EXHIBIT 10.13.2.
OPTION AGREEMENT
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This Option Agreement (the "Agreement") is made as of the 6th day of
March, 2003, by and between Xxxxxxx Laboratories, Inc., a New York corporation
("Xxxxxxx"), and INyX Pharma, Limited., a company organized under the laws of
England and Wales (the "Company").
RECITALS
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WHEREAS, the Company and Xxxxxxx have entered into a certain 6%
Convertible Promissory Note due March 6, 2007 (the "Note"), for an aggregate
principal amount of GBP2,500,000 (the "Principal Amount");
WHEREAS, pursuant to the terms and conditions of the Note, Xxxxxxx may,
at any time during the life of the Note, convert the entirety of the then
outstanding Principal Amount into equity securities of the Company (the
"Conversion Shares");
WHEREAS, upon Xxxxxxx'x conversion of the entire Principal Amount of
the Note into Conversion Shares, Xxxxxxx'x Conversion Shares shall represent
twenty percent (20%) of the rights to vote at general meetings of the Company
and twenty percent (20%) of the right to receive amounts distributed by the
Company by way of dividend or other distribution of the Company's assets (the
"Maximum Xxxxxxx Percentage Interest"), and if the Company pays down the
Principal Amount on the Note, the Maximum Xxxxxxx Percentage Interest shall be
adjusted proportionately (the "Adjusted Xxxxxxx Percentage Interest");
WHEREAS, Xxxxxxx desires to have the option to purchase that amount of
equity shares of the Company that are required for Xxxxxxx to maintain either
the Maximum Xxxxxxx Percentage Interest or the Adjusted Xxxxxxx Percentage
Interest (as applicable); and
WHEREAS, as a condition precedent and material inducement for Xxxxxxx
to extend the Principal Amount to the Company pursuant to the Note, the Company
must execute and deliver this Agreement to Xxxxxxx.
NOW THEREFORE, in consideration of the above recitals and the mutual
covenants, representations, warranties and agreements set forth herein, and for
the purpose of defining the terms and provisions of this Agreement, and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto intending to be legally bound do hereby
agree as follows:
AGREEMENT
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1. Definitions. Capitalized terms used herein are used as defined in
this Section 1 or as defined elsewhere in this Agreement. For purposes of this
Agreement:
(a) The term "Business Day" shall mean any day on which the
commercial banks in the City of Miami, Florida and London, England are
open for business.
(b) The term "Dilutive Event" shall mean any issuance by the
Company of any class of its equity securities or debt or equity
securities convertible into any class of its equity securities (an
"Equity Issue") or any other action by the Company (other than the
repayment of the Note) that would have the effect of reducing the
percentage of the Company's Outstanding Capital Stock represented by
the Conversion Shares to a percentage below the Maximum Xxxxxxx
Percentage Interest or the Adjusted Xxxxxxx Percentage Interest (as
applicable).
(c) The term "Fair Market Price" shall mean such price as may
be agreed between the Company and Xxxxxxx or, in the event that
agreement cannot be reached, the price which an Independent Expert
states in writing to be in its opinion the fair value of the shares
concerned on a sale as between a willing seller and a willing purchaser
and in determining such fair value the Independent Expert shall be
instructed in particular:
(i) to have regard to the rights and restrictions
attached to such shares in respect of income, capital and
voting but to disregard any other special rights or
restrictions attached to such shares;
(ii) to disregard whether such shares represent a
minority or a majority interest; and
(iii) if the Company is then carrying on business as
a going concern, to assume that it will continue to do so,
and the Independent Expert shall be considered to be acting as an
expert and not as an arbitrator and its decision shall be final and
binding.
(d) The term "Independent Expert" shall mean an independent
firm of accountants, investment bankers or a similar suitably qualified
organization to be mutually agreed upon by the parties.
(e) The term "Option Price" shall mean the price per share at
which equity securities are sold pursuant to an Equity Issue constituting a
Dilutive Event or, if there is no Equity Issue, the Fair Market Price of the
subject equity securities relating to the subject Dilutive Event.
(f) The term "Option Shares" shall mean that amount of any
class of the Company's equity shares that represent the Maximum Xxxxxxx
Percentage Interest or the Adjusted Xxxxxxx Percentage Interest (as applicable)
of the total number of equity securities of the Company that are issued in
connection with a subject Dilutive Event.
(g) The term "Outstanding Capital Stock" shall mean, at any
time, the issued and outstanding shares of capital stock of the Company on a
fully diluted basis (i.e. all issued equity shares of the Company and all those
equity shares of the Company which are issuable upon the exercise of options,
puts, convertible debentures, warrants or other securities exercisable or
exchangeable in respect of or for the Company's equity shares).
2. Option.
(a) During the period commencing on the date that Xxxxxxx
shall have converted the Principal Amount of the Note into Conversion Shares
until the date that Xxxxxxx shall no longer be a holder of any of the Company's
equity securities (the "Option Period"), Xxxxxxx may exercise, from time to time
during the Option Period and subject to the terms and conditions contained
herein, the option to acquire the Option Shares for the Option Price (the
"Option"). The exercise by Xxxxxxx of the Option shall entitle Xxxxxxx to
purchase, and shall require the Company to sell, the Option Shares as herein
provided.
(b) During the Option Period, the Company shall provide prior
written notice to Xxxxxxx of any Dilutive Event (a "Dilutive Event Notice").
(c) The Option may be exercised by Xxxxxxx as to all or less
than all of the Option Shares at any time during the Option Period by delivery
of written notice(s) from Xxxxxxx to the Company (the "Notice of Exercise") at
the address specified on the signature page hereto designating the number of and
description of the desired class of Option Shares to be purchased and a date and
time for closing the purchase and sale of such Option Shares (each, a "Closing
Date"), which date and time shall not be earlier than the close of business on
the 5th Business Day, nor later than the close of business on the 10th Business
Day, following delivery by Xxxxxxx of the Notice of Exercise pursuant to this
paragraph.
(d) Upon the exercise of the Option by Xxxxxxx, the Option
Price (or the corresponding proportionate amount of the Option Price in the
event of an exercise of the Option for less than all of the Option Shares) shall
be paid by Xxxxxxx to the Company on the Closing Date by wire transfer of
immediately available funds. In exchange for the payment by Xxxxxxx of the
Option Price (or the lesser proportionate purchase price), the Company shall
deliver to Xxxxxxx certificates evidencing the Option Shares described in the
Notice of Exercise in proper form for transfer, free and clear of any claims,
security interests, liens and encumbrances of any kind, except as provided by
law and/or in the Stockholders Agreement.
3. Closing of Option. The closing of each purchase and sale of Option
Shares hereunder upon the exercise of the Option (each, a "Closing") shall be
held at the principal offices of the Company on the date and time specified in
the Notice of Exercise.
4. Representations and Warranties of the Company. The Company hereby
represents and warrants to Xxxxxxx as of the date hereof:
4.1 Authority. It has full right, power and authority to enter
into this Agreement, and this Agreement has been duly authorized, executed and
delivered by it and constitutes the legal, valid and binding agreement of the
Company enforceable against the Company in accordance with its terms (except in
all cases as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws affecting the
enforcement of creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceeding may be brought).
4.2 Actions Pending. There is no action, suit, claim,
investigation or proceeding pending or, to the knowledge of the Company,
threatened against it which questions the validity of this Agreement and the
transactions contemplated hereby or thereby, or any action taken or to be taken
pursuant hereto or thereto.
4.3 No Conflicts. The execution and delivery of this Agreement
does not, and the consummation of the transactions contemplated hereby will not,
conflict with, or result in any breach pursuant to any provision of any of the
constituent documents of the Company or result in any breach of any material
loan or credit agreement, note, mortgage, indenture, lease, pension plan or
other agreement or obligation of the Company or its properties or assets.
5. Miscellaneous.
5.1 Impairment. The Company will not, by amendment of its
charter documents or through reorganization, consolidation, merger, dissolution,
issue or sale of securities, sale of assets or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the terms of this
Agreement. The Company shall not take any steps in relation to its share capital
which would have the effect of reducing the Option Price payable per share below
par value.
5.2 Issue of Shares. The Company shall, during the Option
Period, ensure that the Company maintains sufficient authorized but unissued
share capital and other authorities and powers of directors of the Company and
take all other requisite action to enable the prompt issue of shares pursuant to
any exercise of the Option.
5.3 Further Assurances. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use all reasonable efforts
to take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable to consummate and make effective as
promptly as practicable the transactions contemplated by this Agreement,
including, without limitation, using all reasonable efforts to obtain all
necessary waivers, consents and approvals and to effect all necessary
registrations and filings.
5.4 Parties in Interest. All representations, covenants and
agreements contained in this Agreement by or on behalf of any of the parties
hereto shall bind and inure to the benefit of the respective successors and
assigns of the parties hereto whether so expressed or not.
5.5 Amendments and Waivers. Any term of this Agreement may be
amended or waived in writing and only with the written consent of Xxxxxxx and
the Company.
5.6 Notices. Unless otherwise provided herein, any notice
required or permitted by this Agreement shall be in writing and shall be deemed
sufficient upon delivery, when delivered personally or by overnight courier or
sent by telegram or fax, or five (5) Business Days after being deposited in the
U.S. mail as certified or registered mail with postage prepaid, and addressed to
the party to be notified at such party's address or fax number as set forth
below or as subsequently modified by written notice.
5.7 Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law. The parties agree to
renegotiate such provision in good faith. In the event that the parties cannot
reach a mutually agreeable and enforceable replacement for such provision, then
(a) such provision shall be excluded from this Agreement, (b) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (c) the
balance of the Agreement shall be enforceable in accordance with its terms.
5.8 Governing Law. This Agreement and all acts and
transactions pursuant hereto shall be governed, construed and interpreted in
accordance with the laws of the State of Florida without giving effect to
principles of conflicts of laws.
5.9 Counterparts. 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.
5.10 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.
5.11 Expenses. Each party hereto will pay its own expenses in
connection with the transactions contemplated hereby, whether or not such
transactions shall be consummated; provided that, if any action at law or in
equity is necessary to enforce or interpret the terms of this Agreement, the
prevailing party shall be entitled to reasonable attorneys' fees, cost and
necessary disbursements in addition to any other relief to which such party may
be entitled.
5.12 Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subject
matter hereof.
5.13 Survival of Agreement. All representations and warranties
made herein or in any agreement, certificate or instrument delivered to Xxxxxxx
pursuant to or in connection with this Agreement shall survive the execution and
delivery of this Agreement and the issuance, sale and delivery of the Option
Shares.
5.14 Brokerage. Each party hereto will indemnify and hold
harmless the others against and in respect of any claim for brokerage or other
commissions relative to this Agreement or to the transactions contemplated
hereby, based in any way on agreements, arrangements or understandings made or
claimed to have been made by such party with any third party.
[signature page follows]
The parties have executed this Option Agreement as of the date first
above written.
XXXXXXX LABORATORIES, INC.
By /S/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Vice President, CFO and Treasurer
Address: 000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxx
Fax: 000-000-0000
INYX PHARMA, LTD.
By: /S/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Director
Address: Innovation House
0 Xxxxxxx Xxxxx, Xxxxx Xxxx
Xxxxxxx, Xxxxxxxx, Xxxxxxx
Fax: 00-000-000000
