Exhibit 10.25
METASYN, INC.
SERIES E CONVERTIBLE PREFERRED STOCK
PURCHASE AGREEMENT
Dated as of May 31, 1996
Table of Contents
1. Authorization of Shares; Use of Proceeds............................................................... 1
1.1 Authorization................................................................................. 1
1.2 Adjustment in Number of Shares................................................................ 1
1.3 Use of Proceeds............................................................................... 2
SECTION 2. Agreement to Sell and Purchase the Shares............................................ 2
2.1 First Closing................................................................................. 2
2.2 Second Closing................................................................................ 2
2.3 Delivery of the Shares at the Closings........................................................ 2
3. Representations of the Company......................................................................... 3
3.1 Organization and Standing..................................................................... 3
3.2 Capitalization................................................................................ 3
3.3 Issuance of Shares............................................................................ 4
3.4 Reservation of Common Stock................................................................... 4
3.5 Subsidiaries.................................................................................. 4
3.6 Stockholder List and Agreements............................................................... 4
3.7 Tax Returns and Payments...................................................................... 4
3.8 ERISA......................................................................................... 5
3.9 Title to Assets............................................................................... 5
3.10 No Material Adverse Change.................................................................... 5
3.11 Real Property Leases.......................................................................... 5
3.12 Insurance..................................................................................... 6
3.13 Transactions with Affiliates.................................................................. 6
3.14 Assumptions or Guaranties of Indebtedness of Other Persons.................................... 6
3.15 Investments in Other Persons.................................................................. 6
3.16 Authority for Agreements...................................................................... 6
3.17 Conflicting Agreements and Violations of Charter Provisions................................... 6
3.18 Consents and Approvals........................................................................ 6
3.19 Compliance with Laws.......................................................................... 7
3.20 Litigation.................................................................................... 7
3.21 Financial Statements.......................................................................... 7
3.22 Absence of Liabilities........................................................................ 7
3.23 Patents and Trademarks........................................................................ 7
3.24 Material Contracts and Obligations............................................................ 8
3.25 Employees and Consultants..................................................................... 8
3.26 Books and Records............................................................................. 8
3.27 Permits....................................................................................... 8
3.28 Not a Real Property Holding Company........................................................... 8
3.29 Disclosures................................................................................... 8
i
4. Representations of DRL................................................................................. 8
4.1 Organization and Standing..................................................................... 9
4.2 Authority..................................................................................... 9
4.3 Investment.................................................................................... 9
4.4 Experience.................................................................................... 9
4.5 Accredited Investor........................................................................... 9
4.6 Consents and Approvals........................................................................ 9
4.7 Compliance with Other Instruments............................................................. 9
4.8 Litigation................................................................................... 10
4.9 Disclosure................................................................................... 10
5. Conditions to the Obligations of DRL.................................................................. 10
5.1 Accuracy of Representations and Warranties................................................... 10
5.2 Performance.................................................................................. 10
5.3 Financing Agreements......................................................................... 11
5.4 Certificates and Documents................................................................... 11
5.5 Compliance Certificate....................................................................... 11
5.6 Other Matters................................................................................ 11
5.7 Opinion of Counsel........................................................................... 11
5.8 License Agreement............................................................................ 11
5.9 Amendment to Rights Agreement................................................................ 12
6. Conditions to the Obligations of the Company.......................................................... 12
6.1 Accuracy of Representations and Warranties................................................... 12
6.2 Performance.................................................................................. 12
6.3 License Agreement............................................................................ 12
6.4 Waivers...................................................................................... 12
7. Covenants of the Company.............................................................................. 12
7.1 Material Changes and Litigation.............................................................. 12
7.2 Non-Compete and Non-Solicitation Agreement................................................... 12
7.3 Payment of Taxes and Trade Debt.............................................................. 12
7.4 Maintenance of Insurance..................................................................... 13
7.5 Key Man Life Insurance....................................................................... 13
7.6 Preservation of Corporate Existence.......................................................... 13
7.7 Maintenance of Properties, etc............................................................... 13
7.8 Compliance with ERISA........................................................................ 13
7.9 Common Stock Purchase Agreement.............................................................. 14
7.10 Financial Statements......................................................................... 14
7.11 Inspection Rights............................................................................ 14
7.12 Observation Rights........................................................................... 14
7.13 Termination of Covenants..................................................................... 15
8. Successors and Assigns................................................................................ 15
ii
9. Transfers............................................................................................. 15
9.1 Permitted Transfers.......................................................................... 15
9.2 Subsequent Transferees....................................................................... 16
10. Confidentiality....................................................................................... 16
11. Survival of Representations and Warranties............................................................ 16
12. Notices............................................................................................... 16
13. Brokers............................................................................................... 16
14. Entire Agreement...................................................................................... 17
15. Amendments and Waivers................................................................................ 17
16. Counterparts.......................................................................................... 17
17. Headings.............................................................................................. 17
18. Severability.......................................................................................... 17
19. Governing Law......................................................................................... 17
Exhibits
A - Restated Certificate of Incorporation
B - Exceptions to Representations and Warranties
C - List of Stockholders
D - Financial Information
E - Form of Opinion of Xxxxxx & Dodge LLP
F - Form of Amendment to Third Amended and Restated Stockholders' Rights Agreement
G - Form of Employee Nondisclosure and Assignment of Inventions Agreement
H- Form of Consultant Nondisclosure and Assignment of Inventions Agreement
I - Non-compete and Non-solicitation Agreement
J - Common Stock Purchase Agreement
K - Stock Purchase and Right of First Refusal Agreement
Schedules
1 - Real Property Leases
2 - Agreements with Affiliates
3 - Investments in Other Persons
iii
SERIES E CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
This Agreement, dated as of May 31, 1996, is entered into by and among
Metasyn, Inc., a Delaware corporation (the "Company"), and Daiichi Radioisotope
Laboratories, Ltd., a Japanese corporation ("DRL").
WHEREAS, Metasyn is a development stage pharmaceutical company focused
on the discovery and development of injectable contrast-enhancing agents for
magnetic resonance imaging ("MRI") and ultrasound imaging; and
WHEREAS, Metasyn and DRL have entered into a Development and License
Agreement dated as of March 29, 1996 (the "License Agreement") for the further
development and sale in Japan of a vascular agent intended for use as an
enhancer for MRI known as "Compound XX- 000"; and
WHEREAS, DRL desires to purchase from Metasyn, and Metasyn desires to
issue and sell to DRL, shares of Metasyn's Series E Convertible Preferred Stock;
NOW THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, the parties hereto agree as follows:
1. Authorization of Shares; Use of Proceeds.
1.1 Authorization. The Company has, or before the Closing (as
defined in Section 2) will have, duly authorized the sale and issuance to DRL of
up to 868,329 shares of Company's Series E Convertible Preferred Stock, $.01 par
value per share (the "Series E Preferred Stock") having the rights,
restrictions, privileges and preferences set forth in the Restated Certificate
of Incorporation attached hereto as Exhibit A (the "Restated Certificate"). The
Company has, or on or before the Closing will have, adopted and filed the
Restated Certificate with the Secretary of State of the State of Delaware. The
shares of Series E Preferred Stock being sold under this Agreement shall
collectively constitute and are hereinafter referred to as the "Shares."
1.2 Adjustment in Number of Shares. For purposes of Section 1.1 above,
the number of Shares was determined as follows:
N = .08 (X + N)
where N is the number of shares of Series E Preferred Stock, and X is Metasyn's
"Common Stock Deemed Outstanding" at the close of business on May 1, 1996. For
purposes hereof, "Metasyn's Common Stock Deemed Outstanding" shall mean (i) the
number of shares of Metasyn's Common Stock, $.01 par value per share ("Common
Stock"), outstanding plus (ii) all shares issuable, or which may become issuable
under any outstanding agreements
1
(excluding this Agreement), warrants, convertible debt, convertible preferred
stock and other convertible securities, option rights or otherwise. If, on or
before July 31, 1996, Metasyn issues shares of its Common Stock (or any
securities convertible into, exchangeable for or exercisable with respect to,
shares of Metasyn's Common Stock) to financial institutions or other
professional investors at a purchase price per share of Common Stock which is
less than the conversion price provided for Series E Preferred Stock, then, in
such event, all of such shares and securities (the "New Stock") shall be deemed
to have been issued and outstanding on May 1, 1996; and the number of shares of
Series E Preferred Stock issued and to be issued to DRL pursuant to this
Agreement shall thereupon be recalculated in accordance with the formula set
forth above. The additional Shares of resulting from such recalculation will be
issuable to DRL without consideration additional to that provided in Section 2
below, and Metasyn will issue such additional Shares to DRL as follows: sixty
percent (60%) of the additional Shares to be issued on the date of issuance of
the New Stock, and the balance to be issued at the Second Closing. If the number
of Shares is increased pursuant to the foregoing provisions, DRL agrees to
consent to and approve all amendments to the Restated Certificate which may be
appropriate to reflect such increase.
1.3 Use of Proceeds. The Company will use the proceeds from
the sale of the Shares for the development of Compound MS-325 and other working
capital purposes.
SECTION 2. Agreement to Sell and Purchase the Shares.
2.1 First Closing. Concurrently with the execution and
delivery of this Agreement (the "First Closing"), the Company shall sell to DRL,
and DRL shall purchase from the Company, upon the terms and conditions
hereinafter set forth, 520,997 of the Shares, at a price per share of
approximately $5.76, for an aggregate purchase price of Three Million Dollars
($3,000,000.00) in United States dollars.
2.2 Second Closing. At such time as the Company provides
written notice to DRL of the filing of an investigational new drug application
package for the Licensed Products (as defined in the License Agreement) by the
Company with the United States Food and Drug Administration (which filing shall
hereinafter be referred to as the "Milestone Event"), DRL shall purchase from
the Company, and the Company shall sell to DRL, 347,332 Shares at a price per
share of approximately $5.76, for an aggregate purchase price of Two Million
Dollars ($2,000,000.00) in United States dollars. The closing of the purchase
and sale described herein shall occur not later than ten (10) business days
following DRL's receipt of the Company's written notice of the Milestone Event
(the "Second Closing"; the First Closing and the Second Closing are sometimes
referred to herein individually as a "Closing" and collectively as the
"Closings").
2.3 Delivery of the Shares at the Closings. Each Closing shall
occur at a place and time (a "Closing Date") to be agreed upon by the Company
and DRL. At each Closing, DRL shall pay to the Company the purchase price for
the Shares being purchased at such closing by certified or bank check or wire
transfer and the Company shall deliver to
2
DRL one or more stock certificates registered in the name of DRL, or in such
nominee name(s) as designated in writing by DRL, representing the number of
Shares being purchased at such Closing in accordance with this Section 2 and
Section 1.2, if applicable. If, at the Second Closing, any of the conditions
specified in Section 5 shall have not been fulfilled, DRL shall, unless it
waives such conditions, be relieved of its obligation to make the second
investment at the Second Closing without thereby waiving any other rights it may
have by reason of such failure or such nonfulfillment or relieving DRL from any
other obligations hereunder.
3. Representations of the Company. Subject to and except as disclosed by
the Company in Exhibit B hereto, the Company hereby represents and warrants to
DRL as follows:
3.1 Organization and Standing. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has full corporate power and authority to own and hold its
properties and conduct its business as presently conducted and as proposed to be
conducted by it and to enter into and perform this Agreement, and the amendment
to the Third Amended and Restated Stockholders' Rights Agreement between the
Company and certain investors listed therein (the "Rights Agreement"), and the
agreements, documents and instruments contemplated hereby and thereby
(collectively, the "Financing Agreements"), and to carry out the transactions
contemplated by the Financing Agreements. The Company is duly qualified to do
business as a foreign corporation and is in good standing in the Commonwealth of
Massachusetts, such jurisdiction being the only jurisdiction in which the
failure to so qualify would have a material adverse effect on the operations or
financial condition of the Company. The Company has furnished to DRL true and
complete copies of its Restated Certificate and By-Laws, each as amended to date
and presently in effect.
3.2 Capitalization. The authorized capital stock of the
Company (after the filing of the Restated Certificate and immediately prior to
the Closing) will consist of: 11,500,000 shares of common stock, $.01 par value
per share (the "Common Stock"), of which 2,304,721 shares are issued and
outstanding; and 6,813,393 shares of Preferred Stock, $.01 par value per share,
of which (i) 104,388 have been designated Series A Convertible Preferred Stock,
93,691 of which are issued and outstanding, (ii) 2,655,138 of which have been
designated Series B Convertible Preferred Stock, 2,643,736 of which are issued
and outstanding, (iii) 1,445,536 of which have been designated Series C
Convertible Preferred Stock, 1,432,318 of which are issued and outstanding, (iv)
1,740,002 shares of Series D Convertible Preferred Stock, 1,700,002 of which are
issued and outstanding and (v) 868,329 shares of Series E Preferred Stock, none
of which are issued and outstanding. All of the issued and outstanding shares of
the Company's capital stock have been duly authorized and validly issued and are
fully paid and non-assessable, and have been issued in transactions which have
been exempt from the registration requirements of applicable federal and state
securities laws. Except as set forth in Exhibit B hereto or contemplated by this
Agreement, (i) no subscription, warrant, option, convertible security or other
right (contingent or otherwise) to purchase or acquire any shares of capital
stock of the Company is authorized or outstanding, (ii) there is not any
commitment or offer of the Company to issue any subscription, warrant, option,
convertible security or other such right or to issue or distribute
3
to holders of any shares of its capital stock any evidences of indebtedness or
assets of the Company, and (iii) the Company has no obligation (contingent or
otherwise) to purchase, redeem or otherwise acquire any shares of its capital
stock or any interest therein or to pay any dividend or make any other
distribution in respect thereof. Except as set forth in Exhibit B hereto or
contemplated by this Agreement, no person or entity is entitled to (i) any
preemptive or similar right with respect to the issuance of any capital stock of
the Company, or (ii) any rights with respect to the registration of any capital
stock of the Company under the Securities Act of 1933, as amended. Except as set
forth in Exhibit B hereto or contemplated by this Agreement, the designations,
powers, preferences, rights, qualifications, limitations and restrictions in
respect of each class and series of authorized capital stock of the Company are
as set forth in the Restated Certificate and By-Laws, each as amended, and all
such designations, powers, preferences, rights, qualifications, limitations and
restrictions are valid, binding and enforceable and in accordance with all
applicable laws.
3.3 Issuance of Shares. The issuance and delivery of the
Shares and the issuance and delivery of the shares of Common Stock issuable upon
conversion of the Shares (the "Conversion Stock"), have been, or will be on or
prior to the Closing, duly authorized and reserved for issuance by all necessary
corporate action on the part of the Company, and the Shares and the shares of
Conversion Stock, when issued upon such conversion, will be duly and validly
issued, fully paid and non-assessable.
3.4 Reservation of Common Stock. The Company has authorized
and reserved, and will continue to reserve, free of preemptive and other
preferential rights, a sufficient number of its authorized but unissued shares
of Common Stock to satisfy the rights of conversion of any holders of Series E
Preferred Stock.
3.5 Subsidiaries. The Company has no subsidiaries and does not
own or control, directly or indirectly, any other corporation, association or
business entity.
3.6 Stockholder List and Agreements. Attached hereto as
Exhibit C is a true and complete list of the stockholders of the Company,
showing the number of shares of Common Stock or other securities of the Company
held by each stockholder immediately prior to the Closing. Except as
contemplated by this Agreement or in Exhibit C, there are no agreements, written
or oral, between the Company and any holder of its capital stock, or, to the
best knowledge of the Company, among any holders of its capital stock, relating
to the acquisition, disposition or voting of the capital stock of the Company.
3.7 Tax Returns and Payments. The Company has timely filed all
required tax returns and reports (other than those not required to be filed by
applicable law or regulation) and has paid, or adequately provided for the
payment of, all taxes, assessments and other governmental charges imposed upon
it or upon any of its assets, income or franchises, other than any such charges
which are currently payable without penalty or interest and taxes, assessments
and charges which are being contested in good faith by the Company. The charges,
accruals and reserves on the books of the Company with respect to taxes for all
fiscal periods are adequate in the opinion of the Company. Except to the extent
adequate reserves have been set up, the Company does not know of any actual or
proposed tax assessment for any fiscal period. The federal income tax returns of
the Company have
4
never been audited by the Internal Revenue Service. The Company has not received
notice of any tax lien imposed by any taxing authority which is outstanding
against the assets, properties or business of the Company.
3.8 ERISA. Each employee benefit plan sponsored by the Company
is in material compliance with applicable provisions of the Employee Retirement
Income Security Act of 1974 ("ERISA") and the Internal Revenue Code of 1986, as
amended (the "Code"). The Company has not incurred any material liability to the
Pension Benefit Guaranty Corporation ("PBGC") or any employee benefit plan on
account of any failure to meet the contribution requirements of any such plan,
minimum funding requirements or prohibited transactions under ERISA or the Code,
termination of a single employer plan, partial or complete withdrawal from a
multi-employer plan, or the insolvency, reorganization or termination of any
multi-employer plan, and no event has occurred or conditions exist which present
a material risk that the Company will incur any material liability on account of
any of the foregoing circumstances. The consummation of the transactions
contemplated by this Agreement will not result in any prohibited transaction
under ERISA or the Code for which an exemption is not available.
3.9 Title to Assets. The Company has good and merchantable
title to all of its owned assets free of any mortgages, pledges, charges, liens,
security interests or other encumbrances except (i) those reflected on its
audited financial statements or the notes thereto, or (ii) tax and mechanics
liens not material to the Company or any property to which such liens relate.
The Company enjoys peaceful and undisturbed possession under all leases (both
capital and operating leases) under which it is operating, and all said leases
are valid and subsisting and in full force and effect on and against the Company
and, to the knowledge of the Company, the other parties thereto.
3.10 No Material Adverse Change. Since December 31, 1995,
except as indicated in the Financial Statements (as defined below) or in any
Exhibit or Schedule hereto, or for changes in general economic conditions, (i)
there has been no material adverse change in the business, properties,
operations or condition, financial or otherwise, of the Company, whether or not
covered by insurance and whether or not arising from transactions in the
ordinary course of business; (ii) the business, assets, financial condition, or
operations of the Company or any of its properties or assets, including without
limitation its patents, patent rights, copyrights, trademarks, trade secrets and
other intellectual property rights, have not been adversely affected as the
result of any legislative or regulatory change or any revocation or change in
any material franchise, permit, license or right to do business, whether or not
insured against; and (iii) the Company has not entered into any material
transaction other than in the ordinary course of business, made any distribution
on its capital stock, or redeemed or repurchased any of its capital stock.
3.11 Real Property Leases. The Company's real property
identified on Schedule 1 is leased as described in such Schedule, having been
leased on what the Company believes to be customary terms and conditions in view
of the nature and location of the properties.
5
3.12 Insurance. The Company carries insurance with financially
sound and reputable insurance companies or associations and in such amounts and
covering such risks as are adequate and customary for the type and scope of its
properties and business.
3.13 Transactions with Affiliates. Except as set forth in
Schedule 2, the Company is not a party to or bound by any agreement with any
officer, director, or holder of more than 5% of the Company's outstanding
capital stock on a fully diluted basis ("Affiliate"). All of the agreements
identified on Schedule 2 hereto were entered into by the Company in good faith
and are on terms no less favorable to the Company than those which the Company
could have obtained from non-Affiliates.
3.14 Assumptions or Guaranties of Indebtedness of Other
Persons. The Company has not assumed, guaranteed, endorsed or otherwise become
directly or contingently liable on (including, without limitation, liability by
way of agreement, contingent or otherwise, to purchase, to provide funds for
payments, to supply funds to or otherwise invest in the debtor or otherwise to
assure the creditor against loss) any indebtedness of any other person.
3.15 Investments in Other Persons. Except as set forth in
Schedule 3, the Company has not made any loan or advance to any person which is
outstanding on the date of this Agreement, nor is the Company obligated or
committed to make any such loan or advance, nor does the Company own any capital
stock or assets comprising the business of, obligations of, or any interest in,
any person. The Company has no subsidiaries.
3.16 Authority for Agreements. The execution, delivery and
performance by the Company of the Financing Agreements have been duly authorized
by all necessary corporate action, and the Financing Agreements have been duly
executed and delivered by the Company. The Financing Agreements constitute the
valid and binding obligations of the Company enforceable against the Company in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, moratorium and similar laws affecting the rights and remedies of
creditors generally and also by general principles of equity.
3.17 Conflicting Agreements and Violations of Charter
Provisions. The Company is not in violation of its Restated Certificate, By-laws
or of any agreement or instrument by which it is bound, except for violations
which, individually or in the aggregate, would not materially and adversely
affect the business, properties, operations or condition, financial or
otherwise, of the Company. Neither the authorization, execution and delivery of
the Financing Agreements, the consummation of the transactions therein
contemplated, nor the fulfillment of or compliance with the terms thereof, will
conflict with or result in a material breach of any of the terms of the Restated
Certificate or By-laws, or of any statute, law, rule or regulation, or of any
judgment, decree, writ, injunction, order or award of any arbitrator, court or
governmental authority specifically naming the Company, or of any lease,
indenture, agreement or instrument which is applicable to the Company or by
which the Company is bound, or constitute a default thereunder.
3.18 Consents and Approvals. The Company has obtained or made
all necessary (i) governmental consents, approvals and authorizations, and
registrations and
6
filings with governmental authorities (other than such as may be required in
Japan), and (ii) consents, approvals, waivers and notifications of stockholders,
creditors, lessors and other non-governmental persons, in each case, which are
required to be obtained or made by the Company in connection with the execution
and delivery of the Financing Agreements, and the consummation of the
transactions herein and therein contemplated.
3.19 Compliance with Laws. The Company is not in violation of
any statute, law, rule or regulation, or in default with respect to any
judgment, writ, injunction, decree, rule or regulation of any court or
governmental agency or instrumentality specifically naming the Company,
including, without limitation, laws relating to environmental protection, except
for such violations or defaults which do not, individually or in the aggregate,
materially and adversely affect the business, assets, operations or condition,
financial or otherwise, of the Company.
3.20 Litigation. There is no action, suit, proceeding or
investigation pending, or, to the best of the Company's knowledge, currently
threatened against the Company, which questions the validity of the Financing
Agreements or the right of the Company to enter into them, or to consummate the
transactions contemplated thereby, or that might result, either individually or
in the aggregate, in any material adverse change in the assets, properties,
financial condition, business or prospects of the Company. Metasyn is not a
party to, or to the best of its knowledge, named in any order, writ, injunction,
judgment or decree of any court, government, agency or instrumentality. There is
no action, suit or proceeding by Metasyn currently pending or that Metasyn
presently intends to initiate.
3.21 Financial Statements. Set forth on Exhibit D is a
complete and correct copy of the audited balance sheet of the Company as of
December 31, 1995 and the related statements of operations and changes in
financial position for the nine-month period then ended, each together with the
notes thereto (collectively, the "Financial Statements"). The Financial
Statements have been prepared in accordance with generally accepted accounting
principles consistently applied (except as noted) and fairly present the
financial condition of the Company at the date thereof and for the periods
covered thereby.
3.22 Absence of Liabilities. Except for liabilities incurred
from operations conducted in the ordinary course of business since December 31,
1995, the Company does not have any liabilities or obligations of any type,
whether absolute or contingent, other than as disclosed herein or in the
Schedules or Exhibits hereto.
3.23 Patents and Trademarks. Set forth on Exhibit B is a true
and complete list of all patents, patent applications, trademarks, service
marks, trademark and service xxxx applications, trade names, registered
copyrights and licenses presently owned or licensed by the Company. The licenses
set forth on Exhibit B are the valid, binding and enforceable obligations of the
Company and, to the best of the Company's knowledge, of the other parties
thereto, subject to applicable bankruptcy, insolvency, moratorium and similar
laws affecting the rights and remedies of creditors generally and also by
general principles of equity. The Company is not aware of and has not received
any notice of infringement of any patents, trademarks, service marks, trade
names, copyrights, licenses, trade secrets or other proprietary rights of any
other person or entity. The Company is not aware that any
7
employee is obligated under any contract (including any license, covenant or
commitment of any nature), or under common law, or subject to any judgment,
decree or order of any court or administrative agency, that would interfere with
the use of such employee's best efforts to promote the interests of the Company
or would conflict with the Company's business as proposed to be conducted. To
the best of the Company's knowledge, no prior employer of any employee of the
Company has any right to or interest in any inventions, improvements,
discoveries or other information assigned to the Company by such employee
pursuant to a nondisclosure and assignment of invention agreement (in the form
attached hereto as Exhibit G) executed by such employee, or otherwise so
assigned.
3.24 Material Contracts and Obligations. Exhibit B sets forth
a list of all material agreements of any nature to which the Company is a party
or by which it is bound.
3.25 Employees and Consultants. All employees and consultants
of the Company whose employment responsibility requires access to confidential
or proprietary information of the Company have executed and delivered
nondisclosure and assignment of invention agreements in the forms of Exhibits G
and H, respectively, and all of such agreements are in full force and effect.
None of the employees of the Company is represented by any labor union.
3.26 Books and Records. The minute books of the Company
contain complete and accurate records of all meetings and other corporate
actions of its stockholders and its Board of Directors and committees thereof.
The stock ledger of the Company is complete and reflects all issuances,
transfers, repurchases and cancellations of shares of capital stock of the
Company.
3.27 Permits. The Company has all franchises, permits,
licenses and any similar authority necessary for the conduct of its business as
now being conducted by it, the lack of which would materially and adversely
affect the Company's business, properties, prospects or financial condition. The
Company is not in default in any material respect under any of such franchises,
permits, licenses or other similar authority.
3.28 Not a Real Property Holding Company. The Company is not a
real property holding corporation within the meaning of Internal Revenue Code
Section 897(c)(2) and any regulations promulgated thereunder.
3.29 Disclosures. Neither this Agreement nor any Exhibit or
Schedule hereto contains or will contain any material misstatement of fact or
omits or will omit to state a material fact necessary to make the statements
contained herein or therein, in light of the circumstances in which they were
made, not misleading. The Company knows of no information or fact which has or
would have a material adverse effect on the financial condition, business or
prospects of the Company which has not been disclosed to DRL.
4. Representations of DRL. DRL represents and warrants to the Company
as follows:
8
4.1 Organization and Standing. DRL is a corporation duly
organized, validly existing and in good standing under the laws of Japan and has
full corporate power and authority to own and hold its properties and conduct
its business as presently conducted and as proposed to be conducted by it and to
enter into and perform the Financing Agreements and to carry out the
transactions contemplated thereby. DRL has not been organized, reorganized or
recapitalized specifically for the purpose of investing in the Company.
4.2 Authority. The execution, delivery and performance by the
Company of the Financing Agreements have been duly authorized by all necessary
corporate action, and the Financing Agreements have been duly executed and
delivered by DRL. The Financing Agreements constitute the valid and binding
obligations of DRL enforceable against DRL in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, moratorium and similar laws
affecting the rights and remedies of creditors generally and also by general
principles of equity.
4.3 Investment. DRL is acquiring the Shares and the shares of
Common Stock into which the Shares may be converted, for its 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, except as contemplated by this Agreement and the Exhibits hereto,
DRL has no present or contemplated agreement, undertaking, arrangement,
obligation, indebtedness or commitment providing for the disposition thereof.
4.4 Experience. DRL has carefully reviewed the representations
concerning the Company contained in this Agreement, and has had the opportunity
to make detailed inquiry concerning the Company, its business and its personnel;
the officers of the Company have made available to DRL any and all written
information which it has requested and have answered to DRL's satisfaction all
inquiries made by DRL; and DRL has adequate net worth and means of providing for
its current needs and personal contingencies to sustain a complete loss of its
investment in the Company; DRL's overall commitment to investments which are not
readily marketable is not disproportionate to its net worth and DRL's investment
in the Shares will not cause such overall commitment to become excessive; and
DRL has sufficient knowledge and experience to evaluate the risk of its
investment in the Company.
4.5 Accredited Investor. DRL is an "accredited investor"
within the meaning of Rule 501(a) of Regulation D under the Securities Act of
1933, as amended.
4.6 Consents and Approvals. No consents, approvals,
qualifications, orders or authorizations of, or registrations and filings with,
any governmental authority is required on the part of DRL in connection with
DRL's valid execution, delivery or performance of the Financing Agreements and
the consummation of the transactions therein contemplated.
4.7 Compliance with Other Instruments. DRL is not in violation
of any provision of its charter or internal regulations or of any provision of
any mortgage, indenture, agreement, instrument or contract by which it is bound,
or, to the best of its
9
knowledge, or any judgment, decree, writ, injunction, order, statute, rule or
regulation applicable to DRL. The execution, delivery and performance by DRL of
the Financing Agreements, and the consummation of the transactions contemplated
thereby, will not result in any violation or be in conflict with or constitute,
with or without the passage of time or giving of notice, either a default under
any such provision or and event that results in the creation of any lien, charge
or encumbrance upon any of DRL's assets or the suspension, revocation,
impairment, forfeiture or nonrenewal of any permit, license, authorization or
approval applicable to DRL, its business or operations, or any of its assets or
properties.
4.8 Litigation. There is no action, suit, proceeding or
investigation pending, or, to the best of DRL's knowledge, any basis therefor or
threat thereof, against the Company, which questions the validity of the
Financing Agreements or the right of DRL to enter into them, or to consummate
the transactions contemplated thereby, or that might result, either individually
or in the aggregate, in any material adverse change in the assets, condition
(financial or otherwise), business or prospects of the DRL.
4.9 Disclosure. DRL has provided Metasyn with all the
information available to it that Metasyn has requested for deciding whether to
enter into the Financing Agreements and whether to consummate the transactions
contemplated thereby. Neither this Agreement nor any other document, certificate
or instrument furnished Metasyn by or on behalf of DRL pursuant to this
Agreement, taken as a whole, contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
contained herein not misleading in light of the circumstances in which they were
made.
5. Conditions to the Obligations of DRL. The obligation of each of DRL
to purchase Shares at each Closing is subject to the fulfillment, or the waiver
by DRL, of the following conditions on or before such Closing:
5.1 Accuracy of Representations and Warranties. Each
representation and warranty contained in Section 3 shall be true on and as of
the date of the Closing with the same effect as though such representation and
warranty had been made on and as of that date; provided, however, that in
connection with the Second Closing, the Company may make any amendments to the
representations and warranties contained in subsections 3.2, 3.5, 3.6, 3.7,
3.10(iii), 3.11, 3.13, 3.14, 3.15, 3.23 (except the second and third sentences
thereof), 3.24, 3.25 and 3.29 (only to the extent necessary to reflect
amendments to the preceding subsections), as well as to the exhibits and
schedules hereto in connection therewith, it may deem necessary or desirable to
update the information contained therein to reflect the conduct of the Company's
business in the ordinary course (other than with respect to material adverse
information) without such amendments constituting a failure on the part of the
Company to fulfill this condition.
5.2 Performance. The Company shall have performed and complied
with all agreements and conditions contained in this Agreement required to be
performed or complied with by the Company prior to or at the Closing.
10
5.3 Financing Agreements. The Financing Agreements
contemplated hereby shall have been executed and delivered by the Company, by
DRL and by each of the other parties thereto by the First Closing.
5.4 Certificates and Documents. The Company shall have
delivered to DRL:
(i) The Restated Certificate of the Company, as in
effect prior to the date of the Closing, certified by the Secretary of State of
the State of Delaware;
(ii) Certificates, as of the most recent practicable
dates, as to the corporate good standing of the Company issued by the Secretary
of State of the State of Delaware and the Secretary of the Commonwealth of
Massachusetts, confirming such good standing on or immediately prior to the date
of the Closing;
(iii) By-laws of the Company, certified by its
Secretary or Assistant Secretary as of the date of the Closing; and
(iv) Resolutions of the Board of Directors and
stockholders of the Company, authorizing and approving all matters in connection
with this Agreement and the transactions contemplated hereby, certified by the
Secretary or Assistant Secretary of the Company as of the date of the Closing.
5.5 Compliance Certificate. The Company shall have delivered
to DRL a certificate, executed by the President of the Company, dated the date
of the Closing, certifying to the fulfillment of the conditions specified in
Sections 5.1 through 5.4 of this Agreement.
5.6 Other Matters. All corporate and other proceedings in
connection with the transactions contemplated by this Agreement and all
documents and instruments incident to such transactions shall be reasonably
satisfactory in substance and form to DRL, and DRL shall have received all such
counterpart originals or certified or other copies of such documents as it may
reasonably request.
5.7 Opinion of Counsel. DRL shall have received an opinion
from Xxxxxx & Dodge LLP, counsel for the Company, dated the date of the Closing,
addressed to DRL, substantially in the form attached hereto as Exhibit E.
5.8 License Agreement. The License Agreement shall be in full
force and effect and a valid and legally binding obligation of Metasyn. Metasyn
shall have performed all of its obligations under the License Agreement fully
and on a timely basis and as of the date of the Closing no condition or event
shall have occurred which there constitutes, or which, after notice or lapse of
time or both, would constitute a breach or default by Metasyn under the License
Agreement.
11
5.9 Amendment to Rights Agreement. Contemporaneously with the
execution of this Agreement, Metasyn shall deliver an amendment to the Rights
Agreement substantially in the form attached hereto as Exhibit F.
6. Conditions to the Obligations of the Company. The obligations of the
Company under Section 2 of this Agreement are subject to fulfillment, on or
before each Closing, of each of the following conditions:
6.1 Accuracy of Representations and Warranties. The
representations and warranties of DRL contained in Section 4 shall be true on
and as of the date of the Closing with the same effect as though such
representations and warranties had been made on and as of that date.
6.2 Performance. DRL shall have performed and complied with
all agreements and conditions contained in this Agreement required to be
performed or complied with by it prior to or at the Closing.
6.3 License Agreement. The License Agreement shall be in full
force and effect and a valid and legally binding obligation of DRL. DRL shall
have performed all of its obligations under the License Agreement fully and on a
timely basis and as of the date of the Closing no condition or event shall have
occurred which there constitutes, or which, after notice or lapse of time or
both, would constitute a breach or default by DRL under the License Agreement.
6.4 Waivers. The Company shall have received waivers from its
investors who are parties to the Right Agreement of their right of first refusal
under Section 3 thereof with respect to the issuance of the Shares.
7. Covenants of the Company.
7.1 Material Changes and Litigation. The Company will promptly
notify DRL of any material adverse change in the business, properties, assets or
condition, financial or otherwise, of the Company and of any litigation or
governmental proceeding or investigation pending or, to the best knowledge of
the Company, threatened against the Company, or against any officer, director,
key employee, consultant, or principal stockholder of the Company materially
affecting or which, if adversely determined, would materially adversely affect
its present or proposed business, properties, assets or condition taken as a
whole.
7.2 Non-Compete and Non-Solicitation Agreement. The Company
and its key employees and consultants will enter into non-compete and non-
solicitation agreements substantially in the form attached hereto as Exhibit I.
7.3 Payment of Taxes and Trade Debt. The Company will pay and
discharge all taxes, assessments and governmental charges or levies imposed upon
it or upon its income or profits or business, or upon any properties belonging
to it, prior to the date on which penalties attach thereto, and all lawful
claims which, if unpaid, might become a lien or
12
charge upon any properties of the Company, provided that the Company shall not
be required to pay any such tax, assessment, charge, levy or claim which is
being contested in good faith and by appropriate proceedings if the Company
shall have set aside on its books adequate reserves with respect thereto, or
where the failure to so pay would not have a material adverse effect on the
business, assets, operations or financial condition of the Company. The Company
will pay, when due, or in conformity with customary trade terms but not later
than 90 days from the due date, all lease obligations, all trade debt, and all
other indebtedness incident to the operations of the Company, except such as are
being contested in good faith and by proper proceedings if the Company shall
have set aside on its books sufficient reserves with respect thereto, or where
the failure to so pay would have a material adverse effect on the business,
assets, operations or financial condition of the Company.
7.4 Maintenance of Insurance. The Company will maintain
insurance with financially sound and reputable insurance companies or
associations in such amounts and covering such risks as is usually carried by
companies engaged in similar businesses and owning similar properties in the
same general areas in which the Company operates.
7.5 Key Man Life Insurance. The Company shall obtain and/or
maintain insurance policies in the amount of $2,000,000 on the life of Xx.
Xxxxxxx X. Xxxxxxx and in the amount of $2,000,000 on the life of Xxxxxxx X.
Xxxx, the proceeds of which are payable to the Company.
7.6 Preservation of Corporate Existence. The Company will
preserve and maintain its corporate existence, rights, franchises and privileges
in the jurisdiction of its incorporation, and qualify and remain qualified, as a
foreign corporation in each jurisdiction in which such qualification is
necessary or desirable in view of its business and operations or the ownership
of its properties. The Company shall preserve and maintain all licenses and
other rights to use patents, processes, licenses, trademarks, trade names,
inventions, intellectual property rights or copyrights owned or possessed by it
and necessary to the conduct of its business, except where the failure to
preserve and maintain such intellectual property rights would not have a
material adverse effect on the business operations, assets or financial
condition of the Company.
7.7 Maintenance of Properties, etc. The Company will maintain
and preserve all of its properties, necessary or useful in the proper conduct of
its business, in good repair, working order and condition, ordinary wear and
tear excepted, except where the failure to so preserve and maintain would not
have a material adverse effect on the business, assets, operations or financial
condition of the Company.
7.8 Compliance with ERISA. The Company will comply with all
minimum funding requirements applicable to any pension or other employee benefit
or employee contribution plans which are subject to ERISA or to the Code, and
comply in all other material respects with the provisions of ERISA and the Code,
and the rules and regulations thereunder, which are applicable to any such plan.
The Company shall not permit any event or condition to exist which could permit
any such plan to be terminated under circumstances which would cause the lien
provided for in Section 4068 of ERISA to attach to the assets of the Company.
13
7.9 Common Stock Purchase Agreement. The Company will cause
all employees who acquire Common Stock from the Company to execute a Common
Stock Purchase Agreement substantially in the form of Exhibit J hereto (for
issuances of restricted stock), or a Stock Purchase and Right of First Refusal
Agreement substantially in the form of Exhibit K hereto (for issuances of stock
upon exercise of stock options).
7.10 Financial Statements. The Company will:
(i) furnish to DRL, within 90 days after the end of
each fiscal year of the Company, an audited balance sheet of the Company as at
the end of such year and audited statements of income and of changes of cash
flows of the Company for such year, certified by certified public accountants of
established national reputation selected by the Company, and prepared in
accordance with generally accepted accounting principles; and
(ii) furnish to DRL, within 20 days after the end of
each quarter, an unaudited balance sheet of the Company as at the end of such
quarter and unaudited statements of income for such quarter and of changes of
cash flows of the Company for such quarter and for the current fiscal year to
the end of such quarter, setting forth in comparative form the Company's
projected financial statements for the corresponding periods for the current
fiscal year, and summaries of bookings and backlogs for such quarter.
The foregoing financial statements shall be prepared on a consolidated
basis if the Company then has any subsidiaries. The financial statements
delivered pursuant to clause (ii) above shall be accompanied by a certificate of
the Chief Financial Officer or Treasurer of the Company stating that such
statements have been prepared in accordance with generally accepted accounting
principles consistently applied (except as noted) and fairly present the
financial condition of the Company at the date thereof and for the periods
covered thereby.
7.11 Inspection Rights. The Company will permit DRL, or its
authorized representative, access to the Company's facilities during normal
business hours, upon reasonable request and prior notice, for the purpose of
inspecting the property, affairs and finances of the Company and for discussing
the same with any of the Company's officers, directors and employees; provided,
however, that DRL will maintain the confidentiality of any information obtained
by it during the course of any such inspection.
7.12 Observation Rights. The Company will permit DRL to
designate a representative to attend all meetings of the Company's Board of
Directors (whether in person or by telephone or video conference) as a
non-voting observer; provided, however, that the Company reserves the right to
exclude DRL's representative from any meeting or portion thereof at the sole
discretion of the Company's Board of Directors and/or its presiding officer. As
soon as possible after the execution of this Agreement, DRL will notify the
Company in writing of the name of the individual designated by DRL as its
initial representative for purposes of this Section 7.12 and agrees to notify
the Company in writing prior to any change in its representative. In addition,
the Company agrees to furnish DRL with copies of (i) materials prepared by or on
behalf of the Company and circulated to the Board of Directors, and (ii) any
correspondence between the Company and members of the Board of Directors;
provided, however, that the Company may, in its sole discretion,
14
withhold from DRL any and all materials and correspondence pertaining to matters
(i) discussed or to be discussed in a meeting or portion of a meeting from which
the DRL Representative was excluded or will be excluded pursuant to the
provisions of this Section 7.12 or (ii) that the Company deems to be highly
confidential or with respect to which the Company believes in good faith DRL has
or may have a conflict of interest. DRL will maintain the confidentiality of any
information obtained by it in any manner pursuant to this Section 7.12. Prior to
attending any meeting of the Board of Directors, DRL agrees to require its
representative to execute and deliver to the Company a confidentiality agreement
in a form reasonably satisfactory to counsel to the Company. The Company shall
provide DRL with reasonable prior written notice of all scheduled meetings of
the Company's Board of Directors.
7.13 Termination of Covenants. The covenants of the Company
contained in this Section 7 shall terminate, and be of no further force or
effect, upon the effective date of a Registration Statement (as defined in the
Rights Agreement) covering the Company's first public offering of Common Stock
in which the price per share to the public exceeds $6.00 (subject to appropriate
adjustment in the event of any stock dividend, stock split, combination or other
similar recapitalization) and the gross proceeds to the Company equal at least
$15,000,000.
8. Successors and Assigns. Except as provided in Section 9, the
provisions of this Agreement shall be binding upon, and inure to .the benefit
of, the respective successors, assigns, heirs, executors and administrators of
the parties hereto.
9. Transfers.
9.1 Permitted Transfers. The Shares, Registrable Shares and
rights granted to DRL under this Agreement may be transferred by DRL to (a) any
entity that controls, is controlled by, or is under common control with, DRL, or
(b) any person or entity other than an entity described in clause (a) hereof
acquiring all, but not less than all, of the Shares or Registrable Shares (as
such terms are defined in the Rights Agreement) held by DRL; provided, however,
that, in either case, (i) the Company is given written notice by the transferee
at the time of such transfer stating the name and address of the transferee and
identifying the securities with respect to which such rights are being assigned,
and (ii) any transferee to whom rights under this Agreement are transferred
shall, as a condition to such transfer, deliver to the Company a written
instrument by which such transferee agrees to be bound by the obligations
imposed upon DRL under Section 10 to the same extent as if such transferee were
a party hereto; provided, further, that in the case of a proposed transfer to an
entity which neither controls, is controlled by, nor is under common control
with, DRL, the Shares or Registrable Shares issued to DRL or the rights granted
to DRL hereunder or under any other Financing Agreement, may not be transferred
to any entity which is, in the reasonable judgment of the Board of Directors of
the Company, a competitor of the Company. Registrable Shares (other than the
Shares) shall not be subject to the foregoing transfer restrictions provided
that the Company is given prior written notice of any transfer. In addition, DRL
may transfer Shares or Registrable Shares as part of any merger of the Company
or sale of all or substantially all of the outstanding capital stock of the
Company. Except as provided herein, no transfer of Shares, Registrable Shares or
rights under this
15
Agreement shall be permitted. The foregoing transfer restrictions shall
terminate and be of no further force or effect upon the occurrence of a "Public
Offering" (as defined in the Restated Certificate) or the acquisition of the
Company, whether effected by means of merger, sale of assets or capital stock or
otherwise.
9.2 Subsequent Transferees. A transferee to whom Shares,
Registrable Shares or rights are transferred pursuant to this Section 9 (other
than (i) Registrable Shares (other than the Shares) with respect to which the
Company has received prior written notice of such transfer or (ii) as part of
any merger of the Company or sale of all or substantially all of the outstanding
capital stock of the Company) may not again transfer such Shares, Registrable
Shares or rights to any other person or entity, other than as provided in
Section 9.1 above, mutatis mutandis.
10. Confidentiality. DRL agrees that it will keep confidential and will
not disclose or divulge any confidential, proprietary or secret information
which DRL may obtain from the Company pursuant to financial statements, reports
and other materials submitted by the Company to DRL pursuant to this Agreement
or pursuant to visitation or inspection rights granted hereunder, unless such
information is known, or until such information becomes known, to the public.
11. Survival of Representations and Warranties. All agreements,
representations and warranties contained herein shall survive the execution and
delivery of this Agreement and the closing of the transactions contemplated
hereby.
12. Notices. All notices, requests, consents, and other communications
under this Agreement shall be in writing and shall be delivered by hand or
mailed by first class certified or registered mail, return receipt requested,
postage prepaid:
If to the Company, at Metasyn, Inc., c/o Xxxxxxx X. Xxxx, President, 00
Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000-0000, or at such other address or
addresses as may have been furnished in writing by the Company to DRL, with a
copy to Xxxxxxx X. Xxxxxx, Esq., Xxxxxx & Dodge LLP, Xxx Xxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000;
If to DRL, at Daiichi Radioisotope Laboratories, Ltd., 17-10 Kyobashi
1-Chome Xxxx- Xx, Xxxxx 000 Xxxxx or at such other address or addresses as may
have been furnished to the Company in writing by DRL, with a copy to Xxxxxxx X.
Xxxxxx, Esq., Xxxxxx, XxXxxxxxx & Fish, LLP, Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000.
Notices provided in accordance with this Section 12 shall be deemed
delivered upon personal delivery or 48 hours after deposit in the mail.
13. Brokers. The Company and DRL (i) represents and warrants to the
other that it has retained no finder or broker in connection with the
transactions contemplated by this Agreement, and (ii) will indemnify and save
the other harmless from and against any and all claims, liabilities or
obligations with respect to brokerage or finders' fees or commissions, or
consulting fees in connection with the transactions contemplated by this
Agreement asserted
16
by any person on the basis of any statement or representation alleged to have
been made by such indemnifying party.
14. Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter including, but not limited to, the Master Agreement dated as of
March 29, 1996 between Metasyn and DRL.
15. Amendments and Waivers. Except as otherwise expressly set forth in
this Agreement, any term of this Agreement may be amended and the observance of
any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), with the written consent of
the Company and the holders of Securities (as such term is defined in the Rights
Agreement) converted or convertible into not less than 66 2/3% of the
Registrable Shares. Any amendment or waiver effected in accordance with this
Section 15 shall be binding upon each holder of any Shares or Registrable Shares
(including Conversion Stock) and each future holder of all such securities and
the Company. No waivers of or exceptions to any term, condition or provision of
this Agreement, in any one or more instances, shall be deemed to be, or
construed as, a further or continuing waiver of any such term, condition or
provision.
16. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
17. Headings. The headings of the sections, subsections, and paragraphs
of this Agreement have been added for convenience only and shall not be deemed
to be a part of this Agreement.
18. Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision.
19. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts.
17
IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of
the day and year first above written.
METASYN, INC.
By: /s/ Xxxxxxx X. Xxxx
-----------------------------------
Name: Xxxxxxx X. Xxxx
Title: President and Chief Executive Officer
DAIICHI RADIOISOTOPE
LABORATORIES, LTD.
By: /s/ Xxxxx Xxxxx
-----------------------------------
Name: Xxxxx Xxxxx, M.D.
Title: President and Chief Executive Officer
18
