<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. __)*
DIATIDE, INC.
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(Name of Issuer)
Common Stock, $.001 par value
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(Title of Class of Securities)
25284210
-------------------------------------------
(CUSIP Number)
John J. Suydam, Esq.
O'Sullivan, Graev & Karabell, LLP
30 Rockefeller Plaza
41st Floor
New York, New York 10112
(212) 408-2400
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
September 23, 1997
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(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject to this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) and (4), check the following
box .
Check the following box if a fee is being paid with the statement . (A fee
is not required only if the filing person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such
class.) (See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are
to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section
of the Act but shall be subject to all other provisions of the Act (however,
see the Notes).
Page 1 of 11 Pages
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CUSIP No. 25284210 SCHEDULE 13D
------------
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Chase Venture Capital Associates, L.P.
13-337-6808
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
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7 SOLE VOTING POWER
1,653,564
NUMBER OF ------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY Not applicable
EACH ------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH
1,653,564
------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
Not applicable
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,653,564
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.4%
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14 TYPE OF REPORTING PERSON*
PN
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Page 2 of 11 Pages
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SCHEDULE 13D
------------
ISSUER: Diatide, Inc. CUSIP NUMBER: 25284210
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PRELIMINARY NOTE
All information set forth herein has been adjusted to reflect a change
in the name and address of the reporting person.
ITEM 1. SECURITY AND ISSUER.
This statement relates to the Common Stock, par value $0.001 per
share (the "Common Stock"), of Diatide, Inc., a Delaware corporation (the
"Issuer"). The Issuer's principal executive offices are located at 9 Delta
Drive, Londonderry, New Hampshire 03053.
ITEM 2. IDENTITY AND BACKGROUND.
This statement is being filed by Chase Venture Capital Associates,
L.P. (hereinafter referred to as "CVCA"), whose principal business office is
located at 380 Madison Avenue, 12th Floor, New York, New York 10017. The
general partner of CVCA is Chase Capital Partners, a New York general
partnership ("CCP"), whose principal business office is located at the same
address as CVCA.
Set forth below are the names of each general partner of CCP who is a
natural person. Each such general partner is a U.S. citizen, whose principal
occupation is general partner of CCP and whose principal business office address
(except for Mr. Soghikian) is c/o Chase Capital Partners, 380 Madison Avenue,
12th Floor, New York, New York 10017.
John R. Baron
Mitchell J. Blutt, M.D.
Arnold L. Chavkin
Michael R. Hannon
Donald J. Hofmann
Stephen P. Murray
John M.B. O'Connor
Brian J. Richmand
Shahan D. Soghikian
Jeffrey C. Walker
Damion E. Wicker, M.D.
Mr. Soghikian's principal business office address is c/o Chase Capital
Partners, 125 London Wall, London EC2Y5AJ, England.
Jeffrey C. Walker is the managing general partner of CCP. The
remaining general partners of CCP are Chase Capital Corporation, a New York
corporation ("Chase Capital"), CCP Principals, L.P., a Delaware limited
partnership ("Principals") and CCP European Principals, L.P., a Delaware limited
partnership ("European Principals"), each of whose principal business office is
located at the same address as CVCA. Chase Capital is a wholly owned subsidiary
of The Chase Manhattan Corporation, a Delaware corporation, whose principal
business office is located at the same address as CVCA. The general partner of
each of Principals and European Principals is Chase Capital. Set forth in
Schedule A hereto and incorporated herein by reference are the names,
Page 3 of 11 Pages
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business addresses, principal occupations of each executive officer of Chase
Capital, each of whom is a U.S. citizen.
The Chase Manhattan Corporation ("Chase") is a Delaware corporation
engaged (primarily through subsidiaries) in the commercial banking business with
its principal office located at 270 Park Avenue, New York, New York 10017. Set
forth in Schedule B hereto and incorporated herein by reference are the names,
business addresses, principal occupations and employments of each executive
officer and director of Chase, each of whom is a U.S. citizen.
To CVCA's knowledge, the response to Items 2(d) and (e) of Schedule
13D is negative with respect to CVCA and all persons regarding whom information
is required hereunder by virtue of CVCA's response to Item 2.
Insofar as the requirements of Items 3-6 inclusive of this Schedule
13D Statement require that, in addition to CVCA, the information called for
therein should be given with respect to each of the persons listed in this Item
2, including CCP, CCP's individual general partners, Chase Capital, Chase
Capital's executive officers and directors, Principals, and Principals'
controlling partner, European Principals and European Principals' controlling
partner, Chase and Chase's executive officers and directors, the information
provided in Items 3-6 with respect to CVCA should also be considered fully
responsive with respect to the aforementioned persons who have no separate
interests in the Issuer's Common Stock which is required to be reported
thereunder. Although the definition of "beneficial ownership" in Rule 13d-3
under the Securities and Exchange Act of 1934, as amended (the "Exchange Act"),
might also be deemed to constitute these persons beneficial owners of the
Issuer's Common Stock acquired by CVCA, neither the filing of this statement nor
any of its contents shall be deemed an admission that any of such persons is a
beneficial owner of the Issuer's Common Stock acquired by CVCA or a member of a
group together with CVCA either for the purpose of Schedule 13D of the Exchange
Act or for any other purpose with respect to the Issuer's Common Stock.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
DESCRIPTION OF TRANSACTION
On September 23, 1997, the Issuer and CVCA, Medsource S.A. and
Neomed Fund Limited (the "Investors") entered into a Securities
Purchase Agreement (the "Agreement"). Pursuant to the Agreement, CVCA
purchased (i) 871,795 shares of the Issuer's Series A Convertible
Preferred Stock (the "Preferred Stock"), which shares are immediately
convertible into 871,795 shares of the Issuer's Common Stock (subject
to adjustment), and (ii) Warrants to purchase 130,769 shares of the
Issuer's Common Stock (the "Warrants") (subject to adjustment).
CVCA's original cost basis for the above purchases is $8,500,000. The
funds CVCA used to acquire the securities were from its contributed
capital.
Prior to the above-described transaction, CVCA had been the
beneficial owner of 651,000 shares of the Issuer's Common Stock.
CVCA disclaims that it is a member of a group with any other
persons either for purposes of this Schedule 13D or for any other
purpose related to its beneficial ownership of the Issuer's
securities.
ITEM 4. PURPOSE OF TRANSACTION.
Page 4 of 11 Pages
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The acquisition of the Issuer's equity securities has been made by
CVCA for investment purposes. Although CVCA has no present intention to do so,
CVCA may make additional purchases of common Stock either in the open market or
in privately negotiated transactions, including transactions with the Issuer,
depending on an evaluation of the Issuer's business prospects and financial
condition, the market for the Common Stock, other available investment
opportunities, money and stock market conditions and other future developments.
Depending on these factors, CVCA may decide to sell all or part of its holdings
of the Issuer's Common Stock in one or more public or private transactions.
Except as set forth in this Item 4, CVCA has no present plans or
proposals that relate to or would result in any of the actions specified in
clauses (a) through (j) of Item 4 of Schedule 13D. However, CVCA reserves the
right to propose or participate in future transactions which may result in one
or more of such actions, including but not limited to, an extraordinary
corporate transaction, such as a merger, reorganization or liquidation, of a
material amount of assets of the Issuer or its subsidiaries, or other
transactions which might have the effect of causing the Issuer's common Stock to
cease to be listed on the NASDAQ National Market System or causing the Common
Stock to become eligible for termination of registration, under section 12(g) of
the Exchange Act.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
CVCA is deemed to be the beneficial owner of 1,653,564 shares of the
Issuer's Common Stock. CVCA's deemed beneficial ownership represents 14.4% of
the Issuer's Common Stock on a fully diluted basis. Except as set forth in Item
4, CVCA has sole voting power and dispositive power with respect to its shares
of Common Stock.
Except as reported in Item 6 below and incorporated herein by
reference, there have been no transactions in the Common Stock during the past
sixty days which are required to be reported in this Statement. No person other
than CVCA has the right to receive or the power to direct the receipt of
dividends from or the proceeds from the sale of the Common Stock owned
beneficially by CVCA.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Reference is made to the information disclosed under Items 3 and 4 of
this Statement which is incorporated by reference in response to this Item. In
addition to such information, the following contracts, arrangements,
understandings or relationships are reported hereunder.
(a) REGISTRATION RIGHTS AGREEMENT. The Issuer and the Investors
entered into a Registration Rights Agreement dated as of September 23,
1997 (the "Registration Agreement"). The Registration Agreement
grants the Investors, including CVCA, certain demand rights with
respect to registration under the 1933 Act. The Registration
Agreement also grants "piggy-back" rights to CVCA to participate in
certain registration statements filed by the Issuer.
(b) WARRANT NO. 1. CVCA has acquired from the Issuer Warrant
No. 1 dated as of September 23, 1997. Warrant No. 1 allows CVCA to
purchase up to 130,769 shares of Common Stock of the Issuer. The
Warrants are immediately exercisable and will expire on September 23,
2007.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Page 5 of 11 Pages
<PAGE>
1. Securities Purchase Agreement, dated as of September 23, 1997,
among the Issuer and the Investors.
2. Registration Rights Agreement, dated as of September 23, 1997,
among the Issuer and the Investors.
3. Warrant No. 1, dated as of September 23, 1997.
4. Certificate of Designations of the Preferred Stock of Diatide,
Inc. To be Designated Series A Convertible Preferred Stock.
SCHEDULE A
Item 2 information for executive officers and directors of Chase
Capital.
SCHEDULE B
Item 2 information for executive officers and directors of Chase.
Page 6 of 11 Pages
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: October 1, 1997 CHASE VENTURE CAPITAL ASSOCIATES, L.P.
By: CHASE CAPITAL PARTNERS,
its General Partner
By: /s/ Damion Wicker, M.D.
---------------------------------
Name: Damion Wicker, M.D.
Title: General Partner
Page 7 of 11 Pages
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SCHEDULE A
CHASE CAPITAL CORPORATION
-------------------------
EXECUTIVE OFFICERS
President Jeffrey C. Walker**
Executive Vice President Mitchell J. Blutt, M.D.**
Vice President & Secretary Gregory Meridith*
Vice President & Treasurer Donna L. Carter**
Assistant Secretary Robert C. Carroll*
DIRECTORS
William B. Harrison, Jr. *
Jeffrey C. Walker **
- ------------------------------
* Principal occupation is employee and/or officer of Chase. Business address
is c/o The Chase Manhattan Corporation, 270 Park Avenue, New York, New York
10017.
** Principal occupation is employee of Chase and/or general partner of Chase
Capital Partners. Business address is c/o CCP, 380 Madison Avenue, 12th
Floor, New York, New York 10017.
Page 8 of 11 Pages
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SCHEDULE B
THE CHASE MANHATTAN CORPORATION
-------------------------------
EXECUTIVE OFFICERS*
Walter V. Shipley, Chairman and CEO
Edward D. Miller, Senior Vice Chairman
Thomas G. Labrecque, President and COO
William B. Harrison, Jr., Vice Chairman
DIRECTORS**
PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME BUSINESS OR RESIDENCE ADDRESS
- ---- -----------------------------------
Frank A. Bennack, Jr. President and Chief Executive Officer
The Hearst Corporation
959 Eighth Avenue
New York, NY 10019
Susan V. Berresford President
The Ford Foundation
320 East 43rd Street
New York, NY 10017
M. Anthony Burns Chairman, President and CEO
Ryder System, Inc.
3600 N.W. 2nd Avenue
Miami, FL 33166
H. Laurance Fuller Chairman of the Board and Chief Executive Officer
Amoco Corporation
200 East Randolph Drive
Chicago, IL 60601
- --------------------------
* Pricipal occupation is executive officer and/or employee of The Chase
Manhattan Bank. Business address is c/o The Chase Manhattan Bank, 270 Park
Avenue, New York, New York 10017. Each executive officer of Chase is a
U.S. citizen.
** Each of the persons named below is a citizen of the United States of
America.
Page 9 of 11 Pages
<PAGE>
PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME BUSINESS OR RESIDENCE ADDRESS
- ---- -----------------------------------
Melvin R. Goodes Chairman of the Board and
Chief Executive Officer
Warner-Lambert Company
201 Tabor Road
Morris Plains, NJ 07950
William H. Gray, III President and Chief Executive Officer
United Negro College Fund, Inc.
8260 Willow Oaks Corporate Drive
P.O. Box 10444
Fairfax, VA 22031
George V. Grune Retired Chairman and Chief Executive
Officer of the Reader's Digest
Association, Inc.
Chairman of the Board
The DeWitt Wallace-Reader's Digest Fund
Lila Wallace-Reader's Digest Fund
2 Park Avenue, 23rd Floor
New York, NY 10016
William B. Harrison, Jr. Vice Chairman of the Board
The Chase Manhattan Corporation
270 Park Avenue, 8th Floor
New York, NY 10017-2070
Harold S. Hook Chairman of the Board
American General Corporation
2929 Allen Parkway
Houston, TX 77019
Helene L. Kaplan Of Counsel
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue - Room 29-72
New York, NY 10022
Thomas G. Labrecque President and Chief Operating Officer
The Chase Manhattan Corporation
270 Park Avenue, 8th Floor
New York, NY 10017-2070
J. Bruce Llewellyn Chairman of the Board
The Philadelphia Coca-Cola Bottling Company,
The Coca-Cola Bottling Company of Wilmington, Inc.
and Queen City Broadcasting, Inc.
The Philadelphia Coca-Cola Bottling Company
30 Rockefeller Plaza, 29th Floor
New York, New York 10112
Page 10 of 11 Pages
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PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME BUSINESS OR RESIDENCE ADDRESS
- ---- -----------------------------------
Edward D. Miller Senior Vice Chairman of the Board
The Chase Manhattan Corporation
270 Park Avenue, 8th Floor
New York, NY 10017-2070
Edmund T. Pratt, Jr. Chairman Emeritus
Pfizer Inc.
Astors Lane
Port Washington, NY 11050
Henry B. Schacht Chairman of the Board and
Chief Executive Officer
Lucent Technologies, Inc.
600 Mountain Avenue - Room 6A511
Murray Hill, NJ 07974
Walter V. Shipley Chairman of the Board and Chief
Executive Officer
The Chase Manhattan Corporation
270 Park Avenue, 8th Floor
New York, NY 10017-2070
Andrew C. Sigler Retired Chairman of the Board
and Chief Executive Officer
Champion International Corporation
1 Champion Plaza
Stamford, CT 06921
John R. Stafford Chairman, President and Chief
Executive Officer
American Home Products Corporation
Five Giralda Farms
Madison, NJ 07940
Marina v.N. Whitman Professor of Business Administration
and Public Policy
The University of Michigan
School of Public Policy
411 Lorch Hall, 611 Tappan Street
Ann Arbor, MI 48109-1220
Page 11 of 11 Pages
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Exhibit 99.1
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DIATIDE, INC.
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SECURITIES PURCHASE AGREEMENT
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September 23, 1997
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<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
SECTION 1. Certificate of Designations................................. 1
SECTION 2. Issuance and Sale of Preferred Shares and Warrants;
Reservation of Conversion Shares and Warrant Shares;
Closing...................................................... 1
2.1. Authorization of Issuance of Preferred Shares and Warrants... 1
2.2. Reservation of Conversion Shares and Warrant Shares.......... 1
2.3. Sale of Securities........................................... 1
2.4. The Closing.................................................. 2
2.5. Fair Value of Preferred Shares and Warrants.................. 2
SECTION 3. Representations and Warranties of the Corporation............ 2
3.1. Organization; Power and Authority; Qualifications............ 2
3.2. Authorization of the Documents; No Conflicts................. 3
3.3. Authorization of the Securities.............................. 3
3.4. No Consent or Approval Required.............................. 4
3.5. Small Business Matters....................................... 4
3.6 Capitalization............................................... 5
3.7 Defaults..................................................... 5
3.8. Reports and Financial Information............................ 6
3.9. Offering Exemption........................................... 6
3.10. Brokers...................................................... 6
3.11. Registration Rights.......................................... 7
3.12 No Preemption Rights......................................... 7
SECTION 4. Representations and Warranties of the Investors.............. 7
4.1. Authorization of the Documents............................... 7
4.2. Investment Representations................................... 7
SECTION 5. Restriction on Transfer..................................... 8
SECTION 6. Expenses.................................................... 9
SECTION 7. Exchanges; Lost, Stolen or Mutilated Certificates........... 9
SECTION 8. Survival of Representations and Warranties.................. 10
SECTION 9. Governing Law............................................... 10
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SECTION 10. Waivers; Amendments......................................... 10
SECTION 11. Remedies.................................................... 10
SECTION 12. Successors and Assigns...................................... 11
SECTION 13. Entire Agreement............................................ 11
SECTION 14. Notices..................................................... 11
SECTION 15. Counterparts; Facsimile Signatures.......................... 12
SECTION 16. Headings.................................................... 12
SECTION 17. Nouns and Pronouns.......................................... 12
SECTION 18. Public Disclosure........................................... 12
SECTION 19 Additional Agreements........................................ 13
19.1 Listing on the Nasdaq Market.................................. 13
19.2 Compliance Cooperation........................................ 13
19.3 Nomination to the Corporation's Board of Directors............ 13
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ATTACHMENTS
-----------
EXHIBITS
- --------
Exhibit A - Certificate of Designations
Exhibit B - Warrant Agreement
Exhibit C - Form of Registration Rights Agreement
SCHEDULES
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Schedule I - Investors
Schedule 3.1 - Organization; Power and Authority; Qualifications
Schedule 3.2 - Authorization of the Documents; No Conflicts
Schedule 3.4 - No Consent or Approval Required
Schedule 3.7 - Defaults
Schedule 3.10 - Brokers
Schedule 3.11 - Registration Rights
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DEFINITIONS
-----------
The following terms used in this Agreement are defined where indicated
below.
Term Section
- ---- -------
33 and 34 Act Reports................................................ 3.8(b)
Business............................................................. 3.5(c)
By-laws.............................................................. 3.1
Certificate of Designations.......................................... 1
Certificate of Incorporation......................................... 1
Charter Documents.................................................... 3.2
Closing.............................................................. 2.4
Closing Date......................................................... 2.4
Contracts............................................................ 3.7
Conversion Shares.................................................... 2.1
Corporation.......................................................... Preamble
Document(s).......................................................... 3.2
Exchange Act......................................................... 3.4
Financial Statements................................................. 3.8
Governmental Entity.................................................. 3.7
HSR Act.............................................................. 3.2
Investor(s).......................................................... Preamble
Laws................................................................. 3.2
Listing Application.................................................. 3.5
Majority of the Investors............................................ 10(b)
Management Options................................................... 3.6(a)
Material Adverse Effect.............................................. 3.1
Nasdaq Market........................................................ 3.4
Nomination Date1..................................................... 9.3
Person............................................................... 3.2
Preferred Shares..................................................... 2.1
Registration Rights Agreement........................................ 3.1
SBIA................................................................. 3.5(a)
SBIC Investor........................................................ 19.2(a)
SEC.................................................................. 3.1
SEC Reports.......................................................... 3.8(a)
Securities........................................................... 2.1
Securities Act....................................................... 3.4
Series A Convertible Preferred Stock................................. 1
Transfer............................................................. 5(a)
Warrant Agreement.................................................... 2.1
Warrant Shares....................................................... 2.1
Warrants............................................................. 2.1
-iv-
<PAGE>
SECURITIES PURCHASE AGREEMENT dated September 23, 1997, among DIATIDE,
INC., a Delaware corporation (the "Corporation"), and each of the investors
identified on SCHEDULE I (each, an "Investor" and, collectively, the
"Investors").
The Corporation develops and manufactures radiopharmaceuticals for the
diagnosis and treatment of diseases. The parties hereto desire to provide for
the Corporation's sale of certain convertible preferred stock and warrants to
the Investors, in accordance with the provisions set forth herein.
ACCORDINGLY, in consideration of the mutual covenants and conditions herein
contained, the parties hereto hereby agree as follows:
SECTION 1. CERTIFICATE OF DESIGNATIONS. Prior to the Closing, the
Corporation shall file with the Secretary of State of the State of Delaware a
Certificate of Designations (the "Certificate of Designations"), a copy of which
is attached hereto as EXHIBIT A. The Restated Certificate of Incorporation of
the Corporation, as amended by the Certificate of Designations, is referred to
herein as the "Certificate of Incorporation." The Certificate of Designations
(i) designates 1,300,000 shares of convertible preferred stock, $.01 par value,
of the Corporation as Series A Convertible Preferred Stock (the "Series A
Convertible Preferred Stock") and (ii) sets forth the rights, restrictions,
privileges and preferences of the Series A Convertible Preferred Stock.
SECTION 2. AUTHORIZATION OF ISSUANCE AND SALE OF PREFERRED SHARES AND
WARRANTS; RESERVATION OF CONVERSION SHARES AND WARRANT SHARES; CLOSING.
2.1. AUTHORIZATION OF ISSUANCE OF PREFERRED SHARES AND WARRANTS.
Subject to the terms and conditions hereof, the Corporation has authorized the
issuance at the Closing of an aggregate of (a) 1,210,256 shares (the "Preferred
Shares") of Series A Convertible Preferred Stock, together with the 1,210,256
shares of Common Stock of the Corporation, $.001 par value (the "Common Stock"),
issuable upon conversion of the Preferred Shares, as adjusted (the "Conversion
Shares"), and (b) warrants (the "Warrants") to be dated the Closing Date
substantially in the form attached hereto as EXHIBIT B to purchase up to an
aggregate of 181,538 shares, as adjusted (the "Warrant Shares"), of Common
Stock. For purposes of this Agreement, the term "Securities" shall mean the
Preferred Shares, the Conversion Shares, the Warrants and the Warrant Shares.
2.2. RESERVATION OF CONVERSION SHARES AND WARRANT SHARES. Subject to
the terms and conditions hereof, the Corporation shall reserve (i) 1,210,256
Conversion Shares and (ii) 181,538 Warrant Shares.
2.3. SALE OF SECURITIES. (a) At the Closing, the Corporation shall
sell to each Investor, and each Investor shall severally purchase from the
Corporation, upon the terms and subject to the conditions hereinafter set forth,
the Securities set forth
<PAGE>
opposite such Investor's name on SCHEDULE I, for the aggregate purchase price
set forth opposite such Investor's name.
(b) At the Closing, the Corporation shall deliver to each Investor
(i) a certificate, registered in such Investor's name, representing the
Preferred Shares purchased by such Investor at the Closing and (ii) a Warrant
certificate, registered in such Investor's name, representing the Warrants
purchased by such Investor at the Closing, against receipt by the Corporation of
a wire transfer of immediately available funds to an account designated by the
Corporation in an amount equal to the purchase price for the Preferred Shares
and Warrants being purchased by such Investor at the Closing.
2.4. THE CLOSING. The closing (the "Closing") hereunder with respect
to the issuance and sale of the Securities shall take place at the offices of
Hale and Dorr LLP, 60 State Street, Boston, Massachusetts 02109 on September 23,
1997, or such other date as shall be agreed to by the Corporation and the
Investors (the date upon which the Closing occurs being referred to as the
"Closing Date")
2.5. FAIR VALUE OF PREFERRED SHARES AND WARRANTS. The Corporation and
the Investors have, in good faith, established that the fair market value of the
Preferred Shares and the Warrants is $9.63 per share and $0.12 (per Warrant to
purchase one share of Common Stock), respectively, for purposes of establishing
the cost basis of the Warrants to the Investors and the related Federal income
tax consequences to the Corporation and the Investors arising from this
Agreement. The Corporation and the Investors shall prepare and file their
respective Federal income tax returns in a manner which is consistent with the
foregoing allocation of fair market values to the Preferred Shares and the
Warrants pursuant to this Agreement.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE CORPORATION. The
Corporation hereby represents and warrants to the Investors as of the date
hereof as follows:
3.1. ORGANIZATION; POWER AND AUTHORITY; QUALIFICATIONS. The
Corporation 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 own, lease and operate its properties and to carry on its
business as presently conducted. The Corporation is qualified and in good
standing to transact business as a foreign corporation in those jurisdictions
listed on SCHEDULE 3.1, which jurisdictions constitute all the jurisdictions in
which the character of the property owned or leased by the Corporation or the
nature of the activities conducted by the Corporation makes such qualification
necessary, except where the failure to be so qualified and in good standing is
not reasonably expected to have a material adverse effect on the business,
properties, assets, liabilities, operations or financial condition of the
Corporation (a "Material Adverse Effect"). True and complete copies of the
Certificate of
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<PAGE>
Incorporation and the By-laws (the "By-laws") of the Corporation, as amended to
and as in effect on the date hereof, have been filed by the Company with the
Securities and Exchange Commission ("SEC").
3.2. AUTHORIZATION OF THE DOCUMENTS; NO CONFLICTS. The Corporation
has all requisite power to execute, deliver and perform this Agreement, the
Certificate of Designations, the Warrants and the Registration Rights Agreement
and the transactions contemplated thereby. Such documents, together with this
Agreement, are collectively referred to herein as the "Documents" and each,
individually, a "Document." The execution, delivery and performance by the
Corporation of the Documents have been duly authorized by all requisite
corporate action by the Corporation and each Document constitutes a valid and
binding obligation of the Corporation, enforceable against the Corporation in
accordance with its terms, except as rights to indemnification may be limited by
federal or state securities laws and except for the effect of bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating to or
affecting the rights of creditors generally. The execution, delivery and
performance of the Documents, the consummation of the transactions contemplated
by the Documents and compliance with the provisions of the Documents by the
Corporation, and the issuance, sale and delivery of the Securities, after
completion of any filings required pursuant to the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 (the "HSR Act"), will not, except in circumstances that
will not have a Material Adverse Effect, (a) violate any provision of any law,
statute, ordinance, rule or regulation, or any ruling, writ, injunction, order,
judgment or decree of any Governmental Entity (collectively, "Laws") applicable
to the Corporation or any of its properties or assets, (b) except as set forth
on SCHEDULE 3.2, conflict with or result in any breach of any of the terms,
conditions or provisions of, or constitute (with due notice or lapse of time, or
both) a default (or give rise to any right of termination, cancellation or
acceleration) under the Charter Documents of the Corporation or any Contract (as
defined in Section 3.6 below) or (c) result in the creation of any mortgages,
judgments, claims, liens, security interests, pledges, escrows, charges,
restrictions or other encumbrances of any kind or character whatsoever upon any
of the properties or assets of the Corporation. As used herein, the "Charter
Documents" of any Person shall mean the certificate of incorporation and by-laws
of such Person, as amended, and "Person" shall mean an individual, a
partnership, a joint venture, a corporation, a limited liability company, a
trust, any other entity or a government or any department or agency thereof.
3.3. AUTHORIZATION OF THE SECURITIES. The authorization, issuance,
sale and delivery of the Securities and the reservation of the Conversion Shares
and the Warrant Shares have been duly authorized by all requisite corporate
action of the Corporation. Upon their issuance, the Preferred Shares, the
Conversion Shares, the Warrants and the Warrant Shares, assuming payment of the
conversion price for the Conversion Shares and the exercise price for the
Warrant Shares as provided in the Warrants, will be validly issued and
outstanding, fully paid and nonassessable, and
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not subject to preemptive or any other similar rights of the stockholders of the
Corporation.
3.4. NO CONSENT OR APPROVAL REQUIRED. Except as set forth on SCHEDULE
3.4, and except for applicable filings with The Nasdaq Stock Market, Inc. (the
"Nasdaq Market"), under the HSR Act, under the Securities Act of 1933, as
amended (the "Securities Act"), or the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), no consent of any Person and no consent, approval
or authorization of, or declaration to or filing with, any Governmental Entity
is required for the valid authorization, execution and delivery by the
Corporation of any Document or for the consummation of the transactions
contemplated by the Documents or for the valid authorization, issuance and
delivery of the Preferred Shares and the Warrants or for the valid
authorization, reservation, issuance and delivery of the Conversion Shares and
the Warrant Shares, other than those consents, approvals, authorizations,
declarations or filings which have been obtained or made as of the Closing Date.
3.5. SMALL BUSINESS MATTERS. (a) The Corporation, together with its
"affiliates" (as that term is defined in Title 13, Code of Federal Regulations,
Section 121.103), is a "small business concern" within the meaning of the Small
Business Investment Act of 1958, as amended ("SBIA"), and the regulations
thereunder, including Title 13, Code of Federal Regulations, Section 121.301(c).
The information set forth in the Small Business Administration Forms 480, 652
and Part A of Form 1031 regarding the Corporation and its affiliates, when
delivered to the Investors, will be accurate and complete. Copies of such forms
shall be completed and executed by the Corporation and delivered to the
Investors at the Closing of the sale of the Securities to the Investors.
(b) No portion of the proceeds of the sale of the Securities (i) will
be used to provide capital to a corporation licensed under the SBIA, (ii) will
be used to acquire farm land, (iii) will be used to fund production of a single
item or defined limited number of items, generally over a defined production
period, and such production will constitute the majority of the activities of
the Corporation (examples include motion pictures and electric generating
plants), or (iv) will be used for any purpose contrary to the public interest
(including, but not limited to, activities which are in violation of law) or
inconsistent with free competitive enterprise, in each case, within the meaning
of 13 C.F.R. Section 107.720.
(c) The Corporation's primary business activity does not involve
directly or indirectly, financing others, the purchase or discounting of debt
obligations, factoring or long-term leasing of equipment with no provision for
maintenance or repair, and the Corporation is not classified under Major Group
65 (Real Estate) of the SIC Manual. The assets of the business of the
Corporation (the "Business") will not be reduced or consumed, generally without
replacement, as the life of the Business progresses, and the nature of the
Business does not require that a
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stream of cash payments be made to the Business's financing sources, on a basis
associated with the continuing sale of assets (examples of such businesses would
include real estate development projects and oil and gas wells)
(d) The proceeds from the sale of the Securities will not be used
substantially for a foreign operation; and at Closing or within one year
thereafter, no more than 49% of the employees or tangible assets of the
Corporation will be located outside the United States. This subsection (d) does
not prohibit such proceeds from being used to acquire foreign materials and
equipment or foreign property rights for use or sale in the United States.
3.6. CAPITALIZATION. The authorized capital stock of the Corporation
immediately upon the consummation at the Closing of the transactions
contemplated hereby shall consist of:
(a) 50,000,000 shares of Common Stock, of which (A) 10,517,183 shares
shall have been duly authorized, validly issued and shall be outstanding, fully
paid and nonassessable, (B) 1,210,256 shares shall have been duly reserved for
issuance upon conversion of the Preferred Shares, (C) 181,538 shares shall have
been duly reserved for issuance upon exercise of the Warrants, and (D) 2,510,025
shares shall have been duly reserved for issuance pursuant to options granted or
to be granted under the Corporation's employee benefit plans or to employees or
consultants outside such plans (the "Management Options"); and
(b) 10,591,874 shares of Preferred Stock, of which 1,300,000 shares
shall have been duly designated as Series A Convertible Preferred Stock, all of
which shares will be outstanding as of the Closing Date and shall have been
fully paid and nonassessable upon consummation of the Closing.
3.7. DEFAULTS. Except as set forth on SCHEDULE 3.7, the Corporation
is not in default under (a) its Charter Documents, (b) any indenture, mortgage,
lease, purchase or sales order, or any other contract, agreement or instrument
to which the Corporation is a party or by which the Corporation or any of its
properties is bound or affected (collectively, "Contracts") or (c) any order or
decree of any court or any Federal, state, municipal or other domestic or
foreign governmental department, commission, board, bureau, agency or
instrumentality (a "Governmental Entity"), except in the case of the foregoing
clauses (a), (b) or (c) where any such default is not reasonably expected to
have a Material Adverse Effect. To the best knowledge of the Corporation, there
exists no condition, event or act which constitutes, or which after notice,
lapse of time or both, would constitute, such a default under any of the
foregoing except where such a default is not reasonably expected to have a
Material Adverse Effect.
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3.8. REPORTS AND FINANCIAL INFORMATION. (a) The Corporation has filed
in a timely manner all reports required to be filed by it with the SEC pursuant
to the Exchange Act since June 18, 1996 (the date of the effectiveness of the
Corporation's registration statement for its initial public offering of
securities), including, without limitation, an Annual Report on Form 10-K for
the year ended December 31, 1996 and Form 10-Q for the quarterly periods ended
March 31, 1997 and June 30, 1997 (collectively, the "SEC Reports").
(b) None of the SEC Reports or any registration statement, definitive
proxy statement and other documents filed by the Company with the SEC since
June 18, 1996 (collectively, the "33 and 34 Act Reports"), as of their
respective dates (as amended through the date hereof), (i) contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading or (ii) failed to
comply in all material respects with the requirements of the Securities Act, the
Exchange Act or the respective rules and regulations of the SEC thereunder.
(c) Except as set forth on SCHEDULE 3.8, the financial statements
contained in the 33 and 34 Act Reports and the unaudited balance sheet of the
Corporation as of June 30, 1997, and the related statements of operations and
statements of cash flows for the period then ended (collectively, the "Financial
Statements") (i) were in accordance with the books and records of the
Corporation, (ii) presented fairly in all material respects the consolidated
financial condition and results of operations of the Corporation as of the dates
and for the periods indicated and (iii) were prepared in accordance with
generally accepted accounting principles consistently applied (except as set
forth in the notes thereto and subject, in the case of Financial Statements as
at the end of or for the periods other than fiscal years, to normal year-end
audit adjustments and the absence of footnotes).
(d) The Financial Statements complied, when filed, as to form in all
material respects with the applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto.
3.9. OFFERING EXEMPTION. The offering, sale, and issuance of the
Securities are, or will be, exempt from registration under the Securities Act
and the rules and regulations promulgated thereunder; and the aforesaid
offering, sale and issuance is also exempt from registration under applicable
state securities and "blue sky" laws. The Corporation has made or will make all
requisite filings and has taken or will take all action necessary to be taken to
comply with such applicable state securities or "blue sky" laws.
3.10. BROKERS. Except as set forth on SCHEDULE 3.10, neither the
Corporation nor any of the officers, directors, employees or stockholders of the
Corporation has
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employed any broker or finder in connection with the transactions contemplated
by this Agreement.
3.11. REGISTRATION RIGHTS. Except as set forth on SCHEDULE 3.11,
pursuant to agreements which have been filed by the Corporation as exhibits with
the SEC, or as set forth in the form of Registration Rights Agreement attached
as Exhibit C, no person has any right to cause the Corporation to effect the
registration under the Securities Act of any shares of Common Stock or any other
securities (including debt securities) of the Corporation.
3.12. NO PREEMPTIVE RIGHTS. There exist no statutory preemptive, or
other similar rights to purchase securities of the Corporation.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS. Each Investor
severally represents and warrants to the Corporation as to itself, as follows:
4.1. AUTHORIZATION OF THE DOCUMENTS. Such Investor has all requisite
power to execute, deliver and perform the Documents to which it is a party and
the transactions contemplated by such Documents, and the execution, delivery and
performance by such Investor of the Documents to which it is a party have been
duly authorized by all requisite action by such Investor and each such Document
constitutes a valid and binding obligation of such Investor enforceable against
such Investor in accordance with its terms.
4.2. INVESTMENT REPRESENTATIONS. (a) Such Investor is acquiring the
Securities to be purchased by such Investor hereunder and, in the event that
such Investor should acquire any Conversion Shares or Warrant Shares which are
not registered under the Securities Act, will be acquiring such Conversion
Shares or Warrant Shares for its own account, for investment and not with a view
to the distribution thereof within the meaning of the Securities Act.
(b) Such Investor understands that (i) the Securities have not been
registered under the Securities Act or applicable state securities laws, by
reason of their issuance by the Corporation in a transaction exempt from the
registration requirements of the Securities Act or applicable state securities
laws and (ii) the Securities must be held by such Investor indefinitely unless a
subsequent disposition thereof is registered under the Securities Act or
applicable state securities laws or is exempt from registration.
(c) Each Investor further understands that, with respect to the
Securities, the exemption from registration afforded by Rule 144 (the provisions
of which are known to such Investor) promulgated under the Securities Act
depends on the satisfaction of various conditions, and that, if applicable, Rule
144 may afford the only basis for sales and only in limited amounts.
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(d) Such Investor will not transfer the Securities except in
compliance with the Documents.
(e) Such Investor has not employed any broker or finder in connection
with the transactions contemplated by this Agreement.
SECTION 5. RESTRICTION ON TRANSFER. (a) Preferred Shares and Conversion
Shares held by the Investors shall not be sold, transferred, assigned, pledged,
encumbered or otherwise disposed of (each, a "Transfer") except upon the
conditions specified in this Section 5, which conditions are intended to insure
compliance with the provisions of the Securities Act.
(b) Each certificate for Preferred Shares and Conversion Shares held
by the Investors shall be stamped or otherwise imprinted with a legend in
substantially the following form:
"The Securities represented by this Certificate have been acquired for
investment and have not been registered under the Securities Act of 1933,
as amended. These Securities may not be sold or transferred in the absence
of such registration or an exemption therefrom under said Act."
(c) Each Investor shall, prior to any Transfer of any Preferred
Shares or Conversion Shares, give written notice to the Corporation of such
Investor's intention to effect such Transfer and to comply with the provisions
of this Section 5. Each such notice shall describe the manner and circumstances
of the proposed Transfer and, if requested by the Corporation, shall be
accompanied by (i) the written opinion, addressed to the Corporation, of counsel
for the holder of such Preferred Shares or Conversion Shares, stating that in
the opinion of such counsel (which opinion and counsel shall be reasonably
satisfactory to the Corporation) such proposed Transfer does not involve any
transaction requiring registration or qualification of such shares under the
Securities Act and (ii) such certifications as may reasonably be requested by
the Corporation evidencing the facts establishing the exemption from the
registration requirements of the Securities Act being sought. No opinion of
counsel shall be necessary for (i) a Transfer by an Investor which is a
partnership to a partner of such Investor, or a retired partner of such holder
who retires after the date hereof, or the estate of any such partner or retired
partner, if in each case the transferee agrees in writing to be subject to the
terms of this Section 5 to the same extent as if such transferee were originally
a signatory to this Agreement, and (ii) a Transfer pursuant to Rule 144 or 144A.
(d) The restrictions imposed by this Section 5 upon the
transferability of any Preferred Shares or Conversion Shares held by the
Investors shall cease and terminate when (i) any such shares are sold or
otherwise disposed of pursuant to an
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effective registration statement under the Securities Act or (ii) the holder of
such Preferred Shares or Conversion Shares has met the requirements for Transfer
of such Preferred Shares or Conversion Shares pursuant to Rule 144. Whenever
the restrictions imposed by this Section 5 shall terminate, as herein provided,
each Investor holding Preferred Shares or Conversion Shares as to which such
restrictions have terminated shall be entitled to receive from the Corporation,
without expense, a new certificate not bearing the restrictive legend set forth
in Section 5(b).
SECTION 6. EXPENSES. (a) The Corporation will pay the fees and expenses
of (i) O'Sullivan Graev & Karabell, LLP up to a limit of $50,000 for its
services in connection with the purchase of the Securities, including
preparation and negotiation of the Documents and due diligence investigation of
the Corporation in connection therewith, (ii) Advanced Bioresearch Associates in
the amount of up to $30,000 and (iii) Venture One Corporation in the amount of
up to $10,000, which fees and expenses relating to the transactions contemplated
by this Agreement shall be paid by the Corporation at the Closing.
(b) The Corporation shall save the Investors harmless from any and
all liability with respect to any stamp or similar taxes which may be determined
to be payable in connection with the execution and delivery and performance of
the Documents or any modification, amendment or alteration of the terms or
provisions of the Documents, and it shall similarly pay and hold the Investors
harmless from all issue taxes in respect of the issuance of the Conversion
Shares or the Warrant Shares to the Investors; PROVIDED, HOWEVER, that the
Corporation shall have no liability hereunder for the payment of any such taxes
on and after and other than in connection with the initial issuance of the
Preferred Shares, the Conversion Shares and the Warrant Shares.
(c) The Corporation shall reimburse the initial Investors for any
filing fees paid by such Investors in connection with any filing under the HSR
Act pursuant to the terms of the Warrants which filing may be necessary upon the
exercise of the Warrants.
SECTION 7. EXCHANGES; LOST, STOLEN OR MUTILATED CERTIFICATES. Upon
surrender by any Investor to the Corporation of any certificate or instrument
representing Securities, the Corporation at its expense shall issue in exchange
therefor, and deliver to such Investor, a new certificate or instrument
representing such Securities, in such denominations as may be requested in
writing by such Investor. Every certificate or instrument representing
Securities surrendered for registration shall be duly endorsed. Upon receipt of
evidence reasonably satisfactory to the Corporation of the loss, theft,
destruction or mutilation of any certificate representing any Securities
purchased or acquired by an Investor, upon delivery of any indemnity agreement
and a bond reasonably satisfactory to the Corporation, or in case of any such
mutilation, upon surrender and cancellation of such certificate or
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instrument, the Corporation at its expense will issue and deliver to such
Investor a new certificate or instrument for such Securities of like tenor and
in the same amount and name, in lieu of such lost, stolen or mutilated
certificate.
SECTION 8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Corporation contained in this Agreement
shall survive until the first anniversary of the Closing except for the
representations and warranties set forth in (i) the first sentence of Section
3.1, (ii) the first and second sentence of Section 3.2 and (iii) Section 3.3,
which shall survive without limitation.
SECTION 9. GOVERNING LAW. All questions concerning the construction,
interpretation and validity of this Agreement shall be governed by and construed
in accordance with the domestic laws of the State of Delaware without giving
effect to any choice or conflict of law provision or rule (whether in the State
of Delaware or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Delaware.
SECTION 10. WAIVERS; AMENDMENTS. (a) No failure or delay of any Investor
in exercising any power or right under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Investors hereunder are
cumulative and not exclusive of any rights or remedies which they would
otherwise have. No waiver of any provision of any Document or consent to any
departure by the Corporation therefrom shall in any event be effective unless
the same shall be authorized as provided in paragraph (b) below, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. No notice or demand on the Corporation in any case
shall entitle the Corporation to any other or further notice or demand in
similar or other circumstances.
(b) Neither this Agreement nor any provision hereof, may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by a "Majority of the Investors" and the Corporation and each
Investor at that time and thereafter shall be bound by any such waiver,
amendment or modification complying with the provisions of this Section 10. The
Corporation shall promptly send copies of each consent, waiver, amendment or
other modification (and any request for any thereof received by the Corporation)
relating to this Agreement to each Investor. For purposes of this Agreement a
"Majority of the Investors" shall mean Investors that shall hold from time to
time a majority of the Preferred Shares of the Corporation then outstanding.
SECTION 11. REMEDIES. In case any one or more of the warranties and/or
agreements set forth in this Agreement shall have been breached by the
Corporation,
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the Investors (or any Investor) may proceed to protect and enforce its or their
rights either by suit in equity and/or by action at law, including, but not
limited to, an action for damages as a result of any such breach and/or an
action for specific performance of any such warranties or agreement contained in
this Agreement.
SECTION 12. SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure
to the benefit of the Corporation and the Investors and their respective
successors, assigns, heirs and personal representatives. Any Investor may
assign all or a portion of its rights hereunder to any Person who shall purchase
no less than Preferred Shares and Warrants together representing the right to
convert into or be exercisable for 300,000 shares of Common Stock (such number
being subject to adjustment for any stock dividend, stock split, subdivision,
combination or other recapitalization of the Common Stock of the Company);
PROVIDED, HOWEVER, that such transferee shall, as a condition to the
effectiveness of such assignment, be required to execute a counterpart to this
Agreement agreeing to be treated as an Investor hereunder, a copy of which shall
be delivered to the Corporation, whereupon such transferee shall have the
benefits of and shall be subject to the restrictions contained in this Agreement
as if such transferee was originally included in the definition of an Investor
and had originally been a party hereto.
SECTION 13. ENTIRE AGREEMENT. This Agreement and the other writings
referred to herein or delivered pursuant hereto which form a part hereof contain
the entire agreement among the parties with respect to the subject matter hereof
and supersede all prior and contemporaneous arrangements or understandings with
respect thereto (including the proposal letter between the Corporation and one
of the Investors dated August 15, 1997, as amended).
SECTION 14. NOTICES. All notices, requests, consents and other
communications hereunder to any party shall be deemed to be sufficient if
contained in a written instrument delivered in person or sent by telecopy,
nationally-recognized overnight courier or first class registered or certified
mail, return receipt requested, postage prepaid, addressed to such party at the
address set forth below or such other address as may hereafter be designated in
writing by such party to the other parties:
(i) if to the Corporation, to:
Diatide, Inc.
Nine Delta Drive
Londonderry, NH 03053
Telecopy: (714) 668-5024
Attention: Daniel F. Harrington
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with a copy to:
Hale and Dorr LLP
60 State Street
Boston, MA 02109
Telecopy: (617) 526-6000
Attention: Jeffrey N. Carp, Esq.
(i) if to the Investors, to their respective addresses set forth on
SCHEDULE I hereto, with a copy to:
O'Sullivan Graev & Karabell, LLP
30 Rockefeller Plaza
New York, New York 10112
Telecopy: (212) 408-2420
Attention: John J. Suydam, Esq.
All such notices, requests, consents and other communications shall be deemed to
have been delivered (a) in the case of personal delivery or delivery by
telecopy, on the date of such delivery if such date is a business day or, if not
a business day, the first business day thereafter, (b) in the case of dispatch
by nationally-recognized overnight courier, on the next business day following
such dispatch and (c) in the case of mailing, on the third business day after
the posting thereof.
SECTION 15. COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may be
executed in any number of counterparts, and each such counterpart hereof shall
be deemed to be an original instrument, but all such counterparts together shall
constitute but one agreement. Facsimile counterpart signatures to this
Agreement shall be acceptable at the Closing if the originally executed
counterpart is delivered within a reasonable period thereafter.
SECTION 16. HEADINGS. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed to be a
part of this Agreement.
SECTION 17. NOUNS AND PRONOUNS. Whenever the context may require, any
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of names and pronouns shall include the
plural and vice-versa.
SECTION 18. PUBLIC DISCLOSURE. Except as may be required to comply with
applicable law, no party to this Agreement shall make or cause to be made any
press release or similar public announcement or communication concerning the
execution or performance of this Agreement unless specifically approved in
advance by the
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Corporation and a Majority of the Investors. Any public announcement required
by applicable law shall only be made after reasonable notice to the Corporation
and the Investors (which notice shall include a copy of the proposed
announcement).
SECTION 19. ADDITIONAL AGREEMENTS.
19.1. LISTING ON THE NASDAQ MARKET. Within 90 days of the Closing
Date, the Corporation agrees to use its reasonable best efforts to file a
listing application (the "Listing Application") with the Nasdaq Market to effect
the listing of all of the Conversion Shares and all of the Warrant Shares. The
Corporation shall pay all expenses and fees in connection with the Listing
Application.
19.2. COMPLIANCE COOPERATION. (a) Promptly after the end of
eachfiscal year (but in any event prior to February 28 of each year), the
Corporation shall provide to each Investor which is a small business investment
company licensed under the SBIA (an "SBIC Investor"), a written assessment, in
form and substance reasonably satisfactory to such SBIC Investor, of the
economic impact of the SBIC's Investors's financing hereunder, specifying the
full-time equivalent jobs created or retained, the impact of the financing on
the consolidated revenues and profits of the Business and on taxes paid by the
Business and its employees.
(b) At reasonable frequency, upon the request of an SBIC Investor or
any Affiliate of an SBIC Investor, the Corporation will (i) provide to such
Person such financial statements and other information as such Person may from
time to time reasonably request for the purpose of assessing the Corporation's
financial condition and (ii) furnish to such Person all information reasonably
requested by it in order for it to prepare and file SBA Form 468 and any other
information reasonably requested or required by any governmental agency
asserting jurisdiction over such Person.
(c) For a period of one year following the date hereof, the
Corporation will not change its business activity if such change would render
the Corporation ineligible to receive financial assistance from an SBIC Investor
under the SBIA and the regulations thereunder.
(d) The Corporation will at all times comply with the
non-discrimination requirements of 13 C.F.R., Parts 112, 113 and 117.
19.3. NOMINATION TO THE CORPORATION'S BOARD OF DIRECTORS . For so long
as at least 300,000 Preferred Shares remain outstanding, the Corporation agrees
that, if requested to do so by Investors holding a majority of the Preferred
Shares then outstanding at least 60 days prior to the mailing of its proxy
materials to stockholders (the "Nomination Date"), it will nominate Dr. Damion
Wicker to the Board of Directors in connection with its next upcoming annual
meeting of stockholders to which such proxy materials relate, PROVIDED, however,
that the Corporation shall not
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be required to nominate any other candidate in lieu of Dr. Damion Wicker for any
reason. The Company shall notify the Investors at least 10 days prior to the
Nomination Date; PROVIDED, however, that the failure to so notify the Investors
shall not result in any liability to the Corporation.
IN WITNESS WHEREOF, each of the undersigned has caused this Securities
Purchase Agreement to be executed as of the date first written above.
DIATIDE, INC.
By:
--------------------------------------
Name:
Title:
CHASE VENTURE CAPITAL ASSOCIATES, L.P.
BY: CHASE CAPITAL PARTNERS,
ITS GENERAL PARTNER
By:
--------------------------------------
Name:
Title:
MEDSOURCE S.A.
By:
--------------------------------------
Name:
Title:
NEOMED FUND LIMITED
By:
--------------------------------------
Name:
Title:
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SCHEDULE I
TO SECURITIES PURCHASE AGREEMENT
No. of Aggregate
Preferred No. of Purchase
Investors Shares Warrants Price
- --------- --------- -------- ----------
Chase Venture Capital Associates, L.P. 871,795 130,769 $8,500,000
380 Madison Avenue, 12th Floor
New York, New York 10017
Attention: Damion Wicker, M.D.
Medsource S.A. 307,692 46,154 3,000,000
c/o BB Medtech AG
Vodergasse 3
CH-8200 Schaffhausen
Switzerland
Neomed Fund Limited 30,769 4,615 300,000
c/o Bank of Bermuda Limited
Bank of Bermuda Building
P.O. Box HM 1020
Hamilton, Bermuda HMDX
Attention: Mr. Coln Mawer
Totals 1,210,256 181,538 $11,800,000
========= ======= ===========
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SCHEDULE 3.1: ORGANIZATION; POWER; AND AUTHORITY; QUALIFICATIONS -- None
SCHEDULE 3.2: AUTHORIZATION OF THE DOCUMENTS; NO CONFLICTS -- None
SCHEDULE 3.4: NO CONSENT OR APPROVAL REQUIRES -- None
SCHEDULE 3.7: DEFAULTS -- None
SCHEDULE 3.10: BROKERS -- None
SCHEDULE 3.11: REGISTRATION RIGHTS -- None
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Exhibit 99.2
REGISTRATION RIGHTS AGREEMENT
-----------------------------
This Agreement dated as of September 23, 1997 is entered into by and among
Diatide, Inc., a Delaware corporation (the "Company"), and the Stockholders
identified on Schedule I hereto (the "Stockholders").
In consideration of the mutual promises and covenants contained in this
Agreement, the Company and the Stockholders agree as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms
shall have the following respective meanings:
"COMMISSION" means the Securities and Exchange Commission, or any
other Federal agency at the time administering the Securities Act and the
Exchange Act.
"COMMON STOCK" means the common stock, $.001 par value per share,
of the Company.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, or any similar Federal statute, and the rules and regulations of the
Commission issued under such Act, as they each may, from time to time, be in
effect.
"OTHER REGISTRABLE SHARES" means at any time all shares of Common
Stock (other than Stockholder Registrable Shares) (i) currently or hereafter
issued by the Company with respect to which the holders thereof have the right
to require the Company to register such shares pursuant to the Securities Act;
(ii) which would otherwise be Stockholder Registrable Shares but for the second
to last sentence under the definition of Stockholder Registrable Shares; (iii)
shares of Common Stock held by Chase Venture Capital Associates, L.P. on the
date hereof and (iv) any other shares of Common Stock issued in respect of the
shares described in the preceding clauses (i), (ii) and (iii) (because of
stock-splits, stock dividends, reclassifications, recapitalizations, or similar
events); PROVIDED, HOWEVER, that shares of Common Stock shall cease to be Other
Registrable Shares (i) upon any sale pursuant to a Registration Statement or
Rule 144 under the Securities Act or (ii) with respect to shares which would be
Stockholder Registrable Shares but for the second to last sentence under the
definition of Stockholder Registrable Shares, upon any sale or transfer in any
manner to a person or entity which, by virtue of Section 13 of this Agreement,
is not entitled to the rights provided by this Agreement.
"REGISTRABLE SHARES" means at any time Stockholder Registrable
Shares and Other Registrable Shares.
<PAGE>
"REGISTRATION EXPENSES" means the expenses described in
Section 5.
"REGISTRATION STATEMENT" means a registration statement filed by
the Company with the Commission for a public offering and sale of securities of
the Company (other than a registration statement on Form S-8 or Form S-4, or
their successors, or any other form for a limited purpose, or any registration
statement covering only securities proposed to be issued in exchange for
securities or assets of another corporation).
"SECURITIES ACT" means the Securities Act of 1933, as amended, or
any successor Federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.
"SHARES" means the shares of Series A Convertible Preferred
Stock, par value $.01 per share, as more fully defined in Section 2.1 of the
Securities Purchase Agreement dated as of September 23, 1997 by and among the
Company and the Stockholders.
"STOCKHOLDER PRIORITY" shall mean at any time $11,800,000 less
any net proceeds received by or payable to the holders of the Stockholder
Registrable Shares sales of Registrable Shares or their respective predecessors
in interest pursuant to (i) sales of Registrable Shares (other than Other
Registrable Shares) pursuant to any prior required registration pursuant to
Section 2 hereof or incidental registration pursuant to Section 3 hereof, (ii)
sales of Registrable Shares (other than Other Registrable Shares) pursuant to
Rule 144 under the Securities Act, (iii) sales of Registrable Shares to an
unaffiliated party, or (iv) any event which is treated as a liquidation of the
Company (or any successor) pursuant to the terms of the Certificate of
Designations for the Shares.
"STOCKHOLDER REGISTRABLE SHARES" means (i) the shares of Common
Stock issued or issuable upon conversion or exchange of the Shares, (ii) the
shares of Common Stock issued or issuable upon the exercise of the Warrants to
purchase 181,538 shares of Common Stock (the "Warrant Shares") issued to the
Stockholders on September 23, 1997 (the "Warrants") and (iii) any other shares
of Common Stock issued in respect of the securities described in the preceding
clauses (i) and (ii) (because of stock splits, stock dividends,
reclassifications, recapitalizations, or similar events); PROVIDED, HOWEVER,
that shares of Common Stock which are Stockholder Registrable Shares shall cease
to be Stockholder Registrable Shares upon (i) any sale pursuant to a
Registration Statement or Rule 144 under the Securities Act, or (ii) upon any
sale in any manner to a person or entity which, by virtue of Section 13 of this
Agreement, is not entitled to the rights provided by this Agreement.
Notwithstanding the foregoing, on and after the time that the Stockholder
Priority is reduced to zero, all securities which are Stockholder Registrable
Shares shall cease to
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be Stockholder Registrable Shares and shall thereafter be included in the
definition of Other Registrable Shares. Wherever reference is made in this
Agreement to a request or consent of holders of a certain percentage of
Stockholder Registrable Shares, the determination of such percentage shall
include shares of Common Stock issuable upon conversion of the Shares and upon
exercise of the Warrants even if such conversion has not been effected or such
exercise has not been made.
"STOCKHOLDERS" means the Stockholders and any persons or entities
to whom the rights granted under this Agreement are transferred by any
Stockholder, their successors or assigns pursuant to Section 13 hereof.
2. REQUIRED REGISTRATIONS.
(a) At any time after October 1, 1998, a Stockholder or Stockholders
holding in the aggregate at least 51% of the Stockholder Registrable Shares
(determined without regard to the second to last sentence under the definition
of Stockholder Registrable Shares) may request, in writing, that the Company
effect the registration on Form S-1 or Form S-2 (or any successor form) of
Registrable Shares owned by such Stockholder or Stockholders with an aggregate
value of at least $5,000,000; PROVIDED, HOWEVER, that no Stockholder or
Stockholders shall have the right to request a registration pursuant to this
Section 2(a) at any time the Company is eligible to file a Registration
Statement on Form S-3 (or any successor form) or any other Form applicable to
secondary offerings.
(b) At any time after the Company becomes eligible to file a
Registration Statement on Form S-3 (or any successor form relating to secondary
offerings), a Stockholder or Stockholders holding in the aggregate at least 51%
of the Stockholder Registrable Shares (determined without regard to the second
to last sentence under the definition of Stockholder Registrable Shares) may
request the Company, in writing, to effect the registration on Form S-3 (or such
successor form), of Registrable Shares held by such holders with an aggregate
value of at least $1,000,000.
(c) In the case of a registration requested pursuant to this Section
2, if the holders initiating the registration intend to distribute the
Registrable Shares by means of an underwriting, they shall so advise the Company
in their request. In the event such registration is underwritten, the right of
other Stockholders to participate shall be conditioned on such Stockholders'
participation in such underwriting.
(d) Upon receipt of any request for registration pursuant to this
Section 2, the Company shall promptly give written notice of such proposed
registration to all Stockholders. Such Stockholders shall have the right, by
giving written notice to the Company within 30 days after the Company provides
its notice, to elect to have included in such registration such of their
Registrable Shares as such
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<PAGE>
Stockholders may request in such notice of election, subject in the case of an
underwriting to the approval of the underwriter managing the offering as
provided in Section 2(e) below and to the priorities set forth in Section 2(g)
below. Thereupon, the Company shall, as expeditiously as possible, use its best
efforts to effect the regis tration on Form S-1 or Form S-2 (or any successor
forms) in the case of a registration requested pursuant to Section 2(a) above,
or on Form S-3 (or such successor form), in the case of a registration requested
pursuant to Section 2(b) above, of all Registrable Shares which the Company has
been requested to register.
(e) Notwithstanding any other provision of this Section 2, if the
managing underwriter advises the Stockholders initiating a registration pursuant
to Section 2(c) in writing that marketing factors require a limitation of the
number of shares to be underwritten, then the Stockholders initiating the
registration shall so advise all other Stockholders holding Registrable Shares
which would otherwise be included in the underwriting and the number of
Registrable Shares that may be included in the underwriting shall be allocated
among all such Stockholders, including the Stockholders initiating the
registration, in proportion (as nearly as practicable) to the number of
Registrable Shares of the Company owned by each such Stockholder. If the
managing underwriter does not limit the number of Registrable Shares to be
underwritten subject to Section 2(g) below, the Company and other holders of
securities of the Company who have registration rights similar to those set
forth herein may include Common Stock for their respective accounts in such
registration if the managing underwriter states that such inclusion would not
adversely affect the offering of Registrable Shares for any reason and if the
number of Registrable Shares held by the Stockholders which would otherwise have
been included in such registration and underwriting will not thereby be limited
or reduced.
(f) The Company shall not be required to effect more than one
registration pursuant to Section 2(a) above ("Demand Registration Statement")
but may be required to effect Demand Registration Statements pursuant to Section
2(b) above without limitation other than as set forth in Section 2(b). In
addition, the Company shall not be required to effect more than one registration
pursuant to this Section 2 during any six month period. For purposes of this
Section 2(f), a Registration Statement shall not be counted as a Demand
Registration Statement until such time as such Registration Statement has been
declared effective by the Commission and has remained effective for 120 days, or
if sooner, until all the Registrable Shares registered thereunder have been
sold.
(g) The Company will include Common Stock in an underwritten Demand
Registration Statement required pursuant to Sections 2(a) or 2(b) above as
follows:
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(i) First, among the holders of Stockholders who have requested
to be included in such registration pursuant to Section 2
hereof, PRO RATA based upon the number of Registrable Shares
owned by each Stockholder.
(ii) Second, PRO RATA among the other persons or entities holding
Other Registrable Shares.
3. INCIDENTAL REGISTRATION.
(a) Whenever the Company proposes to file a Registration Statement
(other than pursuant to Section 2) at any time and from time to time, it will,
prior to such filing, give written notice to all Stockholders of its intention
to do so and, upon the written request of a Stockholder or Stockholders given
within 30 days after the Company provides such notice (which request shall state
the intended method of disposition of such Registrable Shares), the Company
shall use its best efforts to cause all Registrable Shares which the Company has
been requested by such Stockholder or Stockholders to register to be registered
under the Securities Act to the extent necessary to permit their sale or other
disposition in accordance with the intended methods of distribution specified in
the request of such Stockholder or Stockholders; provided that the Company shall
have the right to postpone or withdraw any registration effected pursuant to
this Section 3 without obligation to any Stockholder.
(b) In connection with any offering under this Section 3 involving an
underwriting, the Company shall not be required to include any Registrable
Shares in such underwriting unless the holders thereof accept the terms of the
underwriting as agreed upon between the Company and/or the holders of shares of
Common Stock or other securities of the Company who have registration rights
similar to those set forth in Section 2 hereof and who have initiated or are
participating in the offering pursuant to such rights (the "Initiating
Rightsholders") and the underwriters selected by it, and then only in such
quantity as will not, in the opinion of the underwriters, jeopardize the success
of the offering of securities proposed to be offered and sold by the Company.
If in the opinion of the managing underwriter the registration of all, or part
of, the Registrable Shares which the Stockholders have requested to be included
would materially and adversely affect such offering, then the Company shall be
required to include in the underwriting only that number of Registrable Shares
(as determined in accordance with the next sentence), if any, which the managing
underwriter believes may be sold without causing such adverse effect. If the
number of Registrable Shares to be included in the underwriting in accordance
with the foregoing is less than the total number of shares which the holders of
Registrable Shares have requested to be included, then (i) the Stockholders who
have requested registrations shall first be entitled to include all shares that
they have requested to be included to the extent necessary to reduce the
Stockholder Priority to
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<PAGE>
zero, (ii) the party or parties initiating the registration (i.e., the Company
or the Initiating Shareholders) shall then be entitled to include all shares
that they have requested to be registered and (iii) the Stockholders who have
requested registration and other holders of shares of Common Stock or other
securities of the Company entitled to include shares of Common Stock in such
registration on a parity with the Stockholders (other than the Shareholders who
shall be entitled to include the total number of shares they have requested as
provided in clause (i) and the Initiating Stockholders with respect to the
shares included as provided in clause (ii)) shall participate in the
underwriting pro rata based upon their total ownership of shares of Common Stock
of the Company.
4. REGISTRATION PROCEDURES. If and whenever the Company is required by
the provisions of this Agreement to use its best efforts to effect the
registration of any of the Registrable Shares under the Securities Act, the
Company shall:
(a) file with the Commission a Registration Statement with respect to
such Registrable Shares and use its best efforts to cause that Registration
Statement to become and remain effective for 120 days from the effective date or
such lesser period until all such Shares are sold;
(b) as expeditiously as possible prepare and file with the Commission
any amendments and supplements to the Registration Statement and the prospectus
included in the Registration Statement as may be necessary to keep the
Registration Statement effective for 120 days from the effective date or such
lesser period until all the Registrable Shares are sold;
(c) as expeditiously as possible furnish to each selling Stockholder
such reasonable numbers of copies of the prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents as the selling Stockholder may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Shares owned
by the selling Stockholder;
(d) as expeditiously as possible use its best efforts to register or
qualify the Registrable Shares covered by the Registration Statement under the
securities or Blue Sky laws of such states as the selling Stockholders shall
reasonably request, and do any and all other acts and things that may be
necessary or desirable to enable the selling Stockholders to consummate the
public sale or other disposition in such states of the Registrable Shares owned
by the selling Stockholder; PROVIDED, HOWEVER, that the Company shall not be
required in connection with this paragraph (d) to qualify as a foreign
corporation or execute a general consent to service of process in any
jurisdiction;
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<PAGE>
(e) as expeditiously as possible, cause all such Registrable Shares
to be listed on each securities exchange or quotation system on which similar
securities issued by the Corporation are then listed;
(f) promptly provide a transfer agent and registrar for all such
Registrable Shares not later than the effective date of such registration
statement;
(g) promptly make available for inspection by the sellers of such
Registrable Shares, any managing underwriter participating in any disposition
pursuant to such registration statement, and any attorney or accountant or other
agent retained by any such underwriter or selected by the sellers of Registrable
Shares, all financial and other records, pertinent corporate documents and
properties of the Company and cause the Company's officers, directors, employees
and independent accountants to supply all information reasonably requested by
any such seller, underwriter, attorney, accountant or agent in connection with
such registration statement;
(h) as expeditiously as possible, notify each seller of such
Registrable Shares, promptly after it shall receive notice thereof, of the time
when such registration statement has become effective or a supplement to any
prospectus forming a part of such registration statement has been filed; and
(i) as expeditiously as possible, notify each seller of such
Registrable Shares of any request by the Commission for the amending or
supplementing of such registration statement or prospectus or for additional
information.
If the Company has delivered preliminary or final prospectuses to the
selling Stockholders and after having done so the prospectus is amended to
comply with the requirements of the Securities Act, the Company shall promptly
notify the selling Stockholders and, if requested, the selling Stockholders
shall immediately cease making offers of Registrable Shares and return all
prospectuses to the Company. The Company shall promptly provide the selling
Stockholders with revised prospectuses and, following receipt of the revised
prospectuses, the selling Stockholders shall be free to resume making offers of
the Registrable Shares.
5. ALLOCATION OF EXPENSES. The Company will pay all Registration
Expenses for all registrations under Sections 2(a) and 2(b), and all
registrations under Section 3 of this Agreement; PROVIDED, HOWEVER, that if a
registration is withdrawn at the request of the Stockholders requesting such
registration (other than as a result of information concerning the business or
financial condition of the Company which is made known to the Stockholders after
the date on which such registration was requested, which withdrawal is made
within 10 days after such information is made known to the Stockholders) and if
the requesting Stockholders elect not to have such registration counted as a
registration requested under, as the case may be,
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<PAGE>
Sections 2(a) or 2(b), the requesting Stockholders shall pay the Registration
Expenses of such registration pro rata in accordance with the number of their
Registrable Shares included in such registration. Such expenses shall be borne
by the Stockholders on a pro rata basis, based on the number of Registrable
Shares included in such registration by each such Stockholder. For purposes of
this Section, the term "Registration Expenses" shall mean all expenses incurred
by the Company in complying with this Agreement including, without limitation,
all registration and filing fees, exchange listing fees, printing expenses, fees
and disbursements of counsel for the Company, state Blue Sky fees and expenses,
and the expense of any special audits incident to or required by any such
registration, but excluding underwriting discounts, selling commissions and the
fees and expenses of selling Stockholders' own counsel.
6. INDEMNIFICATION AND CONTRIBUTION. In the event of any registration of
any of the Registrable Shares under the Securities Act pursuant to this
Agreement, the Company will indemnify and hold harmless the seller of such
Registrable Shares, each underwriter of such Registrable Shares, and each other
person, if any, who controls such seller or underwriter within the meaning of
the Securities Act or the Exchange Act against any losses, claims, damages or
liabilities, joint or several, to which such seller, underwriter or controlling
person may become subject under the Securities Act, the Exchange Act, state
securities or Blue Sky laws or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement under which such Registrable Shares were
registered under the Securities Act, any preliminary prospectus or final
prospectus contained in the Registration Statement, or any amendment or
supplement to such Registration Statement, or arise out of or are based upon the
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and the
Company will reimburse such seller, underwriter and each such controlling person
for any legal or any other expenses reasonably incurred by such seller,
underwriter or controlling person in connection with investigating or defending
any such loss, claim, damage, liability or action; PROVIDED, HOWEVER, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any untrue statement
or omission made in such Registration Statement, preliminary prospectus or
prospectus, or any such amendment or supplement, in reliance upon and in
conformity with information furnished to the Company, in writing, by or on
behalf of such seller, underwriter or controlling person specifically for use in
the preparation thereof.
In the event of any registration of any of the Registrable Shares under the
Securities Act pursuant to this Agreement, each seller of Registrable Shares,
severally and not jointly, will indemnify and hold harmless the Company, each of
its directors and officers and each underwriter (if any) and each person, if
any, who controls the
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<PAGE>
Company or any such underwriter within the meaning of the Securities Act or the
Exchange Act, against any losses, claims, damages or liabilities, joint or
several, to which the Company, such directors and officers, underwriter or
controlling person may become subject under the Securities Act, Exchange Act,
state securities or Blue Sky laws or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement under which such Registrable Shares were
registered under the Securities Act, any preliminary prospectus or final
prospectus contained in the Registration Statement, or any amendment or
supplement to the Registration Statement, or arise out of or are based upon any
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, if the
statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of such seller,
specifically for use in connection with the preparation of such Registration
Statement, prospectus, amendment or supplement; PROVIDED, HOWEVER, that the
obligations of a Stockholder hereunder shall be limited to an amount equal to
the proceeds to such Stockholder of Registrable Shares sold as contemplated
herein.
Each party entitled to indemnification under this Section 6 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; PROVIDED, that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld); and, PROVIDED, FURTHER, that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Agreement except to the extent that the Indemnifying
Party is adversely affected by such failure. The Indemnified Party may
participate in such defense at such party's expense; PROVIDED, HOWEVER, that the
Indemnifying Party shall pay such expense if representation of such Indemnified
Party by the counsel retained by the Indemnifying Party would be inappropriate
due to actual or potential differing interests between the Indemnified Party and
any other party represented by such counsel in such proceeding; provided further
that in no event shall the Indemnifying Party be required to pay the expenses of
more than one law firm per jurisdiction as counsel for the Indemnified Party.
The Indemnifying Party also shall be responsible for the expenses of such
defense if the Indemnifying Party does not elect to assume such defense. No
Indemnifying Party, in the defense of any such claim or litigation shall, except
with the consent of each Indemnified Party, consent to entry of any judgment or
enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party of a
release from all liability in respect of such claim or litigation, and no
Indemnified Party shall consent to entry of any judgment or settle
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<PAGE>
such claim or litigation without the prior written consent of the Indemnifying
Party, which consent shall not be unreasonably withheld.
In order to provide for just and equitable contribution in circumstances in
which the indemnification provided for in this Section 6 is due in accordance
with its terms but for any reason is held to be unavailable to an Indemnified
Party in respect to any losses, claims, damages and liabilities referred to
herein, then the Indemnifying Party shall, in lieu of indemnifying such
Indemnified Party, contribute to the amount paid or payable by such Indemnified
Party as a result of such losses, claims, damages or liabilities to which such
party may be subject in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and the Stockholders on the other
in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company and the Stockholders shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of material fact related to information supplied by the Company
or the Stockholders and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Stockholders agree that it would not be just and equitable
if contribution pursuant to this Section 6 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above. Notwithstanding the provisions
of this paragraph of Section 6, in no case shall any one Stockholder be liable
or responsible for any amount in excess of the net proceeds received by such
Stockholder from the offering of Registrable Shares; PROVIDED, HOWEVER, that no
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. Any party
entitled to contribution will, promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of which a claim
for contribution may be made against another party or parties under this
Section, notify such party or parties from whom contribution may be sought, but
the omission so to notify such party or parties from whom contribution may be
sought shall not relieve such party from any other obligation it or they may
have thereunder or otherwise under this Section. No party shall be liable for
contribution with respect to any action, suit, proceeding or claim settled
without its written consent.
7. INDEMNIFICATION WITH RESPECT TO UNDERWRITTEN OFFERING. In the event
that Registrable Shares are sold pursuant to a Registration Statement in an
underwritten offering pursuant to Section 2(c), the Company agrees to (a) enter
into an underwriting agreement containing customary representations and
warranties with respect to the business and operations of an issuer of the
securities being registered and customary covenants and agreements to be
performed by such issuer, including without limitation customary provisions with
respect to indemnification by
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the Company of the underwriters of such offering; (b) engage reputable legal
counsel to render customary opinions and advice with respect to the Registration
Statement and (c) engage a nationally recognized public accounting firm to issue
customary "cold comfort letters" and advice with respect to the Registration
Statement.
8. INFORMATION BY HOLDER. Each holder of Registrable Shares included in
any registration shall furnish to the Company such information regarding such
holder and the distribution proposed by such holder as the Company may
reasonably request in writing and as shall be required in connection with any
registration, qualification or compliance referred to in this Agreement. In
addition, each person that is, becomes or was a Stockholder at any time under
this Agreement, shall promptly furnish to the Company upon request, information
relating to such Stockholder's and it's affiliates holdings of Company
securities, including, without limitation, the number of shares owned by such
Stockholder and its affiliates, the date of such holdings, the date and number
of shares transferred or sold at any time and the name of the transferee, and
the purchase price (or net consideration, if applicable) received by such
Stockholder upon the transfer of any Company security.
9. LIMITATIONS ON REGISTRATION RIGHTS.
(a) Notwithstanding the provisions of Section 2, the Company may by
written notice to the Stockholders (x) delay filing a Demand Registration
Statement requested by a Stockholder (a "Delayed Demand Registration
Statement") or (y) require that the Stockholders immediately cease sales of
shares under any effective Registration Statement ("Suspended Registration
Statement"), in any period during which the Company is engaged in (i) a
registered public offering of the Company, or (ii) any activity or transaction
or preparations or negotiations for any activity or transaction ("Company
Activity") that the Company desires to keep confidential for business reasons,
if the Company determines in good faith that the public disclosure requirements
imposed on the Company under the Securities Act in connection with any such
Registration Statement would require disclosure of the Company Activity;
provided, that, (i) in the aggregate, all such delays of filing Delayed Demand
Registration Statements and/or cessations of sales under Suspended Registration
Statements shall not exceed 150 days in any 12-month period and (ii) the Company
shall cause any suspended Registration Statement to remain effective for one
additional day for each day, or any portion of a day, that the Stockholders were
required to cease sales of shares thereunder.
(b) If the Company requires the Stockholders to cease sales of shares
pursuant to Section 9(a) above, the Company shall, as promptly as practicable
following the termination of the circumstance which entitled the Company to do
so, give written notice to the Stockholders that such circumstance has
terminated and that they may resume sales pursuant to the Suspended Registration
Statement. If the prospectus included in such Suspended Registration Statement
has been amended to
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comply with the requirements of the Securities Act, the Company shall enclose
such revised prospectus with the notice to Stockholders given pursuant to this
Section 9(b), and the Stockholders shall make no offers or sales of shares
pursuant to such Suspended Registration Statement other than by means of such
revised prospectus.
10. "STAND-OFF" AGREEMENT. Each Stockholder, if requested by the Company
and an underwriter of Common Stock or other securities of the Company, shall
agree not to sell or otherwise transfer or dispose of any Registrable Shares or
other securities of the Company held by such Stockholder (except shares
permitted to be sold pursuant to Section 2 or 3 of this Agreement) for a
specified period of time (not to exceed 90 days) following the effective date of
a Registration Statement pursuant to which such Stockholder or an affiliate
thereof has registered shares ("Stand-Off Agreement"). The Company may impose
stop-transfer instructions with respect to the Registrable Shares or other
securities subject to the foregoing restriction until the end of the stand-off
period. Nothing in this Section 10 shall prohibit transfers to affiliates
pursuant to Section 13 hereof.
11. RULE 144 REQUIREMENTS. The Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;
(b) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and
(c) furnish to any holder of Registrable Shares upon request a
written statement by the Company as to its compliance with the reporting
requirements of said Rule 144, and of the Securities Act and the Exchange Act, a
copy of the most recent annual or quarterly report of the Company, and such
other reports and documents of the Company as such holder may reasonably request
to avail itself of any similar rule or regulation of the Commission allowing it
to sell any such securities without registration.
12. MERGERS, ETC. The Company shall not, directly or indirectly, enter
into any merger, consolidation or reorganization in which the Company shall not
be the surviving corporation unless the proposed surviving corporation shall,
prior to such merger, consolidation or reorganization, agree in writing to
assume the obligations of the Company under this Agreement, and for that purpose
references hereunder to "Registrable Shares" shall be deemed to be references to
the securities which the Stockholders would be entitled to receive in exchange
for Registrable Shares under any such merger, consolidation or reorganization;
PROVIDED, HOWEVER, that the provisions of this Section 12 shall not apply in the
event of any merger, consolidation or reorganization in which the Company is not
the surviving corporation if all
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<PAGE>
Stockholders are entitled to receive in exchange for their Registrable Shares
consideration consisting solely of (i) cash, (ii) securities of the acquiring
corporation which may be immediately sold to the public without registration
under the Securities Act, or (iii) securities of the acquiring corporation which
the acquiring corporation has agreed to register within 90 days of completion of
the transaction for resale to the public pursuant to the Securities Act.
13. TRANSFERS OF CERTAIN RIGHTS.
(a) This Agreement, and the rights and obligations of each
Stockholder hereunder, may be assigned by such Stockholder to another
Stockholder, to any affiliate of such Stockholder or to any person or entity
acquiring at least 300,000 Stockholder Registrable Shares (determined without
regard to the second to last sentence under the definition of the Stockholder
Registrable Shares) (such number being subject to adjustment for any stock
dividend, stock split, subdivision, combination or other recapitalization of the
Common Stock of the Company); provided, however, that the transferee provides
written notice of such assignment to the Company stating its name and address
and identifying the securities with respect to which such rights are being
assigned; and provided further, that the Company receives the written instrument
provided in subparagraph (b) below. Any transferee to whom a transfer is made
in accordance with the immediately preceding sentence shall be deemed a
Stockholder for purposes of this Agreement.
(b) Any transferee (other than a Stockholder) to whom rights
hereunder 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 Stockholders under this Agreement to the same extent as
if such transferee were a party thereto.
(c) A transferee to whom rights are transferred pursuant to this
Section 13 may not again transfer such rights to any other person or entity,
other than as provided in this Section 13.
14. GENERAL.
(a) NOTICES. All notices, requests, consents, and other
communications under this Agreement shall be in writing and shall be delivered
by hand, sent by a reputable overnight business courier or mailed by first class
certified or registered mail, return receipt requested, postage prepaid:
If to the Company, at Nine Delta Drive, Londonderry, New Hampshire 03053,
Attention: President, or at such other address or addresses as may have been
furnished in writing by the Company to the Stockholders, with a copy to Hale and
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<PAGE>
Dorr LLP, 60 State Street, Boston, Massachusetts 02109, Attention: Jeffrey N.
Carp, Esq.
If to the Stockholders, to their respective addresses set forth on Schedule
I hereto, or at such other address or addresses as may have been furnished to
the Company in writing by such Stockholders, with a copy to O'Sullivan, Graev &
Karabell, LLP, 30 Rockefeller Plaza, New York, New York 10112, Attention: John
J. Suydam Esq.
Notices provided in accordance with this Section 14(a) shall be deemed
delivered (i) upon personal delivery if notice is hand delivered, (ii) on the
next business day if the notice is given by a reputable overnight business
courier and (iii) three business days after deposit in the United States mail if
sent by United States mail return receipt requested.
(b) 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.
(c) NO THIRD PARTY BENEFICIARY. This Agreement shall not confer any
rights or remedies on any person or entity other than the Company and the
Stockholders.
(d) AMENDMENTS AND WAIVERS. 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 Stockholders
holding a majority of the Stockholder Registrable Shares (determined without
regard to the second to last sentence under the definition of Stockholder
Registrable Shares) held by all of the Stockholders; PROVIDED, that this
Agreement may be amended with the consent of the holders of less than all
Stockholder Registrable Shares only in a manner which affects all Stockholder
Registrable Shares in the same fashion. 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.
(e) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall be one and the same document.
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<PAGE>
(f) SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
(g) GOVERNING LAW: This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, this Agreement has been executed on the day and year
first above written by the parties listed below:
DIATIDE, INC.
By:
------------------------------------
Name:
Title:
CHASE VENTURE CAPITAL
ASSOCIATES, L.P.
By: Chase Capital Partners,
its General Partner
By:
------------------------------------
Name:
Title:
MEDSOURCE S.A.
By:
------------------------------------
Name:
Title:
NEOMED FUND LIMITED
By:
------------------------------------
Name:
Title:
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<PAGE>
SCHEDULE I
----------
INVESTORS
- ---------
Chase Venture Capital Associates, L.P.
380 Madison Avenue, 12th Floor
New York, New York 10017
Attention: Damion Wicker, M.D.
Medsource S.A.
c/o BB Medtech AG
Vodergasse 3
CH-8200 Schaffhausen
Switzerland
Neomed Fund Limited
c/o Bank of Bermuda Limited
Bank of Bermuda Building
P.O. Box HM 1020
Hamilton, Bermuda HMDX
Attention: Mr. Colin Mawer
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<PAGE>
Exhibit 99.3
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUED UPON ITS
EXERCISE ARE SUBJECT TO THE RESTRICTIONS ON
TRANSFER SET FORTH IN SECTION 4 OF THIS WARRANT
-----------------------------------------------------------
Warrant No. 1 Number of Shares: 130,769
(subject to adjustment)
Date of Issuance: September 23, 1997
DIATIDE, INC.
-------------
COMMON STOCK PURCHASE WARRANT
------------------------------
(Void after September 23, 1999)
Diatide, Inc., a Delaware corporation (the "Company"), for value received,
hereby certifies that Chase Venture Capital Associates, L.P., a Delaware limited
partnership, or its registered assigns (the "Registered Holder"), is entitled,
subject to the terms set forth below, to purchase from the Company, at any time
or from time to time on or after the date of issuance and on or before September
23, 1999 at not later than 5:00 p.m. (Boston, Massachusetts time), 130,769
shares of Common Stock, $.001 par value per share, of the Company, at a purchase
price of $11.70 per share. The shares purchasable upon exercise of this Warrant,
and the purchase price per share, each as adjusted from time to time pursuant to
the provisions of this Warrant, are hereinafter referred to as the "Warrant
Shares" and the "Purchase Price," respectively.
1. EXERCISE.
(a) Subject to compliance by the Registered Holder of this Warrant
and the Company with the requirements of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, if applicable, this Warrant may be exercised by the
Registered Holder, in whole or in part, by surrendering this Warrant, with the
purchase form appended hereto as EXHIBIT I duly executed by such Registered
Holder or by such Registered Holder's duly authorized attorney, at the principal
office of the Company, or at such other office or agency as the Company may
designate, accompanied by payment in full, in lawful money of the United States
(or surrender of Warrants as provided below), of the Purchase Price payable in
respect of the number of Warrant Shares purchased upon such exercise.
<PAGE>
(b) The Registered Holder may, at its option to the extent it holds
sufficient warrants in-the-money, to elect to pay some or all of the Purchase
Price payable upon an exercise of this Warrant by cancelling a portion of this
Warrant exercisable for such number of Warrant Shares as is determined by
dividing (i) the total Purchase Price payable in respect of the number of
Warrant Shares being purchased upon such exercise by (ii) the excess of the Fair
Market Value per share of Common Stock as of the effective date of exercise, as
determined pursuant to subsection 1(c) below (the "Exercise Date") over the
Purchase Price per share. If the Registered Holder wishes to exercise this
Warrant pursuant to this method of payment with respect to the maximum number of
Warrant Shares purchasable pursuant to this method, then the number of Warrant
Shares so purchasable shall be equal to the total number of Warrant Shares,
minus the product obtained by multiplying (x) the total number of Warrant Shares
by (y) a fraction, the numerator of which shall be the Purchase Price per share
and the denominator of which shall be the Fair Market Value per share of Common
Stock as of the Exercise Date. The Fair Market Value per share of Common Stock
shall be determined as follows:
If the Common Stock is listed on a national securities exchange, the NASDAQ
National Market System, the NASDAQ system, or another nationally recognized
exchange or trading system as of the Exercise Date, the Fair Market Value per
share of Common Stock shall be deemed to be the last reported sale price per
share of Common Stock thereon on the Exercise Date; or, if no such price is
reported on such date, such price on the next preceding business day (provided
that if no such price is reported on the next preceding business day, the Fair
Market Value per share of Common Stock shall be determined pursuant to the next
paragraph).
If the Common Stock is not listed on a national securities exchange, the
NASDAQ National Market System, the NASDAQ system or another nationally
recognized exchange or trading system as of the Exercise Date, the Fair Market
Value per share of Common Stock shall be deemed to be the amount most recently
determined by the Board of Directors to represent the fair market value per
share of the Common Stock (including without limitation a determination for
purposes of granting Common Stock options or issuing Common Stock under an
employee benefit plan of the Company); and, upon request of the Registered
Holder, the Board of Directors (or a representative thereof) shall promptly
notify the Registered Holder of the Fair Market Value per share of Common Stock.
Notwithstanding the foregoing, if the Board of Directors has not made such a
determination within the three-month period prior to the Exercise Date, then
(A) the Fair Market Value per share of Common Stock shall be the amount next
determined by the Board of Directors to represent the fair market value per
share of the Common Stock (including without limitation a determination for
purposes of granting Common Stock options or issuing Common Stock under an
employee benefit plan of the Company), (B) the Board of Directors shall make
such a determination within 15 days of a request by the Registered Holder that
it do so, and (C) the exercise of this
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<PAGE>
Warrant pursuant to this subsection 1(b) shall be delayed until such
determination is made.
(c) Each exercise of this Warrant shall be deemed to have been
effected immediately prior to the close of business on the day on which this
Warrant shall have been surrendered to the Company as provided in
subsection 1(a) above. At such time, the person or persons in whose name or
names any certificates for Warrant Shares shall be issuable upon such exercise
as provided in subsection 1(c) below shall be deemed to have become the holder
or holders of record of the Warrant Shares represented by such certificates.
(d) As soon as practicable after the exercise of this Warrant in full
or in part, and in any event within 10 days thereafter, the Company, at its
expense, will cause to be issued in the name of, and delivered to, the
Registered Holder, or as such Holder (upon payment by such Holder of any
applicable transfer taxes) may direct:
(i) a certificate or certificates for the number of full Warrant
Shares to which such Registered Holder shall be entitled upon such exercise
plus, in lieu of any fractional share to which such Registered Holder would
otherwise be entitled, cash in an amount determined pursuant to Section 3
hereof; and
(ii) in case such exercise is in part only, a new warrant or
warrants (dated the date hereof) of like tenor, calling in the aggregate on the
face or faces thereof for the number of Warrant Shares equal (without giving
effect to any adjustment therein) to the number of such shares called for on the
face of this Warrant minus the sum of (a) the number of such shares purchased by
the Registered Holder upon such exercise plus, (b) the number of Warrant Shares
(if any) covered by the portion of this Warrant cancelled in payments of the
Purchase Price payable upon such exercise pursuant to subsection 1(b) above.
2. ADJUSTMENTS.
(a) If outstanding shares of the Company's Common Stock shall be
subdivided into a greater number of shares or a dividend in Common Stock shall
be paid in respect of Common Stock, the Purchase Price in effect immediately
prior to such subdivision or at the record date of such dividend shall
simultaneously with the effectiveness of such subdivision or immediately after
the record date of such dividend be proportionately reduced. If outstanding
shares of Common Stock shall be combined into a smaller number of shares, the
Purchase Price in effect immediately prior to such combination shall,
simultaneously with the effectiveness of such combination, be proportionately
increased. When any adjustment is required to be made in the Purchase Price,
the number of Warrant Shares purchasable upon the exercise of this Warrant shall
be changed to the number determined by dividing (i) an amount equal to the
number of shares issuable upon the exercise of this
-3-
<PAGE>
Warrant immediately prior to such adjustment, multiplied by the Purchase Price
in effect immediately prior to such adjustment, by (ii) the Purchase Price in
effect immediately after such adjustment.
(b) If there shall occur any capital reorganization or
reclassification of the Company's Common Stock (other than a change in par value
or a subdivision or combination as provided for in subsection 2(a) above), or
any consolidation or merger of the Company with or into another corporation, or
a transfer of all or substantially all of the assets of the Company, then, as
part of any such reorganization, reclassification, consolidation, merger or
sale, as the case may be, lawful provision shall be made so that the Registered
Holder of this Warrant shall have the right thereafter to receive upon the
exercise hereof the kind and amount of shares of stock or other securities or
property which such Registered Holder would have been entitled to receive if,
immediately prior to any such reorganization, reclassification, consolidation,
merger or sale, as the case may be, such Registered Holder had held the number
of shares of Common Stock which were then purchasable upon the exercise of this
Warrant. In any such case, appropriate adjustment (as reasonably determined in
good faith by the Board of Directors of the Company) shall be made in the
application of the provisions set forth herein with respect to the rights and
interests thereafter of the Registered Holder of this Warrant, such that the
provisions set forth in this Section 2 (including provisions with respect to
adjustment of the Purchase Price) shall thereafter be applicable, as nearly as
is reasonably practicable, in relation to any shares of stock or other
securities or property thereafter deliverable upon the exercise of this Warrant.
(c) When any adjustment is required to be made in the Purchase Price,
the Company shall promptly mail to the Registered Holder a certificate setting
forth the Purchase Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment. Such certificate shall also
set forth the kind and amount of stock or other securities or property into
which this Warrant shall be exercisable following the occurrence of any of the
events specified in subsection 2(a) or (b) above.
3. FRACTIONAL SHARES. The Company shall not be required upon the
exercise of this Warrant to issue any fractional shares, but shall make an
adjustment therefor in cash on the basis of the Fair Market Value per share of
Common Stock, as determined pursuant to subsection 1(b) above.
4. REQUIREMENTS FOR TRANSFER.
(a) This Warrant and the Warrant Shares shall not be sold or
transferred unless either (i) they first shall have been registered under the
Securities Act of 1933, as amended (the "Act"), or (ii) the Company first shall
have been furnished with an opinion of legal counsel, reasonably satisfactory to
the Company,
-4-
<PAGE>
to the effect that such sale or transfer is exempt from the registration
requirements of the Act.
(b) Notwithstanding the foregoing, no registration or opinion of
counsel shall be required for (i) a transfer by a Registered Holder which is a
partnership to a partner of such partnership or a retired partner of such
partnership who retires after the date hereof, or to the estate of any such
partner or retired partner, if the transferee agrees in writing to be subject to
the terms of this Section 4, or (ii) a transfer made in accordance with Rule 144
under the Act.
(c) Each certificate representing Warrant Shares shall bear a legend
substantially in the following form:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may not
be offered, sold or otherwise transferred, pledged or hypothecated
unless and until such securities are registered under such Act or an
opinion of counsel satisfactory to the Company is obtained to the
effect that such registration is not required."
The foregoing legend shall be removed from the certificates representing any
Warrant Shares, at the request of the holder thereof, at such time as they
become eligible for resale pursuant to Rule 144(k) under the Act.
5. NO IMPAIRMENT. The Company will not, by amendment of its charter or
through reorganization, consolidation, merger, dissolution, sale of assets or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant, but will at all times in good faith assist
in the carrying out of all such terms and in the taking of all such action as
may be necessary or appropriate in order to protect the rights of the holder of
this Warrant against impairment.
6. LIQUIDATING DIVIDENDS. If the Company pays a dividend or makes a
distribution on the Common 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 Common Stock (a
"Liquidating Dividend"), then the Company will pay or distribute to the
Registered Holder of this Warrant, upon the exercise hereof, in addition to the
Warrant Shares purchased upon such exercise, the Liquidating Dividend which
would have been paid to such Registered Holder if he had been the owner of
record of such Warrant Shares immediately prior to the date on which a record is
taken for such Liquidating Dividend or, if no record is taken, the date as of
which the record holders of Common Stock entitled to such dividends or
distribution are to be determined.
-5-
<PAGE>
7. NOTICES OF RECORD DATE, ETC. In case:
(a) the Company shall take a record of the holders of its Common
Stock (or other stock or securities at the time deliverable upon the exercise of
this Warrant) 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; or
(b) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the surviving entity), or any
transfer of all or substantially all of the assets of the Company; or
(c) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
then, and in each such case, the Company will mail or cause to be mailed to the
Registered Holder of this Warrant 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 or
winding-up 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 the exercise of this Warrant) shall be entitled to
exchange their shares of Common Stock (or such other stock or securities) for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, transfer, dissolution, liquidation or
winding- up. Such notice shall be mailed at least ten (10) days prior to the
record date or effective date for the event specified in such notice.
8. RESERVATION OF STOCK. The Company will at all times reserve and keep
available, solely for issuance and delivery upon the exercise of this Warrant,
such number of Warrant Shares and other stock, securities and property, as from
time to time shall be issuable upon the exercise of this Warrant.
9. EXCHANGE OF WARRANTS. Upon the surrender by the Registered Holder of
any Warrant or Warrants, properly endorsed, to the Company at the principal
office of the Company, the Company will, subject to the provisions of Section 4
hereof, issue and deliver to or upon the order of such Holder, at the Company's
expense, a new Warrant or Warrants of like tenor, in the name of such Registered
Holder or as such Registered Holder (upon payment by such Registered Holder of
any applicable transfer taxes) may direct, calling in the aggregate on the face
or faces thereof for the
-6-
<PAGE>
number of shares of Common Stock called for on the face or faces of the Warrant
or Warrants so surrendered.
10. REPLACEMENT OF WARRANTS. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of an
indemnity agreement (with surety if reasonably required) in an amount reasonably
satisfactory to the Company, or (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will issue, in lieu thereof, a new
Warrant of like tenor.
11. TRANSFERS, ETC.
(a) The Company will maintain a register containing the names and
addresses of the Registered Holders of this Warrant. Any Registered Holder may
change its or his address as shown on the warrant register by written notice to
the Company requesting such change.
(b) Subject to the provisions of Section 4 hereof, this Warrant and
all rights hereunder are transferable, in whole or in part, upon surrender of
this Warrant with a properly executed assignment (in the form of EXHIBIT II
hereto) at the principal office of the Company.
(c) Until any transfer of this Warrant is made in the warrant
register, the Company may treat the Registered Holder of this Warrant as the
absolute owner hereof for all purposes; PROVIDED, HOWEVER, that if and when this
Warrant is properly assigned in blank, the Company may (but shall not be
obligated to) treat the bearer hereof as the absolute owner hereof for all
purposes, notwithstanding any notice to the contrary.
12. MAILING OF NOTICES, ETC. All notices and other communications from
the Company to the Registered Holder of this Warrant shall be mailed by
first-class certified or registered mail, postage prepaid, to the address
furnished to the Company in writing by the last Registered Holder of this
Warrant who shall have furnished an address to the Company in writing. All
notices and other communications from the Registered Holder of this Warrant or
in connection herewith to the Company shall be mailed by first-class certified
or registered mail, postage prepaid, to the Company at its principal office set
forth below. If the Company should at any time change the location of its
principal office to a place other than as set forth below, it shall give prompt
written notice to the Registered Holder of this Warrant and thereafter all
references in this Warrant to the location of its principal office at the
particular time shall be as so specified in such notice.
-7-
<PAGE>
13. NO RIGHTS AS STOCKHOLDER. Until the exercise of this Warrant, the
Registered Holder of this Warrant shall not have or exercise any rights by
virtue hereof as a stockholder of the Company.
14. CHANGE OR WAIVER. This Warrant may be one of a series of Warrants
issued by the Company, all dated the date hereof and of like tenor, except as to
the number of shares of Common Stock subject thereto (collectively, the "Company
Warrants"). Any term of this Warrant may be amended or waived upon the written
consent of the Company and the holders of Company Warrants representing at least
51% of the number of shares of Common Stock then subject to outstanding Company
Warrants; PROVIDED that any such amendment or waiver must apply to all Company
Warrants then outstanding; and PROVIDED FURTHER that the number of Warrant
Shares subject to this Warrant and the Purchase Price of this Warrant may not be
amended, and the right to exercise this Warrant may not be waived, without the
written consent of the holder of this Warrant (it being agreed that an amendment
to or waiver under any of the provisions of Section 2 of this Warrant shall not
be considered an amendment of the number of Warrant Shares or the Purchase
Price).
15. HEADINGS. The headings in this Warrant are for purposes of reference
only and shall not limit or otherwise affect the meaning of any provision of
this Warrant.
16. GOVERNING LAW. This Warrant will be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts.
DIATIDE, INC.
By:________________________________
[Corporate Seal] Title:_____________________________
ATTEST:
_________________________
-8-
<PAGE>
EXHIBIT I
PURCHASE FORM
To: Diatide, Inc. Dated:______________
The undersigned, pursuant to the provisions set forth in the attached
Warrant (No. 1), hereby irrevocably elects to purchase _____ shares of the
Common Stock covered by such Warrant. The undersigned herewith makes payment of
$____________ in cash, representing the full purchase price for such shares at
the price per share provided for in such Warrant.
Signature:__________________________
Address:____________________________
____________________________
<PAGE>
EXHIBIT II
ASSIGNMENT FORM
FOR VALUE RECEIVED, Chase Venture Capital Associates, L.P. hereby sells,
assigns and transfers all of the rights of the undersigned under the attached
Warrant (No. 1) with respect to the number of shares of Common Stock covered
thereby set forth below, unto:
NAME OF ASSIGNEE ADDRESS NO. OF SHARES
- ---------------- ------- -------------
Dated:______________ Signature:_______________________________
Dated:______________ Witness:_________________________________
<PAGE>
Exhibit 99.4
Certificate of Designations of the Preferred Stock
of Diatide, Inc.
To be Designated
Series A Convertible Preferred Stock
--------------------------------------------------
Diatide, Inc., a Delaware corporation (the "Corporation"), pursuant to
authority conferred on the Board of Directors of the Corporation by the Restated
Certificate of Incorporation ("Certificate of Incorporation") and in accordance
with the provisions of Section 151 of the General Corporation Law of the State
of Delaware, certifies that the Board of Directors of the Corporation, at a
meeting duly called and held, at which a quorum was present and acting
throughout, duly adopted the following resolution:
RESOLVED: That, pursuant to the authority expressly granted to and vested
in the Board of Directors of the Corporation in accordance with the provisions
of its Certificate of Incorporation, a series of Preferred Stock of the
Corporation be and hereby is established, consisting of 1,300,000 shares, to be
designated "Series A Convertible Preferred Stock" (the "Series A Preferred
Stock"); that the Board of Directors be and hereby is authorized to issue such
shares of Series A Preferred Stock from time to time and for such consideration
and on such terms as the Board of Directors shall determine; and that, subject
to the limitations provided by law and by the Certificate of Incorporation, the
powers, designations, preferences and relative, participating, optional or other
special rights of, and the qualifications, limitations or restrictions upon, the
Series A Preferred Stock shall be as follows:
1. DIVIDENDS. The Corporation shall not declare or pay any distributions
on shares of Common Stock until the holders of the Series A Preferred Stock then
outstanding shall have first received, or simultaneously receive, a distribution
on each outstanding share of Series A Preferred Stock in an amount at least
equal to the product of (i) the per share amount, if any, of the dividends or
other distributions to be declared, paid or set aside for the Common Stock,
multiplied by (ii) the number of whole shares of Common Stock into which such
share of Series A Preferred Stock is then convertible.
2. LIQUIDATION, DISSOLUTION OR WINDING UP; CERTAIN MERGERS,
CONSOLIDATIONS AND ASSET SALES.
a. In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of shares of Series A
Preferred Stock then outstanding shall be entitled to be paid out of the assets
of the Corporation legally available for distribution to its stockholders, after
and subject to the payment in full of all amounts required to be distributed to
the holders of any other class or series of stock of the Corporation ranking on
liquidation prior and in preference to the Series A Preferred Stock
(collectively referred to as "Senior Preferred
<PAGE>
Stock"), but before any payment shall be made to the holders of Common Stock or
any other class or series of stock ranking on liquidation junior to the Series A
Preferred Stock (such Common Stock and other stock being collectively referred
to as "Junior Stock") by reason of their ownership thereof, an amount equal to
the greater of (i) $9.75 per share plus declared but unpaid dividends, if any,
or (ii) such amount per share as would have been payable had each such share
been converted into Common Stock pursuant to Section 4 immediately prior to such
liquidation, dissolution or winding up. If upon any such liquidation,
dissolution or winding up of the Corporation the remaining assets of the
Corporation available for distribution to its stockholders shall be insufficient
to pay the holders of shares of Series A Preferred Stock the full amount to
which they shall be entitled, the holders of shares of Series A Preferred Stock
and any class or series of stock ranking on liquidation on a parity with the
Series A Preferred Stock shall share ratably in any distribution of the
remaining assets and funds of the Corporation in proportion to the respective
amounts which would otherwise be payable in respect of the shares held by them
upon such distribution if all amounts payable on or with respect to such shares
were paid in full.
b. After the payment of all preferential amounts required to be paid
to the holders of Senior Preferred Stock, Series A Preferred Stock and any other
class or series of stock of the Corporation ranking on liquidation on a parity
with the Series A Preferred Stock, upon the dissolution, liquidation or winding
up of the Corporation, the holders of shares of Junior Stock then outstanding
shall be entitled to receive the remaining assets and funds of the Corporation
available for distribution to its stockholders.
c. The merger or consolidation of the Corporation into or with
another corporation (except a merger or consolidation in which the holders of
capital stock of the Corporation immediately prior to such merger or
consolidation continue to hold immediately following such merger or
consolidation at least 51% by voting power of the capital stock of the surviving
corporation), the sale of all or substantially all the assets of the Corporation
or the approval by the Company's Board of Directors of a transaction or series
of related transactions in connection with the acquisition by any person or
group of affiliated persons of capital stock of the Corporation having a
majority of the votes upon an election of directors, shall be deemed to be a
liquidation, dissolution or winding up of the Corporation for purposes of this
Section 2(c) unless the holders of at least a majority of the then outstanding
shares of Series A Preferred Stock and any other class or series of stock
ranking on liquidation on a parity with the Series A Preferred Stock, acting
together as a single class, elect otherwise by giving written notice thereof to
the Corporation at least 10 days before the effective date of such event;
PROVIDED, HOWEVER, that a merger of the Corporation shall not be deemed to be a
liquidation if the holders of the Series A Preferred Stock
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would receive in such transaction for each share of Series A Preferred Stock,
upon conversion of such share of Series A Preferred Stock, cash or marketable
securities (including freely tradeable shares of common stock of the acquiring
company) with a fair market value greater than the liquidation value of such
share of Series A Preferred Stock. If the foregoing written notice is given,
the provisions of Section 5(c) shall apply. The value of any property, rights
or other securities distributed or deemed distributed shall be determined in
good faith by the Board of Directors of the Corporation.
3. VOTING.
(a) Each holder of outstanding shares of Series A Preferred Stock
shall be entitled to the number of votes equal to the number of whole shares of
Common Stock into which the shares of Series A Preferred Stock held by such
holder are then convertible (as adjusted from time to time pursuant to Section
5(a) hereof), at each meeting of stockholders of the Corporation (and written
actions of stockholders in lieu of meetings) with respect to any and all matters
presented to the stockholders of the Corporation for their action or
consideration. Except as provided by law, by the provisions of Subsection 3(b)
below or by the provisions establishing any other series of Series Preferred
Stock, holders of Series A Preferred Stock and of any other outstanding series
of Series Preferred Stock shall vote together with the holders of Common Stock
as a single class.
(b) The Corporation shall not amend, alter or repeal the preferences,
special rights or other powers of the Series A Preferred Stock so as to affect
adversely the Series A Preferred Stock, without the written consent or
affirmative vote of the holders of a majority of the then outstanding shares of
Series A Preferred Stock, given in writing or by vote at a meeting, consenting
or voting (as the case may be) separately as a class. For this purpose, without
limiting the generality of the foregoing, the issuance of any shares of capital
stock which are required to be redeemed by the Corporation, which provide for
dividends (other than dividends substantially similar to those set forth in
Section 1 hereof) or with a preference or priority over the Series A Preferred
Stock as to the right to receive either dividends or amounts distributable upon
liquidation, dissolution or winding up of the Corporation shall be deemed to
affect adversely the Series A Preferred Stock, and the authorization of any
shares of capital stock on a parity with Series A Preferred Stock as to the
right to receive either dividends or amounts distributable upon liquidation,
dissolution or winding up of the Corporation shall not be deemed to affect
adversely the Series A Preferred Stock. The number of authorized shares of
Series A Preferred Stock may be increased or decreased (but not below the number
of shares then outstanding) by the directors of the Corporation pursuant to
Section 151 of the General Corporation Law of Delaware or by the affirmative
vote of the holders of a
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majority of the then outstanding shares of the Common Stock, Series A Preferred
Stock and all other classes or series of stock of the Corporation entitled to
vote thereon, voting as a single class, irrespective of the provisions of
Section 242(b)(2) of the General Corporation Law of Delaware.
4. OPTIONAL CONVERSION. The holders of the Series A Preferred Stock
shall have conversion rights as follows (the "Conversion Rights"):
a. RIGHT TO CONVERT. Each share of Series A Preferred Stock shall
be convertible, at the option of the holder thereof, at any time and from time
to time, and without the payment of additional consideration by the holder
thereof, into such number of fully paid and nonassessable shares of Common Stock
as is determined by dividing $9.75 by the Conversion Price (as defined below) in
effect at the time of conversion. The "Conversion Price" shall initially be
$9.75. The Conversion Price, and the rate at which shares of Series A Preferred
Stock may be converted into shares of Common Stock, are subject to adjustment as
provided in Section 5(a) below.
In the event of a liquidation of the Corporation, the right to convert
shall terminate at the close of business on the first full day preceding the
date fixed for the payment of any amounts distributable on liquidation to the
holders of the Series A Preferred Stock. The Company shall use reasonable
efforts to notify holders of Series A Preferred Stock at least five days prior
to any liquidation.
b. FRACTIONAL SHARES. No fractional shares of Common Stock shall be
issued upon conversion of the Series A Preferred Stock. In lieu of any
fractional shares to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to such fraction multiplied by the Conversion
Price.
c. MECHANICS OF CONVERSION.
(i) In order for a holder of Series A Preferred Stock to convert
shares of Series A Preferred Stock into shares of Common Stock, such holder
shall surrender the certificate or certificates for such shares of Series A
Preferred Stock at the office of the transfer agent for the Series A Preferred
Stock (or at the principal office of the Corporation if the Corporation serves
as its own transfer agent), together with written notice that such holder elects
to convert all or any number of the shares of the Series A Preferred Stock
represented by such certificate or certificates (the "Notice"). Such notice
shall state such holder's name or the names of the nominees in which such holder
wishes the certificate or certificates for shares of Common Stock to be issued.
If required by the Corporation, certificates surrendered for conversion shall be
endorsed or accompanied by a written instrument or instruments of transfer, in
form satisfactory to the Corporation, duly executed by the registered holder or
his
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or its attorney duly authorized in writing. The receipt of the Notice by the
Corporation shall be the conversion date so long as the transfer agent (or the
Corporation if it serves as its own transfer agent) receives such certificates
in proper form within three business days thereafter or if such certificates in
proper form are not timely received within such three business days then, the
date of both the receipt of such certificates and notice by the transfer agent
(or by the Corporation if the Corporation serves as its own transfer agent)
shall be the conversion date ("Conversion Date"). The Corporation shall, as
soon as practicable after the Conversion Date, issue and deliver at such office
to such holder of Series A Preferred Stock, or to his or its nominees, a
certificate or certificates for the number of shares of Common Stock to which
such holder shall be entitled, together with cash in lieu of any fraction of a
share.
(ii) The Corporation shall at all times when the Series A
Preferred Stock shall be outstanding, reserve and keep available out of its
authorized but unissued stock, for the purpose of effecting the conversion of
the Series A Preferred Stock, such number of its duly authorized shares of
Common Stock as shall from time to time be sufficient to effect the conversion
of all outstanding Series A Preferred Stock. Before taking any action which
would cause an adjustment reducing the Conversion Price below the then par value
of the shares of Common Stock issuable upon conversion of the Series A Preferred
Stock, the Corporation will take any corporate action which may, in the opinion
of its counsel, be necessary in order that the Corporation may validly and
legally issue fully paid and nonassessable shares of Common Stock at such
adjusted Conversion Price.
(iii) Upon any such conversion, no adjustment to the
Conversion Price shall be made for any declared but unpaid dividends on the
Series A Preferred Stock surrendered for conversion or on the Common Stock
delivered upon conversion.
(iv) All shares of Series A Preferred Stock which shall have been
surrendered for conversion as herein provided shall no longer be deemed to be
outstanding and all rights with respect to such shares, including the rights, if
any, to receive notices and to vote, shall immediately cease and terminate on
the Conversion Date, except only the right of the holders thereof to receive
shares of Common Stock in exchange therefor and payment of any dividends
declared but unpaid thereon. Any shares of Series A Preferred Stock so converted
shall be retired and cancelled and shall not be reissued, and the Corporation
(without the need for stockholder action) may from time to time take such
appropriate action as may be necessary to reduce the authorized Series A
Preferred Stock accordingly.
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(v) The Corporation shall pay any and all issue and other taxes
that may be payable in respect of any issuance or delivery of shares of Common
Stock upon conversion of shares of Series A Preferred Stock pursuant to this
Section 4. The Corporation shall not, however, be required to pay any tax which
may be payable in respect of any transfer involved in the issuance and delivery
of shares of Common Stock in a name other than that in which the shares of
Series A Preferred Stock so converted were originally registered, and no such
issuance or delivery shall be made unless and until the person or entity
requesting such issuance has paid to the Corporation the amount of any such tax
or has established, to the satisfaction of the Corporation, that such tax has
been paid.
5. CERTAIN ADJUSTMENTS.
a. ADJUSTMENT FOR STOCK SPLITS AND COMBINATIONS. If the Corporation
shall at any time or from time to time after the date on which a share of
Series A Preferred Stock was first issued ("the Original Issue Date") effect a
subdivision of the outstanding Common Stock, the Conversion Price then in effect
immediately before that subdivision shall be proportionately decreased. If the
Corporation shall at any time or from time to time after the Original Issue Date
combine the outstanding shares of Common Stock, the Conversion Price then in
effect immediately before the combination shall be proportionately increased.
Any adjustment under this paragraph shall become effective at the close of
business on the date the subdivision or combination becomes effective.
b. ADJUSTMENT FOR RECLASSIFICATION, EXCHANGE, OR SUBSTITUTION. If
the Common Stock issuable upon the conversion of the Series A Preferred Stock
shall be changed into the same or a different number of shares of any class or
classes of stock, whether by capital reorganization, reclassification, or
otherwise (other than a subdivision or combination of shares provided for above,
or a reorganization, merger, consolidation, or sale of assets provided for
below), then and in each such event the holder of each such share of Series A
Preferred Stock shall have the right thereafter to convert such share into the
kind and amount of shares of stock and other securities and property receivable
upon such capital reorganization, reclassification, or other change, by holders
of the number of shares of Common Stock into which such shares of Series A
Preferred Stock might have been converted immediately prior to such capital
reorganization, reclassification, or other change.
c. ADJUSTMENT FOR MERGER OR REORGANIZATION, ETC. In the event of
any consolidation or merger of the Corporation with or into another corporation
or the sale of all or substantially all of the assets of the Corporation to
another corporation (other than a consolidation, merger or sale which is covered
by Section 2(c)), each share of Series A Preferred Stock shall thereafter be
convertible (or
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shall be converted into a security which shall be convertible) into the kind and
amount of shares of stock or other securities or property to which a holder of
the number of shares of Common Stock of the Corporation deliverable upon
conversion of such Series A Preferred Stock would have been entitled upon such
consolidation, merger or sale; and, in such case, appropriate adjustment (as
determined in good faith by the Board of Directors) shall be made in the
application of the provisions in this Section 5 set forth with respect to the
rights and interest thereafter of the holders of the Series A Preferred Stock,
to the end that the provisions set forth in this Section 5 shall thereafter be
applicable, as nearly as reasonably may be, in relation to any shares of stock
or other property thereafter deliverable upon the conversion of the Series A
Preferred Stock.
6. REDEMPTION. At any time after the third anniversary of the Original
Issue Date, the Corporation shall have the right to redeem, in whole but not in
part, the then outstanding shares of Series A Preferred Stock; provided,
however, that the Corporation shall be required to give each holder of the
Series A Preferred Stock 30 days' notice (the "Redemption Notice") of its
intention to redeem such Stock and each holder shall have 30 days from the date
of the Redemption Notice to exercise its conversion rights, as set forth in
Section 4 above; provided further, however, the Corporation shall not have the
foregoing right of redemption unless the last trade price on its outstanding
Common Stock for 30 consecutive trading days ending on the date prior to the
date such notice of redemption is mailed to the holders of the Series A
Preferred Stock is 120% of the Conversion Price.
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IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be
affixed hereto and this Certificate of Designations of the Preferred Stock to be
signed by its President and Chief Executive Officer this 23rd day of September,
1997.
DIATIDE, INC.
By:
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Richard T. Dean,
President and Chief
Executive Officer
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