Exhibit 10.65
SECOND AGREEMENT AND AMENDMENT (the "Agreement"), effective as
of January 22, 2001, by and among Incara Pharmaceuticals
Corporation, a Delaware corporation (the "Company"), Elan
International Services, Ltd. ("EIS"), a Bermuda exempted
limited liability company and a wholly owned subsidiary of
Elan Corporation, plc, an Irish public limited liability
company ("Elan"), and Elan Pharma International Limited, an
Irish private limited liability company and a wholly owned
subsidiary of Elan and an affiliate of EIS ("EPIL").
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RECITALS:
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WHEREAS, the Company, EIS and EPIL have entered into a Securities
Purchase Agreement dated as of December 21, 2000 (the "Purchase Agreement"),
pursuant to which the Company issued and sold to EIS, and EIS purchased from the
Company, (i) 12,015 shares of the Company's Series C Preferred Stock, par value
U.S.$0.01 per share (the "Series C Preferred Stock"), (ii) a warrant to purchase
up to 22,191 shares of the Company's Series B Preferred Stock, par value
U.S.$0.001 per share (the "Series B Preferred Stock"), (iii) 28,457 shares of
Series B Preferred Stock and (iv) 825,000 shares of common stock, par value
U.S.$0.001 per share of the Company (the "Incara Common Stock"). The Company
further issued and sold to EPIL, and EPIL purchased from the Company, a
convertible promissory note of the Company (the "Note"), amounts in respect of
which shall be disbursed from time to time in an aggregate amount of up to
U.S.$4,806,000 in accordance with its terms and subject to the conditions
contained therein. The rights, preferences and privileges of the Series B
Preferred Stock and Series C Preferred Stock are as set forth in the Company's
Certificate of Designations, Preferences and Rights, filed with the Secretary of
State of the State of Delaware on January 19, 2001 (the "Certificate of
Designations");
WHEREAS, the parties desire to amend the Certificate of Designations to
clarify liquidation rights and the definition of a "Liquidation Event"; and
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants contained herein, the sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
2. Amendment to the Certificate of Designations. The parties
agree that the Certificate of Designations shall be amended,
by the filing of an amendment to the Certificate of
Designations with the Secretary of State of the State of
Delaware, as follows:
2.1 Section 3 of Article I of the Certificate of
Designations shall be amended and restated in its
entirety to read as follows:
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"3. Liquidation. In the event of any Wind-up or Asset
Sale (each as defined in clauses (i) and (ii),
respectively, of the definition of Liquidation Event
in Article IV below), whether voluntary or
involuntary, the holders of Series B Preferred Stock
shall have the right to receive, pari passu with the
holders of the Common Stock and subject to the rights
of the holders of Series C Preferred Stock and any
other senior class or series of capital stock of the
Corporation, the assets of the Corporation in
proportion to the number of shares of Common Stock
held by each such holder (assuming, for such
purposes, the holders of Series B Preferred Stock are
deemed to hold that number of shares of Common Stock
equal to the number of shares of Common Stock into
which such shares of Series B Preferred Stock are
then convertible)."
2.2 Section 5(e)(ii) of Article I of the Certificate of
Designations shall be amended and restated in its
entirety to read as follows:
"(ii) The Corporation shall give written notice to
all holders of Series B Preferred Stock at least 10 days prior
to the date on which the Corporation closes its books or takes
a record (A) with respect to any dividend or distribution upon
Common Stock, (B) with respect to any pro rata subscription
offer to holders of Common Stock, or (C) for determining
rights with respect to any Significant Transaction or
Liquidation Event."
1.3 Section 5(c) of Article II of the Certificate of
Designations shall be amended and restated in its entirety to read as
follows:
"(c) Conversion upon Occurrence of
Significant Transaction. Upon the occurrence of a Significant
Transaction, the Corporation and any holder of Series C
Preferred Stock may convert all or any portion of the Series C
Preferred Stock held by such holder into a number of shares of
Series B Conversion Stock in the same manner as provided in
subsection (a) above, and then, into a number of shares of
Common Stock in the same manner as provided in Article I,
Section 5 hereof, provided that if the Significant Transaction
results in the holders of the outstanding equity securities of
the Corporation immediately prior to such Significant
Transaction holding securities representing less than 25% of
the outstanding equity securities (on an as converted common
stock basis) of the surviving entity immediately following the
Significant Transaction, then, notwithstanding the provisions
of Article II, Section 5(b)(i) hereof, the Series C Conversion
Price shall be equal to the Fair Market Value (on an as
converted to common stock basis), provided further that the
Series C Conversion Price shall not be less than the Share
Price Floor (as defined in Article II Section 6(a) hereof) (on
an as converted to common stock basis) or greater than the
Series C Conversion Price set forth in Article II, Section
5(b)(i) hereof (as might be adjusted as provided in Article
II, Section 5(d) hereof)."
1.4 Section 9 of Article IV of the Certificate of Designations
shall be amended and restated in its entirety to read as follows:
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"9. Liquidation Event. The term "Liquidation
Event" means an event occasioned by, and including, (i) the
liquidation, dissolution, bankruptcy or winding-up of the
affairs of the Corporation (each, a "Wind-Up"), (ii) the sale
of all or substantially all of the Corporation's assets (and
"Asset Sale"), or (iii) the issuance by the Corporation of
equity securities in a transaction or series of related
transactions which results in the holders of the outstanding
equity securities of the Corporation immediately prior to such
transaction or series of related transactions holding
securities representing less than 25% of the outstanding
equity securities (on an as converted common stock basis) of
the Corporation immediately following such transaction or
series of related transactions."
3. Existing Representations, Warrants and Covenants. The Company
hereby represents and warrants that all representations and
warranties contained in the Purchase Agreement and the Note
are true and correct, in all material respects, and the
Company has complied, and is presently in compliance, in all
material respects, with all agreements and covenants set forth
in the Transaction Documents, as of the date of this
Agreement.
4. Amendment and Waiver. This Agreement may not be modified or
amended, or any of the provisions hereof waived, except by
written agreement of the Company, EIS and EPIL dated after the
date hereof.
5. Headings. The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of the Agreement.
6. Entire Agreement. This Agreement and the Transaction Documents
contain the entire understanding of the parties with respect
to the subject matter hereof and thereof and supersede all
prior agreements and understandings among the parties with
respect thereto.
7. Governing Law. This Agreement shall be governed in all
respects by the laws of the State of New York, without giving
effect to principles of conflicts of laws, and in accordance
with the terms of Section 13 of the Purchase Agreement.
8. Counterparts. This Agreement may be executed in any number of
counterparts, including by facsimile signature, each of which
shall be deemed an original, but all of which together shall
constitute one and the same instrument.
9. Expenses. Each of the parties shall be responsible for its own
costs and expenses incurred in connection with the
transactions contemplated hereby.
10. Successors and Assigns. The provisions hereof shall inure to
the benefit of, and be binding upon, the successors and
assigns of the parties hereto.
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11. Severability. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not be in any
way affected or impaired thereby.
[The next page is the signature page.]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first above written.
Incara Pharmaceuticals Corporation
By:
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Name:
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Title:
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Elan International Services, Ltd.
(sole shareholder of Series C Preferred Stock)
By:
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Name:
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Title:
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Elan Pharma International Limited
By:
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Name:
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Title:
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