AMENDMENT AGREEMENT
AMENDMENT AGREEMENT, dated as of April 24, 1998, to the Note
Purchase and Warrant Agreement dated as of April 14, 1997 (the "Agreement") by
and among IOMED, INC., a Utah corporation ("IOMED"), ELAN INTERNATIONAL
SERVICES, LTD., a Bermuda corporation ("EIS"), ELAN INTERNATIONAL MANAGEMENT,
LTD., a Bermuda corporation ("EIM"), and, solely in the capacity of escrow
agent hereunder, XXXXX XXXXXXXXXXXX XXXXXXXXXXX & XXXXXXXXX LLC, a New York
limited liability company (the "Escrow Agent"). Capitalized terms used and not
defined herein have the meanings assigned to them in the Agreement.
RECITALS:
A. EIM purchased from IOMED certain promissory notes dated as
of the date of the Agreement in the original principal amounts of $10 million
(the "A Note") and $5 million (the "B Note"; together with the A Note, the
"Notes").
B. Pursuant to the terms of the Agreement, on the date of
consummation of an IOMED IPO, the outstanding amount of principal and accrued
and unpaid interest on the Notes are provided to be due and payable to EIM, and
EIS is obligated to subscribe for a certain number of shares of IOMED Common
Stock (the "Subscription"), as set forth in the Agreement.
C. The parties desire to amend the Agreement as set forth
herein in order to clarify the timing and process of such payment and the
Subscription.
AGREEMENT:
The parties hereto agree as follows:
1. Closing. The closing of the transactions contemplated by this
Agreement shall occur as of April 24, 1998 (the "Calculation Date") at the
offices of BFSM in New York City, or at such other place as the parties hereto
shall agree. On the Calculation Date:
(a) IOMED shall pay to EIM (i) the principal amount of $10
million together with interest in the amount of $500,958.94 in full
satisfaction of the A Note, and (ii) the principal amount of $5
million together with interest in the amount of $250,479.47 in full
satisfaction of the B Note; the parties conclusively acknowledging
that the interest amounts referred to herein constitute the aggregate
interest due and payable on the Notes through and including the
Calculation Date, and that under certain circumstances such amounts
may be recalculated in accordance with the terms of Section 2(b)
below; and
(b) EIM shall deliver to the Escrow Agent the original
counterparts of the Notes, together with an executed statement in the
form of Exhibit A hereto (the "Payoff Letter"),
all of which shall be held in escrow by the Escrow Agent until
consummation of the Subscription as described below.
2. Subscription.
(a) Upon receipt of written notification from the U.S.
Securities and Exchange Commission that IOMED's Registration Statement
on Form S-1, as amended (the "Form S-1"), shall have been declared
effective, IOMED shall notify EIS of such receipt (the "Notice") by
delivery of the notification form attached hereto as Exhibit B. Not
later than the third day after receipt of the Notice:
(i) EIS shall pay to IOMED (x) $10,500,958 as
payment in full for 1,400,128 shares of Common Stock, and (y)
$5,250,479 as payment in full for 700,064 shares of Common Stock
(shares issuable in respect of such purchases, the "Shares");
(ii) IOMED shall deliver to EIS certificates
evidencing the Shares (the "Certificates"), subject to Section 3
below; and
(iii) the Escrow Agent shall deliver the original
counterparts of the Notes and the original Payoff Letter to IOMED.
(b) In the event that IOMED has not provided written Notice
to EIS on or before April 30, 1998, as of the date on which the Notice
is received (the "Recalculation Date"), the parties shall recalculate
(x) the accrued interest amounts referred to in Section 1(a), (y) the
subscription price for the Shares referred to in Section 2(a)(i), and
(z) the number of Shares referred to in Section 2(a)(i)(y);
(c) On the Recalculation Date, (i) IOMED shall pay to EIM the
accrued and unpaid amount of the recalculated interest as described
above, (ii) EIS shall pay to IOMED the recalculated subscription price
and (iii) IOMED shall deliver to EIS certificates evidencing the
recalculated number of Shares, subject to Section 3 below.
3. Exchange. As of the date hereof, EIS hereby exercises its right
under Section 1.6 of the Agreement, to convert 893,801 shares of Common Stock
to 893,801 shares of IOMED convertible Series D Non-Voting Preferred Stock (the
"D Preferred"), without par value, and having the rights and preferences as
described in the Certificate of Designations, a copy of which is attached
hereto as Exhibit C. IOMED shall deliver certificates evidencing the D
Preferred shares along with the Certificates in accordance with Section
2(a)(ii) above.
4. Registration. Neither the Shares nor the D Preferred shall be
registered under the Securities Act of 1933 at the time of issuance, and the
Certificates, including certificates evidencing the D Preferred, shall bear a
restrictive legend as indicated in the Agreement. All Shares, including shares
issuable upon conversion of the D Preferred, shall be Registrable Securities
(as defined in the Agreement) entitled to registration and other rights and
benefits in
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accordance with the terms of the Registration Rights Agreement dated as of the
date of the Agreement.
5. Representations, Covenants and Warranties.
(a) IOMED hereby represents and covenants to EIS and EIM as
follows:
(i) all representations and warranties made by IOMED in
the Agreement are true and correct as if made as of the date hereof,
except that
(x) Schedule 4(a)(i)(x) attached hereto
accurately and completely sets forth the current capital structure of the
Company, and except for the options and warrants described thereon, the
Company does not have any rights or options to subscribe for or purchase,
or any warrants or other agreements providing for or requiring the
issuance by the Company of, any capital stock or securities convertible
into or exchangeable for its capital stock;
(y) Schedule 4(a)(i)(y) attached hereto
accurately and completely sets forth the unaudited consolidated balance
sheet of the Company as of December 31, 1997, prepared in accordance with
generally accepted accounting principles applied on a basis consistent
with prior periods; and
(z) Schedule 4(a)(i)(z) attached hereto
accurately and completely sets forth any additional material contracts of
the Company executed since the date of the Agreement. There is no default
or violation thereunder by any party thereto, and the Closing and the
consummation of the transactions contemplated hereby will not cause the
Company or any party to such a material contract to be in default or
violation thereof.
(ii) IOMED has filed a preliminary Form S-1 with the
SEC and will amend such Form in response to SEC comments thereon, and
use its best efforts to cause such Form S-1 to be declared effective
by the SEC as soon as practicable;
(iii) IOMED has, as of the date hereof, fully
complied with each and every affirmative covenant or refrained from
violating each and every negative covenant, as applicable, as
described in Article 4 of the Agreement.
(b) EIS and EIM hereby represent to IOMED that all
representations and warranties made by EIS and EIM in the Agreement
are true and correct in all material respects as of the date hereof.
6. Termination. In the event that IOMED shall not have consummated the
IPO on or before May 10, 1998, this Amendment shall be of no force or effect,
unless otherwise agreed to by each of the parties hereto. In the case of such
termination:
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(a) EIM shall immediately return the full amount of funds paid, if
any, by IOMED in repayment of the Notes to IOMED;
(b) the Escrow Agent shall return the Notes and the Payoff Letter
held in escrow to EIM; and
(c) the transactions contemplated herein shall be canceled and
annulled and of no further force and effect.
7. Release of Security Interest. Upon the repayment of the Notes by
IOMED, as contemplated herein, the security interest in and to the "Elan
Iontophoretic Intellectual Property and the DDS Iontophoretic Patent Rights"
granted to EIM pursuant to paragraph 1.5(b) of the Agreement shall
automatically, and without further action by the parties, be released and
terminated. EIM shall take all reasonable actions as may be requested by IOMED
from time to time, including without limitation the execution and delivery of
documents and instruments, necessary to evidence such release and termination.
8. Governing Law. This Agreement shall be governed by the laws of the
State of New York, without giving effect to the choice of laws provisions
thereof.
9. Escrow Agent.
(a) In performing its duties hereunder, the Escrow Agent
shall be entitled to rely upon certificates, signatures and instructions from
the parties hereto which it, in good faith, believes to be genuine.
(b) The Escrow Agent shall not be entitled to receipt of any
fee in connection with its escrow services as described herein.
(c) The parties hereto hereby agree to indemnify the Escrow
Agent from loss, liability, demand, claim, action, cause of action, cost,
damage or expense, including interest, penalties, reasonable attorneys' fees
and expenses and all amounts paid in investigation, defense or settlement of
any of the foregoing (collectively, "Losses"), that the Escrow Agent may incur
as a result of, in connection with, relating or incidental to or by virtue of
any nonfulfillment, default or breach of its duties hereunder; except that the
foregoing indemnity shall not be applicable to Losses owing to gross negligence
on the part of the Escrow Agent.
(d) The parties hereto hereby waive any claim of conflict of
interest on the part of the Escrow Agent in performing its duties hereunder and
in its continuing legal representation of EIS and EIM.
10. No other amendment. The amendment of the Agreement is limited to
the matters described herein; all other portions of the Agreement shall remain
unchanged and in full force and effect as originally stated.
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[Signature page follows]
IN WITNESS WHEREOF, the undersigned have hereunto set their hands as
of the 24th day of April 1998.
IOMED, INC.
By:
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Xxxxxx X. Xxxxxxx,
Vice President and Chief Financial Officer
ELAN INTERNATIONAL MANAGEMENT, LTD.
----------------------------
Name:
Title:
ELAN INTERNATIONAL SERVICES, LTD.
----------------------------
Name:
Title:
Agreed to:
XXXXX XXXXXXXXXXXX XXXXXXXXXXX &
XXXXXXXXX LLC
----------------------------
Name:
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EXHIBIT B
IOMED, Inc.
0000 Xxxx 0000 Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
VIA FACSIMILE
Elan International Services, Ltd.
000 Xx. Xxxxx Xxxxx
Xxxxxx Xxxxxx XX00
Bermuda
Attention: Xxxxx Xxxxxx
Facsimile: 000-000-0000
NOTICE OF EFFECTIVENESS
Dear Xxxxx:
Under the terms of Section 2 of that Amendment Agreement dated as of
April , 1998 by and among IOMED, Inc., Elan International Services, Ltd.,
Elan International Management, Ltd. and Xxxxx Xxxxxxxxxxxx Xxxxxxxxxxx &
XxXxxxxxx LLC (as escrow agent) be advised that we have received written notice
from the U.S. Securities and Exchange Commission that the Registration
Statement on Form S-1, as amended by Amendment No. filed on 199 ,
has been declared effective as of .
Sincerely,
---------------------
Xxxxxx Xxxxxxx
Chief Financial Officer
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Date
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