Exhibit 10.2
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is made as of this 29th
day of March, 2005, by and among Molecular Insight Pharmaceuticals, Inc., a
Massachusetts corporation (the "Company"), and the investors identified on the
signature pages hereto (each an "Investor" and collectively, the "Investors").
RECITALS:
A. The Company desires to raise up to $30,000,030 (the "Aggregate
Purchase Price") through the issuance and sale to the Investors at a per share
purchase price of $202.00 (the "Per Share Purchase Price") of up to an aggregate
of 148,515 shares (the "Series C Preferred Shares") of a newly created series of
preferred stock, par value $0.01 per share, of the Company, designated as
"Series C Convertible Preferred Stock" (the "Series C Preferred Stock"), which
Series C Preferred Stock shall have the rights, preferences and privileges set
forth in the Articles of Amendment to the Articles of Organization of the
Company, in the form of Exhibit A attached hereto (the "Articles of Amendment");
B. Upon the terms and subject to the conditions set forth in this
Agreement and pursuant to Section 4(2) of the Securities Act of 1933, as
amended, and Rule 506 promulgated thereunder, the Investors desire to purchase
from the Company, and the Company desires to issue and sell to the Investors,
such number of shares of Series C Preferred Stock, as are set forth next to each
such Investor's name on the applicable Schedule I attached hereto; and
C. Contemporaneously with the purchase and sale of the Series C
Preferred Shares at each Closing, the parties hereto will enter into an Investor
Rights Agreement, in the form attached hereto as Exhibit B (the "Investor Rights
Agreement"), which shall, among other things, set forth the rights of the
Investors to: (i) the registration of shares of common stock, par value $0.01
per share, of the Company (the "Common Stock") issuable to the Investors upon
conversion of the Series C Preferred Stock; (ii) the receipt of certain
information from the Company; and (iii) the participation in future issuances
and transfers of securities of the Company.
NOW, THEREFORE, in consideration of the mutual promises made herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and each of the Investors, severally
and not jointly, hereto agree as follows:
1. Definitions. In addition to those terms defined above and elsewhere in
this Agreement, for the purposes of this Agreement, the following terms shall
have the meanings set forth in this Section 1:
"Affiliate" means, with respect to any Person, any other Person
which directly or indirectly Controls, is Controlled by, or is under common
Control with, such Person. Notwithstanding the foregoing, none of the Company,
its owners, officers, directors, employees, agents or advisors (or any of their
family members) shall be deemed an "Affiliate" of an Investor, unless any such
Person is otherwise (i.e., independent of the Company) an Affiliate of such
Investor.
"Aggregate Purchase Price" has the meaning set forth in the recitals
to this Agreement.
"Agreement" has the meaning set forth in the preamble to this
Agreement.
"Articles of Amendment" has the meaning set forth in the recitals to
this Agreement.
"Articles of Organization" means the Articles of Organization of the
Company filed with the Secretary of Commonwealth of the Commonwealth of
Massachusetts on January 10, 1997, as amended.
"Board" means the Board of Directors of the Company.
"Business Day" means a day, other than a Saturday or Sunday, on
which banks in New York, New York are open for the general transaction of
business.
"Cash Placement Agent Fee" means, with respect to each Closing, the
amount payable to the Placement Agent as compensation for the issuance and sale
of the Series C Preferred Shares pursuant to this Agreement and the other
Transaction Documents, which amount is set forth on Schedule 1.
"Cerberus" means Cerberus Capital Management, L.P., for itself
and/or one or more of its Affiliates and/or accounts managed by Cerberus Capital
Management, L.P., including, without limitation, Cerberus Partners, L.P.
"Cerberus Counsel" means Xxxxxxxxxx Xxxxxxx PC, counsel to Cerberus.
"Cerberus Counsel Fees" has the meaning set forth in Section 9.5.
"Closing" means, as the context in which such term is used requires,
the Initial Closing or a Follow-on Closing.
"Closing Date" means, as the context in which such term is used
requires, the Initial Closing Date or a Follow-on Closing Date.
"Co-Lead Investors" means Cerberus Partners, L.P. and MedCap
Partners, L.P.
"Commission" means the U.S. Securities and Exchange Commission or
any other successor federal agency then administering the Securities Act and
other federal securities laws.
"Common Stock" means the Common Stock and any other securities into
which or for which such Common Stock may be converted or exchanged pursuant to a
plan of recapitalization, reorganization, merger, consolidation, sale of assets
or other similar transaction.
"Company" has the meaning set forth in the preamble to this
Agreement.
"Company Counsel" means Xxxxx & Lardner LLP, counsel to the Company.
"Company's Knowledge" means the actual knowledge of the key
employees of the Company and of each of the Subsidiaries, after due inquiry and
investigation.
"Confidential Information" means trade secrets, confidential
information and know-how (including but not limited to ideas, formulae,
compositions, manufacturing and production processes, procedures and techniques,
research and development information, clinical data, computer program code,
performance specifications, support documentation, drawings, specifications,
designs, business and marketing plans, and customer and supplier lists and
related information).
"Control" means the possession, direct or indirect, of the power to
direct or cause the
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direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"Conversion Shares" means the shares of Common Stock issuable upon
conversion of the Series C Preferred Stock.
"Dividend Shares" means shares of Common Stock issuable as dividends
on the Series C Preferred Stock in accordance with the terms of the Articles of
Amendment.
"Environmental Laws" has the meaning set forth in Section 4.14.
"Escrow Amount" has the meaning set forth in Section 3.1(a).
"Escrow Termination Date" means: (a) in the case of the Initial
Closing, March 29, 2005; and (b) in the case of a Follow-on Closing, ten (10)
Business Days after Cerberus' receipt of the notice contemplated by Section
6.1(r); provided, however, Cerberus may, in its sole discretion, extend an
Escrow Termination Date by giving written notice to the Company and Cerberus
Counsel of its election to so extend such Escrow Termination Date, and such
Escrow Termination Date shall be the date specified in such notice, provided,
further, however, the Escrow Termination Date with respect to the Initial
Closing shall not be later than April 11, 2005, and in the case of a Follow-on
Closing, shall not be later than the sooner of the 61st day after the Initial
Closing Date and twenty (20) Business Days after Cerberus' receipt of the notice
contemplated by Section 6.1(r), and on such extended date, if such Closing shall
not have occurred, Cerberus Counsel shall return the Escrow Amount attributable
to such Closing in accordance with Section 3.1(b).
"FDA" means the U.S. Food and Drug Administration.
"FDCA" means the U.S. Food Drug and Cosmetics Act (FDCA), 21 U.S.C.
Sec. 301 et seq., as amended, and any successor federal statute, and the rules
and regulations promulgated thereunder, all as the same shall be in effect from
time to time.
"Financial Statements" has the meaning set forth in Section 4.6.
"Follow-on Closing" has the meaning set forth in Section 2.2(d).
"Follow-on Closing Date" has the meaning set forth in Section
2.2(d).
"Follow-on Investor" means an Investor who purchases shares of
Series C Preferred Stock in a Follow-on Closing, who must be either (x) engaged
in the same or a similar business or industry as the Company (i.e., strategic
investors), (y) approved in writing by Cerberus in its reasonable discretion or
(z) a holder of Series B Convertible Preferred Stock that exercises its right to
participate in the Follow-on Closing pursuant to Section 7 of Unit Purchase
Agreement dated February 23, 2004 by and among the Company and the purchasers of
Series B Convertible Preferred Stock named therein.
"Xxxxx-Xxxxxx Act" means the Drug Price Competition and Patent Term
Restoration Act of 1984 (Pub. L. 98-417 (1984)), otherwise known as the Hatch
Waxman of 1984, 21 U.S.C. 355, as amended, and any successor federal statute,
and the rules and regulations promulgated thereunder, all as the same shall be
in effect from time to time.
"Indebtedness" means all obligations, contingent and otherwise,
which should, in accordance with generally accepted accounting principles, be
classified upon the obligor's balance sheet
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(or the notes thereto) as liabilities, but in any event including liabilities
secured by any mortgage on property owned or acquired subject to such mortgage,
whether or not the liability secured thereby shall have been assumed, and also
including (i) all guaranties, endorsements and other contingent obligations, in
respect of Indebtedness of others, whether or not the same are or should be so
reflected in said balance sheet (or the notes thereto), except guaranties by
endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business and (ii) the present value of
any lease payments due under leases required to be capitalized in accordance
with applicable Statements of Financial Accounting Standards, determined by
discounting all such payments at the interest rate determined in accordance with
applicable Statements of Financial Accounting Standards.
"Indemnified Person" has the meaning set forth in Section 8.3.
"Initial Closing" has the meaning set forth in Section 2.2(a).
"Initial Closing Date" has the meaning set forth in Section 2.2(a).
"Initial Investor" means an Investor that purchases shares of Series
C Preferred Stock at the Initial Closing.
"Intellectual Property" means all of the following: (i) patents,
patent disclosures and inventions (whether or not patentable and whether or not
reduced to practice); (ii) trademarks, service marks, trade dress, trade names,
corporate names, logos, slogans and Internet domain names, together with all
goodwill associated with each of the foregoing; (iii) copyrights and
copyrightable works; (iv) registrations, applications and renewals for any of
the foregoing; (v) Confidential Information; and (vi) computer software
(including, but not limited to, data, data bases and documentation), but
excluding off-the-shelf non-customized software.
"Investor" has the meaning set forth in the preamble to this
Agreement, and refers to, as the context in which such term is used requires, an
Initial Investor or a Follow-on Investor; provided, that, if the context does
not so require, then such term refers to all Investors under this Agreement
regardless of which Closing such Investor purchases its Series C Preferred
Stock.
"Investor Rights Agreement" has the meaning set forth in the
recitals to this Agreement.
"Key Employee" means each of Xxxxx Xxxxxx, Xxxx Xxxxxx, Xxxxxxxx
Xxxxx and Xxxx XxXxxx.
"License Agreements" has the meaning set forth in Section 4.13(b).
"Losses" has the meaning set forth in Section 8.2.
"Material Adverse Change" means a material adverse change in (i) the
results of operations, assets, prospects, business or condition (financial or
otherwise) of the Company and its Subsidiaries, if any, taken as a whole; (ii)
the legality, validity or enforceability of any Transaction Document; or (iii)
the Company's ability to perform fully on a timely basis its obligations under
any of the Transaction Documents.
"Material Adverse Effect" means a material adverse effect on: (i)
the results of operations, assets, prospects, business or condition (financial
or otherwise) of the Company and its Subsidiaries, if any, taken as a whole;
(ii) the legality, validity or enforceability of any Transaction Document; or
(iii) the Company's ability to perform fully on a timely basis its obligations
under any of
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the Transaction Documents.
"Maximum Number" means 148,515 shares of Series C Preferred Stock.
"NDA" means a New Drug Application filed with the FDA.
"Per Share Purchase Price" has the meaning set forth in the recitals
to this Agreement.
"Person" means an individual, corporation, partnership, limited
liability company, trust, business trust, association, joint stock company,
joint venture, sole proprietorship, unincorporated organization, governmental
authority or any other form of entity not specifically listed herein.
"Placement Agent" means XX Xxxxx & Co.
"Regulation D" means Regulation D, as promulgated by the Commission
under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended, and
any successor federal statute, and the rules and regulations of the Commission
promulgated thereunder, all as the same shall be in effect from time to time.
"Series C Director" has the meaning ascribed thereto in the Articles
of Amendment.
"Series C Preferred Stock" has the meaning set forth in the recitals
to this Agreement.
"Series C Preferred Shares" has the meaning set forth in the
recitals to this Agreement.
"Shares" means the Series C Preferred Shares, the Conversion Shares
and the Dividend Shares.
"Subsidiary" or "Subsidiaries" means any corporation or trust of
which the Company and/or any of its other Subsidiaries directly or indirectly
owns at the time outstanding shares (regardless of class) of such corporation or
trust comprising more than 50% of the voting power of such corporation or trust.
"Transaction Documents" means this Agreement, the Articles of
Amendment, the Investor Rights Agreement, and each of the other agreements,
documents, certificates and instruments executed and delivered in connection
with the foregoing.
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2. Purchase and Sale of Securities; Initial and Follow-on Closings.
2.1. Purchase and Sale of Securities. Upon the terms and subject to the
conditions contained herein, at each Closing, the Company shall issue and sell,
and each Investor listed on Schedule I (in the case of the Initial Closing, and
Schedule I-A, Schedule I-B, and so on, in the case of each Follow-on Closing, if
any) attached hereto, shall severally, and not jointly, purchase, the number of
shares of Series C Preferred Stock in the amounts set forth opposite such
Investor's name on the applicable Schedule I attached hereto, in exchange for
the cash consideration set forth as the "Purchase Price" opposite such
Investor's name on the applicable Schedule I attached hereto. For purposes
hereof, the number of shares of Series C Preferred Stock with respect to each
Investor set forth on the applicable Schedule I shall be equal to the quotient
of the "Purchase Price" opposite such Investor's name on the applicable Schedule
I divided by the Per Share Purchase Price.
2.2. Closings.
(a) The initial closing of the transactions contemplated by this
Agreement (the "Initial Closing") shall take place at 10:00 a.m. at the offices
of Company Counsel, 000 Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, by
facsimile, e-mail or similar communication, on March 29, 2005, or as soon after
that as all of the conditions to the respective obligations of the Company and
the Initial Investors have been satisfied or waived (the "Initial Closing
Date"), or at such other location as the Company and Cerberus shall mutually
agree and/or on such other date as Cerberus shall determine in its sole
discretion, but in no event later than April 11, 2005.
(b) Upon satisfaction of the conditions to the applicable Closing
set forth in Section 6 hereof, the Company shall issue or cause to be issued to
each Investor, a certificate or certificates representing the number of shares
of Series C Preferred Stock as is set forth opposite such Investor's name on the
applicable Schedule I attached hereto, against delivery to the Company by
Cerberus Counsel, in its capacity as escrow agent hereunder, for the benefit of
such Investor of the amount set forth as the "Purchase Price" opposite such
Investor's name on the applicable Schedule I attached hereto, in immediately
available funds, by wire transfer to an account designated before the applicable
Closing in writing by the Company for such purpose.
(c) Upon satisfaction of the conditions to the applicable Closing
set forth in Section 6, the Company and Cerberus shall jointly instruct Cerberus
Counsel to release to the Company the Escrow Amount attributable to such
Closing.
(d) From time to time during the period beginning on the day after
the Initial Closing Date and ending 60 calendar days thereafter, in one or more
transactions (each, a "Follow-on Closing"), the Company may issue and sell a
number of shares of Series C Preferred Stock, up to the Maximum Number (less the
number of all shares of Series C Preferred Stock theretofore issued and sold by
the Company), on the same terms and conditions that all other shares of Series C
Preferred Stock have been issued and sold by the Company, to Follow-on Investors
who are either (x) engaged in the same or a similar business or industry as the
Company (i.e., strategic investors), (y) approved in writing by Cerberus in its
reasonable discretion or (z) holders of Series B Convertible Preferred Stock
that exercise their respective rights to participate in the Follow-on Closing
pursuant to Section 7 of Unit Purchase Agreement dated February 23, 2004 by and
among the Company and the purchasers of Series B Convertible Preferred Stock
named therein. The Company shall give written notice of each Follow-on Closing
to Cerberus as described in Section 6.1(r) at least five (5) days in advance of
such Follow-on Closing. Each Follow-on Closing shall take place at 10:00 a.m. at
the offices of Company Counsel, 000 Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000, by facsimile, e-mail or similar communication, no less
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than five (5) days after written notice thereof has been received by Cerberus as
described in Section 6.1(r), or as soon after that as all of the conditions to
the respective obligations of the Company and the Follow-on Investors to
consummate the Follow-on Closing have been satisfied or waived (each, a
"Follow-on Closing Date"), or at such other location as the Company and Cerberus
shall mutually agree and/or on such other date as each of them shall determine
in their sole discretion, but in no event later than the 61st day after the
Initial Closing Date. With each Follow-On Closing, the Company and each
Follow-On Investor shall execute a counter part signature page to this Agreement
and each of the other Transaction Documents to which the Investors are a party,
which counterpart signature page shall be deemed an amendment to the applicable
Agreement or Transaction Document without any further action on the part of the
other Investors and notwithstanding anything to the contrary in such agreement
pertaining to amendment thereof.
3. Escrow.
3.1. (a) Simultaneously with the execution and delivery of this
Agreement by an Investor, such Investor shall: (i) promptly cause a wire
transfer of immediately available funds (U.S. dollars) in an amount representing
the "Purchase Price", as set forth on such Investor's signature page and
opposite its name on the applicable Schedule I affixed hereto, to be paid to an
escrow account of Cerberus Counsel, in its capacity as escrow agent hereunder,
set forth on Schedule II affixed hereto (the aggregate amounts being held in
escrow are referred to herein as the "Escrow Amount"); and (ii) deliver to
Cerberus a duly executed counterpart to the Investor Rights Agreement. Cerberus
Counsel shall hold the Escrow Amount in escrow in accordance with Section
3.1(b). Cerberus Counsel shall invest the Escrow Amount received pursuant to
this Section 3.1(a) in accordance with the instructions set forth on Schedule
III, annexed hereto and made a part hereof.
(b) With respect to each Closing, Cerberus Counsel shall
continue to hold the Escrow Amount in escrow (as may be invested pursuant to
Schedule III) in accordance with and subject to this Agreement, from the date of
its receipt of the funds constituting the Escrow Amount until the sooner of: (x)
the Closing Date to which such Escrow Amount applies, in which case, such Escrow
Amount shall be distributed in accordance with Section 3.3; or (y) the
applicable Escrow Termination Date applicable to such Escrow Amount (after
taking into account any extensions thereof), in which case the Escrow Amount
attributable to such Closing shall be returned to the Investors in accordance
with their written wire transfer instructions delivered to Cerberus Counsel. In
the case of an Escrow Termination Date, if Cerberus Counsel has not received
written wire transfer instructions from any Investor before the 30th day after
the applicable Escrow Termination Date, then Cerberus Counsel may, in its sole
and absolute discretion, either (x) deposit that portion of the Escrow Amount to
be returned to such Investor in a court of competent jurisdiction on written
notice to such Investor and Cerberus Counsel shall thereafter have no further
liability with respect to such deposited funds, or (y) continue to hold such
portion of the Escrow Amount pending receipt of written wire transfer
instructions from such Investor or an order from a court of competent
jurisdiction, and in case of clauses (x) and (y), the reasonable fees and
expenses of Cerberus Counsel may be deducted from such portion of the Escrow
Amount.
3.2 The Company and the Investors acknowledge and agree for the
benefit of Cerberus Counsel (which shall be deemed to be a third party
beneficiary of this Section 3.2 and of Section 9.5) as follows:
(a) Cerberus Counsel: (i) is not responsible for the
performance by the Company or the Investors of this Agreement or any of the
Transaction Documents or for determining or compelling compliance therewith;
(ii) is only responsible for (A) holding the applicable Escrow Amount in escrow
pending receipt of written instructions from the Company and Cerberus directing
the release of such Escrow Amount, (B) disbursing the applicable
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Escrow Amount in accordance with the written instructions from the Company and
Cerberus, and (C) investing the applicable Escrow Amount in accordance with
Schedule III, each of the responsibilities of Cerberus Counsel in clause (A),
(B) and (C) is ministerial in nature, and no implied duties or obligations of
any kind shall be read into this Agreement against or on the part of Cerberus
Counsel (collectively, the "Cerberus Counsel Duties"); (iii) shall not be
obligated to take any legal or other action hereunder which might in its
judgment involve or cause it to incur any expense or liability unless it shall
have been furnished with indemnification acceptable to it, in its sole
discretion; (iv) may rely on and shall be protected in acting or refraining from
acting upon any written notice, instruction (including, without limitation, wire
transfer instructions, whether incorporated herein or provided in a separate
written instruction), instrument, statement, certificate, request or other
document furnished to it hereunder and believed by it to be genuine and to have
been signed or presented by the proper Person, and shall have no responsibility
for making inquiry as to, or for determining, the genuineness, accuracy or
validity thereof, or of the authority of the Person signing or presenting the
same; and (v) may consult counsel satisfactory to it, and the opinion or advice
of such counsel in any instance shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with the opinion or advice of such counsel.
Documents and written materials referred to in this Section 3.2(a) include,
without limitation, e-mail and other electronic transmissions capable of being
printed, whether or not they are in fact printed; and any such e-mail or other
electronic transmission may be deemed and treated by Cerberus Counsel as having
been signed or presented by a Person if it bears, as sender, the Person's e-mail
address.
(b) Cerberus Counsel shall not be liable to anyone for any
action taken or omitted to be taken by it hereunder, except in the case of
Cerberus Counsel's gross negligence or willful misconduct in breach of Cerberus
Counsel Duties. IN NO EVENT SHALL CERBERUS COUNSEL BE LIABLE FOR INDIRECT,
PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGE OR LOSS (INCLUDING BUT NOT LIMITED TO
LOST PROFITS) WHATSOEVER, EVEN IF CERBERUS COUNSEL HAS BEEN INFORMED OF THE
LIKELIHOOD OF SUCH LOSS OR DAMAGE AND REGARDLESS OF THE FORM OF ACTION.
(c) The Company and the Investors jointly and severally,
hereby indemnify and hold harmless Cerberus Counsel from and against any and all
loss, liability, cost, damage and expense, including, without limitation,
reasonable counsel fees and expenses, which Cerberus Counsel may suffer or incur
by reason of any action, claim or proceeding brought against Cerberus Counsel
arising out of or relating to the performance of Cerberus Counsel Duties only,
unless such action, claim or proceeding is exclusively the result of the willful
misconduct or gross negligence of Cerberus Counsel.
(d) Cerberus Counsel has acted as legal counsel to Cerberus in
connection with this Agreement and the other Transaction Documents, is merely
acting as a stakeholder, in its capacity as escrow agent hereunder, and is,
therefore, hereby authorized to continue acting as legal counsel to Cerberus
including, without limitation, with regard to any dispute arising out of this
Agreement, the other Transaction Documents, the Escrow Amount or any other
matter. Each of the Company and each Investor hereby expressly consents to
permit Cerberus Counsel to represent Cerberus in connection with all matters
relating to this Agreement, including, without limitation, with regard to any
dispute arising out of this Agreement, the other Transaction Documents, the
Escrow Amount or any other matter, and hereby waives any conflict of interest or
appearance of conflict or impropriety with respect to such representation. Each
of the Company and the Investors has consulted with its own counsel specifically
about this Section 3 to the extent they deemed necessary, and has entered into
this Agreement after being satisfied with such advice.
(e) Cerberus Counsel shall have the right at any time to
resign for any reason and be discharged of its duties as escrow agent hereunder
by giving written notice of its resignation to the
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Company and Cerberus at least ten (10) calendar days prior to the specified
effective date of such resignation. All obligations of Cerberus Counsel
hereunder shall cease and terminate on the effective date of its resignation and
its sole responsibility thereafter shall be to hold the Escrow Amount, for a
period of ten (10) calendar days following the effective date of resignation, at
which time:
(i) if a successor escrow agent shall have been
appointed and have accepted such appointment in a
writing to both the Company and Cerberus, then
upon written notice thereof given to each of the
Investors or Follow-on Investors, as the case may
be, Cerberus Counsel shall deliver the Escrow
Amount to the successor escrow agent, and upon
such delivery, Cerberus Counsel shall have no
further liability or obligation; or
(ii) if a successor escrow agent shall not have been
appointed, for any reason whatsoever, Cerberus
Counsel shall at its option in its sole
discretion, either (A) deliver the applicable
Escrow Amount then held by it to a court of
competent jurisdiction selected by Cerberus
Counsel and give written notice thereof to the
Company and the Investors or Follow-on Investors,
as the case may be, or (B) continue to hold Escrow
Amount in escrow pending written direction from
the Company and Cerberus in form and formality
satisfactory to Cerberus Counsel.
(f) In the event that Cerberus Counsel shall be uncertain as
to its duties or rights hereunder or shall receive written instructions with
respect to an Escrow Amount or any portion thereunder which, in its sole
discretion, are in conflict either with other written instructions received by
it or with any provision of this Agreement, Cerberus Counsel shall have the
absolute right to suspend all further performance under this Agreement (except
for the safekeeping of such Escrow Amount) until such uncertainty or conflicting
instructions have been resolved to Cerberus Counsel's sole satisfaction by final
judgment of a court of competent jurisdiction or joint written instructions from
the Company and Cerberus. In the event that any controversy arises between the
Company and one or more of the Investors or Follow-on Investors, as the case may
be, or any other party with respect to this Agreement or any Escrow Amount,
Cerberus Counsel shall not be required to determine the proper resolution of
such controversy or the proper disposition of such Escrow Amount, and shall have
the absolute right, in its sole discretion, to deposit the Escrow Amount
pertaining to such Investor(s) with the clerk of a court selected by Cerberus
Counsel and file a suit in interpleader in that court and obtain an order from
that court requiring all parties involved to litigate in that court their
respective claims arising out of or in connection with the disputed portion of
the Escrow Amount. Upon the deposit by Cerberus Counsel of the disputed portion
of the Escrow Amount with the clerk of such court in accordance with this
provision, Cerberus Counsel shall thereupon be relieved of all further
obligations and released from all liability hereunder with respect to the
disputed portion of the Escrow Amount.
(g) The provisions of Section 3 shall survive any termination
of this Agreement.
3.3 Release of Escrow upon Closing. Cerberus Counsel, in its
capacity as escrow agent hereunder, shall, at the applicable Closing, release
that portion of the Escrow Amount attributable to such Closing in accordance
with the following:
(a) in the case of the Initial Closing, receipt of written
instructions from the Company and Cerberus that the Initial Closing shall have
been consummated, in which case, Cerberus
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Counsel shall release that portion of the Escrow Amount constituting the
aggregate "Purchase Price" reflected on the Schedule I attributable to the
Initial Closing as follows: (A) the portion of the Cash Placement Agent Fee
applicable to the Initial Closing to the Placement Agent, (B) subject to
Section 9.5, the Cerberus Counsel Fees for the Initial Closing to Cerberus
Counsel and (C) the balance of the aggregate "Purchase Price" reflected on
Schedule I to the Company; and
(b) in the case of each Follow-on Closing, if any, receipt of
written instructions from the Company and Cerberus that such Follow-on Closing
shall have been consummated, in which case, Cerberus Counsel shall release that
portion of the Escrow Amount constituting the aggregate "Purchase Price"
reflected on the applicable Schedule I attributable to such Follow-on Closing as
follows: (A) the portion of the Cash Placement Agent Fee applicable to such
Follow-on Closing to the Placement Agent, (B) subject to Section 9.5, the
Cerberus Counsel Fees for such Follow-on Closing to Cerberus Counsel, and (C)
the balance of the Escrow Amount then held by Cerberus Counsel to the Company.
4. Representations and Warranties of the Company. The Company hereby
represents and warrants to each Investor, severally and not jointly, on and as
of the date hereof and the applicable Closing Date, knowing and intending such
Investor's reliance hereon, that:
4.1. Organization, Good Standing and Qualification. Each of the
Company and its Subsidiaries, a complete list of which is set forth in Schedule
4.1 hereto, is a corporation duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has all
requisite corporate power and authority to carry on its business as now
conducted and to own its properties. Each of the Company and its Subsidiaries is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction in which the conduct of its business or its ownership or
its leasing of property makes such qualification or licensing necessary, unless
the failure to so qualify in any such jurisdiction would not have a Material
Adverse Effect.
4.2. Authorization. The Company has the requisite corporate power
and authority and has taken all requisite action on the part of the Company, its
officers, directors and stockholders necessary for: (i) the authorization,
execution and delivery of the Transaction Documents; (ii) the authorization of
the performance of all obligations of the Company hereunder or thereunder; and
(iii) the authorization, issuance (or reservation for issuance) and delivery of
the Shares. The Transaction Documents constitute the legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
their respective terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability, relating
to or affecting creditors' rights generally and general principles of equity.
4.3. Capitalization.
(a) Schedule 4.3(a) sets forth (without giving effect to the
Articles of Amendment): (i) the authorized capital stock of the Company on the
date hereof; (ii) the number of shares of capital stock issued and outstanding;
(iii) the number of shares of capital stock issuable, and the number of shares
of capital stock reserved for issuance, pursuant to the Company's stock plans;
and (iv) the number of shares of capital stock issuable and reserved for
issuance pursuant to securities (other than the Shares) exercisable for, or
convertible into or exchangeable for any shares of capital stock of the Company.
All of the shares of the Company's capital stock have been, or upon issuance
will be, duly authorized, validly issued, fully paid, nonassessable and free of
preemptive rights and were, or upon issuance will be, issued in full compliance
with applicable law and any rights of third parties. All of the issued and
outstanding shares of capital stock of each Subsidiary have been duly authorized
and validly issued and are fully paid, nonassessable and free of preemptive
rights, were issued in full compliance with applicable law and any rights of
third parties and are owned by the Company, beneficially and of record,
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and, except as described on Schedule 4.3(a), are subject to no lien, encumbrance
or other adverse claim. Except as set forth on Schedule 4.3(a), no Person is
entitled to preemptive or similar statutory or contractual rights with respect
to any securities of the Company. Except as described on Schedule 4.3(a), there
are no outstanding warrants, options, convertible securities or other rights,
agreements or arrangements of any character under which the Company or any of
its Subsidiaries is or may be obligated to issue any equity securities of any
kind and, except as contemplated by this Agreement, neither the Company nor any
of its Subsidiaries is currently in negotiations for the issuance of any equity
securities of any kind. Except as described on Schedule 4.3(a) and except for
the Investor Rights Agreement, there are no voting agreements, buy-sell
agreements, option or right of first purchase agreements or other agreements of
any kind among the Company and any of its security holders or other third
parties relating to the securities of the Company. Except as described on
Schedule 4.3(a) and except for the Investor Rights Agreement, the Company has
not granted any Person the right to require the Company to register any of its
securities under the Securities Act, whether on a demand basis or in connection
with the registration of securities of the Company for its own account or for
the account of any other Person.
(b) Schedule 4.3(b) sets forth a true and complete table
setting forth the pro forma capitalization of the Company on a fully diluted
basis giving effect to: (i) the issuance of the Series C Preferred Shares
through and including the applicable Closing; (ii) any adjustments in other
securities resulting from the issuance of the Series C Preferred Shares through
and including the applicable Closing; and (iii) the exercise or conversion of
all outstanding securities. Except as described on Schedule 4.3(b), the issuance
and sale of the Series C Preferred Shares hereunder will not obligate the
Company to issue shares of Common Stock or other securities to any other Person
(other than the Investors in their capacity as Investors hereunder) and will not
result in the adjustment of the exercise, conversion, exchange or reset price of
any outstanding security.
4.4. Valid Issuance. The Series C Preferred Shares have been duly
and validly authorized and, when issued to the Investors in accordance with the
terms of this Agreement, will be validly issued, fully paid and nonassessable,
shall have the rights, preferences and limitations set forth in the Articles of
Amendment and the Investor Rights Agreement and shall be free and clear of all
liens, claims, encumbrances and restrictions, except for restrictions on
transfer set forth in the Transaction Documents or imposed by applicable
securities laws. Upon the due conversion of the Series C Preferred Stock, the
Conversion Shares will be validly issued, fully paid and nonassessable, and
shall be free and clear of all liens, claims, encumbrances and restrictions,
except for restrictions on transfer set forth in the Transaction Documents or
imposed by applicable securities laws. The Company has reserved a sufficient
number of shares of Common Stock for issuance upon conversion of the Series C
Preferred Stock.
4.5. Consents. The execution, delivery and performance by the
Company of the Transaction Documents and the offer, issuance and sale of the
Shares require no consent of, authorization by, exemption from, filing with or
notice to, any governmental body, agency, official or any other Person, other
than those filings that have been made pursuant to applicable state securities
laws and those post-sale filings pursuant to applicable state and federal
securities laws which the Company undertakes to file within the applicable time
periods. The Company has taken all action necessary to exempt: (i) the issuance
and sale of the Shares; (ii) the issuance of the Conversion Shares upon due
conversion of the Series C Preferred Stock; and (iii) the other transactions
contemplated by the Transaction Documents from the provisions of any
anti-takeover, business combination or control share law or statute binding on
the Company or to which the Company or any of its assets and properties may be
subject or any provision of the Company's Articles of Organization, Bylaws or
any stockholder rights agreement that is or could become applicable to the
Investors as a result of the transactions contemplated hereby, including without
limitation, the issuance of the Shares and the ownership, disposition or voting
of the Shares by the Investors or the exercise of any right granted to the
Investors pursuant to this Agreement or the other Transaction Documents.
-11-
4.6. Financial Information. The unaudited financial statements of
the Company as of and for the (a) fiscal year ended December 31, 2003 and (b)
nine-month period ended September 30, 2004, attached hereto as Schedule 4.6,
present fairly in all material respects the financial position of the Company as
of the dates thereof and the results of operations for the periods covered
thereby, and have been prepared in accordance with generally accepted accounting
principles consistently applied, except for the absence of footnotes and normal
recurring adjustments not customarily included in such unaudited statements (the
"Financial Statements").
4.7. No Material Adverse Change. Except as identified and described
on Schedule 4.7(a), since September 30, 2004, there has not been:
(i) any change in the consolidated assets, liabilities,
financial condition or operating results of the Company from that reflected in
the Financial Statements, except for changes (x) as a result of the Company's
conduct of business in the ordinary course or as a result of the passage of
time, or (y) which have not had a Material Adverse Effect, individually or in
the aggregate;
(ii) any declaration or payment of any dividend, or any
authorization or payment of any distribution, on any of the capital stock of the
Company, or any redemption or repurchase of any securities of the Company;
(iii) any material damage, destruction or loss, whether or not
covered by insurance, to any assets or properties of the Company or its
Subsidiaries;
(iv) any waiver, not in the ordinary course of business, by
the Company or any Subsidiary of a material right or of a material debt owed to
it;
(v) any satisfaction or discharge of any lien, claim or
encumbrance or payment of any obligation by the Company or a Subsidiary, except
which is not material to the assets, properties, financial condition, operating
results, prospects or business of the Company and its Subsidiaries, taken as a
whole;
(vi) any change or amendment to the Company's Articles of
Organization or Bylaws, or material change to any material contract or
arrangement by which the Company or any Subsidiary is bound or to which any of
their respective assets or properties is subject;
(vii) any material labor difficulties or labor union
organizing activities with respect to employees of the Company or any
Subsidiary;
(viii) any material transaction entered into by the Company or
a Subsidiary other than in the ordinary course of business;
(ix) the loss of the services of any Key Employee, or change
in the composition or duties of any executive officers of the Company or any
Subsidiary;
(x) the loss or threatened loss of any customer which has had
or could reasonably be expected to have a Material Adverse Effect; or
(xi) any other event or condition of any character that has
had or could reasonably be expected to have a Material Adverse Effect.
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4.8. No Conflict, Breach, Violation or Default. The execution,
delivery and performance of the Transaction Documents by the Company and the
issuance and sale of the Shares will not (with or without the lapse of time or
the giving of notice, or both) conflict with or result in a breach or violation
of any of the terms and provisions of, or constitute a default under: (i) the
Company's Articles of Organization or Bylaws, both as in effect on the date
hereof (true and accurate copies of which have been provided to the Investors
before the date hereof); or (ii)(a) any statute, rule, regulation or order of
any governmental agency or body or any court, domestic or foreign, having
jurisdiction over the Company, any Subsidiary or any of their respective assets
or properties that would have a Material Adverse Effect, or (b) except as set
forth on Schedule 4.8, any agreement or instrument to which the Company or any
Subsidiary is a party or by which the Company or a Subsidiary is bound or to
which any of their respective assets or properties is subject, other than a
conflict, breach, violation or default which would not have a Material Adverse
Effect.
4.9. Tax Matters. Each of the Company and each Subsidiary has timely
prepared and filed all tax returns required to have been filed by the Company or
such Subsidiary with all appropriate governmental agencies and timely paid all
taxes shown as due thereon. The charges, accruals and reserves on the books of
the Company in respect of taxes for all fiscal periods are adequate in all
material respects, and there are no material unpaid assessments against the
Company or any Subsidiary nor, to the Company's Knowledge, any basis for the
assessment of any additional taxes, penalties or interest for any fiscal period
or audits by any federal, state or local taxing authority except for any
assessment which is not material to the Company and its Subsidiaries, taken as a
whole. All taxes and other assessments and levies that the Company or any
Subsidiary is required to withhold or to collect for payment have been duly
withheld and collected and paid to the proper governmental entity or third party
when due. There are no tax liens or claims pending or, to the Company's
Knowledge, threatened against the Company or any Subsidiary or any of their
respective assets or properties. Except as described on Schedule 4.9, there are
no outstanding tax sharing agreements or other such arrangements between the
Company and any Subsidiary or other corporation or entity. Neither the Company
nor any Subsidiary is presently undergoing any audit by a taxing authority, or
has waived or extended any statute of limitations at the request of any taxing
authority.
4.10. Title to Properties. The Company and each Subsidiary has good
and marketable title to all real properties and all other properties and assets
owned by it, in each case free from liens, encumbrances and defects that would
materially affect the value thereof or materially interfere with the use
currently made or currently planned to be made thereof by them; and the Company
and each Subsidiary holds any leased real or personal property under valid and
enforceable leases with no exceptions that would materially interfere with the
use currently made or currently planned to be made thereof by them.
4.11. Certificates, Authorities and Permits. The Company and each
Subsidiary possess adequate certificates, authorities or permits issued by
appropriate governmental agencies or bodies necessary to conduct the business
now operated by it, and neither the Company nor any Subsidiary has received any
notice of proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely to the Company or
such Subsidiary, could reasonably be expected to have a Material Adverse Effect,
individually or in the aggregate.
4.12. No Labor Disputes. No material labor dispute with the
employees of the Company or any Subsidiary exists or, to the Company's
Knowledge, is imminent.
4.13. Intellectual Property.
(a) All Intellectual Property of the Company and its
Subsidiaries is currently
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in compliance with all legal requirements (including timely filings, proofs and
payments of fees), except where the failure to so comply with any of such
requirements, individually or in the aggregate, would not have a Material
Adverse Effect, and is valid and enforceable. Except as listed on Schedule
4.13(a), no Intellectual Property of the Company or its Subsidiaries which is
necessary for the conduct of Company's and each of its Subsidiaries' respective
businesses as currently conducted or as currently proposed to be conducted has
been or is now involved in any cancellation, dispute or litigation, and, to the
Company's Knowledge, no such action is threatened. Except as listed on Schedule
4.13(a), no patent of the Company or its Subsidiaries has been or is now
involved in any interference, reissue, re-examination or opposition proceeding.
(b) All of the licenses and sublicenses and consent, royalty
or other agreements concerning Intellectual Property which are necessary for the
conduct of the Company's and each of its Subsidiaries' respective businesses as
currently conducted or as currently proposed to be conducted to which the
Company or any Subsidiary is a party or by which any of their assets are bound
(other than generally commercially available, non-custom, off-the-shelf software
application programs having a retail acquisition price of less than $10,000 per
license) (collectively, "License Agreements") are valid and binding obligations
of the Company or its Subsidiaries that are parties thereto and, to the
Company's Knowledge, the other parties thereto, enforceable in accordance with
their terms, except to the extent that enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws affecting the enforcement of creditors' rights generally, and
there exists no event or condition which will result in a material violation or
material breach of or constitute (with or without due notice or lapse of time or
both) a material default by the Company or any of its Subsidiaries or, to the
Company's Knowledge, any other party, under any such License Agreement.
(c) The Company and its Subsidiaries own or have the valid
right to use all of the Intellectual Property that is necessary for the conduct
of the Company's and each of its Subsidiaries' respective businesses as
currently conducted or as currently proposed to be conducted, free and clear of
all (x) liens, encumbrances or adverse claims with respect to Intellectual
Property that is owned by the Company or any of its Subsidiaries, or (y)
obligations to license all such owned Intellectual Property and Confidential
Information, other than licenses entered into in the ordinary course of the
Company's and its Subsidiaries' businesses. The Company and its Subsidiaries
have a valid and enforceable right to use all third party Intellectual Property
and Confidential Information used or held for use in the respective businesses
of the Company and its Subsidiaries as currently conducted or as currently
proposed to be conducted.
(d) The conduct of the Company's and its Subsidiaries'
businesses as currently conducted and as currently proposed to be conducted does
not and will not, to the Company's Knowledge, infringe any Intellectual Property
rights of any third party or any confidentiality obligation owed to a third
party. To the Company's Knowledge, the Intellectual Property and Confidential
Information of the Company and its Subsidiaries which are necessary for the
conduct of Company's and each of its Subsidiaries' respective businesses as
currently conducted or as currently proposed to be conducted are not being
infringed by any third party. Except as set forth on Schedule 4.13(d), there is
no litigation or order pending or outstanding or, to the Company's Knowledge,
threatened, that seeks to limit or challenge or that concerns the ownership,
use, validity or enforceability of any Intellectual Property or Confidential
Information of the Company and its Subsidiaries and the Company's and its
Subsidiaries' use of any Intellectual Property or Confidential Information owned
by a third party, and, to the Company's Knowledge, there is no valid basis for
the same.
(e) The consummation of the transactions contemplated hereby
will not result in the alteration, loss, impairment of or restriction on the
Company's or any of its Subsidiaries'
-14-
ownership or right to use any of the Intellectual Property or Confidential
Information which is necessary for the conduct of the Company's and each of its
Subsidiaries' respective businesses as currently conducted or as currently
proposed to be conducted.
(f) To the Company's Knowledge, all software owned by the
Company or any of its Subsidiaries, and, to the Company's Knowledge, all
software licensed from third parties by the Company or any of its Subsidiaries:
(i) is free from any material defect or programming, design or documentation
error; (ii) operates and runs in a reasonable and efficient business manner; and
(iii) conforms in all material respects to the specifications and purposes
thereof.
(g) The Company and its Subsidiaries have taken reasonable
steps to protect the Company's and its Subsidiaries' rights in their
Intellectual Property and Confidential Information. Each employee, consultant
and contractor who has had access to Confidential Information and Intellectual
Property which is necessary for the conduct of Company's and each of its
Subsidiaries' respective businesses as currently conducted or as currently
proposed to be conducted has executed an agreement to maintain the
confidentiality of such Confidential Information and Intellectual Property and
has executed appropriate agreements that are substantially consistent with the
Company's standard forms therefor. To the Company's Knowledge, there has been no
material disclosure of any of the Company's or its Subsidiaries' Confidential
Information or Intellectual Property to any third party without the Company's
consent.
4.14. Environmental Matters. Neither the Company nor any Subsidiary:
(i) is in violation of any statute, rule, regulation, decision or order of any
governmental agency or body or any court, domestic or foreign, relating to the
use, disposal or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to hazardous or
toxic substances (collectively, "Environmental Laws"); (ii) owns or operates any
real property contaminated with any substance that is subject to any
Environmental Laws; (iii) is liable for any off-site disposal or contamination
pursuant to any Environmental Laws; and (iv) to the Company's Knowledge, is
subject to any claim relating to any Environmental Laws; in each case, to the
extent such violation, contamination, liability or claim has had or could
reasonably be expected to have a Material Adverse Effect, individually or in the
aggregate; and there is no pending or, to the Company's Knowledge, threatened
investigation that might lead to such a claim.
4.15. Litigation. Except as set forth on Schedule 4.15, there are no
pending actions, suits or proceedings against or affecting the Company, its
Subsidiaries or any of its or their properties; and to the Company's Knowledge,
no such actions, suits or proceedings are threatened or contemplated.
4.16. Insurance Coverage. Set forth on Schedule 4.16 is a true and
complete list of all insurance policies maintained by the Company in force as of
the date of this Agreement (including name of insurer, agent, annual premium,
coverage, deductible amounts and expiration date). The Company is not in default
regarding the payment of any premiums due with respect to the insurance policies
on Schedule 4.16.
4.17. Brokers and Finders. Except as set forth on Schedule 4.17, no
Person will have, as a result of the transactions contemplated by this Agreement
or the other Transaction Documents, any valid right, interest or claim against
or upon the Company or any Subsidiary for any commission, fee or other
compensation pursuant to any agreement, arrangement or understanding entered
into by or on behalf of the Company.
4.18. No Directed Selling Efforts or General Solicitation. Neither
the Company nor any Affiliate, nor any Person acting on its behalf has conducted
any "general solicitation" or "general
-15-
advertising" (as those terms are used in Regulation D) in connection with the
offer or sale of any of the Securities.
4.19. No Integrated Offering. Neither the Company nor any of its
Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any Company security or solicited any
offers to buy any Company security under circumstances that would adversely
affect reliance by the Company on Section 4(2) of the Securities Act for the
exemption from the registration requirements imposed under Section 5 of the
Securities Act for the transactions contemplated by this Agreement or the other
Transaction Documents or would require such registration under the Securities
Act.
4.20. Private Placement. Subject to the accuracy of the
representations and warranties of the Investors contained in Section 5 hereof,
the offer and sale of the Shares to the Investors as contemplated hereby is made
in reliance upon available exemptions from the registration requirements of the
Securities Act.
4.21. Questionable Payments. Neither the Company nor any of its
Subsidiaries nor, to the Company's Knowledge, any of their respective current or
former stockholders, directors, officers, employees, agents or other Persons
acting on behalf of the Company or any Subsidiary, has on behalf of the Company
or any Subsidiary or in connection with their respective businesses: (i) used
any corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity; (ii) made any direct or
indirect unlawful payments to any governmental officials or employees from
corporate funds; (iii) established or maintained any unlawful or unrecorded fund
of corporate monies or other assets; (iv) made any false or fictitious entries
on the books and records of the Company or any Subsidiary; or (v) made any
unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful
payment of any nature.
4.22. Transactions with Affiliates. Except as set forth on Schedule
4.22, there are no loans, leases, royalty agreements or other continuing
transactions between the Company and (a) any Person owning 5% or more of any
class of capital stock of the Company, or (b) any member of the immediate family
of such stockholder or an officer, employee or director of the Company, or (c)
any corporation or other entity controlled by an officer, employee, director or
stockholder of the Company or a member of the immediate family of such officer,
employee, director or stockholder.
4.23. Disclosure. This Agreement, the other Transaction Documents
and certificates furnished to the Investors or their counsel by or on behalf of
the Company at the applicable Closing in connection with the transactions
contemplated hereby do not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
contained herein or therein, in light of the circumstances under which they were
made, not misleading.
4.24. FDA Matters. The Company has provided the Investors with a
true and accurate copy of all material correspondence with and submissions to
the U.S. Food and Drug Administration (the "FDA"). The Company has not received
from the FDA or any other governmental agency any other material communication,
written or oral, pertaining to the Company's protocols or trials. To the
Company's Knowledge, (a) neither the FDA nor any other governmental agency
intends to take an adverse position or action with respect to the Company's
protocols or trials, and (b) no facts or circumstances exist which would cause
the FDA or any other governmental agency to take such adverse position or
action.
-16-
5. Representations and Warranties of the Investors. Each of the Investors
hereby severally, and not jointly, represents and warrants to the Company on and
as of the date hereof, knowing and intending that the Company rely thereon,
that:
5.1. Authorization. The Investor has the requisite power and
authority to enter into this Agreement, the Investor Rights Agreement and any
other Transaction Document to which it is a party. The execution, delivery and
performance by the Investor of the Transaction Documents to which such Investor
is a party have been duly authorized and will each constitute the valid and
legally binding obligation of the Investor, enforceable against the Investor in
accordance with their respective terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability, relating to or affecting creditors' rights generally, and general
principles of equity.
5.2. Purchase Entirely for Own Account. The Shares to be received by
the Investor hereunder will be acquired for the Investor's own account, not as
nominee or agent, for investment purposes only and not with a view to the resale
or distribution of any part thereof in violation of the Securities Act, and the
Investor has no present intention of selling, granting any participation in, or
otherwise distributing the same in violation of the Securities Act. The Investor
is not a registered broker-dealer or an entity engaged in the business of being
a broker-dealer.
5.3. Investment Experience. The Investor acknowledges that it can
bear the economic risk and complete loss of its investment in the Shares and it
has such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment contemplated
hereby. The Investor has significant experience in making private investments,
similar to the purchase of the Shares hereunder. The Investor understands that
its investment in the Shares involves a high degree of risk.
5.4. Disclosure of Information. The Investor has received all
additional information related to the Company and the offer and sale of the
Shares as requested by it and has had an opportunity to ask questions of and
receive answers from the Company regarding the Company, its business and the
terms and conditions of the offering of the Shares. Neither such inquiries nor
any other due diligence investigation conducted by the Investor shall modify,
amend or affect the Investor's right to rely on the Company's representations
and warranties contained in this Agreement.
5.5. Reliance on Exemptions. Each Investor understands that (i) the
Shares are being offered and sold in reliance upon specific exemptions from the
registration requirements of the U.S. federal and state securities laws and (ii)
the Company is relying upon the truth and accuracy of, and such Investor's
compliance with, the representations, warranties, agreements, acknowledgements
and understandings of such Investor set forth herein in order to determine the
availability of such exemptions and the eligibility of such Investor to acquire
the Shares. Each Investor understands that no U.S. federal or state agency or
any other government or governmental agency has passed upon the validity of or
made any recommendation or endorsement of the Shares.
5.6. Restricted Securities. The Investor understands that the Shares
are characterized as "restricted securities" under the U.S. federal securities
laws inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
such securities may be resold without registration under the Securities Act only
in certain limited circumstances.
5.7. Legends.
(a) It is understood that certificates evidencing such Shares
may bear a
-17-
restrictive legend in the following form, as well as any other legends that may
be required by a Transaction Document or applicable law:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE LAWS OF
ANY STATE OF THE UNITED STATES OR IN ANY OTHER JURISDICTION.
THESE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED UNLESS (I) SUCH SECURITIES HAVE BEEN
REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933, AS
AMENDED, OR (II) THE COMPANY HAS RECEIVED AN OPINION OF
COUNSEL SATISFACTORY TO IT THAT SUCH TRANSFER MAY LAWFULLY BE
MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES
LAWS."
(b) If required by the authorities of any state in connection
with the issuance or sale of the Shares, certificates evidencing such Shares may
bear the legend required by such state authority.
5.8. Accredited Investor. The Investor is an "accredited investor"
as defined in Rule 501(a) of Regulation D.
5.9. No General Solicitation. The Investor did not learn of the
investment in the Shares as a result of any "general advertising" or "general
solicitation" as those terms are contemplated in Regulation D, as amended, under
the Securities Act. The Investor is a resident of the jurisdiction set forth
under such Investor's name on the applicable Schedule I hereto.
5.10. Brokers and Finders. Except as set forth in Schedule 5.10, no
Person will have, as a result of the transactions contemplated by this Agreement
or any other Transaction Document, any valid right, interest or claim against or
upon the Company, any Subsidiary or any other Investor for any commission, fee
or other compensation pursuant to any agreement, arrangement or understanding
entered into by or on behalf of the Investor.
6. Conditions to Closing.
6.1. Conditions to the Investors' Obligations. The obligation of the
Investors to purchase the Series C Preferred Shares at the applicable Closing is
subject to the fulfillment, to the satisfaction of each of the Investors
intending to purchase the Series C Preferred Stock in such Closing (such intent
to be manifested by such Investor's execution of a counterpart to this Agreement
with respect to the applicable Closing), on or prior to the applicable Closing
Date, of the following conditions, any of which may be waived in writing only by
(x) a majority of such Investors (measured by the dollar amount to be purchased
by each such Investor) and (y) Cerberus:
(a) The representations and warranties made by the Company in
Section 4 hereof shall be true and correct on the applicable Closing Date. The
Company shall have performed in all material respects all obligations and
conditions herein required to be performed or observed by it on or prior to the
applicable Closing Date;
(b) Except for any regulatory filings that, under applicable
law, may be made after the applicable Closing, the Company shall have obtained
or made, as the case may be, in a
-18-
timely fashion any and all authorizations, consents, permits, approvals,
registrations, filings and waivers from governmental authorities and/or other
third parties that are necessary and/or appropriate for consummation of the
purchase and sale of the Series C Preferred Shares at such Closing, all of which
shall be in full force and effect;
(c) The Company shall have executed and delivered a
counterpart to the Investor Rights Agreement to the Investors intending to
purchase the Series C Preferred Stock in such Closing;
(d) No judgment, writ, order, injunction, award or decree of
or by any court, or judge, justice or magistrate, including any bankruptcy court
or judge, or any order of or by any governmental authority, shall have been
issued, and no action or proceeding shall have been instituted by any
governmental authority, or self-regulatory organization enjoining or preventing
the consummation at such Closing of the transactions contemplated by this
Agreement or any other Transaction Document;
(e) The Company shall have delivered to the Investors
intending to purchase the Series C Preferred Stock in such Closing a
certificate, dated as of the applicable Closing Date, executed by the Chief
Executive Officer or Chief Operating Officer of the Company, certifying as to
the fulfillment of the conditions specified in subsections (a), (b) and (d) of
this Section 6.1;
(f) The Company shall have delivered to the Investors
intending to purchase the Series C Preferred Stock in such Closing a
certificate, dated as of the applicable Closing Date, executed by the Secretary
of the Company, certifying as to: (i) the resolutions of the Board authorizing
the transactions contemplated by this Agreement and the other Transaction
Documents; (ii) the Articles of Organization of the Company; and (iii) the
By-Laws of the Company, each as in effect as of the applicable Closing Date;
(g) The Company shall have delivered to the Investors
intending to purchase the Series C Preferred Stock in such Closing a good
standing certificate from the Secretary of Commonwealth of the Commonwealth of
Massachusetts;
(h) The Investors intending to purchase the Series C Preferred
Stock in such Closing shall have received a written legal opinion, in the form
attached hereto as Exhibit C, dated as of the applicable Closing date, from
Company Counsel;
(i) In the case of the Initial Closing only, Cerberus Counsel,
in its capacity as escrow agent hereunder shall have received from the Investors
intending to purchase the Series C Preferred Stock in such Closing funds to
purchase shares of Series C Preferred Stock for an aggregate purchase price of
at least $15,000,000 and the Company shall not have waived any of the conditions
set forth in Section 6.2 with respect to any Initial Investor;
(j) Since March 1, 2005, there shall not have occurred a
Material Adverse Change;
(k) The Company shall have in effect officers' and directors'
insurance from such insurance carrier and in such amounts as are in effect on
the date of this Agreement;
(l) Each officer and director of the Company shall be party to
a valid, binding and enforceable indemnification agreement with the Company in
the form reviewed by the Co-Lead Investors prior to the Initial Closing;
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(m) Each Key Employee and each consultant of the Company with
access to Company Confidential Information shall be party to a valid, binding
and enforceable confidentiality agreement with the Company in the form reviewed
by the Co-Lead Investors prior to the Initial Closing;
(n) The Company shall have delivered evidence, satisfactory to
the Investors intending to purchase the Series C Preferred Stock in such
Closing, of the filing of the Articles of Amendment with the Secretary of the
Commonwealth of Massachusetts;
(o) The Company shall have delivered to the Investors
intending to purchase the Series C Preferred Stock in such Closing waivers
and/or consents from the holders of the Company's Series A Convertible Preferred
Stock and Series B Convertible Preferred Stock sufficient to (1) permit the
issuance of the Series C Preferred Stock in accordance with the terms of this
Agreement and the Articles of Amendment at such Closing, and (2) with respect to
the Series B Convertible Preferred Stock, waive all rights of first offer or
first refusal which such holders may otherwise have in connection with the sale
and issuance of the Series C Preferred Stock at such Closing;
(p) The Company shall have amended its outstanding warrants
issued to the holders of the Series B Convertible Preferred Stock, in a manner
acceptable to Cerberus, so that such warrants shall remain in full force and
effect and shall not terminate upon any issuance of the Series C Preferred
Stock;
(r) In the case of each Follow-on Closing, (x) five calendar
days shall have elapsed since the date written notice of such Follow-on Closing
shall have been given by the Company to Cerberus, which notice shall identify
each of the Follow-on Investors intending to purchase the Series C Preferred
Stock in such Closing, and be accompanied by the Schedule I applicable to such
Follow-on Closing, and (y) Cerberus shall have approved in writing of each
Follow-on Investor intending to purchase the Series C Preferred Stock in such
Follow-on Closing who is described in clause (y) of the definition of Follow-on
Investor by executing a counterpart of such Schedule I; and
6.2. Conditions to Obligations of the Company. The Company's
obligation to sell and issue the Series C Preferred Shares at a given Closing is
subject to the fulfillment to the satisfaction of the Company on or prior to the
applicable Closing Date of the following conditions, any of which may be waived
in writing by the Company:
(a) The representations and warranties made by the Investors
in Section 5 hereof shall be true and correct in all material respects on such
Closing Date;
(b) Each of the Investors intending to purchase the Series C
Preferred Stock in such Closing shall have executed and delivered to the Company
a counterpart to this Agreement, the Investor Rights Agreement and each other
Transaction Document to which such Investor is a party;
(c) Each of the Investors intending to purchase the Series C
Preferred Stock in such Closing shall have delivered to Cerberus Counsel, as
escrow agent hereunder, the amount set forth as the "Purchase Price" opposite
such Investor's name on the applicable Schedule I attached hereto; and
(d) No judgment, writ, order, injunction, award or decree of
or by any court, or judge, justice or magistrate, including any bankruptcy court
or judge, or any order of or by any governmental authority, shall have been
issued, and no action or proceeding shall have been instituted by any
governmental authority, or self-regulatory organization enjoining or preventing
the consummation at such Closing of the transactions contemplated by this
Agreement or any other Transaction Document.
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7. Covenants and Agreements of the Company.
7.1. Reservation of Common Stock. The Company shall at all times
reserve and keep available out of its authorized but unissued shares of Common
Stock, solely for the purpose of providing for the conversion of the Series C
Preferred Stock, such number of shares of Common Stock as shall from time to
time equal the number of shares sufficient to permit the conversion of the
Series C Preferred Stock issued pursuant to this Agreement in accordance with
their respective terms.
7.2. No Conflicts. The Company will not take any action, enter into
any agreement or make any commitment that would conflict or interfere in any
material respect with the Company's obligations to the Investors under the
Transaction Documents.
7.3. Unlegended Certificates. From and after the earlier of: (i) the
registration of the Shares for resale pursuant to the Investor Rights Agreement;
and (ii) the time when the Company receives from its legal counsel a written
opinion that the Shares are then eligible for transfer pursuant to Rule 144(k)
promulgated under the Securities Act, the Company shall, upon an Investor's
written request (the "Certificate Request"), promptly cause certificates
evidencing such Shares to be replaced with certificates which do not bear any
restrictive legends. When the Company is required to cause unlegended
certificates to replace previously issued legended certificates, if unlegended
certificates are not delivered to an Investor within three (3) Business Days of
submission by that Investor of legended certificate(s) to the Company's transfer
agent together with a representation letter in customary form, the Company shall
be liable to the Investor for liquidated damages equal to 1.5% of the aggregate
market price (i.e., the highest closing price during such three day period) of
the Shares evidenced by such certificate(s) for each 10-day period (or portion
thereof) beyond such three (3) Business Day-period that the unlegended
certificates have not been so delivered. Notwithstanding the foregoing, such
three (3) Business Day-period shall be extended until the Company or its
transfer agent has received from the Investor such information as is necessary
for the issuance of the unlegended certificates in accordance with applicable
Federal and state securities laws and as is reasonably requested in writing by
the Company promptly, and in no even more than one (1) Business Day, following
the Company's receipt of such Investor's Certificate Request. The Company shall
pay such amount(s) to the Investor upon demand therefor, and such payment shall
be in addition to, and not in lieu of, all other remedies and rights available
to such Investor.
7.4. Insurance. Without the approval of a majority of the Board
(which approval includes the affirmative vote of the Series C Director), the
Company shall not materially reduce the insurance coverages described in Section
4.16, including, without limitation, the directors' and officer's insurance.
7.5. Employment Agreements. The Company shall maintain employment
and non-compete agreements with all of its officers, in the form reviewed by
the Co-Lead Investors prior to the Initial Closing, and shall not amend any such
agreements except in any manner that benefits the Company or as approved by the
Board (which approval includes the affirmative vote of the Series C Director).
7.6. Confidentiality Agreements. The Company shall maintain
confidentiality agreements with each Key Employee and each consultant of the
Company with access to Confidential Information, in the form reviewed by the
Co-Lead Investors prior to the Initial Closing, and shall not amend any such
agreements except in any manner that benefits the Company or does not reduce the
confidentiality protection thereof, in each case, as approved by the Board
(which approval includes the affirmative vote of the Series C Director).
7.7. Compliance with Laws. The Company will comply in all material
respects with
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all applicable laws, rules, regulations, orders and decrees of all governmental
authorities, except to the extent non-compliance would not have a Material
Adverse Effect.
7.8. Use of Proceeds. The proceeds from the sale of the Shares shall
be used for the payment of expenses related to the transactions contemplated
hereby and for general working capital purposes consistent with the Company's
budget approved by the Board as of the Initial Closing.
7.9. Xxxxx-Xxxxxx Act. The Company shall apply to qualify each drug
for which it seeks FDA approval for the marketing exclusivity provisions of the
Xxxxx-Xxxxxx Act in Sections 505(j)(5)(D) and/or 505(c)(3)(D) of the FDCA,to the
maximum extent permitted by such laws, by taking the following steps, at its own
expense: (i) submitting patent information to the FDA in the form required by
the FDA to be included in a NDA; (ii) resubmitting patent information to the FDA
within 30 days after approval of an NDA or supplement to identify the patents
that apply to the drug substance (active ingredient), drug product (formulation
and composition) or approved method of use, actually approved; (iii) filing with
the FDA within 30 days after the issuance of the patent described in clause
(ii), the information required in the form of a supplement to the approved NDA
if a patent that applies to the drug substance, drug product or approved method
of use which is actually approved, issues after approval of the NDA; (iv)
submitting with the NDA prior to its approval (1) a statement that the applicant
is claiming the exclusivity described in the first sentence of this Section 7.9,
(2) a reference to the appropriate paragraph under 21 C.F.R. 314.08 that
supports its claim; (3) if the Company claims exclusivity under Sec. 21 C.F.R.
314.108(b)(2), information to show that, to the best of its knowledge or belief,
a drug has not previously been approved under Section 505(b) of the FDCA
containing any active moiety in the drug for which the Company is seeking
approval; if the company claims exclusivity under 21 C.F.R. 314.108(b)(4) or
(b)(5), information sufficient to show that the application contains new
clinical investigations that are essential to approval of the application or
supplement and were conducted or sponsored by the Company; (v) obtaining and
maintaining without interruption all U.S. and foreign patent(s) that apply to
each drug substance, drug product or approved method of use, approved by the
FDA; (vi) taking any and all legal action permitted by applicable law to
prosecute patent infringement claims against sponsors of Abbreviated New Drug
Applications, Abbreviated New Animal Drug Applications or New Drug Applications
under Section 505(b)(2) of the FDCA ("paper NDA's"); and (vii) taking such other
reasonable steps as may be necessary or required by applicable law or
regulation, as may be in effect from time to time, in order to qualify for the
aforesaid marketing exclusivity provisions.
7.10 Recordation of Patent Assignments. Promptly following, and in
any event within 30 days after, the Initial Closing Date, the Company will file
patent assignment(s) for recording accompanied by certificate(s) issued by
appropriate authorities showing a change of name or merger and the appropriate
recordation form cover sheet with the appropriate foreign and domestic
authorities, including, without limitation, the U.S. Patent & Trademark Office,
reflecting the change of the Company's name from "Biostream, Inc." to "Molecular
Insight Pharmaceuticals, Inc." with respect to all patents, foreign and
domestic, previously assigned to the Company to establish a clear chain of title
for each patent assigned to the Company, and within six (6) months after the
Initial Closing Date, the Company will provide the Co-Lead Investors with U.S.
Patent & Trademark Office official evidence of each such filing. The Company
shall diligently pursue, and use commercially reasonable efforts to complete,
the performance of its obligations under this Section 7.10.
7.11 Amendment of Licenses due to name change. Promptly following,
and in any event within one (1) year after, the date of this Agreement, the
Company will obtain, and provide copies to the Co-Lead Investors of, duly
executed, valid, binding and enforceable amendments to: (x) that certain License
Agreement, effective December 15, 2000, between Biostream, Inc., as licensee,
and The Board of Governors of the University of Western Ontario, to reflect the
change of the Company's name from "Biostream, Inc." to "Molecular Insight
Pharmaceuticals, Inc."; and (y) that certain Research Agreement
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and Exclusive License, effective December 29, 1997, and that certain Exclusive
License Agreement, effective March 1, 2000, between Georgetown University, as
licensor, and Zebra Pharmaceuticals, Inc., as licensee, to reflect the merger of
Zebra Pharmaceuticals, Inc. into Biostream, Inc. and the change of the Company's
name from "Biostream, Inc." to "Molecular Insight Pharmaceuticals, Inc." The
Company shall diligently pursue, and use commercially reasonable efforts to
complete, the performance of its obligations under this Section 7.11.
8. Survival and Indemnification.
8.1. Survival. All representations, warranties, covenants and
agreements contained in this Agreement shall be deemed to be representations,
warranties, covenants and agreements as of the date hereof and shall survive
until the later to occur of (x) 30 days after delivery to Cerberus of the
Company's audited financial statements, together with the auditors written
opinion thereon, for the first fiscal year ended after the Initial Closing and
(y) 15 months after the Initial Closing; provided, however, that the provisions
contained in: (a) Section 4.4 and Section 8.2(ii) hereof shall survive
indefinitely; (b) Sections 4.9 and 4.14 shall survive until 90 days after the
applicable statute of limitations.
8.2. Indemnification. The Company shall indemnify and hold harmless
each Investor and its Affiliates and the directors, officers, employees,
investors, partners and agents of each Investor and its Affiliates, from and
against any and all losses, claims, damages, liabilities and expenses incurred
by any such Person (including without limitation reasonable attorney fees and
disbursements and other expenses incurred in connection with investigating,
preparing or defending any action, claim or proceeding, pending or threatened
and the costs of enforcement hereof) (collectively, "Losses") as a result of (i)
any breach of representation, warranty, covenant or agreement made by, or to be
performed on the part of, the Company under the Transaction Documents, or (ii)
the recall of any of the Company's products (but only to the extent such
Investor would be personally liable), and, in each case, will reimburse any such
Person for all such amounts as they are incurred by such Person.
8.3. Conduct of Indemnification Proceedings. Promptly after receipt
by any Person (the "Indemnified Person") of notice of any demand, claim or
circumstances which would or might give rise to a claim or the commencement of
any action, proceeding or investigation in respect of which indemnity may be
sought pursuant to Section 8.2, such Indemnified Person shall promptly notify
the Company in writing and the Company shall assume and control the defense
thereof, including the employment of counsel reasonably satisfactory to such
Indemnified Person, and shall assume the payment of all fees and expenses in
connection with such defense and such counsel; provided, however, that the
failure of any Indemnified Person to so notify the Company shall not relieve the
Company of its obligations hereunder except to the extent that the Company is
actually and materially prejudiced by such failure to notify. In any such
proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless: (i) the Company and the Indemnified Person shall
have mutually agreed to the retention of such counsel; or (ii) in the reasonable
judgment of counsel to such Indemnified Person (x) representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them or (y) if there are one or more defenses
available to such Indemnified Person that is/are not available to the Company.
Without the prior written consent of the Indemnified Person, which consent shall
not be unreasonably withheld, delayed or conditioned, the Company shall not
effect any settlement of any pending or threatened action, claim or proceeding,
with respect to any Indemnified Person, unless such settlement includes an
unconditional release of such Indemnified Person from all liability arising out
of such proceeding.
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9. Miscellaneous.
9.1. Successors and Assigns. This Agreement may not be assigned by a
party hereto without the prior written consent of the Company or the Investors
who participated in the same Closing, as applicable; provided, however, that an
Investor may assign its rights and delegate its duties hereunder in whole or in
part, without the prior written consent of the Company, to an Affiliate or the
other Investors (regardless of the Closing in which any such Investor purchased
its Series C Preferred Stock), provided, that, no such assignment shall be
effective or confer any right on any such assignee unless, prior to such
assignment, the assignee agrees in writing that such assignee will be bound by
all provisions binding on such Investor hereunder. The provisions of this
Agreement shall inure to the benefit of and be binding upon the respective
permitted successors and assigns of the parties. Except for Cerberus Counsel,
which is an express intended third-party beneficiary hereof for the limited
purpose of Section 3.2 and Section 9.5 of this Agreement, and except for any
other provisions of this Agreement expressly to the contrary, nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement.
9.2. Counterparts: Faxes. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement may also
be executed via facsimile, which shall be deemed an original.
9.3. Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
9.4. Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given as hereinafter described: (i) if given by personal delivery,
then such notice shall be deemed given upon such delivery; (ii) if given by
telex or telecopier, then such notice shall be deemed given upon receipt of
confirmation of complete transmittal with a confirming copy by first class mail;
(iii) if given by mail, then such notice shall be deemed given upon the earlier
of (A) receipt of such notice by the recipient or (B) three (3) days after such
notice is deposited in first class mail, postage prepaid; and (iv) if given by
an internationally recognized overnight air courier, then such notice shall be
deemed given one (1) Business Day after delivery to such carrier. All notices
shall be addressed to the party to be notified at the address as follows, or at
such other address as such party may designate by ten (10) days' advance written
notice to the other party:
If to the Company:
Molecular Insight Pharmaceuticals, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Mr. Xxxxx Xxxxxx
Fax:(000)000-0000
With a copy to:
Xxxxx & Lardner LLP
000 Xxxxxxxxxx Xxxxxx
00xx Xxxxx
-00-
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx Xxxxx, Esq.
Fax: (000)000-0000
If to any of the Investors:
to the addresses set forth on the applicable Schedule I
attached hereto.
9.5. Expenses. The Company shall pay the reasonable fees and
expenses of Cerberus Counsel in connection with the transactions contemplated by
this Agreement (the "Cerberus Counsel Fees"), with respect to the Initial
Closing, in an amount not to exceed $60,000 through the Initial Closing Date,
and with respect to each Follow-on Closing, in an amount not to exceed $7,500
through each such Follow-on Closing Date, which Cerberus Counsel Fees shall
include, without limitation, the fees and expenses associated with the
negotiation, preparation and execution and delivery of this Agreement and the
other Transaction Documents. On the sooner of the Closing or the Escrow
Termination Date, Cerberus Counsel may apply such retainer to Cerberus Counsel
Fees and return the excess thereof, if any, to the Company. Except as set forth
above, the Company and the Investors shall each bear their own expenses in
connection with the negotiation, preparation, execution and delivery of this
Agreement. In the event that legal proceedings are commenced by any party to
this Agreement against another party to this Agreement in connection with this
Agreement or the other Transaction Documents, the party or parties which do not
prevail in such proceedings shall severally, but not jointly, pay their pro rata
share of the reasonable attorneys' fees and other reasonable out-of-pocket costs
and expenses incurred by the prevailing party in such proceedings.
9.6. Amendments and Waivers. This Agreement shall not be amended and
the observance of any term of this Agreement shall not be waived (either
generally or in a particular instance and either retroactively or prospectively)
without the prior written consent of (i) the Company and (ii) at least a
majority of the Investors holding a majority of the Series C Preferred Stock
(which majority must include Cerberus); provided, however, that any provision
hereof which impairs the rights or increases the obligations of a specific
Investor disproportionately to other Investors shall not be amended or waived
without the prior written consent of the Company and that particular Investor;
provided, further, that any provision affecting the rights or obligations of
Cerberus Counsel, shall not be waived or amended without the prior written
consent of Cerberus Counsel. Any amendment or waiver effected in accordance with
this Section 9.6 shall be binding upon each holder of any Shares purchased under
this Agreement at the time outstanding, each future holder of all such Shares,
and the Company.
9.7. Publicity. No public release or announcement concerning the
transactions contemplated by this Agreement or any other Transaction Document
shall be issued by the Company or the Investors without the prior consent of the
Company (in the case of a release or announcement by any of the Investors) or
Cerberus (in the case of a release or announcement by the Company) (which
consents shall not be unreasonably withheld), except as such release or
announcement may be required by law, in which case the Company or the Investors,
as the case may be, shall allow the Investors or the Company, as applicable, to
the extent reasonably practicable in the circumstances, reasonable time to
comment on such release or announcement in advance of such issuance.
9.8. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof but shall be interpreted as if it
were written so as to be enforceable to the maximum extent permitted by
applicable law, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render
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unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereby waive any provision of law which renders
any provision hereof prohibited or unenforceable in any respect.
9.9. Entire Agreement. This Agreement, including the Exhibits and
Schedules (including without limitation all Disclosure Schedules and, in the
case of a Follow-on Closing, each subsequent version of Schedule I), and the
other Transaction Documents constitute the entire agreement among the parties
hereof with respect to the subject matter hereof and thereof and supersede all
prior agreements and understandings, both oral and written, between the parties
with respect to the subject matter hereof and thereof.
9.10. Further Assurances. The parties shall execute and deliver all
such further instruments and documents and take all such other actions as may
reasonably be required to carry out the transactions contemplated hereby and to
evidence the fulfillment of the agreements herein contained.
9.11. Governing Law; Consent to Jurisdiction. This Agreement shall
be governed by, and construed in accordance with, the internal laws of the State
of New York without regard to the choice of law principles thereof, except that
the Shares and the designations, powers, preferences, rights of, and the
qualification, limitations and restrictions on, the Shares issued pursuant to
this Agreement shall be governed by the laws of the Commonwealth of
Massachusetts. Each of the parties hereto irrevocably submits to the
jurisdiction of the courts of the State of New York located in New York County
and the United States District Court for the Southern District of New York for
the purpose of any suit, action, proceeding or judgment relating to or arising
out of this Agreement and the transactions contemplated hereby. Service of
process in connection with any such suit, action or proceeding may be served on
each party hereto anywhere in the world by the same methods as are specified for
the giving of notices under this Agreement. Each of the parties hereto
irrevocably consents to the jurisdiction of any such court in any such suit,
action or proceeding and to the laying of venue in such court. Each party hereto
irrevocably waives any objection to the laying of venue of any such suit, action
or proceeding brought in such courts and irrevocably waives any claim that any
such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. THE COMPANY AND EACH OF THE INVESTORS HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATING TO OR
ARISING OUT OF THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY.
9.12 Independent Nature of Investors' Obligations and Rights. Except
as expressly provided herein and therein, the obligations of each Investor under
this Agreement and each other Transaction Document are several and not joint
with the obligations of any other Investor (regardless of the Closing at which
such Investor purchased its Series C Preferred Stock), and no Investor shall be
responsible in any way for the performance of the obligations of any other
Investor (regardless of the Closing at which such Investor purchased its Series
C Preferred Stock) under this Agreement or any other Transaction Document. The
decision of each Investor to purchase Series C Preferred Stock pursuant to this
Agreement and the other Transaction Documents has been made by such Investor
independently of any other Investor (regardless of the Closing at which such
Investor purchased its Series C Preferred Stock). Nothing contained herein or in
any other Transaction Document, and no action taken by any Investor (including,
without limitation, any of the Co-lead Investors) pursuant hereto or thereto,
shall be deemed to constitute the Investors (regardless of the Closing at which
such Investor purchased its Series C Preferred Stock) as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Investors are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by this
Agreement or the other Transaction Documents. Each Investor acknowledges that no
other Investor (including, without limitation, any of the Co-lead
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Investors, and regardless of the Closing at which such Investor purchased its
Series C Preferred Stock) has acted as agent for such Investor in connection
with making its investment hereunder and that no Investor (including, without
limitation, any of the Co-lead Investors, and regardless of the Closing at which
such Investor purchased its Series C Preferred Stock) will be acting as agent of
such Investor in connection with monitoring its investment in the Shares or
enforcing its rights under this Agreement or the other Transaction Documents.
Each Investor shall be entitled to independently protect and enforce its rights,
including, without limitation, the rights arising out of this Agreement or out
of the other Transaction Documents, and it shall not be necessary for any other
Investor (regardless of the Closing at which such Investor purchased its Series
C Preferred Stock) to be joined as an additional party in any proceeding for
such purpose. The Company acknowledges that each of the Investors has been
provided with the same Transaction Documents for the purpose of closing a
transaction with multiple Investors at multiple Closings and not because it was
required or requested to do so by any Investor. Notwithstanding anything
contained in this Agreement or any other Transaction Document to the contrary,
neither of the Co-Lead Investors shall have any duty, fiduciary or otherwise, to
any other Investor (regardless of the Closing at which such Investor purchased
its Series C Preferred Stock) by virtue of such Investor serving as a Co-Lead
Investor or otherwise.
[signature page follows]
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[COMPANY SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as
of the date first above written.
MOLECULAR INSIGHT
PHARMACEUTICALS, INC.
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
Name:
Title:
-28-
[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
CERBERUS PARTNERS, L.P.
By: Cerberus Associates, LLC,
its General Partner
By: /s/ Xxxx Xxxxxxx
----------------------------------
Xxxx Xxxxxxx
Managing Director
MEDCAP PARTNERS, L.P.
By:___________________________________
Name: ________________________________
Title: _______________________________
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[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
INVESTOR:
Xxxxxx X. Xxxxxx Family Trust 5/99
--------------------------------------
Name of Investor
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Trustee
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[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
INVESTOR:
Xxxx X. Xxxxxx, Esq.
-------------------------------
Name of Investor
By: /s/ Xxxx X. Xxxxxx, Esq.
---------------------------
Name: Xxxx X. Xxxxxx, Esq.
Title: ________________________
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[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as
of the date first above written.
INVESTOR:
XXXXXXX X. DEUTSCH
-------------------------------
Name of Investor
By: /s/ Xxxxxxx X. Deutsch
---------------------------
Name: Xxxxxxx X. Deutsch
Title:
-32-
[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
INVESTOR:
XXXXXXXX X. XXXXXXX REVOCABLE TRUST Xxxxx X. Xxxxxxx Revocable Trust V/A
V/A 29/2004 -------------------------------------
Name of Investor
/s/ Xxxxxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxxxx
------------------------- ---------------------------------
Name: Xxxxxxxx X. Xxxxxxx Name: Xxxxx X. Xxxxxxx
Title: Trustee Title: Trustee
-33-
[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
INVESTOR:
Xxxxx Xxxxx
--------------------------------------
Name of Investor
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
-34-
[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
INVESTOR:
Xxxxxxxx X. Xxxxx Trust
-----------------------------------
Name of Investor
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Trustee
-35-
[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
INVESTOR:
[ILLEGIBLE]
--------------------------------------
Name of Investor
By:___________________________________
Name: ________________________________
Title: _______________________________
-36-
[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
INVESTOR:
Xxxxxx Xxxxxx and Xxxx Xxxxx
--------------------------------------
Name of Investor
By: /s/ Xxxxxx Xxxxxx & Xxxx Xxxxx
----------------------------------
Name: XXXXXX XXXXXX & XXXX XXXXX
Title:
-------------------------------
000 XXXXXX XXXX XXXX
XXXXXXXX XX - 00000
000-000-0000
Xxx@XxxXxxxxx.xxx
-37-
[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
INVESTOR:
________________
Name of Investor
By: /s/ Xxxxx Xxxxxxx
__________________________________
Name: Xxxxx X. Xxxxxxx
Title: _______________________________
-38-
[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
INVESTOR:
Xxxxxx X. Xxxxxxxx Revocable Trust
--------------------------------------
Name of Investor
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxx
--------------------------------
Title: Trustee
-------------------------------
I am purchasing a total of 1,750 Series C Preferred Stock @ $202.00 per share
for a total investment of $353,500. The split between those purchased as a
Series B investor or as a Series C investor, I understand is moot.
-39-
[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
INVESTOR:
Xxxxxxx Xxxxx
--------------------------------------
Name of Investor
By: /s/ Xxxxxxx Xxxxx
----------------------------------
Name: Xxxxxxx Xxxxx
--------------------------------
Title:________________________________
-40-
[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
INVESTOR:
American Durham L.P.
-------------------------------------
Name of Investor
By: /s/ X.X. Xxxxxx
---------------------------------
Name: X.X. Xxxxxx
-------------------------------
Title: Managing Principal
------------------------------
-41-
[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
INVESTOR:
International Durham, Ltd.
-------------------------------------
Name of Investor
By: /s/ X.X. Xxxxxx
---------------
Name: X.X. Xxxxxx
-------------------------------
Title: Managing Principal
------------------------------
-42-
[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
INVESTOR:
Institutional Benchmarks Master Fund
-------------------------------------
Name of Investor
By: /s/ Xxxxx Xxxxxxx
------------------
Name: Xxxxx Xxxxxxx
-------------------------------
Title: Director
------------------------------
-43-
[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
INVESTOR:
Xxxxxxx Xxxxx
-------------------------------------
Name of Investor
By: /s/ Xxxxxxx Xxxxx
-----------------
Name: Xxxxxxx Xxxxx
--------------------------------
Title:
-------------------------------
-44-
[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
INVESTOR:
Xxxxxxx X. Xxxxxxxx
-------------------------------------
Name of Investor
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Name:
-------------------------------
Title:
------------------------------
-45-
[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
INVESTOR:
/s/ Xxxx X. Xxxxx
-------------------------------------
Name of Investor
By: /s/ XXXX X. XXXXX
-----------------
Name:
-------------------------------
Title:
------------------------------
-46-
[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
INVESTOR:
Xxxxxx X. Xxxx
--------------------------------------
Name of Investor
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
-47-
[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
INVESTOR:
THE RAPTOR GLOBAL PORTFOLIO LTD.
--------------------------------------
Name of Investor
By: Investment Corporation,
Investment Advisor
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
--------------------------------
Title: Managing Director
-------------------------------
-48-
[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
INVESTOR:
THE TUDOR BVI GLOBAL PORTFOLIO LTD.
-----------------------------------
Name of Investor
By: Tudor Investment Corporation,
Trading Advisor
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxxxx
--------------------
Title: Managing Director
--------------------
-49-
[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
INVESTOR:
TUDOR PROPRIETARY TRADING, L.L.C.
---------------------------------
Name of Investor
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxxxx
--------------------
Title: Managing Director
--------------------
-50-
[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
INVESTOR:
/s/ Xxxxxxx X. Xxxxx (XXXXXXX X. XXXXX)
---------------------------------------
Name of Investor
/s/ Xxxx Xxxxx Xxxxx (XXXX XXXXX XXXXX)
---------------------------------------
By:
-----------------------------------
Name:
--------------------------------
Title:
--------------------------------
Joint Tenants with Right of
Survivorship
-51-
[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
INVESTOR:
THE ALTAR ROCK FUND L.P.
------------------------------------
Name of Investor
------------------------------------
By: Tudor Investment Corporation,
General Partner
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxxxx
--------------------
Title: Managing Director
--------------------
-52-
[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
INVESTOR:
/s/ June X. Xxxxx, Trustee
--------------------------------------
Name of Investor
By: June X. Xxxxx Revocable Trust
---------------------------------
dated August 13, 2001
Name:
-------------------------------
Title:
------------------------------
-53-
[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
INVESTOR:
/s/ Xxxx X. Xxxxxx
-------------------------------------
Name of Investor
By:
------------------
Name: Xxxx X. Xxxxxx
-------------------------------
Title:
------------------------------
-54-
[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
INVESTOR:
MedCap Partners L.P.
-------------------------------------
Name of Investor
By: /s/ [ILLEGIBLE]
---------------
Name: [ILLEGIBLE]
-------------------------------
Title: Managing Member of the GP
------------------------------
-55-
[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
INVESTOR:
MedCap Master Fund, L.P.
-------------------------------------
Name of Investor
By: /s/ [ILLEGIBLE]
---------------
Name: [ILLEGIBLE]
-------------------------------
Title: Managing Member of the GP
------------------------------
-56-
[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
INVESTOR:
/s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name of Investor
By: Xxxxxxx Xxxxx
-------------
Individually
Name:
-------------------------------
Title:
------------------------------
To Purchase 620 shares of Series C Convertible Preferred Stock at a Purchase
Price of $202 per share. Investment proceeds $125,240.
-57-
[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
INVESTOR:
XXXXXXX X. XXXX
-------------------------------
Name of Investor
By: /s/ Xxxxxxx X. Xxxx
---------------------------
Name: XXXXXXX X. XXXX
--------------------------
Title:
-------------------------
-58-
[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
INVESTOR:
XXXXX X. XXXX
-----------------------------------
Name of Investor
By: /s/ Xxxxx X. Xxxx
-------------------------------
Name: Xxxxx X. Xxxx
-----------------------------
Title:
----------------------------
(000) 000-0000
-59-
[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
INVESTOR:
/s/ Xxxxx X. Xxxxxxxxx
----------------------------------
Name of Investor
By: /s/ Xxxxx X. Xxxxxxxxx
----------------------------------
Name: XXXXX X. XXXXXXXXX
--------------------------------
Title:
-------------------------------
-60-
[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
INVESTOR:
Xxxx X. Xxx
--------------------------------------
Name of Investor
By: /s/ Xxxx X. Xxx
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
-61-
[INVESTOR SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
INVESTOR:
/s/ Xxxxxx Xxxxx
_________________________
Name of Investor
By: _________________________
Name: XXXXXX XXXXX
________________________
Title:_______________________
-62-
