EXHIBIT A
TO
NOTE AND WARRANT PURCHASE AGREEMENT
FORM OF NOTE
THIS NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF
COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.
MIRAVANT MEDICAL TECHNOLOGIES
SECURED CONVERTIBLE PROMISSORY NOTE
$__________ ____________, 200_
MIRAVANT MEDICAL TECHNOLOGIES, a Delaware corporation (the "Maker"),
for value received, promises to pay to the order of ST. CLOUD INVESTMENTS, LTD.,
a British Virgin Islands company (the "Holder"), the principal sum of
___________ DOLLARS ($___________), together with interest at the rate per annum
equal to the "Prime Rate" published by the Wall Street Journal plus Three
Percent (3.0%), as adjusted in accordance with Section 3(c) (the "Interest
Rate"). All principal and accrued but unpaid interest hereunder is payable on
December 31, 2009 (the "Maturity Date"). This Note shall be subject to the
following additional terms and conditions:
1. Purchase Agreement. This Note is issued pursuant to that certain
Note and Warrant Purchase Agreement dated March 7, 2005 (the "Purchase
Agreement"), and is entitled to the benefits of such Purchase Agreement. All
capitalized terms that are used in this Note and are not otherwise defined
herein are intended to have the meanings assigned to such terms in the Purchase
Agreement.
2. Security Agreement. THE COMPANY'S OBLIGATIONS UNDER THIS NOTE ARE
SECURED BY A SECURITY AGREEMENT DATED MARCH 7, 2005 (THE "SECURITY AGREEMENT").
ADDITIONAL RIGHTS OF HOLDER ARE SET FORTH IN THE SECURITY AGREEMENT.
3. Payment of Principal and Interest
(a) Interest will be due and payable quarterly in arrears and
will be payable on the fifth Business Day after the end of each calendar quarter
(i.e., the fifth Business Day of April, July, October and January) of each year,
with the first such payment due on _________, 200_. The Interest Rate applicable
for any quarter shall be calculated on the first Business Day of such calendar
quarter. At the Maker's option, exercisable by written notice to the Holder
within five (5) days subsequent to the interest due date, the interest payable
on such date may be (i) added to principal or (ii) paid in shares of
unregistered Common Stock of the Maker based on a per share price equal to the
average of the closing sales prices of the shares of Maker's Common Stock on a
national exchange or over-the-counter trading system during all trading days of
the full calendar month prior to the date interest is due hereunder. The entire
unpaid principal and accrued but unpaid interest on this Note shall be due and
payable in full on the Maturity Date. Maker may only pre-pay amounts owing
hereunder upon receipt of Holder's prior written consent.
(b) Except as otherwise provided herein, all sums payable
hereunder shall be paid in lawful money of the United States of America which
shall be legal tender for public and private debts at the time of payment. If
the payment to be made hereunder shall be due on a day other than a Business
Day, such payment shall be made on the next succeeding Business Day. "Business
Day" means any day other than a Saturday, Sunday, or a day on which banking
institutions are authorized or required to close. All payments shall be credited
first toward interest then due and the remainder toward principal.
(c) Any and all payments by Maker to or for the account of
Holder hereunder or under the Purchase Agreement or any Warrant delivered
thereunder (collectively, the "Loan Documents") shall be made free and clear of
and without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of Holder income and franchise taxes that are imposed by
the state or foreign jurisdiction under the laws of which Holder is organized or
is or should be qualified to do business or any political subdivision thereof
(all such non excluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities in respect of payments hereunder or under the Loan Documents
being hereinafter referred to as "Taxes"). If Maker shall be required by law to
deduct any Taxes from or in respect of any sum payable to Holder hereunder or
under any other Loan Document, (i) the sum payable by Maker shall be increased
as may be necessary so that after Maker has made all required deductions
(including deductions applicable to additional sums payable under this Section
3(c)) Holder receives an amount equal to the sum it would have received had no
such deductions been made, (ii) Maker shall make all such deductions and (iii)
Maker shall pay the full amount deducted to the relevant taxation authority or
other authority in accordance with applicable law.
4. Default Rate. Notwithstanding any other provision in this Note to
the contrary, any amount, whether of accrued interest or principal, that is not
paid when due (whether at stated maturity, by acceleration or otherwise), unless
notice is given by the Company pursuant to Section 3(a) above, shall bear
interest, from the date on which such amount is due until such amount is paid in
full, at the Interest Rate, plus Three Percent (3.0%) per annum.
5. Conversion Rights
(a) Conversion Option. This Note (including unpaid interest)
shall be convertible, at any time and from time to time, in whole or in part, at
the option of the Holder (the "Conversion Option"), into Conversion Shares, as
defined in the Purchase Agreement. The number of Conversion Shares into which
this Note is convertible shall be equal to the principal amount of this Note,
plus any unpaid interest divided by $___________ (determined as One Hundred Ten
Percent (110%) of the average of the closing sales prices of the shares of
Maker's Common Stock on a national exchange or over-the-counter trading system
during all trading days of the full calendar month prior to the date of the Note
(the "Conversion Price")). The Conversion Option shall terminate upon the
payment in full of this Note in accordance with the terms hereof.
(b) Issuance of Securities on Conversion. As soon as
practicable after conversion of this Note, in whole or in part, Maker at its
expense will cause to be issued in the name of and delivered to the Holder, a
certificate or certificates for the number of fully paid and non-assessable
Conversion Shares of the Company to which that the Holder shall be entitled on
such conversion. No fractional shares will be issued on conversion of the Note.
If on conversion of the Note a fraction of a share results, Maker will round the
number of Conversion Shares to the nearest whole number. In the event that this
Note is converted in part, Maker shall deliver to the Holder a new Note in like
tenor for the amount not converted.
(c) Reservation of Conversion Shares. The Maker will at all
times reserve and keep available, solely for the issuance and delivery upon the
exercise of this Note, such shares of the Conversion Shares and other stock,
securities and property, as from time to time shall be issuable upon the
conversion of this Note and issuable upon the conversion of the Conversion
Shares.
6. Events of Default. Upon the occurrence of any Event of Default,
then, at the option of the Holder, all sums owing and to become owing hereon
shall become immediately due and payable. After the occurrence and during the
continuance of any Event of Default, all payments on this Note shall be applied
first to the payment of any costs, fees or other charges incurred in connection
with the indebtedness evidenced hereunder, next to the payment of accrued
interest, and then to the reduction of the principal amount hereof. "Event of
Default" means any of the following:
(a) Maker fails to pay any amounts due hereunder when due;
(b) Maker fails to observe or perform any material covenant,
warranty or agreement to be performed by Maker under (i) this Note, (ii) the
Purchase Agreement, including, but not limited to any of the Covenants set forth
in Section 4 thereunder, (iii) the Warrant granted pursuant to the Purchase
Agreement, or (iv) any other agreement, document or instrument executed by the
parties related directly or indirectly to the subject matter hereof;
(c) Dissolution or liquidation of Maker;
(d) The filing by Maker of a petition under any chapter of the
Federal Bankruptcy Code or the institution of any other proceeding under any
state or federal law relating to bankruptcy, bankruptcy reorganization,
insolvency or relief of debtors;
(e) The filing against Maker of an involuntary petition under
any chapter of the Federal Bankruptcy Code or the institution of any other
proceeding under any state or federal law relating to bankruptcy, bankruptcy
reorganization, insolvency or relief of debtors where such petition or
proceeding is not dismissed within ninety (90) days from the date on which it is
filed or instituted; or
(f) If Maker fails to meet its financial obligations in a
timely manner in the reasonable judgment of Holder.
7. Attorneys' Fees; Waiver of Demand, and Other Costs and Expenses. If
action is instituted to collect this Note, the Maker promises to pay all costs
and expenses, including reasonable attorneys' fees, incurred in connection with
such action upon resolution of such dispute in favor of the Holder. The
obligations to make the payments provided for in this Note are absolute and
unconditional and not subject to any defense, set-off, counterclaim, rescission,
recoupment or adjustment whatsoever. The Maker hereby expressly waives demand
and presentment for payment, notice of nonpayment, notice of default, dishonor,
protest, notice of protest, bringing of suit and diligence in taking any action
to collect any amount called for hereunder, and shall be directly and primarily
liable for the payment of all sums owing and to be owing hereon, regardless of
and without any notice, diligence, act or omission with respect to the
collection of any amount called for hereunder.
8. No Assignment. Neither this Note nor any of the rights, interests or
obligations hereunder may be assigned, by operation of law or otherwise, in
whole or in part, by the Maker without the Holder's prior written consent.
9. No Waiver; Amendments; Remedies; Etc. Neither acceptance by the
Holder of partial or delinquent payment nor any failure on the part of the
Holder to exercise, or any delay in exercising, any right under this Note or
under applicable law shall operate as a waiver of any obligation of Maker or any
right of the Holder, and no single or partial exercise of any right under this
Note shall preclude any other or further exercise thereof or the exercise of any
other right. No waiver, amendment, alteration or other modification of any
provision of this Note shall in any event be effective unless the same shall be
in writing and signed by the Holder. The remedies provided in this Note are
cumulative and not exclusive of any remedies provided by law. All of the
covenants, provisions, and conditions herein contained are made on behalf of,
and shall apply to and bind the respective distributees, personal
representatives, successors, and assigns of the parties hereto, jointly and
severally.
10. Recapitalization; Anti-Dilution Protection Upon Subsequent
Offering. In case the Maker shall at any time after the date hereof (i) declare
any dividend of Common Stock, (ii) subdivide any class of its outstanding
capital stock, (iii) combine its outstanding capital stock into a smaller number
of shares, (iv) issue any shares of its capital stock by reclassification of the
Common Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing corporation), or
(v) otherwise accomplish or effect a recapitalization (each, a "Recapitalization
Event"), then, in each case, the number and kind of shares of equity securities
receivable upon conversion of this Note, in effect at the time of the record
date for such dividend or of the effective date of such subdivision,
combination, or reclassification, shall be proportionately adjusted so that the
Holder after such time shall be entitled to receive the aggregate number and
kind of shares which, if this Note had been converted in full immediately prior
to such time, the Holder would have owned upon such conversion and been entitled
to receive by virtue of such dividend, subdivision, combination, or
reclassification. In addition, the Conversion Price of this Note shall be
adjusted in accordance with Section 4.4 of the Purchase Agreement in the event
of a subsequent financing transaction as specified therein. Such adjustments
shall be made successively and as equitably as possible whenever any event
listed above shall occur.
11. Notices of Certain Transactions.
In case:
(a) the Maker shall take a record of the holders of its
capital stock (or other securities at the time deliverable upon the exercise of
this Note) for the purpose of entitling or enabling them to receive any dividend
or other distribution, or to receive any right to subscribe for or purchase any
shares of stock of any class or any other securities, or to receive any other
right, to subscribe for or purchase any shares of stock of any class or any
other securities, or to receive any other right, or
(b) of any capital reorganization of the Maker, any
reclassification of the capital stock of the Maker, any consolidation or merger
of the Company, any consolidation or merger of the Maker with or into another
corporation, or any transfer of all or substantially all of the assets of the
Maker, or
(c) of the voluntary or involuntary dissolution, liquidation
or winding-up of the Maker, or
(d) of any redemption of any of the outstanding capital stock,
or
(e) the Maker pays a dividend or makes a distribution on any
of its capital stock payable otherwise than in cash out of earnings or earned
surplus (determined in accordance with generally accepted accounting principles)
except for a stock dividend payable in shares of such capital stock,
then, and in each such case, the Maker will mail or cause to be mailed to the
Holder of this Note a notice specifying, as the case may be, (i) the date on
which a record is to be taken for the purpose of such dividend, distribution or
right, and stating the amount and character of such dividend, distribution or
right, or (ii) the effective date on which such reorganization,
reclassification, consolidation, merger, transfer, dissolution, liquidation,
winding-up or redemption is to take place, and the time, if any is to be fixed,
as of which the holders of record of Common Stock (or such other stock or
securities at the time deliverable upon such reorganization, reclassification,
consolidation, merger, transfer, dissolution, liquidation, winding-up or
redemption) are to be determined. Such notice shall be mailed at least ten (10)
business days prior to the record date or effective date for the event specified
in such notice.
12. Governing Law. This Note shall be construed in accordance with the
laws of the State of California, without regard to the conflicts of law
provisions of the State of California or of any other state.
EXECUTED as of the date first above written.
MIRAVANT MEDICAL
TECHNOLOGIES, a Delaware corporation
By:
-----------------------------------
Name:
Title:
Address: 000 Xxxxxx Xxxxx
Xxxxx Xxxxxxx, XX 00000
Attn: Chief Executive Officer
