Exhibit 4.1
EXHIBIT A
TO SECURITIES PURCHASE AGREEMENT
SENIOR SECURED CONVERTIBLE
NOTE
NEITHER THIS NOTE NOR THE
SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS, OR
(B) THE TRANSFEROR PROVIDES THE COMPANY WITH REASONABLE
ASSURANCES AND CUSTOMARY REPRESENTATIONS THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS. THIS
NOTE IS ISSUED SUBJECT TO THE TERMS OF A SECURITIES PURCHASE
AGREEMENT, DATED AS OF OCTOBER 30, 2006 (“SECURITIES PURCHASE
AGREEMENT”), BY AND AMONG ANTIGENICS INC. AND THE HOLDER OF
THIS NOTE.
A NTIGENICS I NC .
S ENIOR S ECURED C ONVERTIBLE N OTE
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Issuance Date: October
, 2006
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Principal: U.S. $
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FOR VALUE RECEIVED,
ANTIGENICS INC., a Delaware
corporation (the “Company” ), hereby promises to
pay to the order of
[
] or its registered
assigns ( “Holder” ) the amount set out above as
the Principal (as reduced pursuant to the terms hereof pursuant to
redemption, conversion or otherwise, the
“Principal” ) when due, whether upon the
Maturity Date (as defined below), acceleration, redemption or
otherwise (in each case, in accordance with the terms hereof) and
to pay interest ( “Interest” ) on any
outstanding Principal at the Interest Rate, from the date set out
above as the Issuance Date (the “Issuance Date”
) until the same becomes due and payable, whether upon an Interest
Date (as defined below) or the Maturity Date, acceleration,
conversion, redemption or otherwise (in each case in accordance
with the terms hereof). This Senior Secured Convertible Note
(including all Senior Secured Convertible Notes issued in exchange,
transfer or replacement hereof, this “Note” ) is
one of an issue of Senior Secured Convertible Notes issued pursuant
to the Securities Purchase Agreement (as defined below)
(collectively, the “Notes” and such other Senior
Secured Convertible Notes, the “Other Notes” ).
Certain capitalized terms used herein are defined in
Section 29.
(1) INTEREST; INTEREST RATE .
Interest on this Note shall commence accruing on the Issuance Date
and shall be computed on the basis of a 360-day year of twelve
30-day months from the actual number of days elapsed and shall be
payable in arrears for each Interest Period on the last day of the
applicable Interest Period during the period beginning on the
Issuance Date and ending, subject to earlier acceleration,
redemption or conversion, on, and
including, the Maturity Date (even if the
Maturity Date is not the last day of an Interest Period) (each, an
“Interest Date” ) with the first Interest Date
being December 30, 2006. Interest shall be payable on each
Interest Date to the record holder of this Note on the applicable
Interest Date in cash (“ Cash Interest ”) or, at
the option of the Company may be paid in kind notes in the form of
Exhibit B to the Securities Purchase Agreement (“ PIK
Notes ”) or a combination thereof, provided that the
Interest which accrued during any period will be payable in PIK
Notes unless the Company delivers written notice (each a “
Cash Election Notice ”) of such election to each
holder of the Notes on or prior to the twentieth (20
th
) Company Trading
Day prior to the Interest Date (each, an “ Interest
Election Date ”). Each Cash Election Notice must specify
the amount of Interest that shall be paid as Cash Interest, if any,
and the amount of Interest that shall be paid in PIK Notes. If the
Company elects to pay in PIK Notes, such PIK Notes shall be issued
to the record holder of the Note within twenty (20) days after
the Interest Date. Prior to the payment of Interest on an Interest
Date, Interest on this Note shall accrue at the Interest Rate and
be payable by way of inclusion of the Interest in the Conversion
Amount (as defined below) in accordance with
Section 2(b)(i).
(2) CONVERSION OF NOTES .
This Note shall be convertible into (i) shares of the
Company’s common stock, par value $.01 per share (the
“Company Common Stock” ) or (ii) Antigenics MA
Stock, on the terms and conditions set forth in this Section
2.
(a) Conversion Right .
Subject to the provisions of Section 2(g), at any time or
times on or after the Issuance Date, the Holder shall be entitled
to convert any portion of the outstanding and unpaid Conversion
Amount in multiples of $10,000 (or, if less, any remaining
Conversion Amount) into (i) fully paid and nonassessable
shares of Company Common Stock in accordance with
Section 2(e), at the Conversion Rate (as defined below) or
(ii) Antigenics MA Stock, at the Antigenics MA Conversion Rate
(as defined below). The Company shall not issue any fraction of a
share of Company Common Stock or Antigenics MA Stock upon any
conversion. If the issuance would result in the issuance of a
fraction of a share of Company Common Stock or Antigenics MA Stock,
the Company shall round such fraction of a share of Company Common
Stock or Antigenics MA Stock, respectively, up to the nearest whole
share. The Company shall pay any and all taxes that may be payable
with respect to the issuance and delivery of Company Common Stock
or Antigenics MA Stock upon conversion of any Conversion Amount;
provided that the Company shall not be required to pay any
tax that may be payable in respect of any transfer involved in the
issue and delivery of Company Common Stock or Antigenics MA Stock
to any Person other than the Holder or with respect to any income
tax due by the Holder with respect to such Company Common Stock or
Antigenics MA Stock issued upon conversion.
(b) Company Common Stock
Conversion Rate . The number of shares of Company Common Stock
issuable upon conversion of any Conversion Amount pursuant to
Section 2(a)(i) shall be determined by dividing (x) such
Conversion Amount by (y) the Conversion Price (as defined
below) (the “Conversion Rate” ).
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(i)
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“
Conversion Price ” means as of any Conversion Date (as
defined below) during the period beginning on the Issuance Date and
ending on and including the Maturity Date, the Fixed Conversion
Price.
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(ii)
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“
Fixed Conversion Price ” means $3.50 (also referred to
as the “ Initial Fixed Conversion Price ”),
subject to adjustment as provided herein.
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(c) Antigenics MA Stock
Conversion Rate . The percentage of shares of Antigenics MA
Stock issuable upon conversion of any Conversion Amount pursuant to
Section 2(a)(ii) (the “Antigenics MA
Conversion” ) shall be determined by multiplying
(x) the quotient of the Conversion Amount divided by
$25,000,000 by (y) thirty percent (30%). To convert any
Conversion Amount into shares of Antigenics MA Stock on any date (a
“ Antigenics MA Conversion Date ”), the Holder
shall give the Company ninety (90) days’ prior written
notice (the “ Antigenics MA Stock Conversion Notice
”) transmitted by facsimile (or otherwise
deliver).
(d) Company Buyout Right .
Notwithstanding anything in this Section 2 to the contrary,
upon receipt of a Antigenics MA Stock Conversion Notice, the
Company shall have the right to redeem the Notes subject to the
Antigenics MA Stock Conversion Notice (the “Company Buyout
Right ”) at a price equal to the value of the Conversion
Amount plus an amount, when taken together with any Cash Interest
payments made prior to the exercise of the Company Buyout Right,
that would generate an annual internal rate of return to the Holder
of thirty percent (30%) in respect of the Principal. The
Company shall have sixty (60) days, following receipt of the
Antigenics MA Stock Conversion Notice to give notice of its
decision to exercise the Company Buyout Right.
(e) Mechanics of Stock
Conversion .
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(i)
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Optional
Conversion . To convert
any Conversion Amount into shares of Company Common Stock on any
date (a “Conversion Date” ), the Holder shall
(A) transmit by facsimile (or otherwise deliver), for receipt
on or prior to 11:59 p.m., New York Time, on such date, a copy of
an executed notice of conversion in the form attached hereto as
Exhibit I (the “Conversion Notice” ) to
the Company and (B) if required by Section 2(e)(iii),
surrender this Note to a common carrier for delivery to the Company
as soon as practicable on or following such date (or an
indemnification undertaking with respect to this Note in the case
of its loss, theft or destruction). On or before the second
(2 nd ) Business Day following the
date of receipt of a Conversion Notice, the Company shall transmit
by facsimile a confirmation of receipt of such Conversion Notice to
the Holder and the Transfer Agent (as defined below). On or before
the third (3 rd ) Business Day following the
date of receipt of a Conversion Notice (the “Share
Delivery Date” ), the Company shall issue and deliver to
the address as specified in the Conversion Notice, a certificate,
registered in the name of the Holder or its designee, for the
number of shares of Company Common Stock to which the Holder shall
be entitled. If this Note is physically surrendered for conversion
as required by Section 2(e)(iii) and the outstanding Principal
of this Note is greater than the Principal portion of the
Conversion Amount being converted, then the Company shall as soon
as practicable and in no event later than three (3) Business
Days after receipt of this Note (the “Note Delivery
Date” ) and at its own expense, issue and deliver to the
holder a new Note (in accordance with Section 17(d))
representing the outstanding Principal not converted. The Person or
Persons entitled to receive the shares of Company Common Stock
issuable upon a
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conversion of this Note shall be
treated for all purposes as the record holder or holders of such
shares of Company Common Stock on the Conversion Date to the extent
permitted by applicable law.
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(ii)
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Company’s Failure to Timely
Convert . If the Company
shall fail to issue a certificate to the Holder or credit the
Holder’s balance account with Depository Trust Company for
the number of shares of Company Common Stock to which the Holder is
entitled upon conversion of any Conversion Amount on or prior to
the date which is five (5) Business Days after the Conversion
Date (a “Conversion Failure” ), then
(A) the Company shall pay damages in cash to the Holder for
each day of such Conversion Failure in an amount equal to 0.25% of
the product of (I) the sum of the number of shares of Company
Common Stock not issued to the Holder on or prior to the Share
Delivery Date and to which the Holder is entitled, and (II) the
Closing Sale Price of the Company Common Stock on the Share
Delivery Date and (B) the Holder, upon written notice to the
Company, may void its Conversion Notice with respect to, and retain
or have returned, as the case may be, any portion of this Note that
has not been converted pursuant to such Conversion
Notice.
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(iii)
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Book-Entry . Notwithstanding anything to the contrary set
forth herein, upon conversion of any portion of this Note in
accordance with the terms hereof, the Holder shall not be required
to physically surrender this Note to the Company unless
(A) the full Conversion Amount represented by this Note is
being converted or (B) the Holder has provided the Company
with prior written notice (which notice may be included in the
Conversion Notice or Antigenics MA Stock Conversion Notice)
requesting reissuance of this Note upon physical surrender of this
Note. The Holder and the Company shall maintain records showing the
Principal and Interest converted and the dates of such conversions
or shall use such other method, reasonably satisfactory to the
Holder and the Company, so as not to require physical surrender of
this Note upon conversion.
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(iv)
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Pro Rata
Conversion; Disputes . In
the event that the Company receives a Conversion Notice from more
than one holder of Notes for the same Conversion Date and the
Company can convert some, but not all, of such portions of the
Notes submitted for conversion, the Company, subject to
Section 2(g), shall convert from each holder of Notes electing
to have Notes converted on such date a pro rata amount of such
holder’s portion of its Notes submitted for conversion based
on the principal amount of Notes submitted for conversion on such
date by such holder relative to the aggregate principal amount of
all Notes submitted for conversion on such date. In the event of a
dispute as to the number of shares of Company Common Stock issuable
to the Holder in connection with a conversion of this Note, the
Company shall issue to the Holder the number of shares of Company
Common Stock not in dispute and resolve such dispute in accordance
with Section 22.
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(f) Payment of Principal at
Maturity; Company Election . On the Maturity Date, the Company
shall pay to the Holder the sum of the Principal and accrued and
unpaid Interest (“ Unpaid Principal Amount ”) in
same day funds; provided, however, that if the
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Company has satisfied the Company Election
Conversion Condition (as defined below), the Company may elect to
pay such Unpaid Principal Amount by converting such Unpaid
Principal Amount into the number of Company Common Stock equal to
the amount of such Unpaid Principal Amount divided by the ninety
percent (90%) of the Weighted Average Price of Company Common
Stock during the prior twenty (20) Company Trading Days
preceding the Company Election Date (a “ Company Election
Conversion ”). If a Company Election Conversion occurs,
the Company and the Holder shall follow the procedures for
Conversion set forth in this Section 2; provided, however, the
Holder shall not be required to send the Conversion Notice
contemplated by paragraph 2(e)(i) above. The “ Company
Election Conversion Condition ” means that the average
equity market capitalization for the Company calculated based on
the closing prices for the shares of Company Common Stock during
the twenty (20) Company Trading Days preceding the Maturity
Date , shall be greater than $300,000,000 on a fully diluted
basis.
(g) Limitations on
Conversions .
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(i)
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Beneficial
Ownership . The Company
shall not effect any conversion of this Note, and the Holder of
this Note shall not have the right to convert any portion of this
Note, pursuant to this Section 2 or otherwise, to the extent
that after giving effect to such conversion, the Holder (together
with the Holder’s affiliates), would beneficially own in
excess of 9.99% (the “ Maximum Percentage ”) of
the number of shares of Company Common Stock outstanding
immediately after giving effect to such conversion. For purposes of
the foregoing sentence, the number of shares of Company Common
Stock beneficially owned by the Holder and its affiliates shall
include the number of shares of Company Common Stock issuable upon
conversion of this Note with respect to which the determination of
such sentence is being made, but shall exclude the number of shares
of Company Common Stock which would be issuable upon
(A) conversion of the remaining, nonconverted portion of this
Note beneficially owned by the Holder or any of its affiliates and
(B) exercise or conversion of the unexercised or nonconverted
portion of any other securities of the Company (including, without
limitation, any Other Notes or warrants) subject to a limitation on
conversion or exercise analogous to the limitation contained herein
beneficially owned by the Holder or any of its affiliates. Except
as set forth in the preceding sentence, for purposes of this
Section 2(g)(i), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Securities Exchange Act
of 1934, as amended (the “ 1934 Act ”). For
purposes of this Section 2(g)(i), in determining the number of
outstanding shares of Company Common Stock, the Holder may rely on
the number of outstanding shares of Company Common Stock as
reflected in (x) the Company’s most recent Form 10-Q or
Form 10-K, as the case may be, (y) a more recent public
announcement by the Company or (z) any other more recent
notice from the Company or the Transfer Agent setting forth the
number of shares of Company Common Stock outstanding. For any
reason at any time, upon the written or oral request of the Holder,
the Company shall within three (3) Business Days confirm
orally and in writing to the Holder the number of shares of Company
Common Stock then outstanding. In any case, the number of
outstanding shares of Company Common Stock shall be determined
after giving effect to the conversion or exercise of securities of
the Company, including this Note, by the Holder or its affiliates
since the date as of which such number of outstanding shares of
Company Common Stock was reported.
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(ii)
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Principal
Market Regulation . The
Company shall not be obligated to issue any shares of Company
Common Stock upon conversion of this Note, whether pursuant to this
Section 2 or otherwise, if the issuance of such shares of
Company Common Stock would exceed the aggregate number of shares of
Company Common Stock which the Company may issue upon conversion or
exercise of the Notes without breaching the Company’s
obligations under the rules or regulations of the Principal Market
(the “Exchange Cap” ), except that such
limitation shall not apply in the event that the Company
(A) obtains the approval of its stockholders as required by
the applicable rules of the Principal Market for issuances of
Company Common Stock in excess of such amount, regardless of
whether or not the shares of Company Common Stock are then listed
on the applicable market or (B) obtains a written opinion from
outside counsel to the Company that such approval is not required,
which opinion shall be reasonably satisfactory to the Required
Holders. In the event the Company is unable to obtain a written
opinion pursuant to Section g(ii)(A), the Company shall use its
reasonable best efforts to obtain stockholder approval. Until such
approval or written opinion is obtained, no purchaser of the Notes
pursuant to the Securities Purchase Agreement (the
“Purchasers” ) shall be issued in the aggregate,
upon conversion of Notes, shares of Company Common Stock in an
amount greater than the product of the Exchange Cap multiplied by a
fraction, the numerator of which is the principal amount of Notes
issued to such Purchaser pursuant to the Securities Purchase
Agreement on the Closing Date and the denominator of which is the
aggregate principal amount of all Notes issued to the Purchasers
pursuant to the Securities Purchase Agreement on the Closing Date
(with respect to each Purchaser, the “Exchange Cap
Allocation” ). In the event that any Purchaser shall sell
or otherwise transfer any of such Purchaser’s Notes, the
transferee shall be allocated a pro rata portion of such
Purchaser’s Exchange Cap Allocation, and the restrictions of
the prior sentence shall apply to such transferee with respect to
the portion of the Exchange Cap Allocation allocated to such
transferee. In the event that any holder of Notes shall convert all
of such holder’s Notes into a number of shares of Company
Common Stock which, in the aggregate, is less than such
holder’s Exchange Cap Allocation, then the difference between
such holder’s Exchange Cap Allocation and the number of
shares of Company Common Stock actually issued to such holder shall
be allocated to the respective Exchange Cap Allocations of the
remaining holders of Notes on a pro rata basis in proportion to the
aggregate principal amount of the Notes then held by each such
holder.
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(h) Notwithstanding anything in the
above provisions to the contrary, if the Holder exercises any of
its rights under the Pledge and Security Agreement in Article 9 of
the Uniform Commercial Code then it shall no longer have the right
to convert its shares into Antigenics MA Stock.
(3) COMPANY CALL OPTION .
After October 30, 2009, the Company shall have the option, at any
time when the Weighted Average Price of the Company Common
Stock
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during the prior thirty (30) day period is
$7.00 (appropriately adjusted for any stock dividend, stock split,
stock combination or other similar transaction) or higher, to
redeem the Note for cash at (100%) of the Conversion Amount,
provided that (i) such redemption shall occur on the date that
is twenty (20) Company Trading Days (the “Call
Date” ) following the date of the Company notice and
(ii) prior to the Call Date, the provisions in Section 2
shall remain in effect.
(4) RIGHTS UPON EVENT OF
DEFAULT .
(a) Event of Default . Each
of the following events (so long as its continuing) shall
constitute an “Event of Default” :
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(i)
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the
Company’s failure to pay to the Holder any amount of
Principal or Interest except, in the case of a failure to pay
Interest only if such failure continues for a period of at least
five (5) Business Days;
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(ii)
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any default
under, redemption of or acceleration prior to maturity of any
Indebtedness (as defined in the Securities Purchase Agreement) of
the Company aggregating in excess of $1,000,000;
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(iii)
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the Company
pursuant to or within the meaning of Title 11, U.S. Code, or any
similar Federal, foreign or state law for the relief of debtors
(collectively, “Bankruptcy Law” ),
(A) commences a voluntary case, (B) has an involuntary
case filed against it and such case is not dismissed within thirty
(30) days, (C) consents to the appointment of a receiver,
trustee, assignee, liquidator or similar official, or
(D) makes a general assignment for the benefit of its
creditors;
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(iv)
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a final
judgment or judgments for the payment of money aggregating in
excess of $1,000,000 are rendered against the Company and which
judgment or judgments are not, within sixty (60) days after
the entry thereof, bonded, discharged or stayed pending appeal, or
are not discharged within sixty (60) days after the expiration
of such stay; provided, however, that any judgment which is covered
by insurance or an indemnity from a credit worthy party shall not
be included in calculating the $1,000,000 amount set forth
above;
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(v)
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the Company
breaches any representation or warranty in this Note or makes a
misleading representation or warranty which results in a material
adverse effect on the financial condition of the
Company;
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(vi)
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the Company
breaches, in any material respect, a covenant or agreement in this
Note which remains uncured after notice for a period of at least
thirty (30) consecutive days.; or
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(vii)
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the Company
ceases to operate.
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(b) Redemption Right .
Promptly after the occurrence of an Event of Default, the Company
shall deliver written notice thereof via facsimile and overnight
courier (an “Event of Default Notice” ) to the
Holder. At any time after the earlier of the Holder’s receipt
of an Event of Default Notice and the Holder becoming aware of an
Event of Default and prior to 90 days after written notice from the
Company to the Holder that such Event of Default is cured
(which
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written notice shall provide reasonably
satisfactory evidence that such Event of Default has actually been
cured), the Holder may require the Company to redeem all or any
portion of this Note by delivering written notice thereof (the
“Event of Default Redemption Notice” ) to the
Company, which Event of Default Redemption Notice shall indicate
the portion of this Note that the Holder is electing to redeem.
Each portion of this Note subject to redemption by the Company
pursuant to this Section 4(b) shall be redeemed by the Company
at a price equal to the Conversion Amount to be redeemed (the
“Event of Default Redemption Price” ).
Redemptions required by this Section 4(b) shall be made in
accordance with the provisions of Section 10.
(5) RIGHTS UPON FUNDAMENTAL
TRANSACTION AND CHANGE OF CONTROL .
(a) Assumption . Without
limiting any rights of the Holder pursuant to paragraph
(b) below, the Company shall not enter into or be party to a
Fundamental Transaction unless (i) the Successor Entity
assumes in writing all of the obligations of the Company under this
Note in accordance with the provisions of this Section 5(a)
pursuant to a written agreement prior to such Fundamental
Transaction, including an undertaking to deliver to the Holder in
exchange for this Note a security of the Successor Entity evidenced
by a written instrument substantially similar in form and substance
to the Notes, including, without limitation, having a principal
amount and interest rate equal to the principal amounts and the
interest rate of this Note and (ii) the Successor Entity
(including its Parent Entity) is a publicly traded corporation
whose common stock is quoted on or listed for trading on an
Eligible Market. Upon the occurrence of any Fundamental
Transaction, the Successor Entity shall succeed to, and be
substituted for (so that from and after the date of such
Fundamental Transaction, the provisions of this Note referring to
the “Company” shall refer instead to the Successor
Entity), and may exercise every right and power of the Company and
shall assume all of the obligations of the Company under this Note
with the same effect as if such Successor Entity had been named as
the Company herein. Upon consummation of the Fundamental
Transaction, the Successor Entity shall deliver to the Holder
confirmation that there shall be issued upon conversion or
redemption of this Note at any time after the consummation of the
Fundamental Transaction, in lieu of the shares of the Company
Common Stock (or other securities, cash, assets or other property)
purchasable upon the conversion or redemption of the Notes prior to
such Fundamental Transaction, such shares of stock, securities,
cash, assets or any other property whatsoever (including warrants
or other purchase or subscription rights) which the Holder would
have been entitled to receive upon the happening of such
Fundamental Transaction had this Note been converted immediately
prior to such Fundamental Transaction, as adjusted in accordance
with the provisions of this Note. The provisions of this Section
shall apply similarly and equally to successive Fundamental
Transactions and shall be applied without regard to any limitations
on the conversion or redemption of this Note.
(b) Holder Redemption Right .
No sooner than fifteen (15) Business Days nor later than ten
(10) Business Days prior to the consummation of a Change of
Control, but not prior to the public announcement of such Change of
Control, the Company shall deliver written notice thereof via
facsimile and overnight courier to the Holder (a “ Change
of Control Notice ”). At any time during the period
beginning after the Holder’s receipt of a Change of Control
Notice and ending on the date of the consummation of such Change of
Control (or, in the event a Change of Control Notice is not
delivered at least ten (10) Business Days prior to
consummation of such Change of Control, at any time on or after the
date which is ten (10) Business Days prior
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to a Change of Control and ending ten
(10) Business Days after the consummation of such Change of
Control), the Holder may require the Company to redeem all or any
portion of this Note by delivering written notice thereof (“
Holder Change of Control Redemption Notice ”) to the
Company, which Holder Change of Control Redemption Notice shall
indicate the Conversion Amount the Holder is electing to redeem.
The portion of this Note subject to redemption pursuant to this
Section 5 shall be redeemed by the Company at a price equal to
101% of the Conversion Amount being redeemed (the “ Holder
Change of Control Redemption Price ”). Redemptions
required by this Section 5(b) shall be made in accordance with
the provisions of Section 10 and shall have priority to
payments to stockholders in connection with a Change of Control.
Notwithstanding anything to the contrary in this Section 5(b),
but subject to Sections 2(g), until the Holder Change of Control
Redemption Price (together with any interest thereon) is paid in
full, the Conversion Amount submitted for redemption under this
Section 5(b) (together with any interest thereon) may be
converted, in whole or in part, by the Holder into Company Common
Stock pursuant to Section 2.
(6) RIGHT OF FIRST REFUSAL
.
(a) Equity Offering . If the
Company sells, at any time up to the Maturity Date, an equity
interest in Antigenics MA (“ Equity Offering ”),
the Holder shall have a right of first refusal (which shall be
transferable to affiliates of the Holder and to a purchaser of this
Note and automatically transferred with this Note while this Note
is outstanding) to purchase Holder’s pro rata share (in
proportion to the principal amount this Note represents to the
aggregate principal amount of all the Notes) of up to 50% of such
Equity Offering on the same terms as the third party purchaser,
including without limitation any preemptive rights in connection
with any subsequent offering or sales. In the event that this Note
is redeemed prior to the Maturity Date (the “ Redemption
Date ”), this right of first refusal shall survive for
the benefit of the entity holding this Note at the time of
redemption until the Maturity Date, and after the Redemption Date,
such right shall be assignable, in whole or in part, other than to
a competitor of GSK, based on the pro rata ownership of the Notes
at the time of redemption; provided, however, that no such transfer
shall be effected unless the transferee would have the right to
purchase at least 10% of the transferor’s right to
participate in such Equity Offering.
(b) Offer . The Company shall
deliver to the Holder written notice of an Equity Offering,
specifying the price and terms and conditions of a proposed Equity
Offering. Unless the Company determines not to consummate such
Equity Offering, the Holder shall have a period of ten
(10) Business Days from the date of the notice from the
Company (the “10-Day Period”) to irrevocable determine
whether to exercise this right.
(c) Notice of Acceptance .
Holder shall evidence its intention to accept the Offer by
delivering a written notice setting forth the equity interest,
subject to Section 6(a) above, that it elects to purchase (the
“ Notice of Acceptance ”). The Notice of
Acceptance must be delivered to the Company prior to the end of the
10-day Period.
(d) Purchase of Shares . If
the Holder tenders its Notice of Acceptance prior to the end of the
10-day Period indicating its intention to purchase its pro rata
share of the Equity Offering, the Company shall schedule a closing.
Upon the closing of the sale of the Equity Offering to be purchased
by the holders, the Holder shall (i) purchase from the Company
that portion of the Equity Offering for which it tendered a Notice
of Acceptance upon the terms
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specified in the Offer, and (ii) execute
and deliver an agreement further restricting transfer of such
Equity Offering. The obligation of any Holder to purchase such
Equity Offering is further conditioned upon the preparation of a
purchase agreement embodying the terms of the Equity Offering,
which shall be reasonably satisfactory in form and substance to the
participating Holders.
(7) RIGHTS UPON ISSUANCE OF OTHER
SECURITIES .
(a) Adjustment of Fixed
Conversion Price upon Issuance of Company Common Stock . If and
whenever on or after the Issuance Date, the Company issues or
sells, or in accordance with this Section 7(a) is deemed to
have issued or sold, any shares of Company Common Stock (including
the issuance or sale of shares of Company Common Stock owned or
held by or for the account of the Company, but excluding shares of
Company Common Stock comprising Excluded Securities) for a
consideration per share (the “ New Issuance Price
”) less than $3.00 (the “ Applicable Price
”) (the foregoing a “Dilutive Issuance” ),
then immediately after such Dilutive Issuance, the Fixed Conversion
Price then in effect shall be reduced to an amount equal to a
16.66% premium to the New Issuance Price. For purposes of
determining the adjusted Fixed Conversion Price under this
Section 7(a), the following shall be applicable:
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(i)
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Issuance of
Options . If the Company
in any manner grants or sells any Options and the lowest price per
share for which one share of Company Common Stock is issuable upon
the exercise of any such Option or upon conversion or exchange or
exercise of any Convertible Securities issuable upon exercise of
such Option is less than the Applicable Price, then such share of
Company Common Stock shall be deemed to be outstanding and to have
been issued and sold by the Company at the time of the granting or
sale of such Option for such price per share. For purposes of this
Section 7(a)(i), the “lowest price per share for which
one share of Company Common Stock is issuable upon the exercise of
any such Option or upon conversion or exchange or exercise of any
Convertible Securities issuable upon exercise of such Option”
shall be equal to the sum of the lowest amounts of consideration
(if any) received or receivable by the Company with respect to any
one share of Company Common Stock upon granting or sale of the
Option, upon exercise of the Option and upon conversion or exchange
or exercise of any Convertible Security issuable upon exercise of
such Option. No further adjustment of the Fixed Conversion Price
shall be made upon the actual issuance of such Company Common Stock
or of such Convertible Securities upon the exercise of such Options
or upon the actual issuance of such Company Common Stock upon
conversion or exchange or exercise of such Convertible
Securities.
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(ii)
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Issuance of
Convertible Securities .
If the Company in any manner issues or sells any Convertible
Securities and the lowest price per share for which one share of
Company Common Stock is issuable upon such conversion or exchange
or exercise thereof is less than the Applicable Price, then such
share of Company Common Stock shall be deemed to be outstanding and
to have been issued and sold by the Company at the time of the
issuance of sale of such Convertible Securities for such price per
share. For the purposes of this Section 7(a)(ii), the
“price per share for which one share of Company Common Stock
is issuable upon such conversion or exchange or exercise”
shall be equal to the sum of the lowest
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amounts of consideration (if any)
received or receivable by the Company with respect to any one share
of Company Common Stock upon the issuance or sale of the
Convertible Security and upon the conversion or exchange or
exercise of such Convertible Security. No further adjustment of the
Fixed Conversion Price shall be made upon the actual issuance of
such Company Common Stock upon conversion or exchange or exercise
of such Convertible Securities, and if any such issue or sale of
such Convertible Securities is made upon exercise of any Options
for which adjustment of the Fixed Conversion Price had been or are
to be made pursuant to other provisions of this Section 7(a),
no further adjustment of the Fixed Conversion Price shall be made
by reason of such issue or sale.
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(iii)
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Change in
Option Price or Rate of Conversion . If the purchase price provided for in any
Options, the additional consideration, if any, payable upon the
issue, conversion, exchange or exercise of any Convertible
Securities, or the rate at which any Convertible Securities are
convertible into or exchangeable or exercisable for Company Common
Stock changes at any time, the Fixed Conversion Price in effect at
the time of such change shall be adjusted to the Fixed Conversion
Price which would have been in effect at such time had such Options
or Convertible Securities provided for such changed purchase price,
additional consideration or changed conversion rate, as the case
may be, at the time initially granted, issued or sold. For purposes
of this Section 7(a)(iii), if the terms of any Option or
Convertible Security that was outstanding as of the Issuance Date
are changed in the manner described in the immediately preceding
sentence, then such Option or Convertible Security and the Company
Common Stock deemed issuable upon exercise, conversion or exchange
thereof shall be deemed to have been issued as of the date of such
change. No adjustment shall be made if such adjustment would result
in an increase of the Fixed Conversion Price then in
effect.
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(iv)
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Calculation
of Consideration Received . In case any Option is issued in connection
with the issue or sale of other securities of the Company, together
comprising one integrated transaction in which no specific
consideration is allocated to such Options by the parties thereto,
the Options will be de
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