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EXHIBIT 10.66
AMENDMENT AGREEMENT
THIS AMENDMENT AGREEMENT, dated as of March 18, 1998 (this "Agreement"),
by and between SHAMAN PHARMACEUTICALS, INC., a Delaware corporation (the
"Company"), and the undersigned holders of the Company's Senior Subordinated
Convertible Notes (each, a "Holder" and collectively, the "Holders").
W I T N E S S E T H:
WHEREAS, the Company and each Holder are parties to a Note Purchase
Agreement, dated as of June 30, 1997 (each, a "Note Purchase Agreement"),
pursuant to which the Company issued to the respective Holder a Senior
Subordinated Convertible Note (each, a "Note" and collectively, the "Notes"),
the outstanding principal amounts of which are set forth on the signature pages
of this Agreement; and
WHEREAS, the Company and each Holder wish to amend such Holder's Note
upon the terms and subject to the conditions of this Agreement;
NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. AMENDMENTS OF NOTES. On the Effective Date:
(a) the definition of the term "Conversion Price" in Section 7.1(b) of
each Note shall be amended by deleting the existing definition in its entirety
and substituting in lieu thereof the following:
"Conversion Price" means on any date the Computed Price for such
date; provided, however, that during the period from the Issuance Date
to and including March 31, 1998 in no event shall the Conversion Price
be less than $5.50 (subject to equitable adjustment from time to time on
terms reasonably acceptable to the Majority Holders for (i) stock
splits, (ii) stock dividends, (iii) combinations, (iv) capital
reorganizations, (v) issuance to all holders of Common Stock of rights
or warrants to purchase shares of Common Stock at a price per share less
than the Trading Price which would otherwise be applicable, (vi) the
distribution by the Company to all holders of Common Stock of evidences
of indebtedness of the Company or cash (other than regular quarterly
cash dividends), (vii) tender offers by the Company or any subsidiary of
the Company or other repurchases of shares of Common Stock in one or
more transactions which, individually or in the aggregate, result in the
purchase of more than 10% of the Common Stock outstanding and (viii)
similar events relating to the Common Stock, in each such case which
occur on or after the Execution Date) regardless of the Conversion Price
otherwise determined in accordance with the terms of this Note; provided
further, however, that, if at any time (x) an Event of Default shall
have occurred or (y) at any time on or after November 21, 1997 there
shall occur any material adverse change or any material adverse
development in the business, properties, operations, condition
(financial or
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other), results of operations or prospects of the Company (provided that
a decline in the market price of the Company's Common Stock price shall
not, in and of itself, constitute such a material adverse change or
material adverse development under clause (y) above), then from and
after the date of occurrence of an event or change referred to in such
clause (x) or clause (y), the Conversion Price shall be determined
without regard to the first proviso to this definition.
(b) The definition of the term "Maximum Share Amount" in each
Note shall be amended by changing the respective figure therein for the
Note registered in the name of each Holder listed below to be as
follows:
Name of Registered Holder New Maximum Share Amount
------------------------- ------------------------
Delta Opportunity Fund, Ltd. 1,042,036
Xxxx & Xxxxxxxx Group, LLC 128,251
Xxxxxx Partners 521,019
Olympus Securities, Ltd. 521,019
Omicron Partners, LP 804,548
OTATO Limited Partnership 192,376
Overbrook Fund I, LLC 128,251
; provided, however, that if the Nasdaq determines that the issuance of shares
of Common Stock upon exercise of the Warrants (as defined herein) need not be
integrated with the issuance of shares of Common Stock upon conversion of, and
in payment of interest on, the Notes for purposes of Rule 4460(i) of the Nasdaq
(or any successor, replacement or similar provision), then the definition of the
term Maximum Share Amount shall have the meaning originally provided in each
Note. Upon the request of any Holder, the Company shall seek such determination
from Nasdaq.
2. WARRANTS. (a) On the Effective Date, the Company shall issue to each
Holder Common Stock Purchase Warrants in the form attached hereto as EXHIBIT A
(the "Warrants"), entitling the holders thereof to purchase the respective
numbers of shares of Common Stock set forth opposite their names below:
Holder Number
------ ------
Delta Opportunity Fund, Ltd. 43,900
Xxxx & Xxxxxxxx Group, LLC 5,403
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Xxxxxx Partners 21,950
Olympus Securities, Ltd. 21,950
Omicron Partners, LP 30,789
OTATO Limited Partnership 8,105
Overbrook Fund I, LLC 5,403
(b) On or before the Filing Date, the Company will file with the SEC a
Registration Statement on Form S-3 (the "Warrant Share Registration Statement")
relating to the resale by each Holder of the shares of Common Stock issued or
issuable upon exercise of the Warrants (the "Warrant Shares") and shall
thereafter use its best efforts to obtain SEC effectiveness of the Warrant Share
Registration Statement as promptly as possible after such filing. As used
herein, "Filing Date" means the earlier of (i) March 31, 1998 and (ii) the date
which is 15 Business Days after the date on which the arithmetic average of the
Market Price of the Common Stock for five consecutive Trading Days shall have
been at least equal to 90% of the Purchase Price (as defined in the Warrants) in
effect at such time. The Warrant Share Registration Statement shall otherwise be
subject in all respects to the provisions of Section 8 of each Holder's Note
Purchase Agreement as if the Warrant Share Registration Statement were the
Registration Statement.
(c) NASDAQ LISTING. Promptly after the Effective Date, the Company will
file with Nasdaq an application or other document required by Nasdaq for the
listing of the Warrant Shares with Nasdaq and shall provide evidence of such
filing to each Holder.
3. REPRESENTATIONS, WARRANTIES, COVENANTS, ETC. OF THE COMPANY.
The Company represents and warrants to each Holder that the following
matters are true and correct on the date of execution and delivery of this
Agreement and will be true and correct on the Effective Date, and the Company
covenants and agrees with each Holder as follows:
(a) ORGANIZATION AND AUTHORITY. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has all requisite corporate power and authority to (i) own, lease
and operate its properties and to carry on its business as described in the SEC
Reports and as currently conducted, and (ii) to execute, deliver and perform its
obligations under this Agreement, the Warrants and the other Transaction
Documents, and to consummate the transactions contemplated hereby and thereby.
(b) CONCERNING THE WARRANT SHARES. The Warrant Shares have been duly
authorized and, when issued upon exercise of the Warrants, will be duly and
validly issued, fully paid and non-assessable and will not subject the holder
thereof to personal liability by reason of being such holder. The holders of
outstanding shares of capital stock of the Company are not entitled to
preemptive or other rights to subscribe for the Warrants or the Warrant Shares.
The
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Company has duly reserved 137,500 shares of Common Stock as the Warrant
Shares, and such shares shall remain so reserved, and the Company shall from
time to time reserve such additional shares of Common Stock as shall be required
to be reserved pursuant to the Warrants, so long as the Warrants are
outstanding. The Common Stock is listed for trading on Nasdaq and no suspension
of trading in the Common Stock is in effect. The Company knows of no reason why
the Warrant Shares will not be eligible for listing on Nasdaq.
(c) CORPORATE AUTHORIZATION. This Agreement, the Warrants and the other
Transaction Documents have been duly and validly authorized by the Company; this
Agreement has been duly executed and delivered by the Company and, assuming due
execution and delivery by each Holder, this Agreement is, and the Warrants will
be, when executed and delivered by the Company, valid and binding obligations of
the Company enforceable in accordance with their respective terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws now or hereafter in
effect relating to or affecting creditors' rights generally and general
principles of equity, regardless of whether enforcement is considered in a
proceeding in equity or at law.
(d) NON-CONTRAVENTION. The execution and delivery of this Agreement and
the Warrants by the Company and the consummation by the Company of the issuance
of the Warrants and the Warrant Shares and the other transactions contemplated
by this Agreement and the Warrants do not and will not, with or without the
giving of notice or the lapse of time, or both, (i) result in any violation of
any provision of the certificate of incorporation or by-laws of the Company,
(ii) conflict with or result in a breach by the Company of any of the terms or
provisions of, or constitute a default under, or result in the modification of,
or result in the creation or imposition of any lien, security interest, charge
or encumbrance upon any of the properties or assets of the Company pursuant to,
any indenture, mortgage, deed of trust or other agreement or instrument to which
the Company is a party or by which the Company or any of its properties or
assets are bound or affected which would have a material adverse effect on the
business, properties, operations, condition (financial or other), results of
operations or prospects of the Company or (iii) violate or contravene any
applicable law, rule or regulation or any applicable decree, judgment or order
of any court, United States federal or state regulatory body, administrative
agency or other governmental body having jurisdiction over the Company or any of
its properties or assets which would have a material adverse effect on the
business, properties, operations, condition (financial or other), results of
operations or prospects of the Company or (iv) have any material adverse effect
on any permit, certification, registration, approval, consent, license or
franchise necessary for the Company to own or lease and operate any of its
properties and to conduct any of its business or the ability of the Company to
make use thereof.
(e) APPROVALS. No authorization, approval or consent of, or filing with,
any court, governmental body, regulatory agency, self-regulatory organization,
or stock exchange or market or the stockholders of the Company is required to be
obtained or made by the Company in connection with the execution, delivery and
performance of this Agreement and the Warrants and the issuance and sale of the
Warrants and the Warrant Shares as contemplated by this Agreement and the terms
of the Warrants, other than (1) listing of the Warrant Shares on Nasdaq, (2)
registration of the resale of the Warrant Shares under the 1933 Act as
contemplated by Section 2(b) and (3) as may be required under applicable state
securities or "blue sky" laws.
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4. REPRESENTATIONS, WARRANTIES, COVENANTS, ETC. OF THE HOLDERS.
Each Holder severally and not jointly represents and severally and not
jointly warrants to, and covenants and agrees with, the Company as follows:
(a) PURCHASE FOR INVESTMENT; CIRCUMSTANCES OF OFFER. Such Holder is
acquiring the Warrants to be issued to such Holder for its own account for
investment and not with a view towards the public sale or distribution thereof;
any Warrant Shares acquired by such Holder will be acquired only for its own
account for investment; and such Holder has no intention of making any
distribution, within the meaning of the 1933 Act, of Warrant Shares except in
compliance with the registration requirements of the 1933 Act or pursuant to an
exemption therefrom;
(b) ACCREDITED INVESTOR. Such Holder is an "accredited investor" as that
term is defined in Rule 501 of Regulation D by reason of Rule 501(a)(3) thereof;
(c) REOFFERS AND RESALES. The Buyer will not, directly or indirectly,
offer, sell, pledge, transfer or otherwise dispose of (or solicit any offers to
buy, purchase or otherwise acquire or take a pledge of) any of such Holder's
Warrants or Warrant Shares unless registered under the 1933 Act and the rules
and regulations promulgated thereunder or pursuant to an exemption from
registration;
(d) COMPANY RELIANCE. Such Holder understands that the Warrants to be
issued to such Holder are being offered and issued, the Warrant Shares issuable
upon exercise of such Warrants are being offered and, upon exercise of the
Warrants to be issued to such Holder, the Warrant Shares issued upon exercise of
such Warrants will be sold in reliance on one or more exemptions from the
registration requirements of the 1933 Act, including, without limitation,
Regulation D, and exemptions from state securities laws and that the Company is
relying upon the truth and accuracy of, and such Holder's compliance with, the
representations, warranties, agreements, acknowledgments and understandings of
such Holder set forth herein in order to determine the availability of such
exemptions and the eligibility of such Holder to acquire such Warrants and
Warrant Shares;
(e) INFORMATION PROVIDED. Such Holder and its advisors have requested,
received and considered all information relating to the business, properties,
operations, condition (financial or other), results of operations and prospects
of the Company and information relating to the offer and issuance of the
Warrants to be issued to such Holder and the offer and, upon exercise of such
Warrants, sale of the Warrant Shares issuable upon exercise of such Warrants
deemed relevant by them; such Holder and its advisors have been afforded the
opportunity to ask questions of the Company concerning the terms of such
Warrants and Warrant Shares and the business, properties, operations, condition
(financial or other), results of operations and prospects of the Company and
have received satisfactory answers to any such inquiries; without limiting the
generality of the foregoing, such Holder has had the opportunity to obtain and
to review the SEC Reports; such Holder has, in connection with its decision to
acquire the Warrants to be issued to such Holder, relied solely upon the SEC
Reports, the representations, warranties,
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covenants and agreements of the Company set forth in this Agreement and to be
contained in the Warrants, as well as any investigation of the Company completed
by such Holder or its advisors; and such Holder understands that its investment
in the Securities involves a high degree of risk;
(f) ABSENCE OF APPROVALS. Such Holder understands that no United States
federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Warrants to be issued
to such Holder;
(g) AGREEMENT. Such Holder has all requisite power and authority,
corporate or otherwise, to execute, deliver and perform its obligations under
this Agreement and to consummate the transactions contemplated hereby; and this
Agreement has been duly and validly authorized, duly executed and delivered by
such Holder and, assuming due execution and delivery by the Company, is a valid
and binding agreement of such Holder enforceable in accordance with its terms,
except as the enforceability hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws now or
hereafter in effect relating to or affecting creditors' rights generally and
general principles of equity, regardless of whether enforcement is considered in
a proceeding in equity or at law; and
(h) BUYER STATUS. Such Holder is not a "broker" or "dealer" as those
terms are defined in the 1934 Act which is required to be registered with the
SEC pursuant to Section 15 of the 1934 Act.
5. LIMITATION ON CERTAIN ACTIONS. During the period from the date of
this Agreement to March 31, 1998 the Company shall not offer, sell, contract to
sell or issue (or engage any person to assist the Company in taking any such
action) any equity securities or securities convertible into, exchangeable for,
or otherwise entitling the holder to acquire, any Common Stock at a price below
the market price of the Common Stock provided, however, that nothing in this
Section 5 shall prohibit the Company from offering, selling or issuing (or
engaging a person to assist the Company in taking such action) securities (x)
pursuant to compensation plans for employees, directors, officers, advisers or
consultants of the Company and in accordance with the terms of such plans as in
effect as of the date of this Agreement, (y) upon exercise of conversion,
exchange, purchase or similar rights issued, granted or given by the Company and
outstanding as of the date of this Agreement or (z) pursuant to a public
offering made directly by the Company on a basis similar to the offerings made
pursuant to the 1997 Registration Statements or underwritten on a firm
commitment basis and, in each case, registered under the 1933 Act; and provided
further, however, that nothing in this Section 5 shall prohibit the Company from
offering or engaging a person to assist the Company in offering equity
securities or securities convertible into, exchangeable for, or otherwise
entitling the holder to acquire, any Common Stock at a price below the market
price of the Common Stock in a single such transaction.
6. EFFECT OF AMENDMENT. From and after the Effective Date, (a) the
rights and obligations of the Company and each Holder with respect to such
Holder's Note set forth in such Holder's Note Purchase Agreement and Note and in
the Security Agreement, the Transfer Agent Agreement and all other agreements,
documents and instruments contemplated hereby and thereby (collectively, the
"Transaction Documents") shall apply with full force and effect to such
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Holder's Note as amended hereby and (b) the Transaction Documents shall be
deemed amended hereby such that all applicable references therein to such
Holder's Note shall refer to such Holder's Note as amended hereby.
7. EFFECTIVENESS OF THIS AGREEMENT. This Agreement shall become
effective on the date and time when the following shall have occurred (the
"Effective Date"):
(a) counterparts of this Agreement shall have been executed and
delivered by the Company and each Holder;
(b) the Company shall have issued to each Holder the number of Warrants
provided in Section 3 hereof;
(c) the conditions to the Company's obligations set forth in Section 7
shall have been satisfied or waived by the Company; and
(d) the conditions to the obligations of the Holders set forth in
Section 8 shall have been satisfied or waived by the Holders.
8. CONDITIONS TO THE COMPANY'S OBLIGATION. The Company's obligations
under this Agreement are conditioned upon satisfaction of the following
conditions precedent on or before the Effective Date (any one or more of which
may be waived by the Company in its sole discretion):
(a) On the Effective Date, no legal action, suit or proceeding shall be
pending or threatened which seeks to restrain or prohibit the transactions
contemplated by this Agreement; and
(b) The representations and warranties of each Holder contained in this
Agreement shall have been true and correct on the date of this Agreement and
shall be true and correct on the Effective Date as if given on and as of the
Effective Date (except for representations given as of a specific date which
representations shall be true and correct as of such date), and on or before the
Effective Date each Holder shall have performed all covenants and agreements of
such Holder contained herein required to be performed by such Holder on or
before the Effective Date.
9. CONDITIONS TO THE HOLDER'S OBLIGATION. The several obligations of the
Holders under this Agreement are conditioned upon satisfaction of the following
conditions precedent for all Holders on or before the Effective Date (any one or
more of which may be waived by such Holder in its sole discretion):
(a) On the Effective Date, no legal action, suit or proceeding shall be
pending or threatened which seeks to restrain or prohibit the transactions
contemplated by this Agreement;
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(b) The representations and warranties of the Company contained in this
Agreement shall have been true and correct on the date of this Agreement and,
except for the approvals referred to in clause (3) of Section 3(e), which shall
have been obtained, shall be true and correct on the Effective Date as if given
on and as of the Effective Date (except for representations given as of a
specific date which representations shall be true and correct as of such date),
and on or before the Effective Date the Company shall have performed all
covenants and agreements of the Company contained herein required to be
performed by the Company on or before the Effective Date; and
(c) No event which, (1) would constitute an Event of Default under any
Note or, with the giving of notice or the passage of time or both, would
constitute an Event of Default under any Note shall have occurred and be
continuing or (2) would constitute a Repurchase Event under any Note or, with
the giving of notice or the lapse of time, or both, would constitute a
Repurchase Event under any Note shall have occurred and be continuing.
10. CONFIRMATION OF AGREEMENTS. Except as amended by this Agreement, the
Notes and the other Transaction Documents shall remain in full force and effect
in accordance with their respective terms.
11. MISCELLANEOUS. (a) Capitalized terms used in this Agreement and
defined herein shall have the respective meanings provided herein. Capitalized
terms used in this Agreement and not otherwise defined in this Agreement shall
have the respective meanings provided in the Notes and, if not defined in the
Notes, the Note Purchase Agreements.
(b) This Agreement shall be construed and interpreted in accordance with
the laws of the State of New York.
(c) This Agreement may be executed in any number of counterparts and by
different parties hereto on separate counterparts, each of which counterparts
when so executed and delivered, shall be deemed to be an original and all of
which counterparts, taken together, shall constitute but one and the same
instrument. This Agreement may be executed and delivered by a party by a
telephone line facsimile transmission bearing a signature on behalf of such
party transmitted by such party to the other party.
(d) Section and paragraph headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
(e) Any provision of this Agreement that is prohibited, unenforceable or
not authorized in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition, unenforceability or
non-authorization without invalidating the remaining provisions hereof or
affecting the validity, enforceability or legality of such provision in any
other jurisdiction.
(f) No amendment or waiver of any provision of this Agreement shall in
any event be effective unless the same shall be in writing and signed by the
party to be charged with
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enforcement thereof and any such waiver shall be effective only in the specific
instance and for the specific purpose for which given. No failure on the part of
any party to exercise, and no delay in exercising, any right under this
Agreement shall operate as a waiver thereof by such party. No single or partial
exercise of any right under this Agreement shall preclude any other or further
exercise thereof or the exercise of any other right.
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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Agreement as of the date first above
written.
SHAMAN PHARMACEUTICALS, INC.
By_____________________________________
Name:
Title:
$3,250,000.00 DELTA OPPORTUNITY FUND, LTD.
By_____________________________________
Name:
Title:
$400,000.00 XXXX & XXXXXXXX GROUP, LLC
By_____________________________________
Name:
Title:
$1,625,000.00 XXXXXX PARTNERS
By_____________________________________
Name:
Title:
$1,625,000.00 OLYMPUS SECURITIES, LTD.
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By_____________________________________
Name:
Title:
$2,279,334.06 OMICRON PARTNERS, LP
By_____________________________________
Name:
Title:
$600,000.00 OTATO LIMITED PARTNERSHIP
By_____________________________________
Name:
Title:
$400,000.00 OVERBROOK FUND I, LLC
By_____________________________________
Name:
Title:
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