Exhibit 99.5
VASOGEN INC.
VASOGEN IRELAND LIMITED
c/o Vasogen Inc.
0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
November 3, 2005
SMITHFIELD FIDUCIARY LLC
c/o Highbridge Capital Management, LLC
0 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxx X. Xxxxxx and Xxxx X. Chill
Dear Sirs:
We refer to the Senior Convertible Note, dated as of October 7, 2005 (the
"Note"), issued by Vasogen Ireland Limited, a company incorporated under the
laws of the Republic of Ireland (the "Company"), and acknowledged and agreed to
by Vasogen Inc., a Canadian corporation (the "Parent"), in favor of Smithfield
Fiduciary LLC, a Cayman Islands company (the "Holder"), in the original
principal amount of U.S. Three Million Dollars (US$3,000,000). Capitalized terms
used but not defined in this letter agreement ("Letter") have the respective
meanings set forth in the Note.
The Company, the Parent and the Holder hereby agree as follows:
1. Amendment. Subject to the execution by the Company, the Parent and the
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holders of the Other Notes of letters in identical form and substance to this
Letter, the Note is hereby amended by adding the following subsections (f) and
(g) at the end of Section 3 thereof:
"(f) Payment in Lieu of Conversion Above Number of Common Shares Available
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for Resale under the Registration Statement. If at any time while this
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Note is outstanding, the Holder delivers a Conversion Notice and, on the
date of receipt of such Conversion Notice by Vasogen (the "Conversion
Notice Date"), following the application of, when applicable, Section 3(e)
hereof, the number of Common Shares that Vasogen would otherwise be
required to issue pursuant to the foregoing provisions of this Section 3
to satisfy such conversion in full (the "Required Conversion Shares")
exceeds the number of Common Shares that are available for resale under
the Registration Statement (as defined in the Registration Rights
Agreement) (such excess, the "Unregistered
2
Shares" and the difference between the Required Conversion Shares minus
the Unregistered Shares, the "Available Shares"), then (A) the Company
shall direct Vasogen to, and upon such direction Vasogen shall or shall
cause the Transfer Agent to, issue to the Holder the Available Shares by
the third (3rd) Trading Day following receipt of the applicable Conversion
Notice and (B) the Company shall pay to the Holder, in lieu of Vasogen
issuing Unregistered Shares and in addition to any Conversion Make-Whole
amount required to be paid pursuant to Section 3(e), within twelve (12)
Trading Days following the Conversion Notice Date in cash an amount equal
to the product of (x) the Unregistered Shares multiplied by (y) (1) in the
event the Holder has not received an Unavailability Notice (as defined
below) prior to the delivery of its Conversion Notice, 105% of the
arithmetic average of the Weighted Average Price of the Common Shares
during the period beginning on, and including, the day the Holder delivers
its Conversion Notice and ending on, and including, the third (3rd)
Trading Day following receipt of such Conversion Notice or (2) in the
event the Holder has received an Unavailability Notice prior to delivery
of such Conversion Notice, 105% of the Weighted Average Price of the
Common Shares on the applicable Conversion Date (the "Unregistered Shares
Redemption Payment"); provided, however, that if at any time the
arithmetic average of the Weighted Average Price of the Common Shares
calculated for the applicable period or day in accordance with clause (1)
or (2) is less than $1.00, then for purposes of clause (y) such arithmetic
average shall be multiplied by 110% instead of 105% to determine the
Unregistered Shares Redemption Payment. In the event that the Company and
Vasogen receive a Conversion Notice from more than one holder of Notes for
the same Conversion Date and the Available Shares can cover some, but not
all, of such portions of the Notes submitted for conversion, Vasogen shall
allocate the Available Shares amongst the converting holders in accordance
with Section 3(c)(iv). Provided that Vasogen delivers the Common Shares
and makes the Unregistered Shares Redemption Payment in the time periods
set forth in clauses (A) and (B) of the foregoing sentence, the
obligations of the Company and Vasogen with respect to such Conversion
Notice shall be deemed to be fully satisfied and the Holder shall have no
right to pursue any remedies set forth in Section 3(c)(ii) hereof with
respect to such Conversion Notice.
(g) Notice of Unavailability of Common Shares Under the Registration
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Statement. The Company or Vasogen shall deliver to the Holder a written
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notice (an "Unavailability Notice") that there are no additional Common
Shares available for resale under the
3
Registration Statement (the "Unavailability Date") at the earlier of (i)
no more than one (1) Trading Day after such Unavailability Date or (ii) no
more than one (1) Trading Day after the delivery of any Conversion Notice
by a Holder requiring a conversion of a number of Required Conversion
Shares in excess of the amount of any Available Shares."
2. Expenses. The Company shall pay an amount to the Holder or its
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designee(s) to cover legal expenses reasonably incurred by the Holder in
relation to the review, preparation and execution of this Letter.
3. Ratification of the Note. Except as expressly provided herein, all of
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the terms and conditions of the Note are ratified and shall remain unchanged and
continue in full force and effect.
4. Further Assurances. Each party shall do and perform, or cause to be
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done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
any other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Letter.
5. Governing Law. This Letter shall be governed by and construed in
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accordance with the laws of the State of New York.
6. Execution in Counterparts. This Letter may be executed in several
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counterparts, each of which shall be deemed to be an original and all of which
shall constitute one and the same Letter. Signature pages exchanged by facsimile
or other electronic means shall be fully binding.
7. Headings. The headings in this Letter are for convenience of reference
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only, and shall not be deemed to alter or affect the meaning or interpretation
of any provisions hereof.
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Please confirm your understanding and agreement of the foregoing by
signing below and returning an executed counterpart of this Letter to the
undersigned.
Very truly yours,
SIGNED BY XXXX XXXX AS A DEED
FOR AND ON BEHALF OF VASOGEN
IRELAND LIMITED PURSUANT TO A
POWER OF ATTORNEY
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Pursuant to a Power of Attorney
VASOGEN INC.
By:
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Name:
Title:
Accepted and agreed to as of the date first written above by:
SMITHFIELD FIDUCIARY LLC
By:
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Name:
Title:
