Exhibit 10.18
MdBio
GMP Manufacturing Incentive Program
AWARD, STOCK PURCHASE AND WARRANT AGREEMENT
This GMP MANUFACTURING AWARD, STOCK PURCHASE AND WARRANT AGREEMENT is made
as of this 30th day of September, 1999, by and between MdBio, Inc., a Maryland
non-stock, not-for-profit corporation ("MdBio") and Boston Biomedica, Inc., a
Massachusetts corporation with its headquarters located in West Bridgewater,
Massachusetts ("BBI").
BACKGROUND OF AGREEMENT
MdBio is a not-for-profit corporation qualified under the Internal
Revenue Code Section 501(c)(3). One of its missions is to encourage
the expansion of bioscience manufacturing in the State of Maryland.
Consistent with this mission, MdBio has instituted its GMP
Manufacturing Incentive Program (the "Program"), whereby MdBio
invests in bioscience enterprises for the specific purpose of having
the proceeds of such investment used for the manufacture, under
GMP-compliant conditions, of bioscience products within the state of
Maryland.
BBI would like to participate in the Program by having the proceeds
derived from an investment by MdBio in BBI used for supporting the
improvement of the GMP manufacturing capabilities at BBI Biotech
Research Laboratories located in Gaithersburg, Maryland. These
improvements will allow BBI to serve a greater variety of commercial
clients, and will include the purchase of equipment to automate
sample processing and quality control, as well as instrumentation
for the measurement of buffer preparations and nucleic acid samples.
In consideration of the covenants contained herein, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Purchase and Sale of Shares.
1.1 Closing. The Closing on the transactions contemplated by this
Agreement shall take place simultaneous with the execution and delivery of this
Agreement (the "Closing").
1.2 Payment. At Closing, MdBio shall agree to pay to BBI the sum of One
Hundred Seventy-five Thousand Dollars ($175,000) (the "Award").
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1.3 Share Price. For the purposes of this Agreement, the "Share Price" of
BBI common stock shall be defined as the average of the stock's closing price on
the five trading days immediately preceding the Closing.
1.4 Stock Units/Unit Price. A "Stock Unit" shall be defined as consisting
of one share of BBI common stock plus a warrant to purchase an additional share
of BBI common stock under the conditions described in Section 1.5 below. The
"Unit Price" shall be defined as the "Share Price" defined in Section 1.3 above
plus One Dollar and Eighty-four Cents ($1.84).
1.5 Warrant. The warrant described in Section 1.4 shall be exercisable, in
whole or in part, and from time to time over a four year period, commencing on
the Closing date and bear customary terms and conditions concerning stock
splits, dividends, etc. The exercise price of this warrant will be Ten Dollars
($10.00) per share.
1.6 Issuance of Units. In consideration for the Award, BBI shall deliver
to MdBio at Closing the number of Stock Units equal to the quotient resulting
from the division of One Hundred Seventy-five Thousand Dollars ($175,000) by the
Unit Price, with the quotient rounded to the nearest whole number.
3. Representations and Warranties of BBI. BBI hereby represents and warrants
as follows:
3.1 Organization. BBI is a corporation duly organized, validly existing
and in good standing under the laws of the State of Massachusetts.
3.2 Authority Relative to this Agreement. BBI has the corporate power and
authority to execute and deliver this Agreement. The execution and delivery by
BBI of the Agreement, and the consummation of the transactions contemplated
thereby, have been duly authorized by the Board of Directors of BBI. This
Agreement, when executed and delivered by BBI, will constitute a valid and
binding obligation of BBI, enforceable against BBI in accordance with its terms
except as may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally or general principles of equity.
3.3 No Violation. The execution and delivery of this Agreement will not
(a) violate any provisions of BBI's Amended and Restated Articles of
Organization or Amended and Restated Bylaws, (b) result in a default or give
rise to any right of termination, modification or acceleration under the
provisions of any agreement or other instrument or obligation to which BBI is a
party or by which BBI or its assets are bound, or (c) violate any law or
regulation, or any judgment, order or decree of any court, governmental body,
commission or agency applicable to BBI.
3.4 Informational Schedules. BBI agrees to provide MdBio with the
following documents, either at the Closing or at its earliest convenience
thereafter: 1) BBI's Amended and Restated Articles of Organization; 2) BBI's
Amended and Restated Bylaws; 3) a list of all current BBI officers and members
of its Board of Directors; and 4) BBI's most current Balance Sheet and Statement
of Income at the time of Closing.
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3.5 Litigation. There are no actions, suits, claims, investigations or
proceedings pending or, to the knowledge of BBI, threatened against BBI which
have or can reasonably be expected to have adverse effect on BBI or its assets.
3.6 Project Costs. The projected total cost of the improvements to BBI
Biotech Research Lab's manufacturing capabilities contemplated under this
agreement is $350,000. The Award therefore represents fifty percent (50%) of
this cost.
4. Representations and Warranties of MdBio. MdBio hereby represents and
warrants as follows:
4.1 Organization. MdBio is a corporation duly organized, validly existing
and in good standing under the laws of the State of Maryland.
4.2 Authority Relative to this Agreement. MdBio has the corporate power
and authority to execute and deliver this Agreement. The execution and delivery
by MdBio of the Agreement, and the consummation of the transactions contemplated
thereby, have been duly authorized by the Board of Directors of MdBio. This
Agreement, when executed and delivered by MdBio, will constitute a valid and
binding obligation of MdBio, enforceable against MdBio in accordance with its
terms except as may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally or general principles of equity.
4.3 No Violation. The execution and delivery of this Agreement will not
(a) violate any provisions of MdBio's Certificate of Incorporation or Bylaws,
(b) result in a default or give rise to any right of termination, modification
or acceleration under the provisions of any agreement or other instrument or
obligation to which MdBio is a party or by which MdBio or its assets are bound,
or (c) violate any law or regulation, or any judgment, order or decree of any
court, governmental body, commission or agency applicable to MdBio.
4.4 Investment Intent; Accredited Investor; Legends. MdBio is purchasing
or acquiring the Stock Units, and the shares of common stock and Warrants
constituting the Stock Units, for its own account for investment and not with a
present view to, or for sale in connection with, any distribution thereof in
violation of the Securities Act of 1933, as amended (the "Act"), MdBio
represents and warrants that MdBio: (a) is experienced in the evaluation of
businesses similar to BBI, (b) has such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and risks of an
investment in BBI, (c) has the ability to bear the economic risks of an
investment in BBI, (d) has been furnished with or has had access to such
information as is specified in subparagraph (b)(2) of Rule 502 promulgated under
the Act and has carefully reviewed and understood such information, (c) has been
afforded the opportunity to ask questions of and to receive answers from BBI and
to obtain any additional information necessary to make an informed investment
decision with respect to an investment in BBI, and (f) is an "Accredited
lnvestor~', as such term is defined in subparagraph (a) of Rule 501 promulgated
under the Act. MdBio hereby consents to the imposition of a legend substantially
similar to the following on each certificate representing the shares of common
stock and Warrants constituting Stock Units and , unless registered under the
Act pursuant to Section 5.2, below, each certificate for shares of common stock
issued upon exercise of the Warrants, and MdBio agrees to abide by the
restrictions contained therein:
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"[This Warrant has] (The shares represented by this certificate have) not
been registered under the Securities Act of 1933, as amended (the "Act")
and may not be sold, transferred, pledged, hypothecated or assigned unless
registered under the Act or an opinion of counsel, satisfactory to the
corporation, is obtained to the effect that such sale, transfer or
assignment is exempt from the registration requirements of the Act."
MdBio acknowledges that unless the shares of common stock issuable upon
exercise of the Warrants have been registered under the Act pursuant to Section
5.2, below, each representation and warranty made by MdBio in this Section 4.4
must be made by MdBio again at the time of each exercise of the Warrants, and
the exercise of the Warrants shall be conditioned and subject to such
representation and warranty.
4.5 Restricted Securities. MdBio understands that the Stock Units, and the
shares of common stock and Warrants constituting the Stock Units, have not been
registered under the Act by reason of a specific exemption from the registration
provisions of the Act which depends upon, among other things, the bona fide
nature of MdBio's investment intent as expressed herein. MdBio acknowledges that
the Stock Units, and the shares of common stock and Warrants constituting the
Stock Units and, unless registered under the Act pursuant to Section 5.2.1
below, the shares of common stock issuable upon exercise of the Warrants, when
received, must be held indefinitely unless they are subsequently registered
under the Act or an exemption from such registration is available. MdBio has
been advised of or is aware of the provisions of Rule 144 promulgated under the
Act, which rule permits limited resale of securities purchased in a private
placement subject to the satisfaction of certain conditions contained therein.
5. Additional Covenants.
5.1 Maryland Manufacturing. For a period commencing from the date hereof
until the fifth (5th) anniversary of the Closing (the "Commitment Period"), BBI
(or its successors) shall cause the manufacturing activities of BBI Biotech
Research Labs to take place in the State of Maryland (for the purposes of this
agreement, "manufacturing activities" shall mean production of virus and
bacteria for use in BBI's controls and panels, as well as quality control
testing for human pathogens using nucleic acid methodology).
BBI shall promptly notify MdBio in writing of its election to perform any of
these manufacturing activities outside Maryland during the Commitment Period
(the "Election Notice"). The Election Notice shall be provided to MdBio from
time to time and shall provide BBI's good faith estimate of the cost of
out-of-state manufacturing as compared to manufacturing conducted in Maryland
during the same period. Should BBI elect to incur more than 50% of its costs for
these activities outside the State of Maryland during the Commitment Period,
then MdBio shall have an option to sell the Stock Units defined in Section 1.4
back to BBI for a purchase price equal to $175,000 plus compound interest at the
rate of 15% per annum from the Closing.
5.2 "Piggy-Back" Rights. In the event of a public offering or other
registration of BBI's stock, MdBio shall enjoy and be entitled to standard
piggyback registration rights granted by BBI to any other shareholder holding
shares as of the date of this agreement and on terms no less favorable than
granted to any such shareholder.
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6. Miscellaneous.
6.1 Integration. This Agreement constitutes the entire understanding of
the parties as to the subject matter and supersedes all prior understandings and
agreements between the parties and their representatives.
6.2 Amendment and Waiver. This Agreement may be amended, modified,
supplemented or changed in whole or in part only by a written agreement making
express reference to this Agreement that is executed by all parties hereto. Any
of the terms and conditions of this Agreement may be waived in whole or in part,
but only by a written agreement making express reference to this Agreement and
executed by the party against whom the waiver is asserted.
6.3 Binding Agreement and Successors. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and upon each of their
respective successors and permitted assigns.
6.4 No Assignment. This Agreement may not be assigned, nor any obligations
delegated, in whole or in part, without the express prior written consent of the
parties hereto, with such consent in all cases to be conditioned upon assignee's
agreement to be bound by the terms and conditions of this Agreement.
6.5 Notices. Any notice, request, instruction or other document or
communication required or permitted to be given under this Agreement shall be in
writing and shall be deemed to be given upon (I) delivery in person, (ii) three
(3) business days after being deposited in the mail, first class postage
prepaid, for mailing by certified or registered mail, (iii) one day after being
deposited within an overnight courier, charges prepaid for next day delivery, or
(iv) when transmitted by facsimile, upon receipt of a facsimile confirmation by
the intended recipient, with a copy simultaneously sent as provided in clauses
(ii) or (iii), in every case addressed as follows (or at such other persons or
addresses as may be specified from time to time pursuant to a notice sent in
accordance with this section):
Notice to MdBio should be delivered or mailed to:
MdBio, Inc.
Attention: Executive Director
0000 X. 0xx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000
Notices to BBI should be delivered or mailed to:
BBI, Inc.
Attention: President
000 Xxxx Xxxxxx
Xxxx Xxxxxxxxxxx, XX 00000-0000
Facsimile: 000-000-0000
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6.6 Section Headings. The section headings contained in this Agreement and
the exhibits are for convenience of reference only and shall not limit or
otherwise affect the meaning or interpretation of this Agreement or exhibits or
any of their terms or conditions.
6.7 Governing Law. This Agreement shall be governed by and construed under
the laws of the State of Maryland, excluding its choice of law provisions.
6.8 Courts. Any dispute arising from the interpretation or operation of
this Agreement shall be resolved in the courts of the State of Maryland, and the
parties hereby consent to and elect, and waive any objection to, the
jurisdiction of courts within the State of Maryland, waiving all objections as
to venue or forum non conveniens or similar objections in the event of
litigation.
6.9 Counterparts. This Agreement may be signed in any number of duplicate
originals with the same effect as if the signature to each original were on the
same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement, effective as of
the year and day first above written.
MdBio, Inc. BBI, Inc.
By: _______________________ By: _______________________
C. Xxxxxx Xxxxx Xxxxxxx X. Xxxxxxxxxx
Executive Director Chairman & CEO
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