HALE AND DORR LLP
COUNSELLORS AT LAW
60 STATE STREET, BOSTON, MASSACHUSETTS 02109
617-526-6000 o FAX 617-526-5000
CHRISTINA NICOLOSI
617-526-6284
[email protected]
January 25, 1999
VIA ELECTRONIC TRANSMISSION
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Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, NW
Washington, D.C. 20549
Re: Diatide, Inc. (File No. 0-28434)
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Ladies and Gentlemen:
On behalf of Diatide, Inc. (the "Company"), attached for filing
pursuant to the requirements of Section 13 of the Securities Exchange Act of
1934, as amended, Rule 13a-11 thereunder, and Regulation S-T, is a Current
Report on Form 8-K.
Please do not hesitate to call the undersigned at the number above if
you have any questions or if I may be of further assistance.
Very truly yours,
/s/ Christina Nicolosi
Christina Nicolosi
CN/lml
Enclosure
cc: Richard T. Dean, Ph.D.
Mr. Daniel Harrington
Jeffrey N. Carp, Esq.
Washington, DC Boston, MA London, UK*
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HALE AND DORR LLP INCLUDES PROFESSIONAL CORPORATIONS
*BROBECK HALE AND DORR INTERNATIONAL (AN INDEPENDENT JOINT VENTURE LAW FIRM)
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): January 19, 1999
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Diatide, Inc.
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(Exact Name of Registrant as Specified in its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
0-28434 04-3078258
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(Commission File Number) (I.R.S. Employer Identification No.)
Nine Delta Drive
Londonderry, New Hampshire 03053
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(Address of Principal Executive Offices) (Zip Code)
(603) 437-8970
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
On January 19, 1999, Diatide, Inc. (the "Company") completed the sale
of approximately $6.0 million of convertible preferred stock (the "Preferred
Stock") to two investors in a private transaction. The Preferred Stock is
convertible into 825,309 shares of the Company's Common Stock, $.001 par value
per share (the "Common Stock"), at a conversion price per share of $7.27. The
Company also issued Common Stock Purchase Warrants (the "Warrants") to the
investors to purchase in the aggregate 123,795 shares of Common Stock at an
exercise price of $8.72 per share. The Warrants will expire on January 19, 2001.
Under the terms of a Registration Rights Agreement, dated as of
January 19, 1999, the investors holding in the aggregate at least 51% of the
Stockholder Registrable Shares (as defined therein) have the right to require
the Company to register the Common Stock issuable upon the conversion of the
Preferred Stock or the exercise of the Warrants at any time after January 19,
2000.
On January 21, 1999, the Company issued a press release announcing
that it has sold $6.0 million of preferred stock to two investors in a private
transaction. A copy of the press release is attached to this Current Report on
Form 8-K as Exhibit 99.1.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(c) Exhibits.
See Exhibit Index attached hereto.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Date: January 25, 1999 DIATIDE, INC.
By: /s/Daniel F. Harrington
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Daniel F. Harrington
Vice President, Chief Financial Officer
and Treasurer
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EXHIBIT INDEX
Exhibit
Number Description
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3.1 Restated Certificate of Incorporation, as amended.
4.1 Specimen Certificate for shares of Series B
Convertible Preferred Stock, $.01 par value, of
the Registrant.
4.2 Form of Common Stock Purchase Warrant dated as of January 19,
1999.
10.1 Securities Purchase Agreement dated as of January 19, 1999,
among Alta BioPharma Partners, L.P., Alta Embarcadero
BioPharma Partners, LLC and the Registrant.
10.2 Registration Rights Agreement dated as of January 19, 1999,
among Alta BioPharma Partners, L.P., Alta Embarcadero
BioPharma Partners, LLC and the Registrant.
99.1 Press Release dated January 21, 1999.
RESTATED
CERTIFICATE OF INCORPORATION
OF
DIATIDE, INC.
(Originally incorporated as Diatech, Inc.)
Diatide, Inc., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware, does hereby
certify as follows:
1. The Corporation filed its original Certificate of Incorporation
with the Secretary of State of Delaware on February 6, 1990, which Certificate
of Incorporation was amended by a Certificate of Amendment of Certificate of
Incorporation filed on April 19, 1990, a Certificate of Amendment of Certificate
of Incorporation filed on September 18, 1990, a Certificate of Amendment of
Certificate of Incorporation filed on December 5, 1991, a Certificate of
Amendment of Certificate of Incorporation filed on December 27, 1991, a
Certificate of Amendment of Certificate of Incorporation filed on August 17,
1992, a Certificate of Amendment of Certificate of Incorporation filed on March
17, 1993, a Certificate of Amendment of Certificate of Incorporation filed on
November 12, 1993, a Certificate of Amendment of Certificate of Incorporation
filed on January 14, 1994, a Certificate of Amendment of Certificate of
Incorporation filed on May 17, 1995, a Certificate of Amendment of Certificate
of Incorporation filed on August 11, 1995, a Certificate of Amendment of
Certificate of Incorporation filed on January 26, 1996, a Certificate of
Amendment of Certificate of
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Incorporation filed on June 6, 1996, a Certificate of Amendment of Certificate
of Incorporation filed on June 14, 1996, a Certificate of Correction to the
Certificate of Incorporation filed on July 24, 1996, and a Certificate of
Retirement of Stock filed on even date herewith.
2. At a meeting of the Board of Directors of the Corporation, a
resolution was duly adopted, pursuant to Sections 141(f) and 245 of the General
Corporation Law of the State of Delaware, setting forth a Restated Certificate
of Incorporation of the Corporation and declaring said Restated Certificate of
Incorporation advisable. The resolution setting forth the Restated Certificate
of Incorporation, which merely restates and integrates and does not further
amend the Certificate of Incorporation, is as follows:
RESOLVED: That the Restated Certificate of Incorporation of the Corporation, as
amended, be and hereby is restated in its entirety so that the same shall read
as follows:
FIRST. The name of the Corporation is:
Diatide, Inc.
SECOND. The address of its registered office in the State of Delaware
is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington,
County of New Castle. The name of its registered agent at such address is The
Corporation Trust Company.
THIRD. The nature of the business or purposes to be conducted or
promoted by the Corporation is as follows:
To engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of
Delaware.
FOURTH. The total number of shares of all classes of stock which the
Corporation shall have authority to issue is Fifty Million (50,000,000) shares
of Common Stock, $.001 par value per share ("Common Stock"), and (ii) Ten
Million
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Five Hundred Ninety-One Thousand Eight Hundred Seventy-Four (10,591,874) shares
of Preferred Stock, $.01 par value per share ("Preferred Stock").
The following is a statement of the designations and the powers,
privileges and rights, and the qualifications, limitations or restrictions
thereof in respect of each class of capital stock of the Corporation.
A. COMMON STOCK.
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1. General. The voting, dividend and liquidation rights of the
holders of the Common Stock are subject to and qualified by the rights of the
holders of the Preferred Stock of any series as may be designated by the Board
of Directors upon any issuance of the Preferred Stock of any series.
2. Voting. The holders of the Common Stock are entitled to one vote
for each share held at all meetings of stockholders (and written actions in lieu
of meetings). There shall be no cumulative voting.
The number of authorized shares of Common Stock may be increased or
decreased (but not below the number of shares thereof then outstanding) by the
affirmative vote of the holders of a majority of the stock of the Corporation
entitled to vote, irrespective of the provisions of Section 242(b)(2) of the
General Corporation Law of Delaware.
3. Dividends. Dividends may be declared and paid on the Common Stock
from funds lawfully available therefor as and when determined by the Board of
Directors and subject to any preferential dividend rights of any then
outstanding Preferred Stock.
4. Liquidation. Upon the dissolution or liquidation of the
Corporation, whether voluntary or involuntary, holders of Common Stock will be
entitled to receive all assets of the Corporation available for distribution to
its stockholders, subject to any preferential rights of any then outstanding
Preferred Stock.
B. PREFERRED STOCK.
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Preferred Stock may be issued from time to time in one or more
series, each of such series to have such terms as stated or expressed herein and
in the resolution or resolutions providing for the issue of such series adopted
by the Board of Directors of the Corporation as hereinafter provided. Any shares
of Preferred Stock which may be redeemed, purchased or acquired by the
Corporation may be reissued except as otherwise provided by law. Different
series of Preferred Stock shall not be construed to constitute different classes
of shares for the purposes of voting by classes unless expressly provided.
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Authority is hereby expressly granted to the Board of Directors from
time to time to issue the Preferred Stock in one or more series, and in
connection with the creation of any such series, by resolution or resolutions
providing for the issue of the shares thereof, to determine and fix such voting
powers, full or limited, or no voting powers, and such designations, preferences
and relative participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, including without
limitation thereof, dividend rights, conversion rights, redemption privileges
and liquidation preferences, as shall be stated and expressed in such
resolutions, all to the full extent now or hereafter permitted by the General
Corporation Law of Delaware. Without limiting the generality of the foregoing,
the resolutions providing for issuance of any series of Preferred Stock may
provide that such series shall be superior or rank equally or be junior to the
Preferred Stock of any other series to the extent permitted by law. Except as
otherwise specifically provided in this Certificate of Incorporation, no vote of
the holders of the Preferred Stock or Common Stock shall be a prerequisite to
the issuance of any shares of any series of the Preferred Stock authorized by
and complying with the conditions of the Certificate of Incorporation, the right
to have such vote being expressly waived by all present and future holders of
the capital stock of the Corporation.
FIFTH. The name and mailing address of the sole incorporators are as
follows:
NAME MAILING ADDRESS
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Richard A. Hoffman 60 State Street
Boston, MA 02109
SIXTH. In furtherance of and not in limitation of powers conferred
by statute, it is further provided:
1. Election of directors need not be by written ballot.
2. The Board of Directors is expressly authorized to
adopt, amend or repeal the By-Laws of the Corporation.
SEVENTH. Whenever a compromise or arrangement is proposed between
this Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof, or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this corporation under the provisions of section 279 of Title 8 of the
Delaware Code order a meeting of the
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creditors or class of creditors, and/or of the stockholders or class of
stockholders of this Corporation, as the case my be, to be summoned in such
manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this Corporation, as the case may be,
agree to any compromise or arrangement and to any promise or arrangement, the
said compromise or arrangement and the said reorganization shall, if sanctioned
by the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of this Corporation, as the case may be, and also on this
Corporation.
EIGHTH. Except to the extent that the General Corporation Law of the
State of Delaware prohibits the elimination or limitation of liability of
directors for breaches of fiduciary duty, no director of the Corporation shall
be personally liable to the Corporation or its stockholders for monetary damages
for any breach of fiduciary duty as a director, notwithstanding any provision of
law imposing such liability. No amendment to or repeal of this provision shall
apply to or have any effect on the liability or alleged liability of any
director of the Corporation for or with respect to any acts or omissions of such
director occurring prior to such amendment.
NINTH. 1. Action, Suits and Proceedings Other than by or in the Right
of the Corporation. The Corporation shall indemnify each person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation), by
reason of the fact that he or she is or was, or has agreed to become, a director
or officer of the Corporation, or is or was serving, or has agreed to serve, at
the request of the Corporation, as a director, officer or trustee of, or in a
similar capacity with, another corporation, partnership, joint venture, trust or
other enterprise (including any employee benefit plan) (all such persons being
referred to hereafter as an "Indemnitee"), or by reason of any action alleged to
have been taken or omitted in such capacity, against all expenses (including
attorneys' fees) judgment, fines and amounts paid in settlement actually and
reasonably incurred by him or her on his or her behalf in connection with such
action, suit or proceeding and any appeal therefrom, if he or she acted in good
faith and in a manner he or she reasonably believed to be in, or not opposed to,
the best interest of the Corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his or her conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he or she reasonably believed to be in, or not
opposed to, the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his or her
conduct was unlawful. Notwithstanding anything to the contrary in this Article,
except as set
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forth in Section 6 below, the Corporation shall not indemnify an Indemnitee
seeking indemnification in connection with a proceeding (or part thereof)
initiate by the Indemnitee unless the initiation thereof was approved by the
Board of Directors of the Corporation.
2. Actions or Suits by or in the Right of the Corporation. The
Corporation shall indemnify any Indemnitee who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Corporation to procure a judgment in its favor by
reason of the fact that he or she is or was, or has agreed to become, a director
or officer of the Corporation, or is or was serving, or has agreed to serve, at
the request of the Corporation, as a director, officer or trustee of, or in a
similar capacity with, another corporation, partnership, joint venture, trust or
other enterprise (including any employee benefit plan), or by reason of any
action alleged to have been taken or omitted in such capacity, against all
expenses (including attorneys' fees) and amounts paid in settlement actually and
reasonably incurred by him or her or on his or her behalf in connection with
such action, suit or proceeding and any appeal therefrom, if he or she acted in
good faith and in a manner he or she reasonably believed to be in, or not
opposed to, the best interests of the Corporation, except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Corporation
unless and only to the extent that the Court of Chancery of Delaware or the
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of such liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses (including attorneys' fees) which the Court of
Chancery of Delaware or such other court shall deem proper.
3. Indemnification for Expenses of Successful Party. Notwithstanding
the other provisions of this Article, to the extent that an Indemnitee has been
successful, on the merits or otherwise, in defense of any action, suit or
proceeding referred to in Sections 1 and 2 of this Article, or in defense of any
claim, issue or matter therein, or on appeal from any such action, suit or
proceeding, he or she shall be indemnified against all expenses (including
attorneys' fees) actually and reasonably incurred by him or her or on his or her
behalf in connection therewith. Without limiting the foregoing, if any action,
suit or proceeding is disposed of, on the merits or otherwise (including a
disposition without prejudice), without (i) the disposition being adverse to the
Indemnitee, (ii) an adjudication that the Indemnitee was liable to the
Corporation, (iii) a plea of guilty or nolo contendere by the Indemnitee, (iv)
an adjudication that the Indemnitee did not act in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and (v) with respect to any criminal proceeding, an adjudication
that the Indemnitee had reasonable cause to believe his or her conduct was
unlawful, the Indemnitee shall be considered for the purposes hereof to have
been wholly successful with respect thereto.
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4. Notification and Defense of Claim. As a condition precedent to his
or her right to be indemnified, the Indemnitee must notify the Corporation in
writing as soon as practicable of any action, suit, proceeding or investigation
involving him or her for which indemnity will or could be sought. With respect
to any action, suit, proceeding or investigation of which the Corporation is so
notified, the Corporation will be entitled to participate therein at its own
expenses and/or to assume the defense thereof at its own expense, with legal
counsel reasonably acceptable to the Indemnitee. After notice from the
Corporation to the Indemnitee of its election so to assume such defense, the
Corporation shall not be liable to the Indemnitee for any legal or other
expenses subsequently incurred by the Indemnitee in connection with such claim,
other than as provided below in this Section 4. The Indemnitee shall have the
right to employ his or her own counsel in connection with such claim, but the
fees and expenses of such counsel incurred after notice from the Corporation of
its assumption of the defense thereof shall be at the expense of the Indemnitee
unless (i) the employment of counsel by the Indemnitee has been authorized by
the Corporation, (ii) counsel to the Indemnitee shall have reasonably concluded
that there may be a conflict of interest or position on any significant issue
between the Corporation and the Indemnitee in the conduct of the defense of such
action or (iii) the Corporation shall not in fact have employed counsel to
assume the defense of such action, in each of which cases the fees and expenses
of counsel for the Indemnitee shall be at the expense of the Corporation, except
as otherwise expressly provided by this Article. The Corporation shall not be
entitled, without the consent of the Indemnitee, to assume the defense of any
claim brought by or in the right of the Corporation or as to which counsel for
the Indemnitee shall have reasonably made the conclusion provided for in clause
(ii) above.
5. Advance of Expenses. Subject to the provisions of Section 6 below,
in the event that the Corporation does not assume the defense pursuant to
Section 4 of this Article of any action, suit, proceeding or investigation of
which the Corporation receives notice under this Article, any expenses
(including attorneys' fees) incurred by an Indemnitee in defending a civil or
criminal action, suit, proceeding or investigation or any appeal therefrom shall
be paid by the Corporation in advance of the final disposition of such matter,
provided, however, that the payment if such expense incurred by an Indemnitee in
advance of the final disposition of such matter shall be made only upon receipt
of an undertaking by or on behalf of the Indemnitee to repay all amounts so
advanced in the event that it shall ultimately be determined that the Indemnitee
is not entitled to be indemnified by the Corporation as authorized in this
Article. Such undertaking may be accepted without reference to the financial
ability of such person to make such repayment.
6. Procedure for Indemnification. In order to obtain indemnification
or advancement of expenses pursuant to Section 1, 2, 3 or 5 of this Article, the
Indemnitee shall submit to the Corporation a written request, including in such
request such documentation and information as is reasonably available to the
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Indemnitee and is reasonably necessary to determine whether and to what extent
the Indemnitee is entitled to indemnification or advancement of expenses. Any
such indemnification or advancement of expenses shall be made promptly, and in
any event within 60 days after receipt by the Corporation of the written request
of the Indemnitee, unless with respect to requests under Section 1, 2 or 5 the
Corporation determines, by clear and convincing evidence, within such 60-day
period that the Indemnitee did not meet the applicable standard of conduct set
forth in Section 1 or 2, as the case may be. Such determination shall be made in
each instance by (a) a majority vote of a quorum of the directors of the
Corporation consisting of persons who are not at that time parties to the
action, suit or proceeding in question ("disinterested directors"), (b) if no
such quorum is obtainable, a majority vote of a committee of two or more
disinterested directors, (c) a majority vote of a quorum of the outstanding
shares of stock of all classes entitled to vote for directors, voting as a
single class, which quorum shall consist of stockholders who are not at that
time parties to the action, suit or proceeding in question, (d) independent
legal counsel (who may be regular legal counsel to the Corporation), or (e) a
court of competent jurisdiction.
7. Remedies. The right to indemnification or advances as granted by
this Article shall be enforceable by the Indemnitee in any court of competent
jurisdiction if the Corporation denies such request, in whole or in part, or if
no disposition thereof is made within the 60-day period referred to above in
Section 6. Unless otherwise provided by law, the burden of proving that the
Indemnitee is not entitled to indemnification or advances of expenses under this
Article shall be on the Corporation. Neither the failure of the Corporation to
have made a determination prior to the commencement of such action that
indemnification is proper in the circumstance because the Indemnitee has met the
applicable standard of conduct, nor an actual determination by the Corporation
pursuant to Section 6 that the Indemnitee has not met such applicable standard
of conduct, shall be a defense to the action or create a presumption that the
indemnitee has not met the applicable standard of conduct. The Indemnitee's
expenses (including attorneys' fees) incurred in connection with successfully
establishing his or her right to indemnification, in whole or in part, in any
such proceeding shall also be indemnified by the Corporation.
8. Subsequent Amendment. No amendment, termination or repeal of this
Article or of the relevant provisions of the General Corporation Law of Delaware
or any other applicable laws shall affect or diminish in any way the rights of
any Indemnitee to indemnification under the provisions hereof with respect to
any action, suit, proceeding or investigation arising out of or relating to any
actions, transactions or acts occurring prior to the final adoption of such
amendment, termination or repeal.
9. Other Rights. The indemnification and advancement of expenses
provided by this Article shall not be deemed exclusive of any other rights to
which
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an Indemnitee seeking indemnification or advancement of expenses may be entitled
under any law (common or statutory), agreement or vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in any other capacity while holding office for the Corporation,
and shall continue as to an Indemnitee who has ceased to be a director or
officer, and shall inure to the benefit of the estate, heirs, executors and
administrators of the Indemnitee. Nothing contained in this Article shall be
deemed to prohibit, and the Corporation is specifically authorized to enter
into, agreements with officers and directors providing indemnification rights
and procedures different from those set forth in this Article. In addition, the
Corporation may, to the extent authorized from time to time by its Board of
Directors, grant indemnification rights to other employees or agents of the
Corporation or other persons serving the Corporation and such rights may be
equivalent to, or greater or less than, those set forth in this Article.
10. Partial Indemnification. If an Indemnitee is entitled under any
provision of this Article to indemnification by the Corporation for some or a
portion of the expenses (including attorneys' fees), judgments, fines or amounts
paid in settlement actually and reasonably incurred by him or her or on his or
her behalf in connection with any action, suit, proceeding or investigation and
any appeal, therefrom but not, however, for the total amount thereof, the
Corporation shall nevertheless indemnify the Indemnitee for the portion of such
expenses (including attorneys' fees), judgments, fines or amounts paid in
settlement to which the Indemnitee is entitled.
11. Insurance. The Corporation may purchase and maintain insurance,
at its expense, to protect itself and any director, officer, employee or agent
of the Corporation or other corporation, partnership, joint venture, trust or
another corporation, partnership, joint venture, trust or other enterprise
(including any employee benefit plan) against any expense, liability or loss
incurred by him or her in any such capacity, or arising out of his or her status
as such, whether or not the Corporation would have the power to indemnify such
person against such expense, liability or loss under the General Corporation Law
of Delaware.
12. Merger or Consolidation. If the Corporation is merged into or
consolidated with another corporation and the Corporation is not the surviving
corporation, the surviving corporation shall assume the obligations of the
Corporation under this Article with respect to any action, suit, proceeding or
investigation arising out of or relating to any actions, transactions or facts
occurring prior to the date of such merger or consolidation.
13. Savings Clause. If this Article or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each Indemnitee as to any expenses
(including attorneys' fees)
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judgments, fines and amounts paid in settlement in connection with any action,
suit, proceeding or investigation, whether civil, criminal or administrative,
including an action by or in the right of the Corporation, to the fullest extent
permitted by any applicable portion of this Article that shall not have been
invalidated and to the fullest extent permitted by applicable law.
14. Definitions. Terms used herein and defined in Section 145(h) and
Section 145(i) of the General Corporation Law of Delaware shall have the
respective meanings assigned to such terms in such Section 145(h) and Section
145(i).
15. Subsequent Legislation. If the General Corporation Law of
Delaware is amended after adoption of this Article to expand further the
indemnification permitted to Indemnities, then the Corporation shall indemnify
such persons to the fullest extent permitted by the General Corporation Law of
Delaware, as so amended.
TENTH. The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Restated Certificate of Incorporation, in
the manner now or hereafter prescribed by statute and this Restated Certificate
of Incorporation, and all rights conferred upon stockholders herein are granted
subject to this reservation.
ELEVENTH. This Article is inserted for the management of the business
and for the conduct of the affairs of the Corporation.
1. Number of Directors. The number of directors of the Corporation
shall not be less than three. The exact number of directors within the
limitations specified in the preceding sentence shall be fixed from time to time
by, or in the manner provided in, the Corporation's By-Laws.
2. Classes of Directors. The Board of Directors shall be and is
divided into three classes: Class I, Class II and Class III. No one class shall
have more than one director more than any other class. If a fraction is
contained in the quotient arrived at by dividing the designated number of
directors by three, then if such fraction is one-third, the extra director shall
be a member of Class II, and if such fraction is two-thirds, one of the extra
directors shall be a member of Class I and one of the extra directors shall be a
member of Class II, unless otherwise provided from time to time by resolution
adopted by the Board of Directors.
3. Election of Directors. Elections of directors need not be by
written ballot except as and to the extent provided in the By-Laws of the
Corporation.
4. Terms of Office. Each director shall serve for a term ending on
the date of the third annual meeting following the annual meeting at which such
director was elected; provided, that each initial director in Class I shall
serve for a term ending on
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the date of the annual meeting in 1997; each initial director in Class II shall
serve for a term ending on the date of the annual meeting in 1998; and each
initial director in Class III shall serve for a term ending on the date of the
annual meeting in 1999; and provided further, that the term of each director
shall be subject to the election and qualification of his successor and to his
earlier death, resignation or removal.
5. Allocation of Directors Among Classes in the Event of Increases or
Decreases in the Number of Directors. In the event of any increase or decrease
in the authorized number of directors, (i) each director then serving as such
shall nevertheless continue as a director of the class which he is a member and
(ii) the newly created or eliminated directorships resulting from such increase
or decrease shall be apportioned by the Board of Directors among the three
classes of directors so as to ensure that no one class has more than one
director more than any other class. To the extent possible, consistent with the
foregoing rule, any newly created directorships shall be added to those classes
whose terms of office are to expire at the latest dates following such
allocation, and any newly eliminated directorships shall be subtracted from
those classes whose terms of officers are to expire at the earliest dates
following such allocation, unless otherwise provided from time to time by
resolution adopted by the Board of Directors.
6. Quorum; Action at Meeting. A majority of the directors at any time
in office shall constitute a quorum for the transaction of business. In the
event one or more of the directors shall be disqualified to vote at any meeting,
then the required quorum shall be reduced by one for each director so
disqualified, provided that in no case shall less than one-third of the number
of directors fixed pursuant to Section 1 above constitute a quorum. If at any
meeting of the Board of Directors there shall be less than such a quorum, a
majority of those present may adjourn the meeting from time to time. Every act
or decision done or made by a majority of the directors present at a meeting
duly held at which a quorum is present shall be regarded as the act of the Board
of Directors unless a greater number is required by law, by the By-Laws of the
Corporation or by this Restated Certificate of Incorporation.
7. Removal. Directors of the Corporation may be removed only for
cause by the affirmative vote of the holders of at least two-thirds of the
shares of the capital stock of the Corporation issued and outstanding and
entitled to vote.
8. Vacancies. Any vacancy in the Board of Director, however
occurring, including a vacancy resulting from an enlargement of the board, shall
be filled only by a vote of a majority of the directors then in office, although
less than a quorum, or by a sole remaining director. A director elected to fill
a vacancy shall be elected to hold office until the next election of the class
for which such director shall have been chosen, subject to the election and
qualification of his or her successor and to his or her earlier death,
resignation or removal.
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<PAGE>
9. Stockholder Nominations and Introduction of Business, Etc. Advance
notice of stockholder nominations for election of directors and other business
to be brought by stockholders before a meeting of stockholders shall be given in
the manner provided by the By-Laws of the Corporation.
10. Amendments to Article. Notwithstanding any other provisions of
law, this Restated Certificate of Incorporation or the By-Laws of the
Corporation, and notwithstanding the fact that a lesser percentage may be
specified by law, the affirmative vote of the holders of at least seventy-five
percent (75%) of the shares of capital stock of the Corporation issued and
outstanding and entitled to vote shall be required to amend or repeal, or to
adopt any provision inconsistent with, this Article ELEVENTH.
TWELFTH. Stockholders of the Corporation may not take any action by
written consent in lieu of a meeting. Notwithstanding any other provisions of
law, the Restated Certificate of Incorporation or the By-Laws of the
Corporation, and notwithstanding the fact that a lesser percentage may be
specified by law, the affirmative vote of the holders of at least seventy-five
percent (75%) of the shares of capital stock of the corporation issued and
outstanding and entitled to vote shall be required to amend or repeal, or to
adopt any provision inconsistent with, this Article TWELFTH.
THIRTEENTH. Special meetings of stockholders may be called at any
time by only the President or the Board of Directors. Business transacted at any
special meeting of stockholders shall be limited to matters relating to the
purpose or purposes stated in the notice of meeting. Notwithstanding any other
provision of law, this Restated Certificate of Incorporation or the By-Laws of
the Corporation, as amended, and notwithstanding the fact that a lesser
percentage may be specified by law, the affirmative vote of the holders of at
least seventy-five percent (75%) of the shares of capital stock of the
Corporation issued and outstanding and entitled to vote shall be required to
amend or repeal, or to adopt any provision inconsistent with this Article
THIRTEENTH.
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<PAGE>
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to
be affixed hereto and this Restated Certificate of Incorporation to be signed by
its President and Chief Executive Officer this 24th day of July, 1996.
DIATIDE, INC.
By: /s/ Richard T. Dean
-------------------------
Richard T. Dean,
President and
Chief Executive Officer
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<PAGE>
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 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
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<PAGE>
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 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
-2-
<PAGE>
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 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.
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<PAGE>
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 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
-4-
<PAGE>
("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.
(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-
<PAGE>
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 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-
<PAGE>
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.
-7-
<PAGE>
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: /s/ Richard T. Dean
---------------------------
Richard T. Dean,
President and Chief
Executive Officer
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<PAGE>
Certificate of Designations of the Preferred Stock
of Diatide, Inc.
To be Designated
Series B 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 830,000 shares, to
be designated "Series B Convertible Preferred Stock" (the "Series B Preferred
Stock"); that the Board of Directors be and hereby is authorized to issue such
shares of Series B 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 B Preferred Stock shall be as follows:
1. Dividends. The Corporation shall not declare or pay any
distributions on shares of Common Stock (other than distributions covered by
Sections 5(d) and (e)) until the holders of the Series B Preferred Stock then
outstanding shall have first received, or simultaneously receive, a distribution
on each outstanding share of Series B 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 B 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 B
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 B Preferred Stock
(collectively referred to as "Senior Preferred Stock"), but before any payment
shall be made to the holders of Series A Convertible Preferred Stock, Common
Stock or any other class or series of stock ranking on
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<PAGE>
liquidation junior to the Series B Preferred Stock (such Series A Convertible
Preferred Stock, 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) $7.27 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 B Preferred Stock the full amount to
which they shall be entitled, the holders of shares of Series B Preferred Stock
and any class or series of stock ranking on liquidation on a parity with the
Series B 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 B Preferred Stock and any
other class or series of stock of the Corporation ranking on liquidation on a
parity with the Series B 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 B Preferred Stock and any other class or series of stock
ranking on liquidation on a parity with the Series B 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 B Preferred Stock would receive in such
transaction for each share of Series B Preferred Stock, upon conversion of such
share of Series B 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 B
-2-
<PAGE>
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 B 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 B 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 B 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 B Preferred Stock so
as to affect adversely the Series B Preferred Stock, without the written consent
or affirmative vote of the holders of a majority of the then outstanding shares
of Series B 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
B 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 B Preferred Stock, and the
authorization of any shares of capital stock on a parity with Series B 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 B Preferred Stock. The number of authorized shares
of Series B 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 majority of the then outstanding shares of the Common
Stock, Series A Preferred Stock, Series B 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.
-3-
<PAGE>
4. Optional Conversion. The holders of the Series B Preferred Stock
shall have conversion rights as follows (the "Conversion Rights"):
a. Right to Convert. Each share of Series B 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 $7.27 by the Conversion Price (as defined below) in
effect at the time of conversion. The "Conversion Price" shall initially be
$7.27. The Conversion Price, and the rate at which shares of Series B Preferred
Stock may be converted into shares of Common Stock, are subject to adjustment as
provided in Section 5 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 B Preferred Stock. The Company shall use reasonable
efforts to notify holders of Series B 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 B 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 B Preferred Stock to
convert shares of Series B Preferred Stock into shares of Common Stock, such
holder shall surrender the certificate or certificates for such shares of Series
B Preferred Stock at the office of the transfer agent for the Series B 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 B 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 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
-4-
<PAGE>
("Conversion Date"). The Corporation shall, as soon as practicable after the
Conversion Date, issue and deliver at such office to such holder of Series B
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 B
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 B 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 B 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 B 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 B Preferred Stock surrendered for conversion or on the Common Stock
delivered upon conversion.
(iv) All shares of Series B 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 B 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 B
Preferred Stock accordingly.
(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 B 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 B 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-
<PAGE>
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 B 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 B 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 B
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 B
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 B Preferred Stock shall thereafter be
convertible (or 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 B 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 B 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 B Preferred Stock.
-6-
<PAGE>
d. Adjustment for Certain Dividends and Distributions. In the
event the Corporation at any time, or from time to time after the Original Issue
Date, shall make or issue, or fix a record date for the determination of holders
of Common Stock entitled to receive, a dividend or other distribution payable in
additional shares of Common Stock, then and in each such event the Conversion
Price then in effect shall be decreased as of the time of such issuance or, in
the event such a record date shall have been fixed, as of the close of business
on such record date, by multiplying the Conversion Price then in effect by a
fraction:
(i) the numerator of which shall be the total number of shares
of Common Stock issued and outstanding immediately prior to the time of such
issuance or the close of business on such record date, and
(ii) the denominator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to the time of
such issuance or the close of business on such record date, plus the number of
shares of Common Stock issuable in payment of such dividend or distribution;
provided, however, that if such record date shall have been fixed and such
dividend is not fully paid or if such distribution is not fully made on the date
fixed therefor, the Conversion Price shall be recomputed accordingly as of the
close of business on such record date and thereafter the Conversion Price shall
be adjusted pursuant to this Section as of the time of actual payment of such
dividends or distributions.
e. Adjustments for Other Dividends and Distributions. In the
event the Corporation at any time or from time to time after the Original Issue
Date shall make or issue, or fix a record date for the determination of holders
of Common Stock entitled to receive, a dividend or other distribution payable in
securities of the Corporation other than shares of Common Stock, then and in
each such event provision shall be made so that the holders of Series B
Preferred Stock shall receive upon conversion thereof in addition to the number
of shares of Common Stock receivable thereupon, the amount of securities of the
Corporation that they would have received had their Series B Preferred Stock
been converted into Common Stock on the date of such event and had thereafter,
during the period from the date of such event to and including the conversion
date, retained such securities receivable by them as aforesaid during such
period giving application to all adjustments called for during such period,
under this Section with respect to the rights of the holders of the Series B
Preferred Stock; and provided further, however, that no such adjustment shall be
made if the holders of Series B Preferred Stock simultaneously receive a
dividend or other distribution of such securities in an amount equal to the
amount of such securities as they would have received if all outstanding shares
of Series B Preferred Stock had been converted into Common Stock on the date of
such event.
-7-
<PAGE>
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 B Preferred Stock;
provided, however, that the Corporation shall be required to give each holder of
the Series B 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 B
Preferred Stock is 120% of the Conversion Price.
-8-
<PAGE>
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 19th day of January,
1999.
DIATIDE, INC.
By: /s/ Richard T. Dean
----------------------------
Richard T. Dean,
President and Chief
Executive Officer
-9-
RESTRICTED SECURITIES SEE LEGENDS ON REVERSE SIDE
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
NUMBER SHARES
-X- -X-
DIATIDE, INC.
FULLY PAID NON-ASSESSABLE
Series B Convertible Preferred Stock
$0.01 Par Value Per Share
This Certifies that XXX SPECIMEN XXX is the
------------------------------------------------------
registered holder of --- Zero --- Shares
-----------------------------------------------------
Diatide, Inc.
transferable only on the books of the Corporation by the holder hereof in person
or by Attorney upon surrender of this Certificate properly endorsed.
In Witness Whereof, the said Corporation has caused this Certificate to be
signed by its duly authorized officers and its Corporate Seal to be hereunto
affixed
this XXxx day of XX A.D. xx
------------------------------ --------------------------- ---------
- ----------------------------- -------------------------------
President Treasurer
<PAGE>
The shares represented by this certificate have not been registered under the
Securities Act of 1933, as amended, and may not be transferred, pledged or
hypothecated unless and until such shares 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 corporation has more than one class of stock authorized to be issued. The
corporation will furnish without charge to each stockholder upon written request
a copy of the full text of the preferences, voting powers, qualifications and
special and relative rights of the shares of each class of stock (and any series
thereof) authorized to be issued by the corporation as set forth in the
Certificate of Incorporation of the corporation and amendments thereto filed
with the Secretary of the State of Delaware.
--------------------
CERTIFICATE
FOR
0
SHARES
of the
Capital Stock
--------------------
DIATIDE, INC.
--------------------
ISSUED TO
XXX SPECIMEN XXX
DATE
XXXX XX XXXX
--------------------
For Value Received,______hereby sell, assign and transfer
unto_____________________________________________________
___________________________________________________Shares
represented by the within Certificate and do hereby
irrevocably constitute and appoint
_________________________________________________Attorney
to transfer the said Shares on the books of the within named
Corporation with full power of substitution in the premises.
Dated__________________ ________
In presence of
__________________________________
_________________________
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUED UPON ITS
EXERCISE ARE SUBJECT TO THE RESTRICTIONS ON
TRANSFER SET FORTH IN SECTION 4 OF THIS WARRANT
------------------------------------------------------------
Warrant No. 1 Number of Shares: _______
(subject to adjustment)
Date of Issuance: January __, 1999
DIATIDE, INC.
-------------
Common Stock Purchase Warrant
-----------------------------
(Void after January __, 2001)
Diatide, Inc., a Delaware corporation (the "Company"), for value
received, hereby certifies that _____________________________, 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 January __, 2001 at not later than
5:00 p.m. (Boston, Massachusetts time), _______ shares of Common Stock, $.001
par value per share, of the Company, at a purchase price of $_____ 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) 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.
(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
-1-
<PAGE>
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 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)
-2-
<PAGE>
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 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
-3-
<PAGE>
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, 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
-4-
<PAGE>
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.
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
-5-
<PAGE>
(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 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.
-6-
<PAGE>
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.
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
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<PAGE>
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 State of Delaware.
DIATIDE, INC.
By:________________________________
[Corporate Seal] Title:_____________________________
ATTEST:
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EXHIBIT I
---------
PURCHASE FORM
-------------
To: Diatide, Inc. Dated:______________
The undersigned, pursuant to the provisions set forth in the attached
Warrant (No. 1), hereby irrevocably elects to purchase _____ shares of the
Common Stock covered by such Warrant. The undersigned herewith makes payment of
$____________ in cash, representing the full purchase price for such shares at
the price per share provided for in such Warrant.
Signature:__________________________
Address:____________________________
____________________________
<PAGE>
EXHIBIT II
----------
ASSIGNMENT FORM
---------------
FOR VALUE RECEIVED, ______________________________________ hereby
sells, assigns and transfers all of the rights of the undersigned under the
attached Warrant (No. 1) with respect to the number of shares of Common Stock
covered thereby set forth below, unto:
Name of Assignee Address No. of Shares
- ---------------- ------- -------------
Dated:______________ Signature:____________________________
Dated:______________ Witness:______________________________
- --------------------------------------------------------------------------------
DIATIDE, INC.
--------------------------------------------
SECURITIES PURCHASE AGREEMENT
--------------------------------------------
January 19, 1999
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<PAGE>
Table of Contents
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<TABLE>
<CAPTION>
Page
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<S> <C> <C> <C>
SECTION 1. Certificate of Designations....................................................................1
SECTION 2. Authorization of 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. Capitalization.................................................................................4
3.6. Defaults.......................................................................................4
3.7. Reports and Financial Information..............................................................5
3.8. Offering Exemption.............................................................................5
3.9. Brokers........................................................................................6
3.10. Registration Rights............................................................................6
3.11. No Preemption Rights...........................................................................6
3.12. Investments Relating to Certain Foreign Countries .....................6
3.13. Indemnification................................................................................6
SECTION 4. Representations and Warranties of the Investors................................................6
4.1. Authorization of the Documents.................................................................6
4.2. Investment Representations.....................................................................6
SECTION 5. Restriction on Transfer........................................................................7
SECTION 6. Expenses.......................................................................................8
SECTION 7. Exchanges; Lost, Stolen or Mutilated Certificates..............................................9
SECTION 8. Survival of Representations and Warranties.....................................................9
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SECTION 9. Governing Law..................................................................................9
SECTION 10. Waivers; Amendments............................................................................9
SECTION 11. Remedies......................................................................................10
SECTION 12. Successors and Assigns........................................................................10
SECTION 13. Entire Agreement..............................................................................10
SECTION 14. Notices.......................................................................................10
SECTION 15. Counterparts; Facsimile Signatures............................................................11
SECTION 16. Headings......................................................................................12
SECTION 17. Nouns and Pronouns............................................................................12
SECTION 18. Public Disclosure.............................................................................12
SECTION 19. Listing on the Nasdaq Market..................................................................12
SECTION 20. Nomination to the Corporation's Board of Directors............................................12
</TABLE>
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Attachments
-----------
EXHIBITS
- --------
Exhibit A - Certificate of Designations
Exhibit B - Warrant Agreement
Exhibit C - Form of Registration Rights Agreement
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<PAGE>
Definitions
The following terms used in this Agreement are defined where
indicated below.
Term Section
- ---- -------
33 and 34 Act Reports...............................................3.7(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..............................................................3.6
Conversion Shares......................................................2.1
Corporation.......................................................Preamble
Document(s)............................................................3.2
Exchange Act...........................................................3.4
Financial Statements...................................................3.7
Governmental Entity....................................................3.6
Investor(s).......................................................Preamble
Laws...................................................................3.2
Listing Application....................................................3.5
Majority of the Investors............................................10(b)
Management Options..................................................3.5(a)
Material Adverse Effect................................................3.1
Nasdaq Market..........................................................3.4
Person.................................................................3.2
Preferred Shares.......................................................2.1
Registration Rights Agreement.........................................3.10
SEC....................................................................3.1
SEC Reports.........................................................3.7(a)
Securities.............................................................2.1
Securities Act.........................................................3.4
Series B Convertible Preferred Stock.....................................1
Transfer..............................................................5(a)
Warrant Agreement......................................................2.1
Warrant Shares.........................................................2.1
Warrants...............................................................2.1
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<PAGE>
SECURITIES PURCHASE AGREEMENT dated January 19, 1999, 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 830,000 shares of convertible preferred stock, $.01 par value, of
the Corporation as Series B Convertible Preferred Stock (the "Series B
Convertible Preferred Stock") and (ii) sets forth the rights, restrictions,
privileges and preferences of the Series B 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) 825,309 shares (the "Preferred
Shares") of Series B Convertible Preferred Stock, together with the 825,309
shares of Common Stock of the Corporation, $.001 par value per share (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 123,795 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) 825,309
Conversion Shares and (ii) 123,795 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
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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,
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 January 19,
1999, 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 $7.18 per share and $0.09 (per Warrant to
purchase one share of Common Stock), respectively, for purposes of establishing
the cost basis of the Warrants to the Investors and the related Federal income
tax consequences to the Corporation and the Investors arising from this
Agreement. The Corporation and the Investors shall prepare and file their
respective Federal income tax returns in a manner which is consistent with the
foregoing allocation of fair market values to the Preferred Shares and the
Warrants pursuant to this Agreement.
SECTION 3. Representations and Warranties of the Corporation. The
Corporation hereby represents and warrants to the Investors as of the date
hereof as follows:
3.1. Organization; Power and Authority; Qualifications. The
Corporation is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all requisite corporate
power and authority to own, lease and operate its properties and to carry on its
business as presently conducted. The Corporation is qualified and in good
standing to transact business as a foreign corporation in those jurisdictions
listed on Schedule 3.1, which jurisdictions constitute all the jurisdictions in
which the character of the property owned or leased by the Corporation or the
nature of the activities conducted by the Corporation makes such qualification
necessary, except where the failure to be so qualified and in good standing is
not reasonably expected to have a material adverse effect on the business,
properties, assets, liabilities, operations or financial condition of the
Corporation (a "Material Adverse Effect"). True and complete copies of the
Certificate of
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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, 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) 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 not subject to preemptive or any
other similar rights of the stockholders of the Corporation.
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3.4. No Consent or Approval Required. Except for applicable filings
with The Nasdaq Stock Market, Inc. (the "Nasdaq Market"), 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. 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 (i) 10,580,729
shares shall have been duly authorized, validly issued and shall be outstanding,
fully paid and nonassessable, (ii) 1,210,256 shares shall have been duly
reserved for issuance upon conversion of the outstanding shares of the
Corporation's Series A Convertible Preferred Stock, $.01 par value per share
("Series A Preferred Stock"), (iii) 181,538 shares shall have been duly reserved
for issuance upon exercise of the warrants issued on September 23, 1997 in
connection with the issuance and sale of the Series A Preferred Stock, (iv)
825,309 shares shall have been duly reserved for issuance upon conversion of the
Preferred Shares, (v) 123,795 shares shall have been duly reserved for issuance
upon exercise of the Warrants and (vi) 2,446,792 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 (i)
1,300,000 shares shall have been duly designated as Series A Convertible
Preferred Stock, 1,210,256 of which shares shall be outstanding and fully paid
and nonassessable and (ii) 830,000 shares shall have been duly designated as
Series B Convertible Preferred Stock, 825,309 of which shares will be
outstanding as of the Closing Date and will be fully paid and nonassessable,
upon consummation of the Closing.
3.6. Defaults. 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
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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.
3.7. 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 January 1, 1998, including, without limitation, an
Annual Report on Form 10-K for the year ended December 31, 1997 and Form 10-Q
for the quarterly periods ended March 31, 1998, June 30, 1998 and September 30,
1998 (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 January 1, 1998 (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) The financial statements contained in the 33 and 34 Act
Reports (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.
3.8. 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
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take all action necessary to be taken to comply with such applicable state
securities or "blue sky" laws.
3.9. Brokers. Neither the Corporation nor any of the officers,
directors, employees or stockholders of the Corporation has employed any broker
or finder in connection with the transactions contemplated by this Agreement.
3.10. Registration Rights. Except 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 (the "Registration
Rights Agreement"), 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.
3.11. No Preemptive Rights. There exist no statutory preemptive, or
other similar rights to purchase securities of the Corporation.
3.12. Investments Relating to Certain Foreign Countries. The
Corporation has not participated and is not participating in, an anti-Israeli
boycott within the scope of chapter 7 of Part 2 of Division 4 of Title 2 of the
California Government Code as has been in effect from time to time.
3.13. Indemnification. The Certificate of Incorporation provides that
except to the extent the General Corporation Law of the State of Delaware
prohibits the elimination or limitation of liability of directors for breaches
of fiduciary duty, no director of the Corporation shall be personally liable to
the Corporation or its stockholders for monetary damages for any breach of
fiduciary duty as a director, notwithstanding any provision of law imposing such
liability. The Certificate of Incorporation also provides for the
indemnification of the directors on the terms set forth therein.
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
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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.
(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.
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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 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 reasonable fees
and expenses of Bay Venture Counsel, LLP up to a limit of $10,000 for its
services in connection with the purchase of the Securities by the Investors,
including negotiation of the Documents and due diligence investigation of the
Corporation in connection therewith, which reasonable 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.
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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 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.
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(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, 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 affiliate of such Investor, or
to any Person who shall purchase no less than Preferred Shares and Warrants
together representing the right to convert into or be exercisable for 175,000
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.
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,
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<PAGE>
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
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:
Bay Venture Counsel, LLP
1999 Harrison Street
Suite 1300
Oakland, CA 94612
Telecopy: (510) 834-7440
Attention: Donald Reinke, 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.
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<PAGE>
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 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. 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.
SECTION 20. 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
JeanDeleage 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 be required to nominate any other
candidate in lieu of Jean Deleage 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.
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<PAGE>
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: /s/ Daniel F. Harrington
-------------------------------------------
Name: Daniel F. Harrington
Title: Vice President and Chief Financial Officer
ALTA BIOPHARMA PARTNERS, L.P.
By: ALTA BIOPHARMA MANAGEMENT, LLC
By: /s/ Eileen McCarthy
------------------------------------------
Managing Director
ALTA EMBARCADERO BIOPHARMA
PARTNERS, LLC
By: /s/ Eileen McCarthy
-------------------------------------------
Member
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<PAGE>
SCHEDULE I
TO SECURITIES PURCHASE AGREEMENT
<TABLE>
<CAPTION>
No. of Aggregate
Preferred No. of Purchase
Investors Shares Warrants Price
--------- ------ -------- -----
<S> <C> <C> <C>
Alta BioPharma Partners, L.P. 795,332 119,299 $5,782,063.64
c/o Alta Partners
One Embarcadero Center, Suite 4050
San Francisco, CA 94111
Attn: Hilary Strain
Telephone: (415) 362-4022
Alta Embarcadero BioPharma 29,977 4,496 $217,932.79
Partners, LLC
c/o Alta Partners
One Embarcadero Center, Suite 4050
San Francisco, CA 94111
Attn: Hilary Strain
Telephone: (415) 362-4022
------- ------- -------------
Totals: 825,309 123,795 $5,999,996.43
</TABLE>
<PAGE>
SCHEDULE 3.1: Organization; Power; and Authority;
Qualifications -- New Hampshire
Exhibit 10.2
------------
REGISTRATION RIGHTS AGREEMENT
-----------------------------
This Agreement dated as of January 19, 1999 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:
"Chase Registrable Shares" means Stockholder Registrable Shares
(as such term is defined in the Chase Registration Rights Agreement).
"Chase Registration Rights Agreement" means the Registration
Rights Agreement dated as of September 23, 1997 by and among the Company and the
Stockholders (as defined therein), as amended from time to time.
"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 and Chase 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) which would otherwise be Chase Registrable
Shares but for the second to last sentence under the definition of Stockholder
Registrable Shares in the Chase Registration Rights Agreement 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
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<PAGE>
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, Chase Registrable Shares and Other Registrable Shares.
"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 B Convertible Preferred
Stock, par value $.01 per share, as more fully defined in Section 2.1 of the
Securities Purchase Agreement dated as of January 19, 1999 by and among the
Company and the Stockholders.
"Stockholder Priority" shall mean at any time $6,000,000 less
any net proceeds received by or payable to the holders of the Stockholder
Registrable Shares or their respective predecessors in interest pursuant to (i)
sales of Stockholder Registrable Shares pursuant to any prior required
registration pursuant to Section 2 hereof or incidental registration pursuant to
Section 3 hereof, (ii) sales of Stockholder Registrable Shares pursuant to Rule
144 under the Securities Act, (iii) sales of Stockholder 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 123,795 shares of Common Stock (the "Warrant Shares") issued to the
Stockholders on January 19, 1999 (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
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<PAGE>
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 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 January 19, 2000, 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 $4,000,000; 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 Stockholders 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
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<PAGE>
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 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. The Company may also include in such
registration Registrable Shares requested to be included by other holders of
Registrable Shares, subject in the case of an underwriting to the approval of
the underwriter managing the offering as provided in Section 2(e) below and to
the priorities set forth in Section 2(g) below. Thereupon, the Company shall, as
expeditiously as possible, use its best efforts to effect the regis tration on
Form S-1 or Form S-2 (or any successor forms) in the case of a registration
requested pursuant to Section 2(a) above, or on Form S-3 (or such successor
form) in the case of a registration requested pursuant to Section 2(b) above, of
all Registrable Shares which the Company has been requested to register.
(e) Notwithstanding any other provision of this Section 2, if
the managing underwriter advises the Stockholders initiating a registration
pursuant to Section 2(c) in writing that marketing factors require a limitation
of the number of shares to be underwritten, then the Stockholders initiating the
registration shall so advise the Company and 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 in the manner set forth in Section 2(g) below. 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 Registrable
Shares 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
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<PAGE>
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:
(i) First, pro rata among the Stockholders holding
Stockholder Registrable Shares who have requested to
have Stockholder Registrable Shares included in such
registration pursuant to Section 2 hereof, and the
holders of Chase Registrable Shares who have requested
to have Chase Registrable Shares included in such
registration (to the extent necessary to reduce the
Stockholder Priority (as defined in the Chase
Registration Rights Agreement) to zero), based upon the
number of Stockholder Registrable Shares owned by each
such Stockholder and the number of Chase Registrable
Shares owned by each such holder of Chase Registrable
Shares.
(ii) Second, pro rata among the other persons or entities
holding Other Registrable Shares based upon the number
of Other Registrable Shares held by such persons and
entities.
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
-5-
<PAGE>
such underwriting unless the holders thereof accept the terms of the
underwriting as agreed upon between the Company and/or the holders of
Registrable Shares 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 Stockholders") 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 and/or the Initiating Stockholders. If in
the opinion of the managing underwriter the registration of all, or part of, the
Registrable Shares 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 Registrable
Shares which the Stockholders have requested to be included, then
(i) the Stockholders who have requested registration shall
first be entitled to include all Registrable Shares
that they have requested to be included to the extent
necessary to reduce the Stockholder Priority to zero;
provided that such Registrable Shares shall be included
with such Registrable Shares as have been requested to
be included by the holders of Chase Registrable Shares
Chase Registration Rights Agreement) (but only to the
extent necessary to reduce the Stockholder Priority (as
defined in the Chase Registration Rights Agreement) to
zero), on a pro rata basis, based upon the number of
Stockholder Registrable Shares owned by each requesting
stockholder and the number of Chase Registrable Shares
owned by each requesting holder of Chase Registrable
Shares;
(ii) the party or parties initiating the registration (i.e.,
the Company or the Initiating Stockholders) 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 Registrable Shares entitled to include
shares of Common Stock in such registration on a parity
with the Stockholders (other than the Stockholders 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.
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<PAGE>
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;
(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
-7-
<PAGE>
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, 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.
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<PAGE>
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 Stockholder selling
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 Stockholder selling
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 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
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<PAGE>
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 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
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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 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 Stockholder holding 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
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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 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
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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 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
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175,000 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 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 Bay
Venture Counsel, LLP, 1999 Harrison Street, Suite 1300, Oakland, California
94612, Attention: Donald Reinke, 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)
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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.
(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.
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IN WITNESS WHEREOF, this Agreement has been executed on the day and
year first above written by the parties listed below:
DIATIDE, INC.
By: /s/ Daniel F. Harrington
---------------------------------------------
Name: Daniel F. Harrington
Title: Vice President and Chief Executive Officer
ALTA BIOPHARMA PARTNERS, L.P.
By: ALTA BIOPHARMA MANAGEMENT, LLC
By: /s/ Eileen McCarthy
----------------------------------------------
Managing Director
ALTA EMBARCADERO BIOPHARMA
PARTNERS, LLC
By: /s/ Eileen McCarthy
-----------------------------------------------
Member
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SCHEDULE I
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Investors
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Alta BioPharma Partners, L.P.
Alta Embarcadero BioPharma Partners, LLC
Exhibit 99.1
------------
For Immediate Release
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DIATIDE ANNOUNCES $6.0 MILLION FINANCING
LONDONDERRY, NH - Jan. 21, 1999 - Diatide, Inc. (Nasdaq: DITI) today announced
that it has sold $6.0 million of preferred stock to two unnamed investors in a
private transaction. The preferred stock is convertible into 825,309 shares of
Diatide common stock. This stock will not earn dividends. The investors also
have received warrants to purchase 123,795 shares of Diatide common stock at an
exercise price of $8.72 per share, expiring on January 19, 2001.
The investors have the right to require the Company to register the common stock
issuable upon the conversion of the preferred stock and any exercised warrants
at any time after January 19, 2000.
"This $6 million transaction was made at market price which remains fixed,
reflecting the investors' confidence in our strategy," said Richard T. Dean,
Ph.D., President and CEO of Diatide. "Our cash will be used to advance the
marketing and development programs for Diatide's specialty imaging and
therapeutic products."
Diatide is developing a novel line of diagnostic and therapeutic agents -
Techtides(R) and Theratides(TM) - as pharmaceuticals with commercial and medical
promise. The Company's lead product, AcuTect(TM) for the imaging of acute venous
thrombosis (blood clots) in the lower extremities, received FDA approval in
September 1998. AcuTect(TM) is a novel peptide-based imaging agent intended to
help physicians detect acute thrombi that if undetected could lead to risk of
pulmonary embolism (PE). PE kills approximately 100,000 Americans each year.
Diatide's second product, NeoTect(TM) for the noninvasive detection of lung
cancer, is awaiting FDA approval under priority review. NeoTect(TM) received an
approvable letter in December 1998.
Diatide is a specialty pharmaceutical company developing and marketing
proprietary, disease-specific pharmaceuticals for the diagnosis and treatment of
life-threatening conditions. Diatide has applied its proprietary technologies in
the areas of peptide engineering and radiolabeling chemistry to produce a number
of peptides that bind with high affinity and specificity to molecular targets on
diseased tissue and to which a radioisotope can be attached for imaging or
therapeutic purposes. The result is a development pipeline of medical imaging
products (Techtides(R)), and solid tumor and cardiovascular therapeutics
(Theratides(R)). For AcuTect(TM) and NeoTect(TM), Diatide has a marketing and
sales collaboration with U.K. - headquartered Nycomed Amersham plc, the world's
leading diagnostic imaging company and one of the largest research-based
biotechnology suppliers to global markets.
<PAGE>
Diatide is based in New Hampshire, where it conducts most of its research and
development activities with a staff of 90 full-time employees, including 15
Ph.D.s and two MDs on its research staff. More information on the Company can be
obtained from its web site, http://www.diatide.com.
For Further Information:
Daniel F. Harrington
Chief Financial Officer
603-437-8970
This press release contains forward-looking statements that involve a number of
risks and uncertainties. For this purpose, any statements contained herein that
are not statements of historical fact may be deemed to be forward-looking
statements. Without limiting the foregoing, the words "believes," "anticipates,"
"plans," "expects," "intends," and similar expressions are intended to identify
forward-looking statements. Important factors that could cause actual results to
differ materially from those indicated by such forward-looking statements are
set forth under the caption "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations - Certain Factors that May Affect
Future Results" ("Certain Factors") in the Company's Annual Report on Form 10-K
for the year ended December 31, 1997 which is on file with the Securities and
Exchange Commission. These Certain Factors are incorporated herein by reference.
As more fully described in the Certain Factors, the Company's potential products
(other than AcuTect(TM)) are all still in development. There can be no assurance
that the Company's potential products will demonstrate the safety, efficacy, and
cost attributes currently expected by the Company, or that results from
preliminary clinical studies will be predictive of results that will be obtained
in later clinical studies; there can be no assurance as to when the FDA will
complete its review of the NDA for NeoTect(TM) (P829); and, there can be no
assurance that the Company will receive regulatory approvals to commence or
continue clinical trials of product candidates, or to market any products,
including NeoTect(TM); and, there can be no assurance that AcuTect(TM),
NeoTect(TM), or the Company's other potential products will be commercially
successful, or accepted by the medical community or third-party payors, or that
technologies, patents and proposed products of other companies will not render
the Company's products obsolete or noncompetitive.
# # #
