DC_DOCS\84553.4
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement") is made and
entered into this 22nd day of December, 1997, between PERIMMUNE
HOLDINGS, INC., a Delaware corporation ("Holdings"), and MENTOR
CORPORATION, a Minnesota Corporation ("Purchaser").
WHEREAS, Purchaser currently holds 20 shares of Series
B Convertible Preferred Stock, par value $0.01 per share of
Holdings which have certain rights, designations and preferences
set forth in the Certificate of Designations (as defined herein)
(the "Preferred Stock");
WHEREAS, subject to, and in accordance with, the terms
hereof, Holdings desires to issue and sell to Purchaser, and
Purchaser desires to purchase and acquire from Holdings, 100
shares of the Preferred Stock with an aggregate liquidation
preference of Five Million Dollars ($5,000,000) (the "Preferred
Shares"); and
WHEREAS, Holdings holds all of the issued and
outstanding shares of capital stock of PERIMMUNE, INC., a
Delaware corporation.
Accordingly, in consideration of the foregoing and of
the mutual promises, covenants, and conditions set forth below,
the parties hereby agree as follows:
I.
DEFINITIONS
As used herein, the terms below shall have the
following meanings:
"Affiliate" shall mean any entity controlling,
controlled by or under common control with a Person. For the
purposes of this definition, "control" shall have the meaning
presently specified for that word in Rule 405 promulgated by the
SEC under the Securities Act.
"Agreement" shall mean this Stock Purchase Agreement,
together with all schedules and exhibits referenced herein.
"Amended and Restated Registration Rights Agreement"
means the Amended and Restated Registration Rights Agreement by
and among Holdings and Purchaser substantially in the form
attached hereto as Exhibit A.
"Applicable Law" means any statute, law, rule, or
regulation or any judgment, order, writ, injunction or decree of
any Governmental Entity to which a specified person or property
is subject.
"Certificate of Amendment" means the Certificate of
Amendment to the Certificate of Designations, Preferences and
Relative, Participating, Optional and Other Special Rights of
Preferred Stock and Qualifications, Limitations and Restrictions
Thereof, of Series B Convertible Preferred Stock of PerImmune
Holdings, Inc., increasing the number of authorized shares of
Preferred Stock (as defined herein), substantially in the form
attached hereto as Exhibit B.
"Certificate of Designations" means the Certificate of
Designations, Preferences and Relative, Participating, Optional
and Other Special Rights of Preferred Stock and Qualifications,
Limitations and Restrictions Thereof, of Series B Convertible
Preferred Stock of PerImmune Holdings, Inc., constituting a
portion of the Certificate of Incorporation.
"Certificate of Incorporation" means the Certificate of
Incorporation of Holdings as amended from time to time and as in
effect on the date hereof.
"Claim" has the meaning set forth in Section 8.6 of the
Agreement.
"Claim Notice" has the meaning set forth in Section 8.6
of the Agreement.
"Closing" has the meaning set forth in Section 5.1 of
the Agreement.
"Closing Date" has the meaning set forth in Section 5.1
of the Agreement.
"Code" means the Internal Revenue Code of 1986, as
amended. All citations to the Code or to the regulations
promulgated thereunder shall include any amendments or any
substitute or successor provisions thereto.
"Common Stock" has the meaning set forth in Section 3.3
of the Agreement.
"Encumbrance" means any claim, lien, pledge, option,
charge, easement, security interest, right-of-way, encumbrance or
other rights of third parties, and, with respect to any
securities, any agreements, understandings or restrictions
affecting the voting rights or other incidents of record or
beneficial ownership pertaining to such securities.
"Governmental Entity" means any court or tribunal in
any jurisdiction (domestic or foreign) or any public,
governmental, or regulatory body, agency, department, commission,
board, bureau, or other authority or instrumentality (domestic or
foreign).
"Holdings Indemnified Parties" has the meaning set
forth in Section 8.3 of the Agreement.
"Indemnified Parties" means Holdings Indemnified
Parties and Purchaser Indemnified Parties.
"Losses" has the meaning set forth in Section 8.2 of
the Agreement.
"Material Adverse Effect" with respect to any person or
entity shall mean an event, occurrence or condition that has had
or reasonably would be expected to have a material adverse effect
on the business, condition (financial or otherwise), assets,
liabilities, working capital or operations of such person or
entity and its Subsidiaries (if any), taken as a whole.
"Material Agreement" means, with respect to Holdings or
PerImmune:
(a) any contract which involves performance of
services or delivery of goods and/or materials, by or to
Holdings or PerImmune of an amount or value in excess of
$500,000;
(b) any note, debenture, other evidence of
indebtedness, guarantee, loan, letter of credit, surety-bond
or financing agreement or instrument or other contract for
money borrowed, including any agreement or commitment for
future loans, credit or financing;
(c) any lease, rental or occupancy agreement,
license, installment and conditional sale agreement, and
other contract affecting the ownership of, leasing of, title
to, use of, or any leasehold or other interest in, any real
property;
(d) any material licensing agreement or other
contract with respect to patents, trademarks, copyrights, or
other intellectual property, including agreements with
current or former employees, consultants or contractors
regarding the exploitation, appropriation or the
nondisclosure of Intellectual Property;
(e) any employment agreement, collective
bargaining agreement or other contract to or with any
employee or any labor union or other employee representative
of a group of employees relating to wages, hours, and other
conditions of employment;
(f) any bonus, pension, profit sharing,
retirement, stock purchase, stock option, deferred
compensation, medical, hospitalization or life insurance
plan, contract, understanding with respect to any or all of
the employees of Holdings or PerImmune;
(g) any joint venture contract, partnership
agreement, limited liability company or other contract
(however named);
(h) any agreement granting any preemptive right,
right of first refusal or similar right to any Person;
(i) any covenant not to compete or other
restriction on the ability of Holdings or PerImmune to
conduct its business or engage in any other activity;
(j) any agreement not made in the ordinary course
of business that is material to Holdings or PerImmune; and
(k) any amendment, supplement, and modification
(whether written or oral) in respect of any of the
foregoing.
"Permits" shall mean all licenses, permits, orders,
consents, approvals, registrations, authorizations,
qualifications and filings required by any federal, state, local
or foreign laws or governmental or regulatory bodies and all
industry or other non-governmental self-regulatory organizations.
"Permitted Encumbrances" means (i) any mechanic's or
materialmen's lien or similar Encumbrances with respect to
amounts not yet due and payable or which are being contested in
good faith by appropriate proceedings and for which appropriate
reserves have been established, (ii) Encumbrances for Taxes not
yet due and payable or which are being contested in good faith by
appropriate proceeding, for which appropriate reserves have been
established, or (iii) easements, licenses, covenants, rights of
way and similar Encumbrances which, individually or in the
aggregate, would not materially and adversely affect the
marketability or value of the property encumbered thereby or
materially interfere with the operations of Holdings or
PerImmune, as applicable.
"Person" means any individual, copartner, association,
partnership, joint venture, limited liability company, trust,
estate or other entity or organization.
"Preferred Shares" has the meaning set forth in the
Recital hereto.
"Preferred Stock" has the meaning set forth in the
Recital hereto.
"Proprietary Right" has the meaning set forth in
Section 3.15 of the Agreement.
"Purchase Price" has the meaning set forth in Section 2
of the Agreement.
"Purchaser Indemnified Party" has the meaning set forth
in Section 8.2 of the Agreement.
"Return" or "Returns" means all returns, declarations,
reports, statements, and other documents required to be filed in
respect of Taxes.
"Securities Act" means the Securities Act of 1933, as
amended.
"Subsidiary" means, with respect to any Person, (a) any
corporation of which at least a majority in interest of the
outstanding voting stock (having by the terms thereof voting
power under ordinary circumstances to elect a majority of the
directors of such corporation, irrespective of whether or not at
the time stock of any other class or classes of such corporation
shall have or might have voting power by reason of the happening
of any contingency) is at the time, directly or indirectly, owned
or controlled by such Person, by one or more Subsidiaries of such
Person, or by such Person and one or more of its Subsidiaries, or
(b) any corporate or non-corporate entity in which such Person,
one or more Subsidiaries of such Person, or such Person and one
or more Subsidiaries of such Person, directly or indirectly, at
the date of determination thereof, has an ownership interest and
100% of the revenue of which is included in the consolidated
financial reports of such Person consistent with generally
accepted accounting principles.
"Tax" or "Taxes" means any federal, state, local,
foreign and other net income, gross income, gross receipts,
sales, use, ad valorem, transfer, franchise, profits, license,
lease, service, service use, withholding, payroll, employment,
excise, severance, stamp, occupation, premium, property, windfall
profits, customs, duties or other taxes, fees, assessments, or
charges of any kind whatever, together with any interest and any
penalties, additions to tax, or additional amounts with respect
thereto.
"Third Party Notice" has the meaning set forth in
Section 8.5 of the Agreement.
II.
ISSUANCE AND SALE OF THE PREFERRED SHARES
At the Closing, Holdings will issue and sell to
Purchaser, and Purchaser will purchase and acquire from Holdings,
the Preferred Shares for an aggregate purchase price of Five
Million Dollars ($5,000,000) (the "Purchase Price"). The
Preferred Shares will have the respective rights, preferences and
privileges set forth in the Certificate of Incorporation as
amended by the Certificate of Designations and the Supplemental
Certificate of Designations.
III.
REPRESENTATIONS AND WARRANTIES OF HOLDINGS
Holdings makes the following representations and
warranties to Purchaser:
3.1. Organization. Holdings is a corporation duly
organized, validly existing, and in good standing under the laws
of the State of Delaware and has full power and authority to
conduct its business as currently conducted and to enter into and
perform this Agreement.
3.2. Authorization. The execution, delivery and performance
of this Agreement and the filing of the Supplemental Certificate
of Designations by Holdings have been duly authorized by all
necessary corporate action on the part of Holdings. This
Agreement has been duly executed by Holdings and delivered to
Purchaser and constitutes the legal, valid and binding obligation
of Holdings, enforceable in accordance with its terms except as
its enforceability may be limited by bankruptcy, insolvency, or
other laws affecting creditors' rights generally and the exercise
of judicial discretion in accordance with general equitable
principles and as provisions for indemnification, contribution or
waiver of statutory or other rights or remedies may be limited by
public policy considerations.
3.3. Authorization of Issuance. Upon issuance by Holdings
as contemplated herein and payment by Purchaser of the
consideration therefor described herein, the Preferred Shares
will be duly authorized, validly issued, fully paid and
nonassessable. Upon completion of the transaction contemplated
hereunder, the shares of common stock to be issued upon
conversion of the Preferred Shares, par value $0.01 per share of
Holdings (the "Common Stock") will be duly authorized and
reserved for issuance and, upon conversion in accordance with the
terms of the Preferred Stock, will be validly issued, fully paid
and nonassessable and will not be subject to any preemptive or
similar rights, except as set forth on Schedule 3.3.
3.4. No Breach. Except as set forth on Schedule 3.4, none
of (i) the execution, delivery and performance of this Agreement
by Holdings, (ii) the consummation of this Agreement and all
other documents or instruments related thereto or executed in
connection therewith or in contemplation of the transaction
hereunder, or (iii) Holdings' compliance with the terms and
conditions hereof will, with or without the giving of notice or
the lapse of time or both, conflict with, breach the terms and
conditions of, constitute a default under, or violate Holdings'
Certificate of Incorporation or Bylaws or any judgment, decree,
order or Material Agreement to which Holdings is a party or by
which Holdings is legally bound, or any law, rule or regulation
applicable to Holdings.
3.5. Capitalization.
(a) The authorized capital stock of Holdings
consists of 3,000 shares of Common Stock and 1,000 shares of
preferred stock, of which 100 shares have been designated
Series A Convertible Preferred Stock and 20 shares have been
designated Preferred Stock. As of the date hereof, 601.5
shares of Common Stock are outstanding and 120 shares of
preferred stock (of which 100 shares have been designated
Series A Convertible Preferred Stock and 20 have been
designated Preferred Stock) are outstanding. As of the date
hereof, 257 shares of Common Stock are reserved for issuance
upon exercise of outstanding options to purchase shares of
Common Stock, 100 shares of Common Stock are reserved for
issuance upon the conversion of the 100 shares of
outstanding Series A Convertible Preferred Stock and 20
shares of Common Stock are reserved for issuance upon the
conversion of the 20 shares of outstanding Preferred Stock.
Except as set forth on Schedule 3.5 hereto, Holdings does
not have outstanding any other stock or securities
convertible or exchangeable for any shares of its capital
stock or containing any profit participation features, nor
does it have outstanding any rights, options or warrants to
subscribe for or to purchase its capital stock or any stock
or securities convertible into or exchangeable for its
capital stock or any stock appreciation rights or phantom
stock plans, nor has it reserved any shares of capital stock
for issuance upon exercise or conversion of any rights,
options or warrants to subscribe for or to purchase its
capital stock or any stock or securities convertible into or
exchangeable for its capital stock. Holdings is not a party
to any agreement which requires Holdings to repurchase or
otherwise acquire or retire any shares of its capital stock
or any warrants, options or other rights to acquire its
capital stock, except as set forth on the Schedule 3.5.
(b) Except as set forth on Schedule 3.5, there
are no statutory or contractual stockholders' preemptive
rights or rights of refusal with respect to the issuance of
capital stock of Holdings. Except as set forth on Schedule
3.5, there are no agreements to which Holdings or any
holders of the capital stock of Holdings is a party with
respect to the voting or transfer of the capital stock of
Holdings.
(c) All of the outstanding shares of Holdings'
capital stock are duly authorized, validly issued, fully
paid and nonassessable with the rights specified in
Holdings' Certificate of Incorporation, and free of liens or
restrictions other than as stated herein.
3.6. Consents and Approvals. Except as set forth on
Schedule 3.6, no consent, approval, order, authorization of, or
declaration, filing, or registration with, any Governmental
Entity is required to be obtained or made by Holdings in
connection with the execution and delivery by Holdings of this
Agreement or the consummation of the transaction contemplated
hereby, other than any such consent, approval, order,
authorization, declaration, filing or registration, the failure
of which to seek or maintain does not individually or in the
aggregate, have a Material Adverse Effect on Holdings. No
consent or approval of any person other than any Governmental
Entity is required to be obtained or made by Holdings in
connection with the execution and delivery by Holdings of this
Agreement or the consummation of the transaction contemplated
hereby.
3.7. Subsidiaries.
(a) Other than PerImmune, Inc., Holdings does not
own, directly or indirectly, capital stock or other
securities of any corporation or partnership or have any
direct or indirect equity ownership interest in any other
Person.
(b) PerImmune, Inc. is a corporation duly
organized, validly existing, and in good standing under the
laws of the State of Delaware and has full power and
authority to conduct its business as currently conducted.
(c) The authorized capital stock of PerImmune,
Inc. consists of 100,000 shares of Common Stock. As of the
date hereof, 1,000 shares of Common Stock are outstanding.
Except as set forth on Schedule 3.7, PerImmune, Inc. does
not have outstanding any other stock or securities
convertible or exchangeable for any shares of its capital
stock or containing any profit participation features, nor
does it have outstanding any rights, options or warrants to
subscribe for or to purchase its capital stock or any stock
or securities convertible into or exchangeable for its
capital stock or any stock appreciation rights or phantom
stock plans, nor has it reserved any shares of capital stock
for issuance upon exercise or conversion of any rights,
options or warrants to subscribe for or to purchase its
capital stock or any stock or securities convertible into or
exchangeable for its capital stock. PerImmune, Inc. is not
a party to any agreement which requires it to repurchase or
otherwise acquire or retire any shares of its capital stock
or any warrants, options or other rights to acquire its
capital stock.
3.8. Private Offering. No form of general solicitation or
general advertising was used by Holdings or its representatives
in connection with the offer or sale of the Preferred Shares.
Assuming the accuracy of the representations and warranties of
Purchaser in Section 4.5 hereof, no registration of the Preferred
Shares pursuant to the provisions of the Securities Act or any
state securities or "blue sky" laws will be required by the
offer, sale or issuance of the Preferred Shares pursuant to this
Agreement.
3.9. Liabilities. Except as set forth on Schedule 3.9,
Holdings has no material liabilities or obligations of any nature
(whether absolute, accrued, contingent or otherwise and whether
matured or unmatured) relating to its business that are of a
nature required to be set forth on a balance sheet in accordance
with GAAP, except (i) liabilities or obligations reflected and
reserved for on the balance sheet dated December 31, 1996, (ii)
liabilities or obligations incurred since December 31, 1996 in
the ordinary course of business, (iii) liabilities which have
been disclosed herein or in the schedules hereto, or (iv)
liabilities arising under or contemplated by this Agreement.
3.10. Compliance With Laws. Except as set forth on
Schedule 3.10, (i) each of Holdings and PerImmune is in
compliance with all Applicable Laws other than violations which
do not, and will not, individually or in the aggregate, have a
Material Adverse Effect on Holdings or PerImmune, as the case may
be; (ii) each of Holdings and PerImmune has obtained and holds
all material permits, licenses, variances, exemptions, orders,
franchises, approvals and authorizations of all Governmental
Entities necessary for the lawful conduct of its business or the
lawful ownership, use and operation of its assets, except when
the failure to do so does not and will not, individually or in
the aggregate, have a Material Adverse Effect on Holdings or
PerImmune, as the case may be; and (iii) neither Holdings nor
PerImmune has received any written notice of violation of any
Applicable Law, which has not been dismissed or otherwise
disposed of, that Holdings or PerImmune (as applicable) has not
so complied other than with respect to violations of Applicable
Law which do not, and will not, individually or in the aggregate,
have a Material Adverse Effect on Holdings or PerImmune, as the
case may be.
3.11. Litigation. Except as set forth on Schedule 3.11,
(i) neither Holdings nor PerImmune nor any of their respective
assets is a party or subject to any filed litigation or
arbitration proceeding; and (ii) neither Holdings nor PerImmune
has received written notice of any governmental investigation or
proceeding involving Holdings, PerImmune or any of their
respective assets, nor to their knowledge is any litigation
threatened.
3.12. Tax Matters. Except as otherwise set forth on
Schedule 3.12,
(a) There have been properly completed and filed
on a timely basis and in correct form all Returns required
to be filed on or prior to the date hereof, except for any
Returns, the failure of which to file, would not have a
Material Adverse Effect on Holdings or PerImmune, as
applicable. As of the time of filing, the foregoing Returns
correctly reflected the facts regarding the income,
business, assets, operations, activities, status, or other
matters of Holdings or PerImmune, as applicable, or any
other information required to be shown thereon.
(b) With respect to all amounts in respect of
Taxes imposed on Holdings or PerImmune or for which Holdings
or PerImmune is or could be liable, whether to taxing
authorities (as, for example, under law) or to other persons
or entities (as, for example, under tax allocation
agreements), with respect to all taxable periods or portions
of periods ending on or before the date hereof, all
applicable tax laws and agreements have been fully complied
with, and all such amounts required to be paid by Holdings
or PerImmune, as applicable, to taxing authorities or others
on or before the date hereof have been paid, except for such
laws and agreements, the failure with which to comply, and
such amounts the failure of which to pay, would not have a
Material Adverse Effect on Holdings or PerImmune, as
applicable.
3.13. Title to Assets, Etc. Except for Permitted
Encumbrances, each of Holdings and PerImmune has good and
marketable title to or valid and subsisting leasehold interests
in all assets material to their businesses as currently conducted
and, except as set forth on Schedule 3.13, none of the material
assets is subject to any Encumbrance, except for Encumbrances
which, individually or in the aggregate, are not substantial in
amount and do not materially detract from the value of the
property or assets of Holdings or PerImmune (as applicable) or
interfere with the present use of such property or assets (taken
as a whole) and have not arisen other than in the ordinary course
of business. Each of Holdings and PerImmune has in all material
respects performed all the obligations required to be performed
by it with respect to all material assets leased by it through
the date hereof, except where the failure to perform would not
have a Material Adverse Effect on Holdings or PerImmune (as
applicable). All such leases are valid, binding and enforceable
with respect to Holdings or PerImmune (as applicable) in
accordance with their terms and are in full force and effect; no
event of default has occurred which constitutes a default
thereunder on the part of Holdings or PerImmune (as applicable)
and neither Holdings nor PerImmune has knowledge of the
occurrence of any event of default which constitutes a default
thereunder by any other party which defaults are reasonably
likely to have a Material Adverse Effect on it.
3.14. Contracts; No Defaults.
(a) Schedule 3.14 contains a listing of each
Material Agreement. True, correct and complete copies of
each Material Agreement have been delivered to or made
available to Purchaser and its agents and representatives.
(b) Except as set forth on Schedule 3.14, all of
the Material Agreements of Holdings and PerImmune are (i) in
full force and effect, (ii) represent the legal, valid and
binding obligations of Holdings or PerImmune, as applicable,
and are enforceable against Holdings or PerImmune, as
applicable, in accordance with their terms and (iii) to the
best knowledge of Holdings or PerImmune, as applicable,
represent the legal, valid and binding obligations of the
other parties thereto and are enforceable against such
parties in accordance with their terms. Except as set forth
on Schedule 3.14, no condition exists or event has occurred
which, with notice or lapse of time or both, would
constitute a material default or a basis for force majeure
or the claim of excusable delay or nonperformance under such
Material Agreements.
3.15. Intellectual Property.
(a) Each of Holdings and PerImmune either owns or
has valid licenses or other rights to use all patents,
copyrights, trademarks, software, databases, data, other
technical information used in their businesses as presently
conducted ("Proprietary Rights"), subject to the limitations
contained in the agreements governing the use of the same,
with such exceptions as would not result in a Material
Adverse Effect on Holdings. There are no limitations
contained in the agreements of the type described in the
immediately preceding sentence which, upon consummation of
the transaction contemplated hereunder, will alter or impair
any such rights, breach any such agreement with any third
party vendor, or require payments of additional sums
thereunder, except any such limitations that would not have
a Material Adverse Effect on Holdings or PerImmune, as
applicable. Each of Holdings and PerImmune is in compliance
in all material respects with such licenses and agreements
and, except as set forth on Schedule 3.15, there are no
pending or, to the best knowledge of Holdings, threatened
proceedings challenging or questioning the validity or
effectiveness of any license or agreement relating to such
property or the right of Holdings or PerImmune to use, copy,
modify or distribute the same.
(b) No person has a right, other than those set
forth on Schedule 3.15 to receive a royalty or similar
payment in respect of any material Proprietary Rights
whether or not pursuant to any contractual arrangements
entered into by Holdings or PerImmune.
IV.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser makes the following representations and
warranties to Holdings:
4.1. Organization. Purchaser is a corporation duly
organized, validly existing, and in good standing under the laws
of the State of Minnesota, and has full power and authority to
conduct its business as currently conducted and to enter into and
perform this Agreement.
4.2. Authorization. The execution, delivery and performance
of this Agreement by Purchaser have been duly authorized by all
necessary corporate action on the part of Purchaser. This
Agreement has been duly executed by Purchaser and delivered to
Holdings and constitutes the legal, valid and binding obligation
of Purchaser, enforceable in accordance with its terms except as
its enforceability may be limited by bankruptcy, insolvency or
other laws affecting creditors' rights generally and the exercise
of judicial discretion in accordance with general equitable
principles.
4.3. No Breach. None of (i) the execution, delivery and
performance of this Agreement by Purchaser, (ii) the consummation
of this Agreement and all other documents or instruments related
thereto or executed in connection therewith or in contemplation
of the transaction hereunder, or (iii) Purchaser's compliance
with the terms and conditions hereof will, with or without the
giving of notice or the lapse of time or both, conflict with,
breach the terms and conditions of, constitute a default under,
or violate Purchaser's charter or Bylaws, or any judgment,
decree, order or material agreement to which Purchaser is a party
or by which Purchaser is legally bound, or any law, rule or
regulation applicable to Purchaser.
4.4. Consents and Appeals. Except as set forth on Schedule
4.4, no consent, approval, order or authorization of, or
declaration, filing or registration with, any Government Entity
is required to be obtained or made by Purchaser in connection
with the execution and delivery by Purchaser of this Agreement or
the consummation of the transaction contemplated hereby. No
consent or approval of any person other than any Governmental
Entity is required to be obtained or made by Purchaser in
connection with the execution and delivery by Purchaser of this
Agreement or the consummation of the transaction contemplated
hereby.
4.5. Sophistication, Purchase for Own Account.
(a) Sophistication, etc. Purchaser is
knowledgeable, sophisticated and experienced in business and
financial matters; is able to bear the economic risks of its
investment in the Preferred Shares and is presently able to
afford the complete loss of such investment; and has been
afforded access to information about Holdings and its
financial condition, results of operations, business,
property, management and prospects sufficient to enable it
to evaluate its investment in Holdings. Purchaser
represents that it is an "accredited investor" as such term
is defined in Rule 501(a) of Regulation D under the
Securities Act of 1933, as amended (the "Securities Act").
(b) Purchase for Own Account. The Preferred
Shares, and the shares of Common Stock to be issued upon
conversion of the Preferred Shares, are being or will be
acquired by Purchaser (as applicable) for its own account
and with no intention of distributing or reselling such
securities or any part thereof in any transaction that would
be in violation of the Securities Act or the securities laws
of any state, without prejudice, however, to the rights of
Purchaser at all times to sell or otherwise dispose of all
or any part of the Preferred Shares or the shares of Common
Stock issuable upon conversion of the Preferred Shares under
an effective registration statement under the Securities Act
or pursuant to an exemption from such registration available
under the Securities Act, and subject, nevertheless, to the
disposition of such Purchaser's property being at all times
within its control. If Purchaser should in the future
decide to dispose of any of the Preferred Shares or the
shares of Common Stock issuable upon conversion of the
Preferred Shares, Purchaser understands and agrees that it
may do so only in compliance with the Securities Act and
applicable state securities laws, as then in effect. Such
Purchaser agrees to the imprinting, so long as required by
law, of a legend on certificates representing all of the
Preferred Shares or the shares of Common Stock to be issued
upon conversion of the Preferred Shares to the following
effect:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN
APPLICABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS
OF SUCH ACT OR SUCH LAWS.
V.
CLOSING
5.1. Closing Date. The consummation of the purchase of the
Preferred Shares contemplated hereby (the "Closing") shall take
place within thirty days of the date hereof (the "Closing Date").
The Closing shall take place at the offices of PerImmune
Holdings, Inc. at 0000 Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx, and
shall be effective as of 12:01 a.m. on the Closing Date.
5.2. Performance at Closing. The following deliveries shall
be made at Closing:
5.2.1. By Purchaser. Purchaser shall deliver to
Holdings:
(a) To an account designated by Holdings, the
Purchase Price by wire transfer of immediately available
funds; and
(b) Such other documents as may be reasonably
requested by Holdings' counsel.
5.2.2. By Holdings. Holdings shall deliver to
Purchaser:
(a) A certificate evidencing the Preferred
Shares, which shall be registered in Purchaser's name; and
(b) Such other documents as may be reasonably
requested by Purchaser's counsel.
5.3. Other Documents and Acts.
(a) The parties will execute such other documents
and perform such other acts, after the Closing Date, as may
be necessary for the complete implementation and
consummation of this Agreement.
(b) At Closing, Holdings and the Purchaser will
execute and deliver the Amended and Restated Registration
Rights Agreement.
5.4. Certificates; Opinions. At Closing, the Purchaser and
Holdings will deliver the certificates and opinion of counsel
specified in Sections 6.1(c) and 6.2(c)-(d), respectively, in
form and substance reasonably satisfactory to the parties'
respective counsel.
VI.
CONDITIONS TO CLOSING
6.1. Conditions to Holdings' Obligations. The obligations
of Holdings to consummate the transaction contemplated hereby on
the Closing Date is subject to the satisfaction or waiver on or
prior to the Closing Date, of each of the following conditions:
(a) Consents. All Permits and waivers from
Governmental Entities and all consents, approvals, permits
and waivers from other parties necessary to permit Purchaser
and Holdings to consummate the transaction contemplated
hereby, shall have been obtained, unless the failure to
obtain any such Permit or waiver from a Governmental Entity
or any other consent, approval, permit or waiver would not
have a Material Adverse Effect upon Holdings.
(b) No Governmental or Other Proceedings or
Litigation. There shall be no injunction or court order
restraining consummation of the transaction contemplated
hereunder and there shall be no pending or threatened action
or proceeding by or before a court or governmental body
brought by or on behalf of any Governmental Entity seeking
to restrain or invalidate all or any portion of the
transactions contemplated hereunder, and there shall not
have been adopted any law or regulation making all or any
portion of the transaction contemplated hereunder illegal.
(c) Certificates. Purchaser will furnish
Holdings with such certificates, in form and substance
satisfactory to Holdings, of the Chief Executive Officer and
the Secretary of Purchaser and others to evidence compliance
with the conditions set forth in this Article 6.
6.2. Conditions to Purchaser's Obligations. The obligation
of Purchaser to consummate the transaction contemplated hereby on
the Closing Date is subject to the satisfaction or waiver on or
prior to the Closing Date of each of the following conditions:
(a) Consents. All Permits and waivers from
Governmental Entities and all consents, approvals, permits
and waivers from other parties necessary to permit Purchaser
and Holdings to consummate the transaction contemplated
hereby, shall have been obtained, unless the failure to
obtain any such Permit or waiver from a Governmental Entity
or any other consent, approval, permit or waiver would not
have a Material Adverse Effect upon Holdings or Purchaser.
(b) No Governmental or Other Proceedings or
Litigation. There shall be no injunction or court order
restraining consummation of the transaction contemplated
hereunder and there shall be no pending or threatened action
or proceeding by or before a court or governmental body
brought by or on behalf of any Governmental Entity seeking
to restrain or invalidate all or any portion of the
transactions contemplated hereunder, and there shall not
have been adopted any law or regulation making all or any
portion of the transaction contemplated hereunder illegal.
(c) Opinion of Counsel. Holdings shall have
delivered to Purchaser the opinion of Xxxxxx & Xxxxxxx,
counsel to Holdings, with respect to the matters set forth
on Exhibit C hereto.
(d) Certificates. Holdings shall furnish
Purchaser with such certificates, in form and substance
satisfactory to Purchaser, of the Chief Executive Officer
and the Secretary of Holdings and others to evidence
compliance with the conditions set forth in this Article 6.
(e) Certificate of Designations. Holdings shall
have adopted the Certificate of Amendment, the Certificate
of Amendment shall have been appropriately filed with the
office of the Secretary of State of the State of Delaware
and shall have become effective under the Delaware General
Corporation Law. Holdings shall have provided the Purchaser
with evidence of such adoption and filing.
VII.
ADDITIONAL AGREEMENTS OF PURCHASER AND HOLDINGS
7.1. Prohibition on Sale; Right of First Offer.
(a) Purchaser hereby covenants and agrees that it
will not sell, transfer, convey, assign, pledge, hypothecate
or otherwise dispose of the Preferred Shares (or any
interest therein) without the prior written consent of
Holdings (which consent will not be unreasonably withheld).
(b) Notwithstanding Section 7.1(a) above, in the
event that a Qualifying IPO (as defined in the Certificate
of Designations), does not occur within nine months after
the date hereof, Purchaser may at any time thereafter offer
to sell or otherwise dispose of all or any portion of the
Preferred Shares to any Person other than Holdings in
accordance with the provisions below. If Purchaser finds a
buyer ("Buyer") for the Preferred Shares, Purchaser shall
notify Holdings of its intent to sell or otherwise dispose
of the Preferred Shares to Buyer. Purchaser shall set forth
in the notice to Holdings the name of Buyer and the terms
and conditions of the proposed sale or other disposition,
and Holdings shall thereafter have fifteen days after
delivery of such notice to notify Purchaser whether or not
it will purchase the Preferred Shares on the same terms and
conditions set forth in the notice. If Holdings accepts the
offer, then Holdings shall purchase the Preferred Shares
under the same terms and conditions offered to Buyer, except
that Holdings must make the payment for the Preferred Shares
within thirty days after accepting the offer to purchase the
Preferred Shares. If Holdings declines to accept the offer
or if it accepts the offer but fails to purchase the
Preferred Shares within the requisite time frame, then
Purchaser may sell the Preferred Shares to Buyer or any
other buyer at any time thereafter so long as the terms and
conditions of such sale or other disposition are no more
favorable to Buyer or other buyer as set forth in the notice
to Holdings. In the event that the proposed purchase price
to Buyer or other buyer is later adjusted to a price lower
than the price originally set forth in the written notice to
Holdings, Purchaser must provide a second written notice to
Holdings setting forth the lower price and giving Holdings
another opportunity to purchase the Offered Shares for the
lower price; if Holdings accepts the new offer to purchase
the Preferred Shares at the lower price it must pay the
purchase price within ten days after receipt of the second
notice from Purchaser.
7.2. Lock-Up Agreement; Sale After Lock-Up Period.
(a) Purchase hereby covenants and agrees that it
will sign any reasonable "lock-up" letter with terms and
conditions substantially the same as any lock-up letter that
certain officers, directors or other significant
stockholders are requested to sign restricting Purchaser's
ability to sell, transfer, convey, assign, pledge,
hypothecate, or otherwise dispose of securities of Holdings
for a period of up to 180 days after a Qualifying IPO (the
"Lock-Up Period"), as may be requested by underwriters in
connection with such Qualifying IPO.
(b) After the Lock-Up Period, if any, Purchaser
may sell or otherwise dispose of Common Stock of Holdings at
any time without restriction (other than under applicable
law) so long as: (i) the net proceeds of any such sale or
sales do not exceed the Purchase Price, (ii) Purchaser
provides ten days' prior written notice to Holdings prior to
any such sale, and (iii) Holdings is given the opportunity
to purchase the subject securities from Purchaser at the
prevailing market price during such ten-day period.
(c) After the Lock-Up Period and so long as the
Research, Collaboration and Distribution Agreement, dated
December __, 1997 (the "Research Agreement"), between
Holdings and Purchaser remains in effect, Purchaser may also
sell or otherwise dispose of additional securities of
Holdings (beyond the number of shares allowed under Section
7.2(b)) at the prevailing market price so long as: (i)
Purchaser provides Holdings with three business days' prior
notice each time it intends to sell any additional
securities, (ii) Holdings is given the opportunity to
purchase such additional securities during said three
business day period, and (iii) following any such sale,
Purchaser continues to hold at least fifty percent (50%) of
the shares of Common Stock initially held by Purchaser upon
conversion of the Preferred Stock in connection with the
Qualifying IPO. Upon termination or expiration of the
Research Agreement or in the event that Holdings is in
material default thereunder and the default is not cured
within 30 days of receipt of notice from Purchaser by
Holdings of such default, Purchaser may at any time sell any
additional securities of Holdings in its possession without
the restrictions set forth above.
(d) For the purpose of this Section 7.2, the term
"market price" shall mean (i) the average of the closing
price of a share of common stock on the principal exchange
on which shares of common stock are then trading, if any,
during such ten-day period, or (ii) if such common stock is
not traded on an exchange but is quoted on Nasdaq or a
successor quotation system, (1) the average, during such ten
day period, of the last sales price (if the common stock is
then listed as a National Market Issue under the Nasdaq
National Market System) or (2) the average of the mean
between the closing representative bid and asked prices for
each day during such ten-day period (in all other cases) for
common stock as reported by Nasdaq or such successor
quotation system, or (iii) if the common stock is not
publicly traded on an exchange and not quoted on Nasdaq or a
successor quotation system, the average of the mean between
the closing bid and asked prices for the common stock for
each day during the ten day period.
7.3. Reservation of Shares. Until all Preferred Shares are
no longer outstanding due to conversion or otherwise, Holdings
shall at all times reserve and keep available out of its
authorized Common Stock, solely for the purpose of issue or
delivery upon conversion of the Preferred Shares as provided in
the Certificate of Designations, the maximum number of shares of
Common Stock that may be issuable or deliverable upon such
conversion. Such shares of Common Stock shall, when issued or
delivered in accordance with the provisions of the Certificate of
Designations, be duly authorized, validly issued and fully paid
and non-assessable. Holdings shall issue such Common Stock in
accordance with the provisions of the Certificate of Designations
and shall otherwise comply with the terms thereof.
7.4. Registration Rights Agreement. On the Closing Date,
Holdings and Purchaser shall enter into the Amended and Restated
Registration Rights Agreement.
VIII.
INDEMNIFICATION
8.1. Survival of Representations, Etc. The representations,
warranties, covenants and agreements of the parties hereto
contained herein, shall survive the Closing, but, other than
those contained in Section 3.1, 3.3, 3.5 and 7.1 through 7.4,
shall terminate on the date twelve months from the Closing Date;
provided, however, that there shall be no such termination with
respect to any representation or warranty as to which a bona fide
claim has been asserted prior to such date.
8.2. Indemnification by Holdings. Holdings shall indemnify
and hold harmless Purchaser and its Affiliates, directors,
officers, advisors, agents and employees (the "Purchaser
Indemnified Parties") to the fullest extent lawful, from and
against any and all demands, losses, damages, penalties, claims,
liabilities, obligations, actions, causes of action, and
reasonable expenses (including without limitation, costs of
investigating, preparing or defending any such claim or action
and reasonable legal fees and expenses) (collectively, "Losses"),
arising by reason of or resulting from any breach of any
warranty, representation, covenant or agreement of Holdings
contained in this Agreement or in any certificate delivered
pursuant thereto; provided, however, that no Purchaser
Indemnified Party shall be entitled to indemnification by
Holdings hereunder with respect to any Losses arising solely from
the bad faith or gross negligence (as finally determined by a
court of competent jurisdiction) of such Purchaser Indemnified
Party or any Affiliate, director, officer, agent, or employee of
such Purchaser Indemnified Party.
8.3. Indemnification by Purchaser. Purchaser shall
indemnify and hold harmless Holdings and its Affiliates,
directors, officers, advisors, agents and employees (the
"Holdings Indemnified Parties") to the fullest extent lawful,
from and against any and all Losses arising by reason of or
resulting from any breach of any warranty, representation,
covenant or agreement of such Purchaser contained in this
Agreement or in any certificate delivered pursuant thereto,
provided, however, that no Holdings Indemnified Party shall be
entitled to indemnification by Purchaser hereunder with respect
to any Losses arising solely from the bad faith or gross
negligence (as finally determined by a court of competent
jurisdiction) of such Holdings Indemnified Party, or any
Affiliate, director, officer, agent or employee of such Holdings
Indemnified Party.
8.4. Losses. The term "Losses" as used in this Section 8 is
not limited to matters asserted by third parties, but includes
Losses incurred or sustained by an Indemnified Party in the
absence of third party claims. Payments by an Indemnified Party
of amounts for which such Indemnified Party is indemnified
hereunder shall not necessarily be a condition precedent to
recovery.
8.5. Defense of Claims. If a claim for Losses (a "Claim")
is to be made by an Indemnified Party, such Indemnified Party
shall give written notice (a "Claim Notice") to the indemnifying
party as soon as practicable after such Indemnified Party becomes
aware of any fact, condition or event which may give rise to
Losses for which indemnification may be sought under this Section
8. If any lawsuit or enforcement action is filed against any
Indemnified Party hereunder, notice thereof (a "Third Party
Notice") shall be given to the indemnifying party as promptly as
practicable (and in any event within fifteen (15) calendar days
after the service of the citation or summons). The failure of
any Indemnified Party to give timely notice hereunder shall not
affect rights to indemnification hereunder, except to the extent
that the indemnifying party demonstrates actual damage caused by
such failure. After receipt of a Third Party Notice, if the
indemnifying party shall acknowledge in writing to the
Indemnified Party that the indemnifying party shall be obligated
under the terms of its indemnity hereunder in connection with
such lawsuit or action, then the indemnifying party shall be
entitled, if it so elects, (i) to take control of the defense and
investigation of such lawsuit or action, (ii) to employ and
engage attorneys of its own choice to handle and defend the same,
at the indemnifying party's cost, risk and expense unless the
named parties to such action or proceeding include both the
indemnifying party and the Indemnified Party and the Indemnified
Party has been advised in writing by counsel that there may be
one or more legal defenses available to such Indemnified Party
that are different from or additional to those available to the
indemnifying party, and (iii) to compromise or settle such claim,
which compromise or settlement shall be made only with the
written consent of the Indemnified Party, such consent not to be
unreasonably withheld. The Indemnified Party shall cooperate in
all reasonable respects with the indemnifying party and such
attorneys in the investigation, trial and defense of such lawsuit
or action and any appeal arising therefrom; and the Indemnified
Party may, at its own cost, participate in the investigation,
trial and defense of such lawsuit or action and any appeal
arising therefrom and appoint its own counsel therefor, at its
own cost. The parties shall also cooperate with each other in
any notifications to insurers. If the indemnifying party fails
to assume the defense of such claim within fifteen (15) calendar
days after receipt of the Third Party Notice, the Indemnified
Party against which such claim has been asserted will (upon
delivering notice to such effect to the indemnifying party) have
the right to undertake the defense, compromise or settlement of
such claim and the indemnifying party shall have the right to
participate therein at its own cost; provided, however, that such
claim shall not be compromised or settled without the written
consent of the indemnifying party, which consent shall not be
unreasonably withheld. In the event the Indemnified Party
assumes the defense of the claim the Indemnified Party will keep
the indemnifying party reasonably informed of the progress of any
such defense, compromise or settlement. Notwithstanding the
foregoing, the indemnifying party shall not be liable for the
reasonable fees and expenses of more than one separate firm of
attorneys at any time for any and all Indemnified Parties (which
firm shall be designated in writing by such Indemnified Party or
Parties) in connection with any one such action or proceeding
arising out of the same general allegations or circumstances.
8.6. Tax Treatment of Indemnity. The parties agree that any
indemnification payments made pursuant to this Agreement shall be
treated for Tax purposes as an adjustment to the consideration
for the purchase of the Preferred Shares, unless otherwise
required by applicable law, in which event indemnification
payments shall be made in an amount sufficient to indemnify the
party on a net after-Tax basis.
IX.
GENERAL PROVISIONS
9.1. Expenses. Except as otherwise provided herein, all
expenses involved in the preparation and consummation of this
Agreement shall be borne by the party incurring the same whether
or not the transaction contemplated hereby is consummated.
9.2. Notices. All notices, requests, demands, and other
communications pertaining to this Agreement shall be in writing
and shall be deemed duly given when delivered personally (which
shall include delivery by Federal Express or other nationally
recognized, reputable overnight courier service that issues a
receipt or other confirmation of delivery) to the party for whom
such communication is intended, or three (3) business days after
the date mailed by certified or registered U.S. mail, return
receipt requested, postage prepaid, addressed as follows:
(a) If to Purchaser:
Mentor Corporation
0000 Xxxxxxxxx Xxxxxx
Xxxxx Xxxxxxx, XX 00000
Attn: General Counsel
(b) If to Holdings:
PerImmune, Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxx, Xx., Ph.D.
with a copy to:
Xxxxxx & Xxxxxxx
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxx X. Xxxxxxxxx
Any party may change its address for notices by notice to the
other given pursuant to this Section 9.
9.3. Brokers. Each party represents and warrants to the
other that no agent, broker, investment banker, or other person
or firm acting on behalf of such party or any of its affiliates
or under the authority of any of them is or will be entitled to
any broker's or finder's fee or any other commission or similar
fee in connection with the transaction contemplated hereby, other
than Vector Securities, whose fees will be solely the
responsibility of Holdings.
9.4. Waiver. Unless otherwise specifically agreed in
writing to the contrary: (i) the failure of either party at any
time to require performance by the other of any provision of this
Agreement shall not affect such party's right thereafter to
enforce the same; (ii) no waiver by either party of any default
by any other shall be valid unless in writing and acknowledged by
an authorized representative of the non-defaulting party, and no
such waiver shall be taken or held to be a waiver by such party
of any other preceding or subsequent default; and (iii) no
extension of time granted by either party for the performance of
any obligation or act by any other party shall be deemed to be an
extension of time for the performance of any other obligation or
act hereunder.
9.5. Entire Agreement. This Agreement, the exhibits and
schedules hereto (which are incorporated by reference herein)
constitute the entire agreement between the parties with respect
to the subject matter hereof and referenced herein, supersede and
terminate any prior agreements between the parties (written or
oral). This Agreement may not be altered or amended except by an
instrument in writing signed by the party against whom
enforcement of any such change is sought.
9.6. Counterparts. This Agreement may be signed in any
number of counterparts with the same effect as if the signatures
on each such counterpart were on the same instrument.
9.7. Construction. The Section headings of this Agreement
are for convenience only and in no way modify, interpret or
construe the meaning of specific provisions of the Agreement.
9.8. Severability. If any one or more of the provisions
contained in this Agreement should be found invalid, illegal or
unenforceable in any respect, the validity, legality, and
enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby. Any illegal or
unenforceable term shall be deemed to be void and of no force and
effect only to the minimum extent necessary to bring such term
within the provisions of applicable law and such term, as so
modified, and the remaining provisions of this Agreement shall
then be fully enforceable.
9.9. Choice of Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Maryland
without regard to the choice of law rules utilized in that
jurisdiction.
IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be executed by a respective duly authorized officer
as of the date first written above.
PERIMMUNE HOLDINGS, INC.
By: /s/XXXXXXX X. XXXXX
Name: Xxxxxxx X. Xxxxx
Title: President
MENTOR CORPORATION
By: /s/XXXXXXXXXXX XXXXXX
Name: Xxxxxxxxxxx Xxxxxx
Title: Chairman, CEO
SCHEDULES AND EXHIBITS
The Registrant will make the following schedules and
exhibits available upon request:
Schedule 3.3 Pre-emptive Rights
Schedule 3.5 Capitalization
Schedule 3.6 Consent and Approvals
Schedule 3.7 Subsidiaries
Schedule 3.9 Liabilities
Schedule 3.10 Non-compliance with Laws
Schedule 3.11 Litigation
Schedule 3.12 Tax Matters
Schedule 3.13 Title to Assets
Schedule 3.14 Contracts
Schedule 3.15 Intellectual Property
Exhibit A Form of Certificate of
Designations, Preferences and
Relative, Participating
Optional and other Special
Rights and Qualifications,
Limitations and Restrictions
Thereof of Series B
Convertible Preferred Stock of
Perimmune Holdings, Inc.
Exhibit B Form of Amended and Restated
Registration Rights Agreement
