Exhibit 10.17
PRICE PROTECTION AGREEMENT
PRICE PROTECTION AGREEMENT (the "Agreement") is made as of May 1, 2002, by and
among B. Twelve, Inc. a Florida corporation (the "Corporation"), and
Credifinance Gestion S.A., a Switzerland corporation (the "Holder").
RECITALS
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WHEREAS, the Corporation and the Holder are entering into that certain
Convertible Debenture - Series A and Security Agreement dated of even date
herewith (the "Debenture") for the financing of the Corporation's use of
proceeds as defined in the Debenture under Section 5.1(16);
WHEREAS, the Holder has made the Debenture closing conditional on the
Corporation providing anti-dilution protection to the Holder,
WHEREAS, the Corporation has agreed to deliver additional Common Shares to the
Holder for each share owned by the Holder on a fully diluted basis, as set out
in in Schedule A to this Agreement, in the event that the Corporation is
required to issue shares directly or indirectly at a price below the Purchase
Price defined herein;
NOW THEREFORE, in consideration of the mutual promises herein made, and in
consideration of the representations, warranties, and covenants herein
contained, the Corporation and the Holder hereby agree as follows:
ARTICLE 1
INTERPRETATION
SECTION 1.1 DEFINITIONS.
As used in this Agreement, the following terms have the following meanings:
"affiliates" means, with respect to a specified Person, any Person directly or
indirectly controlling, controlled by, or under common control with the
specified Person, including without limitation their stockholders and any
Affiliates thereof. A Person shall be deemed to control a corporation or other
entity if the Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and business of the corporation or other
entity, whether through the ownership of voting securities, by contract, or
otherwise.
"Business Day" means any day of the year, other than Saturday, Sunday or other
day on which banks are required or authorized to close in Xxxxxxx, Xxxxxxx.
"Common Shares" means the shares of $0.0001 par value of the Corporation
designated as common shares in its certificate of incorporation dated March 5,
1999, as amended by certificates and articles of amendment, as such shares exist
at the commencement of business on this date. "Common Share" is the singular of
Common Shares.
"Medarex Agreement" means the Securities Acquisition Agreement dated January 15,
2001 between Medarex Inc. and the Corporation.
"Person" means an individual, partnership, corporation, trust, joint venture,
joint stock company, limited liability company, association, unincorporated
organization, Governmental Authority, or any other entity.
"Purchase Price" means the Purchase Price as defined in the Medarex Agreement,
or $3.00 per Common Share.
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"Securities Laws" means the Securities Act of 1933 and the securities laws of
any state in the United States of America and the rules, regulations and
policies of any U.S. securities regulatory authority administering such
securities laws, as the same shall be in effect from time to time.
"Shareholders Agreement" means that certain Amended and Restated Unanimous
Shareholders' Agreement dated January 15, 2001 by and among the Corporation and
its shareholders, as amended from time to time.
ARTICLE 2
ANTI-DILUTION PROVISIONS
SECTION 2.1. DELIVERY OF ADDITIONAL COMMON SHARES.
(a) If, at any time or from time to time after the date hereof, the Corporation
shall issue or sell any Common Shares (a "Change of Shares") for a consideration
per share less than the Purchase Price (the "New Purchase Price"), then the
Corporation shall be required to deliver to the Purchaser such number of
additional Common Shares (the "Additional Shares") as shall be determined by
dividing the Stated Amount by the New Purchase Price and then subtracting the
number Common Shares which have been delivered to the Purchaser pursuant to the
Agreement prior to any such Change of Shares. Purchaser shall not be required to
pay any additional consideration for any such Additional Shares. Notwithstanding
the foregoing, no adjustment in the number of shares deliverable hereunder shall
be made as a result of the issuance or sale of Common Shares pursuant to the
exercise of any options, warrants and convertible or exchangeable securities
outstanding or in effect on the date hereof.
For the purposes of any adjustment to be made in accordance
with this Section 2.1 (a) the following provisions shall be applicable:
(i) In case of the issuance or sale of Common Shares (or of
other securities deemed hereunder to involve the issuance or sale of Common
Shares) for a consideration part or all of which shall be cash, the amount of
the cash portion of the consideration therefore deemed to have been received by
the Corporation shall be (i) the subscription price, if Common Sharesare offered
by the Corporation for subscription, or (ii) the public offering price (before
deducting therefrom any compensation paid or discount allowed in the sale,
underwriting or purchase thereof by underwriters or any expenses incurred in
connection therewith), if such securities are sold to the underwriters or
dealers for public offering without a subscription offering, or (iii) the gross
amount of cash actually received by the Corporation for such securities, in any
other case.
(ii) In case of the issuance or sale (otherwise than as a
dividend or other distribution on any class of shares of the Corporation, and
otherwise than on the exercise of options, rights or warrants or the conversion
or exchange of convertible or exchangeable securities) of Common Shares (or of
other securities deemed hereunder to involve the issuance or sale of Common
Shares) for a consideration part or all of which shall be other than cash, the
amount of consideration therefore other than cash deemed to have been received
by the Corporation shall be the value of such consideration as determined in
good faith by the Board of Directors of the Corporation.
(iii) Common Shares issuable by way of dividend or other
distribution on any class of shares of the Corporation shall be deemed to have
been issued immediately after the opening of business on the day following the
record date for the determination of shareholders entitled to receive such
dividend or other distribution and shall be deemed to have been issued without
consideration.
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(iv) The reclassification of securities of the Corporation
other than Common Shares into securities including Common Shares shall be deemed
to involve the issuance of such Common Shares for a consideration other than
cash immediately prior to the close of business on the date fixed for the
determination of security holders entitled to receive such shares, and the value
of the consideration allocable to such Common Shares shall be determined as
provided in subsection (ii) of this Section 2.1 (a).
(b) The provisions of Section 2.1 (a) shall apply in case the Corporation shall
at any time after the date hereof issue options, rights or warrants to subscribe
for Common Shares, or issue any securities convertible into or exchangeable for
Common Shares, for a consideration per share (determined as provided in Section
2.1 (a) above) less than the Purchase Price and the Corporation shall deliver to
the Purchaser such additional Common Shares as determined by making the
computation in accordance with the provisions of Section 2.1 (a) hereof
(c) If any change shall occur in the price per share provided for in any of the
options, rights or warrants referred to in this Section 2.1 (c), or in the price
per share or ratio at which the securities referred to in Section 2.1 (c) are
convertible or exchangeable, such options, rights or warrants or conversion or
exchange rights, as the case may be, to the extent not theretofore exercised,
shall be deemed to have expired or terminated on the date when such price change
became effective in respect of shares not theretofore issued pursuant to the
exercise or conversion or exchange thereof, and the Corporation shall be deemed
to have issued upon such date new options, rights, warrants or convertible or
exchangeable securities.
(d) After each adjustment of the number of Common Shares deliverable by the
Corporation pursuant to this Section 2.1, the Corporation will promptly prepare
a certificate signed by the President, and by the Treasurer or the Secretary, of
the Corporation setting forth: (i) the Purchase Price as so adjusted, (ii) the
number of Common Shares deliverable after such adjustment, and (iii) a brief
statement of the facts accounting for such adjustment.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
In addition to the representations and warranties supplied by the Corporation to
the Holder in the Debenture, the Corporation hereby represents and warrants to
the Holder as follows:
SECTION 3.1. CAPITALIZATION OF THE CORPORATION
(a) Immediately prior to the closing of the Debenture, the authorized
capital of the Corporation will consist of the classes and amounts set
forth as follows:
1,000,000 Preferred Shares
25,000,000 Common Shares
(b) Except as contemplated by the Debenture, or otherwise set forth in
Table 1 below, there are, and immediately after consummation of the
closing of the Debenture there will be, no (i) outstanding warrants,
options, agreements, convertible securities or other commitments or
instruments pursuant to which the Corporation is or may become
obligated to issue or sell any shares of its capital or other
securities or (ii) preemptive or similar rights to purchase or
otherwise acquire shares of the capital or other securities of the
Corporation pursuant to any provision of Law, the Corporation's
Organizational Documents or any Contract to which the Corporation, or
to the Corporation's knowledge, any stockholder thereof is a party.
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TABLE 1: OUTSTANDING SECURITIES HELD IN TRUST OR UNEXERCISED (IMMEDIATELY PRIOR TO DATE OF DEBENTURE)
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Description of Issue Diluted Shares or Protected
Value
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Outstanding Warrants 500,000
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Shares Held In Trust 250,000
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Shares held in trust by the Company but issued to Credifinance Securities 25,000
Limited to be release on the closing of the Debenture and immediately
transferred to Credifinance Gestion S.A.
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Medarex Agreement - Anti-Dilution Protection $1,200,000
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(c) All shares of the capital and other securities issued by the
Corporation have been issued in transactions in accordance with
applicable Laws governing the sale and purchase of securities.
ARTICLE 4
MISCELLANEOUS
SECTION 4.1. SURVIVAL OF AGREEMENTS.
All agreements and covenants contained herein shall survive indefinitely until,
by their respective terms, they are no longer operative.
SECTION 4.2. REGISTRATION RIGHTS.
(a) The parties hereto agree that the Holder shall be entitled to the
registration rights with respect to the Shares granted to all shareholders under
the provisions of Article 11 of the Shareholders Agreement and such provisions
are hereby incorporated herein by reference thereto as if fully set forth
herein.
(b) The parties agree that the provisions of Article 11 of the Shareholders
Agreement shall survive any termination of the Shareholders Agreement without
limit as to time.
SECTION 4.3. EXPENSES.
The Corporation will be responsible for the costs and expenses incurred in
connection with this Agreement (including but not limited to accountants' fees,
attorneys' fees and other expenses).
SECTION 4.4. NO THIRD PARTY BENEFICIARIES.
Except as expressly provided herein, this Agreement shall not confer any rights
or remedies upon any Person other than the parties hereto and their respective
successors and permitted assigns, personal representatives, heirs and estates,
as the case may be. Without limiting the generality of the foregoing, all
representations, covenants and agreements benefiting the Holder shall inure to
the benefit of any and all subsequent holders from time to time of the Shares.
SECTION 4.5. ENTIRE AGREEMENT.
This Agreement and the documents relating to the Debenture constitute the entire
agreement among the parties hereto and supersede any prior understandings,
agreements or representations by or among such parties, written or oral, that
may have related in any way to the subject matter of any document.
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SECTION 4.6. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors, permitted assigns, representatives,
heirs and estate. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other parties.
SECTION 4.7. COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original but all of which together shall constitute one and the
same instrument.
SECTION 4.8. NOTICES.
All notices, requests, demands, claims, and other communications hereunder shall
be in writing and shall be deemed to have been duly given if delivered
personally, telecopied, sent by nationally recognized overnight courier or
mailed by registered or certified mail (return receipt requested), postage
prepaid, to the parties at the following addresses (or at such other address for
a party as shall be specified by like notice):
If to the Corporation, to:
B. Twelve, Inc.
X/X X. Xxxxxx Xxxxxxx
00X Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxx-Xxx Xxxxxx, Ph.D.
If to the Holder, to
Credifinance Gestion S.A.
00 xxx Xxxxxx Xxxxx
CH-1201 Geneva
Attention: Xxxxxxx Xxxxxxxxx
with a copy to:
Credifinance Securities Limited
00X Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxx Xxxxx
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All such notices and other communications shall be deemed to have been given and
received (i) in the case of personal delivery, on the date of such delivery,
(ii) in the case of delivery by telecopy, on the date of such delivery, (iii) in
the case of delivery by nationally recognized overnight courier, on the second
business day following the date when sent and (iv) in the case of mailing, on
the fifth business day following such mailing.
SECTION 4.9. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the
internal laws of the State of Florida, without giving effect to principles of
conflicts of laws.
SECTION 4.10. AMENDMENTS AND WAIVERS.
No amendment or waiver of any provision of this Agreement shall be valid unless
the same shall have been approved by the Corporation and the Holder. No waiver
by any party of any default, misrepresentation, or breach of warranty or
covenant hereunder, whether intentional or not, shall be deemed to extend to any
prior or subsequent default, misrepresentation, or breach of warranty or
covenant hereunder or affect in any way any tights arising by virtue of any
prior or subsequent such occurrence.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
CORPORATION: B. TWELVE INC.,
a Florida corporation
By: ______________________________
Name: Xxxx-Xxx Xxxxxx, Ph.D.
Title: President and Chief Executive Officer
HOLDER: CREDIFINANCE GESTION S.A.
a Switzerland corporation
By: ______________________________
Name: Xxxxxxx Xxxxxxxxx
Title: President
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SCHEDULE A
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CREDIFINANCE GESTION S.A.
OWNERSHIP POSITION IN B. TWELVE, INC.
AS AT MAY 1, 2002 (IMMEDIATELY AFTER THE DATE OF THE DEBENTURE)
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SECURITY HELD: NUMBER HELD:
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Common Shares of B. Twelve, Inc. 3,300,000
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Warrants to purchase one Common Share of B. Twelve Inc. at an exercise price of $1.00 250,000
per share on or before June 1, 2003
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Warrants to purchase one Common Share of B. Twelve Inc. at an exercise price of $1.00 250,000
per share on or before November 15, 2006
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$100,000 Secured Convertible Debenture convertible at any time into Common Shares of B. 100,000
Twelve, Inc. at a conversion price of $1.00 per share. The Debenture matures on April
30, 2004.
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Stock Options to purchase one Common Share of B. Twelve, Inc. at $1.00 per share on or 25,000
before April 30, 2007.
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NUMBER OF SHARES PRICE PROTECTED UNDER THIS AGREEMENT ON A FULLY-DILUTED BASIS. 3,925,000
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