<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )*
DIATIDE, INC.
- --------------------------------------------------------------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $ .001 PER SHARE
- --------------------------------------------------------------------------------
(Title of Class of Securities)
252842-10-9
-------------------------------
(CUSIP Number)
DR. DANIEL BUGMANN
GRAFENAUWEG 4, 6301 ZUG CH/SWITZERLAND
011-41-41-724-5959
------------------
COPY TO:
DANIEL L. GOELZER, ESQ.
BAKER & MCKENZIE
815 CONNECTICUT AVENUE, N.W.
WASHINGTON, D.C. 20006
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notice and Communications)
AUGUST 21, 1996
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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 that is the subject
of this Schedule 13D, and is filing this schedule because
of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g),
check the following box. [ ]
NOTE: Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all
exhibits. See Sections 240.13d-7 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> 2
CUSIP No. 252842-10-9
<TABLE>
==========================================================================================================================
<S> <C>
1. Names of Reporting Persons. BB MEDTECH AG
I.R.S. Identification Nos. of above persons (entities only). NOT APPLICABLE: FOREIGN CORPORATION
- --------------------------------------------------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group
(a)
(b)
- --------------------------------------------------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------------------------------------------------
4. Source of Funds WC
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5. Check if Disclosure of Legal Proceeding Is Required Pursuant to Items 2(d) or 2(e)
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6. Citizenship or Place of Organization Switzerland
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Number of 7. Sole Voting Power 0
Shares Bene- ----------------------------------------------------------------------------------------------
ficially 8. Shared Voting Power 1,450,346
Owned by ----------------------------------------------------------------------------------------------
Each 9. Sole Dispositive Power 0
Reporting ----------------------------------------------------------------------------------------------
Person With 10. Shared Dispositive Power 1,450,346
----------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Person reporting Person
1,450,346 SHARES OF COMMON STOCK, PAR VALUE OF $.001 PER SHARE (SEE ITEM 5)
- --------------------------------------------------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain shares
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13. Percent of Class Represented by amount in Row (11) 13.4%
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14. Type of Reporting Person HC, CO
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</TABLE>
Page 2 of 9 pages
<PAGE> 3
CUSIP No. 252842-10-9
<TABLE>
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<S> <C>
1. Names of Reporting Persons. MEDSOURCE S.A.
I.R.S. Identification Nos. of above persons (entities only). NOT APPLICABLE: FOREIGN CORPORATION
==========================================================================================================================
2. Check the Appropriate Box if a Member of a Group
(a)
(b)
- --------------------------------------------------------------------------------------------------------------------------
3. SEC Use Only
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4. Source of Funds AF
- --------------------------------------------------------------------------------------------------------------------------
5. Check 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 PANAMA
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- --------------------------------------------------------------------------------------------------------------------------
Number of 7. Sole Voting Power 0
Shares Bene- -----------------------------------------------------------------------------------------------
ficially 8. Shared Voting Power 1,450,346
Owned by -----------------------------------------------------------------------------------------------
Each 9. Sole Dispositive Power 0
Reporting -----------------------------------------------------------------------------------------------
Person With 10. Shared Dispositive Power 1,450,346
-----------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Person reporting Person
1,450,346 SHARES OF COMMON STOCK, PAR VALUE OF $.001 PER SHARE (SEE ITEM 5)
- --------------------------------------------------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain shares
- --------------------------------------------------------------------------------------------------------------------------
13. Percent of Class Represented by amount in Row (11) 13.4%
- --------------------------------------------------------------------------------------------------------------------------
14. Type of Reporting Person CO
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</TABLE>
Page 3 of 9 pages
<PAGE> 4
ITEM 1. SECURITY AND ISSUER
This statement relates to the Common Stock, $.001 par value per
share, (the "Common Stock") of Diatide, Inc. ("Diatide"). Diatide's principal
executive offices are located at Nine Delta Drive, Londenberry, NH 03053.
ITEM 2. IDENTITY AND BACKGROUND
This statement is filed jointly by BB Medtech AG ("BB Medtech") and
Medsource S.A. ("Medsource"). Medsource is a wholly-owned subsidiary of BB
Medtech.
BB Medtech is a holding company incorporated in Switzerland. BB
Medtech's business address is Vordergasse 3, 8200 Schaffhausen, CH/Switzerland.
BB Medtech invests in companies which provide healthcare services, healthcare
devices and healthcare information systems. BB Medtech is publicly traded on the
Swiss Exchange.
Medsource is a wholly-owned subsidiary of BB Medtech incorporated in
the Republic of Panama. Medsource's business address is Swiss Bank Tower, Panama
1, Republic of Panama. The principal business of Medsource is to invest in
companies in the medical device and medical services sectors.
The name, business address, present principal occupation, and
citizenship of each executive officer and director of BB Medtech and Medsource
are set forth on Appendix A hereto, which is incorporated herein by reference.
During the last five (5) years, neither BB Medtech nor Medsource, nor
to the best of their knowledge, any of their executive officers or directors,
has been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of which he was or is
subject to a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities laws
or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Medsource purchased 1,096,500 shares of common stock, $0.001 per
value per share, of Diatide (the "Common Stock") in a series of open market
transactions for an aggregate consideration of $9,642,925. Medsource used
capital to purchase the shares of the Common Stock, which, in turn, was working
capital supplied by BB Medtech. BB Medtech is publicly traded on the Swiss
Exchange, and its shareholders are both private and institutional investors.
In addition, as noted in Item 5(a) and Item 5(c) of this Schedule
13D, on September 23, 1997, Diatide and Medsource, Chase Venture Capital
Associates, L.P. ("Chase") and Neomed Fund Limited ("Neomed") (collectively, the
"Investors") entered into a Securities Purchase Agreement (the "Agreement"). The
Agreement is included as Exhibit 4, which is incorporated herein by reference.
Pursuant to the Agreement, Medsource purchased: (i) 307,692 shares of Series A
Convertible Preferred Stock, $.01 par value per share of Diatide (the "Preferred
Stock"), which shares may be immediately converted into 307,692 shares of the
Common Stock (subject to adjustment); and (ii) Warrant No. 2 dated as of
September 23, 1997 which allows Medsource to purchase up to 46,154 shares of the
Common Stock (the "Warrants") (subject to adjustment). Warrant No. 2 is included
as Exhibit 6, which is incorporated herein by reference. The Warrants are
exercisable immediately. Therefore, as defined by Rule 13d-3(d)(1)(i) under the
Securities Exchange Act of 1934 (the "Exchange Act"), Medsource is the direct
beneficial owner of an additional 353,846 shares of the Common Stock, which was
acquired for an aggregate consideration of $3,000,000. Medsource used capital to
purchase the shares of the Preferred Stock and the Warrants, which, in turn, was
working capital supplied by BB Medtech.
BB Medtech and Medsource disclaim that they are members of a group
with any other persons either for purposes of this Schedule 13D or for any other
purpose related to their beneficial ownership of securities issued by Diatide.
ITEM 4. PURPOSE OF TRANSACTION
The shares of the Common Stock, the shares of the Preferred Stock and
the Warrants directly beneficially owned by Medsource are being held for
investment purposes only. However, Medsource may, from time to time, either
increase or decrease its holdings of the Common Stock, subject to applicable
laws. Any such decision will depend, however, on numerous factors, including,
without limitation, the market price of shares of the Common Stock, the terms
and conditions related to their purchase and sale, the prospects and
profitability of Diatide, other business and investment alternatives of
Medsource and general economic and market conditions.
It is Medsource's general policy not to interfere with the management
of companies in which it holds portfolio
Page 4 of 9 pages
<PAGE> 5
investments. Neither Medsource nor BB Medtech have an intention to influence or
direct Diatide's affairs, modify its corporate structure or interfere with the
business decisions of its management. Except as set forth above, neither
Medsource nor BB Medtech, nor to the best knowledge of such persons, any
executive officer or director of either BB Medtech or Medsource, has any plans
or proposals which relate to or would result in: (a) the acquisition by any
person of additional securities of Diatide or the disposition of securities of
Diatide; (b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving Diatide; (c) a sale or transfer or a
material amount of assets of Diatide; (d) any change in the present board of
directors or management of Diatide, including any plans or proposals to change
the number or term of directors or to fill any existing vacancies on the board;
(e) any material change in the present capitalization or dividend policy of
Diatide; (f) any other material change in Diatide's business or corporate
structure; (g) changes in Diatide's charter, bylaws or instruments corresponding
thereto or other actions which may impede the acquisition of control of Diatide
by any person; (h) causing a class of securities of Diatide to be delisted from
a national securities exchange or to cease to be authorized to be quoted in an
interdealer quotation system of a registered national securities association;
(i) a class of equity securities of Diatide to become eligible for termination
of registration pursuant to Section 12(g)(4) of the Exchange Act; or (j) any
action similar to any of those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) Pursuant to Rules 13d-3(a) and 13d-3(d)(1)(i) of the Exchange
Act, BB Medtech may be deemed to be the indirect beneficial owner of the
1,450,346 of the Common Stock directly beneficially owned by Medsource, by
virtue of the fact that Medsource is a wholly owned subsidiary of BB Medtech. To
the best knowledge of BB Medtech and Medsource, no director or executive officer
of BB Medtech or Medsource owns any securities issued by Diatide.
Of the 1,450,346 shares of the Common Stock directly beneficially
owned by Medsource, 1,096,500 were purchased through a series of open market
transactions. As noted in Item 3 and Item 5(c) of this Schedule 13D, pursuant to
the Agreement, Medsource also purchased 307,692 shares of the Preferred Stock.
The Preferred Stock held by Medsource is immediately convertible into 307,692
shares of the Common Stock. The conversion ratio which governs the conversion of
the shares of the Preferred Stock into shares of the Common Stock, as described
in the Certificate of Designations of the Preferred Stock of Diatide, Inc. (the
"Certificate of Designations"), is subject to adjustment to reflect stock
splits, dividends and other transactions described therein. The Certificate of
Designations is included as Exhibit 7, which is incorporated herein by
reference. Medsource also purchased, pursuant to the Agreement, Warrants which
entitle Medsource to purchase an additional 46,154 shares of the Common Stock.
The Warrants are exercisable at any time. As a result of the purchase of the
shares of the Preferred Stock and the Warrants, Medsource is deemed to be the
direct beneficial owner, as defined by Rule 13d-3(d)(1)(i)under the Exchange
Act, of an additional 353,846 shares of the Common Stock.
(b) The number of shares of the Common Stock, the shares of the
Preferred Stock and the Warrants to which there is sole power to vote or to
direct the vote, shared power to vote or to direct the vote, sole power to
dispose or to direct the disposition, or shared power to dispose or direct the
disposition, is set forth in the cover pages hereof and such information is
incorporated herein by reference. BB Medtech, through its ownership of
Medsource, may be deemed to indirectly beneficially own, as defined in Rule
13d-3(a) under the Exchange Act, the shares of the Common Stock, the shares of
the Preferred Stock and the Warrants directly beneficially owned by Medsource,
and may be deemed to share with Medsource the power to vote, or direct the vote
of, and the power to dispose of or direct the disposition of, the aggregate
1,450,346 shares of the Common Stock directly beneficially owned by Medsource.
Medsource and BB Medtech do not share with Chase and Neomed the power
to vote or to direct the vote or the power to dispose or to direct the
disposition of the shares of the Common Stock, the shares of the Preferred Stock
or the Warrants, held by Medsource and BB Medtech. Likewise, Chase and Neomed do
not share with BB Medtech and Medsource and the power to vote or to direct the
vote or the power to dispose or to direct the disposition of the the shares of
the Common Stock, the shares of the Preferred Stock or other securities issued
by Diatide, held by Chase and Neomed respectively.
(c) Medsource engaged in the following open market transactions with
respect to securities issued by Diatide. Each of these transactions was
completed on the NASDAQ stock market.
<TABLE>
<CAPTION>
==================================================================================================================
DATE TYPE OF SECURITY TRANSACTION AMOUNT PRICE PER
SHARE
==================================================================================================================
<S> <C> <C> <C> <C>
6/18/96 Common Stock Bought 500,000 $8.50
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8/21/96 Common Stock Bought 50,000 $6.13
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 5 of 9 pages
<PAGE> 6
<TABLE>
<CAPTION>
==================================================================================================================
DATE TYPE OF SECURITY TRANSACTION AMOUNT PRICE PER
SHARE
==================================================================================================================
<S> <C> <C> <C> <C>
8/22/96 Common Stock Bought 55,000 $6.25
- ------------------------------------------------------------------------------------------------------------------
8/26/96 Common Stock Bought 30,000 $6.38
- ------------------------------------------------------------------------------------------------------------------
8/27/96 Common Stock Bought 5,000 $6.50
- ------------------------------------------------------------------------------------------------------------------
10/20/97 Common Stock Bought 20,000 $9.05
- ------------------------------------------------------------------------------------------------------------------
12/3/97 Common Stock Bought 26,000 $9.99
- ------------------------------------------------------------------------------------------------------------------
12/4/97 Common Stock Bought 34,000 $9.98
- ------------------------------------------------------------------------------------------------------------------
12/11/97 Common Stock Bought 15,000 $9.25
- ------------------------------------------------------------------------------------------------------------------
12/12/97 Common Stock Bought 5,000 $9.50
- ------------------------------------------------------------------------------------------------------------------
12/18/97 Common Stock Bought 12,500 $9.25
- ------------------------------------------------------------------------------------------------------------------
12/19/97 Common Stock Bought 4,000 $9.44
- ------------------------------------------------------------------------------------------------------------------
1/8/98 Common Stock Bought 20,000 $9.91
- ------------------------------------------------------------------------------------------------------------------
1/29/98 Common Stock Bought 10,000 $9.00
- ------------------------------------------------------------------------------------------------------------------
2/10/98 Common Stock Bought 40,000 $10.00
- ------------------------------------------------------------------------------------------------------------------
2/11/98 Common Stock Bought 25,000 $9.50
- ------------------------------------------------------------------------------------------------------------------
2/12/98 Common Stock Bought 3,000 $9.50
- ------------------------------------------------------------------------------------------------------------------
2/17/98 Common Stock Bought 10,000 $9.50
- ------------------------------------------------------------------------------------------------------------------
2/18/98 Common Stock Bought 12,000 $9.44
- ------------------------------------------------------------------------------------------------------------------
2/20/98 Common Stock Bought 5,000 $9.38
- ------------------------------------------------------------------------------------------------------------------
2/24/98 Common Stock Bought 10,000 $9.63
- ------------------------------------------------------------------------------------------------------------------
2/25/98 Common Stock Bought 20,000 $9.88
- ------------------------------------------------------------------------------------------------------------------
2/26/98 Common Stock Bought 5,000 $10.00
- ------------------------------------------------------------------------------------------------------------------
3/3/98 Common Stock Bought 5,000 $10.00
- ------------------------------------------------------------------------------------------------------------------
3/5/98 Common Stock Bought 10,000 $10.00
- ------------------------------------------------------------------------------------------------------------------
3/9/98 Common Stock Bought 5,000 $10.38
- ------------------------------------------------------------------------------------------------------------------
3/10/98 Common Stock Bought 15,000 $10.50
- ------------------------------------------------------------------------------------------------------------------
3/11/98 Common Stock Bought 20,000 $10.63
- ------------------------------------------------------------------------------------------------------------------
3/12/98 Common Stock Bought 20,000 $10.34
- ------------------------------------------------------------------------------------------------------------------
3/13/98 Common Stock Bought 15,000 $10.46
- ------------------------------------------------------------------------------------------------------------------
3/16/98 Common Stock Bought 10,000 $10.25
- ------------------------------------------------------------------------------------------------------------------
3/17/98 Common Stock Bought 10,000 $10.13
- ------------------------------------------------------------------------------------------------------------------
3/20/98 Common Stock Bought 10,000 $10.00
- ------------------------------------------------------------------------------------------------------------------
4/3/98 Common Stock Bought 10,000 $10.13
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 6 of 9 pages
<PAGE> 7
<TABLE>
<CAPTION>
==================================================================================================================
DATE TYPE OF SECURITY TRANSACTION AMOUNT PRICE PER
SHARE
==================================================================================================================
<S> <C> <C> <C> <C>
4/7/98 Common Stock Bought 30,000 $10.08
- ------------------------------------------------------------------------------------------------------------------
4/9/98 Common Stock Bought 5,000 $10.13
- ------------------------------------------------------------------------------------------------------------------
4/13/98 Common Stock Bought 15,000 $10.13
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
As noted in Item 3 and Item 5(a) of this Schedule 13D, Medsource also
purchased, pursuant to the Agreement, 307,692 shares of the Preferred Stock. As
of July 1, 1998, the Preferred Stock held by Medsource is immediately
convertible into 307,692 shares of Common Stock. Medsource also purchased,
pursuant to the Agreement, Warrants which entitle Medsource to purchase an
additional 46,154 shares of the Common Stock. These Warrants are exercisable at
any time.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER
Reference is made to the information disclosed under Item 3, Item
5(a) and Item 5(c) of this Schedule 13D, which are incorporated by reference in
response to Item 6. In addition, the response to Item 6 is qualified in its
entirety by reference to the text of the Agreement, the Registration Rights
Agreement (as defined herein), Warrant No. 2 and the Certificate of
Designations, the text of each of which is filed as Exhibits 4,5,6 and 7,
respectively, hereto and incorporated herein by reference. Diatide and the
Investors entered into a Registration Rights Agreement dated as of September 23,
1997 (the "Registration Rights Agreement"). The Registration Rights Agreement
grants the Investors, including Medsource, certain demand rights with respect to
the registration of shares of the Common Stock which may be obtained through the
conversion of shares of the Preferred Stock or through the exercise of the
Warrants, under the Securities Act of 1933. The Registration Rights Agreement
also grants "piggy-back" rights to Medsource to participate in certain
registration statements filed by Diatide.
(a) Registration Rights.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 1: Translation of minutes of the March 4, 1996 Board of Directors
meeting of Medsource (evidencing a Power of Attorney in favor of
Victor Bischoff, Dr. Daniel Bugmann, and H. Jorg Graf).
Exhibit 2: Translation of evidence of Power of Attorney in favor of
Dr. Daniel Bugmann, Cyrill Zimmermann, H. Jorg Graf on behalf of
BB Medtech.
Exhibit 3: Agreement by and between BB Medtech and Medsource with respect to
the joint filing of this disclosure statement.
Exhibit 4: Securities Purchase Agreement, dated as of September 23, 1997,
among Diatide and the Investors.
Exhibit 5: Registration Rights Agreement, dated as of September 23, 1997,
among Diatide and the Investors.
Exhibit 6: Warrant No. 2, dated as of September 23, 1997.
Exhibit 7: Certificate of Designations of the Preferred Stock of Diatide,
Inc.
Page 7 of 9 pages
<PAGE> 8
SIGNATURES
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.
<TABLE>
<S> <C>
BB MEDTECH AG
Date: July 7, 1998 By: /s/ H. Jorg Graf
----------------
Name: H. Jorg Graf
Date: July 7, 1998 By: /s/ Dr. Cyrill Zimmermann
-------------------------
Name: Dr. Cyrill Zimmermann
MEDSOURCE S.A.
Date: July 7, 1998 By: /s/ H. Jorg Graf
----------------
Name: H. Jorg Graf
Date: July 7, 1998 By: /s/ Dr. Cyrill Zimmermann
-------------------------
Name: Dr. Cyrill Zimmermann
</TABLE>
Page 8 of 9 pages
<PAGE> 9
APPENDIX A
<TABLE>
<S> <C> <C>
BB MEDTECH AG
Name and Citizenship Business Address Principal Occupation
-------------------- ---------------- --------------------
Jacques Rejeange Vordergasse 3 Chairman and Director
(French Citizen) 8200 Schaffhausen Switzerland
Dr. Victor Bischoff Vordergasse 3 Vice-Chairman and Director
(Swiss Citizen) 8200 Schaffhausen Switzerland
Hansjurg Wyss Synthes Inc. Director
(Swiss Citizen) 1690 Russell Road
P.O. Box 1776
Paoli, PA 19301 (USA)
Dr. Daniel Bugmann Grafenauweg 4 Signatory Authority
(Swiss Citizen) 6301 Zug Switzerland
H.Jorg Graf Grafenauweg 4 Signatory Authority
(Swiss Citizen) 6301 Zug Switzerland
Dr. Philipp Mekler Grafenauweg 4 Signatory Authority
(Swiss Citizen) 6301 Zug Switzerland
Dr. Cyrill Zimmermann Grafenauweg 4 Signatory Authority
(Swiss Citizen) 6301 Zug Switzerland
MEDSOURCE S.A.
Name and Citizenship Business Address Principal Occupation
-------------------- ---------------- --------------------
Dr. Daniel Bugmann Grafenauweg 4 Signatory Authority
(Swiss Citizen) 6301 Zug Switzerland
H. Jorg Graf Grafenauweg 4 Signatory Authority
(Swiss Citizen) 6301 Zug Switzerland
Dr. Cyrill Zimmermann Grafenauweg 4 Signatory Authority
(Swiss Citizen) 6301 Zug Switzerland
Pablo Javier Espino Swiss Bank Tower President and Director
(Panamanian Citizen) Panama 1, Republic of Panama
Aelina M. de Estribi Swiss Bank Tower President and Director
(Panamanian Citizen) Panama 1, Republic of Panama
</TABLE>
Page 9 of 9 pages
<PAGE> 1
EXHIBIT 1
MINUTES OF A MEETING OF THE BOARD OF DIRECTORS OF THE CORPORATION MEDSOURCE
S.A. In the City of Panama, Republic of Panama, on March 4, 1996, a Meeting of
the Board of Directors of MEDSOURCE S.A., was held in the principal offices of
said corporation at 53rd Street Urbanizacion Obarrio, Torre Swiss Bank, 16th
floor, Panama, Republic of Panama, wherein a quorum was at all time present and
active. All of the Directors of the corporation, PABLO J. ESPINO, AIDA MAY
BIGGS and ADELINA M. DE ESTRIBI, were present at the Meeting, therefore the
notice of the meeting was waived. The President of the Corporation PABLO J.
ESPINO presided the Meeting, and the Secretary of the Corporation ADELINA M. DE
ESTRIBI served as Secretary. -- The President then called the Meeting to order
and explained its objects: to grant power of attorney to persons chosen by the
Board of Directors to act on behalf of the corporation with such authority as
the Board may approve, there upon, after an exchange of views on motion duly
made and seconded the following resolutions were unanimously approved:--
RESOLVED: That be and hereby is granted a Power of Attorney as full as it may
be legally necessary in favor of VICTOR BISCHOFF, born on 11.9.1946, with
address at Chemin des Rayes, 1222 Geneva, Switzerland, DANIEL BUGMANN, born on
10.10.1966, with address at Tobelackerstrasse 8, 8620 Wetzikon, Switzerland,
NICOLAS MERIAN, born on 18.1.1961, with address at Rennweg 10, 8001 Zurich,
Switzerland, H. JORG GRAF, born on 12.2.1950, with address at Riedgutschstrasse
33, 8332 Wollerau, Switzerland and HERVE DE KERGROHEN, born on 8.6.1957, with
address at Huobalde 12, 6330 Cham, Switzerland, to act on behalf of the
<PAGE> 2
Corporation, jointly by two, with full powers, which for purposes of
enunciation and not in order to limit this Power of Attorney, are detailed as
follows: to purchase, alienate, transfer, sell, lease, pledge, mortgage,
encumber, or dispose of in any way or manner, the movable or immovable,
corporeal or incorporeal, property of the corporation; to accept, endorse,
collect, deposit and transfer checks, notes and any other negotiable instruments
in its name; to open and to close any kind of banking account, to draw from
accounts and the banking deposits of the corporation, be they checking
accounts, time deposits or against overdraft or any other kind of deposits, be
it in the Republic of Panama or abroad.-- To issue notes, sign, bills of
exchange as a drawer, acceptor, endorser or guarantor; to accept obligations,
be they of a commercial or civil nature; to represent the corporation in
matters of disposition and administration as well as in all affairs of
management and situations in which the corporation has an interest, also in
general part nerships or joint ventures; to buy stock or shares of any kind in
other companies; to take part in Assemblies or meetings in order to make any
kind of agreements, including agreements of constitution, transformation,
increase of capital and dissolution of companies, to become the legal
representative of the company, as plaintiff, defendant, third party or in any
other form, in front of any office of the Republic of Panama or abroad, be they
judicial, administrative, concerning labor, or of any other nature, to
substitute this power inwhole or partially and to revoke the substitutions, to
subscribe documents wherein the corporation may be involved; as debtor or
creditor; to make agreements using arbitrators or any other type of arrangement
whatsoever and to complete any act or to enter into any contract that may be
considered beneficial to the interests of the company MEDSOURCE S.A., because
it is the intention of this Power of Attorney that it be exercised without any
limitations whatsoever.-- It is hereby expressed that this Power of Attorney
can be exercised inside the territory of the Republic of Panama or in any other
country.-- It was also resolved to give authority to the Law firm of MORGAN Y
MORGAN to protocolize a copy of the minutes
<PAGE> 3
of this meeting of the Board of Directors.--Having nothing else to discuss,
the meeting was adjourned.
(sgd.) Pablo J. Espino- President Adelina M. de Estribi- Secretary.
CERTIFICATE: - I, ADELINA M. DE ESTRIBI, Secretary of the corporation MEDSOURCE
S.A., certify that the foregoing is a genuine copy of its original.
(sgd) Adelina M. de Estribi- Secretary
[sig]
<PAGE> 1
EXHIBIT 2
Register of Commerce of the Canton Schaffhausen, Main Register
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Number Type of company Incorporation Del. From 290.3.001.378-9/a Page
<S> <C> <C> <C> <C> <C>
CH-290.3.001.378-9 Inc. 14.11.95 1
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
All entries
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------- -------------------------------------------
Entry Del. Company name Ref Domicile
- ----------------------------------------------------------------------------- -------------------------------------------
<S> <C>
1 BB Medtech AG 1 Schaffhausen
1 BB Medtech SA
1 BB Medtech Inc.
- ----------------------------------------------------------------------------- -------------------------------------------
- ----------------------------------------------------------------------------- -------------------------------------------
Ref Share Capital CHF Paid in CHF Ref Address
- ----------------------------------------------------------------------------- -------------------------------------------
1 24 mn 24 mn 1 Vordergasse 3
c/o BDS Consulting AG
2 2.4 mn shares @ 10 CHF 8200 Schaffhausen
- -----------------------------------------------------------------------------
Ref PS-Capitz:CHF Paid in CHF Participation Certificates
- -----------------------------------------------------------------------------
- ----------------------------------------------------------------------------- -------------------------------------------
Entry Del. Purpose
- ----------------------------------------------------------------------------- -------------------------------------------
1 Collective investments in companies of the medical
technology sector and similar sectors in order to
achieve the highest possible return on equity
- ----------------------------------------------------------------------------- -------------------------------------------
- ----------------------------------------------------------------------------- -------------------------------------------
Entry Del. Remarks Ref Date of articles of incorporation
- ----------------------------------------------------------------------------- -------------------------------------------
1 Organisation: Art. 708 Abs. 1 OR; Nationality and domicile 1 #####
of the board members: exception of to the law by the EJPD 2 #####
10-Nov-95
- ----------------------------------------------------------------------------- -------------------------------------------
- ----------------------------------------------------------------------------- -------------------------------------------
Entry Del Contribution in kind, Acquisition of Assets, Benefits, GS Ref Publication
- ----------------------------------------------------------------------------- -------------------------------------------
1 Contribution in kind: Securities according to the contract 1 Swiss Gazzette of Commerce
dated 22-Nov-95 with a value of CHF 199.9 mn against
159'000 bearer shares, nominal CHF 100, have been issued.
1 Contribution in kind: Securities according to the contract
dated 15-Jun-96 with a value of CHF 110.48 mn against
80'000 bearer shares, nom, CHF 100, have been issued.
- ----------------------------------------------------------------------------- -------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Zer Ref. TB-Nr TB-Datum SHAB SHAB-Date Page Zer Ref TB-Nr TB-Date SHAB Page
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
0 Obmission
OR 1 453 20.5.96 105 3.6.96 3220
OR 1 625 12.6.98 (Permission by EHRA)
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Entry Chge. Del. Details about the persons Function Signatory power
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 Rejeange, Jacques, French Citizen, in
Colombier President of the board Joint signature
1 Bischoff, Dr. Victor, Citizen of Scuol, in
Geneva Vice President of the board Joint signature
1 Wyss, Hansjorg, Citizen of Bern, in Paoli, PA Member of the board Joint signature
1 Bugmann, Daniel Walter, Citizen of Zurich, in
Zurich Joint signature
1 Graf, Hans Jorg, Citizen of Wang, in Wollerau Joint signature
limited joint
signature
limited joint
signature
2 Melder, Philipp, Citizen of Zurich, in Zurich limited joint
signature
2 Zimmermann, Cyrill, Citizen of Zurich, in Zurich limited joint
signature
2 Krebs, Jurgen, German Citizen, in Baar limited joint
signature
2 Revisuisse Price Waterhouse AG, in Zug Auditors
</TABLE>
This excerpt of the cantonal register of commerce is not valid without the
original certification by the authorities.
It contains all valid registrations for this firm as well as all changes of
the registrations since May 20, 1996.
<PAGE> 1
EXHIBIT 3
JOINT FILING AGREEMENT
We, the undersigned, hereby express our agreement that the attached
Schedule 13D (including all amendments thereto) is filed on behalf of each of
the undersigned.
<TABLE>
<S> <C>
BB MEDTECH AG
Date: July 7, 1998 By: /s/ H. Jorg Graf
----------------
Name: H. Jorg Graf
Date: July 7, 1998 By: /s/ Dr. Cyrill Zimmermann
-------------------------
Name: Dr. Cyrill Zimmermann
MEDSOURCE S.A.
Date: July 7, 1998 By: /s/ H. Jorg Graf
----------------
Name: H. Jorg Graf
Date: July 7, 1998 By: /s/ Dr. Cyrill Zimmermann
-------------------------
Name: Dr. Cyrill Zimmermann
</TABLE>
<PAGE> 1
EXHIBIT 4
- --------------------------------------------------------------------------------
DIATIDE, INC.
--------------------------------------------
SECURITIES PURCHASE AGREEMENT
--------------------------------------------
September 23, 1997
- --------------------------------------------------------------------------------
(Rev. 9/23/97)
<PAGE> 2
Table of Contents
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
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
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C> <C>
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
</TABLE>
-ii-
<PAGE> 4
Attachments
EXHIBITS
Exhibit A - Certificate of Designations
Exhibit B - Warrant Agreement
Exhibit C - Form of Registration Rights Agreement
SCHEDULES
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
-iii-
<PAGE> 5
Definitions
The following terms used in this Agreement are defined where indicated
below.
<TABLE>
<CAPTION>
Term Section
- ---- -------
<S> <C>
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 Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.3
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
</TABLE>
-iv-
<PAGE> 6
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> 7
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
-2-
<PAGE> 8
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
-3-
<PAGE> 9
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
-4-
<PAGE> 10
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.
-5-
<PAGE> 11
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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<PAGE> 12
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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<PAGE> 13
(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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<PAGE> 14
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
-9-
<PAGE> 15
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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<PAGE> 16
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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<PAGE> 17
with a copy to:
Hale and Dorr LLP
60 State Street
Boston, MA 02109
Telecopy: (617) 526-6000
Attention: Jeffrey N. Carp, Esq.
(ii) 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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<PAGE> 18
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 each
fiscal 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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<PAGE> 19
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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<PAGE> 20
SCHEDULE I
TO SECURITIES PURCHASE AGREEMENT
<TABLE>
<CAPTION>
No. of Aggregate
Preferred No. of Purchase
Investors Shares Warrants Price
--------- ------ -------- -----
<S> <C> <C> <C>
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. Colin Mawer
Totals 1,210,256 181,538 $11,800,000
========= ======= ===========
</TABLE>
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<PAGE> 21
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 REQUIRED -- None
SCHEDULE 3.7: DEFAULTS -- None
SCHEDULE 3.10: BROKERS -- None
SCHEDULE 3.11: REGISTRATION RIGHTS -- None
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<PAGE> 1
EXHIBIT 5
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> 2
"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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<PAGE> 3
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> 4
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 registration 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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<PAGE> 5
(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> 6
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> 7
(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> 8
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> 9
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> 10
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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<PAGE> 11
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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<PAGE> 12
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> 13
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> 14
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> 15
(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> 16
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> 1
EXHIBIT 6
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. 2 Number of Shares: 46,154
(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 Medsource S.A. 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), 46,154 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.
(rev. 9/23/97)
<PAGE> 2
(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> 3
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
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<PAGE> 4
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,
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<PAGE> 5
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.
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<PAGE> 6
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
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<PAGE> 7
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.
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<PAGE> 8
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> 9
EXHIBIT I
PURCHASE FORM
To: Diatide, Inc. Dated:
--------------
The undersigned, pursuant to the provisions set forth in the attached
Warrant (No. 2), 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> 10
EXHIBIT II
ASSIGNMENT FORM
FOR VALUE RECEIVED, Medsource S. A. hereby sells, assigns and
transfers all of the rights of the undersigned under the attached Warrant (No.
2) 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> 1
EXHIBIT 7
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> 2
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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<PAGE> 3
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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<PAGE> 4
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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<PAGE> 5
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:
-----------------------------
Richard T. Dean,
President and Chief
Executive Officer
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