial Closing Date: shall have the meaning set forth in
Section 2.3
Intellectual Property: shall mean all of the following, owned
or used primarily in the current or contemplated business of the Company: (i)
registered and unregistered trademarks and service marks, trade dress, product
configurations, trade names and other indications of origin, applications or
registrations in any jurisdiction pertaining to the foregoing and all goodwill
associated therewith; (ii) patentable and unpatentable inventions, discoveries,
-3-
improvements, ideas, know-how, formula methodology, processes, compounds,
technology, software (including password unprotected interpretive code or source
code, object code, development documentation, programming tools, drawings,
specifications and data) and applications and patents in any jurisdiction
pertaining to the foregoing, including re-issues, continuations, divisions,
continuations-in-part, renewals or extensions; (iii) trade secrets, including
confidential information and the right in any jurisdiction to limit the use or
disclosure thereof; (iv) copyrights in writings, designs software, mask works or
other works, applications or registrations in any jurisdiction for the foregoing
and all moral rights related thereto; (v) database rights; (vi) Internet Web
sites, domain names and applications and registrations pertaining thereto and
all intellectual property used in connection with or contained in all versions
of the Company's Web sites; (vii) rights under all agreements relating to the
foregoing; (viii) books and records pertaining to the foregoing; and (ix) claims
or causes of action arising out of or related to past, present or future
infringement or misappropriation of the foregoing.
Institutional Investors: shall have the meaning set forth in
Section 2.5.
Investor(s): shall have the meaning set forth in the
Introduction hereto.
Investor Designees: shall have the meaning set forth in
Section 5.4(a).
Majority Investors: shall mean the Investors having
commitments to purchase at least 70% of the Shares at the Initial Closing.
Material Adverse Effect: shall mean, collectively, a material
adverse effect on, or a material adverse change in, or group of such effects on
or changes in the business, properties, business prospects, assets, liabilities,
operations or condition (financial or otherwise) of the Company taken as a
whole.
NASD: shall mean National Association of Securities
Dealers, Inc.
NASDAQ Stock Market: shall have the meaning set forth in
Section 3.23.
Organizational Documents: shall have the meaning set forth in
Section 3.1(a).
Owns, Own, Owned: shall mean the aggregate beneficial
ownership, within the meaning of Rule 13d-3 under the Exchange Act, of an
Investor and any of its Affiliates.
Person: shall mean an individual, partnership, joint-stock
company, corporation, limited liability company, trust or unincorporated
organization, and a government or agency or political subdivision thereof.
Preferred Stock: shall mean the preferred stock, par value
$0.001 per share, of the Company.
Preferred Stock Purchase Price: shall mean $22.10 per share.
Product: shall have the meaning set forth in Section 3.29.
-4-
Prospectus: shall have the meaning set forth in Section 3.18.
Proposed Securities: shall have the meaning set forth in
Section 5.5(a)(1).
Proxy Statement: shall have the meaning set forth in
Section 5.6(b).
Registration Rights Agreement: shall have the meaning set
forth in Section 6.7.
Registration Statement: shall have the meaning set forth in
Section 3.18.
Rights Amendment: shall have the meaning set forth in
Section 6.9.
Sarbanes-Oxley Act: shall mean the Sarbanes-Oxley Act of 2002.
SEC: shall mean the Securities and Exchange Commission.
Securities Act: shall mean the Securities Act of 1933,
as amended.
Shares: shall mean the shares of Exchangeable Preferred Stock
to be purchased by the Investors hereunder.
Standstill Agreement: shall have the meaning set forth in
Section 6.8.
Subsequent Closing: shall have the meaning set forth in
Section 2.3
Subsidiary: shall mean an entity of which a Person owns,
directly or indirectly, more than 50% of the Voting Stock.
Stockholder Approval: shall have the meaning set forth in
Section 5.6(b).
Takeover Statute: shall mean any corporate takeover provision
under laws of the State of Delaware or any other state or federal "fair price",
"moratorium", "control share acquisition" or other similar antitakeover statute
or regulation.
Voting Stock: shall mean securities of any class or classes of
an entity, the holders of which are ordinarily, in the absence of contingencies,
entitled to elect a majority of the corporate directors (or Persons performing
similar functions).
WP: shall mean Warburg Pincus Private Equity VIII, L.P., a
Delaware limited partnership.
SECTION 2. AUTHORIZATION OF SHARES; PURCHASE AND SALE OF SHARES
2.1. Authorization of Shares
On or prior to the Initial Closing, the Company shall have
authorized the sale and issuance of up to an aggregate of two million seven
hundred fourteen thousand nine hundred thirty-two (2,714,932) shares of its
Series A Exchangeable Preferred Stock, par value $0.001 per share (the
"Exchangeable Preferred Stock"), on the terms and conditions set forth in this
-5-
Agreement. The terms, limitations and relative rights and preferences of the
Exchangeable Preferred Stock shall be as set forth in the Certificate of
Designations.
2.2. Issuance of Shares
Subject to the terms and conditions set forth in this
Agreement, and in reliance upon the Company's and the Investors' representations
set forth below, at the Initial Closing, the Company shall sell to the
Investors, and the Investors shall purchase from the Company, the number of
shares of Exchangeable Preferred Stock set forth opposite each Investor's
respective name on Exhibit A, at a purchase price equal to the Preferred Stock
Purchase Price per share.
2.3. Closing and Closing Date
The closing of the transactions contemplated by Section 2.2
(the "Initial Closing") shall take place at 10:00 A.M., New York City time, on
the first Business Day following the date on which the last to be fulfilled or
waived of the conditions set forth in Sections 6 and 7 hereof shall have been
fulfilled or waived in accordance with this Agreement, or on such earlier date
as may be mutually agreed by the Company and the Majority Investors (the
"Initial Closing Date"), at the offices of Willkie Farr & Gallagher LLP, 787
Seventh Avenue, New York, New York 10019, or such other location as the Majority
Investors and the Company shall mutually select. The subsequent closing(s) of
the sale and purchase of Shares as set forth in Section 2.5 below shall take
place at such time and place as the Company and the Investors participating
therein shall mutually agree (a "Subsequent Closing") (the Initial Closing and
any Subsequent Closing shall collectively be referred to herein as a "Closing"
and each such date is referred to as a "Closing Date"). The Company's agreement
with each Investor is a separate agreement and the sales to each Investor are
separate sales.
2.4. Delivery
The sale and purchase of the Shares shall be effected on the
applicable Closing Date by the Company executing and delivering to each
Investor, duly registered in such Investor's name, duly executed stock
certificates evidencing the Shares being purchased by it, against payment of the
purchase price therefore by wire transfer of immediately available funds to such
account as the Company shall designate in writing.
2.5. Subsequent Sales of Shares.
At any time on or before March 8, 2005, the Company may sell
up to the balance of the authorized shares of Exchangeable Preferred Stock
authorized for sale as set forth in Section 2.1 above that are not sold to the
Investors at the Initial Closing (the "Additional Shares") to not more than
three (3) institutional investors (the "Institutional Investors") each Owning
more than four percent (4%) of the Common Stock outstanding on the date of this
Agreement (as certified by such Institutional Investors in writing). All such
sales shall be made on the terms and conditions set forth in this Agreement, and
(i) the representations and warranties of the Company set forth in Section 3
hereof (and the Disclosure Schedule) shall speak as of the Initial Closing and
the Company shall have no obligation to update any such disclosure, and (ii) the
representations and warranties of the Institutional Investors in Section 4
hereof shall speak as of such Subsequent Closing. Not more than an aggregate of
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four hundred fifty-two thousand four hundred eighty-nine (452,489) Additional
Shares of Exchangeable Preferred Stock may be sold to the Institutional
Investors, and no Institutional Investor shall acquire more than the number of
shares of Exchangeable Preferred Stock that results in such Institutional
Investor Owning the same percentage of the Company's outstanding Common Stock
(including, for purposes of this determination, all shares of Common Stock
issuable upon exchange of the Exchangeable Preferred Stock) immediately after
the Subsequent Closing (assuming, for purposes of this determination, the
issuance of all shares of Exchangeable Preferred Stock authorized for sale
pursuant to Section 2.1) as such Institutional Investor Owned on the date of
this Agreement (as certified by such Institutional Investor in writing). The
signature pages to this Agreement may be amended by the Company without the
consent of the Investors to include any Institutional Investors upon the
execution by such Institutional Investors of a counterpart signature page
hereto. Any Shares sold pursuant to this Section 2.5 shall be deemed to be
"Shares" for all purposes under this Agreement and any Institutional Investors
shall be deemed to be "Investors" for all purposes under this Agreement.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Disclosure Schedule delivered by
the Company to the Investors at the Initial Closing or any Subsequent Closing,
as the case may be, the Company represents and warrants to the Investors as of
the date of this Agreement (or, if made as of a specified date, as of such date)
that:
3.1. Corporate Organization
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. Attached
hereto as Exhibits C and D, respectively, are true and complete copies of the
Restated Certificate of Incorporation and By-laws of the Company, as amended
through the date hereof (collectively, the "Organizational Documents").
(b) The Company has all requisite corporate power and
authority to carry on its business as now conducted. The Company has all
requisite power and authority to execute and deliver this Agreement and to
perform its obligations hereunder.
(c) The Company has filed all necessary documents to qualify
to do business as a foreign corporation in each jurisdiction in which the
conduct of the Company's business or the nature of the property owned requires
such qualification, except where the failure to so qualify would not be
reasonably likely to have a Material Adverse Effect.
3.2. Subsidiaries
The Company has no subsidiaries and no equity interests or
investments in any partnership, trust or other entity or organization.
3.3. Capitalization
(a) The authorized capital stock of the Company, immediately
prior to the Initial Closing, shall consist of (i) 75,000,000 shares of Common
Stock and (ii) 10,000,000 shares of Preferred Stock, of which 2,714,932 shares
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shall be designated as Exchangeable Preferred Stock and 1,000,000 shares shall
be designated as Series A Junior Participating Preferred Stock. As of March 2,
2005, the issued and outstanding shares of capital stock of the Company
consisted of 31,175,783 shares of Common Stock and no shares of Preferred Stock.
(b) All the outstanding shares of capital stock of the Company
have been duly and validly issued and are fully paid and non-assessable, and
were issued in accordance with the registration or qualification requirements of
the Securities Act and any relevant state securities laws or pursuant to valid
exemptions therefrom. As of the Initial Closing Date, the Shares will be duly
authorized and, upon issuance, sale and delivery as contemplated by this
Agreement, the Shares will be validly issued, fully paid and non-assessable
securities of the Company. Upon their issuance in accordance with the terms of
the Exchangeable Preferred Stock, the shares of Common Stock issuable upon
exchange of the Exchangeable Preferred Stock will be free and clear of any and
all security interests, pledges, liens, charges, claims, options, restrictions
on transfer, preemptive or similar rights, proxies and voting or other
agreements, or other encumbrances of any nature whatsoever, except for those
provided for herein or otherwise created or imposed upon the Investors and other
than restrictions on transfer imposed by federal or state securities laws, and
except as set forth in the Standstill Agreement.
(c) On the Initial Closing Date, except for the Exchangeable
Preferred Stock and except as disclosed in the Filed Company SEC Reports, there
will be no shares of Common Stock or any other equity security of the Company
issuable upon conversion, exchange or exercise of any outstanding security of
the Company, nor will there be any rights, options, calls or warrants
outstanding or other agreements to acquire shares of Common Stock nor will the
Company be contractually obligated to purchase, redeem or otherwise acquire any
of its outstanding shares. Except to the extent otherwise provided in this
Agreement or the Standstill Agreement or as disclosed in the Filed Company SEC
Reports, (i) no stockholder of the Company is entitled to any preemptive or
similar rights to subscribe for shares of capital stock of the Company and no
stockholder of the Company has any rights, contractual or otherwise, to
designate members of the Company's Board of Directors (the "Board"), other than
in accordance with the DGCL, and (ii) there are no stockholder, voting or other
agreements relating to the rights and obligations of the Company's stockholders.
3.4. Corporate Proceedings, etc.
The Company has authorized the execution, delivery and
performance of this Agreement and each of the transactions and agreements
contemplated hereby. No other corporate action is necessary to authorize such
execution, delivery and performance of this Agreement, and upon such execution
and delivery, this Agreement shall constitute the valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms,
except that such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights and general principles of equity. The Company has
authorized the issuance and delivery of the Shares in accordance with this
Agreement and, subject to the issuance of the Shares, the Company has reserved
for issuance shares of Common Stock initially issuable upon exchange of the
Shares.
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3.5. Consents and Approvals
Except as otherwise provided in this Agreement, the execution
and delivery by the Company of this Agreement, the issuance of any of the
Shares, the performance by the Company of its obligations hereunder and the
consummation by the Company of the transactions contemplated hereby do not
require the Company to obtain any consent, approval, clearance or action of, or
make any filing, submission or registration with, or give any notice to, any
governmental authority or judicial authority.
3.6. Absence of Defaults, Conflicts, etc.
(a) The execution and delivery of this Agreement by the
Company does not, and the fulfillment of the terms hereof and thereof by the
Company, and the issuance, sale and delivery of the Shares will not, (i) violate
or conflict with the Organizational Documents; (ii) result in a breach of any of
the terms, conditions or provisions of, or constitute a default (with or without
the giving of notice or the passage of time (or both)) under, or result in the
modification of, or permit the acceleration of rights under or termination of,
any Contract of the Company; (iii) violate any law, ordinance, standard,
judgment, rule or regulation of any court or federal, state or foreign
regulatory board or body or administrative agency having jurisdiction over the
Company or over its properties or business; or (iv) result in the creation or
imposition of any lien, encumbrance, claim, security interest or restriction
whatsoever upon any of the material properties or assets of the Company, except,
in the cases of clauses (ii), (iii) or (iv), where such event would not be
reasonably likely to have a Material Adverse Effect.
(b) The Company is not in default under or in violation of
(and no event has occurred and no condition exists which, upon notice or the
passage of time (or both), would constitute a default under) (i) the Company's
Organizational Documents, (ii) any Contract of the Company, (iii) any license,
permit or authorization to which the Company is a party or by which it may be
bound or (iv) any order, writ, injunction or decree of any court or any Federal,
state, municipal or other domestic or foreign governmental department,
commission, board, bureau, agency or instrumentality except, in the case of
clause (ii), (iii) or (iv), for defaults or violations which would not be
reasonably likely to have a Material Adverse Effect. Each Contract of the
Company is valid, binding and enforceable against the Company and, to the
Company's best knowledge, the other parties thereto, in accordance with its
terms, and in full force and effect on the date hereof.
3.7. Reports and Financial Statements
The Company has furnished or made available to the Investors,
via its EDGAR filings with the SEC, true and complete copies of the Company's
(i) Annual Reports on Form 10-K for the fiscal years ended December 31, 2003,
December 31, 2002, December 31, 2001, and December 31, 2000, as amended, as
filed with the SEC, (ii) proxy statements, as amended, related to all meetings
of its stockholders (whether annual or special) held since March 27, 2000, and
(iii) all other reports filed with or registration statements declared effective
by the SEC since March 27, 2000, except registration statements on Form S-8
relating to employee benefit plans, which are all the documents (other than
preliminary material) that the Company was required to file with the SEC since
that date (the documents referred to in clauses (i) through (iii), together with
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all accompanying exhibits and all information incorporated therein by reference,
being referred to herein collectively as the "Company SEC Reports"). The Company
has timely made all filings and furnishings with the SEC required of the Company
pursuant to the Exchange Act during the 12 months preceding the date of this
Agreement. As of their respective dates, the Company SEC Reports were duly filed
or furnished with the SEC and complied in all material respects with the
requirements of the Sarbanes-Oxley Act, the Securities Act or the Exchange Act,
as the case may be, and the rules and regulations promulgated by the SEC and
NASDAQ Stock Market thereunder applicable to such Company SEC Reports. Except to
the extent that information contained in any Company SEC Report filed or
furnished with the SEC and made publicly available prior to the date of this
Agreement (a "Filed Company SEC Report") has been revised or superseded by a
later Filed Company SEC Report, as of their respective dates, none of the Filed
Company SEC Reports contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The audited consolidated financial statements included in the
Filed Company SEC Reports comply in all material respects with applicable
accounting requirements of the Securities Act or the Exchange Act and with the
published rules and regulations of the SEC with respect thereto. The financial
statements (including the schedules and notes thereto) included in the Company's
SEC Reports (i) have been prepared in accordance with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods indicated, except as disclosed therein, and (ii) present fairly, in all
material respects, the financial position of the Company as at the dates thereof
and the results of its operations and cash flow for the periods then ended,
except that the unaudited financial statements may not be in accordance with
GAAP because of the absence of footnotes normally contained therein and are
subject to normal year-end audit adjustments.
3.8. Absence of Certain Developments
Except as disclosed in the Filed Company SEC Reports, since
December 31, 2003, there has been no (i) change or event which is reasonably
likely to have a Material Adverse Effect, (ii) declaration, setting aside or
payment of any dividend or other distribution with respect to the capital stock
of the Company, (iii) issuance of capital stock (other than pursuant to (1) the
exercise of options, warrants, or convertible securities outstanding at such
date or (2) employee benefit plans) or options, warrants or rights to acquire
capital stock (other than the rights granted pursuant to employee benefit
plans), (iv) material loss, destruction or damage to any property of the
Company, whether or not insured, (v) acceleration of any indebtedness for
borrowed money or the refunding of any such indebtedness, (vi) labor trouble
involving the Company or any material change in its personnel or the terms and
conditions of employment, (vii) waiver of any valuable right in favor of the
Company, (viii) loan or extension of credit to any officer of the Company or to
any employee of the Company in an amount in excess of $25,000 or (ix)
acquisition or disposition of any material assets (or any contract or
arrangement therefore) or any other material transaction by the Company
otherwise than for fair value in the ordinary course of business.
3.9. Compliance with Law
(a) The Company is not in violation of any laws, ordinances,
governmental rules or regulations to which it is subject, including without
limitation laws or regulations relating to the environment or to occupational
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health and safety, except for violations that would not be reasonably likely to
have a Material Adverse Effect, and no material expenditures are known to be or
expected to be required in order to cause its current operations or properties
to comply with any such laws, ordinances, governmental rules or regulations,
except such expenditures as may be required in order for the Company to comply
with Section 404 of the Sarbanes-Oxley Act.
(b) The Company has all licenses, permits, franchises or other
governmental authorizations necessary to the ownership of its property or to the
conduct of its business in the manner described in the Filed Company SEC
Reports, which if violated or not obtained would be reasonably likely to have a
Material Adverse Effect. The Company has not been finally denied any application
for any such licenses, permits, franchises or other governmental authorizations
necessary to its business.
(c) The Company has not received any written notice from the
FDA or any other federal, state or foreign regulatory agency questioning the
manufacturing practices of any of the Company's contractors and the Company is
not aware of any intent to deliver any such written notice.
(d) The Company is in material compliance with and is taking
all action required for the Company to remain in material compliance with all
provisions of the Sarbanes-Oxley Act and the rules and regulations promulgated
thereunder and all provisions of the NASDAQ Stock Market, in each case as to
which the Company is required to be in compliance.
3.10. Litigation
Except as disclosed in the Filed Company SEC Reports, there is
no legal action, suit, arbitration or other legal, administrative or other
governmental investigation, inquiry or proceeding (whether federal, state, local
or foreign) pending or, to the best of the Company's knowledge, threatened
against or affecting the Company or any of its properties, assets or business
which would be reasonably likely to have a Material Adverse Effect. The Company
is not subject to any order, writ, judgment, injunction, decree, determination
or award of any court or of any governmental agency or instrumentality (whether
federal, state, local or foreign).
3.11. Absence of Undisclosed Liabilities
Except as disclosed in the Filed Company SEC Reports,
subsequent to the respective dates as of which such information is given in the
Filed Company SEC Reports, the Company has not incurred any liability or
obligation, direct or contingent, or entered into any transaction, not in the
ordinary course of business, that is material to the Company taken as a whole,
and there has not been any change in the capital stock, or material increase in
the short-term or long-term debt, of the Company taken as a whole.
3.12. Employees
(a) The Company is not engaged in any unfair labor practice or
discriminatory employment practice and no complaint of any such practice against
the Company has been filed or, to the best of the Company's knowledge,
threatened to be filed with or by the National Labor Relations Board, the Equal
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Employment Opportunity Commission or any other administrative agency, federal or
state, that regulates labor or employment practices, nor is any grievance filed
or, to the best of the Company's knowledge, threatened to be filed, against the
Company by any employee pursuant to any collective bargaining or other
employment agreement to which the Company is a party or is bound which, in any
such case, would be reasonably likely to have a Material Adverse Effect. The
Company is in compliance with all applicable foreign, federal, state and local
laws and regulations regarding occupational safety and health standards except
to the extent that noncompliance would not be reasonably likely to have a
Material Adverse Effect, and has received no complaints from any foreign,
federal, state or local agency or regulatory body alleging such violations of
any such laws and regulations.
(b) The Company is not aware that any officer or key employee,
or that any group of key employees, intends to terminate their employment with
the Company, nor does the Company have a present intention to terminate the
employment of any of the foregoing.
3.13. Tax Matters
There are no federal, state, county or local taxes due and
payable by the Company which have not been paid or will not be paid prior to the
time they become delinquent. The Company has duly filed (except in cases where
valid extensions have been obtained) all federal, state, county and local tax
returns required to have been filed by it and there are in effect no waivers of
applicable statutes of limitations with respect to taxes for any year. No tax
deficiency has been determined adversely to the Company which would be
reasonably likely to have Material Adverse Effect. The Company is not currently
subject to a federal or state tax audit of any kind.
3.14. Intellectual Property
(a) The Company owns all right, title and interest in and to,
or has a valid and enforceable license to use all the Intellectual Property used
by it in connection with its business, which represents all intellectual
property rights necessary to the conduct of its business as now conducted and
presently contemplated, except where the failure to own or license such
Intellectual Property would not be reasonably likely to have a Material Adverse
Effect. The Company is not in breach of any license agreement concerning the
Company's Intellectual Property, including the agreements between or among the
Company and the Center for Innovating Technology, the Virginia Commonwealth
University or the Virginia Commonwealth University Intellectual Property
Foundation, except for breaches that would not be reasonably likely to have a
Material Adverse Effect. Except as disclosed in the Filed Company SEC Reports,
to the best knowledge of the Company, there are no conflicts with or
infringements of any Intellectual Property by any third party, except for
conflicts or infringements that would not be reasonably likely to have a
Material Adverse Effect. To the knowledge of the Company, the conduct of the
business of the Company as currently conducted or contemplated does not conflict
with or infringe any proprietary right of any third party, except for conflicts
or infringements that would not be reasonably likely to have a Material Adverse
Effect. There is no claim, suit, action or proceeding pending or, to the
knowledge of the Company, threatened against the Company: (i) alleging any such
-12-
conflict or infringement with any third party's proprietary rights or (ii)
challenging the Company's ownership or use of, or the validity or enforceability
of any Intellectual Property.
(b) To the Company's knowledge, no present or former employee,
officer or director of the Company, or agent or outside contractor of the
Company, holds any right, title or interest, directly or indirectly, in whole or
in part, in or to any Intellectual Property, except those formally assigned or
transferred to the Company by such employees, officers or directors. No person
has claimed rights to any patent owned by or licensed to the Company by reason
of being an inventor or co-inventor of any claim in such patents, other than the
inventors named on each such patent, and all such inventors have duly assigned
their rights to the patents to the Company or the assignor or licensor of such
patents to the Company.
(c) Neither the execution nor delivery of this Agreement, nor
the carrying on of the Company's business by the employees of and consultants to
the Company will, to the Company's knowledge, conflict with or result in a
breach of the terms, conditions or provisions of, or constitute a default under,
any Contract (including covenants or commitments of any nature) which any of
such employees or consultants is now obligated. The Company does not believe it
is or will be necessary to utilize any inventions of any of its employees (or
people it currently intends to hire) made prior to their employment by the
Company, except those formally assigned or transferred to the Company by such
employees.
(d) To the Company's knowledge: (i) no trade secret of the
Company has been used, disclosed or appropriated to the detriment of the Company
or for the benefit of any Person other than the Company; and (ii) no employee,
independent contractor or agent of the Company has misappropriated any trade
secrets or other confidential information of any other Person in the course of
the performance of his or her duties as an employee, independent contractor or
agent of the Company, except in the cases of clauses (i) and (ii) as would not
be reasonably likely to have a Material Adverse Effect. All employees of the
Company have executed agreements acknowledging their obligation to assign all
inventions made in the course of their employment to the Company.
(e) Each employee, consultant and contractor of the Company
who has had access to confidential information of the Company which is necessary
for the conduct of the Company's business as currently conducted or as currently
proposed to be conducted has executed an agreement to maintain the
confidentiality of such confidential information and has executed appropriate
agreements that are substantially consistent with the Company's standard forms
thereof.
3.15. Title to Tangible Assets
The Company has good and marketable title to its properties
and assets and good title to all its leasehold estates, in each case except as
disclosed in the Filed Company SEC Reports subject to no mortgage, pledge, lien,
lease, encumbrance or charge, other than or resulting from taxes which have not
yet become delinquent and minor liens and encumbrances which do not in any case
materially detract from the value of the property subject thereto or materially
impair the operations of the Company and which have not arisen otherwise than in
the ordinary course of business.
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3.16. Condition of Properties
The property, assets and operations of the Company comply with
all applicable ordinances, regulations and laws, except where the failure to so
comply would not be reasonably likely to have a Material Adverse Effect.
3.17. Transactions with Related Parties
Except as disclosed in the Filed Company SEC Reports, the
Company is not a party to any agreement with any of the Company's directors,
officers or stockholders or any Affiliate or family member of any of the
foregoing under which it: (i) leases any real or personal property (either to or
from such Person); (ii) licenses technology (either to or from such Person);
(iii) is obligated to purchase any tangible or intangible asset from or sell
such asset to such Person; (iv) purchases products or services from such Person;
or (v) has borrowed money from or lent money to such Person. The Company does
not employ as an employee or engage as a consultant any family member of any of
the Company's directors, officers or stockholders. Except as set forth in the
Standstill Agreement, to the best knowledge of the Company, there exist no
agreements among stockholders of the Company to act in concert with respect to
the voting or holding of the Company's securities.
3.18. Registration Statement and Prospectus
A registration statement on Form S-3 (File No. 333-113353)
(the "Registration Statement") with respect to the Shares has been prepared by
the Company in conformity with the requirements of the Securities Act and the
rules and regulations of the SEC thereunder and has been filed with the
Commission under the Securities Act. The Registration Statement, which shall be
deemed to include all information omitted therefrom in reliance upon Rule 430A
and contained in the Prospectus referred to below, has been declared effective
by the SEC under the Securities Act and no post-effective amendment to the
Registration Statement has been filed as of the date of this Agreement. The form
of the prospectus filed by the Company with the SEC pursuant to its Rule 424(b)
and Rule 430A and dated April 21, 2004, is herein referred to as the
"Prospectus."
The SEC has not issued an order preventing or suspending the
use of the Prospectus relating to the offering of the Shares nor instituted
proceedings for that purpose. The Registration Statement and the Prospectus
contain all statements which are required to be stated therein by, and in all
respects conform, as the case may be, to the requirements of the Securities Act
and the rules and regulations of the SEC thereunder. Neither the Registration
Statement nor any amendment thereto, nor the Prospectus, contains, as the case
may be, any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they were made, not
misleading.
3.19. Registration Rights
Except as disclosed in the Filed Company SEC Reports and
pursuant to the Registration Rights Agreement, the Company will not, as of the
Initial Closing Date, be under any obligation to register any of its securities
under the Securities Act.
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3.20. Brokerage
Except for fees payable pursuant to that certain letter
agreement dated February 24, 2005, by and between the Company and Needham &
Company, a copy of which has been provided to WP, there are no claims for
brokerage commissions or finder's fees or similar compensation in connection
with the transactions contemplated by this Agreement based on any arrangement
made by or on behalf of the Company and the Company agrees to indemnify and hold
the Investors harmless against any costs or damages incurred as a result of any
such claim.
3.21. Illegal or Unauthorized Payments; Political
Contributions
Neither the Company nor, to the best of the Company's
knowledge (after reasonable inquiry of its officers and directors), any of the
officers, directors, employees, agents or other representatives of the Company
or any other business entity or enterprise with which the Company is or has been
affiliated or associated, has, directly or indirectly taken any action
prohibited by Section 30A of the Exchange Act.
3.22. Takeover Statute
The Board has taken all action necessary to approve the
transactions contemplated hereby, as it relates to the Investors, for the
purposes of the provisions of Section 203 of the DGCL. To the Company's
knowledge, no other Takeover Statute is applicable to the transactions
contemplated hereby.
3.23. NASDAQ Compliance
The Common Stock is registered pursuant to Section 12(g) of
the Exchange Act, and is listed on The NASDAQ National Market (the "NASDAQ Stock
Market"), and trading in the Common Stock has not been suspended and the Company
has taken no action designed to, or that is likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act or
delisting the Common Stock from the NASDAQ Stock Market, nor has the Company
received any notification that the SEC or the NASD is contemplating terminating
such registration or listing. To the best of the Company's knowledge, the
Company and the Common Stock meet the criteria for continued listing and trading
on the NASDAQ Stock Market.
3.24. Reporting Status
The Company is currently eligible to register the resale of
Common Stock in a secondary offering on a registration statement on Form S-3
under the Securities Act.
3.25. No Manipulation of Common Stock
The Company has not taken and will not take any action outside
the ordinary course of business designed to or that might reasonably be expected
to cause or result in unlawful manipulation of the price of the Common Stock to
facilitate the sale or resale of the Shares or the Exchange Shares.
-15-
3.26. Accountants
PricewaterhouseCoopers LLP has advised the Company that it is,
and to the best knowledge of the Company it is, an independent accountant as
required by the Sarbanes-Oxley Act, the Securities Act and the Exchange Act and
the rules and regulations promulgated thereunder.
3.27. Internal Accounting Controls
The Company maintains a system of internal accounting controls
sufficient, in the judgment of the management of the Company, to provide
reasonable assurance that: (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
3.28. Environmental Matters
To its knowledge, the Company is in compliance with all
applicable Environmental Laws, except where any failure to comply would not be
reasonably likely to have a Material Adverse Effect. There is no civil, criminal
or administrative judgment, action, suit, demand, claim, hearing, notice of
violation, investigation, proceeding, notice or demand letter pending or to the
Company's knowledge threatened against the Company pursuant to Environmental
Laws. To the Company's knowledge, there are no past or present events,
conditions, circumstances, activities, practices, incidents, agreements, actions
or plans which could reasonably be expected to prevent compliance with, or which
have given rise to or will give rise to liability which would have a Material
Adverse Effect, under Environmental Laws.
3.29. FDA Approval
After due investigation, (i) the Company has no knowledge that
any Governmental Authority, including, but not limited to, the FDA, will
ultimately prohibit the marketing, sale, license or use in the United States or
elsewhere of any product (including, but not limited to, EFAPROXYN) proposed to
be developed, produced or marketed by the Company (each, a "Product"), (ii) to
the Company's knowledge, the FDA has not prohibited any product or process from
being marketed or used in the United States which product or process is
substantially similar in function or composition to the Company's lead product
candidate, EFAPROXYN, (iii) the Company has no Product on clinical hold nor does
the Company have any reason to expect that any Product is reasonably likely to
be placed on clinical hold, (iv) the Company has made available to WP all
submissions to the FDA and the FDA responses (and other material correspondence
received from or submitted to the FDA), including, but not limited to, all FDA
warning letters, regulatory letters and notice of adverse finding letters and
the relevant responses, received by the Company or any agent thereof relative to
the development of its Products, including, but not limited to, EFAPROXYN, (v)
none of the Company or its Affiliates or, to the Company's knowledge, its
employees or agents, has ever been sanctioned, formally or otherwise, by the
FDA, and (vi) there has not been any suspensions or debarments by the FDA or
other federal departments and state regulatory bodies against the Company or, to
the knowledge of the Company, any current or former employee of the Company.
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3.30. Insurance
The Company maintains and will continue to maintain insurance
with financially sound and reputable insurers in such amounts and covering such
risks as is reasonably adequate and consistent with industry practice for the
conduct of its business and the value of its property, all of which insurance is
in full force and effect. The Company has not received notice from, and has no
knowledge of any threat by, any insurer that has issued any insurance policy to
the Company that such insurer intends to deny coverage under or cancel,
discontinue or not renew any insurance policy presently in force.
3.31. Transfer Taxes
On the Initial Closing Date, all stock transfer or other taxes
(other than income taxes) which are required to be paid in connection with the
sale and issuance of the Shares hereunder will be, or will have been, fully paid
or provided for by the Company and the Company will have complied with all laws
imposing such taxes.
3.32. Investment Company
The Company is not an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for an investment company,
within the meaning of the Investment Company Act of 1940, as amended.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
Each Investor severally represents and warrants to the Company
as of the date of this Agreement (or, if made as of a specified date, as of such
date) that:
(a) It is acquiring the Shares and, subject to Stockholder
Approval, the Exchange Shares for its own account for investment and not with a
view towards the resale, transfer or distribution thereof, nor with any present
intention of distributing the Shares or the Exchange Shares, but subject,
nevertheless, to any requirement of law that the disposition of the Investor's
property shall at all times be within the Investor's control, and without
prejudice to the Investor's right at all times to sell or otherwise dispose of
all or any part of such securities under a registration under the Securities Act
or under an exemption from said registration available under the Securities Act.
(b) It has full power and legal right to execute and deliver
this Agreement and to perform its obligations hereunder.
(c) It is a validly existing partnership, limited liability
company, trust or corporation, as the case may be, duly organized under the laws
of its jurisdiction of organization or formation.
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(d) It has taken all action necessary for the authorization,
execution, delivery, and performance of this Agreement and its obligations
hereunder, and, upon execution and delivery by the Company, this Agreement shall
constitute the valid and binding obligation of such Investor, enforceable
against such Investor in accordance with its terms, except that such enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights and
general principles of equity.
(e) There are no claims for brokerage commissions or finder's
fees or similar compensation in connection with the transactions contemplated by
this Agreement based on any arrangement made by or on behalf of such Investor
and such Investor agrees to indemnify and hold the Company harmless against any
costs or damages incurred as a result of any such claim.
(f) It has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of its
investment in the Company as contemplated by this Agreement, and is able to bear
the economic risk of such investment for an indefinite period of time. It has
been furnished access to such information and documents as it has requested and
has been afforded an opportunity to ask questions of and receive answers from
representatives of the Company concerning the terms and conditions of this
Agreement and the purchase of the Shares contemplated hereby. It is a "qualified
institutional buyer" within the meaning of Rule 144A(a) of the Securities Act or
an "accredited investor" within the meaning of Rule 501(a) of Regulation D under
the Securities Act.
(g) Except such consents, approvals and filings, the failure
to obtain or make would not, individually or in the aggregate, have a material
adverse effect on the ability of the Investor to consummate the transactions
contemplated by this Agreement, the execution and delivery by it of this
Agreement and the performance by such Investor of its obligations hereunder and
the consummation by such Investor of the transactions contemplated hereby do not
require such Investor to obtain any consent, approval, clearance or action of,
or make any filing, submission or registration with, or give any notice to, any
governmental authority or judicial authority.
(h) The execution and delivery of this Agreement by such
Investor do not, and the fulfillment of the terms hereof and thereof by such
Investor will not, (i) violate or conflict with its partnership agreement, trust
agreement, the articles of incorporation, other constitutive documents or
by-laws (or other similar applicable documents) of the Investor, as applicable;
(ii) result in a breach of any of the terms, conditions or provisions of, or
constitute a default (with or without the giving of notice or the passage of
time (or both)) under, or result in the modification of, or permit the
acceleration of rights under or termination of, any material contract to which
such Investor is a party or (iii) violate any law, ordinance, standard,
judgment, rule or regulation of any court or federal, state or foreign
regulatory board or body or administrative agency having jurisdiction over such
Investor or over its respective properties or businesses; except, in the cases
of clauses (ii) and (iii) where such event would not be reasonably likely to
have a material adverse effect on the Investor's ability to consummate the
transactions contemplated by this Agreement.
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(i) On the date of this Agreement, the Investor (1) is not an
"interested stockholder" within the meaning of Section 203(c)(5) of the DGCL or
(2) has been an "interested stockholder" for a period of more than three years
preceding the date of this Agreement.
SECTION 5. ADDITIONAL AGREEMENTS OF THE PARTIES
5.1. Resale of Shares
Each Investor severally covenants that it will not sell or
otherwise transfer the Shares or, subject to Stockholder Approval, the Exchange
Shares, except pursuant to an effective registration under the Securities Act or
in a transaction which, in the opinion of counsel reasonably satisfactory to the
Company, qualifies as an exempt transaction under the Securities Act and the
rules and regulations promulgated thereunder.
5.2. Covenants Pending Closing
Pending the Initial Closing, the Company will conduct its
business in the ordinary course, and will not, without the Investors' prior
written consent, such consent not to be unreasonably withheld, delayed or
conditioned, take any action which would result in any of the representations or
warranties contained in this Agreement not being true at and as of the time
immediately after such action, or in any of the covenants contained in this
Agreement becoming incapable of performance. Pending the Initial Closing, the
Company will promptly advise the Investors of any action or event of which it
becomes aware which has the effect of making materially incorrect any of such
representations or warranties or which has the effect of rendering any of such
covenants incapable of performance.
5.3. Further Assurances
The Company and each Investor shall execute such documents and
other papers and take such further actions as may be reasonably required or
desirable to carry out the provisions hereof and the transactions contemplated
hereby. The Company and each Investor shall use its reasonable efforts to
fulfill or obtain the fulfillment of the conditions to the Closing as promptly
as practicable.
5.4. Investor Designees
(a) For so long as WP Owns at least two thirds of (i) the
aggregate number of Shares acquired by it on the Initial Closing Date, or (ii)
in the event the Exchange occurs, the aggregate number of shares of Common Stock
Owned by WP immediately after giving effect to the Exchange (the "Exchange Date
Shares"), then, subject to applicable law and the rules and regulations of the
SEC and NASDAQ Stock Market, the Company will nominate and use its reasonable
best efforts to cause to be elected and cause to remain as directors on the
Board two individuals designated by WP (each, an "Investor Designee" and
collectively, the "Investor Designees").
(b) In the event Section 5.4(a) is no longer applicable and
for so long as WP Owns at least 50% of (i) the aggregate number of Shares
acquired by it on the Initial Closing Date, or (ii) in the event the Exchange
occurs, the Exchange Date Shares, then, subject to applicable law and the rules
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and regulations of the SEC and NASDAQ Stock Market, the Company will nominate
and use its reasonable best efforts to cause to be elected and cause to remain
as a director on the Board, one Investor Designee.
(c) Subject to applicable law and the rules and regulations of
the SEC and NASDAQ Stock Market, for so long as at least one Investor Designee
continues to serve as a director on the Board, the Company will use its
reasonable best efforts to cause one of the Investor Designees to be a member of
each principle committee of the Board.
5.5. Subscription Right
(a) If at any time after the date hereof, the Company
determines to issue equity securities of any kind (for these purposes, the term
"equity securities" shall include, without limitation, Common Stock, warrants,
options or other rights to acquire equity securities convertible or exchangeable
into equity securities) of the Company (other than: (i) to the public in a firm
commitment underwriting pursuant to a registration statement filed under the
Securities Act; (ii) the issuance of equity securities to employees, officers or
directors of, or consultants or advisors to the Company pursuant to any employee
benefit plan approved by the Board; (iii) any equity securities issued as
consideration in connection with an acquisition, merger or consolidation by the
Company provided such acquisition, merger or consolidation has been approved by
the Board; (iv) securities issued in connection with licensing, marketing or
distribution arrangements or similar strategic transactions approved by the
Board; (v) stock issued or issuable pursuant to any rights or agreements
outstanding as of the date of this Agreement, including warrants outstanding as
of the date of this Agreement to purchase up to 1,706,893 shares of Common
Stock, and stock issued pursuant to any such rights or agreements granted after
the date of this Agreement approved by the Board; provided that the subscription
rights established by this Section 5.5 apply with respect to the initial sale or
grant by the Company of such rights or agreements; (vi) shares of Exchangeable
Preferred Stock issued as dividends with respect to the Shares purchased by the
Investors hereunder, or (vii) shares of Common Stock issued or issuable upon
exchange of the Exchangeable Preferred Stock) then, for so long as WP Owns at
least two-thirds of (i) the aggregate number of Shares acquired by it on the
Initial Closing Date, or (ii) in the event the Exchange occurs, the Exchange
Date Shares, the Company shall:
(1) give written notice to WP setting forth in reasonable
detail (A) the designation and all of the terms and provisions of the
securities proposed to be issued (the "Proposed Securities"),
including, where applicable, the voting powers, preferences and
relative participating, optional or other special rights, and the
qualification, limitations or restrictions thereof and interest rate
and maturity; (B) the price and other terms of the proposed sale of
such securities; (C) the amount of such Proposed Securities; and (D)
such other information as WP may reasonably request in order to
evaluate the proposed issuance; and
(2) subject to applicable law and the rules and regulations of
the SEC and NASDAQ Stock Market, offer to issue to WP upon the terms
described in the notice delivered pursuant to Section 5.5(a)(1) above,
a portion of the Proposed Securities equal to (i) the percentage of the
Common Stock (including the Exchange Shares issuable upon the Exchange,
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if the Exchange has not occurred) Owned by WP immediately prior to the
issuance of the equity securities relative to the total number of
shares of Common Stock (including the Exchange Shares issuable upon the
Exchange, if the Exchange has not occurred) outstanding immediately
prior to the issuance of the equity securities, multiplied by (ii) the
total number of Proposed Securities. Notwithstanding the foregoing, the
Company shall not be required to offer or sell such Proposed Securities
to WP if it would cause the Company to be in violation of applicable
federal securities laws by virtue of such offer or sale.
(b) WP must exercise its purchase rights hereunder within 5
Business Days after receipt of such notice from the Company. To the extent that
the Company offers two or more securities in units, WP must purchase such units
as a whole and will not be given the opportunity to purchase only one of the
securities making up such unit.
(c) Upon the expiration of the offering period described
above, the Company will be free to sell such Proposed Securities that WP has not
elected to purchase during the 90 days following such expiration on terms and
conditions no more favorable to the purchasers thereof than those offered to WP.
(d) The election by WP not to exercise its subscription rights
under this Section 5.5 in any one instance shall not affect its right (other
than in respect of a reduction in its percentage holdings) as to any subsequent
proposed issuance. Any sale of such securities by the Company without first
giving WP the rights described in this Section 5.5 shall be void and of no force
and effect.
(e) The subscription rights established by this Section 5.5
shall not apply to, and shall terminate upon a consolidation, merger,
reorganization or other form of acquisition of or by the Company in which the
Company's stockholders immediately prior to the transaction retain less than 50%
of the voting power of or economic interest in the surviving or resulting entity
(or its parent), or a sale of the Company's assets in excess of a majority of
the Company's assets (valued at fair market value as determined in good faith by
the Board).
(f) Injunctive Relief. The Company and WP hereby declare that
it is impossible to measure in money the damages which will accrue to the
parties hereto by reason of the failure of any party to perform any of its
obligations set forth in this Section 5.5. Therefore, the Company and WP shall
have the right to specific performance of such obligations, and if any party
hereto shall institute any action or proceeding to enforce the provisions
hereof, each of the Company and WP hereby waive the claim or defense that the
party instituting such action or proceeding has an adequate remedy at law.
5.6. Consents and Approvals; Proxy Statement
(a) From and after the date hereof, the Company shall use its
reasonable best efforts to obtain as promptly as practicable any consent or
approval of any Person, including any regulatory authority, required in
connection with the transactions contemplated hereby.
(b) From and after the date of the Initial Closing, the
Company shall use its reasonable best efforts to obtain as promptly as
practicable any vote of stockholders necessary for approval of the Exchange
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("Stockholder Approval"). In furtherance of the foregoing statement, as promptly
as reasonably practicable after the date hereof and in any event no later than
March 25, 2005, the Company shall prepare and file with the SEC, and shall use
its reasonable best efforts to have cleared by the SEC, a preliminary proxy
statement, and as soon as practicable thereafter (subject to applicable waiting
periods under the Exchange Act, review by the SEC or as required by the
Organizational Documents and applicable law) file with the SEC and promptly
thereafter mail a definitive proxy statement to the Company's stockholders (the
"Proxy Statement"). The Proxy Statement shall contain the recommendation of the
Board, to the extent consistent with its fiduciary duties, that the Company's
stockholders approve the Exchange in accordance with the Organizational
Documents and applicable law, including without limitation, the requirements of
NASD Rule 4350. WP will be given a reasonable opportunity to review and comment
on drafts of the Proxy Statement and the Company will use its reasonable best
efforts to accept comments thereto given by WP and its representatives. The
Company shall promptly take all action necessary in accordance with applicable
law and its Organizational Documents to convene a meeting of the Company's
stockholders, no later than May 30, 2005 or, if such date is impracticable due
to review by the SEC, as soon as practicable thereafter. To the extent
consistent with its fiduciary duties, the Company shall use its reasonable best
efforts to solicit from the Company's stockholders proxies in favor of the
Exchange and shall take all other action reasonably necessary to secure
Stockholder Approval.
5.7. Use of Proceeds
The proceeds received by the Company from the issuance and
sale of the Shares shall be used by the Company for working capital and other
general corporate purposes.
5.8. Takeover Statute
If any Takeover Statute shall become applicable to the
transactions contemplated hereby, including without limitation any takeover
provision under the laws of the State of Delaware, the Company and the members
of the Board shall, to the extent consistent with its fiduciary duties, grant
such approvals and take such actions as are necessary so that the transactions
contemplated hereby may be consummated as promptly as practicable on the terms
contemplated hereby and otherwise use their reasonable best efforts to act to
eliminate or minimize the effects of such statute or regulation on the
transactions contemplated hereby.
SECTION 6. INVESTORS' CLOSING CONDITIONS
The Investors' obligations to purchase the Shares at each
Closing shall be subject to the performance by the Company of its agreements
theretofore to be performed hereunder and to the satisfaction (or waiver), prior
thereto or concurrently therewith, of the following further conditions:
6.1. Representations and Warranties
The representations and warranties of the Company contained in
Section 3 of this Agreement shall be true on and as of the Initial Closing Date
in all material respects (except for such representations and warranties that
are qualified as to materiality, which shall be true in all respects) as though
such representations and warranties were made at and as of such date.
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6.2. Compliance with Agreement
The Company shall have performed and complied in all material
respects with all agreements, covenants and conditions contained in this
Agreement which are required to be performed or complied with by the Company
prior to or on the applicable Closing Date.
6.3. Injunction
There shall be no effective injunction, writ, preliminary
restraining order or any order of any nature issued by a court of competent
jurisdiction directing that the transactions provided for herein or any of them
not be consummated as herein provided.
6.4. Counsel's Opinion
Each Investor shall have received an opinion, dated the
applicable Closing Date from the Company's counsel, Cooley Godward LLP,
substantially in the form of Exhibit E attached hereto.
6.5. Adverse Development
There shall have been no developments in the business of the
Company which would be reasonably likely to have a Material Adverse Effect.
6.6. Directors
Stewart Hen and Jonathan S. Leff shall have been elected to
the Board, effective on the Initial Closing Date. Subject to the applicable law
and the rules and regulations of the SEC and NASDAQ Stock Market, one of the
Investor Designees shall be a member of each principle committee of the Board.
6.7. Registration Rights Agreement
The Company and the Investors shall have executed the
Registration Rights Agreement, the form of which is attached as Exhibit F hereto
(the "Registration Rights Agreement").
6.8. Standstill Agreement
The Company and WP shall have executed the letter agreement,
the form of which is attached as Exhibit G hereto (the "Standstill Agreement").
6.9. Rights Amendment
The Company and Mellon Investor Services LLC, as Rights Agent,
shall have executed the Amendment to Rights Agreement, the form of which is
attached as Exhibit H hereto (the "Rights Amendment").
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6.10. Stop Orders
No stop order or suspension of trading shall been imposed by
the NASDAQ Stock Market, the SEC or any other governmental regulatory body with
respect to public trading in the Common Stock.
6.11. Listing of the Common Stock
In connection with the issuance of the Shares and the
transactions contemplated hereby, the Company shall have submitted to the NASDAQ
Stock Market a "Notification Form: Listing of Additional Shares" as well as any
necessary supporting documentation.
6.12. Nasdaq Interpretative Ruling
The NASDAQ Stock Market shall have issued a written
interpretation confirming that the transactions contemplated hereby, including
the terms of the Exchangeable Preferred Stock, comply with all applicable Nasdaq
rules, including the requirements of Rule 4350(i) and IM-4350-2 ("Interpretive
Material Regarding the Use of Share Caps to Comply with Rule 4350(i)") and the
voting rights requirements of Rule 4351 and IM-4351 ("Voting Rights Policy").
6.13. Filing of Certificate of Designations
The Certificate of Designations shall have been filed with the
Secretary of State of the State of Delaware and shall continue to be in full
force and effect as of the applicable Closing Date.
6.14. Officer's Certificate
Each Investor shall have received a certificate, dated the
applicable Closing Date, signed by a duly authorized executive officer of the
Company, certifying that the conditions specified in the foregoing Sections 6.1,
6.2, 6.3 and 6.5 hereof have been fulfilled.
6.15. Secretary's Certificate
Each Investor shall have received a certificate, dated the
applicable Closing Date, of the Secretary of the Company attaching: (i) a true
and complete copy of the Restated Certificate of Incorporation of the Company,
with all amendments thereto; (ii) true and complete copies of the Company's
By-laws, as amended, in effect as of such date; (iii) a certificate from the
Secretary of State of the State of Delaware as to the good standing of the
Company; (iv) certificates of good standing from the appropriate officials of
the jurisdictions in each state in which the Company is qualified to do business
as a foreign corporation; and (iv) resolutions of the Board authorizing the
execution and delivery of this Agreement, the transactions contemplated hereby,
and the issuance of the Shares.
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6.16. Approval of Proceedings
All proceedings to be taken in connection with the
transactions contemplated by this Agreement, and all documents incident thereto,
shall be satisfactory in form and substance to WP and its special counsel,
Willkie Farr & Gallagher LLP. WP shall have received copies of all documents or
other evidence which they and Willkie Farr & Gallagher LLP may reasonably
request in connection with such transactions and of all records of corporate
proceedings in connection therewith in form and substance reasonably
satisfactory to WP and Willkie Farr & Gallagher LLP.
SECTION 7. COMPANY CLOSING CONDITIONS
The Company's obligation to issue and sell the Shares at each
Closing shall be subject to the performance by each Investor of its agreements
theretofore to be performed hereunder and to the satisfaction (or waiver), prior
thereto or concurrently therewith, of the following further conditions:
7.1. Representations and Warranties
The representations and warranties of the Investors contained
in Section 4 of this Agreement shall be true in all material respects on and as
of the applicable Closing Date (except for such representations and warranties
that are qualified as to materiality, which shall be true in all respects) as
though such representations and warranties were made at and as of such date.
7.2. Compliance with Agreement
The Investors shall have performed and complied in all
material respects with all agreements, covenants and conditions contained in
this Agreement which are required to be performed or complied with by them prior
to or on the applicable Closing Date.
7.3. Investors' Certificates
The Company shall have received a certificate from each
Investor, dated the applicable Closing Date, signed by a duly authorized
representative of the Investor, certifying that the conditions specified in the
foregoing Sections 7.1 and 7.2 hereof have been fulfilled.
7.4. Injunction
There shall be no effective injunction, writ, preliminary
restraining order or any order of any nature issued by a court of competent
jurisdiction directing that the transactions provided for herein or any of them
not be consummated as herein provided.
7.5. Standstill Agreement
The Company and WP shall have executed the letter agreement,
the form of which is attached as Exhibit G hereto (the "Standstill Agreement").
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7.6. Rights Amendment
The Company and Mellon Investor Services LLC, as Rights Agent,
shall have executed the Amendment to Rights Agreement, the form of which is
attached as Exhibit H hereto (the "Rights Amendment").
7.7. Nasdaq Interpretative Ruling
The NASDAQ Stock Market shall have issued a written
interpretation confirming that the transactions contemplated hereby, including
the terms of the Exchangeable Preferred Stock, comply with all applicable Nasdaq
rules, including the requirements of Rule 4350(i) and IM-4350-2 ("Interpretive
Material Regarding the Use of Share Caps to Comply with Rule 4350(i)") and the
voting rights requirements of Rule 4351 and IM-4351 ("Voting Rights Policy").
7.8. Filing of Certificate of Designations
The Certificate of Designations shall have been filed with the
Secretary of State of the State of Delaware and shall continue to be in full
force and effect as of the applicable Closing Date.
7.9. Approval of Proceedings
All proceedings to be taken in connection with the
transactions contemplated by this Agreement, and all documents incident thereto,
shall be reasonably satisfactory in form and substance to the Company. The
Company shall have received copies of all documents or other evidence which it
may have reasonably requested in connection therewith in form and substance
reasonably satisfactory to the Company.
SECTION 8. COVENANTS
8.1. Inspection
As long as an Investor Owns at least twenty percent (20%) of
the outstanding Common Stock, the Company shall permit the Investor, its
nominee, assignee, and its representative to visit and inspect any of the
properties of the Company, to examine all its books of account, records, reports
and other papers, to make copies and extracts therefrom, and provide reasonable
access to and the right to consult with, its officers, directors, key employees
and independent public accountants or any of them (and by this provision the
Company authorizes said accountants to discuss with such Investor, its nominees,
assignees and representatives the finances and affairs of the Company), all at
such reasonable times and as often as may be reasonably requested; provided,
however, that the Company shall not be obligated under this Section 8.1 with
respect to information the Company is contractually obligated to keep
confidential or secret or which the Board of Directors determines in good faith
is confidential and should not, therefore, be disclosed.
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8.2. Confidentiality
(a) As to so much of the information and other material
furnished under or in connection with this Agreement (including without
limitation information furnished pursuant to Section 8.1 hereof) as constitutes
or contains confidential business, financial or other information of the
Company, each Investor covenants for itself and its members and officers that it
will use due care to prevent its officers, members, employees, counsel,
accountants, consultants, advisors and other representatives from disclosing
such information to Persons other than their respective authorized employees,
counsel, accountants, stockholders, partners, limited partners and other
authorized representatives or from using such information except as an Investor
or for the benefit of the Company; provided, however, that such Investor may
disclose or deliver any information or other material disclosed to or received
by it should the Investor be advised by its counsel that such disclosure or
delivery is required by law, regulation or judicial or administrative order. In
the event of any termination of this Agreement prior to the Initial Closing
Date, the Investor shall return to the Company all confidential material
previously furnished to the Investor or its officers, members, employees,
counsel, accountants and other representatives in connection with this
transaction. For purposes of this Section 8.2, "due care" means at least the
same level of care that such Investor would use to protect the confidentiality
of its own sensitive or proprietary information, and this obligation shall
survive termination of this Agreement.
(b) Notwithstanding the foregoing or anything else contained
herein to the contrary, the terms and conditions of (i) that certain
Non-Disclosure Agreement dated January 11, 2005, between the Company and WP, and
(ii) that certain Non-Disclosure Agreement dated January 27, 2005, between the
Company and WP, shall remain in full force and effect in accordance with their
terms with respect to all confidential information of the Company disclosed to
WP thereunder.
8.3. Lost, etc. Certificates Evidencing Shares; Exchange
Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of any
certificate evidencing any Shares or Exchange Shares owned by an Investor, and
(in the case of loss, theft or destruction) of an unsecured indemnity
satisfactory to it, and upon reimbursement to the Company of all reasonable
expenses incidental thereto, and upon surrender and cancellation of such
certificate, if mutilated, the Company will make and deliver in lieu of such
certificate a new certificate of like tenor and for the number of securities
evidenced by such certificate which remain outstanding. Each Investor's
agreement of indemnity shall constitute indemnity satisfactory to the Company
for purposes of this Section 8.3. Upon surrender of any certificate representing
any Shares or Exchange Shares, for exchange at the office of the Company, the
Company at its expense will cause to be issued in exchange therefor new
certificates in such denomination or denominations as may be requested for the
same aggregate number of Shares or Exchange Shares represented by the
certificate so surrendered and registered as such holder may request. The
Company will also pay the cost of all deliveries of certificates for such Shares
or Exchange Shares to the office of the Investor (including the cost of
insurance against loss or theft in an amount satisfactory to the holders) upon
any exchange provided for in this Section 8.3.
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8.4. Securities Law Disclosure; Publicity
The Company shall, at or prior to 8:30 a.m., Eastern Standard
Time, on the first day following the date of this Agreement on which trading
occurs on the NASDAQ Stock Market, (i) issue a press release reasonably
acceptable to the Majority Investors disclosing the transactions contemplated
hereby, and (ii) file a Current Report on Form 8-K with the SEC (the "8-K
Filing") describing the transactions contemplated hereby and including this
Agreement as an exhibit thereto, in the form required by the Exchange Act.
Thereafter, the Company shall timely file any filings and notices required by
the SEC or the NASD with respect to the transactions contemplated hereby.
Notwithstanding the foregoing, the Company shall not publicly disclose the name
of any Investor, or include the name of any Investor in any filing with the SEC
(other than pursuant to the Registration Statement and exhibits to the 8-K
Filing and other periodic filings made by the Company under the Exchange Act) or
the NASD (other than pursuant to an application for the listing of the Shares on
the NASDAQ Stock Market), without the prior written consent of such Investor,
except to the extent such disclosure is required by law or NASD regulations, in
which case the Company shall provide the Investors with prior notice of such
disclosure.
8.5. HSR Act Filing
The Company and WP shall, as soon as practicable after the
date of this Agreement, but in no event later than April 3, 2005, file
Notification and Report Forms under the HSR Act with the Federal Trade
Commission (the "FTC") and the Antitrust Division of the Department of Justice
(the "Antitrust Division") relating to the transaction contemplated by this
Agreement and shall use their reasonable best efforts to respond as promptly as
practicable to all inquiries received from the FTC or the Antitrust Division for
additional information or documentation; provided, however, that no such filing
shall be made if, on or before March 15, 2005 (or such later date as agreed upon
by the Company), WP notifies the Company of its determination that such filing
will not be required by applicable law.
8.6. Insurance
The Company will use its best efforts to maintain all
insurance, including without limitation directors and officers insurance, with
responsible and reputable insurance companies or associations in at least such
amounts and covering such risks as the Company has previously maintained.
SECTION 9. MISCELLANEOUS
9.1. Notices
(a) All communications under this Agreement shall be in
writing and shall be delivered by hand or facsimile or mailed by overnight
courier or by registered mail or certified mail, postage prepaid:
-28-
(1) if to an Investor, at the address or facsimile number set
forth on Exhibit A, or at such other address or facsimile number as
such Investor may have furnished the Company in writing; and
(2) if to the Company, at: 11080 CirclePoint Road,
Westminster, Colorado, 80020 (facsimile: (303) 426-4731), Attention:
General Counsel, or at such other address or facsimile number as it may
have furnished the Investors in writing, with a copy (which shall not
constitute notice) to Cooley Godward LLP, 380 Interlocken Crescent,
Suite 900, Broomfield, Colorado, 80021-8023 (facsimile: (720)
566-4099), Attention: Brent Fassett, Esq.
(b) Any notice so addressed shall be deemed to be given: if
delivered by hand or facsimile, on the date of such delivery; if mailed by
overnight courier, on the first Business Day following the date of such mailing;
and if mailed by registered or certified mail, on the third Business Day after
the date of such mailing.
9.2. Expenses and Taxes
(a) The Company shall reimburse WP, within fifteen Business
Days of such request by WP and in an amount not to exceed $250,000, all of WP's
out-of-pocket fees and expenses incurred in connection with the negotiation,
preparation, execution and delivery of this Agreement and the transactions
contemplated hereby, including, without limitation, the fees and expenses of
WP's attorneys, accountants and consultants employed in connection with WP's
consideration, negotiation and consummation of the transactions contemplated
hereby, WP's due diligence on the Company and any documentation relating to the
transactions contemplated hereby.
(b) The Company will pay, and save and hold each Investor
harmless from any and all liabilities (including interest and penalties) with
respect to, or resulting from any delay or failure in paying, stamp and other
taxes (other than income taxes), if any, which may be payable or determined to
be payable on the execution and delivery or acquisition of the Shares or the
Exchange Shares.
9.3. Reproduction of Documents
This Agreement and all documents relating thereto, including,
without limitation, (i) consents, waivers and modifications which may hereafter
be executed, (ii) documents received by the Investors on the applicable Closing
Date (except for certificates evidencing the Shares themselves), and (iii)
financial statements, certificates and other information previously or hereafter
furnished to the Investors, may be reproduced by the Company and the Investors
by any photographic, photostatic, microfilm, micro-card, miniature photographic
or other similar process and the Company and the Investors may destroy any
original document so reproduced. All parties hereto agree and stipulate that any
such reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by the Company or any
such Investor in the regular course of business) and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence.
-29-
9.4. Termination and Survival
Notwithstanding anything to the contrary contained herein,
this Agreement may be terminated at any time (i) by mutual consent of the
Company and the Majority Investors, (ii) by either the Company or WP if the
Initial Closing shall not have occurred on or prior to March 11, 2005 (unless
such date is extended by mutual written consent); (iii) by the Investors, for
any material breach of this Agreement by the Company; and (iv) by the Company,
for any material breach of this Agreement by the Investors. In the event of
termination pursuant to this Section 9.4, this Agreement shall become null and
void and have no effect, with no liability on the part of the Company or the
Investors, or their members, partners, directors, officers, agents or
stockholders, with respect to this Agreement, except for the (i) liability of
the Company for expenses pursuant to Section 9.2 and (ii) subject to the
foregoing sentence, liability for any breach of any representation, warranty or
covenant contained in this Agreement.
9.5. Successors and Assigns
Except as otherwise expressly provided herein, this Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties. The Company may not assign its rights or obligations
hereunder without the prior written consent of the Majority Investors. WP may
assign its rights and obligations hereunder to not more than three (3) of its
members or Affiliates or Affiliates of its members; provided, that the assignee
provides the Company with written representations and warranties substantially
similar to those provided in Section 4.
9.6. Severability
In the event that any part or parts of this Agreement shall be
held illegal or unenforceable by any court or administrative body of competent
jurisdiction, such determination shall not affect the remaining provisions of
this Agreement which shall remain in full force and effect.
9.7. Governing Law
This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to contracts made
and to be performed entirely within such State.
9.8. Paragraph and Section Headings
The headings of the sections and subsections of this Agreement
are inserted for convenience only and shall not be deemed to constitute a part
thereof.
9.9. Limitation on Enforcement of Remedies
The Company hereby agrees that it will not assert against the
limited partners of any members of any Investor any claim it may have under this
Agreement by reason of any failure or alleged failure by such Investor to meet
its obligations hereunder.
-30-
9.10. Counterparts
This Agreement may be executed in one or more counterparts
(including by facsimile), each of which shall be deemed an original and all of
which together shall be considered one and the same agreement.
9.11. Entire Agreement; Amendment and Waiver
This Agreement, the schedules and exhibits attached hereto
constitute the entire understandings of the parties hereto and supersede all
prior agreements or understandings with respect to the subject matter hereof
among such parties. This Agreement may be amended, and the observance of any
term of this Agreement may be waived, with (and only with) the written consent
of the Company and the Majority Investors.
[SIGNATURE PAGE TO FOLLOW.]
-31-
Very truly yours,
ALLOS THERAPEUTICS, INC.
By: /s/ Michael E. Hart
------------------------------
Name: Michael E. Hart
Title: President and Chief
Executive Officer
ACCEPTED AND AGREED:
WARBURG PINCUS PRIVATE EQUITY VIII, L.P.
By: Warburg Pincus & Co.,
General Partner
By: /s/ Jonathan Leff
---------------------
Name: Jonathan Leff
Title: Partner
EXHIBIT A
SCHEDULE OF INVESTORS
SHARES OF
EXCHANGEABLE
PREFERRED
STOCK
INVESTOR NAME AND ADDRESS
Warburg Pincus Private Equity VIII, L.P. 2,262,443
466 Lexington Avenue
New York, NY 10017
Facsimile: (212) 878-0850
Attention: Mr. Jonathan S. Leff
with a copy (which shall not constitute notice) to:
Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, NY 10019
Facsimile: (212) 728-9222
Attention: Steven J. Gartner, Esq.
-------------------------------------------------------------------------------
EXHIBIT B
CERTIFICATE OF DESIGNATIONS
EXHIBIT C
CERTIFICATE OF INCORPORATION
EXHIBIT D
BYLAWS
EXHIBIT E
FORM OF LEGAL OPINION
EXHIBIT F
REGISTRATION RIGHTS AGREEMENT
EXHIBIT G
STANDSTILL AGREEMENT
EXHIBIT H
RIGHTS AMENDMENT
(iii)
TABLE OF CONTENTS
SECTION 1. INTERPRETATION OF THIS AGREEMENT...........................2
1.1. Defined Terms..............................................2
SECTION 2. AUTHORIZATION OF SHARES; PURCHASE AND SALE OF SHARES.......5
2.1. Authorization of Shares....................................5
2.2. Issuance of Shares.........................................6
2.3. Closing and Closing Date...................................6
2.4. Delivery...................................................6
2.5. Subsequent Sales of Shares.................................6
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY..............7
3.1. Corporate Organization.....................................7
3.2. Subsidiaries...............................................7
3.3. Capitalization.............................................7
3.4. Corporate Proceedings, etc.................................8
3.5. Consents and Approvals.....................................9
3.6. Absence of Defaults, Conflicts, etc........................9
3.7. Reports and Financial Statements...........................9
3.8. Absence of Certain Developments...........................10
3.9. Compliance with Law.......................................10
3.10. Litigation................................................11
3.11. Absence of Undisclosed Liabilities........................11
3.12. Employees.................................................11
3.13. Tax Matters...............................................12
3.14. Intellectual Property.....................................12
3.15. Title to Tangible Assets..................................13
3.16. Condition of Properties...................................14
3.17. Transactions with Related Parties.........................14
3.18. Registration Statement and Prospectus.....................14
3.19. Registration Rights.......................................14
3.20. Brokerage.................................................15
3.21. Illegal or Unauthorized Payments;
Political Contributions...................................15
3.22. Takeover Statute..........................................15
3.23. NASDAQ Compliance.........................................15
3.24. Reporting Status..........................................15
3.25. No Manipulation of Common Stock...........................15
3.26. Accountants...............................................16
3.27. Internal Accounting Controls..............................16
3.28. Environmental Matters.....................................16
3.29. FDA Approval..............................................16
3.30. Insurance.................................................17
3.31. Transfer Taxes............................................17
3.32. Investment Company........................................17
(i)
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS...........17
SECTION 5. ADDITIONAL AGREEMENTS OF THE PARTIES......................19
5.1. Resale of Shares..........................................19
5.2. Covenants Pending Closing.................................19
5.3. Further Assurances........................................19
5.4. Investor Designees........................................19
5.5. Subscription Right........................................20
5.6. Consents and Approvals; Proxy Statement...................21
5.7. Use of Proceeds...........................................22
5.8. Takeover Statute..........................................22
SECTION 6. INVESTORS' CLOSING CONDITIONS.............................22
6.1. Representations and Warranties............................22
6.2. Compliance with Agreement.................................23
6.3. Injunction................................................23
6.4. Counsel's Opinion.........................................23
6.5. Adverse Development.......................................23
6.6. Directors.................................................23
6.7. Registration Rights Agreement.............................23
6.8. Standstill Agreement......................................23
6.9. Rights Amendment..........................................23
6.10. Stop Orders...............................................24
6.11. Listing of the Common Stock...............................24
6.12. Nasdaq Interpretative Ruling..............................24
6.13. Filing of Certificate of Designations.....................24
6.14. Officer's Certificate.....................................24
6.15. Secretary's Certificate...................................24
6.16. Approval of Proceedings...................................25
SECTION 7. COMPANY CLOSING CONDITIONS................................25
7.1. Representations and Warranties............................25
7.2. Compliance with Agreement.................................25
7.3. Investors' Certificates...................................25
7.4. Injunction................................................25
7.5. Standstill Agreement......................................25
7.6. Rights Amendment..........................................26
7.7. Nasdaq Interpretative Ruling..............................26
7.8. Filing of Certificate of Designations.....................26
7.9. Approval of Proceedings...................................26
SECTION 8. COVENANTS.................................................26
8.1. Inspection................................................26
8.2. Confidentiality...........................................27
8.3. Lost, etc. Certificates Evidencing Shares; Exchange.......27
8.4. Securities Law Disclosure; Publicity......................28
(ii)
8.5. HSR Act Filing............................................28
8.6. Insurance.................................................28
SECTION 9. MISCELLANEOUS.............................................28
9.1. Notices...................................................28
9.2. Expenses and Taxes........................................29
9.3. Reproduction of Documents.................................29
9.4. Termination and Survival..................................30
9.5. Successors and Assigns....................................30
9.6. Severability..............................................30
9.7. Governing Law.............................................30
9.8. Paragraph and Section Headings............................30
9.9. Limitation on Enforcement of Remedies.....................30
9.10. Counterparts..............................................31
9.11. Entire Agreement; Amendment and Waiver....................31
Exhibit A Schedule of Investors
Exhibit B Certificate of Designations
Exhibit C Certificate of Incorporation
Exhibit D Bylaws
Exhibit E Form of Legal Opinion
Exhibit F Registration Rights Agreement
Exhibit G Standstill Agreement
Exhibit H Rights Amendment
(iii)
EX-3
4
b405191_ex3.txt
CERTIFICATE OF DESIGNATIONS, ETC.
EXECUTION COPY
Exhibit 3
CERTIFICATE OF DESIGNATIONS, NUMBER, VOTING POWERS,
PREFERENCES AND RIGHTS OF
SERIES A EXCHANGEABLE PREFERRED STOCK
OF
ALLOS THERAPEUTICS, INC.
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
The undersigned DOES HEREBY CERTIFY that the following resolution was
duly adopted by the Board of Directors of Allos Therapeutics, a Delaware
corporation (hereinafter called the "Company"), with the preferences and rights
set forth therein relating to dividends, exchange, redemption, dissolution and
distribution of assets of the Company having been fixed by the Board of
Directors pursuant to authority granted to it under Article IV of the Company's
Amended and Restated Certificate of Incorporation and in accordance with the
provisions of Section 151 of the General Corporation Law of the State of
Delaware:
RESOLVED: That, pursuant to authority conferred upon the Board of
Directors by the Amended and Restated Certificate of Incorporation of the
Company, the Board of Directors hereby authorizes the issuance of 2,714,932
shares of Series A Exchangeable Preferred Stock, par value $0.001 per share, of
the Company, and hereby fixes the designations, powers, preferences and
relative, participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, of such shares, in addition
to those set forth in the Amended and Restated Certificate of Incorporation of
the Company, as follows:
Section 1. Designation. The shares of such series shall be designated
"Series A Exchangeable Preferred Stock" (the "Exchangeable Preferred Stock") and
the number of shares constituting such series shall be 2,714,932. Such number of
shares may be increased or decreased by resolution of the Board of Directors and
the approval of a majority of the holders of the Exchangeable Preferred Stock;
provided, that no decrease shall reduce the number of shares of Exchangeable
Preferred Stock to a number less than the number of shares then outstanding plus
the number of shares reserved for issuance upon the payment of dividends
pursuant to Section 4 hereof.
Section 2. Currency. All Exchangeable Preferred Stock shall be
denominated in United States currency, and all payments and distributions
thereon or with respect thereto shall be made in United States currency. All
references herein to "$" or "dollars" refer to United States currency.
Section 3. Ranking. The Exchangeable Preferred Stock shall, with
respect to dividend rights and rights upon liquidation, winding up or
dissolution, rank prior to each other class or series of shares of the Company.
For purposes hereof, "Junior Stock" shall mean the Common Stock of the Company,
par value $0.001 per share (the "Common Stock"), the Series A Junior
Participating Preferred Stock of the Company, and the shares of any other class
or series of equity securities of the Company.
Section 4. Dividends.
(a) The holders of the Exchangeable Preferred Stock shall be entitled
to receive, when and as declared by the Board of Directors (the "Board of
Directors"), out of the net profits of the Company legally available for
distribution, dividends on each outstanding share of Exchangeable Preferred
Stock at the rate of 10% per annum of the sum of the Stated Value (as herein
defined) of such share of Exchangeable Preferred Stock plus all accumulated and
unpaid dividends thereon from and including the one year anniversary of the date
of issuance of such share of Exchangeable Preferred Stock to and including the
first to occur of (i) the date on which the Redemption Price (as defined below)
of such share of Exchangeable Preferred Stock is paid to the holder thereof in
connection with a Liquidation (as defined below) of the Company or the
redemption of such share of Exchangeable Preferred Stock by the Company, (ii)
the date on which the Acquisition Price (as defined below) of such share of
Exchangeable Preferred Stock is paid to the holder thereof in connection with a
Change in Control (as defined below), (iii) the date on which such share of
Exchangeable Preferred Stock is exchanged for shares of Common Stock as provided
herein, or (iv) the date on which such share of Exchangeable Preferred Stock is
otherwise acquired by the Company. For purposes hereof, the term "Stated Value"
shall mean $22.10 per share of Exchangeable Preferred Stock, subject to
appropriate adjustment in the event of any stock dividend, stock split, stock
distribution or combination with respect to the Exchangeable Preferred Stock;
provided, however, that there shall be no adjustment to the Stated Value in
respect of any dividends paid in additional shares of Exchangeable Preferred
Stock pursuant to this Section 4. Except as otherwise provided herein, dividends
shall be payable in additional shares of Exchangeable Preferred Stock or cash,
at the option of the Company.
(b) To the extent not paid on March 31, June 30, September 30 and
December 31 of each year, beginning March 31, 2006 (the "Dividend Reference
Dates"), all dividends which have accrued on each share of Exchangeable
Preferred Stock outstanding during the three-month period (or other period in
the case of the initial Dividend Reference Date) ending upon each such Dividend
Reference Date shall be accumulated and shall remain accumulated dividends with
respect to such share of Exchangeable Preferred Stock until paid to the holder
thereof.
(c) Dividends on the Exchangeable Preferred Stock shall be cumulative
and shall continue to accrue whether or not declared and whether or not in any
fiscal year there shall be net profits or surplus legally available for the
payment of dividends in such fiscal year, so that if in any fiscal year or
years, dividends in whole or in part are not paid upon the Exchangeable
Preferred Stock, unpaid dividends shall accumulate as against the holders of the
Junior Stock.
(d) Except as otherwise provided herein, if at any time the Company
pays less than the total amount of dividends then accrued with respect to the
Exchangeable Preferred Stock, such payment shall be distributed pro rata among
the holders thereof based upon the aggregate accrued but unpaid dividends on all
shares of Exchangeable Preferred Stock held by each such holder.
-2-
(e) In the event dividends on the Exchangeable Preferred Stock are paid
in additional shares of Exchangeable Preferred Stock, the number of shares of
Exchangeable Preferred Stock to be issued in payment of the dividend with
respect to each outstanding share of Exchangeable Preferred Stock shall be
determined by dividing (i) the amount of the dividend that would have been
payable with respect to such share of Exchangeable Preferred Stock had such
dividend been paid in cash by (ii) the Stated Value. To the extent that any such
dividend would result in the issuance of a fractional share of Exchangeable
Preferred Stock (which shall be determined with respect to the aggregate number
of shares of Exchangeable Preferred Stock held of record by each holder) then
the amount of such fraction multiplied by the Stated Value shall be paid in cash
(unless there are no legally available funds with which to make such cash
payment, in which event such cash payment shall be made as soon as possible).
(f) For so long as the Exchangeable Preferred Stock remains
outstanding, the Company shall not, without the prior consent of the holders of
a majority of the outstanding shares of Exchangeable Preferred Stock, pay any
dividend upon the Junior Stock, whether in cash or other property (other than
shares of Junior Stock), or purchase, redeem or otherwise acquire any such
Junior Stock. Notwithstanding the provisions of this Section 4(f), without
declaring or paying dividends on the Exchangeable Preferred Stock, the Company
may, subject to applicable law, repurchase or redeem shares of capital stock of
the Company from current or former officers or employees of the Company pursuant
to the terms of repurchase or similar agreements in effect from time to time,
provided that such agreements (or the forms thereof) have been approved by the
Board of Directors and the terms of such agreements provide for a repurchase or
redemption price not in excess of the price per share paid by such current or
former officers or employee for such share.
Section 5. Liquidation Preference.
(a) Upon any voluntary or involuntary liquidation, dissolution or
winding up of the Company (each, a "Liquidation") or upon any Change in Control
(as defined below), before any distribution or payment shall be made to holders
of any Junior Stock, each holder of Exchangeable Preferred Stock shall be
entitled to payment out of the assets of the Company legally available for
distribution, an amount per share of Exchangeable Preferred Stock equal to (i)
in the event of a Liquidation, the Redemption Price or (ii) in the event of a
Change in Control, the Acquisition Price (as defined below). If, upon any such
Liquidation or Change in Control, the assets of the Company shall be
insufficient to make payment in full to all holders of Exchangeable Preferred
Stock of the liquidation preference set forth in this Section 5(a), the holders
of Exchangeable Preferred Stock shall share equally and ratably in any
distribution of such assets in proportion to the full Redemption Price or
Acquisition Price, as applicable, to which each such holder would otherwise be
entitled. Upon payment of all amounts due under this Section 5(a), the holders
of Exchangeable Preferred Stock shall have no further rights in respect of such
shares of Exchangeable Preferred Stock and shall not be entitled to participate
in any further distributions of the Company's assets distributed in such
Liquidation or Change in Control. The "Acquisition Price" shall mean the greater
of (i) the sum of the Stated Value of a share of Exchangeable Preferred Stock
plus all accrued but unpaid dividends thereon (whether or not declared) through
the date of such Change in Control or (ii) the Acquisition Fair Market Value (as
defined in Section 11 below) of ten (10) shares of Common Stock.
-3-
(b) A "Change in Control" shall mean (i) a consolidation, merger,
reorganization or other form of acquisition of or by the Company in which the
Company's stockholders immediately prior to the transaction retain less than 50%
of the voting power of or economic interest in the surviving or resulting entity
(or its parent) immediately after the transaction, (ii) a sale of the Company's
assets in excess of a majority of the Company's assets (valued at fair market
value as determined in good faith by the Board), (iii) the acquisition by any
person, other than Warburg Pincus & Co. and its affiliates, of more than 50% of
the Company's outstanding voting securities, or (iv) during any period of 24
consecutive months, individuals who at the beginning of such period were
directors of the Company (together with any new directors whose election or
appointment was approved by the directors then in office) cease for any reason
to constitute a majority of the directors of the Board or the board of directors
of the surviving or resulting entity (or its parent).
Section 6. Voting Rights. For so long as any shares of Exchangeable
Preferred Stock remain outstanding, the Company shall not amend, alter or repeal
the preferences, special rights or other powers of the Exchangeable Preferred
Stock so as to affect adversely the Exchangeable Preferred Stock, without the
written consent or affirmative vote of the holders of at least a majority of the
then outstanding shares of Exchangeable Preferred Stock, given in writing or by
vote at a meeting, consenting or voting (as the case may be) separately as a
class. Except as provided in the immediately preceding sentence or as required
by applicable Delaware law, the holders of Exchangeable Preferred Stock shall
not be entitled to any voting rights as stockholders of the Company.
Section 7. Exchange.
(a) Upon the later to occur of (i) receipt of the Stockholder Approval
(as defined in Section 11 below), and (ii) to the extent required, the
expiration or termination of any waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, that are applicable to the
exchange of the Exchangeable Preferred Stock ("HSR Approval") (the "Exchange
Date"), each outstanding share of Exchangeable Preferred Stock shall
automatically be exchanged for such number of shares of Common Stock determined
by dividing (i) the Stated Value of the Exchangeable Preferred Stock then in
effect (determined as provided in Section 4(a) above) by (ii) the Exchange Price
(as defined below) of the Exchangeable Preferred Stock then in effect (the
"Exchange Rate"). The initial exchange price of the Exchangeable Preferred Stock
shall be $2.21 per share, subject to appropriate adjustment in the event of any
stock dividend, stock split, stock distribution or combination, subdivision,
reclassification or other corporate action having the similar effect with
respect to the Common Stock (the "Exchange Price"). The initial Exchange Rate
for the Exchangeable Preferred Stock shall be ten (10) shares of Common Stock
for each one share of Exchangeable Preferred Stock. In addition, upon any such
exchange all accrued but unpaid dividends (whether or not declared) on the
Exchangeable Preferred Stock shall be paid in shares of Common Stock. The number
of shares of Common Stock to be issued in payment of the accrued but unpaid
dividends (whether or not declared) with respect to each outstanding share of
Exchangeable Preferred Stock shall be determined by dividing the amount of the
dividend that would have been payable had such dividend been paid in cash by an
amount equal to the Exchange Price. Notwithstanding the foregoing, the holders
shall have no obligation to exchange the Exchangeable Preferred Stock for Common
Stock if on or prior to the fifteen-month anniversary of the Initial Issuance
-4-
Date (as defined in Section 11 below) (the "Exchange Termination Date"), the
Stockholder Approval and the HSR Approval have not been obtained. If the
Stockholder Approval and the HSR Approval have not been obtained by the Exchange
Termination Date, then the Company shall not have the option to exchange all or
any portion of the then outstanding Exchangeable Preferred Stock for shares of
Common Stock and such Exchangeable Preferred Stock shall remain outstanding
pursuant to its terms. On the Exchange Date, all rights with respect to the
Exchangeable Preferred Stock so exchanged will terminate, except only the rights
of the holders thereof, upon surrender of their certificate or certificates
therefor, to receive certificates for the number of shares of Common Stock into
which such Exchangeable Preferred Stock and any accrued but unpaid dividends
thereon (whether or not declared) have been exchanged. If so required by the
Company, certificates surrendered for exchange shall be endorsed or accompanied
by written instrument or instruments of transfer, in form satisfactory to the
Company, duly executed by the registered holder or by his attorneys duly
authorized in writing. All certificates evidencing shares of Exchangeable
Preferred Stock which are required to be surrendered for exchange in accordance
with the provisions hereof shall, from and after the Exchange Date, be deemed to
have been retired and canceled and the shares of Exchangeable Preferred Stock
represented thereby exchanged into Common Stock for all purposes,
notwithstanding the failure of the holder or holders thereof to surrender such
certificates on or prior to such date. As soon as practicable after the Exchange
Date and the surrender of the certificate or certificates for Exchangeable
Preferred Stock as aforesaid, the Company shall cause to be issued and delivered
to such holder, or on his or its written order, a certificate or certificates
for the number of full shares of Common Stock issuable on such exchange in
accordance with the provisions hereof and cash as provided in Section 5(b)
hereof in respect of any fraction of a share of Common Stock otherwise issuable
upon such exchange. Any shares of Exchangeable Preferred Stock so exchanged
shall be retired and canceled and shall not be reissued, and the Company may
from time to time take such appropriate action as may be necessary to reduce the
authorized Exchangeable Preferred Stock accordingly.
(b) No fractional shares of Common Stock will be issued upon exchange
of the Exchangeable Preferred Stock or accrued but unpaid dividends thereon. All
shares of Common Stock (including fractions thereof) issuable upon conversion of
more than one share of Exchangeable Preferred Stock (including accrued but
unpaid dividends thereon) by a holder thereof shall be aggregated for purposes
of determining whether the exchange would result in the issuance of any
fractional share. If, after the aforementioned aggregation, the exchange would
result in the issuance of any fractional share of Common Stock, the Company
shall, in lieu of issuing any such fractional share, pay cash equal to the
product of such fraction multiplied by the Exchange Price.
Section 8. Redemption.
(a) For so long as the Exchangeable Preferred Stock remains
outstanding, on or following the Optional Redemption Date (as defined below),
the Company and the holders of at least a majority of the outstanding shares of
Exchangeable Preferred Stock (the "Initiating Holders") shall each have the
option to cause the Company, to the extent it may lawfully do so, to redeem all
(but not less than all) of the outstanding shares of Exchangeable Preferred
Stock for cash in a per share amount equal to the greater of (i) the sum of the
-5-
Stated Value of a share of Exchangeable Preferred Stock plus all accrued but
unpaid dividends thereon (whether or not declared) through the date of such
redemption or (ii) the Fair Market Value (as defined in Section 11 below) of ten
(10) shares of Common Stock on the date which the Company or the Initiating
Holders exercise such right (the "Redemption Price"). For purposes hereof, the
Optional Redemption Date shall mean the later of (i) the fourth anniversary of
the Initial Issuance Date and (ii) the date that is thirty (30) days after the
date on which the Company publicly announces the final results of its ENRICH
(Enhancing Whole Brain Radiation Therapy In Patients with Breast Cancer and
Hypoxic Brain Metastases) trial, which is the Phase 3 clinical trial of its
investigational radiation sensitizer EFAPROXYN(TM) (efaproxiral) in patients
with brain metastases originating from breast cancer.
(b) The Initiating Holders may exercise their option by
delivering written notice thereof (a "Redemption Demand Notice") to the Company,
and the Company shall be required to redeem the Exchangeable Preferred Stock, to
the extent it may lawfully do so, within thirty (30) days after receipt of such
Redemption Demand Notice. As promptly as practicable following (i) the Company's
receipt of a Redemption Demand Notice pursuant to this Section 8(b), or (ii) the
Company's election to redeem the Exchangeable Preferred Stock pursuant to
Section 8(a) above, and in any event at least fifteen (15) days prior to the
date on which such redemption is to be made (the "Redemption Date"), written
notice shall be mailed, postage prepaid, to each holder of record of
Exchangeable Preferred Stock, at his or its post office address last shown on
the records of the Company, specifying the Redemption Date and calling upon such
holder to surrender to the Company, in the manner and at the place designated,
his or its certificate or certificates representing the shares of Exchangeable
Preferred Stock to be redeemed (such notice is hereinafter referred to as the
"Redemption Notice"). On or prior to the Redemption Date, each holder of
Exchangeable Preferred Stock shall surrender his or its certificate or
certificates representing such shares of Exchangeable Preferred Stock to be
redeemed to the Company, in the manner and at the place designated in the
Redemption Notice, and thereupon the Redemption Price of such shares shall be
payable to the order of the person whose name appears on such certificate or
certificates as the owner thereof and each surrendered certificate shall be
canceled. If the funds of the Company legally available for redemption of shares
of Exchangeable Preferred Stock on the Redemption Date are insufficient to
redeem all outstanding shares of Exchangeable Preferred Stock, those funds which
are legally available shall be used to redeem the maximum number of shares pro
rata among the holders of Exchangeable Preferred Stock based upon the aggregate
Redemption Price of all shares held by each such holder. At any time thereafter
when additional funds of the Company are legally available for the redemption of
shares of Exchangeable Preferred Stock, such funds shall immediately be used to
redeem the balance of the shares of Exchangeable Preferred Stock which it has
not previously redeemed. From and after the Redemption Date, unless there shall
have been a default in payment of the Redemption Price, all rights of the
holders of the Exchangeable Preferred Stock (except the right to receive the
Redemption Price without interest upon surrender of their certificate or
certificates) shall cease with respect to such shares, and such shares shall not
thereafter be transferred on the books of the Company or be deemed to be
outstanding for any purpose whatsoever.
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(c) Except as provided in Section 8(a) hereof, the Company shall have
no right to redeem the shares of Exchangeable Preferred Stock. Any shares of
Exchangeable Preferred Stock so redeemed shall be permanently retired, shall no
longer be deemed outstanding and shall not under any circumstances be reissued,
and the Company may from time to time take such appropriate corporate action as
may be necessary to reduce the authorized Exchangeable Preferred Stock
accordingly. Nothing herein contained shall prevent or restrict the purchase by
the Company, from time to time either at public or private sale, of the whole or
any part of the Exchangeable Preferred Stock at such price or prices as the
Company may determine, subject to the provisions of applicable law.
Section 9. Issue Taxes. The Company shall pay all issue taxes, if any,
incurred in respect of the issue of Common Stock on exchange. If a holder of
shares surrendered for exchange specifies that the Common Stock to be issued on
exchange are to be issued in a name or names other than the name or names in
which such surrendered shares stand, the Company shall not be required to pay
any transfer or other taxes incurred by reason of the issuance of such Common
Stock to the name of another.
Section 10. Reservation of Shares. The Company shall at all times
reserve and keep available, free from preemptive rights, for issuance upon the
exchange of Exchangeable Preferred Stock, such number of its authorized but
unissued Common Stock as will from time to time be sufficient to permit the
exchange of all outstanding Exchangeable Preferred Stock. Prior to the delivery
of any securities which the Company shall be obligated to deliver upon exchange
of the Exchangeable Preferred Stock, the Company shall comply with all
applicable laws and regulations which require action to be taken by the Company.
All Common Stock delivered upon exchange of the Exchangeable Preferred Stock
will upon delivery be duly and validly issued and fully paid and nonassessable,
free of all liens and charges and not subject to any preemptive rights.
Section 11. Certain Definitions. As used in this Certificate, the
following terms shall have the following meanings, unless the context otherwise
requires:
"Acquisition Fair Market Value" shall mean the consideration per share
of Common Stock received by the holders thereof in a Change in Control;
provided, that, if the consideration is other than cash, its value will be
deemed its fair market value as determined in good faith by the Board of
Directors and the holders of at least a majority of the outstanding shares of
Exchangeable Preferred Stock.
"Fair Market Value" shall mean the product of the average of the
closing prices for the Common Stock on NASDAQ for the twenty (20) trading days
preceding the relevant date.
"Initial Issuance Date" shall mean March 4, 2005.
"Securities Purchase Agreement" means the Securities Purchase
Agreement, dated as of March 2, 2005, by and between the Company and each of the
Purchasers named therein, as amended from time to time in accordance with its
terms.
"Stockholder Approval" means the approval by the holders of Common
Stock of the Company of the exchange of all shares of Exchangeable Preferred
Stock issued under the Securities Purchase Agreement or issued as dividends
thereon for shares of Common Stock, as required by the applicable rules of the
NASDAQ National Market.
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Section 12. Headings. The headings of the paragraphs of this Schedule
are for convenience of reference only and shall not define, limit or affect any
of the provisions hereof.
Section 13. Waivers. Any of the rights of the holders of the
Exchangeable Preferred Stock set forth herein may be waived by any holder of the
Exchangeable Preferred Stock with respect to such holder and by the affirmative
consent or vote of the holders of a majority of the shares of the Exchangeable
Preferred Stock then outstanding with respect to all holders of the Exchangeable
Preferred Stock.
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IN WITNESS WHEREOF, Allos Therapeutics, Inc. has caused this
Certificate of Designations of Series A Exchangeable Preferred Stock to be duly
executed by its Vice President, General Counsel this 3rd day of March, 2005.
ALLOS THERAPEUTICS, INC.
By: /s/ Marc H. Graboyes
--------------------
Name: Marc H. Graboyes
Title: Vice President, General Counsel
EX-4
5
b405191_ex4.txt
REGISTRATION RIGHTS AGREEMENT
EXECUTION COPY
Exhibit 4
ALLOS THERAPEUTICS, INC.
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of March 4, 2005,
among the investors listed on Schedule I hereto (the "Investors") and Allos
Therapeutics, Inc., a Delaware corporation (the "Company").
R E C I T A L S
WHEREAS, the Investors have, pursuant to the terms of the
Securities Purchase Agreement, dated as of March 2, 2005, by and among the
Company and the Investors (the "Purchase Agreement"), agreed to purchase shares
of Series A Exchangeable Preferred Stock, par value $0.001 per share, of the
Company (the "Exchangeable Preferred Stock"); and
WHEREAS, the shares of Exchangeable Preferred Stock are, under
certain conditions, exchangeable into shares of common stock, par value $0.001
per share of the Company (the "Common Stock"); and
WHEREAS, the Company has agreed, as a condition precedent to
the Investors' obligations under the Purchase Agreement, to grant the Investors
certain registration rights; and
WHEREAS, the Company and the Investors desire to define the
registration rights of the Investors on the terms and subject to the conditions
herein set forth.
NOW, THEREFORE, in consideration of the foregoing premises and
for other good and valuable consideration, the parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following terms have the
respective meanings set forth below:
Agreement: shall mean this Registration Rights Agreement among
the Investors and the Company;
Commission: shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act;
Exchange Act: shall mean the Securities Exchange Act of 1934,
as amended;
Holder: shall mean any Investor who is a holder of Registrable
Securities or any assignee of record of such Registrable Securities in
accordance with the terms hereof;
Initiating Holder: shall mean Warburg Pincus Private Equity
VIII, L.P.;
Person: shall mean an individual, partnership, joint-stock
company, corporation, trust or unincorporated organization, and a government or
agency or political subdivision thereof;
Register, Registered and Registration: shall mean a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act (and any post-effective amendments filed or
required to be filed) and the declaration or ordering of effectiveness of such
registration statement;
Registrable Securities: shall mean (A) shares of Common Stock
issuable upon exchange of the shares of Exchangeable Preferred Stock purchased
by the Investors pursuant to the Securities Purchase Agreement, (B) any other
shares of Common Stock acquired by the Investors and (C) any stock of the
Company issued as a dividend or other distribution with respect to, or in
exchange for or in replacement of, the shares of Exchangeable Preferred Stock or
Common Stock referred to in clause (A) or (B); provided, however, that
notwithstanding the foregoing, Registrable Securities shall not include any
securities (i) sold by a Holder to the public either pursuant to a registration
statement or Rule 144, or (ii) sold in a private transaction in which the
transferor's rights under Section 2 hereof are not assigned in accordance with
the terms of this Agreement.
Registration Expenses: shall mean all expenses incurred by the
Company in compliance with Section 2(a), (b) and (c) hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, fees and expenses of one counsel for
all the Holders in an amount not to exceed $15,000, blue sky fees and expenses
and the expense of any special audits incident to or required by any such
registration (but excluding the compensation of regular employees of the
Company, which shall be paid in any event by the Company);
security, securities: shall have the meaning set forth in
Section 2(1) of the Securities Act;
Securities Act: shall mean the Securities Act of 1933, as
amended; and
Selling Expenses: shall mean all underwriting discounts and
selling commissions applicable to the sale of Registrable Securities and all
fees and disbursements of counsel for each of the Holders other than fees and
expenses of one counsel for all the Holders in an amount not to exceed $15,000.
SECTION 2. REGISTRATION RIGHTS
(a) Requested Registration.
(i) Request for Registration. Subject to the conditions of
this Section 2(a), if the Company shall receive from the Initiating Holder, at
any time on or after the second anniversary of the date hereof, a written
request that the Company effect any registration with respect to all or a part
of the Registrable Securities, the Company will:
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(1) promptly give written notice of the proposed
registration, qualification or compliance to all other
Holders; and
(2) subject to the limitations of this Section 2(a),
as soon as practicable, use its commercially reasonable
efforts to effect such registration (including, without
limitation, the execution of an undertaking to file
post-effective amendments, appropriate qualification under
applicable blue sky or other state securities laws and
appropriate compliance with applicable regulations issued
under the Securities Act) as may be so requested and as would
permit or facilitate the sale and distribution of all or such
portion of such Registrable Securities as are specified in
such request, together with all or such portion of the
Registrable Securities of any Holder or Holders joining in
such request as are specified in a written request received by
the Company within ten (10) business days after written notice
from the Company is given under Section 2(a)(i)(1) above;
provided that the Company shall not be obligated to effect, or
take any action to effect, any such registration pursuant to
this Section 2(a):
(A) In any particular jurisdiction in which
the Company would be required to qualify to do
business or execute a general consent to service of
process in effecting such registration, qualification
or compliance, unless the Company is already subject
to service in such jurisdiction and except as may be
required by the Securities Act or applicable rules or
regulations thereunder;
(B) After the Company has effected one (1)
such registration pursuant to this Section 2(a) and
such registration has been declared or ordered
effective;
(C) If the Registrable Securities requested
by all Holders to be registered pursuant to such
request do not have an anticipated aggregate public
offering price (before any underwriting discounts and
commissions) of not less than $7,500,000;
(D) if within thirty (30) days of receipt of
a written request from the Initiating Holder pursuant
to Section 2(a), the Company gives notice to the
Holders of the Company's intention to file a
registration statement for a public offering within
sixty (60) days, other than pursuant to (i) a
registration statement relating to any employee
benefit plan or (ii) with respect to any corporate
reorganization or transaction under Rule 145 of the
Securities Act, including any registration statements
related to the issuance or resale of securities
issued in such a transaction or (iii) a registration
related to stock issued upon conversion of debt
securities (each a "Special Registration Statement");
(E) if the Initiating Holders propose to
dispose of shares of Registrable Securities that may
be immediately registered on Form S-3 pursuant to a
request made pursuant to Section 2(c) below; or
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(F) If the Board of Directors, in its good
faith judgment, determines that any registration of
Registrable Securities requested pursuant to this
Section 2(a) (a "Requested Registration") should not
be made or continued because it would interfere with
any material financing, acquisition, corporate
reorganization or merger or other material
transaction involving the Company (a "Valid Business
Reason"), the Company may (x) postpone filing a
registration statement relating to a Requested
Registration until such Valid Business Reason no
longer exists, but in no event for more than ninety
(90) days, and (y) in case a registration statement
has been filed relating to a Request Registration, if
the Valid Business Reason has not resulted from
actions taken by the Company, the Company may cause
such registration statement to be withdrawn and its
effectiveness terminated or may postpone amending or
supplementing such registration statement (so long as
the Initiating Holders shall have the rights set
forth in this Section 2(a) within ninety (90) days of
any such event). The Company shall give written
notice of its determination to postpone or withdraw a
registration statement (provided that the Company
shall not disclose any information that could be
deemed material non-public information to any holder
of Registrable Securities that are included in a
registration statement that is subject to such
postponement or withdrawal) and of the fact that the
Valid Business Reason for such postponement or
withdrawal no longer exists, in each case, promptly
after the occurrence thereof. Notwithstanding
anything to the contrary contained herein, the
Company may not postpone or withdraw a filing due to
a Valid Business Reason more than once in any twelve
(12) month period. In addition, the Company shall not
be required to effect any registration pursuant to
Section 2(a), within ninety (90) days after the
effective date of any other Registration Statement of
the Company if the Registration Statement was not for
the account of the Initiating Holders but the
Initiating Holders had the opportunity to include at
least two-thirds of the Registrable Securities they
requested to include in such registration pursuant to
Section 2(b).
The registration statement filed pursuant to the request of the Initiating
Holders may, subject to the provisions of Section 2(a)(ii) below, include other
securities of the Company which are held by Persons who, by virtue of agreements
with the Company, are entitled to include their securities in any such
registration ("Other Stockholders"). In the event any Holder requests a
registration pursuant to this Section 2(a) in connection with a distribution of
Registrable Securities to its partners, the registration shall provide for the
resale by such partners, if requested by such Holder.
The registration rights set forth in this Section 2 may be assigned, in whole or
in part, to any transferee of Registrable Securities (who shall be bound by all
obligations of this Agreement) that (a) is a subsidiary, parent, general
partner, limited partner, retired partner, member or retired member, of a Holder
that is a corporation, partnership or limited liability company, (b) is a
Holder's family member or trust for the benefit of an individual Holder, or (c)
acquires at least five hundred thousand (500,000) shares of Registrable
-4-
Securities (as adjusted for stock splits and combinations); or (d) is an entity
affiliated by common control with such Holder; provided, however, (i) the
transferor shall, within ten (10) days after such transfer, furnish to the
Company written notice of the name and address of such transferee or assignee
and the securities with respect to which such registration rights are being
assigned and (ii) such transferee shall agree to be subject to all restrictions
set forth in this Agreement.
(ii) Underwriting. If the Initiating Holders intend to
distribute the Registrable Securities covered by their request by means
of an underwriting, they shall so advise the Company as a part of their
request made pursuant to Section 2(a)(i).
If Other Stockholders request inclusion of their securities in the underwriting,
the Holders shall offer to include the securities of such Other Stockholders in
the underwriting and may condition such offer on their acceptance of the further
applicable provisions of this Section 2. The Holders whose shares are to be
included in such registration and the Company shall (together with all Other
Stockholders proposing to distribute their securities through such underwriting)
enter into an underwriting agreement in customary form with the representative
of the underwriter or underwriters selected for such underwriting by the
Initiating Holders and reasonably acceptable to the Company; provided, however,
that such underwriting agreement shall not provide for indemnification or
contribution obligations on the part of the Holders materially greater than the
obligations of the Holders under Section (f)(ii). Notwithstanding any other
provision of this Section 2(a), if the representative advises the Holders in
writing that marketing factors require a limitation on the number of shares to
be underwritten, the securities of the Company held by Other Stockholders shall
be excluded from such registration to the extent so required by such limitation.
If, after the exclusion of such shares, further reductions are still required,
the number of shares included in the registration by each Holder shall be
reduced on a pro rata basis (based on the number of shares held by such Holder),
by such minimum number of shares as is necessary to comply with such request. No
Registrable Securities or any other securities excluded from the underwriting by
reason of the underwriter's marketing limitation shall be included in such
registration. If any Other Stockholder who has requested inclusion in such
registration as provided above disapproves of the terms of the underwriting,
such Person may elect to withdraw therefrom by written notice to the Company,
the underwriter and the Initiating Holders. The securities so withdrawn shall
also be withdrawn from registration. If the underwriter has not limited the
number of Registrable Securities or other securities to be underwritten, the
Company and officers and directors of the Company may include its or their
securities for its or their own account in such registration if the
representative so agrees and if the number of Registrable Securities and other
securities which would otherwise have been included in such registration and
underwriting will not thereby be limited.
(b) Company Registration.
(i) If at any time on or after the second anniversary of the
date hereof, the Company shall determine to register any of its equity
securities either for its own account or for the account of Other Stockholders,
other than a registration relating solely to employee benefit plans, or a
registration relating solely to a Rule 145 transaction under the Securities Act,
or a registration on any registration form which does not permit secondary sales
-5-
or does not include substantially the same information as would be required to
be included in a registration statement covering the sale of Registrable
Securities, the Company will:
(1) promptly give to each of the Holders a written notice
thereof (which shall include a list of the jurisdictions in which the
Company intends to attempt to qualify such securities under the
applicable blue sky or other state securities laws); and
(2) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any
underwriting involved therein, all the Registrable Securities specified
in a written request or requests, made by the Holders within fifteen
(15) days after receipt of the written notice from the Company
described in clause (1) above, except as set forth in Section 2(b)(ii)
below. Such written request may specify all or a part of the Holders'
Registrable Securities and shall describe the intended method of
disposition of the Registrable Securities by such Holders. In the event
any Holder requests inclusion in a registration pursuant to this
Section 2(b) in connection with a distribution of Registrable
Securities to its partners, the registration shall provide for the
resale by such partners, if requested by such Holder.
(ii) Underwriting. If the registration of which the Company
gives notice is for a registered public offering involving an underwriting, the
Company shall so advise each of the Holders as a part of the written notice
given pursuant to Section 2(b)(i)(1) above. In such event, the right of each of
the Holders to registration pursuant to this Section 2(b) shall be conditioned
upon such Holders' participation in such underwriting and the inclusion of such
Holders' Registrable Securities in the underwriting to the extent provided
herein. The Holders whose shares are to be included in such registration shall
(together with the Company and the Other Stockholders distributing their
securities through such underwriting) enter into an underwriting agreement in
customary form with the representative of the underwriter or underwriters
selected for underwriting by the Company; provided, however, that such
underwriting agreement shall not provide for indemnification or contribution
obligations on the part of the Holders materially greater than the obligations
of the Holders under Section f(ii). Notwithstanding any other provision of this
Section 2(b), if the representative determines that marketing factors require a
limitation on the number of shares to be underwritten, the representative may
(subject to the allocation priority set forth below) limit the number of
Registrable Securities to be included in the registration and underwriting to
not less than twenty five percent (25%) of the shares included therein (based on
the number of shares). The Company shall so advise all holders of securities
requesting registration, and the number of shares of securities that are
entitled to be included in the registration and underwriting shall be allocated
in the following manner: the securities of the Company held by officers,
directors and Other Stockholders of the Company (other than Registrable
Securities and other than securities held by holders who by contractual right
demanded such registration ("Demanding Holders")) shall be excluded from such
registration and underwriting to the extent required by such limitation, and, if
a limitation on the number of shares is still required, the number of shares
that may be included in the registration and underwriting by each of the Holders
and Demanding Holders shall be reduced, on a pro rata basis (based on the number
-6-
of shares held by such holder), by such minimum number of shares as is necessary
to comply with such limitation. If any of the Holders or any officer, director
or Other Stockholder disapproves of the terms of any such underwriting, he may
elect to withdraw therefrom by written notice to the Company and the
underwriter, delivered at least five (5) business days prior to the effective
date of the registration statement. Any Registrable Securities or other
securities excluded or withdrawn from such underwriting shall be withdrawn from
such registration.
(iii) Right to Terminate Registration. The Company shall have
the right to terminate or withdraw any registration initiated by it
under this Section 2(b) whether or not any Holder has elected to
include securities in such registration , and shall promptly notify any
Holder that has elected to include shares in such registration of such
termination or withdrawal. The Registration Expenses of such withdrawn
registration shall be borne by the Company in accordance with Section
2(d) hereof.
(c) Form S-3. The Company shall use commercially reasonable
efforts to maintain its qualification for registration on Form S-3 for secondary
sales. The Initiating Holder shall, at any time on or after the second
anniversary of the date hereof, have the right to collectively request two (2)
registrations on Form S-3 (such requests shall be in writing and shall state the
number of shares of Registrable Securities to be disposed of and the intended
method of disposition of shares by such holders), provided that the Company
shall not be obligated to effect, or take any action to effect, any such
registration pursuant to this Section 2(c):
(i) Unless the Initiating Holder or Holders requesting
registration propose to dispose of shares of Registrable Securities
having an aggregate price to the public (before deduction of Selling
Expenses) of more than $2,000,000;
(ii) In any particular jurisdiction in which the Company would
be required to qualify to do business or execute a general consent to
service of process in effecting such registration, qualification or
compliance, unless the Company is already subject to service in such
jurisdiction and except as may be required by the Securities Act or
applicable rules or regulations thereunder;
(iii) if within thirty (30) days of receipt of a written
request from any Holder or Holders pursuant to this Section 2(c), the
Company gives notice to such Holder or Holders of the Company's
intention to make a public offering within sixty (60) days, other than
pursuant to a Special Registration Statement;
(iv) If the Board of Directors, in its good faith judgment,
determines that any registration of Registrable Securities pursuant to
this Section 2(c) (an "S-3 Registration") should not be made or
continued because of a Valid Business Reason, the Company may (x)
postpone filing a registration statement relating to a S-3 Registration
until such Valid Business Reason no longer exists, but in no event for
more than ninety (90) days, and (y) in case a registration statement
has been filed relating to a S-3 Registration, if the Company
reasonably believes that there is or may be in existence material
nonpublic information or events involving the Company, the failure of
which to be disclosed in the prospectus included in the registration
-7-
statement could result in a Violation (as defined below), the Company
may cause such registration statement to be withdrawn and its
effectiveness terminated or may postpone amending or supplementing such
registration statement (so long as the Holders shall have the rights
set forth in this Section 2(c) within ninety (90) days of any such
event). The Company shall give written notice of its determination to
postpone or withdraw a registration statement (provided that the
Company shall not disclose any information that could be deemed
material non-public information to any holder of Registrable Securities
that are included in a registration statement that is subject to such
postponement or withdrawal) and of the fact that the Valid Business
Reason for such postponement or withdrawal no longer exists, in each
case, promptly after the occurrence thereof. Notwithstanding anything
to the contrary contained herein, the Company may not postpone or
withdraw a filing due to a Valid Business Reason more than once in any
twelve (12) month period. In addition, the Company shall not be
required to effect any registration pursuant to Section 2(c), (i)
within ninety (90) days after the effective date of any other
Registration Statement of the Company if the Registration Statement was
not for the account of the Holders but the Holders had the opportunity
to include at least two-thirds of the Registrable Securities they
requested to include in such registration or (ii) if Form S-3 (or any
successor form then in effect) is not available for such offering by
the Holders.
The Company shall give written notice to all Holders of the receipt of a request
for registration pursuant to this Section 2(c) and shall provide a reasonable
opportunity for other Holders to participate in the registration, provided that
if the registration is for an underwritten offering, the terms of Section
2(a)(ii) above shall apply to all participants in such offering. Subject to the
foregoing, the Company will use commercially reasonable efforts to effect
promptly the registration of all shares of Registrable Securities on Form S-3 to
the extent requested by the Holder or Holders thereof for purposes of
disposition. In the event any Holder requests a registration pursuant to this
Section 2(c) in connection with a distribution of Registrable Securities to its
partners, the registration shall provide for the resale by such partners, if
requested by such Holder.
(d) Expenses of Registration. All Registration Expenses
incurred in connection with any registration, qualification or compliance
pursuant to this Section 2 shall be borne by the Company, and all Selling
Expenses shall be borne by the Holders of the securities so registered pro rata
on the basis of the number of their shares so registered. The Company shall not,
however, be required to pay for expenses of any registration proceeding begun
pursuant to Section 2(a) or 2(c), the request of which has been subsequently
withdrawn by the Initiating Holder unless (a) the withdrawal is based upon
material adverse information concerning the Company of which the Initiating
Holder was not aware at the time of such request or (b) the Holders of a
majority of Registrable Securities agree to deem such registration to have been
effected as of the date of such withdrawal for purposes of determining whether
the Company shall be obligated pursuant to Section 2(a) or 2(c), as applicable,
to undertake any subsequent registration, in which event such right shall be
forfeited by all Holders). If the Holders are required to pay the Registration
Expenses, such expenses shall be borne by the holders of securities (including
Registrable Securities) requesting such registration in proportion to the number
of shares for which registration was requested. If the Company is required to
pay the Registration Expenses of a withdrawn offering pursuant to clause (a)
above, then such registration shall not be deemed to have been effected for
-8-
purposes of determining whether the Company shall be obligated pursuant to
Section 2(a) or 2(c), as applicable, to undertake any subsequent registration.
(e) Registration Procedures. In the case of each registration
effected by the Company pursuant to this Section 2, the Company will keep the
Holders, as applicable, advised in writing as to the initiation of each
registration and as to the completion thereof. At its expense, the Company will:
(i) keep such registration effective for a period of sixty
(60) days or until the Holders (or in the case of a distribution to the
partners of such Holder, such partners), as applicable, have completed
the distribution described in the registration statement relating
thereto, whichever first occurs; provided, however, that (1) such sixty
(60)-day period shall be extended for a period of time equal to the
period during which the Holders or partners, as applicable, prohibited
from selling any securities included in such registration due to any
suspension of effectiveness provided for in accordance with the
provisions in Sections 2(a)(i)(2)(F) or 2(c)(iv) hereof; and (2) in the
case of any registration of Registrable Securities on Form S-3 which
are intended to be offered on a continuous or delayed basis, such sixty
(60)-day period shall be extended until all such Registrable Securities
are sold, not to exceed two (2) years or the period ending on the date
on which all of the Registrable Securities may be sold pursuant to Rule
144 (without giving effect to Rule 144(k) thereof) of the Securities
Act within ninety (90) days after such date, provided that Rule 415, or
any successor rule under the Securities Act, permits an offering on a
continuous or delayed basis, and provided further that applicable rules
under the Securities Act governing the obligation to file a
post-effective amendment permit, in lieu of filing a post-effective
amendment which (y) includes any prospectus required by Section 10(a)
of the Securities Act or (z) reflects facts or events representing a
material or fundamental change in the information set forth in the
registration statement, the incorporation by reference of information
required to be included in (y) and (z) above to be contained in
periodic reports filed pursuant to Section 12 or 15(d) of the Exchange
Act in the registration statement;
(ii) furnish such number of prospectuses and other documents
incident thereto as each of the Holders, as applicable, from time to
time may reasonably request;
(iii) notify each Holder of Registrable Securities covered by
such registration at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of
any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement
of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing; and
(iv) furnish, on the date that such Registrable Securities are
delivered to the underwriters for sale, if such securities are being
sold through underwriters or, if such securities are not being sold
through underwriters, on the date that the registration statement with
respect to such securities becomes effective, (1) an opinion, dated as
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of such date, of the counsel representing the Company for the purposes
of such registration, in form and substance as is customarily given to
underwriters in an underwritten public offering and reasonably
satisfactory to a majority in interest of the Holders participating in
such registration, addressed to the underwriters, if any, and to the
Holders participating in such registration and (2) a letter, dated as
of such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public
offering and reasonably satisfactory to a majority in interest of the
Holders participating in such registration, addressed to the
underwriters, if any, and if permitted by applicable accounting
standards, to the Holders participating in such registration.
(f) Indemnification.
(i) The Company will indemnify each of the Holders, as
applicable, each of its officers, directors and partners, and each
Person controlling each of the Holders, with respect to each
registration which has been effected pursuant to this Section 2, and
each underwriter, if any, and each person who controls any underwriter,
against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any
prospectus, offering circular or other document (including any related
registration statement, notification or the like) incident to any such
registration, qualification or compliance, or based on any 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 any violation by the Company of the Securities Act or
the Exchange Act or any rule or regulation thereunder applicable to the
Company and relating to action or inaction required of the Company in
connection with any such registration, qualification or compliance
(collectively a "Violation"), and will reimburse each of the Holders,
each of its officers, directors and partners, and each Person
controlling each of the Holders, each such underwriter and each Person
who controls any such underwriter, for any legal and any other expenses
reasonably incurred in connection with investigating and defending any
such claim, loss, damage, liability or action; provided that the
Company will not be liable in any such case to the extent that any such
claim, loss, damage, liability or expense arises out of or is based on
any untrue statement or omission based upon written information
furnished to the Company by the Holders or underwriter and stated to be
specifically for use therein; provided, further, that the indemnity
agreement contained in this Section 2(f)(i) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Company,
which consent shall not be unreasonably withheld.
(ii) Each of the Holders will, if Registrable Securities held
by it are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company,
each of its directors and officers and each underwriter, if any, of the
Company's securities covered by such a registration statement, each
person who controls the Company or such underwriter, each Other
Stockholder and each of their officers, directors, and partners, and
each person controlling such Other Stockholder against all claims,
losses, damages and liabilities (or actions in respect thereof) arising
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out of or based on any untrue statement (or alleged untrue statement)
of a material fact contained in any such registration statement,
prospectus, offering circular or other document made by such Holder,
any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements by
such Holder therein not misleading, and will reimburse the Company and
such Other Stockholders, directors, officers, partners, persons,
underwriters or control persons for any legal or any other expenses
reasonably incurred in connection with investigating and defending any
such claim, loss, damage, liability or action, in each case to the
extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other
document, or such violation is made, in reliance upon and in conformity
with written information furnished to the Company by such Holder and
stated to be specifically for use therein; provided, however, that the
obligations of each of the Holders hereunder shall be limited to an
amount equal to the proceeds to such Holder of securities sold as
contemplated herein; provided further, that the indemnity agreement
contained in this Section 2(f)(ii) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent
shall not be unreasonably withheld.
(iii) Each party entitled to indemnification under this
Section 2(f) (the "Indemnified Party") shall give notice to the party
required to provide indemnification (the "Indemnifying Party") promptly
after such Indemnified Party has actual knowledge of any claim as to
which indemnity may be sought, and shall permit the Indemnifying Party
to assume the defense of any such claim or any litigation resulting
therefrom; provided that counsel for the Indemnifying Party, who shall
conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval
shall not unreasonably be withheld) and the Indemnified Party may
participate in such defense at such party's expense (unless the
Indemnified Party shall have reasonably concluded that there may be a
conflict of interest between the Indemnifying Party and the Indemnified
Party in such action, in which case the fees and expenses of counsel
shall be at the expense of the Indemnifying Party), and provided
further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 2(f) unless the Indemnifying Party is
materially prejudiced thereby. No Indemnifying Party, in the defense of
any such claim or litigation shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a
release from all liability in respect to such claim or litigation. Each
Indemnified Party shall furnish such information regarding itself or
the claim in question as an Indemnifying Party may reasonably request
in writing and as shall be reasonably required in connection with the
defense of such claim and litigation resulting therefrom.
(iv) If the indemnification provided for in this Section 2(f)
is held by a court of competent jurisdiction to be unavailable to an
Indemnified Party with respect to any loss, liability, claim, damage or
expense referred to herein, then the Indemnifying Party, in lieu of
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indemnifying such Indemnified Party hereunder, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such
loss, liability, claim, damage or expense in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party on
the one hand and of the Indemnified Party on the other in connection
with the statements or omissions which resulted in such loss,
liability, claim, damage or expense, as well as any other relevant
equitable considerations. The relative fault of the Indemnifying Party
and of the Indemnified Party 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 Indemnifying Party or by
the Indemnified Party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such
statement or omission.
(v) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with any underwritten
public offering contemplated by this Agreement are in conflict with the
foregoing provisions, the provisions in such underwriting agreement
shall be controlling.
(vi) The foregoing indemnity agreement of the Company and
Holders is subject to the condition that, insofar as they relate to any
loss, claim, liability or damage arising out of a statement made in or
omitted from a preliminary prospectus but eliminated or remedied in the
amended prospectus on file with the Commission at the time the
registration statement in question becomes effective or the amended
prospectus filed with the Commission pursuant to Rule 424(b) under the
Securities Act (the "Final Prospectus"), such indemnity or contribution
agreement shall not inure to the benefit of any underwriter or Holder
if a copy of the Final Prospectus was furnished to the underwriter and
was not furnished to the Person asserting the loss, liability, claim or
damage at or prior to the time such action is required by the
Securities Act.
(g) Information by the Holders.
(i) Each of the Holders holding securities included in any
registration shall furnish to the Company such information regarding
such Holder and the distribution proposed by such Holder as the Company
may reasonably request in writing and as shall be reasonably required
in connection with any registration, qualification or compliance
referred to in this Section 2.
(ii) In the event that, either immediately prior to or
subsequent to the effectiveness of any registration statement, any
Holder shall distribute Registrable Securities to its partners, such
Holder shall so advise the Company and provide such information as
shall be necessary to permit an amendment to such registration
statement to provide information with respect to such partners, as
selling security holders. Promptly following receipt of such
information, the Company shall file an appropriate amendment to such
registration statement reflecting the information so provided. Any
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incremental expense to the Company resulting from such amendment shall
be borne by such Holder.
(h) Rule 144 Reporting.
With a view to making available the benefits of certain rules
and regulations of the Commission which may permit the sale of restricted
securities to the public without registration, the Company agrees to:
(i) make and keep public information available as those terms
are understood and defined in Rule 144 under the Securities Act ("Rule
144");
(ii) use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company
under the Securities Act and the Exchange Act at any time after it has
become subject to such reporting requirements; and
(iii) so long as a Holder owns any Registrable Securities,
furnish to such Holder upon request, a written statement by the Company
as to its compliance with the reporting requirements of Rule 144 and of
the Securities Act and the Exchange Act, a copy of the most recent
annual or quarterly report of the Company, and such other reports and
documents so filed as such Holder may reasonably request in availing
itself of any rule or regulation of the Commission allowing such Holder
to sell any such securities without registration.
(i) Termination. The registration rights set forth in this
Section 2 shall not be available to any Holder if, (i) in the opinion of counsel
to the Company, all of the Registrable Securities then owned by such Holder
could be sold in any ninety (90)-day period pursuant to Rule 144 (without giving
effect to the provisions of Rule 144(k)), or (ii) all of the Registrable
Securities held by such Holder have been sold in a registration pursuant to the
Securities Act or pursuant to Rule 144.
SECTION 3. MISCELLANEOUS
(a) Directly or Indirectly. Where any provision in this
Agreement refers to action to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable whether such action
is taken directly or indirectly by such Person.
(b) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed entirely within such State.
(c) Section Headings. The headings of the sections and
subsections of this Agreement are inserted for convenience only and shall not be
deemed to constitute a part thereof.
(d) Notices.
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(i) All communications under this Agreement shall be in
writing and shall be delivered by hand or facsimile or mailed by
overnight courier or by registered or certified mail, postage prepaid:
(1) if to the Company, to 11080 CirclePoint Road,
Westminster, Colorado, 80020, Attention: President Michael E.
Hart (facsimile: (303) 426-4731), or at such other address as
it may have furnished in writing to the Holders, with a copy
to Cooley Godward LLP (facsimile: (720) 566-4099), Attention:
Brent Fassett, Esq.
(2) if to the Holders, at the address or facsimile
number listed on Schedule I hereto, or at such other address
or facsimile number as may have been furnished the Company in
writing, with a copy to Willkie Farr & Gallagher LLP, 787
Seventh Avenue, New York, NY 10019 (facsimile: (212)
728-9222), Attention: Steven J. Gartner, Esq.
(ii) Any notice so addressed shall be deemed to be given: if
delivered by hand or facsimile, on the date of such delivery; if mailed
by overnight courier, on the first business day following the date of
such mailing; and if mailed by registered or certified mail, on the
third business day after the date of such mailing.
(e) Reproduction of Documents. This Agreement and all
documents relating thereto, including, without limitation, any consents, waivers
and modifications which may hereafter be executed may be reproduced by the
Holders by any photographic, photostatic, microfilm, microcard, miniature
photographic or other similar process and the Holders may destroy any original
document so reproduced. The parties hereto agree and stipulate that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by the Holders in the
regular course of business) and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
(f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties.
(g) Entire Agreement; Amendment and Waiver. This Agreement
constitutes the entire understanding of the parties hereto relating to the
subject matter hereof and supersedes all prior understandings among such
parties. This Agreement may be amended, and the observance of any term of this
Agreement may be waived, with (and only with) the written consent of the Company
and the Holders holding a majority of the then outstanding Registrable
Securities. Any amendment or waiver effected in accordance with this Section
3(g) shall be binding upon each Holder and the Company.
(h) Severability. In the event that any part or parts of this
Agreement shall be held illegal or unenforceable by any court or administrative
body of competent jurisdiction, such determination shall not affect the
remaining provisions of this Agreement which shall remain in full force and
effect.
-14-
(i) Counterparts. This Agreement may be executed in two or
more counterparts (including by facsimile), each of which shall be deemed an
original and all of which together shall be considered one and the same
agreement.
(j) Additional Investors. Notwithstanding anything to the
contrary contained herein, if the Company shall issue additional shares of its
Common Stock or Exchangeable Preferred Stock pursuant to the Purchase Agreement,
any purchaser of such securities shall become a party to this Agreement by
executing and delivering an additional counterpart signature page to this
Agreement and shall be deemed an "Investor," a "Holder" and a party hereunder.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first set forth above.
ALLOS THERAPEUTICS, INC.
By: /s/ Michael E. Hart
---------------------------------
Name: Michael E. Hart
Title: President and Chief
Executive Officer
WARBURG PINCUS PRIVATE EQUITY VIII, L.P.
By: WARBURG PINCUS & CO.,
General Partner
By: Jonathan Leff
-------------
Name: Jonathan Leff
Title: Partner
REGISTRATION RIGHTS AGREEMENT
Schedule I
Investors
INVESTOR NAME AND ADDRESS
Warburg Pincus Private Equity VIII, L.P.
466 Lexington Avenue
New York, NY 10017
Facsimile: (212) 878-0850
Attention: Mr. Jonathan S. Leff
-----------------------------------------
EX-5
6
b405191_ex5.txt
STANDSTILL AGREEMENT
EXECUTION COPY
Exhibit 5
WARBURG PINCUS PRIVATE EQUITY VIII, L.P.
466 LEXINGTON AVENUE
NEW YORK, NY 10017
March 4, 2005
Allos Therapeutics, Inc.
11080 CirclePoint Road
Westminster, CO 80020
Attention: Chief Executive Officer
Gentlemen:
In connection with the acquisition of shares of Series A Exchangeable Preferred
Stock, par value $0.001 per share (the "Preferred Stock"), of Allos
Therapeutics, Inc., a Delaware corporation (the "Company"), by Warburg Pincus
Private Equity VIII, L.P., a Delaware limited partnership (the "Purchaser"),
Warburg Pincus & Co., a New York general partnership and the sole general
partner of the Purchaser ("WP"), and Warburg Pincus LLC, a New York limited
liability company and the sole manager of the Purchaser ("WP LLC" and,
collectively, WP LLC, WP and the Purchaser are referred to herein as, the
"Purchaser Group"), the Company and the Purchaser Group agree as follows:
1. Definitions. For purposes of this letter agreement, the
following terms have the respective meanings set forth below:
"Affiliates"shall mean any fund, whether existing now or in
the future, of which WP (or any entity controlled by WP) is a general
partner or WP LLC (or any entity controlled by WP LLC) is a manager.
"Beneficially Owns" (including the terms "Beneficial
Ownership", "Beneficially Owned" or "Beneficially Owning") shall mean
beneficial ownership within the meaning of Rule 13d-3 under the
Exchange Act.
"Board" shall mean the Board of Directors of the Company.
"Change of Control" shall mean (i) a consolidation, merger,
reorganization or other form of acquisition of or by the Company in
which the Company's stockholders immediately prior to the transaction
retain less than 50% of the voting power of or economic interest in the
surviving or resulting entity (or its parent)
immediately after the transaction, (ii) a sale of the Company's assets
in excess of a majority of the Company's assets (valued at fair market
value as determined in good faith by the Board), (iii) the acquisition
by any person, other than the Purchaser Group and its Affiliates, of
more than 50% of the Company's outstanding voting securities, or (iv)
during any period of 24 consecutive months, individuals who at the
beginning of such period were directors of the Company (together with
any new directors whose election or appointment was approved by the
directors then in office) cease for any reason to constitute a majority
of the directors of the Board or the board of directors of the
surviving or resulting entity (or its parent).
"Independent Directors" shall mean those directors that the
Board has determined to be independent within the meaning of NASD
Marketplace Rule 4200(15) (or any successor rule).
2. Standstill.
(a) For a period of four years from the date hereof (the
"Standstill Period"), no member of the Purchaser Group or any of their
respective Affiliates shall, without the prior written consent of a majority of
the Independent Directors who are not affiliated with the Purchaser Group, in
any manner acquire, agree or seek to acquire, or make any proposal or offer
(other than to a member of the Board or senior management of the Company by
means that would not cause public dissemination thereof) to acquire, whether
directly or indirectly:
(i) any material assets of the Company or
(ii) Beneficial Ownership of any shares of Common Stock, par
value $0.001 per share, of the Company ("Common Stock"), voting equity
securities of the Company or any securities convertible or exchangeable
into or exercisable for any such shares of Common Stock or other
securities (including derivatives), in excess of 44% of (x) the
outstanding Common Stock, plus (y) the Common Stock issuable upon the
exchange of the Company's outstanding Preferred Stock (including any
quarterly accruing dividends thereon) (the "Exchange Shares"),
calculated as if such Exchange Shares had been issued pursuant to an
exchange as of immediately following the original issuance of each such
share of outstanding Preferred Stock (collectively, the "Permitted
Shares").
(b) For so long as Purchaser or its Affiliates Beneficially
Own more than (i) 580,000 shares of Preferred Stock acquired pursuant to the
Securities Purchase Agreement dated as of the date hereof by and between the
Company and the Purchaser (the "Securities Purchase Agreement"), or (ii) 10% of
the Company's outstanding Common Stock, no member of the Purchaser Group or any
of their respective Affiliates shall, without the prior written consent of a
majority of the Independent Directors who are not affiliated with the Purchaser
Group:
(i) propose to any person (other than to a member of the Board
or senior management of the Company by means that would not cause
public dissemination thereof) or effect, seek to effect or enter into,
whether alone or in concert with others, any merger, tender offer,
consolidation, acquisition, scheme, business combination or other
-2-
extraordinary transaction in which the Company or any of its
subsidiaries is a constituent corporation or party (a "Business
Combination");
(ii) solicit proxies or shareholder consents or participate in
any such solicitation for any purpose relating to the election or
removal of directors of the Company;
(iii) support, solicit proxies or shareholder consents or
participate in any such solicitation or vote in favor of any Business
Combination, or propose to any person or effect, seek to effect or
enter into, whether alone or in concert with others, any Business
Combination, in which the Purchaser Group, in the event the Preferred
Stock has been exchanged for Common Stock in accordance with the terms
thereof, receives or would be entitled to receive consideration on a
per share basis which is greater than the consideration to be received
on a per share basis by the other holders of Common Stock; provided,
however, that in the event the Preferred Stock remains outstanding at
the time of a Change of Control, nothing contained herein shall limit
or otherwise prevent the Purchaser Group from receiving the
consideration per share for their shares of Preferred Stock that they
Beneficially Own in accordance with the terms of such Preferred Stock;
(iv) form, join, encourage, influence, advise or participate
in a "group" (as defined in Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) in connection with any of
the foregoing;
(v) make, or take any action (including a request to waive or
amend any provision of this agreement) that would cause the Company to
make, a public announcement regarding any intention of the Purchaser
Group or any of their respective Affiliates to take an action which
would be prohibited by any of the foregoing.
(c) Notwithstanding the foregoing, the provisions of this
Section 2 shall only be in effect so long as the Company is not in material
breach of its obligations under this Agreement or under Section 5.4 of the
Securities Purchase Agreement with respect to the Purchaser Group.
3. No Effect on Directors. Notwithstanding any of the
foregoing, the provisions set forth in Section 2 shall in no way limit the
ability of any individual who is serving as a director of the Company to take
any actions (or to refrain from taking any actions) in their capacity as
directors of the Company.
4. Voting Agreement. In the event the Purchaser Group and
their Affiliates Beneficially Own more than 33% of the Company's outstanding
Common Stock, any shares of Common Stock entitled to vote for the election of
directors Beneficially Owned by the Purchaser Group and their Affiliates in
excess of 33% of the shares of Common Stock then outstanding, with respect to
the election or removal of directors only, shall be voted either, solely at the
Purchaser Group's election (a) as recommended by the Board or (b)(i) in an
election, in the same proportion with the votes of shares of Common Stock voted
in such election (excluding shares with respect to which the votes were
withheld, abstained or otherwise not cast) and not Beneficially Owned by the
-3-
Purchaser Group (excluding withheld shares and abstentions) or (ii) in a removal
vote, in the same proportions as all outstanding shares of Common Stock not
Beneficially Owned by the Purchaser Group (including shares with respect to
which the votes were withheld, abstained or otherwise not cast), whether at an
annual or special meeting of stockholders of the Company, by written consent or
otherwise. The Purchaser Group shall retain its right to vote (or to withhold
its vote) all of its shares on all other matters.
5. Waiver of Section 203. The Company represents and warrants
to the Purchaser Group that the Board has taken all action necessary to approve
the acquisition of the Preferred Stock pursuant to the Securities Purchase
Agreement for the purposes of the provisions of Section 203 of the General
Corporation Law of the State of Delaware ("Section 203") solely as it relates to
the acquisition by the Purchaser Group of beneficial ownership of the Common
Stock (the "Waiver"); provided, however, such Waiver provides that, to the
fullest extent permitted by law, it shall no longer be applicable if, subsequent
to becoming an "interested stockholder" (as defined in Section 203), the
Purchaser Group no longer has beneficial ownership of 15% or more of the Common
Stock as a result of any sale or disposition of beneficial ownership of Common
Stock by the Purchaser Group.
6. Amendments to Rights Agreement. The Company represents and
warrants to the Purchaser Group that the Rights Agreement, dated May 6, 2003, by
and between the Company and Mellon Investor Services LLC, as rights agent (the
"Rights Agreement"), has been duly amended to exclude the Purchaser Group from
the definition of the term "Acquiring Person" as such term may relate to the
acquisition by the Purchaser Group (including by "affiliates" and "associates",
as such terms are defined in Rule 12b-2 under the Exchange Act, of the Purchaser
Group) of Beneficial Ownership of the Permitted Shares described in Section
2(a)(ii) hereof. During the Standstill Period, so long as the Purchaser Group is
not in material breach of its obligations under this Agreement, the Company
shall not amend or modify the definition of "Acquiring Person" in the Rights
Agreement, if, as a result of such amendment or modification, the Purchaser
Group would be deemed to be an "Acquiring Person" thereunder. During the
Standstill Period, so long as the Purchaser Group is not in material breach of
its obligations under this Agreement, the Company shall not adopt a new rights
agreement or an agreement having substantially the same effect of the Rights
Agreement if the Purchaser Group would be considered an "Acquiring Person" (or
would have the same or substantially similar effect of an "Acquiring Person"
under the Rights Agreement).
7. Representations. Each party represents to the other that:
(a) this letter agreement has been duly authorized by all necessary corporate or
partnership action, as the case may be; and (b) this letter agreement is a valid
and binding agreement of such party, enforceable against it in accordance with
its terms.
8. Specific Enforcement; Legal Effect. The parties hereto
agree that any breach of this letter agreement would result in irreparable
injury to other party and that money damages would not be an adequate remedy for
such breach. Accordingly, without prejudice to the rights and remedies otherwise
available under applicable law, either party shall be entitled to specific
performance and equitable relief by way of injunction or otherwise if the other
party breaches or threatens to breach any of the provisions of this letter
-4-
agreement. It is further understood and agreed that no failure or delay by
either party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any right, power or
privilege hereunder. If any term, provision, covenant or restriction in this
letter agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this letter agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated, provided that the parties
hereto shall negotiate in good faith to attempt to place the parties in the same
position as they would have been in had such provision not been held to be
invalid, void or unenforceable. This letter agreement contains the entire
agreement between the parties hereto concerning the matters addressed herein. No
modification of this letter agreement or waiver of the terms and conditions
hereof shall be binding upon either party hereto, unless approved in writing by
each such party; provided, however, that no waiver or amendment shall be
effective as against the Company unless such waiver or amendment is approved in
writing by the vote a majority of the independent members of the Board who are
not affiliated with the Purchaser Group. This Agreement shall be governed by and
construed in accordance with the law of the State of Delaware without regard to
principles of conflicts of law that would cause the application of the laws of
any jurisdiction other than the State of Delaware.
9. Termination. This agreement shall continue in full force
and effect from the date hereof until such time as the Purchaser Group holds
less than 10% of (i) the Company's outstanding Common Stock, plus (ii) the
Exchange Shares, calculated as if such Exchange Shares had been issued pursuant
to an exchange as of immediately following the original issuance of each share
of outstanding Preferred Stock.
10. Counterparts. This letter agreement may be executed in
counterpart (including by facsimile), each of which shall be deemed an original.
[Remainder of Page left blank intentionally]
If you are in agreement with the terms set forth above, please
sign this letter agreement in the space provided below and return an executed
copy to the undersigned.
Very truly yours,
WARBURG PINCUS PRIVATE EQUITY
VIII, L.P.
By: WARBURG PINCUS & CO.,
General Partner
By: /s/ Jonathan Leff
---------------------
Name: Jonathan Leff
Title: Partner
Confirmed and Agreed:
ALLOS THERAPEUTICS, INC.
By: /s/ Michael E. Hart
------------------------
Name: Michael E. Hart
Title: President and Chief Executive Officer
STANDSTILL AGREEMENT