SECOND AMENDMENT AGREEMENT
SECOND
AMENDMENT AGREEMENT
SECOND
AMENDMENT AGREEMENT
(the
"Agreement"),
dated
as of December 29, 2006, by and among pSivida Limited, an Australian
corporation, with headquarters located at Xxxxx 00, XXX Centre, 00 Xxx
Xxxxxxxxx, Xxxxx, XX 0000 Xxxxxxxxx (the "Company"),
and
Castlerigg Master Investments Ltd. (the "Investor").
WHEREAS:
A.
The
Company and the Investor are parties to that certain Securities Purchase
Agreement, dated as of October 5, 2005 (as amended prior to the date hereof,
the
"Existing
Securities Purchase Agreement"),
pursuant to which, among other things, the Investor purchased from the Company
(i) subordinated convertible notes, dated November 16, 2005 (the
"Original
Notes"),
which
are convertible in accordance with their terms into American Depositary Shares
of the Company ("ADSs")
each
of which represents 10 ordinary shares of the Company (the "Ordinary
Shares")
and is
evidenced by an American Depository Receipt ("ADR")
and
(ii) warrants (the "Original
Warrants"),
which
are exercisable to purchase 633,803 ADSs (the "Original
Warrant Shares").
B.
On
November 16, 2005, the Company and the Investors entered into a Registration
Rights Agreement (the "Original
Registration Rights Agreement"),
pursuant to which the Company agreed to provide certain registration rights
with
respect to the Registrable Securities (as defined in the Original Registration
Rights Agreement) under the Securities Act of 1933, as amended (the
"1933
Act"),
and
the rules and regulations promulgated thereunder, and applicable state
securities laws.
C.
The
Company and the Investor are also parties to that certain Amendment Agreement,
dated as of July 28, 2006 (the "Amendment
Agreement"),
pursuant to which, among other things, on September 14, 2006, (i) the Company
paid to the Investor the Amendment Payment Amount (as defined in the Amendment
Agreement); (ii) the Company issued to the Investor amended and restated notes
(the "Existing
Notes"),
convertible into ADSs, in accordance with the terms thereof; (iii) the Company
issued to the Investor Series A Warrants (the "Series
A Warrants")
exercisable to purchase 5,700,000 ADSs (the "Existing
Series A Warrant Shares"),
in
accordance with the terms thereof; (iv) the Company agreed to issue to the
Investor warrants (the "Series
B Warrants")
from
time to time in accordance with the terms of the Existing Notes, which shall
be
exercisable to purchase ADSs (the "Existing
Series B Warrant Shares",
and
collectively with the Original Warrant Shares and the Existing Series A Warrant
Shares, the "Existing
Warrant Shares"),
in
accordance with the terms thereof; (v) the Company and the Investor entered
into
the Amended and Restated Registration Rights Agreement (the "Existing
Registration Rights Agreement"),
pursuant to which the Company has agreed to provide certain registration rights
with respect to the Registrable Securities (as defined in the Existing
Registration Rights Agreement) under the 1933 Act, and the rules and regulations
promulgated thereunder, and applicable state securities laws; (vi) the Company
redeemed $2.5 million in principal amount of the Original
Notes.
D.
In
connection with that certain Letter Agreement, by and between the Company and
the Investor, dated October 17, 2006 (the "Letter
Agreement"),
the
Company
agreed
to
make certain payments to the Investor, and the Company and the Investor agreed
(i) to amend certain of the provisions of the Existing Registration Rights
Agreement in connection with the Registration Statement on Form F-3 (SEC File
No. 333 132777) registering 12,737,139 ADSs issuable to the Investor
and (ii)
to pay the Investor US$800,000 pursuant to Section 3(a) of the Letter Agreement
(the "Letter
Agreement Payment Amount");
E.
The
Company and the Investor desire to enter into this Agreement, pursuant to which,
among other things, in consideration of the Investor's waiver set forth in
Section 2 below, (i) the Company and the Investor shall amend and restate the
Existing Notes in the form attached hereto as Exhibit
A
(the
"Second Amended
and Restated Notes"
and the
ADSs into which it is convertible, the "Second Amended
and Restated Conversion Shares");
(ii) the Company shall issue, upon the terms and conditions stated in this
Agreement, Series C Warrants in the form attached hereto as Exhibit
B
(the
"Series
C Warrants")
which
shall be exercisable to purchase One Million and Five Hundred Thousand
(1,500,000) ADSs (the "Series
C Warrant Shares"),
in
accordance with the terms thereof; (iii) the Company shall issue, upon the
terms
and conditions stated in this Agreement, Series D Warrants in the form attached
hereto as Exhibit
C
(the
"Series
D Warrants",
and
together with the Series C Warrants, the "New
Warrants")
which
as of the date hereof is estimated to be exercisable to purchase Four Million
(4,000,000) ADSs in accordance with the terms thereof (as estimated, the
"Estimated
Series D Warrants")
and
such number of ADSs issuable upon exercise of the Series D Warrants issued
on
the Closing Date in accordance with the terms thereof and after adjustment
in
accordance with Section 4(c) below are referred to herein as the "Series
D Warrant Shares";
(iv) the parties hereto will further amend and restate the Existing
Registration Rights Agreement in the form attached hereto as Exhibit
D
(the
"Second Amended
and Restated Registration Rights Agreement")
and
(v) the Company shall increase the principal amount of the Existing Notes by
$306,391 (the "Note
Increase Amount"),
which
shall constitute payment in full to the Investor of any accrued and unpaid
interest on the Existing Note of the Investor, which is payable on or prior
to
January 2, 2007 under the terms of the Existing Note to the Investor (the
"Interest
Payment Amount").
F.
The
amendment and restatement of the Existing Notes and the issuance of the Series
C
Warrants and Series D Warrants is being made in reliance upon an exemption
from
registration under the 1933 Act.
G.
On
or
prior to the Closing Date, the Company desires to (i) issue to Nordic Eyepharma
K/S and/or one of its affiliates or designees (collectively, "Nordic")
for a
purchase price of up to Five Million Dollar (US$5,000,000) dollars (x) warrants
(the "Nordic
Warrants"),
which
shall be exercisable at an exercise price of $2.00 per share to purchase up
to
One Million (1,000,000) ADSs and
(y) a
convertible security, which shall be convertible at a conversion price of $2.00
per share into up to Two Million (2,000,000) ADSs (collectively, the
"Interim
Financing Transaction")
and
(ii) in a series of periodic investments, to issue to Nordic or such other
Person (the "Finance
Party")
additional convertible or other securities in exchange for up to Twenty Two
Million Dollars (US$22,000,000), in the aggregate, into the Company, an
affiliate or a special purpose entity (the "Financing
Entity"),
into
which the Company shall have assigned or transferred, as applicable or to which
Financing Party the Company shall have granted a Lien (as defined in the Amended
and Restated Note) in
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(collectively,
the "Collateral
Transfer"),
the
intellectual property and assets related to the Company's Medidur and
Mifepristone (RU486) product lines (the "Collateral")
into
the Financing
Entity,
which additional convertible securities shall be convertible at a conversion
price of $2.00 per share into up to Eleven Million, Five Hundred Thousand
(11,500,000) ADSs (the "Secondary
Financing"
and
together with the Interim Financing Transaction, the "Financing
Transactions").
H.
Capitalized
terms used herein and not otherwise defined herein shall have the respective
meanings ascribed to them in the Amended Securities Purchase Agreement (as
defined below) and, if not defined therein, the Second Amended and Restated
Notes.
NOW,
THEREFORE,
in
consideration of the foregoing recitals and the mutual promises hereinafter
set
forth, the Company and the Investor hereby agree as follows:
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1.
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AMENDMENT
AND RESTATEMENT OF NOTES AND ISSUANCE OF NEW
WARRANTS.
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(a)
Series
C Warrants.
As of
the date hereof, as consideration for the Investor entering into this Agreement,
the Company shall issue and deliver to the Investor the Series C Warrants,
exercisable for One Million and Five Hundred Thousand (1,500,000)
ADSs.
(b)
Notes
and Series D Warrants.
Subject
to satisfaction (or waiver) of the conditions set forth in Sections 5 and 6
below, at the closing contemplated by this Agreement (the "Closing"),
(i)
the Investor shall surrender to the Company its Existing Notes and the Company
shall issue and deliver to the Investor the Amended and Restated Notes in a
principal amount equal to the sum of (x) the principal amount of the Existing
Notes being so amended and restated and (y) the Note Increase Amount, (ii)
the
Company shall issue and deliver to the Investor the Series D Warrants,
exercisable for Four Million (4,000,000) ADSs and (iii) the Interest Payment
Amount shall be deemed paid in full to the Investor.
(c)
Letter
Agreement.
Section
3(a) of the Letter Agreement is hereby amended to replace each reference to
"December 28, 2006" with the following:
the
earlier to occur of (x) the Closing Date (as defined in that certain Second
Amendment Agreement, dated December 29, 2006, by and between the Company and
the
Holder (the "Second Amendment Agreement"), (y) the date of the consummation
of
the Secondary Financing (as defined in the Second Amendment Agreement) and
(z)
Xxxxx 00, 0000
(x)
Ratifications.
Except
as otherwise expressly provided herein, (i) the Existing Securities
Purchase Agreement as amended hereby (the "Amended
Securities Purchase Agreement"),
the
Original Warrants, the Series A Warrants and the Irrevocable Transfer Agent
Instructions are, and shall continue to be, in full force and effect and are
hereby ratified and confirmed in all respects, except that on and after the
Closing Date (A) all references in the Existing Securities Purchase Agreement
to
"this Agreement", "hereto", "hereof", "hereunder" or words of like import
referring to the Existing Securities Purchase Agreement shall mean the Amended
Securities Purchase Agreement, (B) all references in the Transaction
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Documents
to "this Agreement", "hereto", "hereof", "hereunder" or words of like import
referring to the Existing Registration Rights Agreement or the Original
Registration Rights Agreement shall mean the Second Amended and Restated
Registration Rights Agreement, (C) all references in the other Transaction
Documents to the "Registration Rights Agreement", "Amended and Restated
Registration Rights Agreement", "thereto", "thereof", "thereunder" or words
of
like import referring to the Existing Registration Rights Agreement or Original
Registration Rights Agreement shall mean the Second Amended and Restated
Registration Rights Agreement, (D) all references in the Securities Purchase
Agreement and the other Transaction Documents to "Transaction Documents" shall
also include this Agreement, the Second Amended and Restated Notes, the Series
C
Warrants and the Series D Warrants, (E) all references in the Securities
Purchase Agreement and the other Transaction Documents to "Notes" or "Amended
and Restated Notes" shall mean the Second Amended and Restated Notes, (F) all
references in the Existing Securities Purchase Agreement and the other
Transaction Documents to "Conversion Shares" or "Amended and Restated Conversion
Shares" shall mean the Second Amended and Restated Conversion Shares, (G) all
references in the existing Securities Purchase Agreement and the other
Transaction Documents to "Warrants" shall be amended to include the New
Warrants, and (H) all references in the Securities Purchase Agreement and the
other Transaction Documents to "Warrant Shares" shall be amended to include
Series C Warrant Shares and the Series D Warrant Shares in addition to the
Existing Warrant Shares, and (ii) the execution, delivery and effectiveness
of
this Agreement shall not operate as an amendment of any right, power or remedy
of the Investor under any Transaction Document, nor constitute an amendment
of
any provision of any Transaction Document.
(e)
Closing
Date.
The
date and time of the Closing (the "Closing
Date")
shall
be 10:00 a.m., New York Time, as soon as practicable after notification of
satisfaction (or waiver) of the conditions to the Closing set forth in Sections
5 and 6 below (or such other time and date as is mutually agreed to by the
Company and the Investor). The Closing shall occur on the Closing Date at the
offices of Xxxxxxx Xxxx & Xxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000.
(f)
Closing.
On the
Closing Date, (i) the Company (A) shall issue and deliver to the
Investor, the Second Amended and Restated Notes, duly executed on behalf of
the
Company and registered in the name of the Investor, and (C) shall issue and
deliver to the Investor, the Series D Warrants, duly executed on behalf of
the
Company and registered in the name of the Investor, and (ii) the Investor
shall deliver to the Company the Existing Notes for cancellation.
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2.
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WAIVERS;
STANDSTILL
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(a)
Net
Cash Balance Waiver.
Effective as of the Closing Date, until and including March 30, 2007, Section
15(e) of the Note is hereby waived in its entirety. From and after March 31,
2007, such waiver shall no longer be effective.
(b)
Registration
Delay Payments Waiver.
Effective as of the Closing Date, the Investor hereby agrees to permanently
waive its right to receive the Registration Delay Payments (as defined in the
Existing Registration Rights Agreement) accrued as a result of the Company's
failure to file the Additional Registration Statement on or prior to the
Additional
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Filing
Deadline (as defined in the Existing Registration Rights Agreement), and unpaid
to such Investor as of the date hereof through the tenth day following the
earlier to occur of (A) the Closing Date, (B) the date of the consummation
of
the Secondary Financing and (C) March 31, 2007.
(c)
Transaction
Waiver.
Effective as of the Closing Date, the Investor hereby agrees to waive any
provision of the Second Amended and Restated Note, which would otherwise
prohibit the Collateral Transfer to the Financing Entity in connection with
the
Secondary Financing.
(d)
Standstill.
The
Investor hereby agrees to forbear from taking any remedial action, declaring
any
default and from accelerating and demanding any amounts due, in respect of
the
Existing Note, the Guaranty, the Existing Securities Purchase Agreement, and
all
other related documents, until the earlier of (the "Forbearance
Expiration Date"):
(i)
5:00 p.m. prevailing Boston, Massachusetts time on Wednesday, Xxxxx 00, 0000,
(xx) the Closing Date and (iii) the occurrence of an Event of Default described
in either of Sections 4(a)(vi) or 4(a)(vii) of the Existing Note (but not
including any involuntary bankruptcy or insolvency petition filed or joined
by
the Investor).
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3.
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REPRESENTATIONS
AND WARRANTIES
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(a)
Investor
Bring Down.
The
Investor hereby represents and warrants to the Company as set forth in Section
2
of the Amended Securities Purchase Agreement as to this Agreement as if such
representations and warranties were made as of the date hereof and set forth
in
their entirety in this Agreement. The Investor hereby represents and warrants
to
the Company with respect to itself only that it is not actually aware of any
outstanding Events of Default. The Investor further represents and warrants
to
the Company that: (a) it is the sole holder of the Existing Notes; (b) that
it has not transferred beneficial ownership thereof; and (c) this agreement
shall constitute written consent of the Required Holders pursuant to Section
17
of the Existing Notes.
(b)
Company
Bring Down.
The
Company represents and warrants to the Investor as set forth in Section 3 of
the
Amended Securities Purchase Agreement as if such representations and warranties
were made as of the date hereof and set forth in their entirety in this
Agreement; provided that the Schedules to the Amended Securities Purchase
Agreement are replaced in their entirety by the Schedules attached to this
Agreement. Such representations and warranties in the Amended Securities
Purchase Agreement to the transactions thereunder and the securities issued
thereby are hereby deemed for purposes of this Agreement to be references to
the
transactions hereunder and the issuance of the securities hereby, and references
therein to "Closing
Date"
being
deemed references to the Closing Date as defined in Section 1(d) above. The
Company represents and warrants to the Investor that it is not aware of any
outstanding Events of Default other than those which have been specifically
waived by the Investor pursuant to Section 2(b). The Company represents and
warrants to the Investor that this Agreement, the terms of the Second Amended
and Restated Notes, the terms of the Series C Warrants, the issue of the Series
C Warrants, the terms of the Series D Warrants, the issue of the Series D
Warrants and the agreement to issue shares or ADRs on exercise of the Second
Amended and Restated Notes or Series C Warrants or Series D Warrants: (i) comply
in all respects with the
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Corporations
Act 2001 (Cwth) and the Listing Rules of the Australian Stock Exchange Limited;
and, (ii) do not require any approval from the Australian Stock Exchange Limited
or shareholders of the Company. The
Company will not challenge, and based on the facts in existence as of the date
hereof, has no basis to disagree with, the Investor's position that the holding
period of the Second Amended and Restated Notes and the Second Amended and
Restated Conversion Shares may be tacked back to the date of issuance of the
Existing Notes for purposes of Rule 144 promulgated under the 1933 Act (or
a
successor rule) and will not take any action which would be likely to adversely
affect such tacking for the benefit of the Investor, including, without
limitation, taking negative action with respect to the reliance by the Company's
transfer agent on an opinion letter of the Investor's Legal
Counsel.
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4.
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CERTAIN
COVENANTS AND AGREEMENTS; RELEASE
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(a)
Disclosure
of Transactions and Other Material Information.
On or
before 10:30 a.m., New York Time, on the
second Business Day following the date of this Agreement, the Company shall
issue a press release (the "Initial
Press Release")
and
shall file a Form 6-K describing the terms of the transactions contemplated
by
this Agreement in the form required by the 1934 Act and attaching the material
Transaction Documents (including, without limitation, this Agreement (other
than
the schedules to this Agreement), the form of each of the Second Amended and
Restated Notes, the Second Amended and Restated Registration Rights Agreement,
the form of each of the Series C Warrants and the Series D Warrants) as exhibits
to such submission (such submission including all attachments, the "Initial
6-K Filing").
On or
before 8:30 a.m., New York Time, on the
first
Business Day following the Closing Date, the Company shall issue a press release
(the "Closing
Press Release")
and
shall file a Form 6-K describing the terms of the transactions contemplated
by
this Agreement in the form required by the 1934 Act and attaching any material
transaction documents not previously filed as exhibits to such filing
(including, without limitation, this Agreement (other than the schedules to
this
Agreement), the form of each of the Second Amended and Restated Notes, the
Second Amended and Restated Registration Rights Agreement, the form of each
of
the Series C Warrants and the Series D Warrants) as exhibits to such submission
(such submission including all attachments, the "Closing
6-K Filing",
and
together with the Initial 6-K Filing, the "6-K
Filings").
The
Initial Press Release and the Closing Press Release shall also indicate that
the
Company is seeking to raise additional funding. From and after the submission
of
the Closing 6-K Filing with the SEC, no Investor shall be in possession of
any
material, nonpublic information received from the Company, any of its
Subsidiaries or any of its respective officers, directors, employees or agents,
that is not disclosed in the 6-K Filings or in some other public filing or
public disclosure. The Company shall not, and shall cause each of its
Subsidiaries and its and each of their respective officers, directors, employees
and agents, not to, provide the Investor with any material, nonpublic
information regarding the Company or any of its Subsidiaries from and after
the
filing of the Closing 6-K Filing with the SEC without the express written
consent of the Investor. In the event of a breach of the foregoing covenant
by
the Company, any of its Subsidiaries, or any of its or their respective
officers, directors, employees and agents, in addition to any other remedy
provided herein or in the Transaction Documents, the Investor shall have the
right to require the Company to make promptly a public disclosure, in the form
of a press release, public advertisement or otherwise, of such material,
nonpublic information. Subject to the foregoing, neither the Company, its
Subsidiaries nor the Investor shall issue any press releases or any other public
statements with respect to the transactions contemplated hereby; provided,
however,
that
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the
Company shall be entitled, without the prior approval of the Investor, to make
any press release or other public disclosure with respect to such transactions
(i) in substantial conformity with the 6-K Filings and contemporaneously
therewith and (ii) as is required by applicable law and regulations (provided
that in the case of clause (i) the Investor shall be consulted by the Company
in
connection with any such press release or other public disclosure prior to
its
release).
(b)
Fees
and Expenses.
The
Company shall reimburse the Investor for its legal fees and expenses in
connection with the preparation and negotiation of this Agreement by paying
such
amount to Xxxxxxx Xxxx & Xxxxx LLP as set forth in such firm's written
invoice therefore (the "Investor
Counsel Expense").
Except as otherwise set forth in this Agreement, each party shall pay the fees
and expenses of its advisers, counsel, accountants and other experts, if any,
and all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement. The Company
shall pay all stamp and other taxes and duties levied in connection with the
issuance of the Second Amended and Restated Notes, Series C Warrants and Series
D Warrants.
(c)
Most
Favored Nation.
As of
the date hereof, the Company and the Investor agree that the ratio of (i) the
Black Scholes Value of the Series C Warrants and the Estimated Series D Warrants
to be issued to Investor hereunder and (ii) the Black Scholes Value of the
Nordic Warrants anticipated to be issued in the Interim Financing Transaction
equals 5.5 (the "Warrant
Ratio").
On
the Closing Date, if either (x) the exercise price of the Nordic Warrants issued
in the Interim Financing Transactions is less than $2.00 (a "Dilutive
Issuance Price")
or (y)
such Nordic Warrants are exercisable
to purchase more than One Million (1,000,000) ADSs (or their equivalent in
ordinary shares), the
Company
shall issue such Series D Warrants to the Investor with an exercise price equal
to such Dilutive Issuance Price (or if no Dilutive Issuance Price exists, the
exercise price shall remain at $2.00) and the number of ADSs issuable upon
exercise of such Series D Warrants (the "Actual
Series D Warrants")
shall
be increased as necessary to ensure that (A) the Black Scholes Value of the
Series C Warrants and the Actual Series D Warrants shall equal (B) the product
of (I) the Warrant Ratio and (II) the Black Scholes Value of the Nordic Warrants
issued in the Interim Financing Transaction; provided,
that,
notwithstanding the foregoing, if the Black Scholes Value of the Actual Series
D
Warrants is less than the Black Scholes Value of the Estimated Series D
Warrants, the Estimated Series D Warrants shall be issued to the Investor on
the
Closing Date. For
the
purpose of this Agreement,
"Black Scholes Value"
of any
warrant means the value of such warrant based on the Black and Scholes Option
Pricing Model obtained from the "OV" function on Bloomberg determined as of
the
day immediately preceding such date of determination and reflecting (i) a
risk-free interest rate corresponding to the U.S. Treasury rate for a period
equal to the remaining term of such warrant as of such date of request and
(ii)
an expected volatility equal to 60 percent.
(d)
Schedules.
The
Company hereby agrees that the Schedules referred to in Section 3(b) and 4(a)
shall be delivered to the Investor no later than the fifth (5th) Business Day
after the date hereof.
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CONDITIONS
TO ComPANY'S OBLIGATIONs hereunder.
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The
obligations of the Company to the Investor hereunder are subject to the
satisfaction of each of the following conditions, provided that these conditions
are for the Company's sole benefit and may be waived by the Company at any
time
in its sole discretion by providing the Investor with prior written notice
thereof:
(a)
The
Investor shall have executed this Agreement and delivered the same to the
Company.
(b)
If
on or
prior to March 31, 2007, the Interim Financing
Transactions shall have been consummated; provided, that after March 31, 2007
this condition shall no longer be a condition to the Company's obligations
hereunder.
(c)
The
representations and warranties of the Investor shall be true and correct in
all
material respects (except for those representations and warranties that are
qualified by materiality or Material Adverse Effect, which shall be true and
correct in all respects) as of the date when made and as of the Closing Date
as
though made at that time (except for representations and warranties that speak
as of a specific date, which shall remain true and correct as of such specific
date).
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6.
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CONDITIONS
TO INVESTOR'S OBLIGATIONS
HEREUNDER.
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The
obligations of the Investor hereunder are subject to the satisfaction of each
of
the following conditions, provided that these conditions are for the Investor's
sole benefit and may be waived by the Investor at any time in its sole
discretion by providing the Company with prior written notice
thereof:
(a)
The
Company shall have executed this Agreement and delivered the same to the
Investor.
(b)
The
Company shall have executed and delivered to the Investor the Series C Warrants
being issued to such Investor as of the date hereof.
(c)
The
Company shall have executed and delivered to the Investor the Second Amended
and
Restated Notes and the Series D Warrants being issued to such Investor at the
Closing.
(d)
The
Company shall have delivered to the Company's transfer agent, with a copy to
the
Investors, a letter stating that the
Irrevocable Transfer Agent Instructions dated October 5, 2005 shall also apply
to the Second
Amended and Restated Conversion Shares and the Second Amended and Restated
Registration Rights Agreement.
(e)
Such
Investor shall have received the opinion of Xxxxxx, Xxxxxx-Xxxxxxx, Colt &
Mosle LLP, the Company's outside U.S. counsel, and Xxxxx Xxxxxx Xxxxxxx, the
Company's outside Australian counsel, each dated as of the Closing Date, similar
in all material respects to the opinions delivered pursuant to the Amendment
Agreement.
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(f)
The
Company shall have delivered to the Investor a certificate, executed by the
Secretary of the Company and dated as of the Closing Date, as to (i) the
resolutions approving the transactions contemplated hereby as adopted by the
Board in a form reasonably acceptable to the Investor, and (ii) the
Constitution, each as in effect as of the Closing, similar in all material
respects to the certificate executed by the Secretary of the Company delivered
pursuant to the Amendment Agreement.
(g)
The
representations and warranties of the Company shall be true and correct in
all
material respects (except for those representations and warranties that are
qualified by materiality or Material Adverse Effect, which shall be true and
correct in all respects) as of the date when made and as of the Closing Date
as
though made at that time (except for representations and warranties that speak
as of a specific date, which shall remain true and correct as of such specific
date) and the Company shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by
the
Transaction Documents to be performed, satisfied or complied with by the Company
at or prior to the Closing Date and no Default or Event of Default shall have
occurred and be continuing on the date hereof either immediately before or
after
giving effect to this Agreement in accordance with its terms. The Investor
shall
have received a certificate, executed by the Chief Executive Officer of the
Company, dated as of the Closing Date, to the foregoing effect and as to such
other matters as may be reasonably requested by the Investor, similar in all
material respects to the certificate executed by the Chief Executive Officer
of
the Company delivered pursuant to the Amendment Agreement.
(h)
The
ADRs
(I) shall be designated for quotation or listed on the Principal Market and
(II)
shall not have been suspended, as of the Closing Date, by the SEC or the
Principal Market from trading on the Principal Market nor shall suspension
by
the SEC or the Principal Market have been threatened, as of the Closing Date,
either (A) in writing by the SEC or the Principal Market or (B) by falling
below
the minimum listing maintenance requirements of the Principal
Market.
(i)
The
Company shall have obtained all governmental, regulatory or third party consents
and approvals, if any, necessary for the issue and sale of the Securities,
including, without limitation, any approvals or notifications required by the
Principal Market.
(j)
The
Company shall have delivered to the Investor such Investor's Investor Counsel
Expense by wire transfer of immediately available funds pursuant to the wire
instructions provided by the Investor.
(k)
The
Company shall have delivered to the Investor such Investor's Letter Agreement
Payment Amount by wire transfer of immediately available funds pursuant to
the
wire instructions provided by the Investor on or prior to the earlier to occur
of (x) the Closing Date, (y) the date of the consummation of the Secondary
Financing and (z) March 31, 2007.
(l)
The
Company shall have delivered duly executed and delivered copies of the
transaction documents with respect to the Financing Transaction to the Investor,
which shall be in form and substance reasonably satisfactory to the Investor
and
the Financing Transactions shall have been consummated.
-9-
(m)
The
Stockholder Approval (as defined below) shall have been obtained.
|
7.
|
STOCKHOLDER
APPROVAL
|
(a)
Stockholder
Approval.
The
Company shall provide each stockholder entitled to vote at a special or annual
meeting of stockholders of the Company (the "Stockholder
Meeting"),
which
shall be called and held not later than February 23, 2007 (the "Stockholder
Meeting Deadline"),
a
proxy statement, substantially in the form which has been previously reviewed
by
the Buyers and Xxxxxxx Xxxx & Xxxxx LLP at the expense of the Company,
soliciting each such stockholder's affirmative vote at the Stockholder Meeting
for approval of resolutions (the "Resolutions")
providing for the issuance of all of the Securities (as defined in the Amended
Securities Purchase Agreement and any other ADSs issuable hereunder (such
affirmative
approval being referred to herein as the "Stockholder
Approval"
and the
date such approval is obtained, the "Stockholder
Approval Date"),
and
the Company shall use its reasonable best efforts to solicit its stockholders'
approval of the Resolutions and to cause the Board of Directors of the Company
to recommend to the stockholders that they approve the Resolutions. The Company
shall be obligated to seek to obtain the Stockholder Approval by the Stockholder
Meeting Deadline. If, despite the Company's reasonable best efforts the
Stockholder Approval is not obtained on or prior to the Stockholder Meeting
Deadline, the Company shall cause an additional Stockholder Meeting to be held
each twelve month period thereafter until such Stockholder Approval is obtained;
provided that if the Board of Directors of the Company does not recommend to
the
stockholders that they approve such resolutions at any such Stockholder Meeting
and the Stockholder Approval is not obtained, the Company shall cause an
additional Stockholder Meeting to be held each calendar quarter thereafter
until
such Stockholder Approval is obtained.
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8.
|
TERMINATION.
|
In
the
event that the Closing does not occur by April 2, 2007 (the "Termination
Date"),
due
to the Company's or the Investors' failure to satisfy the conditions set forth
in Sections 5 and 6 hereof (and the nonbreaching party's failure to waive such
unsatisfied conditions(s)), the nonbreaching party shall have the option to
terminate this Agreement at the close of business on such date without liability
of any party to any other party; provided,
however,
this if
this Agreement is terminated by the non-breaching Investor pursuant to this
Section 8, the Company shall remain obligated to reimburse the Investor for
the
expenses described in Section 4(c) above. Upon such termination, the terms
hereof shall be null and void and the parties shall continue to comply with
all
terms and conditions of the Transaction Documents, as in effect prior to the
execution of this Agreement.
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9.
|
MISCELLANEOUS.
|
(a)
Counterparts.
This
Agreement may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party;
provided that a facsimile signature shall be considered due execution and shall
be binding
-10-
upon
the
signatory thereto with the same force and effect as if the signature were an
original, not a facsimile signature.
(b)
Headings.
The
headings of this Agreement are for convenience of reference and shall not form
part of, or affect the interpretation of, this Agreement.
(c)
Severability.
If any
provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or
the
validity or enforceability of any provision of this Agreement in any other
jurisdiction.
(d)
Governing
Law; Jurisdiction; Jury Trial.
All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of New
York, without giving effect to any choice of law or conflict of law provision
or
rule (whether of the State of New York or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State
of
New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of
the state and federal courts sitting in The City of New York, Borough of
Manhattan, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction
of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process
and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it
under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
If any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or
the
validity or enforceability of any provision of this Agreement in any other
jurisdiction. EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.
(e)
No
Third Party Beneficiaries.
This
Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person.
(f)
Further
Assurances.
Each
party shall do and perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as the other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated
hereby.
-11-
(g)
No
Strict Construction.
The
language used in this Agreement will be deemed to be the language chosen by
the
parties to express their mutual intent, and no rules of strict construction
will
be applied against any party.
(h)
Entire
Agreement; Effect on Prior Agreements; Amendments.
Except
for the Transaction Documents (to the extent any such Transaction Document
is
not amended by this Agreement), this Agreement supersedes all other prior oral
or written agreements between the Investor, the Company, their affiliates and
Persons acting on their behalf with respect to the matters discussed herein,
and
this Agreement and the instruments referenced herein contain the entire
understanding of the parties with respect to the matters covered herein and
therein and, except as specifically set forth herein or therein, neither the
Company nor the Investor makes any representation, warranty, covenant or
undertaking with respect to such matters. No provision of this Agreement may
be
amended other than by an instrument in writing signed by the Company and the
Investor. No provision hereof may be waived other than by an instrument in
writing signed by the party against whom enforcement is sought. No consideration
shall be offered or paid to any Person to amend or consent to a waiver or
modification of any provision of any of the Transaction Documents unless the
same consideration also is offered to all of the parties to the Transaction
Documents, holders of Second Amended and Restated Notes or holders of the
Series C Warrants or holders of the Series D Warrants, as the case may be.
The Company has not, directly or indirectly, made any agreements with any of
the
Investors relating to the terms or conditions of the transactions contemplated
by the Transaction Documents except as set forth in the Transaction
Documents.
(i)
Notices.
Any
notices, consents, waivers or other communications required or permitted to
be
given under the terms of this Agreement must be in writing and will be deemed
to
have been delivered: (i) upon receipt, when delivered personally; (ii) upon
receipt, when sent by facsimile (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party);
or (iii) one Business Day after deposit with an overnight courier service,
in
each case properly addressed to the party to receive the same. The addresses
and
facsimile numbers for such communications shall be:
If
to the
Company:
pSivida
Limited
000
Xxxxxxxx Xxxxxx
Xxxxxxxxx,
XX 00000
Telephone: x0
000
000 0000
Facsimile: x0
000
000 0000
Attention: General
Counsel
with
a
copy (for informational purposes only) to:
Xxxxxx,
Xxxxxx-Xxxxxxx, Colt & Mosle LLP
000
Xxxx
Xxxxxx
Xxx
Xxxx,
XX 00000
-12-
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxxxxx
Xxxxxxx, Esq.
If
to the
Investor, to its address and facsimile number set forth in the Amended
Securities Purchase Agreement, with copies to the Investor's representatives
as
set forth on the Amended Securities Purchase Agreement or on the signature
page
to this Agreement,
with
a
copy (for informational purposes only) to:
Xxxxxxx
Xxxx & Xxxxx LLP
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
X.X.X.
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: Xxxxxxx
X. Xxxxx, Esq.
or
to
such other address and/or facsimile number and/or to the attention of such
other
Person as the recipient party has specified by written notice given to each
other party five (5) days prior to the effectiveness of such change. Written
confirmation of receipt (A) given by the recipient of such notice, consent,
waiver or other communication, (B) mechanically or electronically generated
by
the sender's facsimile machine containing the time, date, recipient facsimile
number and an image of the first page of such transmission or (C) provided
by an
overnight courier service shall be rebuttable evidence of personal service,
receipt by facsimile or receipt from an overnight courier service in accordance
with clause (i), (ii) or (iii) above, respectively.
The
Company hereby irrevocably appoints National Corporate Research, Ltd.,
of 000
Xxxx
00xx
Xxxxxx,
Xxxxx 000, Xxx Xxxx, X.X. 00000, X.X.X. ("NCR")
as its
agent for the receipt of service of process in the United States. The Company
agrees that any document may be effectively served on it in connection with
any
action, suit or proceeding in the United States by service on its agents. The
Investor consents and agrees that the Company may, in its reasonable discretion,
irrevocably appoint a substitute agent for the receipt of service of process
located within the Untied States, and that upon such appointment, the
appointment of NCR may be revoked.
Any
document shall be deemed to have been duly served if marked for the attention
of
the agent at its address as set forth in Section 9(i) or such other address
in
the United States as may be notified to the party wishing to serve the document
and (a) left at the specified address if its receipt is acknowledged in writing;
or (b) sent to the specified address by post, registered mail return receipt
requested. In the case of (a), the document will be deemed to have been duly
served when it is left and signed for. In the case of (b), the document shall
be
deemed to have been duly served when received and acknowledged.
If
the
Company's agent at any time ceases for any reason to act as such, the Company
shall appoint a replacement agent having an address for service in the United
States and shall notify the Investor of the name and address of the replacement
agent. Failing such
-13-
appointment
and notification, the holders of Second Amended and Restated Notes representing
not less than a majority of the aggregate principal amount of the then
outstanding Second Amended and Restated Notes shall be entitled by notice to
the
Company to appoint a replacement agent to act on the Company's behalf. The
provisions of this Section 9(i) applying to service on an agent apply equally
to
service on a replacement agent.
(j)
Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and assigns in accordance with the terms of the
Amended Securities Purchase Agreement.
(k)
Survival.
Unless
this Agreement is terminated under Section 8, the representations and warranties
of the Company and the Investor contained herein and the agreements and
covenants set forth herein shall survive the Closing.
(l)
Remedies.
The
Investor and each holder of the Securities shall have all rights and remedies
set forth in the Transaction Documents and all rights and remedies which such
holders have been granted at any time under any other agreement or contract
and
all of the rights which such holders have under any law. Any Person having
any
rights under any provision of this Agreement shall be entitled to enforce such
rights specifically (without posting a bond or other security), to recover
damages by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. Furthermore, the Company recognizes
that in the event that it fails to perform, observe, or discharge any or all
of
its obligations under this Agreement, any remedy at law may prove to be
inadequate relief to the Investor. The Company therefore agrees that the
Investor shall be entitled to seek temporary and permanent injunctive relief
in
any such case without the necessity of proving actual damages and without
posting a bond or other security.
[Signature
Page Follows.]
-14-
IN
WITNESS WHEREOF,
the
Investor and the Company have caused their respective signature page to this
Agreement to be duly executed as of the date first written above.
|
COMPANY:
|
|
PSIVIDA
LIMITED
By:
/s/
Xxxxxxx X. Xxxx
Name:
Xxxxxxx X. Xxxx
Title:
Vice President of Finance and Chief Financial
Officer
|
[Signature
Page to Second Amendment Agreement]
IN
WITNESS WHEREOF,
the
Investor and the Company have caused their respective signature page to this
Agreement to be duly executed as of the date first written above.
|
INVESTOR:
CASTLERIGG MASTER INVESTMENTS LTD.
|
|
BY:
XXXXXXX ASSET MANAGEMENT CORP
By:
Xxxxxxx
X’Xxxxx
Name:
Xxxxxxx X’Xxxxx
Title:
Chief Financial Officer
|
[Signature
Page to Second Amendment Agreement]
