Exhibit 10.1
UNSECURED CONVERTIBLE DEBENTURE
AND WARRANT PURCHASE AGREEMENT
THIS UNSECURED CONVERTIBLE DEBENTURE AND WARRANT PURCHASE AGREEMENT (the
"Agreement") is entered into as of August 28, 2003, 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 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");
B. 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, units (the "Units"), each Unit consisting of (i) an Unsecured
Convertible Debenture, in the form attached hereto as Exhibit A (collectively,
the "Debentures"), in the principal face amount of $1,000.00, 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 ONE DOLLAR
($1.00) per share, (ii) a Warrant, in the form attached hereto as Exhibit B-1
(the "50% Warrants"), to acquire initially 500 shares of Common Stock, and (iii)
a Warrant, in the form attached hereto as Exhibit B-2 (the "25% Warrants" and,
together with the 50% Warrants, the "Warrants"), to acquire initially 250 shares
of Common Stock. 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 shares of Common Stock issuable upon
exercise of or otherwise pursuant to the Warrants are referred to herein as
"Warrant Shares." The Debentures, the Warrants, the Conversion Shares and the
Warrant Shares are collectively referred to herein as the "Securities" and each
of them may individually be referred to herein as a "Security;"
C. The Debentures shall be senior to those certain unsecured convertible notes
issued by the Company in accordance with a Convertible Debt Purchase Agreement
dated December 19, 2002, as amended (the "Existing Notes"), and the holders of
the Existing Notes shall execute a Subordination Agreement, in the form attached
hereto as Exhibit C (the "Subordination Agreement"), prior to or
contemporaneously with the execution and delivery of this Agreement;
D. In connection with the Subordination Agreement, the Company and the holders
of the Existing Notes (certain of which holders are also Purchasers hereunder)
shall execute a Side Letter Agreement, in the form attached hereto as Exhibit D
(the "Side Letter Agreement"), prior to or contemporaneously with the execution
and delivery of this Agreement, which Side Letter Agreement shall provide, among
other things, that such holders (including those holders that are also
Purchasers hereunder) shall agree not to convert certain of their Existing Notes
or any of the Debentures purchased hereunder or exercise certain of the warrants
previously issued to them in connection with the Existing Notes (including any
additional warrants issued pursuant to the Side Letter Agreement) or any of the
Warrants issued to them hereunder, unless and until such time as the Company has
obtained the Stockholder Approval (as such term is defined in Section 4.19
below); 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 E (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, the Warrants,
the Subordination Agreement, the Side Letter Agreement and the Registration
Rights Agreement are collectively referred to herein as the "Transaction
Documents."
AGREEMENTS
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 UNITS
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 number of Units as is set forth on such
Purchaser's Execution Page, for a purchase price per Unit equal to ONE THOUSAND
DOLLARS ($1,000.00) (as to each Purchaser, the aggregate amount of such
Purchaser's purchase price is referred to herein as the "Purchase Price"). The
aggregate amount of Units to be issued and sold by the Company to all Purchasers
pursuant to this Agreement shall not exceed SIX MILLION DOLLARS ($6,000,000.00).
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 Drinker Xxxxxx & Xxxxx
LLP at One Xxxxx Square, 00xx & Xxxxxx Xxxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
at 10:00 a.m., Philadelphia, Pennsylvania 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 its Purchase Price for the Units
being purchased by such Purchaser by wire transfer to the account designated by
the Company, provided that, in the case of Princess Finance Limited, that
portion of its Purchase Price as is equal to the outstanding principal amount
of, plus accrued interest on, the $750,000 subordinated promissory note issued
to Princess Finance Limited in August 2003 shall be paid by cancellation of such
promissory note.
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 and the Warrant 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 AND
WARRANT 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 other Transaction
Documents to which such Purchaser is a party 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.
2.10 Hedging Transactions. Such Purchaser does not have an existing short
position with respect to the Common Stock.
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 and each of its wholly-owned
subsidiaries (collectively, the "Subsidiaries") 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 and each of its
Subsidiaries 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 and its Subsidiaries, taken as a whole on a
consolidated basis. None of the Company's Subsidiaries has any subsidiaries.
3.2 Authorization; Enforcement. (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, (iii) to issue the Conversion Shares upon conversion of the
Debentures in accordance with the terms thereof, and (iv) to issue the Warrant
Shares upon exercise of the Warrants 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 of the Units and the issuance and reservation for issuance of the
Conversion Shares and the Warrant 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 and the Warrants)
exercisable or exchangeable for, or convertible into, any shares of capital
stock and the number of shares to be reserved for issuance upon conversion of
the Debentures and exercise of the Warrants 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 and the Warrant 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 any of its Subsidiaries, or contracts,
commitments, understandings or arrangements by which the Company or any of its
Subsidiaries is or may become bound to issue additional shares of capital stock
of the Company or any of its Subsidiaries, nor are any such issuances,
contracts, commitments, understandings or arrangements contemplated, (b) there
are outstanding securities or instruments of the Company or any of its
Subsidiaries which contain any redemption or similar provisions and there are no
contracts, commitments, understandings or arrangements by which the Company or
any of its Subsidiaries is or may become bound to redeem or otherwise acquire
any security of the Company or any of its Subsidiaries, and (c) there are no
agreements or arrangements under which the Company or any of its Subsidiaries 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 or any of its
Subsidiaries 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 has furnished 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 or one of its Subsidiaries 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
or any such Subsidiary. The Existing Notes are held by those parties listed on
Schedule 3.3 hereto.
3.4 Issuance of Securities. The Units 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. Subject to the terms
of the Side Letter Agreement, the Conversion Shares and the Warrant Shares are
duly authorized and reserved for issuance, and, upon conversion of the
Debentures or exercise of the Warrants 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 Units and reservation for issuance of the
Conversion Shares and the Warrant 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 or any of its Subsidiaries 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 any of its
Subsidiaries, or by which any property or asset of the Company or any of its
Subsidiaries 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). Neither the Company nor any of its Subsidiaries
is in violation of its Certificate of Incorporation, Bylaws or other
organizational documents, and neither the Company nor any of its Subsidiaries is
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 or any of its
Subsidiaries 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 or any of its Subsidiaries 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 and its
Subsidiaries are 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 and its Subsidiaries 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 neither the Company nor any of its Subsidiaries
has 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 and its consolidated Subsidiaries 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 or any Subsidiary is a party or by which the Company or any
Subsidiary is bound or to which any of the properties or assets of the Company
or any Subsidiary is subject (each a "Contract"). Except as set forth in the
Select SEC Documents, none of the Company, its Subsidiaries or, to the best
knowledge of the Company, any of the other parties thereto is 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, 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 December 31, 2002, 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 and its
Subsidiaries, taken as a whole. 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 or any of its Subsidiaries
have any knowledge or reason to believe that its creditors intend to initiate
involuntary bankruptcy proceedings with respect to the Company or any of its
Subsidiaries.
3.8 Absence of Litigation. Except as disclosed in the Select SEC Documents,
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 or any of its Subsidiaries, threatened against or affecting the Company,
any of its Subsidiaries, 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 or any
of its Subsidiaries, could reasonably be expected to have a Material Adverse
Effect.
3.9 Disclosure. All information relating to or concerning the Company and its
Subsidiaries 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
Subsidiaries or their respective 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, (b) an
"affiliate" of the Company (as defined in Rule 144), or (c) a "beneficial owner"
of more than 5% of the Common Stock (as defined for purposes of Rule 13d-3 of
the Exchange Act). 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 against any Purchaser for brokerage commissions, finder's
fees or similar payments relating to this Agreement or the transactions
contemplated hereby, nor will any employee or director of the Company or any
Purchaser receive any such commissions, finder's fees or similar payments.
3.14 Intellectual Property. Each of the Company and its Subsidiaries 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,
2002. Neither the Company nor any Subsidiary of the Company infringes on or is
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 or any of its Subsidiaries, 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. Neither the Company nor any of its Subsidiaries has entered into
any consent agreement, indemnification agreement, forbearance to xxx or
settlement agreement with respect to the validity of the Company's or its
Subsidiaries' 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 and its Subsidiaries have 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 or its Subsidiaries.
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 or any of its Subsidiaries to any liability with respect to any of the
foregoing matters. No Key Employee has, to the best knowledge of the Company and
its Subsidiaries, any intention to terminate or limit his employment with, or
services to, the Company or any of its Subsidiaries, 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 or on Schedule 3.16 hereto, none of the officers, directors, or
employees of the Company or any of its Subsidiaries is presently a party to any
material transaction with the Company or any of its Subsidiaries (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 Title. Except for liens on certain of the Company's properties and assets
granted in favor of Pharmacia AB (f/k/a Pharmacia Treasury Services AB, f/k/a
Pharmacia & Upjohn Treasury Services AB, "Pharmacia") pursuant to that certain
Amended and Restated Credit Agreement dated as of May 24, 2001 between the
Company and Pharmacia, as amended (the "Pharmacia Credit Agreement"), and that
certain Security Agreement dated as of February 18, 1999 between the Company and
Pharmacia, as amended (the "Pharmacia Security Agreement" and, together with the
Pharmacia Credit Agreement (including the credit agreement predecessor thereto,
which was amended and restated in its entirety thereby) and the outstanding
promissory notes issued in connection therewith, the "Pharmacia Agreements"),
which liens shall be released in their entirety upon consummation of the
transactions contemplated by the Pharmacia Repayment Agreement (as defined in
Section 4.9 below), the Company and its Subsidiaries have good and marketable
title in fee simple to all real property and good and merchantable title to all
personal property owned by them that is material to the business of the Company
and its Subsidiaries, in each case free and clear of all liens, encumbrances and
defects except such as do not materially affect the value of such property and
do not materially interfere with the use made and proposed to be made of such
property by the Company and its Subsidiaries. Any real property and facilities
held under lease by the Company and its Subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not materially interfere with the use made and proposed to be
made of such property and buildings by the Company and its Subsidiaries.
3.18 Tax Status. Except as set forth in the Select SEC Documents, the Company
and each of its Subsidiaries 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 and each of its Subsidiaries 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 presently the subject of any material audit proceedings
by any taxing authority.
3.19 Employee Relations. Neither the Company nor any of its Subsidiaries is
involved in any material union labor dispute nor, to the knowledge of the
Company or any of its Subsidiaries, is any such dispute threatened. The Company
and its Subsidiaries believe that their relations with their 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 and its
Subsidiaries are 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.
3.20 Insurance. The Company and each of its Subsidiaries 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.
3.21 Environmental Matters. There is no environmental litigation or other
environmental proceeding pending or, to the Company's knowledge, threatened by
any governmental regulatory authority or others with respect to the current or
any former business of the Company or any of its Subsidiaries or any partnership
or joint venture currently or at any time affiliated with the Company or any of
its Subsidiaries. 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 any of its Subsidiaries 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 any of its Subsidiaries or by any
partnership or joint venture currently or at any time affiliated with the
Company or any of its Subsidiaries in violation of any applicable environmental
laws. The environmental compliance programs of the Company and each of its
Subsidiaries 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.
3.22 Anti-Takeover Provisions. Prior to the Closing, 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.
3.23 Acknowledgment Regarding Securities. The number of Conversion Shares
issuable upon conversion of the Debentures and the number of Warrant Shares
issuable upon exercise of the Warrants 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 and the Warrant Shares upon the exercise of
the Warrants 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 or Warrant 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 Units hereunder and the consummation of the other
transactions contemplated hereby are in the best interests of the Company and
its stockholders.
ARTICLE IV
COVENANTS
4.1 Best Efforts. The parties shall use their respective 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, and shall provide evidence of any such action so taken
to each Purchaser on or prior to the Closing Date. Within two (2) business days
after the Closing Date, the Company shall file with the SEC a Form 8-K
disclosing this Agreement and the transactions contemplated hereby (the "8-K
Filing"). From and after the 8-K Filing, the Company hereby acknowledges that no
Purchaser shall be in possession of any material nonpublic information received
from the Company, any of its Subsidiaries or any of its respective officers,
directors, employees or agents, that is not disclosed in the 8-K Filing. The
Company shall not, and shall cause each of its Subsidiaries and its and each of
their respective officers, directors, employees and agents not to, provide any
Purchaser with any material nonpublic information regarding the Company or any
of its Subsidiaries from and after the 8-K Filing without the express written
consent of such Purchaser. In the event of a breach of the foregoing covenant by
the Company, any of its Subsidiaries or any of its or their respective officers,
directors, employees and agents, in addition to any other remedy provided herein
or in the other Transaction Documents, a Purchaser shall have the right to make
a public disclosure, in the form of a press release, public advertisement or
otherwise, of such material nonpublic information without the prior approval by
the Company, its Subsidiaries or any of its or their respective officers,
directors, employees or agents; provided that such Purchaser shall first notify
the Company of its intention to do so. No Purchaser shall have any liability to
the Company, its Subsidiaries or any of its or their respective officers,
directors, employees, shareholders or agents for any such disclosure. Subject to
the foregoing, neither the Company nor any Purchaser shall issue any press
releases or any other public statements with respect to the transactions
contemplated hereby; provided, however, that the Company shall be entitled,
without the prior approval of any Purchaser, to make any press release or other
public disclosure with respect to such transactions (i) in substantial
conformity with the 8-K Filing and contemporaneously therewith and (ii) as is
required by applicable law and regulations (provided that in the case of clause
(i) each Purchaser shall be consulted by the Company in connection with any such
press release or other public disclosure prior to its release).
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 Participation Right. Subject to the terms and conditions of this Section
4.4, until the first anniversary of the date hereof, the Purchasers shall have a
right to participate in any financing transaction (whether debt or equity or
both) other than an Excluded Transaction (as hereinafter defined), on the same
terms and conditions as offered by the Company to the other participants in such
transaction. Each time the Company proposes to engage in any financing
transaction, the Company shall deliver a notice (the "Notice") to the
Purchasers, at least ten (10) business days prior to the date on which it
proposes to consummate such financing transaction, stating (a) its bona fide
intention to engage in such financing transaction, (b) a description of the
financing transaction, including the type of security to be issued in connection
therewith, (c) the price and additional terms, if any, upon which it proposes to
consummate the financing transaction, and (d) the anticipated closing date of
the financing transaction. Each Purchaser shall have the right, exercisable by
delivering written notice to such effect to the Company within five (5) business
days after its receipt of the Notice, to participate, at the price and on the
terms specified in the Notice, in such financing transaction up to such
Purchaser's Participation Amount (as hereafter defined). For purposes of this
Agreement, "Participation Amount" means, with respect to each Purchaser, that
percentage of the aggregate gross proceeds proposed to be raised by the Company
in the financing transaction as is equal to the percentage of the total
Debentures purchased by the Purchaser hereunder. If one or more Purchasers does
not elect to participate to the full extent of such Purchaser's Participation
Amount in the financing transaction, the Company may, during the seventy-five
(75)-day period following the expiration of the five (5)-business day period
referred to above, offer the remaining unsubscribed portion of the financing
transaction to any person at a price not less than, and upon terms no more
favorable to the offeree than, those specified in the Notice. If the Company
does not consummate the balance of such financing transaction within such
period, the right provided hereunder shall be deemed to be revived and such
financing transaction shall not be consummated unless first reoffered to the
Purchasers in accordance herewith. For purposes of this Agreement, "Excluded
Transaction" means (i) the issuance of shares of Common Stock upon the exercise
or conversion of the Company's options, warrants or other convertible securities
outstanding as of the date hereof and disclosed on Schedule 3.3 hereto in
accordance with the terms of such options, warrants or other securities as in
effect on the date hereof, (ii) the grant of options to purchase Common Stock,
with exercise prices not less than the market price of the Common Stock on the
date of grant, which are issued to employees, directors or consultants pursuant
to an equity compensation plan approved by the Company's board of directors, and
the issuance of shares of Common Stock upon the exercise thereof, (iii) the
issuance of the Conversion Shares and the Warrant Shares, (iv) the issuance of
shares of Common Stock to the Holders as payment of interest on the Debentures,
in accordance with the terms of the Debentures, (v) the issuance of shares of
Common Stock pursuant to stock splits, combinations, subdivisions, dividends or
other distributions on the outstanding shares of Common Stock, (vi) the issuance
of securities in connection with strategic business partnerships, and (vii) the
issuance of securities pursuant to any credit line or equipment financing from a
bank or similar financial or lending institution approved by the Board of
Directors, which, in the case of any transaction described in clause (ii), (vi)
or (vii), is not, in the good faith judgment of the Company's Board of
Directors, for the primary purpose of raising additional capital.
4.5 Reservation of Shares. The Company currently has authorized and reserved for
the purpose of issuance sufficient shares of Common Stock to provide for the
full conversion of the Debentures and issuance of the Conversion Shares in
connection therewith, the full exercise of the Warrants and the issuance of the
Warrant 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) or the Warrants
(collectively, the "Issuance Obligations"); provided, however, that, as provided
in the Side Letter Agreement, the Conversion Shares and Warrant Shares issuable
upon conversion or exercise of the Debentures and Warrants that are subject to
the Side Letter Agreement (such Debentures and Warrants, the "Restricted
Securities") shall not be included among the Issuance Obligations unless and
until the restrictions on conversion and exercise of such Restricted Securities
have lapsed pursuant to the terms of the Side Letter Agreement. In the event
such number of shares becomes insufficient to satisfy the Issuance Obligations
(including, without limitation, as a result of the lapse of the restrictions on
conversion and exercise of the Restricted Securities), the Company shall take
all necessary action to authorize and reserve such additional shares of Common
Stock necessary to satisfy the Issuance Obligations.
4.6 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 or any of its Subsidiaries. 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; 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.
4.7 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
Warrant Shares or 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.
4.8 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.
4.9 Use of Proceeds. The Company shall use the proceeds from the sale and
issuance of the Units as follows: (a) contemporaneously with the consummation of
the transactions contemplated hereby, ONE MILLION DOLLARS ($1,000,000) shall be
used, together with the other non-cash consideration to be received by
Pharmacia, to repay in full the outstanding indebtedness of the Company owing to
Pharmacia pursuant to the Pharmacia Credit Agreement, in accordance with the
repayment agreement attached hereto as Exhibit F (the "Pharmacia Repayment
Agreement"); (b) TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000) plus accrued
interest shall be used to repay in full the outstanding indebtedness of the
Company described on Schedule 3.16 hereto; (c) the balance of the proceeds shall
be used to fund the completion of the preparation and filing with the U.S. Food
and Drug Administration of the Company's New Drug Application for its AMD
Clinical Trials with respect to PhotoPoint SnET2; and (d) to the extent any
proceeds remain after the foregoing uses, for general corporate purposes and
working capital. In no event shall any proceeds be used to: (i) pay dividends;
(ii) pay for any increase in executive compensation or make any loan or other
advance to any officer, employee, shareholder, director or other affiliate of
the Company, without the express approval of the board of directors acting in
accordance with past practice; (iii) purchase debt or equity securities of any
entity (including redeeming the Company's own securities), except for (A) the
repayment of indebtedness specifically contemplated by the first sentence of
this Section 4.9, (B) evidences of indebtedness issued or fully guaranteed by
the United States of America and having a maturity of not more than one year
from the date of acquisition, (C) certificates of deposit, notes, acceptances
and repurchase agreements having a maturity of not more than one year from the
date of acquisition issued by a bank organized in the United States having
capital, surplus and undivided profits of at least $500,000,000, (D) the
highest-rated commercial paper having a maturity of not more than one year from
the date of acquisition, and (E) "Money Market" fund shares, or money market
accounts fully insured by the Federal Deposit Insurance Corporation and
sponsored by banks and other financial institutions, provided that the
investments consist principally of the types of investments described in clauses
(B), (C), or (D) above; or (iv) make any investment not directly related to the
current business of the Company.
4.10 Additional Securities and Indebtedness. Without the prior written approval
of the holders of a majority in outstanding principal amount of the Debentures
(which approval may be given or withheld by the holders in their sole and
absolute discretion), the Company shall not, in any manner, authorize, create,
issue or sell any securities (whether debt or equity) or incur any indebtedness
(including by way of amendment of the rights of existing securities or
indebtedness), which securities or indebtedness rank as to interest or dividend
rate, repayment terms, effective conversion price or any other terms or
provisions that are equal or senior to the terms and provisions of the
Debentures, nor shall the Company grant any security interest to any creditor
securing its obligations in respect of any indebtedness, whether now existing or
hereafter arising; provided, however, that the foregoing shall not prohibit the
Company from issuing any such security in connection with a merger,
consolidation or other similar business combination.
4.11 Listing. The Company shall promptly secure the listing of the Conversion
Shares and the Warrant 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 or exercise of the Warrants) and shall maintain, so long as any other
shares of Common Stock shall be so listed or quoted, such listing of all
Conversion Shares and Warrant Shares from time to time issuable upon the
conversion of the Debentures or the exercise of the Warrants; provided, however,
that the Company shall not be required to secure the listing of the Conversion
Shares and the Warrant Shares issuable upon conversion or exercise of the
Restricted Securities unless and until such time as the restrictions on
conversion and exercise of such Restricted Securities have lapsed pursuant to
the terms of the Side Letter Agreement. 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 and/or Warrants 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.
4.12 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.
4.13 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.
4.14 Redemptions; Dividends and Prepayment of Indebtedness. So long as any
Purchaser holds any Debentures, the Company shall not, without first obtaining
the written approval of the holders of a majority of the aggregate principal
amount of the Debentures then outstanding (which approval may be given or
withheld by the holders in their sole and absolute discretion), repurchase,
redeem or declare or pay any cash dividend or distribution on any shares of
capital stock of the Company or (except as and to the extent contemplated
herein) prepay any indebtedness of the Company (other than the Debentures).
4.15 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.
4.16 Information. So long as any Purchaser shall beneficially own any
Securities, the Company shall furnish to such Purchaser:
(a) concurrently with the filing with the SEC of its Annual Reports on Form
10-K, a certificate of the President, a Vice President or a senior financial
officer of the Company stating that, based upon such examination or
investigation and review of this Agreement as in the opinion of the signer is
necessary to enable the signer to express an informed opinion with respect
thereto, neither the Company nor any of its Subsidiaries is or has during such
period been in default in the performance or observance of any of the terms,
covenants or conditions hereof, or, if the Company or any of its Subsidiaries
shall be or shall have been in default, specifying all such defaults, and the
nature and period of existence thereof, and what action the Company or such
Subsidiary has taken, is taking or proposes to take with respect thereto; and
(b) the information the Company must deliver to any holder or to any prospective
transferee of Securities in order to permit the sale or other transfer of such
Securities pursuant to Rule 144A of the SEC or any similar rule then in effect.
The Company shall keep at its principal executive office a true copy of this
Agreement (as at the time in effect), and cause the same to be available for
inspection at such office during normal business hours by any holder of
Securities or any prospective transferee of Securities designated by a holder
thereof.
4.17 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.
4.18 Expenses. The Company shall pay to SDS Capital Partners ("SDS Capital") at
Closing reimbursement for the out-of-pocket expenses reasonably incurred by SDS
Capital, its affiliates, and its or their advisors in connection with the
negotiation, preparation, execution and delivery of this Agreement and the other
Transaction Documents, including, without limitation, such advisors' reasonable
due diligence and attorneys' fees and expenses (the "Expenses"), up to an
aggregate amount not to exceed $30,000 without the Company's prior consent. At
the Closing, any Expenses to be reimbursed pursuant to this Section 4.18 shall
be paid by delivery by the Company of a Company check of immediately available
funds or wire transfer to SDS Capital. In addition, from time to time
thereafter, upon SDS Capital's written request and to the extent that the
Company has not already reimbursed SDS Capital for Expenses aggregating $30,000
pursuant to this Section 4.18, the Company shall pay to SDS Capital such
additional Expenses, if any, not covered by such payment, in each case to the
extent reasonably incurred by SDS Capital's agents in connection with the
transactions contemplated by this Agreement and the other Transaction Documents.
4.19 Annual Stockholder Meeting. At the next annual meeting of the stockholders
of the Company, the Company shall solicit the vote of the stockholders for the
approval of an amendment to the Company's Certificate of Incorporation (the
"Stockholder Approval") to (i) increase in the number of authorized shares of
the Company's Common Stock to 65,000,000 shares, and (ii) provide for the
holders of the Debentures to have the right, pursuant to Section 221 of the
Delaware General Corporation Law, to vote on all matters submitted to a vote or
written consent of the holders of the Company's Common Stock, with such
Debenture holders voting in all cases on an as-converted basis (taking into
account, for such purpose, any limitations on the ability of the holders of the
Debentures to convert such Debentures into shares of Common Stock) and as a
single class with the holders of Common Stock. The Company shall recommend to
its stockholders approval of such matters. The Company shall use its best
efforts to solicit from its stockholders proxies in favor of such matters
sufficient to obtain the Stockholder Approval, and shall vote such proxies, and
shall use its best efforts to cause all "affiliates" (as such term is defined in
Rule 12b-2 promulgated under the Exchange Act) of the Company to vote any shares
of Common Stock beneficially owned by such persons or entities, in favor of such
matters. Unless and until such time as the Company obtains the Stockholder
Approval, the Company shall not sell or issue any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for shares of Common
Stock (including, without limitation, options to purchase Common Stock which are
issued to employees, directors or consultants pursuant to the Company's equity
compensation plans), if such issuance would cause the Company not to have a
sufficient number of shares of Common Stock reserved solely and expressly for
the purpose of satisfying the Issuance Obligations.
ARTICLE V
SECURITY TRANSFER MATTERS
5.1 Conversion and Exercise of Debentures and Warrants. Upon conversion of the
Debentures or exercise of the Warrants by any person, (a) if the DTC Transfer
Conditions (as defined below) are satisfied, the Company shall cause its
transfer agent to electronically transmit all Conversion Shares and Warrant
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 and Warrants), registered in the name of such person its nominee,
physical certificates representing the Conversion Shares and Warrant Shares, as
applicable. Even if the DTC Transfer Conditions are satisfied, any person
effecting a conversion of Debentures or exercising Warrants may instruct the
Company to deliver to such person or its nominee physical certificates
representing the Conversion Shares and Warrant 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 or Warrant 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 of Warrant 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 and Warrant 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 and Warrants 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. Such Purchaser shall have received a certificate,
executed by the Chief Executive Officer of the Company after reasonable
investigation, dated as of the Closing Date to the foregoing effect and as to
such other matters as may reasonably be requested by such Purchaser.
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 Repayment of Indebtedness. Such Purchaser shall have received executed
copies of the Pharmacia Repayment Agreement and confirmation from the Company
and Pharmacia that the transactions contemplated thereby, including, without
limitation, the repayment in full of all indebtedness of the Company owing to
Pharmacia, shall be consummated and effective simultaneously with the Closing in
accordance with the terms of that agreement.
7.6 Legal Opinion. Such Purchaser shall have received the legal opinion from the
Company's counsel, dated as of the Closing Date, in the form attached hereto as
Exhibit G.
7.7 Subordination Agreements. Such Purchaser shall have received a Subordination
Agreement in favor of such Purchaser, together with a copy of the Side Letter
Agreement, executed by each holder of Existing Notes.
7.8 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, certified as such by the Secretary
or Assistant Secretary of the Company, and such other documents they reasonably
request in connection with 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. 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. Notwithstanding the foregoing, no Purchaser shall transfer any
Debentures or Warrants or any of its rights hereunder to any of the companies
identified on Schedule 8.7 hereto.
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; provided, however, that Section 4.18 may be enforced by SDS Capital.
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 Publicity. The Company and each Purchaser shall have the right to approve
before issuance any press releases, SEC filings or any other public statements
with respect to the transactions contemplated hereby; provided, however, that
the Company shall be entitled, without the prior approval of the Purchasers, to
make any press release or SEC filings with respect to such transactions as is
required by applicable law and regulations (although the Purchasers shall be
consulted by the Company in connection with any such press release and filing
prior to its release and shall be provided with a copy thereof and must provide
specific consent to the use of their name in connection therewith).
8.11 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 4.2 or 4.6 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 8.11
shall be the same as those set forth in Section 7(c) of the Registration Rights
Agreement.
8.12 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.
8.13 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.
8.14 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.
8.15 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.
8.16 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.
8.17 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. Each Purchaser further
acknowledges that SDS Capital has retained Drinker Xxxxxx & Xxxxx LLP ("DB&R")
to act as its counsel in connection with the transactions contemplated by this
Agreement and the other Transaction Documents and that DB&R has not acted as
counsel for any of the other Purchasers in connection therewith and none of the
other Purchasers have the status of a client of DB&R for conflict of interest or
other purposes as a result thereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURE PAGE TO UNSECURED CONVERTIBLE DEBENTURE AND WARRANT PURCHASE
AGREEMENT]
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:
Number of Units:
------------------------------------
Purchase Price ($1,000 per Unit):
-------------------
Exhibit A
To
Unsecured Convertible Debenture and Warrant Purchase Agreement
UNSECURED CONVERTIBLE DEBENTURE
Exhibit B-1
To
Unsecured Convertible Debenture and Warrant Purchase Agreement
50% DEBENTURE PURCHASE WARRANT
Exhibit B-2
To
Unsecured Convertible Debenture and Warrant Purchase Agreement
25% DEBENTURE PURCHASE WARRANT
Exhibit C
to
Unsecured Convertible Debenture and Warrant Purchase Agreement
SUBORDINATION AGREEMENT
Exhibit D
to
Unsecured Convertible Debenture and Warrant Purchase Agreement
SIDE LETTER AGREEMENT
Exhibit E
to
Unsecured Convertible Debenture and Warrant Purchase Agreement
REGISTRATION RIGHTS AGREEMENT
Exhibit F
to
Unsecured Convertible Debenture and Warrant Purchase Agreement
PHARMACIA REPAYMENT AGREEMENTS
Exhibit G
to
Unsecured Convertible Debenture and Warrant Purchase Agreement
OPINION
List of Schedules
to
Unsecured Convertible Debenture and Warrant Purchase Agreement
Schedule 3.2 - Authorization; Enforcement
Schedule 3.3 - Capitalization
Schedule 3.5 - Conflicts
Schedule 3.16 Transactions with Affiliates
Schedule 8.7 - Prohibited Transferees
Schedule 3.2
to Unsecured Convertible Debenture and Warrant Purchase Agreement
AUTHORIZATION; ENFORCEMENT
NONE
Schedule 3.3
to Unsecured Convertible Debenture and Warrant Purchase Agreement
CAPITALIZATION
Number of Shares
Authorized Stock:
Preferred Stock 20,000,000
Common Stock 50,000,000
Outstanding:
Preferred Stock -0-
Common Stock (as of August 11, 2003) 24,282,743
Stock Options (consists of employees only):
Reserved 6,000,000
Issued (approx. $3.16 avg exercise price) 5,200,212
Exercisable (vested; approx. $4.38 avg exercise price) ~3,400,000
Warrants:
Issued or to be issued (approx. $1.00 exercise price) 7,642,850
---------
|X| August 2002 Equity Funding ($0.50# exercise price) 2,800,000 R
|X| December 2002 Debt Funding ($1.00* exercise price) 1,825,000 R
|X| Pharmacia (Adjusted avg exercise price of $1.00) 360,000 UR
|X| 1997 Funding ($1.00 exercise price) 449,100 R
|X| Various Consultants (Avg exercise price of $5.64) 633,750 +
|X| Warrants from December 2002 Funding from 1,575,000 URR
subordination impact ($1.00* exercise price)
Other Convertible Instruments:
Convertible Notes from December 2002 Debt Funding 6,361,856*
(4,799,530 shares are registered with registration rights on the
remaining anti-dilution shares; the unregistered shares are subject to
restrictions on conversion pursuant to the Side Letter Agreement and
the holders have agreed to defer those registration rights until the
restrictions lapse). The holders are: 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; and
Kinaro Investments S.A.
* Assumes the anti-dilution impact of $1.00 per share per the December 2002 Debt Agreement.
# Also has anti-dilution protection on shares purchased and warrants under the August 2002 private placement offering.
R Registered shares.
UR Unregistered shares with registration rights.
URR Unregistered shares with registration rights. These warrants are
subject to restrictions on exercise pursuant to the Side Letter
Agreement, and the registration rights have been deferred by the
holders until the restrictions lapse.
+ 150,000 shares have piggy back registration rights with the remaining shares unregistered with reasonable efforts required.
Schedule 3.5
to Unsecured Convertible Debenture and Warrant Purchase Agreement
CONFLICTS
NONE
Schedule 3.16
to Unsecured Convertible Debenture and Warrant Purchase Agreement
The Company has borrowed $250,000 from Xxxxx Xxxxxx, an outside Director of
the Company, which amount plus interest shall be repaid in full out of the
proceeds of this Offering.
Schedule 8.7
to Unsecured Convertible Debenture and Warrant Purchase Agreement
PROHIBITED TRANSFEREES
1. QLT, Inc. (NASDAQ: QLTI)
2. Novartis AG (NYSE: NVS)
3. Pharmacyclics, Inc. (NASDAQ: PCYC)
4. DUSA Pharmaceuticals, Inc. (NASDAQ: DUSA)
5. Photogen Technologies, Inc. (NASDAQ: PHGN)
6. Genentech, Inc. (NYSE: DNA)
7. Eyetech Pharmaceuticals, Inc. (Private Company)
8. Any other company that has publicly announced commercial efforts in AMD
or Photodynamic Therapy
9. All executive officers, directors and "affiliates" (as such term is
defined in Rule 12b-2 promulgated under the Exchange Act) of the
foregoing
