Exhibit 10.2
LOAN AND STOCK PURCHASE AGREEMENT
Loan and Stock Purchase Agreement ("Agreement") made this 13th day of
July, 1994, by and among ScripTech Pharmaceuticals, Inc., a Delaware corporation
(the "Company"), and the purchasers listed on Schedule 1 attached hereto
(individually, a "Purchaser" and collectively, the "Purchasers").
In consideration of the mutual promises and agreements set forth herein,
the parties hereto hereby agree as follows:
1. Loan.
(a) Subject to the terms and conditions set forth herein, the
Purchasers will make loans (the "Loans") to the Company, in such amounts as the
Company may request, commencing on July 15, 1994 and prior to the first to occur
of (i) December 31, 1994 (the "Expiration Date"), or (ii) conversion of the
indebtedness outstanding under the Loans pursuant to Section 4 of the
Convertible Promissory Notes (individually a "Note" and, collectively, the
"Notes") evidencing the Loans, or (iii) the earlier termination of the financing
arrangement described herein upon the occurrence of an Event of Default pursuant
to Section 3 of the Notes. The aggregate principal amount of the Loans shall not
exceed $2,500,000 (the "Maximum Loan Amount") and each advance made by the
Purchasers to the Company hereunder upon the Company's request shall be in an
amount not less than $250,000 in the aggregate (the "Minimum Advance Amount").
Upon each request by the Company for a Loan hereunder, each Purchaser shall lend
to the Company its pro rata share of the amount of such advance, which shall be
based upon each Purchaser's respective percentage set forth on Schedule 1
attached hereto. Set forth on Schedule 1 is the maximum amount that each
Purchaser is obligated to lend to the Company hereunder.
(b) Each Loan shall be evidenced by a Note in the form attached
hereto as Exhibit A. Interest on the Notes shall be payable at the time and at
the rate provided in the Notes. The Company hereby irrevocably authorizes the
Purchasers or their agent to make or cause to be made, on a schedule attached to
each Note, at or following the time of making each advance under the Notes, an
appropriate notation reflecting such transaction and the then aggregate unpaid
principal balance of the Loan. Failure to make any such notation shall not,
however, affect the obligation of the Company to repay the Loans. All payments
of principal and interest shall be made in the manner provided in the Notes.
(c) The making by the Purchasers of any and all Loans requested by
the Company under this Agreement and the Notes is subject to the following
conditions precedent that, on the date on which each such Loan is made:
(i) The amount of the Loan requested by the Company shall be
needed to finance the Company's continuing business and operations (and for no
other purpose) for a period not to exceed four (4) months following the date on
which the advance is to made, and
(ii) No event which constitutes, or which with notice or lapse
of time or both would constitute, an Event of Default (as defined in the Notes)
shall have occurred and be continuing.
In no event shall the Company make any request to the Purchasers for a
Loan hereunder unless (i) the Company's cash balance as of the first day of the
month in which the Company makes such a request is not more than $750,000 and
(ii) both of the conditions precedent set forth above have been satisfied. If an
Event of Default has occurred under the Notes, the Company shall give the
Purchaser's Agent (as hereinafter defined) prompt written notice thereof,
describing the nature of the default.
(d) The Company shall repay each Loan in full by the date set forth
in the Note corresponding to such Loan (the "Maturity Date") by delivery of
shares of the Company's capital stock, as set forth in the Notes. The Company
may prepay, at any time and from time to time, without penalty or premium, in
cash, the whole or any portion of the Loans. Any payment by the Company of
principal of and/or interest on the Notes shall be made on a pro rata basis
among the Purchasers, based upon the amount of each Purchaser's Loans as a
percentage of the aggregate amount of the Loans. The Notes shall be convertible
into shares of the Company's capital stock under the circumstances and upon the
terms and conditions set forth in the Notes.
(e) The proceeds of all Loans made by the Purchasers shall be sent,
via wire transfer, to a general deposit account maintained by the Company or by
check to the Company. The proceeds of the Loans shall be used by the Company
solely for working capital purposes.
2. Sale of Shares. In consideration of the Purchasers' agreement to make
the Loans, the Company shall issue, sell and deliver to a Purchaser, upon such
Purchaser making a Loan, that number of shares of Common Stock of the Company
determined by multiplying the aggregate principal amount of such Purchaser's
Loan by .10, at a price of $.05 per share. The Company shall issue and sell a
maximum of 250,000 shares of Common Stock (the "Shares") pursuant to this
Section 2.
3. Representations and Warranties of the Company. The Company represents
and warrants to each of the Purchasers as follows:
(a) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. The Company has
full corporate power and authority to own its property and conduct its business
as now conducted, to enter into and perform this Agreement and the Notes and to
issue, sell and deliver the Shares.
2
(b) The issuance, sale and delivery of the Shares have been duly
authorized by all necessary corporate action on the part of the Company. The
Shares, when issued, will be duly and validly issued, fully paid and
nonassessable and free from any claims, liens or encumbrances. Based in part on
the representations of the Purchasers set forth herein, the offer and sale of
the Notes and the Shares to the Purchasers is exempt from the registration and
qualification requirements of applicable federal and state securities laws.
(c) The execution, delivery and performance by the Company of this
Agreement and the Notes have been duly authorized by all necessary corporate
action on the part of the Company. This Agreement and the Notes constitute the
legal, valid and binding obligations of the Company enforceable against the
Company in accordance with their respective terms, subject to applicable
bankruptcy, reorganization, insolvency, fraudulent conveyance and other similar
laws generally affecting the rights and remedies of creditors and to the
exercise of judicial discretion in accordance with general equitable principles.
(d) The execution and delivery of, and performance of the
transactions contemplated by this Agreement and the Notes, will not (i) violate
any material provision of any law or regulation applicable to the Company, (ii)
conflict with or result in any breach of any of the terms, conditions or
provisions of, or constitute a default under, the Company's Certificate of
Incorporation or By-laws, each as amended to date, or any material indenture,
lease, mortgage, agreement or other instrument to which the Company is a party
or by which it or any of its properties is bound, or any decree, judgment or
order known to the Company which is applicable to the Company or its properties,
or (iii) result in the creation or imposition of any lien, charge or encumbrance
of any nature whatsoever upon any of the assets or properties of the Company.
(e) No consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with, any
governmental authority is required on the part of the Company in connection with
the execution, delivery and performance of this Agreement and the Notes or the
offer, issuance and sale of the Shares, except such filings as shall have been
made prior to and shall be effective on and as of the date hereof or which may
be made after the date hereof or after the issuance and sale of the Shares in
accordance with applicable federal and state securities laws.
4. Representations of the Purchasers. Each of the Purchasers severally and
only as to itself represents, warrants, acknowledges and covenants to the
Company as follows:
(a) Investment. The Purchasers are acquiring the Notes and the
Shares for their own account for investment and not with a view to, or for sale
in connection with, any distribution thereof, nor with any present intention of
distributing or selling the same; and the Purchasers have no present or
contemplated agreement, undertaking, arrangement, obligation or commitment
providing for the disposition thereof.
3
(b) Authority. The Purchasers have full power and authority to lend
money to the Company in accordance with the terms of this Agreement and the
Notes. Each Purchaser that is a corporation or partnership has not been
organized, reorganized or recapitalized specifically for the purpose of
investing in the Company. The execution, delivery and performance of this
Agreement by each Purchaser that is a corporation or partnership has been duly
authorized by all necessary action on the part of each such Purchaser.
(c) Experience. The Company has made available to the Purchasers any
and all written information concerning the Company which they have requested in
connection with the transactions contemplated by this Agreement. The Purchasers
have adequate net worth and means of providing for their current needs and
contingencies, and to sustain a complete loss of their investment in the
Company. The Purchasers have sufficient business and financial knowledge and
experience so as to be capable of evaluating the merits and risks of their
investment in the Company.
(d) Accredited Investor Status. The Purchasers understand that the
Notes and the Shares have been offered and will be sold in reliance upon the
exemption from the registration requirements of Securities Act of 1933, as
amended (the "Act"), under Section 4(2) thereof and Rule 506 promulgated
thereunder. Each Purchaser represents that such Purchaser is an "accredited
investor", as that term is defined in Rule 501(a) promulgated under the Act.
(e) Legend. The Purchasers understand that the Notes will bear the
following legend:
This Note has not been registered under the Securities Act of 1933,
as amended (the "Act") or under the securities law of any state, and
may not be offered, sold or otherwise transferred in the absence of
such registration or an exemption therefrom under the Act and such
state securities laws.
The certificates representing the Shares shall bear a legend substantially
similar to the legend set forth on the Notes.
(f) The Purchasers acknowledge that the Notes and the Shares must be held
indefinitely unless they are subsequently registered under the Act or an
exemption from such registration is available. The Purchasers are aware of the
provisions of Rule 144 under the Act, which permits limited resale of shares
purchased in a private placement subject to the satisfaction of certain
conditions, and understand that the Company has no obligation to make the
provisions of Rule 144 available.
4
6. Agent of the Purchasers.
(a) Each of the Purchasers hereby appoints and authorizes CW
Ventures II, L.P. (the "Agent") to receive requests for Loans from the Company
and to take such action, as agent on behalf of the Purchasers, to effectuate the
making of each Loan including, without limitation, notifying each Purchaser of
the amount of each Loan required to be made by each Purchaser pursuant to
Section 1 of this Agreement and the date upon which each such Loan shall be
made, and maintaining a record of all Loans made to the Company hereunder. The
Agent shall have such other powers as are reasonably incidental to the
foregoing.
(b) The obligations of the Agent are only those set forth herein.
Without limitation of the foregoing, the Agent shall not be required to take any
action with respect to any Event of Default under the Notes other than to
provide the Purchasers with a copy of any notice of an Event of Default given by
the Company pursuant to Section 1(c) hereof. Neither the Agent nor any of its
general or limited partners nor any of their respective partners, officers,
directors, agents or employees shall be liable for any action taken or not taken
by the Agent, as agent, pursuant to this Section 6.
7. Miscellaneous. This Agreement and the Notes constitute the entire
agreement among the parties with respect to the subject matter hereof. This.
Agreement may not be modified or amended except by an instrument in writing
signed by the holders of a majority in interest of the Notes. This Agreement may
be executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument. This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts, without regard to its provisions
regarding conflicts of law.
SCRIPTECH PHARMACEUTICALS, INC.
By /s/ [ILLEGIBLE]
-----------------------------------------
Its President and Chief Executive Officer
5
CW VENTURES II, L.P. ATLAS VENTURE FUND II, L.P.
By: Atlas Venture
Associates II, L.P.
By: /s/ [ILLEGIBLE] By:
------------------------------ ------------------------------
General Partner General Partner
ACCEL IV L.P. ACCEL JAPAN L.P.
By: Accel IV Associates L.P. By: Accel Japan Associates L.P.
Its General Partner Its General Partner
By: By:
------------------------------ ------------------------------
General Partner General Partner
ACCEL KEIRETSU L.P. ACCEL INVESTORS '93 L.P.
By: Accel Partners & Co., Inc.
Its General Partner
By: By:
------------------------------ ------------------------------
General Partner
XXXXXXX X. XXXXXXXXX PROSPER PARTNERS
PARTNERS
By: By:
------------------------------ ------------------------------
General Partner Attorney-in-Fact
NEW ENTERPRISE ASSOCIATES 5 VENROCK ASSOCIATES
By: By:
------------------------------ ------------------------------
General Partner
6
CW VENTURES II, L.P. ATLAS VENTURE FUND II, L.P.
By: Atlas Venture
Associates II, L.P.
By: By: /s/ [ILLEGIBLE]
------------------------------ ------------------------------
General Partner General Partner
ACCEL IV L.P. ACCEL JAPAN L.P.
By: Accel IV Associates L.P. By: Accel Japan Associates L.P.
Its General Partner Its General Partner
By: By:
------------------------------ ------------------------------
General Partner General Partner
ACCEL KEIRETSU L.P. ACCEL INVESTORS '93 L.P.
By: Accel Partners & Co., Inc.
Its General Partner
By: By:
------------------------------ ------------------------------
General Partner
XXXXXXX X. XXXXXXXXX PROSPER PARTNERS
PARTNERS
By: By:
------------------------------ ------------------------------
General Partner Attorney-in-Fact
NEW ENTERPRISE ASSOCIATES 5 VENROCK ASSOCIATES
By: By:
------------------------------ ------------------------------
General Partner
6
CW VENTURES II, L.P. ATLAS VENTURE FUND II, L.P.
By: Atlas Venture
Associates II, L.P.
By: By:
------------------------------ ------------------------------
General Partner General Partner
ACCEL IV L.P. ACCEL JAPAN L.P.
By: Accel IV Associates L.P. By: Accel Japan Associates L.P.
Its General Partner Its General Partner
By: /s/ [ILLEGIBLE] By:/s/ [ILLEGIBLE]
------------------------------ ------------------------------
General Partner General Partner
ACCEL KEIRETSU L.P. ACCEL INVESTORS '93 L.P.
By: Accel Partners & Co., Inc.
Its General Partner
By: /s/ [ILLEGIBLE] By: /s/ [ILLEGIBLE]
------------------------------ ------------------------------
General Partner
XXXXXXX X. XXXXXXXXX PROSPER PARTNERS
PARTNERS
By: By: /s/ [ILLEGIBLE]
------------------------------ ------------------------------
General Partner Attorney-in-Fact
NEW ENTERPRISE ASSOCIATES 5 VENROCK ASSOCIATES
By: By:
------------------------------ ------------------------------
General Partner
6
CW VENTURES II, L.P. ATLAS VENTURE FUND II, L.P.
By: Atlas Venture
Associates II, L.P.
By: By:
------------------------------ ------------------------------
General Partner General Partner
ACCEL IV L.P. ACCEL JAPAN L.P.
By: Accel IV Associates L.P. By: Accel Japan Associates L.P.
Its General Partner Its General Partner
By: By:
------------------------------ ------------------------------
General Partner General Partner
ACCEL KEIRETSU L.P. ACCEL INVESTORS '93 L.P.
By: Accel Partners & Co., Inc.
Its General Partner
By: By:
------------------------------ ------------------------------
General Partner
XXXXXXX X. XXXXXXXXX PROSPER PARTNERS
PARTNERS
By: /s/ [ILLEGIBLE] By:
------------------------------ ------------------------------
General Partner Attorney-in-Fact
NEW ENTERPRISE ASSOCIATES 5 VENROCK ASSOCIATES
By: By:
------------------------------ ------------------------------
General Partner
6
CW VENTURES II, L.P. ATLAS VENTURE FUND II, L.P.
By: Atlas Venture
Associates II, L.P.
By: By:
------------------------------ ------------------------------
General Partner General Partner
ACCEL IV L.P. ACCEL JAPAN L.P.
By: Accel IV Associates L.P. By: Accel Japan Associates L.P.
Its General Partner Its General Partner
By: By:
------------------------------ ------------------------------
General Partner General Partner
ACCEL KEIRETSU L.P. ACCEL INVESTORS '93 L.P.
By: Accel Partners & Co., Inc.
Its General Partner
By: By:
------------------------------ ------------------------------
General Partner
XXXXXXX X. XXXXXXXXX PROSPER PARTNERS
PARTNERS
By: By:
------------------------------ ------------------------------
General Partner Attorney-in-Fact
NEW ENTERPRISE ASSOCIATES 5 VENROCK ASSOCIATES
By: /s/ [ILLEGIBLE] By:
------------------------------ ------------------------------
General Partner General Partner
6
CW VENTURES II, L.P. ATLAS VENTURE FUND II, L.P.
By: Atlas Venture
Associates II, L.P.
By: By:
------------------------------ ------------------------------
General Partner General Partner
ACCEL IV L.P. ACCEL JAPAN L.P.
By: Accel IV Associates L.P. By: Accel Japan Associates L.P.
Its General Partner Its General Partner
By: By:
------------------------------ ------------------------------
General Partner General Partner
ACCEL KEIRETSU L.P. ACCEL INVESTORS '93 L.P.
By: Accel Partners & Co., Inc.
Its General Partner
By: By:
------------------------------ ------------------------------
General Partner
XXXXXXX X. XXXXXXXXX PROSPER PARTNERS
PARTNERS
By: By:
------------------------------ ------------------------------
General Partner Attorney-in-Fact
NEW ENTERPRISE ASSOCIATES 5 VENROCK ASSOCIATES
By: By: /s/ [ILLEGIBLE]
------------------------------ ------------------------------
General Partner
6
SCHEDULE I
LIST OF PURCHASERS
Purchaser Percentage Maximum Loan Amount
--------- ---------- -------------------
CW Ventures II, L.P. 25.81% $645,250.00
c/o CW Group, Inc.
0000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Atlas Venture Fund II, L.P. 20.97% $524,250.00
c/o Atlas Venture
000 Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Accel Japan L.P. 1.42% $35,480.00
One Embarcadero Center (8.0% of 17.74%)
Xxx Xxxxxxxxx, XX 00000
Accel IV L.P. 14.85% $371,210.00
c/o Accel Partners (83.7% of 17.74%)
Xxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Accel Keiretsu L.P. .32% $7,983.00
(1.8% of 17.74%)
Accel Investors `93 L.P. .66% $16,409.00
(3.7% of 17.74%)
Xxxxxxx X. Xxxxxxxxx Partners .39% $9,757.00
(2.2% of 17.74%)
Prosper Partners .10% $2,661.00
(.6% of 17.74%)
7
New Enterprise Associates 5 17.74% $443,500.00
c/o New Enterprise Associates
0000 Xx. Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Venrock Associates 17.74% $443,500.00
00 Xxxxxxxxxxx Xxxxx
Xxxx 0000
Xxx Xxxx, XX 00000
36011
8
Exhibit A
Neither this Note nor the shares of Preferred Stock issuable upon
conversion hereof or the shares of Common Stock issuable upon conversion of the
Preferred Stock have been registered under the Securities Act of 1933, as
amended (the "Act") or any applicable state securities laws, and neither this
Note nor such shares may be offered, sold or otherwise transferred in the
absence of such registration or an exemption therefrom under the Act and such
state securities laws.
SCRIPTECH PHARMACEUTICALS, INC.
Convertible Promissory Note
$ __________ , 1994
FOR VALUE RECEIVED, the undersigned SCRIPTECH PHARMACEUTICALS, INC., a
Delaware corporation (the "Maker"), hereby promises to pay on December 31, 1994
(the "Maturity Date"), unless sooner payable under the terms hereof, to
________________ (the "Payee"), or order, the principal amount of
_____________________ Dollars ($ ______) or such portion thereof as may be
advanced by the Payee (the "principal amount") pursuant to Section 1 of the Loan
and Warrant Agreement dated effective as of July 13, 1994 among the Maker and
the Purchasers identified therein (the "Loan Agreement"), with daily interest
from the date hereof, computed on the basis of a 365-day year for the actual
number of days elapsed, on the principal amount from time to time unpaid to and
including the maturity hereof at the rate per annum equal to four and
one-quarter percent (4.25%), all said interest to be calculated monthly on the
last day of each month, in arrears and to be paid on the Maturity Date or, if
sooner, at the time of payment of the principal amount. Payment of the principal
amount and interest accrued thereon, other than upon any accelerated maturity
occurring as a result of any Event of Default, shall be made by conversion of
this Note into shares of the Maker's capital stock in the manner set forth in
Section 4.1 of this Note, except as otherwise permitted by Section 1.2 hereof.
The Maker irrevocably authorizes the Payee to make or cause to be made, on
a schedule attached to this Note, at or following the time of making any Loan
(as defined in the Loan Agreement), an appropriate notation reflecting such
transaction and the then aggregate unpaid principal amount. Failure of the Payee
to make any such notation shall not, however, affect any obligation of the Maker
hereunder or under the Loan Agreement.
This Note is one of a series of the Maker's notes of even date herewith,
each known as its Convertible Promissory Note (collectively referred to as the
"Notes"), all of like tenor except as to the principal amount thereof. The Notes
are in the aggregate principal amount of up to $2,500,000.
1. PAYMENT PROVISIONS. The Maker covenants that so long as any of the Note
is outstanding:
1.1. Payment at Maturity of Note. On the Maturity Date or on any
accelerated maturity (by default or otherwise) of this Note, the Maker will pay
the entire principal
amount of this Note then outstanding, together with all accrued and unpaid
interest thereon, in the manner required by this Note. Payments of principal and
interest shall be made at the principal office of the Holder (as hereinafter
defined) or at such other place as the Holder may designate to the Maker in
writing. This Note may also be paid by conversion pursuant to Section 4 hereof.
1.2. Optional Prepayments. The Maker may at any time or from time to
time prior to the conversion of this Note pursuant to Section 4 hereof, prepay
all or part of the principal amount of this Note, in cash only, without premium
or penalty.
1.3. Notice of Prepayments. Notice of each prepayment of the Note
pursuant to Section 1.2 shall be given not fewer than five (5) days before the
prepayment date, by mailing to the Holder a notice of prepayment specifying the
date of prepayment, the aggregate amount to be prepaid on such date, and accrued
interest applicable to such prepayment.
2. HOLDER. The term "Holder" shall mean with respect to this Note the
Payee or any person or entity to whom the Note is transferred and the term
"Holders" shall mean, collectively, the Holders of the Notes. In the event of
any transfer, the Holder shall present this Note to the Maker for transfer and
the Maker shall issue a substitute Note to the transferee, subject to compliance
with federal and state securities laws.
3. DEFAULTS.
3.1. Events of Default. The occurrence of any one or more of the
following events shall constitute an event of default under this Note (each
herein referred to as an "Event of Default"):
3.1.1. The Maker shall fail to make any payment in respect of
the principal of this Note or any one of the other Notes or interest on this
Note or any one of the other Notes when due, whether at maturity or by
acceleration or otherwise;
3.1.2. Any representation or warranty made by the Maker in
Loan Agreement or any other document delivered in connection therewith shall
prove to have been misleading or inaccurate in any material respect at the time
it was made;
3.1.3. The Maker shall:
(a) commence a voluntary case under Title 7 or 11 of the
United States Code as from time to time in effect, or authorize, by appropriate
proceedings of its Board of Directors or other governing body, the commencement
of such a voluntary case;
-2-
(b) have filed against it a petition commencing an
involuntary case under said Title 7 or 11;
(c) seek relief as a debtor under any present or future
applicable law of any jurisdiction relating to the liquidation, dissolution or
reorganization of debtors or other similar relief or to the modification or
alteration of the rights of creditors, or consent to or acquiesce in such
relief;
(d) have entered an order by a court of competent
jurisdiction (i) finding it to be bankrupt or insolvent, (ii) ordering or
approving its liquidation, reorganization or any modification or alteration of
the rights of its creditors, (iii) assuming custody of, or appointing a receiver
or other custodian for, all or a substantial part of its property;
(e) make an assignment for the benefit of, or enter into
a composition with, its creditors, or appoint or consent to the appointment of a
receiver or other custodian for all or a substantial part of its property; or
(f) admit in writing its inability to pay its debts as
they become due;
3.1.4. Any default shall exist and remain unwaived or uncured
with respect to any indebtedness of the Maker in excess of $50,000, either
singly or in the aggregate, including the failure to pay any such indebtedness
when due whether by acceleration or otherwise, or any such indebtedness shall
have been declared to be due and payable prior to its stated maturity, or any
event or circumstance shall occur which permits, or with the lapse of time or
giving of notice or both would permit, the acceleration of the maturity of any
such indebtedness by the holders thereof.
3.2. Remedies. Upon the occurrence of an Event of Default:
3.2.1. The Holder may proceed to protect and enforce its
rights under this Note by suit in equity (including without limitation a suit
for rescission), an action at law for damages, and/or other appropriate
proceedings either for specific performance of any provision contained in this
Note or the Loan Agreement, or in aid of the exercise of any power granted to it
in this Note (the Maker hereby acknowledging that the Holder's remedies at law
may be inadequate) and, (unless there shall have occurred an Event of Default
under Section 3.1.3 hereof, in which case the unpaid principal amount of this
Note shall automatically become due and payable without notice or demand), may
by notice to the Maker declare all or any part of the unpaid principal amount of
this Note then outstanding to be forthwith due and payable, and thereupon such
unpaid principal amount or part thereof, together with interest accrued thereon,
shall mature and become so due and payable without presentation, protest or
further demand or notice of any kind, all of which are hereby
-3-
encumbrances or charges with respect to the issuance thereof. The Maker
covenants and agrees to take all action as may be necessary to amend its
Restated Certificate of Incorporation to create and authorize the shares of
Series B Stock and to authorize, if necessary, and reserve a sufficient number
of shares of Common Stock for the purpose of conversion of the Series B Stock;
provided, however, that this obligation shall be conditioned upon the Maker
receiving from the holders of the Maker's Series A Preferred Stock such
consents, approvals and waivers as may be necessary in order to create,
authorize and issue the Series B Stock. The Holder shall cooperate with the
Maker and take any actions as may reasonably be requested by the Maker to
authorize the Series B Stock and obtain such consents, approvals and waivers
from the holders of the Series A Preferred Stock. The Maker further covenants
and agrees that upon the automatic conversion of this Note pursuant to Section
4.2, it shall have authorized and reserved for the purpose of issue upon
conversion of this Note, a sufficient number of its shares of Preferred Stock
and, for the purpose of conversion of the Preferred Stock, a sufficient number
of shares of its Common Stock. Any shares of Preferred Stock as are issuable
pursuant to this Section 4 will not at the time of issuance be registered for
sale under the Securities Act of 1933, as amended, or any state securities law
and transfer thereof will be restricted to transactions made in compliance
therewith. Conversion under this Section 4 shall be deemed to have been made as
of the (i) the Maturity Date in the event of conversion pursuant to Section 4.1
and (ii) the closing date of the Financing in the event of conversion pursuant
to Section 4.2, and the person or persons entitled to receive the shares of
Preferred Stock issuable upon such conversion shall be treated for all purposes
as the record holder or holders of such shares of Preferred Stock as of such
applicable date. Following conversion, the Maker shall promptly deliver to such
person or persons certificates representing all such shares of Preferred Stock
issuable upon conversion.
5. CERTAIN ADJUSTMENTS. In the event of any reclassification,
consolidation or merger of the Maker (other than a merger in which the Maker is
the surviving entity and there is no change in the outstanding shares of the
Maker's capital stock), or subdivision or combination of shares of the Maker's
capital stock, or the payment by the Maker of any stock dividend or declaration
of any stock split, or any other similar event, the number and kind of
securities issuable upon the conversion of this Note and the price per share at
which this Note may be converted, shall be appropriately adjusted by the Maker's
Board of Directors if necessary to equitably protect the rights of the Holder
under this Note.
6. REGISTRATION RIGHTS. The shares of Common Stock issuable upon
conversion of any shares of Series B Stock or Preferred Stock issued upon
conversion of this Note shall be entitled to the registration rights under
Section 8 of that certain Stock Purchase Agreement among the Company and the
Purchasers identified therein dated September 16, 1993, as amended.
7. MISCELLANEOUS. This Note shall be governed by and construed in
accordance with the domestic substantive laws of the Commonwealth of
Massachusetts
-5-
without giving effect to any choice or conflict of law provision or rule that
would cause the application of the domestic substantive laws of any other
jurisdiction. The parties hereto, including the undersigned Maker and all
guarantors and endorsers, hereby waive presentment demand, notice, protest and
all other demands and notices in connection with the delivery, acceptance,
performance and enforcement of this Note, except as specifically otherwise
provided herein, and assent to extensions of the time of payment, or forbearance
or other indulgence without notice. No course of dealing and no delay on the
part of the Holder in exercising any right, power or remedy conferred hereby
shall be exclusive of any other right, power or remedy referred to herein or
now or hereafter available.
WITNESS the execution hereof as an instrument under seal as of the day and
year first above written.
SCRIPTECH PHARMACEUTICALS, INC.
By:
-----------------------------------------
Its President and Chief Executive Officer
Duly Authorized
36137
-6-
