UNSECURED CONVERTIBLE DEBENTURE
PURCHASE AGREEMENT
THIS UNSECURED CONVERTIBLE DEBENTURE PURCHASE AGREEMENT (the
"Agreement") is entered into as of February 5, 2004, by and between MIRAVANT
MEDICAL TECHNOLOGIES, a Delaware corporation (the "Company"), with headquarters
located at 000 Xxxxxx Xxxxx, Xxxxx Xxxxxxx, Xxxxxxxxxx 00000, and each of the
purchasers (individually, a "Purchaser," and, collectively, the "Purchasers")
set forth on the execution pages hereof (each, an "Execution Page," and,
collectively, the "Execution Pages").
RECITALS
A. The parties hereto have agreed to the term and provisions of a Letter of
Intent entitled "Summary of Key Terms - Convertible Note" dated January 29, 2004
(the "Term Sheet") which will be superseded in its entirety by this Agreement.
B. The Company and the Purchasers are executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by the
provisions of Regulation D ("Regulation D"), as promulgated by the United States
Securities and Exchange Commission (the "SEC") under the Securities Act of 1933,
as amended (the "Securities Act");
C. Subject to the terms and conditions stated in this Agreement, the Company
desires to issue and sell to the Purchasers, and each Purchaser desires to
purchase an Unsecured Convertible Debenture, in the form attached hereto as
Exhibit A (collectively, the "Debentures"), which Debentures shall be
convertible into shares of the Company's common stock, par value $0.01 per share
(the "Common Stock"), at an initial conversion rate of TWO DOLLARS ($2.00) per
share. The shares of Common Stock issuable upon conversion of or otherwise
pursuant to the Debentures, including, without limitation, any shares of Common
Stock issued as interest payments under the Debentures, are referred to herein
as the "Conversion Shares." The Debentures and the Conversion Shares are
collectively referred to herein as the "Securities" and each of them may
individually be referred to herein as a "Security;"
D. The Debentures shall be junior to those certain unsecured convertible notes
issued by the Company in accordance with a Convertible Debt Purchase Agreement
dated December 19, 2002, as amended and a Convertible Debenture and Warrant
Purchase Agreement dated August 28, 2003 (the "Existing Notes"), and the Company
shall obtain the consent of the holders of the Existing Notes to the offering of
the Securities if necessary; and
E. Contemporaneously with the execution and delivery of this Agreement, the
parties hereto are executing and delivering a Registration Rights Agreement, in
the form attached hereto as Exhibit B (the "Registration Rights Agreement"),
pursuant to which the Company has agreed to provide certain registration rights
under the Securities Act, the rules and regulations promulgated thereunder and
applicable state securities laws. This Agreement, the Debentures, and the
Registration Rights Agreement are collectively referred to herein as the
"Transaction Documents."
NOW, THEREFORE, in consideration of their respective promises contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and the Purchasers, intending to be
legally bound, hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF debentures
1.1 Purchase and Sale of Units. Subject to the terms and conditions of this
Agreement, at the Closing (as defined in Section 1.2 below), the Company shall
issue and sell to each Purchaser, and each Purchaser, severally and not jointly,
shall purchase from the Company, such Debenture as is set forth on such
Purchaser's Execution Page, for a purchase price as set forth in each Debenture
(the "Purchase Price"). The aggregate principal amount of Debentures to be
issued and sold by the Company to all Purchasers pursuant to this Agreement
shall not exceed TWO MILLION DOLLARS ($2,000,000.00).
1.2 The Closing. Subject to the satisfaction (or waiver) of the conditions set
forth in Articles VI and VII below, the closing of the transactions contemplated
hereby (the "Closing") shall take place at the offices of Sheppard, Mullin,
Xxxxxxx & Xxxxxxx LLP at 000 Xxxxxxx Xxxxxx, Xxxxx Xxxxxxx, Xxxxxxxxxx 00000 at
10:00 a.m., California time, on the date hereof, or at such other time or place
as the Company and the Purchasers may mutually agree (the "Closing Date").
1.3 Form of Payment. Each Purchaser shall pay the Purchase Price indicated in
the Debenture being purchased by such Purchaser by wire transfer to the account
designated by the Company.
ARTICLE II
PURCHASER REPRESENTATIONS AND WARRANTIES
Each Purchaser severally, but not jointly, represents and warrants to
the Company, as of the date hereof and as of the Closing, as follows:
2.1 Investment Purpose. Each Purchaser is purchasing the Securities for such
Purchaser's own account for investment purposes only and not with a present view
toward or in connection with the public sale or distribution thereof, except
pursuant to sales that are exempt from the registration requirements of the
Securities Act and/or sales registered under the Securities Act. Such Purchaser
understands that such Purchaser must bear the economic risk of this investment
indefinitely, unless the Securities are registered pursuant to the Securities
Act and any applicable state securities laws or an exemption from such
registration is available, and that the Company has no present intention of
registering any such Securities other than as contemplated by the Registration
Rights Agreement. Notwithstanding anything in this Section 2.1 to the contrary,
by making the representations herein, such Purchaser does not agree to hold the
Securities for any minimum or other specific term and reserves the right to
dispose of the Securities at any time in accordance with or pursuant to a
registration statement or an exemption from the registration requirements under
the Securities Act and applicable state securities laws.
2.2 Accredited Investor Status. Such Purchaser is an "accredited investor" as
that term is defined in Rule 501(a) of Regulation D.
2.3 Reliance on Exemptions. Such Purchaser understands that the Securities are
being offered and sold to such Purchaser in reliance upon specific exemptions
from the registration requirements of United States federal and state securities
laws and that the Company is relying upon the truth and accuracy of, and each
Purchaser's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Purchaser set forth herein in order
to determine the availability of such exemptions and the eligibility of such
Purchaser to acquire the Securities.
2.4 Information. Such Purchaser and its counsel, if any, have been furnished all
materials relating to the business, finances and operations of the Company and
materials relating to the offer and sale of the Securities which have been
specifically requested by such Purchaser or its counsel, including, without
limitation, the Company's Select SEC Documents (as defined in Section 3.6
below). Such Purchaser has been afforded the opportunity to ask questions of the
Company, was permitted to meet with the Company's officers and has received what
such Purchaser believes to be complete and satisfactory answers to any such
inquiries. Notwithstanding the foregoing, neither such inquiries nor any other
due diligence investigation conducted by such Purchaser or its counsel or any of
their representatives shall modify, amend or affect such Purchaser's right to
rely on the Company's representations and warranties contained in Article III
hereof. Such Purchaser understands that such Purchaser's investment in the
Securities involves a high degree of risk, including, without limitation, the
risks and uncertainties disclosed in the Select SEC Documents.
2.5 Governmental Review. Such Purchaser understands that no United States
federal or state agency or any other government or governmental agency has
passed upon or made any recommendation or endorsement of the Securities.
2.6 Transfer or Resale. Such Purchaser understands that (a) except as provided
in the Registration Rights Agreement, the sale or resale of the Securities have
not been and are not being registered under the Securities Act or any state
securities laws, and the Securities may not be offered, sold, pledged or
otherwise transferred unless subsequently registered thereunder or an exemption
from such registration is available (which exemption the Company expressly
agrees may be established as contemplated in clauses (b), (c) or (d) of Section
5.2 hereof); (b) any sale of such Securities made in reliance on Rule 144 under
the Securities Act (or a successor rule) ("Rule 144") may be made only in
accordance with the terms of Rule 144 and further, if Rule 144 is not
applicable, any resale of such Securities without registration under the
Securities Act under circumstances in which the seller may be deemed to be an
underwriter (as that term is defined in the Securities Act) may require
compliance with some other exemption under the Securities Act or the rules and
regulations of the SEC thereunder in order for such resale to be allowed; (c)
the Company is under no obligation to register such Securities under the
Securities Act or any state securities laws or to comply with the terms and
conditions of any exemption thereunder (in each case, other than pursuant to
this Agreement and the Registration Rights Agreement); (d) the Company has
agreed to register the resale of the Conversion Shares as provided in the
Registration Rights Agreement; and (e) notwithstanding the foregoing or anything
else contained herein to the contrary, the Securities may be pledged as
collateral in connection with a bona fide margin account or other lending
arrangement, provided such pledge is consistent with applicable laws, rules and
regulations and the provisions of the Transaction Documents.
2.7 Legends. Such Purchaser understands that, subject to Article V hereof and
until such time as the Securities have been registered under the Securities Act
as contemplated by the Registration Rights Agreement or otherwise may be sold by
such Purchaser pursuant to Rule 144, the certificates for the Securities will
bear a restrictive legend (the "Legend") in the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF
ANY STATE OF THE UNITED STATES. THE SECURITIES REPRESENTED HEREBY MAY
NOT BE OFFERED OR SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE
SECURITIES LAWS OR UNLESS OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY
IN ACCORDANCE WITH THE TERMS OF A UNSECURED CONVERTIBLE DEBENTURE
PURCHASE AGREEMENT, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF
THE COMPANY, AND MAY BE OBTAINED BY HOLDER WITHOUT CHARGE.
2.8 Authorization: Enforcement. This Agreement and the Registration Rights
Agreement have been duly and validly authorized, executed and delivered on
behalf of such Purchaser and are valid and binding agreements of such Purchaser
enforceable against such Purchaser in accordance with their respective terms.
2.9 Residency. Such Purchaser is a resident of the jurisdiction set forth under
such Purchaser's name on the Execution Page hereto executed by such Purchaser.
Each Purchaser's representations and warranties made in this Article II
are made solely for the purpose of permitting the Company to make a
determination that the offer and sale of the Securities pursuant to this
Agreement comply with applicable United States federal and state securities laws
and not for any other purpose. Accordingly, the Company many not rely on such
representations and warranties for any other purpose. No Purchaser has made or
hereby makes any other representations or warranties, express or implied, to the
Company in connection with the transactions contemplated hereby.
ARTICLE III
COMPANY REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to each Purchaser, as of the date
hereof and as of the Closing, as follows:
3.1 Organization and Qualification. The Company is a corporation duly organized
and existing in good standing under the laws of the jurisdiction in which it is
incorporated, and has the requisite corporate power to own its properties and to
carry on its business as now being conducted. The Company is duly qualified as a
foreign corporation to do business and is in good standing in every jurisdiction
where the failure so to qualify or be in good standing would have a Material
Adverse Effect. For purposes of this Agreement, "Material Adverse Effect" means
any effect which, individually or in the aggregate with all other effects,
reasonably would be expected to be materially adverse to (a) the Securities, (b)
the ability of the Company to perform its obligations under this Agreement or
the other Transaction Documents, or (c) the business, operations, properties,
financial condition, operating results or prospects of the Company, taken as a
whole on a consolidated basis.
3.2 Authorization; Enforcement. Except for the authorization of the shareholders
of the Conversion Shares which is expected within ninety (90) days after the
date of this Agreement, (a) the Company has the requisite corporate power and
authority (i) to enter into and perform its obligations under this Agreement and
the other Transaction Documents, (ii) to issue, sell and perform its obligations
with respect to the Securities in accordance with the terms hereof and thereof,
and (iii) to issue the Conversion Shares upon conversion of the Debentures in
accordance with the terms thereof; (b) the execution, delivery and performance
of this Agreement and the other Transaction Documents by the Company and the
consummation by it of the transactions contemplated hereby and thereby
(including, without limitation, the issuance and reservation for issuance of the
Conversion Shares) have been duly authorized by all necessary corporate action
and, except as set forth on Schedule 3.2 hereto, no further consent or
authorization of the Company, its board of directors (or any committee thereof),
its stockholders or any other person, body or agency is required with respect to
any of the transactions contemplated hereby or thereby; (c) this Agreement and
the other Transaction Documents have been duly executed and delivered by the
Company; and (d) this Agreement and the other Transaction Documents (including,
without limitation, the Securities) constitute legal, valid and binding
obligations of the Company enforceable against the Company in accordance with
their respective terms.
3.3 Capitalization. The capitalization of the Company as of the date hereof,
including the authorized capital stock, the number of shares issued and
outstanding, the number of shares issuable and reserved for issuance pursuant to
the Company's stock option plans, the number of shares issuable and reserved for
issuance pursuant to securities (other than the Debentures) exercisable or
exchangeable for, or convertible into, any shares of capital stock is set forth
on Schedule 3.3 hereto. All of such outstanding shares of capital stock have
been, or upon issuance will be, validly issued, fully paid and non-assessable.
No shares of capital stock of the Company (including the Conversion Shares) are
subject to preemptive rights or any other similar rights of the stockholders of
the Company or any liens or encumbrances. Except as disclosed in Schedule 3.3
hereto, (a) there are no outstanding options, warrants, scrip, rights to
subscribe for, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into or exercisable or exchangeable for, any
shares of capital stock of the Company, or contracts, commitments,
understandings or arrangements by which the Company is or may become bound to
issue additional shares of capital stock of the Company, nor are any such
issuances, contracts, commitments, understandings or arrangements contemplated,
(b) there are no outstanding securities or instruments of the Company which
contain any redemption or similar provisions and there are no contracts,
commitments, understandings or arrangements by which the Company is or may
become bound to redeem or otherwise acquire any security of the Company, and (c)
there are no agreements or arrangements under which the Company is obligated to
register the sale of any of its or their securities under the Securities Act
(except the Registration Rights Agreement). Schedule 3.3 hereto sets forth all
of the securities or instruments of the Company that contain anti-dilution or
similar provisions, and, except as and to the extent set forth thereon, the sale
and issuance of the Securities will not trigger any anti-dilution adjustments to
any such securities or instruments. The Company will make available upon request
to each Purchaser true and correct copies of the Company's Certificate of
Incorporation as in effect on the date hereof ("Certificate of Incorporation"),
the Company's Bylaws as in effect on the date hereof (the "Bylaws") and all
other instruments and agreements governing securities convertible into or
exercisable or exchangeable for capital stock of the Company, all of which
instruments and agreements are set forth on Schedule 3.3 hereto. The Company has
the unrestricted right to vote and, subject to limitations imposed by applicable
law, to receive dividends and distributions on all securities of its
subsidiaries as owned by the Company. The Existing Notes are held by those
parties listed on Schedule 3.3 hereto.
3.4 Issuance of Securities. The Debentures are duly authorized and, upon
issuance in accordance with the terms of this Agreement, (a) will be validly
issued, fully paid and non-assessable, and free from all taxes, liens, claims
and encumbrances, (b) will not be subject to preemptive rights, rights of first
refusal or other similar rights of stockholders of the Company or any other
person that have not been duly and properly waived or complied with, and (c)
will not impose personal liability on the holder thereof. The Conversion Shares
are not currently authorized and not reserved for issuance. Upon approval by the
shareholders of the Company, the Conversion Shares will be duly authorized and
reserved for issuance, and, upon conversion of the Debentures in accordance with
the terms thereof, (i) will be validly issued, fully paid and non-assessable,
and free from all taxes, liens, claims and encumbrances, (ii) will not be
subject to preemptive rights, rights of first refusal or other similar rights of
stockholders of the Company or any other person, and (iii) will not impose
personal liability on the holder thereof.
3.5 No Conflicts. The execution, delivery and performance of this Agreement and
the other Transaction Documents by the Company and the consummation by the
Company of transactions contemplated hereby and thereby (including, without
limitation, the issuance of the Debentures and reservation for issuance of the
Conversion Shares) do not and will not (a) result in a violation of the
Certificate of Incorporation or Bylaws, (b) conflict with, or constitute a
default (or an event which, with notice or lapse of time or both, would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
the Company is a party, or (c) result in a violation of any law, rule,
regulation, order, judgment or decree (including U.S. federal and state
securities laws, rules and regulations and rules and regulations of any
self-regulatory organizations to which either the Company or its securities are
subject) applicable to the Company, or by which any property or asset of the
Company is bound or affected (except, with respect to clauses (b) and (c), for
such possible conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations as would not, individually or in the aggregate,
have a Material Adverse Effect). The Company is not in violation of its
Certificate of Incorporation, Bylaws or other organizational documents, and the
Company is not in default (and no event has occurred which has not been waived
which, with notice or lapse of time or both, would put the Company in default)
under, nor has there occurred any event giving others (with notice or lapse of
time or both) any rights of termination, amendment, acceleration or cancellation
of, any agreement, indenture or instrument to which the Company is a party
(including, without limitation, the Contracts (as defined in Section 3.6
below)), except for possible violations, defaults or rights as would not,
individually or in the aggregate, have a Material Adverse Effect. The businesses
of the Company is not being conducted, and shall not be conducted so long as any
Purchaser owns any of the Securities, in violation of any law, ordinance or
regulation of any governmental entity, except for possible violations the
sanctions for which either individually or in the aggregate would not have a
Material Adverse Effect. The Company possess all certificates, authorizations
and permits issued by the appropriate federal, state, provincial or foreign
regulatory authorities that are material to the conduct of their businesses, and
the Company has not received any notice of proceeding relating to the revocation
or modification of any such certificate, authorization or permit. Except (i) as
may be required under the Securities Act in connection with the performance of
the Company's obligations under the Registration Rights Agreement, (ii) for the
filing of a Form D with the SEC, (iii) as may be required for compliance with
the state securities or Blue Sky laws of applicable jurisdictions, or (iv) as
otherwise set forth on Schedule 3.5 hereto, the Company is not required to
obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency or any regulatory or
self-regulatory agency in order for it to execute, deliver or perform any of its
obligations under this Agreement or the other Transaction Documents or to
perform its obligations in accordance with the terms hereof or thereof.
3.6 SEC Documents. Since December 31, 1998, the Company has timely filed all
reports, schedules, forms, statements and other documents required to be filed
by it with the SEC pursuant to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") (all of the foregoing
filed prior to the date hereof and all exhibits included therein and financial
statements and schedules thereto and documents incorporated by reference
therein, the "SEC Documents"). The Company has made available to each Purchaser
true and complete copies of the SEC Documents. As of their respective dates, the
SEC Documents complied in all material respects with the requirements of the
Exchange Act or the Securities Act, as applicable, and the rules and regulations
of the SEC promulgated thereunder applicable to the SEC Documents, and none of
the SEC Documents, at the time they were filed with the SEC, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. None of
the statements made in any such SEC Documents which is required to be updated or
amended under applicable law has not been so updated or amended in subsequent
filings made prior to the date hereof. As of their respective dates, the
consolidated financial statements of the Company included in the SEC Documents
complied as to form in all material respects with applicable accounting
requirements and the rules and regulations of the SEC applicable with respect
thereto. Such consolidated financial statements have been prepared in accordance
with U.S. generally accepted accounting principles ("GAAP"), consistently
applied, and the rules and regulations of the SEC during the periods involved
(except (i) as may be otherwise indicated in such consolidated financial
statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they do not include footnotes or are condensed or
summary statements) and present accurately and completely the consolidated
financial position of the Company as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended (subject,
in the case of unaudited statements, to normal, immaterial year-end audit
adjustments). Except as set forth in a manner clearly evident to a sophisticated
institutional investor in the consolidated financial statements or the notes
thereto of the Company included in the Select SEC Documents (as defined below),
the Company has no liabilities, contingent or otherwise, other than (i)
liabilities incurred in the ordinary course of business consistent with past
practice subsequent to the date of such financial statements and (ii)
obligations under contracts and commitments incurred in the ordinary course of
business consistent with past practice and not required under GAAP to be
reflected in such financial statements, which liabilities and obligations
referred to in clauses (i) and (ii) are not, individually or in the aggregate,
material to the financial condition or operating results of the Company. To the
extent required by the rules of the SEC applicable thereto, the Select SEC
Documents contain a complete and accurate list of all material undischarged
written or oral contracts, agreements, leases or other instruments to which the
Company is a party or by which the Company is bound or to which any of the
properties or assets of the Company is subject (each a "Contract"). Except as
set forth in the Select SEC Documents, the Company, is not to the best knowledge
of the Company, in breach or violation of any Contract, which breach or
violation would have a Material Adverse Effect. For purposes of this Agreement,
"Select SEC Documents" means the Company's (i) Proxy Statement for its 2003
Annual Meeting, (ii) Annual Report on Form 10-K for the fiscal year ended
December 31, 2002, (iii) Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 2003, June 30, 2003 and September 30, 2003 and (iv) Current
Reports on Form 8-K filed since December 31, 2002.
3.7 Absence of Certain Changes. Except as set forth in the Select SEC Documents,
since September 30, 2003, to the best of the Company's knowledge there has been
no material adverse change and no material adverse development in the business,
properties, operations, financial condition, results of operations or prospects
of the Company, taken as a whole, other than extensions or waivers of the
Existing Notes. The Company has not taken any steps, and does not currently
expect to take any steps, to seek protection pursuant to any bankruptcy or
receivership law, nor does the Company have any knowledge or reason to believe
that its creditors intend to initiate involuntary bankruptcy proceedings with
respect to the Company.
3.8 Absence of Litigation. Except as disclosed in the Select SEC Documents, to
the best of the Company's knowledge there is no action, suit, proceeding,
inquiry or investigation before or by any court, public board, government
agency, or self-regulatory organization or body (including, without limitation,
the SEC) pending or, to the knowledge of the Company, threatened against or
affecting the Company, or any of their respective directors or officers in their
capacities as such, which could reasonably be expected to result in an
unfavorable decision, ruling or finding which would have a Material Adverse
Effect. There are no facts known to the Company (other than as disclosed in the
Select SEC Documents) which, if known by a potential claimant or governmental
authority, could reasonably be expected to give rise to a claim or proceeding
which, if asserted or conducted with results unfavorable to the Company, could
reasonably be expected to have a Material Adverse Effect.
3.9 Disclosure. All information relating to or concerning the Company set forth
in this Agreement or provided to the Purchasers pursuant to this Agreement or
otherwise in connection with the transactions contemplated hereby is true and
correct in all material respects and the Company has not omitted to state any
material fact necessary in order to make the statements made herein or therein,
in light of the circumstances under which they were made, misleading. Except for
the execution and performance of this Agreement, no event or circumstance has
occurred or exists with respect to the Company or its businesses, properties,
prospects, operations or financial conditions, which has not been publicly
disclosed but, under applicable law, rule or regulation, would be required to be
disclosed by the Company in a registration statement filed on the date hereof by
the Company under the Securities Act with respect to a primary issuance of the
Company's securities.
3.10 Acknowledgment Regarding Each Purchaser's Purchase of the Securities. The
Company acknowledges and agrees that each Purchaser is acting solely in the
capacity of arm's length purchaser with respect to this Agreement and the other
Transaction Documents and the transactions contemplated hereby and thereby, and
that no Purchaser is (a) an officer or director of the Company, or (b) an
"affiliate" of the Company (as defined in Rule 144). The Company further
acknowledges that no Purchaser is acting as a financial advisor or fiduciary of
the Company (or in any similar capacity) with respect to this Agreement or the
other Transaction Documents or the transactions contemplated hereby or thereby,
and that any statement made by any Purchaser or any of its representatives or
agents in connection with this Agreement or the other Transaction Documents and
the transactions contemplated hereby and thereby is not advice or a
recommendation, is merely incidental to such Purchaser's purchase of the
Securities and has not been relied upon as such in any way by the Company, its
officers or directors (except for the representations and warranties of such
Purchaser in Article II hereof, which may be relied upon by the Company to the
extent provided therein). The Company further represents to each Purchaser that
the Company's decision to enter into this Agreement and the other Transaction
Documents and to consummate the transactions contemplated hereby and thereby
have been based solely on an independent evaluation by the Company and its
representatives.
3.11 No General Solicitation. Neither the Company nor any distributor
participating on the Company's behalf in the transactions contemplated hereby
(if any) nor any person acting for the Company or any such distributor has
conducted any "general solicitation" (as defined in Regulation D) with respect
to any of the Securities being offered hereby.
3.12 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 security or solicited any offers to buy any security
under circumstances that would require registration of the Securities being
offered hereby under the Securities Act or cause this offering of the Securities
to be integrated with any prior offering of securities of the Company for
purposes of the Securities Act, which result of integration would require
registration of the Securities under the Securities Act. The transactions
contemplated hereby are exempt from the registration requirements of the
Securities Act, assuming the accuracy of the representations and warranties of
each Purchaser set forth in Article II hereof.
3.13 No Brokers. The Company has taken no action which would give rise to any
claim by any person for brokerage commissions, finder's fees or similar payments
by any Purchaser relating to this Agreement or the transactions contemplated
hereby.
3.14 Intellectual Property. To the best of its knowledge the Company owns or is
duly licensed (and, in such event, has the unfettered right to grant
sublicenses) to use all patents, patent applications, trademarks, trademark
applications, trade names, service marks, copyrights, copyright applications,
licenses, permits, inventions, discoveries, processes, scientific, technical,
engineering and marketing data, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information, systems
or procedures) and other similar rights and proprietary knowledge (collectively,
"Intangibles") necessary for the conduct of its business as now being conducted
and as presently contemplated to be conducted in the future as described in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
2003. To the best of its knowledge the Company does not infringe on nor is it in
conflict with any right of any other person with respect to any Intangibles, nor
is there any claim of infringement made by a third party against or involving
the Company, which infringement, conflict or claim, individually or in the
aggregate, could reasonably be expected to result in an unfavorable decision,
ruling or finding which would have a Material Adverse Effect. The Company has
not entered into any consent agreement, indemnification agreement, forbearance
to xxx or settlement agreement with respect to the validity of the Company's
ownership of or right to use its Intangibles and there is no reasonable basis
for any such claim to be successful. The Intangibles are valid and enforceable
and no registration relating thereto has lapsed, expired or been abandoned or
canceled or is the subject of cancellation or other adversarial proceedings, and
all applications therefor are pending and in good standing. The Company has
complied, in all material respects, with their respective contractual
obligations relating to the protection of the Intangibles used pursuant to
licenses. No person is infringing on or violating the Intangibles owned or used
by the Company.
3.15 Key Employees. No Key Employee (as defined below) is, or is now expected to
be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement,
non-competition agreement, or any other contract or agreement or any restrictive
covenant, and the continued employment of each Key Employee does not subject the
Company to any liability with respect to any of the foregoing matters. No Key
Employee has, to the best knowledge of the Company, any intention to terminate
or limit his employment with, or services to, the Company, nor is any such Key
Employee subject to any constraints which would cause such Key Employee to be
unable to devote his full time and attention to such employment or services. For
purposes of this Agreement, "Key Employee" means each of Xxxx X. Xxxxxxx,
Chairman of the Board and Chief Executive Officer, Xxxxx X. Xxx, President, and
Xxxx X. Xxxxxxxx, Chief Financial Officer and Treasurer.
3.16 Transactions With Affiliates. Except as set forth in the Select SEC
Documents, none of the officers, directors, or employees of the Company is
presently a party to any material transaction with the Company (other than for
ordinary course services solely in their capacity as officers, directors or
employees), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any such
officer, director or employee or any corporation, partnership, trust or other
entity in which any such officer, director, or employee has an ownership
interest of five percent or more or is an officer, director, trustee or partner.
3.17 Tax Status. Except as set forth in the Select SEC Documents, the Company
has made or filed all foreign, U.S. federal, state, provincial and local income
and all other tax returns, reports and declarations required by any jurisdiction
to which it is subject (unless and only to the extent that the Company has set
aside on its books provisions reasonably adequate for the payment of all unpaid
and unreported taxes) and has paid all taxes and other governmental assessments
and charges that are material in amount, shown or determined to be due on such
returns, reports and declarations (except those being contested in good faith),
and has set aside on its books provisions reasonably adequate for the payment of
all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply. There are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any jurisdiction, and the officers of the
Company know of no basis for any such claim. The Company has not executed a
waiver with respect to any statute of limitations relating to the assessment or
collection of any foreign, federal, state, provincial or local tax. None of the
Company's tax returns is, to the best knowledge of the Company, presently the
subject of any material audit proceedings by any taxing authority.
3.18 Employee Relations. The Company is not involved in any material union labor
dispute nor, to the knowledge of the Company is any such dispute threatened. The
Company believes that its relations with its employees are good. No executive
officer (as defined in Rule 501(f) of the Securities Act) has notified the
Company that such officer intends to leave the Company or otherwise terminate
such officer's employment with the Company. The Company is in compliance with
all federal, state, local and foreign laws and regulations respecting employment
and employment practices, terms and conditions of employment and wages and
hours, except where failure to be in compliance would not, either individually
or in the aggregate, result in a Material Adverse Effect.
3.19 Insurance. The Company has in force fire, casualty, product liability and
other insurance policies, with extended coverage, sufficient in amount to allow
it to replace any of its material properties or assets which might be damaged or
destroyed or sufficient to cover liabilities to which the Company may reasonably
become subject, and such types and amounts of other insurance with respect to
its business and properties, on both a per occurrence and an aggregate basis, as
are customarily carried by persons engaged in the same or similar business as
the Company. No default or event has occurred that could give rise to a default
under any such policy.
3.20 Environmental Matters. There is no environmental litigation or other
environmental proceeding pending or, to the best knowledge of the Company,
threatened by any governmental regulatory authority or others with respect to
the current or any former business of the Company or any partnership or joint
venture currently or at any time affiliated with the Company. No state of facts
exists as to environmental matters or Hazardous Substances (as defined below)
that involves the reasonable likelihood of a material capital expenditure by the
Company or that may otherwise have a Material Adverse Effect. No Hazardous
Substances have been treated, stored or disposed of, or otherwise deposited, in
or on the properties owned or leased by the Company or by any partnership or
joint venture currently or at any time affiliated with the Company is in
violation of any applicable environmental laws. The environmental compliance
programs of the Company comply in all respects with all environmental laws,
whether foreign, federal, state, provincial or local, currently in effect. For
purposes of this Agreement, "Hazardous Substances" means any substance, waste,
contaminant, pollutant or material that has been determined by any governmental
authority to be capable of posing a risk of injury to health, safety, property
or the environment.
3.21 Anti-Takeover Provisions. The Company and its board of directors have taken
all necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution under
the shareholders rights plan that the Company presently has in effect) or other
similar anti-takeover provision under its Certificate of Incorporation or the
laws of the state of its incorporation which is or could become applicable to
any Purchaser as a result of the transactions contemplated by this Agreement,
including without limitation, the Company's issuance of the Securities or any
other securities pursuant to the terms of this Agreement and any and all
Purchaser's ownership of the Securities or any such other securities.
3.22 Acknowledgment Regarding Securities. The number of Conversion Shares
issuable upon conversion of the Debentures may increase in certain
circumstances. The Company's directors and executive officers have studied and
fully understand the nature of the Securities being sold hereunder. The Company
acknowledges that its obligation to issue Conversion Shares upon conversion of
the Debentures in accordance with the terms thereof is absolute and
unconditional, regardless of the dilution that such issuance may have on the
ownership interests of other stockholders and the availability of remedies
provided for in any of the Transaction Documents relating to a failure or
refusal to issue Conversion Shares. Taking the foregoing into account, the
Company's board of directors has determined in its good faith business judgment
that the issuance of the Debentures hereunder and the consummation of the other
transactions contemplated hereby are in the best interests of the Company and
its stockholders.
3.23 S-2 Registration. The Company is currently eligible to register the resale
by each Purchaser of the Conversion Shares on a registration statement on Form
S-2 under the Securities Act, however the Conversion Shares must first be
authorized by the shareholders of the Company. The Company will use its
commercially reasonable best efforts to obtain authorization from the
shareholders for the Conversion Shares as soon as possible after the Closing.
ARTICLE IV
COVENANTS
4.1 Best Efforts. The parties shall use their respective commercially
reasonable best efforts to timely satisfy each of the conditions described
in Articles VI and VII of this Agreement.
4.2 Securities Laws. The Company shall file a Form D with respect to the
Securities with the SEC as required under Regulation D within fifteen (15) days
after the Closing Date and provide a copy thereof to each Purchaser promptly
after such filing. The Company shall, on or prior to the Closing Date, take such
action as is necessary to qualify the Securities for sale to each Purchaser
under applicable securities laws of the states of the United States or to obtain
an exemption therefrom.
4.3 Reporting Status. So long as any Purchaser beneficially owns any of the
Securities, the Company shall timely file all reports required to be filed with
the SEC pursuant to the Exchange Act, and the Company shall not terminate its
status as an issuer required to file reports under the Exchange Act even if the
Exchange Act or the rules and regulations thereunder would permit such
termination.
4.4 Reservation of Shares. The Company warrants, after authorization by the
shareholders, that it will maintain as authorized and reserved for the purpose
of issuance a sufficient number of shares of Common Stock to provide for the
full conversion of the Debentures and issuance of the Conversion Shares in
connection therewith and as may otherwise be required under the terms of the
Debentures (including, without limitation, in order to make interest payments
thereunder in shares of Common Stock) (the "Issuance Obligations"). In the event
such number of shares becomes insufficient to satisfy the Issuance Obligations,
the Company shall take all necessary action to authorize and reserve such
additional shares of Common Stock necessary to satisfy the Issuance Obligations.
4.5 Information. The Company shall send (via electronic transmission or
otherwise), to each Purchaser until such Purchaser transfers, assigns or sells
all of its Securities in transactions in which the transferee is (unless such
transferee is an affiliate of the Company) not subject to securities law resale
restrictions, within one (1) business day after release, copies of all press
releases issued by the Company. The Company further agrees to promptly provide
to any Purchaser any information with respect to the Company, its properties, or
its business or any Purchaser's investment as such Purchaser may reasonably
request in writing; provided, however, that the Company shall not be required to
give any Purchaser any material nonpublic information. If any information
requested by a Purchaser from the Company contains material nonpublic
information, the Company shall inform such Purchaser in writing that the
information requested contains material nonpublic information and shall in no
event provide such information to such Purchaser without the express written
consent of such Purchaser after being so informed.
4.6 Prospectus Delivery Requirement. Each Purchaser understands that the
Securities Act may require delivery of a prospectus relating to the Common Stock
in connection with any sale thereof by such Purchaser pursuant to a registration
statement under the Securities Act covering the resale by the Purchasers of the
Conversion Shares being sold, and such Purchaser shall comply with the
applicable prospectus delivery requirements of the Securities Act in connection
with any such sale.
4.7 Corporate Existence. So long as any Purchaser beneficially owns any
Securities, the Company shall maintain its corporate existence, and in the event
of a merger, consolidation or sale of all or substantially all of the Company's
assets, the Company shall ensure that the surviving or successor entity in such
transaction (a) assumes the Company's obligations hereunder and under the other
Transaction Documents and (b) is a publicly traded corporation.
4.8 Use of Proceeds. The Company shall use the proceeds from the sale and
issuance of the Debentures of approximately TWO MILLION DOLLARS ($2,000,000) for
general corporate purposes and working capital.
4.9 Listing. The Company shall use its commercially reasonable best efforts to
secure the listing of the Conversion Shares upon each national securities
exchange or automated quotation system, if any, upon which shares of Common
Stock become listed or quoted (subject to official notice of issuance upon
conversion of the Debentures) and shall maintain, so long as any other shares of
Common Stock shall be so listed or quoted, such listing of all Conversion Shares
from time to time issuable upon the conversion of the Debentures. The Company
shall comply in all material respects with the reporting, filing and other
obligations under the bylaws or rules of any such national securities exchange
or automated quotation system on which its shares of Common Stock are listed or
quoted. The Company shall promptly provide to each holder of Debentures copies
of any notices it receives regarding the continued eligibility of the Common
Stock for trading on any national securities exchange or automated quotation
system on which securities of the same class or series issued by the Company are
then listed or quoted, if any.
4.10 No Integrated Offerings. The Company shall not make any offers or sales of
any security (other than the Securities) under circumstances that would require
registration of the Securities being offered or sold hereunder under the
Securities Act or cause this offering of the Securities to be integrated with
any other offering of securities by the Company for purposes of any stockholder
approval provision applicable to the Company or its securities.
4.11 Legal Compliance. The Company shall conduct its business and the business
of its subsidiaries in compliance with all laws, ordinances or regulations of
governmental entities applicable to such businesses, except where the failure to
do so would not have a Material Adverse Effect.
4.12 Pledge of Securities. The Company acknowledges and agrees that the
Securities may be pledged by any Purchaser in connection with a bona fide margin
agreement or other loan or financing arrangement that is secured by the
Securities. The pledge of Securities shall not be deemed to be a transfer, sale
or assignment of the Securities hereunder, and no Purchaser effecting a pledge
of Securities shall be required to provide the Company with any notice thereof
or otherwise make any delivery to the Company pursuant to this Agreement or any
other Transaction Document. The Company shall execute and deliver such
documentation as a pledgee of the Securities may reasonably request in
connection with a pledge of the Securities to such pledgee by a Purchaser.
4.13 Confidential Agreement. Except for any disclosure required by applicable
law or rules of the SEC, the Company and each Purchaser shall, and shall direct
its respective representatives to, hold in confidence all information concerning
this Agreement and the transactions contemplated hereby until the earlier of
such time as (a) the Company has made a public announcement concerning the
Agreement and the transactions contemplated hereby or (b) this Agreement is
terminated.
ARTICLE V
SECURITY TRANSFER MATTERS
5.1 Conversion of Debentures. Upon conversion of the Debentures by any person
and after the Conversion Shares have been authorized and registered by the
Company and its shareholders, (a) if the DTC Transfer Conditions (as defined
below) are satisfied, the Company shall cause its transfer agent to
electronically transmit all Conversion Shares by crediting the account of such
person or its nominee with the Depository Trust Company ("DTC") through its
Deposit Withdrawal Agent Commission system; or (b) if the DTC Transfer
Conditions are not satisfied, the Company shall issue and deliver, or instruct
its transfer agent to issue and deliver, certificates (subject to the Legend and
other applicable provisions hereof and the Debentures), registered in the name
of such person its nominee, physical certificates representing the Conversion
Shares, as applicable. Even if the DTC Transfer Conditions are satisfied, any
person effecting a conversion of Debentures may instruct the Company to deliver
to such person or its nominee physical certificates representing the Conversion
Shares, as applicable, in lieu of delivering such shares by way of DTC Transfer.
For purposes of this Agreement, "DTC Transfer Conditions" means that (i) the
Company's transfer agent is participating in the DTC Fast Automated Securities
Transfer program and (ii) the certificates for the Conversion Shares required to
be delivered do not bear the Legend and the person effecting such conversion or
exercise is not then required to return such certificate for the placement of
the Legend thereon.
5.2 Removal of Legend. The Legend shall be removed and the Company shall issue a
certificate without such Legend to the holder of any Security upon which it is
stamped, or a certificate for a Security shall be originally issued without the
Legend, if, (a) the sale of such Security is registered under the Securities
Act, (b) the holder of such Security provides the Company with an opinion of
counsel, in form, substance and scope customary for opinions of counsel in
comparable transactions (the reasonable cost of which shall be borne by the
Company if, after one (1) year, neither an effective registration statement
under the Securities Act or Rule 144 is available in connection with such sale)
to the effect that a public sale or transfer of such Security may be made
without registration under the Securities Act pursuant to an exemption from such
registration requirements, (c) such Security can be sold pursuant to Rule 144
and the holder provides the Company with reasonable assurances that the Security
can be so sold without restriction, or (d) such Security can be sold pursuant to
Rule 144(k). Each Purchaser agrees to sell all Securities, including those
represented by a certificate(s) from which the Legend has been removed, or which
were originally issued without the Legend, pursuant to an effective registration
statement, in accordance with the manner of distribution described in such
registration statement, and to deliver a prospectus in connection with such
sale, or in compliance with an exemption from the registration requirements of
the Securities Act. In the event the Legend is removed from any Security or any
Security is issued without the Legend and the Security is to be disposed of
other than pursuant to an effective registration statement or pursuant to an
exemption from the registration requirements of the Securities Act, then prior
to, and as a condition to, such disposition such Security shall be relegended as
provided herein in connection with any disposition if the subsequent transfer
thereof would be restricted under the Securities Act. Also, in the event the
Legend is removed from any Security or any Security is issued without the Legend
and thereafter the effectiveness of a registration statement covering the resale
of such Security is suspended or the Company determines that a supplement or
amendment thereto is required by applicable securities laws, then upon
reasonable advance notice to Purchaser holding such Security, the Company may
require that the Legend be placed on any such Security that cannot then be sold
pursuant to an effective registration statement or Rule 144 or with respect to
which the opinion referred to in clause (b) next above has not been rendered,
which Legend shall be removed when such Security may be sold pursuant to an
effective registration statement or Rule 144 or such holder provides the opinion
with respect thereto described in clause (b) next above.
5.3 Transfer Agent Instructions. The Company shall instruct its transfer agent
to issue certificates, registered in the name of each Purchaser, or its nominee,
for the Securities in such amounts determined in accordance with the terms of
the Securities. Such certificates shall bear the Legend only to the extent
provided by Section 5.2 above. The Company covenants that no instruction other
than such instructions referred to in this Article V, and stop transfer
instructions to give effect to Section 2.6 hereof in the case of the transfer of
the Conversion Shares prior to registration thereof under the Securities Act or
without an exemption therefrom, shall be given by the Company to its transfer
agent and that the Securities shall otherwise be freely transferable on the
books and records of the Company. Nothing in this Section shall affect in any
way such Purchaser's obligations and agreement set forth in Section 5.2 hereof
to resell the Securities pursuant to an effective registration statement and to
deliver a prospectus in connection with such sale or in compliance with an
exemption from the registration requirements of applicable securities laws.
5.4 Transfers of Securities. If (a) a Purchaser provides the Company with an
opinion of counsel, which opinion of counsel shall be in form, substance and
scope customary for opinions of counsel in comparable transactions (the
reasonable cost of which shall be borne by the Company if, after one (1) year,
neither an effective registration statement under the Securities Act or Rule 144
is available in connection with such sale), to the effect that the Securities to
be sold or transferred may be sold or transferred pursuant to an exemption from
registration, or (b) a Purchaser provides the Company with reasonable assurances
that such Securities may be sold under Rule 144, the Company shall permit the
transfer, and, in the case of the Conversion Shares, promptly instruct its
transfer agent to issue one or more certificates in such name and in such
denomination as specified by such Purchaser.
5.5 Breach by Company. The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to a Purchaser by vitiating
the intent and purpose of the transaction contemplated hereby. Accordingly, the
Company acknowledges that the remedy at law for a breach of its obligations
under this Article V will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Article V, that each
Purchaser shall be entitled, in addition to all other available remedies, to an
injunction restraining any breach and requiring immediate issuance and transfer,
without the necessity of showing economic loss and without any bond or other
security being required.
ARTICLE VI
CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL
The obligation of the Company hereunder to issue and sell the Units to
each Purchaser at the Closing is subject to the satisfaction, as of the Closing
Date, of each of the following conditions as to such Purchaser, provided that
these conditions are for the Company's sole benefit and may be waived by the
Company at any time in its sole discretion:
6.1 Execution of Transaction Documents. Each Purchaser shall have executed such
Purchaser's Execution Page to this Agreement and each other Transaction Document
to which such Purchaser is a party and delivered the same to the Company.
6.2 Payment of Purchase Price. Each Purchaser shall have delivered the full
amount of such Purchaser's Purchase Price to the Company by wire transfer to the
account designated by the Company.
6.3 Representations and Warranties True; Covenants Performed. The
representations and warranties of each Purchaser shall be true and correct as of
the date hereof and as of the Closing Date as though made at that time (except
for representations and warranties that speak as of a specific date, which shall
be true and correct as of such date), and such Purchaser shall have performed,
satisfied and complied with the covenants, agreements and conditions required by
this Agreement to be performed, satisfied or complied with by such Purchaser at
or prior to the Closing Date.
6.4 No Legal Prohibition. No statute, rule, regulation, executive order, decree,
ruling, injunction, action or proceeding shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent
jurisdiction or any self-regulatory organization having authority over the
matters contemplated hereby which restricts or prohibits the consummation of any
of the transactions contemplated by this Agreement.
ARTICLE VII
CONDITIONS TO EACH PURCHASER'S OBLIGATION TO PURCHASE
The obligation of each Purchaser hereunder to purchase the Units for
which it is subscribing from the Company hereunder at the Closing is subject to
the satisfaction, as of the Closing Date, of each of the following conditions,
provided that these conditions are for each Purchaser's individual and sole
benefit and may be waived by any Purchaser as to such Purchaser at any time in
such Purchaser's sole discretion:
7.1 Execution of Transaction Documents. The Company shall have executed such
Purchaser's Execution Page to this Agreement and each other Transaction Document
to which the Company is a party and delivered executed originals of the same to
such Purchaser.
7.2 Delivery of Securities. The Company shall have delivered to such Purchaser
duly executed Debentures for the number of Units being purchased by such
Purchaser (each in such denominations as such Purchaser shall request),
registered in such Purchaser's name.
7.3 Representations and Warranties True; Covenants Performed. The
representations and warranties of the Company shall be true and correct as of
the date hereof and as of the Closing Date as though made at that time (except
for representations and warranties that speak as of a specific date, which shall
be true and correct as of such date), and the Company shall have performed,
satisfied and complied with the covenants, agreements and conditions required by
this Agreement to be performed, satisfied or complied with by the Company at or
prior to the Closing Date.
7.4 No Legal Prohibition. No statute, rule, regulation, executive order, decree,
ruling, injunction, action or proceeding shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent
jurisdiction or any self-regulatory organization having authority over the
matters contemplated hereby which restricts or prohibits the consummation of any
of the transactions contemplated by this Agreement.
7.5 Corporate Approvals. Such Purchaser shall have received a copy of
resolutions, duly adopted by the board of directors of the Company, which shall
be in full force and effect at the time of the Closing, authorizing the
execution, delivery and performance by the Company of this Agreement and the
other Transaction Documents and the consummation by the Company of the
transactions contemplated hereby and thereby. Notwithstanding the foregoing, the
Company will obtain shareholder approval for authorization and registration of
the Conversion Shares after the Closing.
ARTICLE VIII
GOVERNING LAW; MISCELLANEOUS
8.1 Governing Law: Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in the State of Delaware. The parties hereto
irrevocably consent to the jurisdiction of the United States federal courts and
state courts located in the County of New Castle in the State of Delaware in any
suit or proceeding based on or arising under this Agreement or the transactions
contemplated hereby and irrevocably agree that all claims in respect of such
suit or proceeding may be determined in such courts. The Company and each
Purchaser irrevocably waives the defense of an inconvenient forum to the
maintenance of such suit or proceeding in such forum. The Company and each
Purchaser further agrees that service of process upon the Company or such
Purchaser, as applicable, mailed by the first class mail in accordance with
Section 8.6 shall be deemed in every respect effective service of process upon
the Company or such Purchasers in any suit or proceeding arising hereunder.
Nothing herein shall affect each Purchaser's right to serve process in any other
manner permitted by law. The parties hereto agree that a final non-appealable
judgment in any such suit or proceeding shall be conclusive and may be enforced
in other jurisdictions by suit on such judgment or in any other lawful manner.
The parties hereto irrevocably waive any right to a trial by jury under
applicable law.
8.2 Counterparts. This Agreement may be executed in two or more counterparts,
including, without limitation, by facsimile transmission, all of which
counterparts shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other parties hereto. In the event any signature page is delivered by facsimile
transmission, the party using such means of delivery shall cause the original
manually executed signature pages to be physically delivered to the other
parties as soon as practicable, but in any event within five (5) days
thereafter, provided that the failure to so deliver any original manually
executed signature page shall not affect the validity or enforceability of this
Agreement.
8.3 Construction. Whenever the context requires, the gender of any word used in
this Agreement includes the masculine, feminine or neuter, and the number of any
word includes the singular or plural. Unless the context otherwise requires, all
references to articles and sections refer to articles and sections of this
Agreement, and all references to schedules are to schedules attached hereto,
each of which is made a part hereof for all purposes. The headings of this
Agreement are for convenience of reference and shall not form part of, or affect
the interpretation of, this Agreement.
8.4 Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement or the
validity or enforceability of this Agreement in any other jurisdiction.
8.5 Entire Agreement: Amendments. This Agreement and the other Transaction
Documents (including any schedules and exhibits hereto and thereto) contain the
entire understanding of the parties with respect to the maters covered herein
and therein and, except as specifically set forth herein or therein, neither the
Company nor any Purchaser makes any representation, warranty, covenant or
undertaking with respect to such matters. No provision of this Agreement may be
waived other than by an instrument in writing signed by the party to be charged
with enforcement and no provision of this Agreement may be amended other than by
an instrument in writing signed by the Company and each Purchaser.
8.6 Notice. Any notice herein required or permitted to be given shall be in
writing and may be personally served, sent by certified or registered mail
(postage prepaid and return receipt requested) or delivered by
nationally-recognized overnight courier or by facsimile transmission with
confirmation of receipt, and shall be deemed delivered five days after being
placed in the mail, if mailed, or at the time and date of receipt or refusal of
receipt, if delivered personally or by overnight courier or facsimile
transmission. The initial addresses for such communications shall be as follows,
and each party shall provide notice to the other parties of any change is such
party's address:
(a) if to the Company:
Miravant Medical Technologies
000 Xxxxxx Xxxxx
Xxxxx Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx
Facsimile: (000) 000-0000
with a copy simultaneously transmitted by like means
(which transmittal shall not constitute notice
hereunder) to:
Xxxxxxxx Xxxxxx Xxxxxxx & Hampton, LLP
000 Xxxxxxx Xxxxxx
Xxxxx Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
(b) if to any Purchaser, to the address set forth under such Purchaser's name on
the Execution Page hereto executed by such Purchaser.
8.7 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and assigns. The Company shall
not assign this Agreement or any rights or obligations hereunder. Subject to the
Company's prior written consent, any Purchaser may assign or transfer the
Securities pursuant to the terms of this Agreement and of such Securities, or
assign such Purchaser's rights hereunder to any other person or entity.
8.8 Third Party Beneficiaries. This Agreement is intended for the benefit of the
parties hereto and their respective permitted successors and assigns and is not
for the benefit of, nor may any provision hereof be enforced by, any other
person.
8.9 Survival. The representations and warranties of the Company and the
agreements and covenants set forth in Articles III, IV, V and VIII hereof shall
survive the Closing hereunder notwithstanding any due diligence investigation
conducted by or on behalf of any Purchaser.
8.10 Indemnification. In consideration of each Purchaser's execution and
delivery of this Agreement and the other Transaction Documents and purchase of
the Securities hereunder, and in addition to all of the Company's other
obligations under this Agreement and the other Transaction Documents, from and
after the Closing, the Company shall defend, protect, indemnify and hold
harmless each Purchaser and each other holder of the Securities and all of their
stockholders, partners, members, officers, directors, employees and direct or
indirect investors and any of the foregoing persons' agents or other
representatives (including, without limitation, those retained in connection
with the transactions contemplated by this Agreement, collectively, the
"Indemnitees") from and against any and all actions, causes of action, suits,
claims, losses, costs, penalties, fees, liabilities and damages, and expenses in
connection therewith (irrespective of whether any such Indemnitee is a party to
the action for which indemnification hereunder is sought), and including
reasonable attorneys' fees and disbursements (the "Indemnified Liabilities"),
incurred by any Indemnitee as a result of, or arising out of, or relating to (a)
any misrepresentation or breach of any representation or warranty made by the
Company in this Agreement, any other Transaction Document or any other
certificate, instrument or document contemplated hereby or thereby, (b) any
breach of any covenant, agreement or obligation of the Company contained in this
Agreement, any other Transaction Document or any other certificate, instrument
or document contemplated hereby or thereby or (c) any cause of action, suit or
claim brought or made against such Indemnitee by a third party (including for
these purposes a derivative action brought on behalf of the Company) and arising
out of or resulting from (i) the execution, delivery, performance or enforcement
of this Agreement, any other Transaction Document or any other certificate,
instrument or document contemplated hereby or thereby, (ii) any transaction
financed or to be financed in whole or in part, directly or indirectly, with the
proceeds of the issuance and sale of the Securities, (iii) any disclosure made
by such Purchaser pursuant to Section 2.2 or 2.6 hereof, or (iv) the status of
such Purchaser or holder of the Securities as an investor in the Company. To the
extent that the foregoing undertaking by the Company may be unenforceable for
any reason, the Company shall make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law. Except as otherwise set forth herein, the mechanics and
procedures with respect to the rights and obligations under this Section 8.10
shall be the same as those set forth in Section 7(c) of the Registration Rights
Agreement.
8.11 Further Assurances. Each party shall do and perform, or cause to be done
and performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
8.12 Remedies. No provision of this Agreement providing for any remedy to a
Purchaser shall limit any remedy which would otherwise be available to such
Purchaser at law or in equity. Nothing in this Agreement shall limit any rights
a Purchasers may have with any applicable federal or state securities laws with
respect to the investment contemplated hereby. The Company acknowledges that a
breach by it of its obligations hereunder will cause irreparable harm to the
Purchasers by vitiating the intent and purpose of the transactions contemplated
hereby. Accordingly, the Company acknowledges that the remedy at law for a
material breach of its obligations under this Agreement will be inadequate and
agrees, in the event of a breach or threatened breach by the Company of the
provisions of this Agreement, that each Purchaser shall be entitled, in addition
to all other available remedies, to an injunction restraining any breach and
requiring immediate compliance, without the necessity of showing economic loss
and without any bond or other security being required.
8.13 Payment Set Aside. To the extent that the Company makes a payment or
payments to any Purchaser hereunder or pursuant to any of the other Transaction
Documents or any Purchaser enforces or exercises its rights hereunder or
thereunder, and such payment or payments or the proceeds of such enforcement or
exercise or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, recovered from, disgorged by or are
required to be refunded, repaid or otherwise restored to the Company, a trustee,
receiver or any other person under any law (including, without limitation, any
bankruptcy law, state or federal law, common law or equitable cause of action),
then to the extent of any such restoration the obligation or part thereof
originally intended to be satisfied shall be revived and continued in full force
and effect as if such payment had not been made or such enforcement or setoff
had not occurred.
8.14 Joint Participation in Drafting. Each party to this Agreement has
participated in the negotiation and drafting of this Agreement and the other
Transaction Documents. As such, the language used herein and therein shall be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction will be applied against any party to
this Agreement.
8.15 Knowledge. As used in this Agreement, the term "knowledge" of any person or
entity shall mean and include (a) actual knowledge and (b) that knowledge which
a reasonably prudent business person could have obtained in the management of
his or her business affairs after making due inquiry and exercising due
diligence which a prudent business person should have made or exercised, as
applicable, with respect thereto.
8.16 Exculpation Among Purchasers; No "Group". Each Purchaser acknowledges that
it has independently evaluated the merits of the transactions contemplated by
this Agreement and the other Transaction Documents, that it has independently
determined to enter into the transactions contemplated hereby and thereby, that
it is not relying on any advice from or evaluation by any other Purchaser, and
that it is not acting in concert with any other Purchaser in making its purchase
of securities hereunder or in monitoring its investment in the Company. The
Purchasers and, to its knowledge, the Company agree that the Purchasers have not
taken any actions that would deem such Purchasers to be members of a "group" for
purposes of Section 13(d) of the Exchange Act, and the Purchasers have not
agreed to act together for the purpose of acquiring, holding, voting or
disposing of equity securities of the Company.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
W02-SB:PMUZINICH\80026487.2 -24-
IN WITNESS WHEREOF, the undersigned Purchaser and the Company have
caused this Agreement to be duly executed as of the date first above written.
COMPANY:
MIRAVANT MEDICAL TECHNOLOGIES:
By:/s/ Xxxx X. Xxxxxxx
----------------------
Name: Xxxx X. Xxxxxxx
Title: Chief Executive Officer
PURCHASER:
(Print or Type Name of Purchaser)
By:
--------------------
Name:
Title:
RESIDENCE:
------------------------------------------
ADDRESS:
Telephone:
---------------------------------
Facsimile:
---------------------------------
Attention:
---------------------------------
AGGREGATE SUBSCRIPTION AMOUNT:
Purchase Price ($_________):
-------------------------------
Exhibit A
To
Unsecured Convertible Debenture Purchase Agreement
UNSECURED CONVERTIBLE DEBENTURE
-26-
Exhibit B
To
Unsecured Convertible Debenture Purchase Agreement
REGISTRATION RIGHTS AGREEMENT
List of Schedules
to
Unsecured Convertible Debenture Purchase Agreement
Schedule 3.2 - Authorization; Enforcement
Schedule 3.3 - Capitalization
Schedule 3.5 - Conflicts
