Exhibit 10.4
SIDE LETTER AGREEMENT
August 28, 2003
TO: The Investors Listed on Schedule 1 and Schedule 2 Attached Hereto
Re: Certain Agreements With Respect To Investment in Miravant Medical
Technologies
This Side Letter Agreement is executed in connection with: (i) that certain
Convertible Debt and Warrant Purchase Agreement dated December 19, 2002 (the
"Original Purchase Agreement") by and among Miravant Medical Technologies, a
Delaware corporation (the "Company"), and the investors listed on Schedule 1
attached hereto, as successors to Princess Finance Limited, a BVI company
("Princess" and, together with such investors listed on Schedule 1 attached
hereto, the "Original Investors"); and (ii) that certain Unsecured Convertible
Debenture and Warrant Purchase Agreement of even date herewith (the "New
Purchase Agreement") by and among the Company, the investors listed on Schedule
2 attached hereto (the "New Princess Investors") and certain additional
investors (collectively, the "New Investors").
The Original Investors are the holders of the convertible notes (the
"Notes") and warrants (the "Note Warrants") issued by the Company pursuant to
the Original Purchase Agreement. The Company is entering into the New Purchase
Agreement for the sale and issuance of convertible debentures (the "Debentures")
and warrants (the "Debenture Warrants") to the New Investors (including the New
Princess Investors). In connection with and as a condition to closing under the
New Purchase Agreement, the Original Investors and the Company are required to
enter into a certain Subordination Agreement with the New Investors, such
agreement to be in substantially the form as attached hereto as Exhibit A (the
"Subordination Agreement").
As an inducement to the Original Investors entering into the Subordination
Agreement with the New Investors, and as a further condition to closing under
the New Purchase Agreement, and for other good and valuable consideration the
receipt and sufficiency of which is hereby acknowledged, the Company, the
Original Investors and the New Princess Investors, intending to be legally
bound, hereby agree as follows:
1. Upon issuance of the Debentures and Debenture Warrants pursuant to the
terms of the New Purchase Agreement, the Company shall issue to (i) Princess an
additional warrant, in the same form as the Note Warrants, to purchase 787,500
shares of the Company's Common Stock at an Exercise Price of $1.00 per share,
and (ii) Saules Holdings, Limited (which, for all purposes hereunder, shall be
deemed to be an "Original Investor") an additional warrant, in the same form as
the Note Warrants, to purchase 787,500 shares of the Company's Common Stock at
an Exercise Price of $1.00 per share (collectively, the "Adjustment Warrants").
2. Upon issuance of the Debentures and Debenture Warrants pursuant to the
terms of the New Purchase Agreement, pursuant to Section 4.4 of the Original
Purchase Agreement, the Exercise Price of each Note Warrant issued and
outstanding as of the date hereof (excluding the Loan Origination Warrant) shall
be adjusted to equal $1.00 per share.
3. Upon issuance of the Debentures and Debenture Warrants pursuant to the
terms of the New Purchase Agreement, pursuant to Section 4.4 of the Original
Purchase Agreement, the Conversion Price of each Note issued and outstanding as
of the date hereof (excluding the Notes issued in December 2002 and January
2003) shall be adjusted to equal $1.00 per share.
4. In order to document additional "Purchasers" under the Original Purchase
Agreement and previous transfers of Notes and Note Warrants by Princess, the
following entities are each made party to the Original Purchase Agreement as a
"Purchaser" and each agrees to be bound by the Original Purchase Agreement as
such:
(i) GORUMNA, LTD.;
(ii) PLEYEL HOLDINGS, LIMITED;
(iii) BIG CAT CAPITAL, LIMITED;
(iv) ACACIAS FINANCIAL, LIMITED;
(v) ALERT INVESTMENTS, LIMITED;
(vi) CAMELFORD HOLDINGS, LIMITED;
(vii) DANUBE FINANCIAL, LIMITED;
(viii) DELICE FINANCIAL, LIMITED;
(ix) IRIS FINANCIAL, LIMITED;
(x) PEARL WAVES, INC;
(xi) Tioman Finance Limited;
(xii) Morebath Holdings Limited;
(xiii) Kinaro Investments S.A.; and
(xiv) SAULES Holdings, Limited.
5. Each Original Investor and New Princess Investor acknowledges that,
pursuant to Section 4.19 of the New Purchase Agreement, the Company is required
to solicit the vote of the stockholders for the approval of an amendment to the
Company's Certificate of Incorporation (the "Charter Amendment") that would,
among other things, increase the number of authorized shares of the Company's
Common Stock to 65,000,000 shares (the "Stockholder Approval"). Each Original
Investor agrees that, unless and until such time as the Company has obtained the
Stockholder Approval and the Charter Amendment has been filed with the State of
Delaware and become effective, such Original Investor shall not (a) convert any
Notes currently held or hereafter acquired by such Original Investor to the
extent that the shares of Common Stock issuable upon conversion of such Notes
are not as of the date hereof registered for resale on an effective registration
statement filed under the Securities Act of 1933, as amended (the "Securities
Act"); or (b) exercise any Note Warrants currently held or hereafter acquired by
such Original Investor (including the Adjustment Warrants) to the extent that
the shares of Common Stock issuable upon exercise of such Note Warrants are not
as of the date hereof registered for resale on an effective registration
statement filed under the Securities Act. Each Original Investor represents and
warrants that the number of Notes and Note Warrants subject to the foregoing
restriction on conversion and exercise (described in terms of the number of
shares of Common Stock issuable upon exercise or conversion thereof) that are
held by such Original Investor are accurately set forth on Schedule 1 hereto. In
furtherance of the foregoing restriction on conversion and exercise of certain
Notes and Note Warrants held or acquired by the Original Investors, the Original
Investors further agree that, unless and until such time as the Company has
obtained the Stockholder Approval and the Charter Amendment has been filed with
the State of Delaware and become effective:
(i) compliance by the Company with the covenants regarding the
authorization and reservation of shares of Common Stock for issuance upon
conversion or exercise of such Notes and Note Warrants, as set forth in Section
4(c) of the Notes and Sections 5(b) and (d) of the Note Warrants, is hereby
irrevocably waived;
(ii) any default provisions in the Notes or Note Warrants relating to a
failure by the Company to honor a conversion or exercise thereof are hereby
irrevocably waived; and
(iii) notwithstanding the provisions of Sections 2(a), 2(c) and 3(b) of
that certain Registration Rights Agreement dated as of December 19, 2002 by and
among the Company and the Original Investors (the "Original Registration Rights
Agreement"), the Company shall not be required to register the resale of the
Registrable Securities (as such term is defined in the Original Registration
Rights Agreement) issuable upon conversion or exercise of or otherwise pursuant
to the Notes and Note Warrants held by the Original Investors that are not as of
the date hereof already registered for resale.
6. Each New Princess Investor agrees that, unless and until such time as
the Company has obtained the Stockholder Approval and the Charter Amendment has
been filed with the State of Delaware and become effective, such New Princess
Investor shall not (a) convert any Debentures currently held or hereafter
acquired by such New Princess Investor; or (b) exercise any Debenture Warrants
currently held or hereafter acquired by such New Princess Investor. In
furtherance of the foregoing restriction on conversion and exercise of the
Debentures and Debenture Warrants held or acquired by the New Princess
Investors, the New Princess Investors further agree that, unless and until such
time as the Company has obtained the Stockholder Approval and the Charter
Amendment has been filed with the State of Delaware and become effective:
(i) compliance by the Company with the covenants regarding the
authorization and reservation of shares of Common Stock for issuance upon
conversion or exercise of their Debentures and Debenture Warrants, as set forth
in Section 4.5 of the New Purchase Agreement, Section 4(d) of the Debentures and
Section 5(b) of the Debenture Warrants, is hereby irrevocably waived;
(ii) compliance by the Company with the covenants regarding the listing of
the shares of Common Stock issuable upon conversion or exercise of their
Debentures and Debenture Warrants, as set forth in Section 4.11 of the New
Purchase Agreement and Section 5(c) of the Debenture Warrants, is hereby
irrevocably waived;
(iii) any default provisions in the Debentures and the Debenture Warrants
relating to a failure by the Company to honor a conversion or exercise thereof
are hereby irrevocably waived;
(iv) notwithstanding the provisions of Sections 2(a), 2(c) and 3(c) of that
certain Registration Rights Agreement of even date herewith by and among the
Company and the New Investors (the "New Registration Rights Agreement"), the
Company shall not be required to register the resale of the Registrable
Securities (as such term is defined in the New Registration Rights Agreement)
issuable upon conversion or exercise of or otherwise pursuant to the Debentures
and Debenture Warrants held by the New Princess Investors;
(v) the penalty provisions set forth in Section 2(b) of the New
Registration Rights Agreement are irrevocably waived as to such Registrable
Securities until such time as the Company becomes obligated to register the
resale of such Registrable Securities pursuant to Section 3(c) of the New
Registration Rights Agreement; and
(vi) the 150-day period referenced in Section 5(h) of the Debentures shall
not be deemed to commence, with respect to the Debentures held by the New
Princess Investors only, until the date on which the Company becomes obligated
to register the resale of the Registrable Securities issuable upon conversion of
such Debentures as provided in clause (iv) above.
7. The Notes and Note Warrants that are subject to the restrictions on
conversion and exercise set forth in Paragraph 5 above and the Debentures and
Debenture Warrants that are subject to the restrictions on conversion and
exercise set forth in Paragraph 6 above are referred to herein collectively as
the "Restricted Securities." With respect to all Restricted Securities, in
furtherance of the restrictions on conversion and exercise set forth in
Paragraphs 5 and 6 above, the Original Investors and the New Princess Investors
further agree that, unless and until such time as the Company has obtained the
Stockholder Approval and the Charter Amendment has been filed with the State of
Delaware and become effective:
(i) the Company shall have no obligation to honor, and shall be entitled to
instruct its transfer agent not to honor, any attempts by any Original Investor
or New Princess Investor to convert or exercise any Restricted Securities;
(ii) the Company shall be entitled to place the following legend on each
Restricted Security (and, to the extent the Original Investors already have
possession of such Restricted Securities, the Original Investors shall return
such Restricted Securities to the Company for the placement of the following
legend thereon):
ADDITIONAL RESTRICTIONS ON THE [CONVERSION/ EXERCISE] AND
TRANSFER OF THIS [NOTE/ DEBENTURE/ WARRANT] ARE SET FORTH IN A
CERTAIN SIDE LETTER AGREEMENT DATED AS OF AUGUST 28, 2003, AS
AMENDED FROM TIME TO TIME, AMONG THE COMPANY AND THE HOLDER
HEREOF, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY AND MAY BE OBTAINED BY THE HOLDER HEREOF WITHOUT
CHARGE.
; and
(iii) notwithstanding the terms of the Original Purchase Agreement, the New
Purchase Agreement or the Restricted Securities themselves, no Original Investor
or New Princess Investor may transfer or assign any Restricted Securities, or
any of its rights therein, to any other person or entity unless such transferee
or assignee has agreed in writing to be bound by the restrictions on conversion,
exercise and transfer set forth in this Side Letter Agreement.
8. Except as otherwise provided in this Side Letter Agreement, the terms
and conditions of each of the Original Purchase Agreement, the Original
Registration Rights Agreement, the Notes, the Note Warrants, the New Purchase
Agreement, the New Registration Rights Agreement, the Debentures, the Debenture
Warrants and all other agreements entered into in connection with the foregoing
shall remain in full force and effect.
9. This Side Letter 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.
10. This Side Letter 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.
11. If any provision of this Side Letter 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 Side Letter
Agreement or the validity or enforceability of this Side Letter Agreement in any
other jurisdiction.
12. The New Investors (other than the New Princess Investors) are expressly
intended to be third party beneficiaries of this Side Letter Agreement with
respect to all obligations and agreements of the Original Investors and the New
Princess Investors. No provision of this Side Letter Agreement may be waived
other than by an instrument in writing signed by the party to be charged with
enforcement (including, in the case of the Company, each New Investor other than
the New Princess Investors), and no provision of this Agreement may be amended
other than by an instrument in writing signed by the Company, each Original
Investor, each New Princess Investor and each New Investor.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Please indicate your acceptance of the terms and conditions of this Side
Letter Agreement by signing where indicated below.
MIRAVANT MEDICAL TECHNOLOGIES,
a Delaware corporation
By: /s/Xxxx X. Xxxxxxx
-------------------------------------
Xxxx X. Xxxxxxx, Chief Executive Officer
ACKNOWLEDGED AND AGREED:
PRINCESS FINANCE LIMITED
GORUMNA, LTD.
PLEYEL HOLDINGS, LIMITED
BIG CAT CAPITAL, LIMITED
ACACIAS FINANCIAL, LIMITED
ALERT INVESTMENTS, LIMITED
CAMELFORD HOLDINGS, LIMITED
DANUBE FINANCIAL, LIMITED
DELICE FINANCIAL, LIMITED
IRIS FINANCIAL, LIMITED
PEARL WAVES, INC
Tioman Finance Limited
Morebath Holdings Limited
Kinaro Investments X.X.
XXXXXX INVESTMENTS S.A.
BOMOSEEN INVETMENTS, LD
DANDELION INTERNATIONAL, LTD.
SILVER CREEK INVESTMENTS, LTD.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------------------------
Xxxxxx X. Xxxxxx, Attorney-in-Fact for all of the above
Schedule 1
Original Investors
--------------------------------- - --------------- -- ------------------ -----
Note Shares Warrant Shares
Subject to Subject to Side
Side Letter Letter
--------------------------------- - --------------- -- ------------------ -----
Gorumna, Ltd. 72,913 ---
--------------------------------- - --------------- -- ------------------ -----
Pleyel Holdings, Limited 72,913 ---
--------------------------------- - --------------- -- ------------------ -----
Big Cat Capital, Limited 72,913 ---
--------------------------------- - --------------- -- ------------------ -----
Alert Investments, Limited 72,913 ---
--------------------------------- - --------------- -- ------------------ -----
Camelford Holdings, Limited 72,913 ---
--------------------------------- - --------------- -- ------------------ -----
Acacias Financial Limited 72,913 ---
--------------------------------- - --------------- -- ------------------ -----
Pearl Waves, Inc. 72,913 ---
--------------------------------- - --------------- -- ------------------ -----
Danube Financial, Limited 72,913 ---
--------------------------------- - --------------- -- ------------------ -----
Delice Financial, Limited 72,913 ---
--------------------------------- - --------------- -- ------------------ -----
Iris Financial, Limited 72,913 ---
--------------------------------- - --------------- -- ------------------ -----
Tioman Finance Limited 277,736 25,000
--------------------------------- - --------------- -- ------------------ -----
Morebath Holdings Limited 277,737 25,000
--------------------------------- - --------------- -- ------------------ -----
Kinaro Investments S.A 277,735 25,000
--------------------------------- - --------------- -- ------------------ -----
Saules Holding, Limited --- 787,500
--------------------------------- - --------------- -- ------------------ -----
Princess Finance, Limited --- 787,500
--------------------------------- - --------------- -- ------------------ -----
Totals: 1,562,338 1,650,000
--------------------------------- - --------------- -- ------------------ -----
Schedule 2
New Princess Investors
Bomoseen Investments, Ltd.
Dandelion International, Ltd.
Silver Creek Investments, Ltd.
