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 15, 1999
MIRAVANT MEDICAL TECHNOLOGIES
(Exact name of registrant as specified in its charter)
Delaware 0-25544 77-0222872
(State or other jurisdiction of (Commission (IRS Employer Identification
incorporation) File Number) Number)
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7408 Hollister Avenue
Santa Barbara, California 93117
(Address of principal executive offices) (Zip Code)
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Registrant's telephone number, including area code: (805) 685-9880
N/A
(Former Name or Former Address, if Changed Since Last Report)
ITEM 5. Other Events
On January 15, 1999, Miravant Medical Technologies ("Miravant"), Pharmacia
& Upjohn, Inc. and Pharmacia & Upjohn S.p.A. which involve these entities and
certain other wholly owned subsidiaries (collectively "P&U, Inc.") entered into
an Equity Investment Agreement (the "Equity Investment Agreement") pursuant to
which P&U, Inc. will purchase from Miravant 1,136,533 shares of Common Stock,
par value $.01 per share, of Miravant (the "Common Stock") for an aggregate
purchase price of $19 million. The price of $16.71 per share includes a premium
of approximately 20% over the ten (10) day average per share closing price of
the Common Stock through January 14, 1999, the last trading day prior to the
date of the Equity Investment Agreement. The Equity Investment Agreement
contemplates that Miravant and certain wholly owned subsidiaries of P&U, Inc., a
global, innovation-driven pharmaceutical and health care company, will enter
into certain other agreements, including a Credit Agreement (the "Credit
Agreement") in the form attached as an exhibit to the Equity Investment
Agreement, pursuant to which, among other things, a wholly owned subsidiary of
P&U, Inc. will extend to Miravant up to $22,500,000 in credit to be used to
support Miravant's ophthalmology program as well as for general corporate
purposes. In connection with the extension of this credit, P&U, Inc. or its
wholly owned subsidiaries will receive a total of up to 360,000 warrants to
purchase Common Stock of Miravant. The exercise price of each warrant will be
equal to 140% of the average of the closing prices of the Common Stock for the
ten (10) trading days immediately preceding the borrowing request for the
related loan. Additionally, Miravant and Pharmacia & Upjohn AB ("P&U AB") a
wholly owned subsidiary of P&U, Inc., will amend their existing ophthalmology
development and license agreement. The closing of the Equity Investment
Agreement and related transactions are subject to the satisfaction or waiver of
certain conditions, including but not limited to the termination or expiration
of the applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended. The Equity Investment Agreement and the
exhibits thereto have been filed as exhibits to this Report and are incorporated
herein by reference. The following description of the Equity Investment
Agreement and the other agreements to be entered into in connection therewith is
qualified in its entirety by reference to such exhibits.
THE EQUITY INVESTMENT AGREEMENT
Under the Equity Investment Agreement, P&U, Inc. will purchase from
Miravant 1,136,533 shares of Common Stock for an aggregate purchase price of $19
million. Prior to the earliest of (i) the occurrence of an Event of Default (as
defined in the Credit Agreement), (ii) the commencement of a tender offer by any
person or entity, other than P&U, Inc. or any of its wholly owned subsidiaries,
for shares of Common Stock, or (iii) July 1, 2000, unless specifically requested
in advance by Miravant's Board of Directors, neither P&U, Inc. nor any of its
affiliates will, and P&U, Inc. and its affiliates will not assist or encourage
others (including by providing financing) to, directly or indirectly, acquire or
agree, offer, seek or propose to acquire ownership of any securities issued by
Miravant (including but not limited to beneficial ownership (as defined in Rule
13d-3 under the Securities Exchange Act of 1934)) or enter into any discussions,
negotiations, arrangements or understandings with any person with respect to any
of the foregoing; however that such provision shall not prohibit (i) the
acquisition by P&U, Inc. and its affiliates of a number of shares of Common
Stock which, taken together with the number of shares of Common Stock held by
the wholly owned subsidiary of P&U, Inc. as lender (the "Lender") under the
Credit Agreement, and its affiliates as of the date of such acquisition, does
not exceed 25% of the outstanding Common Stock, (ii) the acquisition by P&U,
Inc. or its affiliates of shares of Common Stock pursuant to the Credit
Agreement or upon exercise of any Warrants (as defined in the Credit Agreement),
or (iii) the acquisition by P&U, Inc. or its affiliates of promissory notes or
any other securities pursuant to the Credit Documents (as defined in the Credit
Agreement).
The Equity Investment Agreement will terminate certain provisions of the
existing Restated and Amended Development and License Agreement for SnET2 in
oncology and urology between Miravant and P&U S.p.A., which would require P&U
S.p.A. to make certain reimbursements of development costs to Miravant and
provides for the amendment of the Amended And Restated Ophthalmology Development
& License Agreement as described below.
Pursuant to the Registration Rights Agreement attached as an exhibit to the
Equity Investment Agreement, P&U S.p.A. will be granted certain "piggyback" and
demand registration rights, for up to three registration statements, with
respect to the shares of Common Stock acquired under the Equity Investment
Agreement.
THE AMENDING AGREEMENT AND THE CARDIOVASCULAR RIGHT OF FIRST NEGOTIATION
The Equity Investment Agreement contemplates that Miravant and P&U AB will
enter into an Amended and Restated Ophthalmology Development and License
Agreement in the form attached as an exhibit to the Equity Investment Agreement
(the "Amending Agreement"). Pursuant to the Amending Agreement, P&U AB will
assume control of the clinical and regulatory aspects of the joint ophthalmic
programs of Miravant and P&U AB, including the PhotoPoint(TM) drug SnET2 (tin
ethyl etiopurpurin) which is in Phase III clinical trials for age-related
macular degeneration ("AMD"). P&U AB will also assume responsibility for the
manufacturing scale-up of SnET2 to commercial levels. The Amending Agreement
will amend the agreement executed in July 1995 and subsequently amended,
pursuant to which Miravant and P&U AB agreed to co-develop, market and
distribute SnET2 for indications in ophthalmology. The Amending Agreement will
terminate certain provisions of such agreement which would require P&U AB to
make certain milestone payments to Miravant for AMD and will require Miravant to
account for the costs to be borne by P&U AB in respect of its additional
clinical and regulatory responsibilities under the Amending Agreement and
liquidity to be provided pursuant to the Credit Agreement from future royalties.
On January 15, 1999, Miravant and P&U, Inc. entered into a letter agreement
(the "Cardiovascular Right of First Negotiation") which provides that if
Miravant develops SnET2 in the field of cardiovascular medicine (the "Field"),
P&U, Inc. or its subsidiaries will have a right of first negotiation to acquire
exclusive marketing rights to SnET2 in the Field. Miravant and P&U, Inc. will
contemplate conducting a feasibility evaluation concerning SnET2 in the Field.
If a definitive agreement is executed by the parties in the Field, P&U, Inc.
will have a right of first negotiation for other drug compounds in the Field.
THE CREDIT AGREEMENT
The Equity Investment Agreement contemplates that Miravant and the Lender
will enter into the Credit Agreement pursuant to which the Lender will agree to
extend to Miravant, for use in support of Miravant's ophthalmology program and
for general corporate purposes, an aggregate amount not to exceed $22,500,000,
in the form of up to six quarterly term loans.
Loans. If requested by Miravant not more than once in each quarter, the
Lender will make a term loan (each, a "Loan") in a principal amount not to
exceed the Maximum Quarterly Amount. "Maximum Quarterly Amount" means, (i) for
the quarter comprising January, February and March, 1999, $3,750,000, and (ii)
for any other quarter (the "Reference Quarter"), the sum of $3,750,000 plus
either (A) if and only if no Loan was made in the quarter immediately preceding
the Reference Quarter or the principal amount of the Loan made in the quarter
immediately preceding the Reference Quarter was less than $3,750,000, then the
amount equal to the amount by which $3,750,000 exceeds the principal amount of
the Loan, if any, made in the quarter immediately preceding the Reference
Quarter, or (B) if and only if the principal amount of the Loan made in the
quarter immediately preceding the Reference Quarter was equal to or greater than
$3,750,000, then zero.
Warrants. Miravant will issue to P&U, Inc. or one of its wholly owned
subsidiaries, in respect of each $62.50 in principal amount of loans extended
under the Credit Agreement, one warrant to purchase one share of Common Stock
having the terms set forth in the Warrant Agreement attached as an exhibit to
the Equity Investment Agreement. If Miravant borrows the full $22,500,000
available under the Credit Agreement, P &U, Inc. or one of its wholly owned
subsidiaries will acquire a total of 360,000 warrants. The exercise price of
each warrant will be equal to 140% of the average of the closing prices of the
Common Stock for the ten (10) trading days immediately preceding the borrowing
request for the related loan. The warrants also contain a provision whereby if
and only if the average of the closing prices of the Common Stock for the thirty
(30) trading days immediately preceding a particular date exceeds the exercise
price of one or more warrants, Miravant shall be entitled to cause the holder of
such warrants to exercise all of the related warrants. The warrants will expire
on the fifth anniversary of the first borrowing made pursuant to the Credit
Agreement.
Interest. Each Loan shall bear interest at a rate per annum equal to the
prime commercial loan rate from time to time publicly announced by Citibank,
N.A. in the City of New York (the "Base Rate"), which rate shall change as and
when the Base Rate changes. Interest is payable quarterly in arrears and
interest due prior to January 1, 2001 shall be payable by a promissory note (an
"Interest Note") evidencing an additional loan made pursuant to the Credit
Agreement, having a principal amount equal to the amount of such interest, and
bearing interest at the Base Rate. Interest due subsequent to December 31, 2000
shall be payable only in cash; provided that if and only if EBITDA (as defined
in the Credit Agreement) for the calendar quarter does not exceed the amount of
interest due, then, subject to the next sentence, such interest shall be payable
by an Interest Note. Miravant shall not be entitled to pay interest on Loans by
an Interest Note in respect of interest payable on any of the four quarters
immediately following the closing of a primary offering or sale of securities in
which the net available proceeds to Miravant from such offering or sale equals
or exceeds $5,000,000.
Repayment. The aggregate outstanding principal of the Loans shall be repaid
in full, together with any accrued interest, not later than the fifth
anniversary of the borrowing date for the first Loan made pursuant to the Credit
Agreement (the "Maturity Date"). Repaid Loans may not be reborrowed. On the
Maturity Date, the Borrower may, at its option, repay all or a portion of the
principal, together with any accrued interest, by delivering to the Lender,
among other things, (i) shares of Common Stock (the "Repayment Shares") equal to
the product of (A) the portion of the aggregate principal of the Loans to be
repaid, together with accrued interest (the "Share Repayment Amount"), divided
by (B) the average of the closing prices of the Common Stock for the ten (10)
trading days immediately preceding the Maturity Date; and (ii) funds equal to
the difference of (A) the aggregate principal amount of the Loans, together with
accrued interest, minus (B) the Share Repayment Amount.
Prepayment. Miravant may prepay portions of the Loans in aggregate
principal amounts of $1,000,000 or integral multiples of $100,000 in excess
thereof, together with accrued interest on the principal of the Loans being
repaid. Miravant will be obligated to apply to prepayment of the Loans a portion
of the net available proceeds to Miravant from any asset disposition (subject to
certain exceptions), a portion of the net available proceeds to Miravant from
any offering or sale of securities, and a portion of the amount by which EBITDA
in any calendar quarter exceeds a specified amount.
Negative Covenants. The Credit Agreement will restrict, and in certain
cases prohibit, Miravant and its subsidiaries from taking certain actions or
entering into certain designated transactions including, but not limited to,
mergers, consolidations or share exchanges, acquiring or disposing of any of
their assets, incurring or assuming certain indebtedness, declaring dividends or
purchasing, acquiring, redeeming or retiring capital stock or other securities,
entering into sale and leaseback transactions and entering into any transaction
with any affiliate or related person of Miravant or any of its subsidiaries. In
addition, the Credit Agreement will restrict Miravant and its subsidiaries from
amending, modifying or waiving any provision of the License Agreement, effective
July 1, 1989, between the University of Toledo, the Medical College of Ohio, St.
Vincent Medical Center and Miravant or the Development and Distribution
Agreement, dated May 28, 1996, between Iridex Corporation and Miravant.
Affirmative and Financial Covenants. The Credit Agreement will require that
Miravant meet certain affirmative and financial conditions, including, but not
limited to, specified levels of Shareholders' Equity (as defined in the Credit
Agreement), the maintenance of designated financial ratios, limits on Operating
Losses (as defined in the Credit Agreement) in years 1999 and 2000, and minimum
spending requirements for Ophthalmology expenses (as defined in the Credit
Agreement) in years 1999 and 2000.
Events of Default. The Credit Agreement will provide that if one or more of
the Events of Default, specified therein, then, and at any time during the
continuance of such Event of Default, the Lender may, by written notice to
Miravant, declare any Loans then outstanding to be due, whereupon the principal
of the loans made under the Credit Agreement so declared to be due, together
with accrued interest thereon and any unpaid amounts accrued under the Credit
Documents, shall become forthwith due.
In addition to those occurrences which customarily constitute events of
default under loan agreements, the Credit Agreement also provides that there
will be an Event of Default if (j) any person or group of persons (within the
meaning of Section 13 or 14 of the Securities Exchange Act of 1934, as amended),
other than the Lender and its affiliates and other than any person or group of
persons which has beneficial ownership of 5% or more of the outstanding shares
of Common Stock as of the date of the Credit Agreement, shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under said Act) of 19.9% or more of the
outstanding shares of Common Stock; or, during any period of 24 consecutive
calendar months, individuals who were directors of Miravant on the first day of
such period shall cease to constitute a majority of the board of directors of
Miravant.
Security. The payment and performance of Miravant's obligations under the
Credit Agreement will be secured by the Miravant's grant to the Lender of a
security interest in and to substantially all of Miravant's real and personal
property.
Item 7. Exhibits
Exhibit
Number Exhibit
10.1 Equity Investment Agreement dated January 15, 1999 between the
Registrant and Pharmacia & Upjohn, Inc., and Pharmacia & Upjohn, S.p.A.
10.2 Credit Agreement between the Registrant and the Lender.
10.3 Warrant Agreement between the Registrant and Pharmacia & Upjohn, Inc.
10.4 Security Agreement between the Registrant and the Secured Party.
10.5 Registration Rights Agreement between the Registrant and Pharmacia &
Upjohn, Inc.
10.6 Amended and Restated Ophthalmology Development & License Agreement
between the Registrant and Pharmacia & Upjohn AB.
10.7 Cardiovascular Right of First Negotiation between the Registrant and
Pharmacia & Upjohn, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MIRAVANT MEDICAL TECHNOLOGIES
By:/s/John M. Philpott
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John M. Philpott
Chief Financial Officer
Date: January 22, 1999
INDEX TO EXHIBITS
Exhibit
Number Exhibit
10.1 Equity Investment Agreement dated January 15, 1999 between the
Registrant and Pharmacia & Upjohn, Inc., and Pharmacia & Upjohn, S.p.A.
10.2 Credit Agreement between the Registrant and the Lender.
10.3 Warrant Agreement between the Registrant and Pharmacia & Upjohn, Inc.
10.4 Security Agreement between the Registrant and the Secured Party.
10.5 Registration Rights Agreement between the Registrant and Pharmacia &
Upjohn, Inc.
10.6 Amended and Restated Ophthalmology Development & License Agreement
between the Registrant and Pharmacia & Upjohn AB.
10.7 Cardiovascular Right of First Negotiation between the Registrant and
Pharmacia & Upjohn, Inc.
EQUITY INVESTMENT AGREEMENT
EQUITY INVESTMENT AGREEMENT (this "Agreement"), dated as of January 15,
1999, between Miravant Medical Technologies, a Delaware corporation (the
"Company"), Pharmacia & Upjohn, Inc., a Delaware corporation (the "Purchaser"),
and Pharmacia & Upjohn, S.p.A., an Italian corporation.
W I T N E S S E T H :
WHEREAS, the Company and Affiliates of the Purchaser are parties to the
Restated and Amended Development and License Agreement, dated June 8, 1998,
between Pharmacia & Upjohn S.p.A. and the Company (the "Oncology License
Agreement"), and the Amended and Restated Ophthalmology Development and License
Agreement, dated June 8, 1998, between Pharmacia & Upjohn AB and the Company
(the "Ophthalmology License Agreement" and, together with the Oncology License
Agreement, the "License Agreements"), and the parties desire to amend such
License Agreements in certain respects, as contemplated herein; and
WHEREAS, certain subsidiaries of the Purchaser are the record owners of
shares of Common Stock (as hereinafter defined), and the Purchaser wishes to
acquire additional shares of Common Stock, all on the terms and subject to the
conditions set forth in this Agreement.
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
Definitions
Section I.1. Terms Generally. The definitions ascribed to terms in this
Agreement apply equally to both the singular and plural forms of such terms.
Whenever the context may require, any pronoun shall be deemed to include the
corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be interpreted as if followed by the phrase
"without limitation". All references herein to the Preamble, Recitals, Articles,
Sections and Schedules shall be deemed references to the Preamble and Recitals,
Articles and Sections of, and Schedules to, this Agreement unless the context
shall otherwise require. The headings and captions herein shall not be given
effect in interpreting or construing the provisions of this Agreement. Except as
otherwise expressly provided herein, all references to "dollars" or "$" shall be
deemed references to the lawful money of the United States of America.
Section I.2. Definitions. The following terms have the meanings ascribed to
them below:
"Act" has the meaning assigned to such term in Section 6.03.
"Affiliate" means any other Person directly or indirectly controlling,
controlled by, or under common control with, that Person.
"Agreement" has the meaning assigned to such term in the preamble hereto.
"Amending Agreement" has the meaning assigned to such term specified in
Section 7.01.
"Associate" has the meaning ascribed to such term in Rule 12b-2 under the
1934 Act.
"Audited Financial Statements" has the meaning assigned to such term in
Section 4.10.
"Business Day" means any day that is not a Saturday, Sunday or other day on
which commercial banks in The City of New York or in Los Angeles, California,
are authorized by law to close.
"Certificate of Incorporation" means the Restated Certificate of
Incorporation of the Company as in effect on the Closing Date.
"Closing" has the meaning assigned to such term in Section 3.02.
"Closing Date" has the meaning assigned to such term in Section 3.02.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the common stock, $.01 par value, of the Company.
"Company" has the meaning assigned to such term in the Preamble.
"Control," "controlled by" or "under common control with" means direct or
indirect possession of the power to direct or cause the direction of management
or policies (whether through ownership of voting securities, by contract or
otherwise); provided that control shall be conclusively presumed when any Person
directly or indirectly owns a majority of the securities having ordinary voting
power for the election of a majority of the directors of a corporation.
"Credit Agreement" has the meaning assigned to such term in Section 7.01.
"Disclosure Package" has the meaning assigned to such term in Section
4.09(a).
"Employee Benefit Plan" has the meaning assigned to such term in Section
4.18.
"Environmental Law" has the meaning assigned to such term in Section 4.22.
"Environmental Property" has the meaning assigned to such term in Section
4.22.
"FDA" has the meaning assigned to such term in Section 4.24.
"Hazardous Materials" has the meaning assigned to such term in Section
4.22.
"Intellectual Property Rights" has the meaning assigned to such term in
Section 4.14.
"License Agreements" has the meaning assigned to such term in the first
Recital.
"Licenses and Permits" means all governmental and private permits,
licenses, certificates of occupancy, franchises and authorizations required to
conduct the business of the Company and its Subsidiaries with operations and
products substantially the same as those of the Company immediately prior to the
consummation of the transaction contemplated hereby or as now contemplated.
"Loss" means any loss, claim, damages, or liability.
"Oncology License Agreement" has the meaning assigned to such term in the
first Recital.
"Ophthalmology License Agreement" has the meaning assigned to such term in
the first Recital.
"Person" means and includes natural persons, corporations, limited
liability companies, limited partnerships, general partnerships, joint stock
companies, joint ventures, associations, companies, trusts or other
organizations, whether or not legal entities, and governments and agencies and
political subdivisions thereof.
"Product Intellectual Property" has the meaning assigned to such term in
Section 4.13.
"Purchase Price" has the meaning assigned to such term in Section 3.01.
"Purchaser" has the meaning assigned to such term in the Preamble.
"Registration Rights Agreement" has the meaning assigned to such term in
Section 7.01.
"Securities" has the meaning assigned to such term in Section 3.01.
"Security Agreement" has the meaning specified in Section 7.01.
"Subsidiary" means any corporation, association or other business entity of
which more than 50% of the total voting power or shares of stock entitled to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by the Company or one or more of
the other Subsidiaries of the Company or a combination thereof.
"Warrant Agreement" has the meaning assigned to such term in Section 7.01.
"1933 Act" means the Securities Act of 1933, as amended and as it may be
amended from time to time, including the rules and regulations thereunder.
"1934 Act" means the Securities Exchange Act of 1934, as amended and as it
may be amended from time to time, including the rules and regulations
thereunder.
ARTICLE II
Amendments to the License Agreements
Section II.1. Amendment to the Oncology License Agreement. The Oncology
License Agreement is hereby amended ab initio, effective as of the Closing Date,
to delete therefrom Section 3.04 thereof in its entirety.
Section II.2. Amendment to Ophthalmology License Agreement. When executed
and delivered as contemplated hereby, the Amending Agreement will amend the
Ophthalmology License Agreement in certain respects, all as set forth in the
Amending Agreement.
ARTICLE III
Equity Investment
Section III.1. Issuance, Sale and Delivery of the Securities. The Company
hereby agrees, subject to the prior satisfaction or waiver in writing by the
Company of the conditions specified in Section 7.02, to issue and sell to the
Purchaser, and the Purchaser hereby agrees, subject to the prior satisfaction or
waiver in writing by the Purchaser of the conditions specified in Section 7.01,
to purchase from the Company, 1,136,533 shares of Common Stock (the
"Securities") for an aggregate purchase price equal to $19,000,000 (the
"Purchase Price").
Section III.2. Closing. The consummation of the stock purchase transaction
contemplated by Section 3.01 shall take place at Sullivan & Cromwell, 125 Broad
Street, New York, New York 10004, at 10:00 a.m., New York time, on the fifth day
following the satisfaction or waiver by the Purchaser in writing of the last to
be satisfied or so waived of the conditions set forth in Article VII, or at such
other location, date and time as may be agreed upon between the Purchaser and
the Company (such consummation being called the "Closing" and such date and time
being called the "Closing Date"). At the Closing, (a) the Company shall deliver,
issue and sell to the Purchaser a stock certificate or certificates in the name
of the Purchaser or any Affiliate of the Purchaser designated to the Company by
the Purchaser, representing the Securities, and (b) the Purchaser shall pay the
Purchase Price by wire transfer or certified or bank cashier's check in same day
funds.
ARTICLE IV
Representations and Warranties of the Company
The Company hereby makes the following representations and warranties which
shall survive the execution and delivery of this Agreement and the issuance,
delivery and sale of the Securities pursuant hereto:
Section IV.1. Organization and Qualification. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and is duly qualified to do business in California. Neither
the Company nor any of its stockholders has adopted or taken any action in
contemplation of any plan of liquidation or dissolution of the Company. The
Company has provided the Purchaser with true, complete and correct copies of the
Certificate of Incorporation and Bylaws of the Company as in effect on the date
hereof.
Section IV.2. Corporate Power of the Company. The Company has the requisite
corporate power and authority to execute, deliver and carry out this Agreement
and all other instruments, documents and agreements contemplated or required by
the provisions of this Agreement to be executed, delivered or carried out by the
Company. The Company has all requisite corporate power and authority under the
laws of the jurisdiction of its incorporation to own and operate its properties
and to carry on its business as now conducted and as presently proposed to be
conducted. The Board of Directors and stockholders of the Company have taken all
necessary corporate action to approve this Agreement and to authorize the
execution, delivery and performance of this Agreement by the Company, the
issuance by the Company of the Securities and the consummation of the
transactions contemplated hereby. This Agreement has been duly properly executed
and delivered by the Company and constitutes the legally valid and binding
obligation of the Company enforceable against it in accordance with its terms.
Section IV.3. No Conflict. Except as set forth in Schedule 4.03, none of
(a) the approval by the Board of Directors and stockholders of the Company of
this Agreement, (b) the execution or the delivery by the Company of this
Agreement or the performance by the Company of its obligations hereunder or the
consummation of the transactions contemplated hereby or (c) the issuance by the
Company of the Securities will (A) conflict with or result in any violation or
constitute a default under the Certificate of Incorporation or Bylaws of the
Company or any agreement, mortgage, indenture, franchise, license, permit,
authorization, lease or other instrument, or any judgment, decree, order, law or
regulation by which the Company or any of its properties or assets is bound, or
(B) result in the creation or imposition of any lien, security interest, charge,
encumbrance, restriction or claim of any nature upon, or give to others any
interest or right, including any right of termination or cancellation, in or
with respect to, or otherwise adversely affect, any property, asset or business
of the Company, or (C) require the Company to obtain or make any consent,
authorization, approval, registration, declaration or filing under any statute,
law, ordinance, regulation, rule, judgment, decree or order of any court or any
governmental agency, board, bureau, body, department or authority of any United
States or foreign jurisdiction, except those which have been completed at the
date of this Agreement, or (D) conflict with any other restriction of any kind
or character to which the Company is subject or to which any of its properties
is bound.
Section IV.4. Subsidiaries. The Company has three Subsidiaries, Miravant
Cardiovascular, Inc., a Delaware corporation, Miravant Pharmaceuticals, Inc., a
Delaware corporation, and Miravant Systems, Inc., a California corporation. Each
Subsidiary is duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation, and has all corporate power and
authority to carry on its business as now conducted and as presently proposed to
be conducted. All of the outstanding capital stock of the Company's Subsidiaries
is validly issued, fully paid and nonassessable and owned by the Company free
and clear of any lien, pledge or other encumbrance. Other than the three
Subsidiaries, the Company does not own any securities or other ownership
interests in any other Person which would entitle the Company to control such
Person.
Section IV.5. Capitalization.
(a) Authorized Shares. The authorized capital of the Company consists of
50,000,000 shares of Common Stock and 20,000,000 shares of preferred stock, of
which 500,000 shares have been designated Series A Preferred Stock. The Company
holds no shares of its capital stock in its treasury. Except as set forth in
Schedule 4.05(a) and except as disclosed in the Disclosure Package, no Person
has any agreement, subscription, option or warrant or any other right or
commitment entitling such Person to acquire from the Company any shares of the
Company's capital stock or any other securities or other instruments convertible
into or exchangeable for any such shares.
(b) Outstanding Shares. At the Closing, no more than 17,200,000 shares of
capital stock of the Company will be issued and outstanding. All of the
Securities when issued, sold and delivered in accordance with the terms hereof
and for the consideration expressed herein, will have been duly authorized and
validly issued, fully paid and non-assessable and free of any liens or
encumbrances. The issuance of the Securities will not violate any preemptive or
other rights and will be in compliance with applicable federal and state
securities laws and regulations. The Company has no obligations or agreements
concerning the repurchase of any of the shares of its outstanding capital stock.
Section IV.6. Corporate Record Keeping. The corporate record and stock
transfer books of the Company and each of its Subsidiaries are complete,
accurate and up-to-date with all necessary signatures and set forth all meetings
and actions taken by the respective incorporators, stockholders and directors of
each such party.
Section IV.7. Compliance With Laws. The Company and each of its
Subsidiaries is in compliance in all material respects with all federal, state,
local and foreign statutes, laws, ordinances, regulations, rules, judgments,
orders and decrees applicable to it or its respective assets, properties,
business or operations.
Section IV.8. Licenses and Permits. The Company is not aware of any fact
which has not been disclosed to the Purchaser which could adversely affect the
ability of the Company to obtain or maintain the Licenses and Permits (or any
consent required to be obtained with respect thereto as a result of the
transactions contemplated hereby) after consummation of the transactions
contemplated hereby on the same terms as such Licenses and Permits were held by
the Company immediately prior to the consummation of the transactions
contemplated hereby.
Section IV.9. Disclosure.
(a) The Company has delivered to the Purchaser copies of the filings made
by the Company with the Commission since December 31, 1995 and prior to the date
hereof and the press releases issued by the Company since September 30, 1998 and
prior to the date hereof (such filings and press releases collectively, the
"Disclosure Package").
(b) To the Company's knowledge, none of such statements, forms or reports
(including, without limitation, any financial statements, exhibits and schedules
included therein and documents incorporated therein by reference), as amended or
supplemented, if applicable, at the time filed, declared effective or mailed, as
the case may be, contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading.
(c) This Agreement and all of the Schedules delivered to the Purchaser in
connection herewith, when read together with the Disclosure Package, do not
contain any statement that is false or misleading with respect to any material
fact and do not omit to state a material fact necessary in order to make the
statements therein not false or misleading. There is no additional fact of which
the Company is aware that has not disclosed in writing to the Purchaser that in
the opinion or belief of the Company materially and adversely affects, or so far
as the Company can now reasonably foresee will materially and adversely affect,
the properties, business or condition (financial or otherwise) of the Company or
any Subsidiary.
Section IV.10. Financial Statements. The Company has furnished to the
Purchaser a true and complete copy of its audited consolidated balance sheet as
of December 31, 1997 and an audited consolidated statement of income and
retained earnings for the year then ended (the "Audited Financial Statements").
Except as disclosed in the Disclosure Package, the Audited Financial Statements
have been prepared in accordance with generally accepted accounting principles
on a basis consistent with prior periods and fairly present the financial
condition and results of operations and changes in the financial condition of
the Company and the Subsidiaries as of the dates thereof, and for the periods
indicated, subject to all normal adjustments. For purposes of this Agreement,
all references to "Audited Financial Statements" include any notes to such
statements.
Section IV.11. Litigation. There is no material suit, action, arbitration
or legal, administrative or other proceeding or pending investigation to which
the Company or any Subsidiary is a party or, to the Company's knowledge, is
threatened against the Company, or any of its Subsidiaries or their businesses,
assets or financial condition. Except as set forth in Schedule 4.11, the Company
has no knowledge of any governmental investigation against the Company or its
Subsidiaries, other than routine government contract audits. To the best of the
Company's knowledge, neither the Company nor any of its Subsidiaries is in
violation or infringement of any intellectual property right, or registrations
or applications therefor, of any other person.
Section IV.12. Conflict of Interest. Except as disclosed in the Disclosure
Package, all purchasing transactions relating to the Company and its
Subsidiaries have been at market prices since inception. No officer or director
of the Company or any Affiliate of any such person has or within the last year
has had, either directly or indirectly:
(a) an equity or debt interest in any corporation, partnership, joint
venture, association, organization or other Person which furnishes or sells or
during such period furnished or sold services or products to the Company or the
Subsidiaries, or purchases or during such period purchased from the Company or
the Subsidiaries any goods or services, or otherwise does or during such period
did business with the Company or the Subsidiaries; or
(b) a beneficial interest in any contract, commitment or agreement to which
the Company or the Subsidiaries is or was a party or under which it was
obligated or bound or to which its properties may be or may have been subject,
other than stock options and other contracts, commitments or agreements between
the Company or the Subsidiaries and such persons in their capacities as
employees, independent contractors, officers or directors of the Company or the
Subsidiaries.
Section IV.13. License Agreements and Product Intellectual Property. The
representations and warranties made by the Company in the License Agreements are
true and correct. The Company has no actual knowledge of any suit, claims or
proceedings pending or threatened with respect to the rights in the intellectual
property owned by or licensed to the Company (the "Product Intellectual
Property"). To the Company's knowledge, there are no commitments or contractual
obligations of which the Company is a party which would prohibit the Company
from entering into this Agreement or performing its obligations hereunder or
which would affect the Company's ability to amend with the Purchaser the
licenses for the Product Intellectual Property provided for in the License
Agreements.
Section IV.14. Intellectual Property Rights.
(a) To the Company's knowledge and except as disclosed in the Disclosure
Package: the Company and its Subsidiaries have good and marketable title to and
own their inventions, licenses, patents, trade secrets or other proprietary
know-how (the "Intellectual Property Rights") free and clear of all mortgages,
liens, loans and encumbrances, except such encumbrances and liens which arise in
the ordinary course of business and do not materially impair the Company's or
its Subsidiaries' ownership or use of the Intellectual Property Rights or
materially detract from the value thereof; no proceedings have been instituted
or are pending which challenge the Company's or its Subsidiaries' rights to the
Intellectual Property Rights or the validity thereof; all material rights or
inventions conceived by any employee or consultant of the Company or its
Subsidiaries during the scope of their services for the Company or its
Subsidiaries have been disclosed and effectively assigned to the Company or its
Subsidiaries; and with respect to the Intellectual Property Rights licensed by
the Company and its Subsidiaries, such licenses are in full force and effect,
the Company and its Subsidiaries are in compliance with the terms and provisions
thereof, and no event has occurred which, with notice or lapse of time or both,
would constitute a breach or violation thereof which could have a material
adverse effect on the financial condition, business or properties of the Company
and its Subsidiaries taken as a whole, and the Company and its Subsidiaries hold
a valid license free of any liens, claims or encumbrances which do not and will
not, individually or in the aggregate, have a material adverse effect on the
financial condition, business or properties of the Company and its Subsidiaries
taken as a whole.
(b) To the Company's knowledge, the Company and its Subsidiaries have the
right and authority to use the Intellectual Property Rights in connection with
the conduct of the business of the Company and its Subsidiaries in the manner
and to the extent such business is presently conducted and as it is proposed to
be conducted, and the Company and its Subsidiaries have not been notified of any
claim that such use conflicts with, infringes upon or violates any rights of any
other Person, except to the extent that such conflict, infringement or violation
does not and will not, individually or in the aggregate, have a material adverse
effect.
Section IV.15. Material Contracts. Except as set forth on Schedule 4.15 and
except as disclosed in the Disclosure Package, there are no material agreements,
undertakings, instruments, contracts or proposed transactions to which the
Company or any of the Subsidiaries is a party or by which it is bound which
involve an option, license or agreement of any kind with respect to the
Intellectual Property Rights of the Company or its Subsidiaries, or the
prohibition or limitation of the Company's or any of its Subsidiaries' ability
to engage in their respective businesses or any other business or to compete
with any Person.
Section IV.16. No Undisclosed Liabilities. Except as disclosed in the
Disclosure Package, there are no liabilities or obligations of any nature,
whether absolute, accrued, contingent or otherwise, and whether due or to become
due (including, without limitation, any liability for taxes and interest,
penalties and other charges payable with respect to any such liability or
obligations) which individually or in the aggregate are material to the
condition (financial or otherwise) of the Company, or prospects of the Company,
which are not disclosed in the Audited Financial Statements, or incurred in the
ordinary course of business subsequent to the latest of the Audited Financial
Statements.
Section IV.17. Changes. Except as disclosed in the Disclosure
Package and except as set forth in Schedule 4.17 or disclosed elsewhere in this
Agreement, since December 31, 1997, except as filed with the Commission, or
disclosed elsewhere in this Agreement there has not been:
(a) any material change in the assets, liabilities (contingent
or otherwise), obligations, condition (financial or otherwise) or operating
results of the Company or any of the Subsidiaries, except operating losses and
changes in the ordinary course of business from that reflected in the Audited
Financial Statements or subsequent financial statements filed with the
Commission;
(b) any material waiver by the Company and its Subsidiaries of
a valuable right which is material to the Company's and its Subsidiaries'
business or of a material debt owed to it;
(c) any satisfaction or discharge of any lien, claim or
encumbrance or payment of any obligation by the Company and its Subsidiaries,
except in the ordinary course of business and which is not material to the
assets, properties, financial condition, operating results, prospects or
business of the Company and its Subsidiaries (as such business is presently
conducted and as it is planned to be conducted);
(d) any material change or amendment to a material contract or
arrangement by which the Company and its Subsidiaries or any of its assets or
properties is bound or subject; or
(e) any other material adverse change in the business or
prospects of the Company and its Subsidiaries (as such business is presently
conducted or planned to be conducted).
Section IV.18. Employee Benefit Plans. No prohibited
transaction (as defined under Section 4975 of the Internal Revenue Code of 1986,
as amended) has occurred. The Company has received a favorable determination of
qualification from the Internal Revenue Service for each employee benefit plan
(as defined in Section 3(3) of ERISA)("Employee Benefit Plan") in which
employees of the Company or the Subsidiaries participate. The financial
statements of the Company accurately reflect all liabilities owed by the Company
to past and present employees or their beneficiaries arising out of such
employees' employment with the Company pursuant to such Employee Benefit Plans.
All amounts required under the terms of any Employee Benefit Plan to have been
paid or accrued as contributions to such Employee Benefit Plan by the Company as
of the last day of the most recent fiscal year of such Plan ended on or before
the date of this Agreement have been paid or accrued.
Section IV.19. Employee Relations. The Company is not bound by
or subject to (and none of its assets or properties is bound by or subject to)
any written or oral, express or implied, contract, commitment or arrangement
with any labor union, and no labor union has requested or, to the knowledge of
the Company, sought to represent any of the employees, representatives or agents
of the Company or any of its Subsidiaries. There is no strike or other labor
dispute involving the Company or any of its Subsidiaries pending, or to the
knowledge of the Company threatened, which could have a material adverse effect
on the assets, properties, financial condition, prospects or business (as now
conducted or as proposed to be conducted) of the Company, nor is the Company
aware of any labor organization activity involving its or its Subsidiaries'
employees. The Company is not aware that any officer or key employee intends to
terminate his or her employment with the Company or any of its Subsidiaries, nor
does the Company intend to terminate the employment of any such person. The
Company believes its relations with its employees are satisfactory.
Section IV.20. Taxes. All required foreign, federal, state and
local tax returns, notices and reports of the Company and its Subsidiaries have
been accurately prepared and duly and timely filed, and all foreign, federal,
state, local and other taxes required to be paid with respect to the periods
covered by such returns have been paid, except such returns and taxes with
respect to which the failure to pay or file would not have a material adverse
effect. The Company has never had any tax deficiency proposed or assessed
against it which would have a material adverse effect, has not executed any
waiver or extension of any statute of limitations on the assessment or
collection of any taxes which would have a material adverse effect and none of
the Company's federal or state tax returns has ever been audited by governmental
authorities. No tax audit, action, suit, proceeding, investigation, examination
or claim is now pending or, to the Company's knowledge, threatened against the
Company, and no issue or question has been communicated to the Company (and is
currently pending) by any taxing authority in connection with any of the
Company's tax returns or reports.
Section IV.21. Use of Proceeds. The proceeds of the sale of the Securities
to the Purchaser hereunder shall be used by the Company for working capital and
other general corporate purposes.
Section IV.22. Environmental Matters. To the Company's best knowledge after
reasonable inquiry:
(a) all assets and property currently or previously owned,
leased, operated or used by the Company or any of the Subsidiaries in connection
with their businesses ("Environmental Property"), all current and previous
conditions on and uses of the Environmental Property and all current and
previous ownership and operations of the Environmental Property and the Company
and the Subsidiaries (including, without limitation, transportation and disposal
of Hazardous Materials by or for the Company or the Subsidiaries) comply, have
at all times complied, and will comply with, and do not cause, and have not
caused, liability to be incurred by the Company or the Subsidiaries under any
current or past federal or state law relating to the protection of health or the
environment, including, without limitation, the common law, including the law of
nuisance and strict liability ("Environmental Law") except where non-compliance
has had and will have no material adverse effect; and neither the Company nor
any of the Subsidiaries is in violation of and has not violated any
Environmental Law which violation has had or will have a material adverse
effect;
(b) the Company has properly obtained and is in compliance
with all necessary permits, registrations, approvals and licenses, and has
properly made all filings with and submissions to any government or other
authority, required by any Environmental Law the failure of which to obtain,
comply with or make would have a material adverse effect. No deficiencies have
been asserted by any such government or authority with respect to such items
which deficiencies have had or will have a material adverse effect; and
(c) there has been no spill, discharge, leak, leaching,
emission, migration, injection, disposal, escape, dumping or release of any kind
on, beneath, above or into the Environmental Property or into the environment
surrounding the Environmental Property of any (i) pollutants or contaminants,
other than automobile emissions, (ii) hazardous, toxic, infectious or
radioactive substances, chemicals, materials or wastes (including, without
limitation, those defined as hazardous under any Environmental Law), (iii)
petroleum including crude oil or any derivative or fraction thereof, (iv)
asbestos fibers, other than contained in automobile brake linings or (v) solid
wastes ((i)-(v) collectively, "Hazardous Materials") which have had or will have
a material adverse effect.
Section IV.23. Registration Rights; Voting Trust Agreements.
Except as described in the Disclosure Package, the Company is not a party to any
contract or commitment which requires the Company to register (now or in the
future, whether contingent or not) under the 1933 Act any of its capital stock.
The Company is not a party to, nor aware of, any stockholder agreements, voting
trusts, proxies or other agreements or understandings with respect to the voting
of any of the capital stock of the Company.
Section IV.24. FDA Matters. Except as disclosed to the
Purchaser in writing, there are no applications or other proceedings presently
pending before the United States Food and Drug Administration (the "FDA"). The
FDA has not delivered a letter of non-approval or threatened to deliver such a
letter with respect to any product manufactured, marketed, licensed or developed
by the Company or any Subsidiary, or any product which the Company or its
Subsidiaries intend to manufacture, market, license or develop.
Section IV.25. Warranties and Representations. All of the foregoing
representations and warranties will survive for a period of one year from the
Closing Date.
ARTICLE V
Covenants
The Company covenants and agrees that so long as the Purchaser
and its Affiliates own more than 5% of the outstanding shares of Common Stock of
the Company, unless the Purchaser shall otherwise consent in writing, it will:
Section V.1. Financial Information. Furnish or cause to be furnished to the
Purchaser the following financial statements and information, which shall be
prepared on a substantially consistent basis:
(a) As soon as available but in any event within 100 days
after the close of each fiscal year of the Company, audited consolidated balance
sheets of the Company and of each of its Subsidiaries as of the close of such
fiscal year, and audited consolidated statements of income, stockholders' equity
and cash flow of the Company and each of its Subsidiaries for such fiscal year,
prepared in accordance with generally accepted accounting principles, setting
forth, in the case of each consolidated balance sheet and consolidated
statement, in comparative form, corresponding figures for the preceding fiscal
year, together with copies of the reports and certificates relating thereto,
including an opinion of Ernst & Young LLP or other independent certified public
accountants of recognized national standing selected by the Company. The Company
and the Purchaser agree that so long as the Company is subject to the reporting
obligations of Section 13 of the 1934 Act pursuant to Section 12(b) or 12(g) of
the 1934 Act, the Company's Annual Report on Form 10-K shall satisfy the
requirements of this Section 5.01(a).
(b) As soon as available but in any event within 60 days after
the end of each fiscal quarter of the Company (i) a consolidated balance sheet
of the Company and its Subsidiaries as of the last day of such fiscal quarter
and consolidated statements of income and cash flow of the Company and each of
its Subsidiaries for such quarter and for the period from the beginning of the
then current fiscal year to the end of such quarter, setting forth in
comparative form corresponding figures for the same quarter and period in the
preceding fiscal year and for the same quarter and period in the current year
and (ii) a consolidating balance sheet for the Company and each of its
Subsidiaries as of the close of such quarter and consolidating statements of
earnings and cash flow for the Company and each of its Subsidiaries for such
quarter and for the period from the beginning of the then current fiscal year to
the end of such quarter, each balance sheet and statement of earnings and cash
flow referred to in this Section to be certified by the principal financial
officer of the Company, provided that any such certificate may state that the
accompanying balance sheet and statements are subject to normal year-end
adjustments based on year-end audit. The Company and the Purchaser agree that so
long as the Company is subject to the reporting obligations of Section 13 of the
1934 Act pursuant to Section 12(b) or 12(g) of the 1934 Act, the Company's
Quarterly Report on Form 10-Q shall satisfy the requirements of this Section
5.01(b).
(c) From time to time, with reasonable promptness, such
additional financial statements and information with respect to the financial
condition of the Company and of its Subsidiaries as the Purchaser may reasonably
request, including, without limitation and without further request, any
financial statements or reports (including comment letters to management)
furnished to the Company or any Subsidiary by its independent certified public
accountants, any and all registration statements, proxy statements and periodic
reports filed by the Company or any Subsidiary with the Commission pursuant to
the 1933 Act or the 1934 Act, and all material press releases issued by or on
behalf of the Company or any Subsidiary.
Section V.2. Access to Information. Provide such information
concerning the operations of the Company and its Subsidiaries as the Purchaser
may from time to time reasonably request in writing, and upon reasonable advance
notice permit representatives of the Purchaser full and free access during
normal business hours to the properties, books and records of the Company and
its Subsidiaries; provided that the Company shall not be required to disclose
any confidential information or information held as a trade secret, and to
discuss the affairs, accounts and finances of the Company or any of its
Subsidiaries with the financial and management personnel of the Company and its
Subsidiaries and with their independent certified public accountants.
Section V.3. Board of Directors' Meetings. The Purchaser shall
receive notices of any and all Board of Directors' meetings in accordance with
the Bylaws of the Company and shall be entitled to attend, as an observer, all
such Board of Directors' meetings. In addition, the Company will provide the
Purchaser with copies of any written consents of the Board of Directors at the
time they are signed by the Board of Directors.
Section V.4. Rule 144. The Company agrees to make and keep
public information regarding the Company available as those terms are understood
and defined in Rule 144 promulgated under the 1933 Act, at all times following
the date of the Company's initial public offering, and to file with the
Commission in a timely manner all reports and other documents required of the
Company under the 1933 Act and the 1934 Act, at any time that it is subject to
such reporting requirements.
ARTICLE VI
Representations, Warranties and Covenants of the Purchaser;
Transfer of Securities
Section VI.1. Representations of the Purchaser. The Purchaser hereby
represents and warrants to the Company as follows:
(a) The Purchaser is a corporation organized under the laws of
Delaware having its principal place of business in Bridgewater, New Jersey.
(b) The Purchaser has the requisite corporate power and
authority to execute, deliver and carry out this Agreement and all other
instruments, documents and agreements contemplated or required by the provisions
of this Agreement to be executed, delivered or carried out by the Purchaser.
This Agreement constitutes the legally valid and binding obligation of the
Purchaser enforceable against the Purchaser in accordance with its terms.
(c) The Purchaser is an "accredited investor" within the
meaning of Regulation D under the 1933 Act, and is acquiring the Securities for
investment for its own account, and not with a view to distribution subject,
nevertheless, to any requirement of law that the disposition of its property
shall at all times be within its control. The Purchaser has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of purchasing the Securities. The Purchaser is aware that
it may be required to bear the economic risk of an investment in the Securities
for an indefinite period, and it is able to bear such risk for an indefinite
period. The Purchaser acknowledges (a) that the Securities being acquired by it
are not being registered under the 1933 Act on the grounds that the issuance of
such securities is exempt from registration under Section 4(2) of the 1933 Act
as not involving any public offering, and (b) that the Company's reliance on
such exemption is predicated in part on the representations made to the Company
by the Purchaser in this Section 6.01.
Section VI.2. Transfer of Securities. The Purchaser will not sell, assign
or transfer all or any part of the Securities acquired by it except as follows:
(a) The Securities or any part thereof or interest therein may
be assigned or transferred to an Affiliate of the Purchaser for its own account
or in connection with a sale of the Purchaser or its portfolio assets; provided
that such assignment or transfer is made in compliance with applicable
securities laws.
(b) The Securities or any part thereof or interest therein may
be assigned or transferred if such transfer is determined by the Purchaser and
its counsel, which may be in-house counsel to the Purchaser, to be necessary in
order to comply with applicable laws, rules or regulations; provided that such
assignment or transfer is made in compliance with applicable securities laws.
(c) The Securities or any part thereof or interest therein may
be assigned or transferred to any other Person or Persons; provided that the
Purchaser shall have furnished to the Company, if reasonably requested to do so,
either (i) an opinion, reasonably satisfactory to counsel for the Company, of
counsel skilled in securities matters (selected by the Purchaser and reasonably
satisfactory to the Company, it being understood and agreed that Sullivan &
Cromwell is and will be reasonably satisfactory to the Company) to the effect
that the proposed sale or transfer may be made without registration under the
1933 Act, or (ii) an interpretive letter from the Commission to the effect that
no enforcement action will be recommended if the proposed sale or transfer is
made without registration under the 1933 Act, in either case accompanied by
evidence reasonably satisfactory to the Company that such transfer will be in
compliance with applicable state securities ("blue sky") laws; provided,
however, that the foregoing proviso shall not apply with respect to any transfer
pursuant to an effective registration statement under the 1933 Act.
Upon the assignment or transfer by the Purchaser of all or any
part of the Securities or its interest therein pursuant to paragraphs (a), (b)
or (c) above, the term "the Purchaser", as used herein, shall thereafter
include, to the extent of the interest so assigned or transferred, the assignee
or transferee of such interest provided, however, that the foregoing shall not
apply with respect to any transfer pursuant to an effective registration
statement under the 1933 Act.
Section VI.3. Private Placement; Legends. The Purchaser
acknowledges and agrees that the Securities have not been registered under the
1933 Act and may not be offered or sold in the United States or to U.S. persons
(as defined in Regulation S) unless the Securities are registered under the 1933
Act, or an exemption from the registration requirements of the 1933 Act is
available. Each certificate evidencing any Securities shall bear a legend in
substantially the following form:
The securities represented by this certificate are subject to an Equity
Investment Agreement, dated January 15, 1999, a copy of which is on
file at the principal office of the Company and will be furnished to
the holder on request to the Secretary of the Company. Such Equity
Investment Agreement provides, among other things, for certain
restrictions on sale, transfer, pledge, hypotheca-tion or other
disposition of the securities evidenced by this certificate.
In addition, unless counsel to the Company shall have advised
the Company that such legend is no longer needed, each certificate evidencing
the Securities shall bear a legend in substantially the following form:
The securities represented by this certificate have not been registered
pursuant to the Securities Act of 1933, as amended (the "Act"), or any
state securities law, and such securities may not be sold, transferred
or otherwise disposed of unless the same are registered and qualified
in accordance with the Act and any applicable state securities laws, or
in the opinion of counsel reasonably satisfactory to the Company such
registration and qualification are not required.
The Purchaser shall have the right to request that the Company
remove such legends if the conditions of Rule 144 of the 1933 Act have been
satisfied with respect to the Securities evidenced by such certificate, or if
such Securities are otherwise registered in accordance with the 1933 Act or
another exemption from such registration is available, and the Company shall
fully cooperate with the Purchaser if any of the foregoing conditions are
satisfied; provided in each case other than registration under the 1933 Act that
the Purchaser shall have furnished to the Company, if reasonably requested to do
so, an opinion or interpretive letter and such other evidence as is referenced
in Section 6.02(c) for a transfer of such Securities.
ARTICLE VII
Conditions to Closing
Section VII.1. Conditions to the Purchaser's Obligations. The
obligation of the Purchaser to purchase the Securities is subject to the prior
satisfaction, or waiver in writing by the Purchaser, of all of the following
conditions:
(a) The representations and warranties of the Company
contained in Article IV shall be true in all material respects as of the Closing
Date as though made at and as of the Closing Date.
(b) The Company shall have performed, in all material
respects, all covenants, agreements and obligations required to be performed by
it on or prior to the Closing Date pursuant to this Agreement.
(c) A Credit Agreement in the form attached hereto as Exhibit
A (the "Credit Agreement"), a Warrant Agreement in the form attached hereto as
Exhibit B (the "Warrant Agreement"), a Security Agreement in the form attached
hereto as Exhibit C (the "Security Agreement"), a Registration Rights Agreement
in the form attached hereto as Exhibit D (the "Registration Rights Agreement")
and an Amended and Restated Ophthalmology Development & License Agreement in the
form attached hereto as Exhibit E (the "Amending Agreement") shall have been
duly executed and delivered by the parties thereto.
(d) The Purchaser shall have received the opinion of Nida &
Maloney PC in the form attached hereto as Exhibit F.
(e) On or prior to the Closing Date, the Company shall tender
to the Purchaser certificate(s) representing the Securities.
(f) The Company and the Purchaser shall have obtained all
necessary authorizations, consents or approvals or other orders or actions
necessary or appropriate for the consummation of the transactions contemplated
by this Agreement, and the Company and the Purchaser shall have made all
necessary filings with any court, administrative agency, or other governmental
or regulatory body or authority required for the execution and delivery by the
Company and the Purchaser of this Agreement or the Company's and the Purchaser's
consummation of the transactions contemplated hereby.
(g) No action, suit, proceeding or investigation by or before
any court, administrative agency or other governmental authority shall have been
instituted or threatened which may restrain, prohibit or invalidate any of the
transactions contemplated by this Agreement.
(h) The waiting period (including any extension thereof)
applicable to the Purchaser's acquisition of the Securities pursuant to this
Agreement under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, shall have expired or been terminated, and the Purchaser shall have
received evidence thereof satisfactory to the Purchaser.
Section VII.2. Conditions to the Company's Obligations. The
obligation of the Company to issue, deliver and sell the Securities is subject
to the prior satisfaction or waiver in writing by the Company of all of the
following conditions:
(a) The representations and warranties of the Purchaser
contained in Section 6.01 shall be true in all material respects as of the
Closing Date as though made at and as of the Closing Date.
(b) The Purchaser shall have performed, in all material
respects, all covenants, agreements and obligations required to be performed by
it on or prior to the Closing Date pursuant to this Agreement.
(c) The Credit Agreement, Warrant Agreement, Security
Agreement, Registration Rights Agreement and Amending Agreement shall have been
duly executed and delivered by the parties thereto.
(d) On the Closing Date, the Purchaser shall tender to the
Company the Purchase Price.
(e) The Company and the Purchaser shall have obtained all
necessary authorizations, consents or approvals or other orders or actions
necessary or appropriate for the consummation of the transactions contemplated
by this Agreement, and the Company and the Purchaser shall have made all
necessary filings with any court, administrative agency, or other governmental
or regulatory body or authority required for the execution and delivery by the
Company and the Purchaser of this Agreement or the Company's and the Purchaser's
consummation of the transactions contemplated hereby.
(f) No action, suit, proceeding or investigation by or before
any court, administrative agency or other governmental authority shall have been
instituted or threatened which may restrain, prohibit or invalidate any of the
transactions contemplated by this Agreement.
(g) The waiting period (including any extension thereof)
applicable to the Purchaser's acquisition of the Securities pursuant to this
Agreement under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, shall have expired or been terminated, and the Company shall have
received evidence thereof satisfactory to the Company.
ARTICLE VIII
Indemnity
Section VIII.1. General. The Company shall indemnify, defend
and save harmless the Purchaser from, against, for and in respect of any Loss
which arises out of or relates to (i) a state of facts as a result of which any
representation made by the Company in Article IV hereof or in any document
delivered pursuant to this Agreement is untrue, inaccurate or misleading in any
respect as of the date hereof, or (ii) the breach of any warranty made by the
Company in Article IV hereof, or (iii) the failure of the Company to comply
with, perform or observe any other term, provision or condition contained in
this Agreement or in any document delivered pursuant to this Agreement; and any
reasonable expenses incurred in connection with investigating, defending or
asserting any claim, action, suit or proceeding incident to any matter
indemnified against hereunder, including, without limitation, court filing fees,
court costs, arbitration fees or costs, witness fees, and fees and disbursements
of legal counsel, investigators, expert witnesses, accountants and other
professionals in connection therewith.
Section VIII.2. Cooperation. Each of the parties hereto agrees
to render to the other parties such assistance as they may reasonably require
and to cooperate in good faith with the other parties in order to ensure the
proper and adequate defense of any claim, action, suit or proceeding brought by
any third party.
Section VIII.3. Remedies Cumulative. The remedies of the
parties provided for in this Article VIII shall be cumulative, shall not
preclude the assertion by any party of any other rights such party may have
under this Agreement, applicable law or otherwise (including rescission) and
shall survive redemption or repurchase of the Securities.
ARTICLE IX
Effectiveness of Agreement
Section IX.1. General. Except as otherwise provided herein,
the provisions of this Agreement shall continue in full force and effect for the
benefit of the holders of the Securities so long as any shares of the Securities
are held by the Purchaser or its Affiliates. The representations and warranties
made herein or in connection herewith shall survive the issuance, delivery and
sale of the Securities.
ARTICLE X
Lockup and Standstill Agreements
Section X.1. Lockup. Prior to the 180th calendar day following
the Closing Date, the Purchaser shall not, and shall cause its Affiliates not
to, sell, assign, transfer or otherwise dispose of any of the Securities, except
that the Purchaser may transfer any of the Securities to any of its wholly owned
subsidiaries.
Section X.2. Standstill.
(a) The Stock Purchase Agreement, dated as of July 1, 1995,
between the Company and Pharmacia & Upjohn S.p.A. is hereby amended ab initio,
effective as of the date thereof, to delete therefrom Section 5.5 thereof in its
entirety.
(b) Prior to the earliest of (i) the occurrence of an Event of
Default (as defined in the Credit Agreement), (ii) the commencement of a tender
offer by any Person, other than Pharmacia & Upjohn, Inc. or any of its wholly
owned subsidiaries, for shares of Common Stock, and (iii) July 1, 2000, unless
specifically requested in advance by the Company's Board of Directors, neither
the Purchaser nor any of the Purchasers' Affiliates will, and the Purchaser and
its Affiliates will not assist or encourage others (including by providing
financing) to, directly or indirectly, acquire or agree, offer, seek or propose
to acquire ownership of any securities issued by the Company (including but not
limited to beneficial ownership (as defined in Rule 13d-3 under the 1934 Act))
or enter into any discussions, negotiations, arrangements or understandings with
any Person with respect to any of the foregoing; provided that this Section
10.02(b) shall not prohibit (i) the acquisition by the Purchaser and its
Affiliates of a number of shares of Common Stock which, taken together with the
number of shares of Common Stock held by the Purchaser and its Affiliates as of
the date of such acquisition, does not exceed 25% of the aggregate number of
outstanding shares of Common Stock as of the date of this acquisition, (ii) the
acquisition by the Purchaser or its Affiliates of shares of Common Stock
pursuant to Section 2.03 of the Credit Agreement or upon exercise of any
Warrants (as defined in the Credit Agreement), or (iii) the acquisition by the
Purchaser or its Affiliates of promissory notes pursuant to the Credit Agreement
or any other securities pursuant to the Credit Documents (as defined in the
Credit Agreement).
ARTICLE XI
Miscellaneous
Section XI.1. APPLICABLE LAW. THIS AGREEMENT AND ALL RIGHTS
ARISING HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED
ENTIRELY WITHIN SUCH STATE.
SECTION XI.2. WAIVER OF JURY. THE COMPANY AND THE PURCHASER
EACH HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY
OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN
ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT AND ANY
RIGHT ARISING HEREUNDER.
Section XI.3. Jurisdiction and Venue; Service of Process. (a)
The Company and the Purchaser each hereby irrevocably submits to the
non-exclusive jurisdiction of any state or federal court in the Borough of
Manhattan, The City of New York for the purpose of any suit, action, proceeding
or judgment relating to or arising out of this Agreement and any right arising
hereunder, and to the laying of venue in the Borough of Manhattan, The City of
New York. The Company and the Purchaser each hereby irrevocably waives, to the
fullest extent permitted by applicable law, any objection to the laying of the
venue of any such suit, action or proceeding brought in the aforesaid courts and
hereby irrevocably waives any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.
(b) The Company agrees that service of process in any such
action or proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage prepaid, to
the Company at its address set forth in Section 11.06 or at such other address
of which the Purchaser shall have been notified pursuant thereto. The Company
further agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction.
(c) Each of the Company and the Purchaser waives, to the
maximum extent not prohibited by law, any right it may have to claim or recover
in any legal action or proceeding referred to in this Section 11.03 any special,
exemplary, punitive or consequential damages.
Section XI.4. Amendments and Waivers.
(a) Any provision of this Agreement may be amended, modified,
supplemented or waived, but only by a written amendment or supplement, or
written waiver, signed by the Company and the Purchaser.
(b) Except to the extent expressly set forth therein, any
waiver shall be effective only in the specific instance and for the specific
purpose for which such waiver is given.
Section XI.5. Cumulative Rights; No Waiver. Each and every
right granted to the Purchaser or allowed the Purchaser by law or equity, shall
be cumulative and not exclusive and may be exercised from time to time. No
failure on the part of the Purchaser to exercise, and no delay in exercising,
any right will operate as a waiver thereof, nor will any single or partial
exercise by the Purchaser of any right preclude any other or future exercise
thereof or the exercise of any other right.
Section XI.6. Notices. Any communication, demand or notice to
be given hereunder will be duly given when delivered in writing or by telecopy
to a party at its address as indicated below or such other address as such party
may specify in a notice to each other party hereto. A communication, demand or
notice given pursuant to this Section 11.06 shall be addressed:
If to the Company, to
Miravant Medical Technologies
7408 Hollister Avenue
Santa Barbara, California 93117
Telecopy: (805) 685-6038
Attention: Gary S. Kledzik
with a copy (which, in and of itself, shall not constitute notice) to
Nida & Maloney PC
800 Anacapa Street
Santa Barbara, California 93101
Telecopy: (805) 568-1955
Attention: Joseph E. Nida
and
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94304
Telecopy: (650) 493-6811
Attention: John T. Sheridan
If to the Purchaser, to
Pharmacia & Upjohn, Inc.
95 Corporate Drive
Bridgewater, New Jersey 08807
Telecopy: (908) 470-8047
Attention: Treasurer
and
Pharmacia & Upjohn, Inc.
95 Corporate Drive
Bridgewater, New Jersey 08807
Telecopy: (908) 306-4485
Attention: Senior Vice President
of Business Development
and
Pharmacia & Upjohn, Inc.
95 Corporate Drive
Bridgewater, New Jersey 08807
Telecopy: (908) 306-4489
Attention: General Counsel
with a copy (which, in and of itself, shall not constitute notice) to
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Telecopy: (212) 558-3588
Attention: Neil T. Anderson,
Matthew G. Hurd
and Martin J. Travers
(b) Unless otherwise provided to the contrary herein, any
notice which is required to be given in writing pursuant to the terms of this
Agreement may be given by telecopy.
Section XI.7. Separability. In case any one or more of the
provisions contained in this Agreement shall be invalid, illegal or
unenforceable in any respect under any law, the validity, legality and
enforceability of the remaining provisions contained in this Agreement shall not
in any way be affected or impaired thereby.
Section XI.8. Persons Benefitting. This Agreement shall be
binding upon and inure to the benefit of the Purchaser and the Company, and
their respective successors, assigns, beneficiaries, executors and
administrators. Nothing in this Agreement is intended or shall be construed to
confer upon any Person, other than the Company and the Purchaser (and such
successors, assigns, beneficiaries, executors and administrators), any right,
remedy or claim under or by reason of this Agreement or any part hereof. This
Agreement may not be assigned without the written consent of the parties hereto,
and any purported assignment made in violation of this provision shall be null
and void. The provisions of the previous sentence notwithstanding, the Purchaser
may assign its rights and obligations under this Agreement to any of its wholly
owned Subsidiaries without the consent of any other party to this Agreement.
Section XI.9. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together constitute one and the same instrument.
Section XI.10. Headings. The descriptive headings of the several Sections
of this Agreement are inserted for convenience and shall not control or affect
the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the date first above written.
MIRAVANT MEDICAL TECHNOLOGIES
By:________________________________
Name:
Title:
PHARMACIA & UPJOHN, INC.
By:________________________________
Name:
Title:
PHARMACIA & UPJOHN, S.p.A.
By:________________________________
Name:
Title:
CREDIT AGREEMENT, dated as of o, 1999, between Miravant Medical
Technologies, a Delaware corporation (the "Borrower") and o, a Swedish
corporation (the "Lender").
W I T N E S S E T H :
WHEREAS, the Borrower has requested the Lender to commit to lend to the
Borrower, for general corporate purposes, an aggregate amount not to exceed
$22,500,000, in the form of up to six term loans, with not more than one such
term loan to be made in each of the six calendar quarters between January 1,
1999 and June 30, 2000; and
WHEREAS, the Lender is willing to make such loans, and the additional loans
described in Section 3.01(b) hereof, on the terms and conditions provided
herein;
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
Definitions
Section I.1. Definitions.
(a) Terms Generally. The definitions ascribed to terms in this Agreement
apply equally to both the singular and plural forms of such terms. Whenever the
context may require, any pronoun shall be deemed to include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be interpreted as if followed by the phrase "without
limitation". The phrase "individually or in the aggregate" shall be deemed
general in scope and not to refer to any specific Section or clause of this
Agreement. All references herein to the Preamble, Recitals, Articles, Sections,
Exhibits and Schedules shall be deemed references to the Preamble and Recitals,
Articles and Sections of, and Exhibits and Schedules to, this Agreement unless
the context shall otherwise require. The table of contents, headings and
captions herein shall not be given effect in interpreting or construing the
provisions of this Agreement. Except as otherwise expressly provided herein, all
references to "dollars" or "$" shall be deemed references to the lawful money of
the United States of America.
(b) Accounting Terms. Except as otherwise expressly provided herein, the
term "consolidated" and all other terms of an accounting nature shall be
interpreted and construed in accordance with GAAP, as in effect from time to
time; provided, however, that, for purposes of determining compliance with any
covenant set forth in Article VII, such terms shall be construed in accordance
with GAAP as in effect on the date of this Agreement, applied on a basis
consistent with the construction thereof applied in preparing the Borrower's
audited financial statements referred to in Section 5.01(h).
(c) Other Terms. The following terms have the meanings ascribed to them
below or in the Sections of this Agreement indicated below:
"Additional Loans" means, collectively, Loans made pursuant to Section
3.01(b).
"Affiliate" means, with respect to any Person, any other Person that
controls, is controlled by, or is under common control with, such Person.
"Agreement" means this credit agreement, as it may be amended, modified or
supplemented from time to time.
"Approved Subsidiary" has the meaning assigned to such term in Section
8.02(a).
"Asset Disposition" by any Person means any transfer, conveyance, sale,
lease or other disposition by such Person or any of its Subsidiaries (including
a consolidation or merger or other sale of any such Subsidiary with, into or to
another Person in a transaction in which such Subsidiary ceases to be a
Subsidiary, but excluding a disposition by a Subsidiary of such Person to such
Person or a Wholly Owned Subsidiary of such Person or by such Person to a Wholly
Owned Subsidiary of such Person) of (i) shares of capital stock (other than
directors' qualifying shares) or other ownership interests of a Subsidiary of
such Person, (ii) substantially all of the assets of such Person or any of its
Subsidiaries representing a division or line of business or (iii) other assets
or rights of such Person or any of its Subsidiaries transferred, conveyed, sold,
leased or disposed of on or subsequent to the date of this Agreement for cash
consideration not in excess of, and having a book value or fair market value not
in excess of, $1,000,000 in the aggregate.
"Assignee" has the meaning assigned to such term in Section 8.02(a).
"Average Price" means the average of the Closing Prices of the Common Stock
for the 10 Trading Days immediately preceding the Maturity Date.
"Base Rate" means, for any day, a rate per annum equal to the rate of
interest from time to time publicly announced by Citibank, N.A. in The City of
New York as its prime commercial loan rate in effect on such day. The Base Rate
shall change as and when the foregoing rate shall change. Any change in the Base
Rate shall become effective as of the opening of business on the day of such
change.
"Board of Directors" means the board of directors of the Borrower.
"Borrower" has the meaning assigned to such term in the Preamble.
"Borrowing Amount" has the meaning set forth in Section 2.02.
"Borrowing Date" means, with respect to any Quarterly Loan, the Business
Day set forth in the relevant Borrowing Request as the date upon which the
Borrower desires to borrow such Quarterly Loan; provided, however, that such
Borrowing Date shall be not fewer than 10 Business Days and not more than 20
Business Days following the Lender's receipt of such Borrowing Request; and
provided, further, that the Borrowing Date with respect to any Loan for the
Quarter consisting of January, February and March, 1999 may be any Business Day
not fewer than five Business Days and not more than ten Business Days following
Lender's receipt of the Borrowing Request relating to such Loan.
"Borrowing Request" means a request by the Borrower for a Quarterly Loan,
which shall specify (i) the requested Borrowing Date, (ii) the Borrowing Amount
for such Quarterly Loan, and (iii) a calculation of the Exercise Price of the
related Warrants.
"Business Day" means any day that is not a Saturday, Sunday or other day on
which commercial banks in The City of New York or in Los Angeles, California,
are authorized by law to close.
"Capital Expenditures" means, for any period, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities and including that
portion of Capital Lease Obligations that is capitalized on the consolidated
balance sheet of the Borrower and its Subsidiaries) by the Borrower and its
Subsidiaries during such period that are included in the property, plant or
equipment reflected in the consolidated balance sheet of the Borrower and its
Subsidiaries.
"Capital Lease Obligations" means, with respect to any Person, the
obligation of such Person to pay rent or other amounts under any lease with
respect to any property (whether real, personal or mixed) acquired or leased by
such Person that is required by GAAP to be accounted for as a liability on a
consolidated balance sheet of such Person.
"Closing Price" means the last reported sale price regular way on the day
in question or, in case no such sale takes place on such day, the reported
closing bid price regular way of the Common Stock, in each case on the principal
national securities exchange on which the Common Stock is listed or admitted to
trading, or, if not listed or admitted to trading on any national securities
exchange, the closing bid price of the Common Stock on the Nasdaq National
Market. In the case of a closing price of Common Stock on the Nasdaq National
Market, such price shall mean the closing price reported in the New York City
edition of The Wall Street Journal or, if not so reported, another authoritative
source.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Common Stock" means the common stock, par value $.01 per share, of the
Company and any other stock of the Borrower into which such common stock may be
converted or reclassified (other than stock of the Borrower into which unissued
Common Stock has been reclassified) or that may be issued in respect of, in
exchange for, or in substitution of, such common stock by reason of any stock
splits, stock dividends, distributions, mergers, consolidations,
recapitalizations or other like events.
"Credit Documents" means, collectively, this Agreement; all of the Notes;
that certain Security Agreement, of even date herewith, between the Borrower, as
debtor, and the Lender, as secured party; and any documents executed and
delivered, or filings made, pursuant to or in connection with such Security
Agreement, including any financing statements filed by the Lender pursuant to
the Uniform Commercial Code and any filings made by the Lender with the Patent
and Trademark Office.
"Current Assets" means, at any date of determination, consolidated current
assets of the Borrower and its Subsidiaries.
"Current Liabilities" means, at any date of determination, consolidated
current liabilities of the Borrower and its Subsidiaries, less the amount of the
current portion of, and any accrued interest on, Indebtedness of the Borrower
and its Subsidiaries.
"Default" means any event or circumstance which, with the giving of notice
or the passage of time, or both, would be an Event of Default.
"Disclosure Package" has the meaning assigned to such term in Section
5.01(h).
"EBITDA" means, for any period, the sum of (i) consolidated net income of
the Borrower and its Subsidiaries for such period, adjusted to exclude
non-recurring gains and losses on unusual items and (ii) consolidated income
taxes, interest income, Interest Expense, depreciation, and amortization
(including, without limitation, amortization associated with goodwill, deferred
debt expenses, restricted stock and option costs and non-competition agreements)
of the Borrower and its Subsidiaries for such period.
"Effective Time" has the meaning assigned to such term in Section 6.01.
"Environmental Claim" means any claim, assertion, demand, notice of
violation, suit, administrative or judicial proceeding, regulatory action,
investigation, information request or order involving any hazardous substance,
Environmental Law, noise or odor pollution or any injury or threat of injury to
human health, property or the environment.
"Environmental Law" means any federal, state, local or foreign statute or
common law, regulation, order, decree, opinion or agency requirement as now in
effect or hereinafter adopted relating to (i) the handling, use, presence,
disposal or release of any hazardous substance or (ii) the protection,
preservation or restoration of the environment, natural resources or human
health or safety.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Group" means the Borrower and all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414 of the Code or are considered to be one employer
under Section 4001 of ERISA.
"Event of Default" has the meaning assigned to such term in Section 8.01.
"Excluded Taxes" means all present and future taxes, levies, imposts,
duties, deductions, withholdings, fees, liabilities and similar charges imposed
on or measured by the overall net income of the Lender (or any office, branch or
Subsidiary of the Lender) or any franchise taxes, taxes on doing business or
taxes measured by capital or net worth imposed on the Lender (or any office,
branch or Subsidiary of the Lender), in each case imposed by the United States
of America or any political subdivision or taxing authority thereof or therein,
or taxes on or measured by the overall net income of any office, branch or
Subsidiary of the Lender or any taxes, levies, imposts, duties, deductions,
withholdings, fees, liabilities and similar changes imposed by any foreign
country or subdivision thereof.
"Exercise Price" has the meaning assigned to such term in the Warrant
Agreement.
"External Scaleup Costs" means the costs incurred by the Borrower
associated with the development of the scale-up of raw materials, the active
pharmaceutical ingredient and final dose formulation necessary to permit the
Product (as defined in that certain Amended and Restated Ophthalmology
Development & License Agreement between the Borrower and an affiliate of the
Lender) to be manufactured by an entity other than the Borrower. Such costs
include, but are not limited to, the costs of development work performed, raw
materials used in development and stability and equipment needed.
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
System (or any successor Governmental Authority).
"GAAP" means generally accepted accounting principles, as set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entities as may be approved by a significant segment of the accounting
profession of the United States of America.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Guaranty" means, with respect to any Person, any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, and including any obligation of such
Person, (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or to purchase (or to advance or supply funds for
the purchase of) any security for the payment of such Indebtedness, (ii) to
purchase property, securities or services for the purpose of assuring the holder
of such Indebtedness of the payment of such Indebtedness or (iii) to maintain
working capital, equity capital or the financial condition or liquidity of the
primary obligor so as to enable the primary obligor to pay such Indebtedness.
The terms "Guaranteed", "Guaranteeing" and "Guarantor" shall have corresponding
meanings.
"Hazardous Substance" means any substance, in any concentration or mixture,
that is (i) listed, classified or regulated pursuant to any Environmental Law,
(ii) petroleum product or by-product, asbestos containing material,
polychlorinated biphenyls, radioactive material or radon or (iii) any waste or
other substance regulated by any Governmental Authority or any Environmental
Law.
"Indebtedness" means, with respect to any Person, (i) all obligations of
such Person for borrowed money or for the deferred purchase price of property or
services (including all obligations, contingent or otherwise, of such Person in
connection with letters of credit, bankers' acceptances, Interest Rate
Protection Agreements or other similar instruments, including currency swaps)
other than indebtedness to trade creditors and service providers incurred in the
ordinary course of business and payable on usual and customary terms, (ii) all
obligations of such Person evidenced by bonds, notes, debentures or other
similar instruments, (iii) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the remedies available to the seller or
lender under such agreement are limited to repossession or sale of such
property), (iv) all Capital Lease Obligations of such Person, (v) all
obligations of the types described in clauses (i), (ii), (iii) or (iv) above
secured by (or for which the obligee has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in any property (including
accounts, contract rights and other intangibles) owned by such Person (up to the
value of such property), even though such Person has not assumed or become
liable for the payment of such Indebtedness, (vi) all preferred stock issued by
such Person or any Subsidiary of such Person, valued at the greater of its
voluntary or involuntary liquidation preference plus accrued and unpaid
dividends, (vii) all Indebtedness of others Guaranteed by such Person and (viii)
all Indebtedness of any partnership of which such Person is a general partner.
"Indemnitee" has the meaning assigned to such term in Section 4.04(b).
"Interest Expense" means, for any period, consolidated interest expense
(including that attributable to Capital Lease Obligations) whether paid or
accrued, of the Borrower and its Subsidiaries with respect to all outstanding
Indebtedness of the Borrower and its Subsidiaries, including all commissions,
discounts and other fees and charges owed with respect to letter of credit and
bankers' acceptance financing and net costs under Interest Rate Protection
Agreements.
"Interest Rate Protection Agreement" means any interest rate swap
agreement, interest rate cap agreement or similar hedging arrangement used by a
Person to fix or cap a floating rate of interest on Indebtedness to a negotiated
maximum rate or amount.
"Investment" by any Person means any direct or indirect loan, advance or
other extension of credit or capital contribution to (by means of transfers of
cash or other property to others or payments for property or services for the
account or use of others, or otherwise), or purchase or acquisition of capital
stock, bonds, notes, debentures or other securities or evidence of Indebtedness
or other obligations of or issued by any other Person.
"Key Agreements" means, collectively, the License Agreement, effective July
1, 1989, between the University of Toledo, the Medical College of Ohio, St.
Vincent Medical Center and the Borrower, as amended prior to the date hereof,
and the Development and Distribution Agreement, dated May 28, 1996, between
Iridex Corporation and the Borrower, as amended prior to the date hereof.
"Lender" has the meaning assigned to such term in the Preamble.
"Lien" means, with respect to any asset of a Person, (i) any mortgage, deed
of trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (ii) the interest of a vendor or lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset,
and (iii) in the case of securities, any purchase option, call or similar right
of any other Person with respect to such securities.
"Loans" means, collectively, the Quarterly Loans and the Additional Loans.
"Material Adverse Effect" means any material and adverse effect on (i) the
consolidated business, properties, condition (financial or otherwise) or
operations, present or prospective, of the Borrower and its Subsidiaries, (ii)
the ability of the Borrower timely to perform any of its material obligations,
or of the Lender to exercise any remedy, under any Credit Document or (iii) the
legality, validity, binding nature or enforceability of any Credit Document.
"Maturity Date" means the fifth anniversary of the Borrowing Date for the
first Loan made pursuant to this Agreement.
"Maximum Quarterly Amount" means, (i) for the Quarter comprising January,
February and March, 1999, $3,750,000, and (ii) for any other Quarter (the
"Reference Quarter"), the sum of $3,750,000 plus either (A) if and only if no
Quarterly Loan was made in the Quarter immediately preceding the Reference
Quarter or the principal amount of the Quarterly Loan made in the Quarter
immediately preceding the Reference Quarter was less than $3,750,000, then the
amount equal to the amount by which $3,750,000 exceeds the principal amount of
the Quarterly Loan, if any, made in the Quarter immediately preceding the
Reference Quarter, or (B) if and only if the principal amount of the Quarterly
Loan made in the Quarter immediately preceding the Reference Quarter was equal
to or greater than $3,750,000, then zero.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA to which any member of the ERISA Group is making or accruing
an obligation to make contributions or has within the preceding five plan years
made or accrued contributions.
"Net Available Asset Disposition Proceeds" means, with respect to any Asset
Disposition by any Person, all cash or readily marketable cash equivalents
received (including by way of sale or discounting of a note, instalment
receivable or other receivable, but excluding any other consideration received
in the form of assumption by the acquiree of Indebtedness or other obligations
relating to such properties or assets or received in any other noncash form)
therefrom by such Person, net of (i) all legal, title and recording tax
expenses, commissions and other fees and expenses incurred and all federal,
state, provincial, foreign and local taxes required to be accrued as a liability
as a consequence of such Asset Disposition, (ii) all payments made by such
Person or its Subsidiaries on any Indebtedness which is secured by such assets
in accordance with the terms of any Lien upon or with respect to such assets or
which must by the terms of such Lien, or in order to obtain a necessary consent
to such Asset Disposition or by applicable law be repaid out of the proceeds
from such Asset Disposition, and (iii) all distributions and other payments made
to minority interest holders in Subsidiaries of such Person or joint ventures as
a result of such Asset Disposition.
"Net Available Securities Offering Proceeds" means, with respect to any
offer or sale of securities by any Person, all cash or readily marketable cash
equivalents received therefrom by such Person, net of all underwriting discounts
and commissions, SEC filing fees, legal fees and disbursements, printing fees,
fees of national securities exchanges or the Nasdaq National Market and auditing
fees incurred by such Person in connection with such offer or sale.
"New Site" has the meaning assigned to such term in Section 7.02(e)(ix).
"Note" means a promissory note of the Borrower in the form set forth in
Exhibit B, executed and delivered in accordance with Section 2.02, 3.01(b) or
6.02(b) in order to evidence a Loan.
"Operating Income" of any Person means, for any period, the consolidated
operating income (or loss) of such Person for such period determined on a
consolidated basis in accordance with generally accepted accounting principles;
provided that there shall be excluded therefrom (a) noncash expense items,
including but not limited to depreciation, amortization, noncash compensation
costs and reserves, (b) the operating income (or loss) of any Person acquired by
such Person or a Subsidiary of such Person in a pooling-of-interests transaction
for any period prior to the date of such transaction, (c) the operating income
(but not operating loss) of any Subsidiary of such Person which is subject to
restrictions which prevent the payment of dividends or the making of
distributions to such Person to the extent of such restrictions, (d) the
operating income (or loss) of any Person that is not a Subsidiary of such Person
except to the extent of the amount of dividends or other distributions actually
paid to such Person by such other Person during such period, (e) gains or losses
on Asset Dispositions by such Person or its Subsidiaries and (f) all
extraordinary gains and extraordinary losses.
"Ophthalmology Expense" means, for any period, the direct and indirect
costs incurred by the Company associated with the field of ophthalmology for
research, pharmaceutical, device and manufacturing development and preclinical
and clinical costs, including, (but not limited to) general and administrative
costs, internal scale-up costs, preclinical costs as required for NDA filing,
clinical and regulatory costs, drug and device development and manufacturing
costs and consultants, but excluding External Scaleup Costs.
"PBGC" means the Pension Benefit Guaranty Corporation (or any successor
Governmental Authority).
"Pension Plan" means a Plan that (i) is an employee pension benefit plan,
as defined in Section 3(3) of ERISA (other than a Multiemployer Plan) and (ii)
is subject to the provisions of Title IV of ERISA or is subject to the minimum
funding standards under Section 412 of the Code.
"Permitted Liens" means, collectively, the following: (i) Liens for taxes,
assessments or charges not yet due or that are being contested in good faith by
appropriate proceedings and (unless the amount thereof is not material to the
Borrower's consolidated financial condition) for which adequate reserves are
being maintained (in accordance with GAAP); (ii) deposits or pledges to secure
obligations under workers' compensation, social security or similar laws, or
under unemployment insurance; (iii) deposits or pledges to secure bids, tenders,
contracts (other than contracts constituting Indebtedness), leases, statutory
obligations, surety and appeal bonds and other obligations of like nature
arising in the ordinary course of business; (iv) mechanics', workers',
materialmen's or similar Liens arising in the ordinary course of business with
respect to obligations which are not overdue for a period of more than 30 days
or which are being contested in good faith by appropriate proceedings; (v) Liens
securing judgments in an amount and for a period not constituting an Event of
Default under Section 8.01(i); (vi) minor imperfections of title on real estate
that do not interfere materially with the use of such property or render title
unmarketable; (vii) any Lien upon or in any property hereafter acquired by the
Borrower or a Subsidiary of the Borrower, provided that such Lien is created
contemporaneously with such acquisition to secure or provide for the payment or
financing of any part of the cost (including construction costs) thereof, and
provided, further, that such Lien attaches only to the property so acquired and
fixed improvements thereon, accessions thereto, replacements and proceeds
thereof, and substitutions therefor; (viii) Liens existing on the date hereof;
(ix) Liens on equipment leased by the Borrower or any Subsidiary of the Borrower
pursuant to a capital lease in the ordinary course of business (including
replacements and proceeds thereof, substitutions therefor and accessions
thereto) incurred solely for the purpose of financing the lease of such
equipment; (x) leases or subleases granted to others in the ordinary course of
Borrower's or its Subsidiary's business not interfering in any material respect
with the business of Borrower and its Subsidiaries taken as a whole, and any
interest or title of a lessor under any lease; (xi) Liens on assets that existed
at the time such assets were acquired by Borrower or any Subsidiary (including
Liens on assets of any corporation that existed at the time it became or becomes
a Subsidiary of the Borrower); provided such Liens were not granted in
contemplation of or in connection with the acquisition of such asset by Borrower
or any such Subsidiary; (xii) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payments of customs duties in connection
with the importation of goods; (xiii) Liens which constitute rights of set-off
of a customary nature or banker's Liens with respect to amounts on deposit,
whether arising by operation of law or by contract, in connection with
arrangement entered into with banks in the ordinary course of business; (xiv)
Liens on insurance proceeds in favor of insurance companies granted solely as
security for financed premiums; and (xv) any Lien renewing, extending or
refinancing a Lien permitted by the foregoing, provided that the principal
amount secured is not increased and the Lien is not extended to other property
(other than by a substitution of like property).
"Person" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation,
institution, public benefit corporation, entity or government (whether Federal,
state, county, city, municipal or otherwise, including any instrumentality,
division, agency, body or department thereof).
"Plan" means an employee benefit plan as defined in Section 3(3) of ERISA
(other than a Multiemployer Plan) which is maintained or contributed to by the
Borrower or any member of the ERISA Group.
"Quarter" means each of the six calendar quarters consisting of January,
February and March, 1999; April, May and June, 1999; July, August and September,
1999; October, November and December, 1999; January, February and March, 2000;
and April, May and June, 2000.
"Quarterly Loan" has the meaning assigned to such term in Section 2.01.
"Related Person" of any Person means, without limitation, any officer or
director of such Person or any other Person owning 5% or more of the outstanding
common stock of such Person or 5% or more of the Voting Stock of such Person.
For purpose of this Agreement, the Lender and its Affiliates shall not be deemed
to be Related Persons of the Borrower or any of its Subsidiaries.
"Repayment Shares" has the meaning assigned to such term in Section
2.03(b).
"Responsible Officer" means the chief executive officer, president, chief
financial officer, chief accounting officer or treasurer of the Borrower.
"Sale and Leaseback Transaction" of any Person means an arrangement with
any lender or investor or to which such lender or investor is a party providing
for the leasing by such Person of any property or asset of such Person which has
been or is being sold or transferred by such Person after the acquisition
thereof or the completion of construction or commencement of operation thereof
to such lender or investor or to any person to whom funds have been or are to be
advanced by such lender or investor on the security of such property or asset.
"SEC" means the Securities and Exchange Commission (or any successor
Governmental Authority).
"Share Repayment Amount" has the meaning assigned to such term in Section
2.03(b).
"Shareholders' Equity" means, as of any date of determination, the total
consolidated shareholders' equity (determined without duplication) of the
Borrower and its Subsidiaries at such date.
"Solvent" means, with respect to a Person and a specified date of
determination, that at such date:
(a) the present fair saleable value of such Person's assets is in excess of
the total amount of such Person's probable liabilities on its existing debts and
obligations (including contingent liabilities) as they become absolute and
matured;
(b) such Person is able to pay its debts as they become due; and
(c) such Person does not have unreasonably small capital to carry on such
Person's business as theretofore operated and all businesses in which such
Person then is about to engage.
"Subsidiary" means, at any time and with respect to any Person, any other
Person the shares of stock or other ownership interests of which having ordinary
voting power to elect a majority of the board of directors or other matters of
such Person are at the time owned, or the management or policies of which is
otherwise at the time controlled, directly or indirectly through one or more
intermediaries (including other Subsidiaries) or both, by such first Person.
Unless otherwise qualified or the context indicates clearly to the contrary, all
references to a "Subsidiary" or "Subsidiaries" in this Agreement refer to a
Subsidiary or Subsidiaries of the Borrower.
"Surplus" has the meaning assigned to such term in Section 7.02(p).
"Taxes" has the meaning assigned to such term in Section 4.03.
"Trading Day" means a day on which the principal national securities
exchange on which the shares of Common Stock are listed or admitted to trading
is open for the transaction of business or, if the shares of Common Stock are
not listed or admitted to trading on any national securities exchange, a day on
which the Nasdaq National Market is open for the transaction of business.
"Voting Stock" of any Person means capital stock of such Person which
ordinarily has voting power for the election of directors (or persons performing
similar functions) of such Person.
"Warrant" has the meaning assigned to such term in the Warrant Agreement.
"Warrant Agreement" means the Warrant Agreement, of even date herewith,
between the Borrower and the Lender.
"Warrant Certificate" has the meaning assigned to such term in the Warrant
Agreement.
"Warrant Number" means, with respect to any Quarterly Loan, a number of
Warrants equal to the product of (i) the Borrowing Amount for such Quarterly
Loan, divided by (ii) 62.50.
"Wholly Owned Subsidiary" means, at any time and with respect to any
Person, a Subsidiary, all the shares of stock of all classes of which (other
than directors' qualifying shares) or other ownership interests at the time are
owned directly or indirectly by such Person and/or one or more other Wholly
Owned Subsidiaries of such Person.
ARTICLE II
The Credit Facility
Section II.1. Loans. Subject to the terms and conditions of this Agreement,
the Lender agrees to make a single term loan (each, a "Quarterly Loan") in
dollars to the Borrower not more than once in each Quarter in a principal amount
not to exceed the Maximum Quarterly Amount per Quarter. Each Quarterly Loan
shall be made on the applicable Borrowing Date only in a principal amount of
$1,000,000 or an integral multiple of $250,000 in excess thereof, but in no
event greater than the Maximum Quarterly Amount for such Quarter.
Section II.2. Borrowing Procedure. In order to borrow a Quarterly Loan, the
Borrower shall deliver a Borrowing Request to the treasurer of Lender, no later
than 12:00 Noon, New York time, on the thirtieth Business Day of the Quarter to
which the Loan relates; provided, however, that any Borrowing Request with
respect to a Quarterly Loan for the Quarter consisting of January, February and
March, 1999 may be furnished to the Lender at any time no later than 12:00 Noon,
New York time, on the fifteenth Business Day following the Effective Time. Each
Borrowing Request shall be accompanied by a duly executed Note in the form of
Exhibit B, dated as of the Borrowing Date and evidencing a loan in the principal
amount set forth in the Borrowing Request (the "Borrowing Amount", which shall
be $1,000,000 or an integral multiple of $250,000 in excess thereof but shall
not exceed the Maximum Quarterly Amount for such Quarter), and a duly executed
Warrant Certificate evidencing a number of Warrants equal to the Warrant Number.
Subject to satisfaction, or waiver by the Lender in writing, of each of the
applicable conditions precedent contained in Article VI, on the applicable
Borrowing Date the Lender shall make available to the Borrower the Borrowing
Amount.
Section II.3. Repayment. (a) The aggregate outstanding principal of the
Loans shall be repaid in full, together with any accrued interest as of the date
of repayment, not later than the Maturity Date. Except as permitted by Section
2.03(b), such principal and interest shall be repaid in cash. Repaid Loans may
not be reborrowed.
(b) If and only if the Common Stock shall have been listed or admitted to
trading on a national securities exchange or quoted on the Nasdaq National
Market on each of the 180 calendar days preceding and including the Maturity
Date, then on, but not following, the Maturity Date, the Borrower may, at its
option, repay all or a portion of the aggregate principal of the Loans, together
with any accrued interest as of the Maturity Date, by delivering to the office
of the Lender theretofore designated in writing to the Borrower not later than
12:00 Noon, New York time, on the Maturity Date, (i) an unlegended certificate
for the number of shares of Common Stock (the "Repayment Shares") equal to the
product, rounded up to the nearest whole number, of (A) the portion of the
aggregate principal of the Loans to be repaid pursuant to this Section 2.03(b),
together with any accrued interest thereon as of the Maturity Date (the "Share
Repayment Amount"), divided by (B) the Average Price; (ii) an opinion of counsel
for the Borrower (which counsel shall be satisfactory to the Lender) in the form
of Exhibit C; (iii) evidence satisfactory to the Lender of the previous
expiration or termination of any waiting period (and any extension thereof)
applicable to the acquisition by the Lender of the Repayment Shares under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the
previous receipt of all governmental and contractual permits, consents and
approvals necessary in connection with such acquisition; (iv) evidence
satisfactory to the Lender of Borrower's compliance with Section 2.03(c); and
(v) a certified or official bank check in same day funds equal to the difference
of (A) the aggregate principal amount of the Loans, together with any accrued
interest as of the Maturity Date, minus (B) the Share Repayment Amount.
(c) The Borrower shall pay all transfer, stamp and other similar taxes that
may be imposed in respect of the issuance or delivery of the Repayment Shares
pursuant to Section 2.03(b) and any and all filing fees incurred by the Lender
pursuant to Section 2.03(b)(iv).
Section II.4. Prepayment. The Borrower may prepay portions of the Loans by
giving notice to the treasurer of the Lender, by telephone, telecopy or in
writing, not later than 12:00 Noon (if not in writing, to be so confirmed not
later than 2:00 P.M.), New York time, on the Business Day preceding the proposed
date of prepayment. Each such prepayment shall be in an aggregate principal
amount of ***** or integral multiples of ***** in excess thereof (or if the
aggregate amount of outstanding Loans is less than *****, then all of such
lesser amount), together with accrued interest on the principal being prepaid to
the date of prepayment; provided, however, that in the case of any prepayment
pursuant to Section 7.02(n), 7.02(o) or 7.02(p), such prepayment shall be in an
aggregate principal amount equal to ***** of the Net Available Asset Disposition
Proceeds, ***** of the Net Available Securities Offering Proceeds or ***** of
the amount of the Surplus, as the case may be, in any such case together with
accrued interest on the principal being repaid to the date of prepayment, up to
but not in excess of the aggregate principal amount of, and accrued interest on,
the outstanding Loans. Each partial prepayment shall be applied to the principal
amount of the Loan or Loans designated by the Lender in its sole discretion, and
the Lender will provide Borrower with reasonable notice concerning such
designation. Prepaid Loans may not be reborrowed.
*****Confidential Treatment Requested
ARTICLE III
Interest
Section III.1. Interest on Loans. (a) Each Loan shall bear interest from
the date made until the date repaid, payable pursuant to Section 3.01(b), at a
rate per annum equal to the Base Rate in effect from time to time, which rate
shall change as and when said Base Rate shall change.
(b) Interest on the Loans shall be payable in arrears on the last day of
each calendar quarter of each year (each such day, a "Quarterly Payment Date"),
commencing with the first such Quarterly Payment Date after the Effective Date,
and on the date such Loan is repaid or prepaid, in the manner set forth in
Section 4.01 or, if and only if permitted below, by the delivery of a Note
evidencing an additional loan made pursuant to this Agreement and having a
principal amount equal to the amount of such interest, as set forth below.
(i) On or prior to the fifth Business Day following each Quarterly
Payment Date prior to January 1, 2001, the Borrower shall execute and
deliver to the treasurer of the Lender a Note having a principal amount
equal to the aggregate amount of all interest on Loans (including
Additional Loans) payable on such Quarterly Payment Date. Each such Note
shall evidence an additional loan made pursuant to this Agreement and shall
bear interest in the manner and at the rate set forth in Section 3.01(a),
which interest shall be payable in the manner set forth in this Section
3.01(b).
(ii) All interest on Loans (including Additional Loans) payable on any
Quarterly Payment Date subsequent to December 31, 2000 shall be paid in the
manner set forth in Section 4.01; provided that if and only if EBITDA for
the calendar quarter ending on such Quarterly Payment Date does not exceed
the amount of such interest as is payable on such Quarterly Payment Date,
then, subject to Section 3.01(b)(iii), on or prior to the fifth Business
Day following such Quarterly Payment Date, the Borrower shall execute and
deliver to the treasurer of the Lender a Note having a principal amount
equal to the aggregate amount of all interest on Loans (including
Additional Loans) payable on such Quarterly Payment Date. Each such Note
shall evidence an additional loan made pursuant to this Agreement and shall
bear interest in the manner and at the rate set forth in Section 3.01(a),
which interest shall be payable in the manner set forth in this Section
3.01(b).
(iii) The Borrower shall not be entitled to pay interest on Loans in
the manner set forth in Section 3.01(b)(ii) in respect of interest payable
on any of the four Quarterly Payment Dates immediately following the
closing of a primary offering or sale of securities by the Borrower in
which the Net Available Securities Offering Proceeds from such offering or
sale equals or exceeds $5,000,000.
(c) No Warrants shall be issuable in connection with any Additional Loan.
Section III.2. Interest on Overdue Amounts. All overdue amounts (including
principal, interest and fees) hereunder, and, during the continuance of any
Event of Default that shall have occurred, each Loan shall bear interest,
payable on demand, at a rate per annum equal to the sum of (i) 10% and (ii) the
rate of interest applicable to such Loan, changing as and when such rate shall
change.
Section III.3. Day Counts. Interest on Loans shall be calculated on the
basis of (a) a 365- or, if applicable, a 366-day year for the actual number of
days elapsed.
Section III.4. Maximum Interest Rate. (a) Nothing in this Agreement shall
require the Borrower to pay interest at a rate exceeding the maximum rate
permitted by applicable law.
(b) If the amount of interest payable to the Lender on any interest payment
date in respect of the immediately preceding interest computation period,
computed pursuant to this Article III, would exceed the maximum amount permitted
by applicable law to be charged by the Lender, the amount of interest payable
for its account on such interest payment date shall automatically be reduced to
such maximum permissible amount.
(c) If the amount of interest payable to the Lender in respect of any
interest computation period is reduced pursuant to Section 3.04(b) and the
amount of interest payable for its account in respect of any subsequent interest
computation period would be less than the maximum amount permitted by law to be
charged by the Lender, then the amount of interest payable in respect of such
subsequent interest computation period shall be automatically increased to such
maximum permissible amount; provided that at no time shall the aggregate amount
by which interest paid to the Lender has been increased pursuant to this Section
3.04(c) exceed the aggregate amount by which interest paid to the Lender has
theretofore been reduced pursuant to Section 3.04(b).
ARTICLE IV
Disbursement and Payment
Section IV.1. Method and Time of Payments. (a) Except as specifically
permitted by Section 3.01(b), and except in the case of payments pursuant to
Sections 3.02, 4.02, 4.03, 4.04 or payments otherwise specified as payable upon
demand, which payments shall be made forthwith upon written demand therefor, all
payments by the Borrower hereunder shall be made without setoff or counterclaim
to the Lender in dollars and in immediately available funds at the office of the
Lender theretofore designated in writing to the Borrower not later than 2:00
p.m., New York time, on the later of the date when due or the fifth Business Day
following the Borrower's receipt of an oral or written confirmation made in
response to the request contemplated by Section 4.01(c).
(b) Whenever any payment from the Borrower shall be due on a day that is
not a Business Day, the date of payment thereof shall be extended to the next
succeeding Business Day. If the date for any payment of principal is extended by
operation of law or otherwise, interest thereon shall be payable for such
extended time.
(c) Promptly upon receipt of a request by the Borrower therefor (which
request may be made by telephone to the treasurer or any assistant treasurer of
Pharmacia & Upjohn, Inc.) the Lender shall confirm the Lender's calculation of
the amount of any payment due on a particular date.
Section IV.2. Compensation for Losses. If the Borrower revokes any
Borrowing Request, then the Borrower shall reimburse the Lender, promptly upon
demand therefor, for all fees and costs actually incurred or paid by the Lender
to third parties in respect of funds obtained by the Lender for the purpose of
making or maintaining the related Loan, or any portion thereof. If requested by
the Borrower, Lender shall provide to the Borrower reasonable documentation
concerning such fees and costs.
Section IV.3. Withholding. All payments under this Agreement and under the
Notes (including payments of principal and interest) shall be payable to the
Lender free and clear of any and all present and future taxes, levies, imposts,
duties, deductions, withholdings, fees, liabilities and similar charges other
than Excluded Taxes (collectively, "Taxes"). If any Taxes are required to be
withheld or deducted from any amount payable under this Agreement, then the
amount payable under this Agreement shall be increased to the amount which,
after deduction from such increased amount of all Taxes required to be withheld
or deducted therefrom, will yield to the Lender the amount stated to be payable
under this Agreement; provided, however, that amounts payable under this
Agreement shall not be increased in respect of any Taxes required to be withheld
or deducted solely as a consequence of the Lender's status as a nonresident
alien, as such term is defined in the Code. The Borrower shall also hold the
Lender harmless and indemnify it for any stamp or other taxes with respect to
the preparation, execution, delivery, recording, performance or enforcement of
the Credit Documents (all of which shall be included within "Taxes"). If any of
the Taxes specified in this Section 4.03 are paid by the Lender, the Borrower
shall, upon demand of the Lender, promptly reimburse the Lender for such
payments, together with any interest, penalties and expenses incurred in
connection therewith. The Borrower shall deliver to the Lender certificates or
other valid vouchers for all Taxes or other charges deducted from or paid with
respect to payments made by the Borrower hereunder.
Section IV.4. Expenses; Indemnity. (a) The Borrower agrees to pay or
reimburse the Lender for all reasonable costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, any other Credit Documents, and any such other documents, including,
without limitation, the reasonable fees and disbursements of counsel to the
Lender (but excluding fees and disbursements incurred on or prior to the date
hereof in negotiating and preparing the Credit Documents); provided, however,
that in the event of any litigation between the Borrower and the Lender
initiated prior to any Event of Default specified in Section 8.01(g) or (h) and
arising out of the matters set forth in Section 4.04(b)(i), the fees and
disbursements of counsel to the Lender shall be borne by the Borrower if and
only if the Lender is the prevailing party. The Borrower also agrees to
indemnify the Lender against any transfer taxes, documentary taxes, assessments
or charges made by any Governmental Authority by reason of the execution and
delivery of any Credit Document.
(b) The Borrower agrees to indemnify the Lender and its directors,
officers, employees, agents and Affiliates (for purposes of this paragraph,
each, an "Indemnitee") against, and to hold each Indemnitee harmless from, any
and all claims, liabilities, damages, losses, costs, charges and expenses
(including fees and expenses of counsel) incurred by or asserted against any
Indemnitee arising out of, in any way connected with, or as a result of (i) the
execution or delivery of any Credit Document or any agreement or instrument
contemplated by any Credit Document, the performance by the parties thereto of
their respective obligations under any Credit Document, the enforcement or
preservation by the parties thereto of their respective rights under any Credit
Document or the consummation of the transactions contemplated by any Credit
Document, (ii) the use of the proceeds of the Loans or (iii) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto. The provisions of this Section
4.04(b) shall not operate or be construed to indemnify the Lender against, or
hold it harmless from, any claims, liabilities, damages, losses, costs, charges
and expenses (including fees and expenses of counsel) incurred by or asserted
against the Lender arising out of or connected with any litigation initiated
prior to any Event of Default specified in Section 8.01(g) or (h) solely between
the Borrower and the Lender in which the Lender is not the prevailing party.
(c) All amounts due under this Section 4.04 shall be payable in immediately
available funds upon written demand therefor.
Section IV.5. Survival. The provisions of Sections 4.02, 4.03, 4.04 and
this Section 4.05 shall remain operative and in full force and effect regardless
of the expiration of the term of this Agreement, the consummation of the
transactions contemplated hereby, the repayment of any of the Loans, the
invalidity or unenforceability of any term or provision of any Credit Document,
or any investigation made by or on behalf of the Lender.
ARTICLE V
Representations and Warranties
Section V.1. Representations and Warranties. The Borrower represents and
warrants to the Lender as follows:
(a) Subsidiaries. At the date hereof, the Borrower has no Subsidiaries
other than those Persons listed on Schedule 5.01(a).
(b) Good Standing and Power. The Borrower and each of its Subsidiaries is a
corporation, duly incorporated and validly existing in good standing under the
laws of the jurisdiction of its incorporation; each has the corporate power to
own its property and to carry on its business as now being conducted; and each
is duly qualified to do business and is in good standing in each jurisdiction in
which the character of the properties owned or leased by it therein or in which
the transaction of its business makes such qualification necessary, except where
the failure to be so qualified, or to be in good standing, individually or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
(c) Corporate Authority. The Borrower has full corporate power and
authority to execute and deliver, and to incur and perform its obligations
under, each of the Credit Documents, all of which have been duly authorized by
all proper and necessary corporate action. No consent or approval of
stockholders is required as a condition to the validity or performance of, or
the exercise by the Lender of any of its rights or remedies under, any Credit
Document.
(d) Authorizations. All authorizations, consents, approvals, registrations,
notices, exemptions and licenses with or from any Governmental Authority or
other Person necessary for the execution, delivery and performance by the
Borrower of, and the incurrence and performance of each of its obligations
under, each of the Credit Documents, and the exercise by the Lender of its
remedies under each of the Credit Documents have been effected or obtained and
are in full force and effect.
(e) Binding Obligation. This Agreement constitutes and, when issued in
accordance with the terms hereof, each Note will constitute the valid and
legally binding obligation of the Borrower enforceable in accordance with its
terms, subject as to enforcement to bankruptcy, insolvency, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(f) Litigation. There are no proceedings or investigations now pending or,
to the knowledge of the Borrower, threatened before any court or arbitrator or
before or by any Governmental Authority which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
(g) No Conflicts. There is no statute, regulation, rule, order or judgment,
and no provision of any agreement or instrument binding upon the Borrower or any
of its Subsidiaries, or affecting their properties, and no provision of the
certificate of incorporation or bylaws (or similar constitutive instruments) of
the Borrower or any of its Subsidiaries, that would prohibit, conflict with or
in any way impair the execution or delivery of, or the incurrence or performance
of any obligations of the Borrower under, any Credit Document, or result in or
require the creation or imposition of any Lien on property of the Borrower or
any of its Subsidiaries as a consequence of the execution, delivery and
performance of any Credit Document.
(h) Financial Condition. Except as disclosed in filings made by the
Borrower with the SEC prior to the date hereof or in the press releases issued
by the Company since September 30, 1998 and prior to the date hereof and
attached to that certain letter, dated the date hereof, from an officer of the
Borrower to an employee of the Lender making reference to this Section (such
filings and such press releases collectively, the "Disclosure Package"), (i) The
consolidated balance sheet of the Borrower as of December 31, 1997, together
with consolidated statements of income, shareholders' equity and cash flows for
the fiscal year then ended, reported upon by Ernst & Young LLP, and the
unaudited consolidated balance sheet of the Borrower as of September 30, 1998,
together with consolidated statements of income and cash flows for the nine
months then ended, heretofore delivered to the Lender, present fairly, in all
material respects, the Borrower's consolidated financial condition and
consolidated results of operations as of the dates and for the periods referred
to and have been prepared in accordance with GAAP consistently applied
throughout the period involved. There are no material liabilities (whether known
or unknown, direct or indirect, fixed or contingent, and of any nature
whatsoever) of the Borrower or any of its Subsidiaries as of the date of such
balance sheet that are not reflected therein or in the notes thereto.
(ii) Except as disclosed in the Disclosure Package, there has been no
material adverse change in the business, properties, condition (financial
or otherwise) or operations, present or prospective, of the Borrower and
its Subsidiaries since the date of the balance sheet dated December 31,
1997 referred to in Section 5.01(h)(i). Except as disclosed in the
Disclosure Package, since December 31, 1997, there has not occurred or
arisen any event, condition or circumstance that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
(i) Taxes. Each of the Borrower and its Subsidiaries has filed or caused to
be filed all tax returns that are required to be filed and paid all taxes that
are required to be shown to be due and payable on said returns or on any
assessment made against it or any of its property and all other taxes,
assessments, fees, liabilities, penalties or other charges imposed on it or any
of its property by any Governmental Authority, except for any taxes,
assessments, fees, liabilities, penalties or other charges which are being
contested in good faith and (unless the amount thereof is not material to the
Borrower's consolidated financial condition) for which adequate reserves have
been established in accordance with GAAP.
(j) Use of Proceeds. The proceeds of the Loans will be used by the Borrower
for general corporate purposes.
(k) Margin Regulations. The making of the Loans and the use of the proceeds
thereof as contemplated by the Credit Documents will not violate or be
inconsistent with any of the provisions of Regulation U, T or X (or any
successor regulation or regulations) of the Federal Reserve Board.
(l) Compliance with ERISA. Each member of the ERISA Group is in compliance
with the applicable provisions of ERISA and the Code with respect to each Plan,
except for any failure so to comply that, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect. No member of
the ERISA Group has (i) an accumulated funding deficiency under Section 412 of
the Code in respect of any Pension Plan, whether or not waived, (ii) failed to
make any contribution or payment to any Pension Plan, or made any amendment to
any Pension Plan, which has resulted or could result in the imposition of a Lien
or the posting of a bond or other security under Section 302(f) of ERISA or
Section 401(a)(29) of the Code, (iii) incurred any liability under Title IV of
ERISA other than a liability to the PBGC for premiums under Section 4007 of
ERISA, all of which have been paid or (iv) engaged in a transaction with respect
to a Plan, which (assuming the taxable period of such transaction, within the
meaning of Section 4975(f)(2) of the Code, to have expired as of the date
hereof) has resulted or could reasonably be expected to result in such member
being subject to a material tax or penalty imposed by Section 4975 of the Code
or Section 502 of ERISA.
(m) Not an Investment Company. Neither the Borrower nor any of its
Subsidiaries is (i) an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or (ii) subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, each as amended, or any foreign,
federal, state or local statute or regulation limiting its ability to incur
indebtedness for money borrowed as contemplated hereby.
(n) Properties. Each of the Borrower and its Subsidiaries has good and
marketable title to, or valid leasehold interests in, all of its respective
properties and assets (excluding intellectual property) that are reflected on
the consolidated balance sheet of the Borrower as of September 30, 1998 referred
to in Section 5.01(h), except for such immaterial properties and assets as have
been disposed of in the ordinary course of business and except for minor defects
in title that do not interfere with the ability of the Borrower or any of its
Subsidiaries to conduct its business as now conducted. Except as set forth in
the Disclosure Package, the Borrower and its Subsidiaries own or are licensed to
use or otherwise have the right to use (or could obtain such ownership or
licences or rights on terms not materially adverse to the Borrower and its
Subsidiaries, taken as a whole) all of the intellectual property rights that are
reasonably necessary for the operation of their respective businesses. All such
assets and properties are so owned or held free and clear of all Liens, except
Permitted Encumbrances.
(o) Compliance with Laws and Charter Documents.
(i) As a result of the Borrower's performing any of its obligations under
the Credit Documents, neither the Borrower nor any of its Subsidiaries will be
in violation of (a) any law, statute, rule, regulation or order of any
Governmental Authority (including Environmental Laws) applicable to it or its
properties or assets or (b) its certificate of incorporation or bylaws.
(ii) Neither the Borrower nor any of its Subsidiaries is in violation of
(A) any law, statute, rule, regulation or order of any Governmental Authority
(including Environmental Laws) applicable to it or its properties, except for
any violations which could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect, or (B) its certificate of
incorporation or bylaws.
(iii) Each of the Borrower and its Subsidiaries has all authorizations,
consents, approvals, registrations, franchises, licenses and permits, with or
from Governmental Authorities and other Persons as are necessary for it to own
its properties and conduct its business as now conducted and the absence of
which could reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
(p) Environmental Protection. To the Borrower's knowledge, based upon
reasonable investigation, all real property owned or leased by the Borrower or
any of its Subsidiaries is free of contamination from any substance that could
result in the incurrence of material liabilities, or constituent thereof,
currently identified or listed as hazardous or toxic pursuant to the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
9601, et seq., or any other Environmental Laws, or any other substance which has
in the past or could at any time in the future cause or constitute a health,
safety or environmental hazard to any person or property, including asbestos in
any building, petroleum products, PCBs, pesticides, or radioactive materials. To
the Borrower's knowledge, based upon reasonable investigation, neither the
Borrower nor any of its Subsidiaries has caused or suffered to occur any release
of any Hazardous Substance into the environment or any other conditions that,
individually or in the aggregate, could reasonably be expected to result in the
incurrence of material liabilities or any material violations of any
Environmental Laws. To the Borrower's knowledge, based upon reasonable
investigation, neither the Borrower nor any of its Subsidiaries has caused or
suffered to occur any condition on any of their property that could give rise to
the imposition of any lien under the Environmental Laws. Except as disclosed in
the Disclosure Package, to the Borrower's knowledge, based on reasonable
investigation, neither the Borrower nor any Subsidiary is engaged in any
manufacturing or any other operations, other than the use of petroleum products
for vehicles, that require the use, handling, transportation, storage or
disposal of any Hazardous Substance, where such operations require permits or
are otherwise regulated pursuant to the Environmental Laws.
(q) Insurance. All of the properties and operations of the Borrower and
each of its Subsidiaries of a character usually insured by companies of
established reputation engaged in the same or a similar business similarly
situated are adequately insured, by financially sound and reputable insurers,
against loss or damage of the kinds and in amounts customarily insured against
by such Persons, and the Borrower and each of its Subsidiaries carry, with such
insurers in customary amounts, such other insurance as is usually carried by
companies of established reputation engaged in the same or a similar business
similarly situated.
(r) Adverse Contracts. Except as disclosed in the Disclosure Package,
neither the Borrower nor any of its Subsidiaries is a party to, nor is it or any
of its property subject to or bound by, any agreement or instrument which
restricts its ability to conduct its business, or could reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.
(s) Solvency. The Borrower and each of its Subsidiaries is and, after
giving effect to Loans and the other transactions contemplated hereby, and after
payment of all estimated legal, investment banking, accounting and other fees
related thereto, the Borrower and each of its Subsidiaries will be Solvent.
Neither the Borrower nor any of its Subsidiaries is and, after giving effect to
Loans and the other transactions contemplated hereby, and after payment of all
estimated legal, investment banking, accounting and other fees related thereto,
the Borrower and each of its Subsidiaries will not be insolvent (as defined in
any of Uniform Laws Annotated, Uniform Fraudulent Transfer Act ss. 2 (West
1985); Cal. Civ. Code ss. 3439.02 (West 1997); and Del. Code Ann. tit. 6, ss.
1302 (1997)).
(t) Disclosure. All information relating to the Borrower or its
Subsidiaries delivered in writing to the Lender in connection with the
negotiation, execution and delivery of this Agreement and the other Credit
Documents, taken together with the information set forth in the Disclosure
Package, is true and complete in all material respects. There is no material
fact of which the Borrower is aware which, individually or in the aggregate,
would reasonably be expected adversely to influence the Lender's credit analysis
relating to the Borrower and its Subsidiaries which has not been disclosed to
the Disclosure Package.
Section V.2 Survival. All representations and warranties made by the
Borrower in this Agreement, and in the certificates or other instruments
prepared or delivered in connection with or pursuant to this Agreement, shall
(i) be considered to have been relied upon by the Lender, (ii) survive the
making of Loans regardless of any investigation made by, or on behalf of, the
Lender, and (iii) continue in full force and effect so long as any Loan, or
other amount payable under any Credit Document remains unpaid.
ARTICLE VI
Conditions Precedent
Section VI.1. Conditions to the Availability of the Commitment. The
obligations of the Lender hereunder are subject to, and no Quarterly Loans shall
be made until the earliest time (the "Effective Time") (which shall be no later
than the close of business in The City of New York on the fifth Business Day
following the Closing contemplated by that certain Equity Investment Agreement,
dated as of January 15, 1999, among the Borrower and certain Affiliates of the
Lender) on which each of the following conditions precedent shall have been
either satisfied or waived in writing by the Lender:
(a) This Agreement. The Agreement shall have been duly executed and
delivered by each of the Lender and the Borrower and each of the other Credit
Documents shall have been duly executed and delivered by each of the parties
thereto.
(b) Evidence of Corporate Action. The Lender shall have received the
following:
(i) a copy of the Certificate of Incorporation, of the Borrower, as in
effect on the Effective Date, certified by the Secretary of State of the State
of Delaware, and a certificate from such Secretary of State as to the good
standing of the Borrower, in each case as of a date reasonably close to the
Effective Date; and
(ii) a certificate of the Secretary or an Assistant Secretary of the
Borrower, dated the Effective Date, and stating (A) that attached thereto is a
true and complete copy of the bylaws of the Borrower as in effect on such date
and at all times since the date of the resolutions described in clause (B)
below, (B) that attached thereto is a true and complete copy of resolutions duly
adopted by the Board of Directors of the Borrower authorizing the execution,
delivery and performance of this Agreement, and that such resolutions have not
been modified, rescinded or amended and are in full force and effect, (C) that
the certificate of incorporation of the Borrower has not been amended since the
date of the last amendment thereto shown on the certificate of good standing
furnished pursuant to clause (i) above, and (D) as to the incumbency and
signature of each officer executing this Agreement or any document delivered in
connection herewith on behalf of the Borrower.
(c) Opinions of Counsel. The Lender shall have received a favorable written
opinion, dated the Effective Date, of Nida & Maloney PC, counsel for the
Borrower, in substantially the form of Exhibit D.
(d) Representations and Warranties. The representations and warranties
contained in Section 5.01 shall be true and correct on the Effective Date, and
the Lender shall have received a certificate, signed by a Responsible Officer of
the Borrower, to that effect.
(e) Other Documents. The Lender shall have received such other
certificates, opinions and other documents as the Lender reasonably may require.
Section VI.2. Conditions to All Quarterly Loans. The obligations of each
Lender to make each Quarterly Loan are subject to the conditions precedent that,
on the date of each Quarterly Loan and after giving effect thereto, each of the
following conditions precedent shall have been satisfied, or waived in writing
by the Lender:
(a) Borrowing Request. The Lender shall have received a Borrowing Request
in accordance with the terms of this Agreement.
(b) Note. The Lender shall have received a duly executed Note in the form
of Exhibit B, dated as of the Borrowing Date and evidencing a Quarterly Loan in
an aggregate principal equal to the Borrowing Amount.
(c) Warrant Certificate. The Borrower shall have duly issued to the Lender
a number of Warrants equal to the Warrant Number in connection with such
Quarterly Loan and shall have duly executed and delivered to the Lender a
Warrant Certificate evidencing such Warrants.
(d) No Default. No Default or Event of Default shall have occurred and be
continuing, nor shall any Default or Event of Default occur as a result of the
making of such Quarterly Loan.
(e) Representations and Warranties; Covenants. The representations and
warranties contained in Section 5.01 shall have been true and correct when made
and (except to the extent that any representation or warranty speaks as of a
date certain) shall be true and correct on the Borrowing Date with the same
effect as though such representations and warranties were made on such Borrowing
Date; and the Borrower shall have complied with all of its covenants and
agreements under the Credit Documents.
Section VI.3. Satisfaction of Conditions Precedent. Each of (i) the
delivery by the Borrower of a Borrowing Request (unless the Borrower notifies
the Lender in writing to the contrary prior to the Borrowing Date) and (ii) the
acceptance of the proceeds of a Quarterly Loan shall be deemed to constitute a
certification by the Borrower that, as of the Borrowing Date, each of the
conditions precedent contained in Sections 6.02(d) and (e) has been satisfied
with respect to any Loans then being made.
ARTICLE VII
Covenants
Section VII.1. Affirmative Covenants. Until satisfaction in full of all the
obligations of the Borrower under the Credit Documents, the Borrower will:
(a) Financial Statements; Compliance Certificates. Furnish to the Lender:
(i) as soon as available, but in no event more than 60 days following the
end of each of the first three quarters of each fiscal year, copies of the
Borrower's Quarterly Report on Form 10-Q being filed with the SEC, which shall
include a consolidated balance sheet and consolidated income statement of the
Borrower and its Subsidiaries for such quarter;
(ii) as soon as available, but in no event more than 100 days following the
end of each fiscal year, a copy of the Borrower's Annual Report on Form 10-K
being filed with the SEC, which shall include the consolidated financial
statements of the Borrower and its Subsidiaries, together with a report thereon
by Ernst & Young LLP (or another firm of independent certified public
accountants reasonably satisfactory to the Lender), for such year;
(iii) together with each report delivered pursuant to Sections 7.01(a)(i)
and (ii), a certificate of the Borrower, signed by a Responsible Officer, in
substantially the form of Exhibit E, stating whether, as of the last date of the
financial statements included in such report, any event has occurred or
circumstance existed which, individually or in the aggregate, constituted a
Default or Event of Default (and, if so, detailing the facts with respect
thereto) and whether the Borrower was in compliance with the covenants set forth
in this Article VII, together with calculations to establish the Borrower's
compliance with the covenants contained in Section 7.03;
(iv) promptly upon the filing by the Borrower with the SEC or any national
securities exchange or national quotation system of any registration statement
(other than a registration statement on Form S-8 or an equivalent form) or
regular periodic report (other than the reports referred to in Sections
7.01(a)(i) and (ii)), notification of such filing; and, at the request of any
Lender, the Borrower shall deliver to such Lender a copy of such filing
(excluding exhibits);
(v) promptly upon the mailing thereof to the shareholders of the Borrower
generally copies of all financial statements, reports and proxy statements so
mailed;
(vi) within five Business Days of any Responsible Officer of the Borrower
obtaining knowledge of any Default or Event of Default of any type specified in
Section 8.01(a), (b), (d), (f), (g), (h) or (l), if such Default or Event of
Default is then continuing, a certificate of a Responsible Officer of the
Borrower stating that such certificate is a "Notice of Default" and setting
forth the details thereof and the action which the Borrower is taking or
proposes to take with respect thereto;
(vii) within ten Business Days of any Responsible Officer of the Borrower
obtaining knowledge of any Default or Event of Default of any type specified in
Section 8.01(c),(e), (i), (j) or (k), if such Default or Event of Default is
then continuing, a certificate of a Responsible Officer of the Borrower stating
that such certificate is a "Notice of Default" and setting forth the details
thereof and the action which the Borrower is taking or proposes to take with
respect thereto; and
(viii) such additional information, reports or statements, regarding the
business, financial condition or results of operations of the Borrower and its
Subsidiaries, as the Lender from time to time may reasonably request.
(b) Corporate Existence. Except as permitted by Section 7.02(a), maintain,
and cause each Subsidiary to maintain, its corporate existence in good standing
and qualify and remain qualified to do business in each jurisdiction in which
the character of the properties owned or leased by it therein or in which the
transaction of its business is such that the failure to qualify, individually or
in the aggregate, could reasonably be expected to have a Material Adverse
Effect.
(c) Conduct of Business. Engage in as its principal business the
development of photoselective drugs and light producing and light delivery
medical devices and related or ancillary businesses, including but not limited
to the businesses of the Borrower described in the Disclosure Package; preserve,
renew and keep in full force and effect, and cause each of its Subsidiaries to
preserve, renew and keep in full force and effect, all franchises and licenses
necessary or desirable in the normal conduct of its and its Subsidiaries'
business and the loss of which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect; and comply, and cause
each of its Subsidiaries to comply, with all applicable laws, orders, rules and
regulations of all Governmental Authorities the failure with which so to comply,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(d) Authorizations. Obtain, make and keep in full force and effect all
authorizations from and registrations with Governmental Authorities required for
the validity or enforceability of the Credit Documents.
(e) Taxes. Pay and discharge, and cause each of its Subsidiaries to pay and
discharge, all taxes, assessments and governmental charges upon it, its income
and its properties prior to the date on which penalties are attached thereto,
except to the extent that (i) such taxes, assessments and governmental charges
shall be contested in good faith and by appropriate proceedings by the Borrower
or such Subsidiary, as the case may be, (ii) unless the amount thereof is not
material to the Borrower's consolidated financial condition, adequate reserves
are maintained (in accordance with GAAP) by the Borrower or such Subsidiary, as
the case may be, with respect thereto, and (iii) any failure to pay and
discharge such taxes, assessments and governmental charges could not reasonably
be expected, individually or in the aggregate, to have a Material Adverse
Effect.
(f) Insurance. Maintain, and cause each of its Subsidiaries to maintain,
insurance with reputable insurance companies against such risks, of such types
(including general liability), on such properties and in such amounts as is
customarily maintained by similar businesses similarly situated, and provide to
the Lender a certificate or certificates of insurance showing that the Lender
has been named as loss payee by endorsement to the policies for such insurance.
(g) Inspection. Permit, and cause each of its Subsidiaries to permit, upon
no fewer than five Business Days' notice, the Lender to have one or more of
their officers and employees, or any other Person designated by the Lender, to
visit and inspect any of the properties of the Borrower and such Subsidiary and
to examine the minute books, books of account and other corporate and financial
records of the Borrower and such Subsidiary, and discuss its affairs, finances
and accounts with its officers and with the Borrower's independent accountants,
during normal business hours and at such other reasonable times, for the purpose
of monitoring the Borrower's compliance with its obligations under agreements to
which the Lender is a party and for no other purpose.
(h) Maintenance of Records. For the Borrower and each of its Subsidiaries
(i) keep proper books of record and account in which entries sufficient to
provide financial statements in accordance with GAAP will be made of all
dealings or transactions of or in relation to its business and affairs; (ii) set
up on its books reserves with respect to all taxes, assessments, charges,
reviews and claims; and (iii) on a current basis, set up on its books, from its
earnings, appropriate reserves against doubtful accounts receivable, advances
and investments and all other proper reserves (including by reason of
enumeration, reserves for premiums, if any, due on required prepayments and
reserves for depreciation, obsolescence, or amortization of properties), which
should be set aside from such earnings in connection with its business. (All
determinations pursuant to this Section 7.01(h) shall be made in accordance
with, or as required by, GAAP.)
(i) Maintenance of Property. Maintain, keep and preserve and cause each of
its Subsidiaries to maintain, keep and preserve all of its properties in good
repair, working order and condition and from time to time make all necessary and
proper repairs, renewals, replacements, and improvements thereto, except to the
extent that any failure so to maintain, keep and preserve such properties,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
(j) ERISA. Furnish to the Lender:
(i) within ten days after a Responsible Officer learns that any "reportable
event" (as defined in Section 4043(c) of ERISA), other than a reportable event
for which the 30-day notice requirement has been waived by the PBGC, has
occurred with respect to a Pension Plan, a statement setting forth details as to
such reportable event and the action proposed to be taken with respect thereto;
(ii) within ten days after receipt thereof, a copy of any notice that any
member of the ERISA Group may receive from the PBGC relating to the intention of
the PBGC to terminate any Pension Plan or to appoint a trustee to administer any
Plan;
(iii) within ten days after filing with any affected party (as such term is
defined in Section 4001 of ERISA) of a notice of intent to terminate a Pension
Plan, a copy of such notice and a statement setting forth the details of such
termination, including the amount of liability, if any, of any member of the
ERISA Group under Title IV of ERISA;
(iv) within ten days after the adoption of a material amendment to a
Pension Plan if, after giving effect to such amendment, the Pension Plan is a
plan described in Section 4021(b) of ERISA, a statement setting forth the
details thereof;
(v) within 30 days after withdrawal from a Pension Plan during a plan year
for which any member of the ERISA Group could be subject to liability under
Section 4063 or 4064 of ERISA, a statement setting forth the details thereof,
including the amount of such liability;
(vi) within 30 days after cessation of operations by any member of the
ERISA Group at a facility under the circumstances described in Section 4062(e)
of ERISA, a statement setting forth the details thereof, including the amount of
liability of the Borrower or a member of the ERISA Group under Title IV of
ERISA;
(vii) within ten days after adoption of an amendment to a Pension Plan
which would require security to be given to the Pension Plan pursuant to Section
401(a)(29) of the Code or Section 307 of ERISA, a statement setting forth the
details thereof, including the amount of such security;
(viii) within ten days after failure by any member of the ERISA Group to
make payment to a Pension Plan which would give rise to a lien in favor of the
Plan under Section 302(f) of ERISA, a statement setting forth the details
thereof, including the amount of such lien;
(ix) within ten days after the due date for filing with the PBGC, pursuant
to Section 412(n) of the Code, of a notice of failure to make a required
installment or other payment with respect to a Pension Plan, a statement setting
forth details as to such failure and the action proposed to be taken with
respect thereto; and
(x) within 30 days after receipt thereof by any member of the ERISA Group
from the sponsor of a Multiemployer Plan, a copy of each notice concerning the
imposition of withdrawal liability or the termination or reorganization of a
Multiemployer Plan.
(k) Notice of Defaults and Adverse Developments. Promptly notify the Lender
upon the discovery by any Responsible Officer of the occurrence of (i) any
Default or Event of Default; (ii) any event, development or circumstance whereby
the financial statements most recently furnished to the Lender fail to present
fairly, in all material respects, and in accordance with GAAP, the financial
condition and operating results of the Borrower and its Subsidiaries as of the
date of such financial statements; (iii) any material litigation or proceedings
that are instituted or threatened (to the knowledge of the Borrower) against the
Borrower or any of its Subsidiaries or any of their respective assets; (iv) any
event, development or circumstance which, individually or in the aggregate,
could reasonably be expected to result in an event or default (or, with the
giving of notice or lapse of time or both, an event of default) under any
Indebtedness and the amount hereof; and (v) any other development in the
business or affairs of the Borrower or any of its Subsidiaries if the effect
thereof would reasonably be expected, individually or in the aggregate, to have
a Material Adverse Effect; in each case describing the nature thereof and the
action the Borrower proposes to take with respect thereto.
(l) Environmental Matters. (i) Comply, and cause each of its Subsidiaries
to comply, in all material respects with all applicable Environmental Laws, (ii)
notify the Lender promptly after becoming aware of any Environmental Claim, or
any fact or circumstance that is reasonably likely to result in an Environmental
Claim or a material violation of any Environmental Law, with respect to the
Borrower's or any of its Subsidiaries' properties or facilities, and (iii)
promptly forward to the Lender a copy of any material order, notice, permit,
application, or any other communication or report received in connection with
any such matters as they may affect such premises.
Section VII.2. Negative Covenants. Until satisfaction in full of all the
obligations of the Borrower under the Credit Documents, the Borrower will not:
(a) Mergers, Consolidations and Sales of Assets. Enter into any merger,
consolidation or share exchange, or acquire assets of any Person, or sell, lease
or otherwise dispose of any of its assets, or permit any of its Subsidiaries so
to do, except that (i) any such Subsidiary may merge or consolidate (A) with or
into the Borrower, if the Borrower shall be the continuing or surviving
corporation, or (B) with or into any one or more Wholly Owned Subsidiary of the
Borrower,(ii) the Borrower or any Subsidiary of the Borrower may make any Asset
Disposition to the extent permitted by Section 7.02(n) and (iii) the Borrower or
any Subsidiary of the Borrower may acquire assets for cash consideration which,
together with all other cash consideration paid by the Borrower or any
Subsidiary for assets on or following the date of this Agreement, does not
exceed *****, and may acquire assets in exchange for shares of Common Stock
having a market value at the time of issuance which, together with the market
value at time of issuance of all other shares of Common Stock issued by the
Borrower in consideration for or in connection with the acquisition of assets on
or following the date of this Agreement, does not exceed *****; provided that
the amount of Indebtedness assumed or incurred by the Borrower or any Subsidiary
of the Borrower in connection with the acquisition of assets on or following the
date of this Agreement pursuant to this Section 7.02(a)(iii) may not exceed
****** of the sum of the cash consideration paid, and the market value at time
of issuance of Common Stock issued, in consideration therefor or in connection
therewith.
*****Confidential Treatment Requested
(b) Liens. Create, incur, assume or suffer to exist any Lien, other than
Permitted Liens, upon or in any of its or any of its Subsidiaries' property or
assets, whether now owned or hereafter acquired.
(c) Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness, or permit any of its Subsidiaries so to do, except:
(i) Indebtedness to the Lender under the Credit Documents,
(ii) Indebtedness of the Borrower or any of its Subsidiaries secured by
Liens specifically permitted by Section 7.02(b),
(iii) Guaranties to the extent permitted by Section 7.02(d),
(iv) Indebtedness existing on the date hereof,
(v) Indebtedness of Borrower to any Subsidiary, and Indebtedness of any
Subsidiary to Borrower or any other Subsidiary, and
(vi) Extension, refinancings, modifications, amendments and restatements of
any of items of Permitted Indebtedness (i) through (v) above, provided that the
principal amount thereof is not increased.
(d) Contingent Liabilities. Assume, Guaranty, endorse, contingently agree
to purchase or otherwise become liable upon the obligation of any other Person,
or permit any of its Subsidiaries to do so, except:
(i) in connection with a merger or consolidation permitted by Section
7.02(a),
(ii) by the endorsement of negotiable instruments for deposit or collection
or similar transactions in the ordinary course of business,
(iii) Guaranties by the Borrower of contractual obligations (other than for
the payment of Indebtedness) of any of its Wholly Owned Subsidiaries, and
(iv) Guaranties existing on the date hereof, but not extensions thereof.
(e) Loans and Investments. Make any Investment or permit any of its
Subsidiaries to do so, except:
(i) Investments existing on the date hereof,
(ii) Investments consisting of the endorsement of negotiable instrument for
deposit or collection or similar transaction in the ordinary course of business,
(iii) Investments accepted in connection with asset dispositions permitted
by Section 7.02(n),
(iv) Investments of the Borrower in or to Subsidiaries of the Borrower or
of Subsidiaries of the Borrower in or to other Subsidiaries of the Borrower or
in or to the Borrower,
(v) Investments consisting of travel advances, employee relocation loans
and other employee loans and advances in the ordinary course of business,
(vi) Investments consisting of loans to employees, officers or directors of
the Borrower or its Subsidiaries outstanding on the date of this Agreement and
not exceeding an aggregate principal balance of *****, relating to the purchase
or equity securities of the Borrower or its Subsidiaries pursuant to employee
stock purchase plans approved by the Borrower's Board of Directors,
*****Confidential Treatment Requested
(vii) Investments consisting of loans to employees, officers or directors
of the Borrower and its Subsidiaries made on or subsequent to the date of this
Agreement and not exceeding an aggregate principal balance of ***** at any time
outstanding,
*****Confidential Treatment Requested
(viii) Investments in the form of debt securities or other evidence of
Indebtedness of Ramus Medical Technologies acquired or received on or subsequent
to the date of this Agreement pursuant to agreements or instruments in effect on
the date of this Agreement and having an aggregate principal amount not
exceeding *****,
*****Confidential Treatment Requested
(ix) *****
*****Confidential Treatment Requested
(x) Investments (including debt obligations) received in connection with
the bankruptcy or reorganization of customers or suppliers and in settlement of
delinquent obligations of, and other disputes with, customers or suppliers
arising in the ordinary course of business,
(xi) Investments pursuant to or arising under currency agreements or
interest rate agreements entered into in the ordinary course of business,
(xii) Investments consisting of notes receivable of, or prepaid royalties
and other credit extensions, to customers and suppliers made or received in the
ordinary course of business, and
(xiii) Investments in the form of deposit accounts and marketable
securities made pursuant to the cash management policy adopted by the Borrower's
Board of Directors and furnished to the Lender prior to the date of this
Agreement.
(f) Capital Expenditures. Make any Capital Expenditures, or permit any of
its Subsidiaries to do so, exceeding ***** in the aggregate for the Borrower and
the Subsidiaries in any one calendar year; provided that following the earliest
to occur of (i) *****
*****Confidential Treatment Requested
(g) Redemptions, etc. Redeem, defease (including but not limited to legal
or covenant defeasance), repurchase, retire or otherwise acquire or retire for
value prior to any scheduled maturity, repayment or sinking fund payment,
Indebtedness, other than Indebtedness to the Lender under the Credit Documents,
or permit any of its Subsidiaries to do so.
(h) Dividends and Purchase of Stock. Declare any dividends (other than
dividends payable in capital stock of the Borrower) on any shares of any class
of capital stock, or purchase, acquire, redeem or retire, or apply any property
or assets to the purchase, acquisition, redemption or retirement of, or set
apart any sum for the payment of any dividends on, or for the purchase,
acquisition, redemption or retirement of, or make any other distribution by
reduction of capital or otherwise in respect of, any shares of any class of
capital stock of the Borrower or any of its Subsidiaries or any options,
warrants or rights to purchase or acquire shares of any class of capital stock
of the Borrower or any such Subsidiary, or permit any of its Subsidiaries which
is not a Wholly Owned Subsidiary to do so, except that
(i) the Borrower may purchase, redeem or otherwise acquire shares of Common
Stock pursuant to any agreement existing on the date hereof between it, or any
Subsidiary of the Borrower, and any officer, director, employee or consultant to
the Borrower or any of its Subsidiaries, in which the Borrower is obligated or
has the option to repurchase from such officer, director, employee or consultant
shares of Common Stock upon such Person's termination of employment or the
services with the Borrower or any such Subsidiary,
(ii) the Borrower may convert, exchange or redeem any Indebtedness
outstanding on the date hereof which by its terms is convertible or exchangeable
or constitutes the right to purchase any shares of any class of capital stock of
the Borrower,
(iii) *****
*****Confidential Treatment Requested
(iv) *****
*****Confidential Treatment Requested
(i) Stock of Subsidiaries. Sell, pledge or otherwise dispose of any shares
of capital stock of any of its Subsidiaries (except in connection with a merger
or consolidation of a Wholly Owned Subsidiary of the Borrower permitted by
Section 7.02(a) or with the dissolution of any Subsidiary of the Borrower) or
permit any of its Subsidiaries to issue any additional shares of capital stock
except pro rata to its stockholders.
(j) Distributions by Subsidiaries. Suffer to exist, or permit any of its
Subsidiaries to suffer to exist, any consensual encumbrance or restriction on
the ability of any such Subsidiary (i) to pay, directly or indirectly, dividends
or make any other distributions in respect of its capital stock or pay any
Indebtedness or other obligation owed to the Borrower or any other Subsidiary of
the Borrower; (ii) to make loans or advances to the Borrower or any Subsidiary
of the Borrower; or (iii) to transfer any of its property or assets to the
Borrower.
(k) Related Agreements. Amend, modify or waive, or permit to be amended,
modified or waived, any provision of the Key Agreements unless, within not less
than 30 days prior to such amendment, modification or waiver, the Borrower shall
have given the Lender notice thereof, including all relevant terms and
conditions thereof, and the Lender shall have consented in writing thereto.
(l) Sale and Leaseback Transactions. Enter into, or permit any of its
Subsidiaries to enter into, any Sale and Leaseback Transaction.
(m) Transactions with Affiliates and Related Persons. Directly or
indirectly enter into, or permit any of its Subsidiaries to directly or
indirectly enter into, on or following the date hereof, any transaction
(including, without limitation, the purchase, sale, lease or exchange of
property, the rendering of any service or the making of any loan or advance, but
excluding transactions between the Borrower and Wholly Owned Subsidiaries of the
Borrower) with any Affiliate or Related Person of the Borrower or any of its
Subsidiaries.
(n) Asset Dispositions. Make any Asset Disposition, or permit any of its
Subsidiaries to make any Asset Disposition, in one or more related transactions,
unless
(i) the Borrower (or such Subsidiary, as the case may be) receives
consideration at the time of such disposition at least equal to the fair market
value of the shares or assets disposed of (which shall be as determined in good
faith by the Board of Directors and evidenced by a resolution adopted thereby),
(ii) the consideration for such disposition consists of cash or readily
marketable cash equivalents or the assumption of Indebtedness of the Borrower or
other obligations relating to such assets and release from all liability on the
Indebtedness or other obligations assumed, and
(iii) ***** of the Net Available Asset Disposition Proceeds from such
disposition (including from the sale of any marketable cash equivalents received
therein) are applied by the Borrower (or such Subsidiary, as the case may be),
within 48 hours of the receipt thereof, to prepayment of Loans pursuant to
Section 2.04.
*****Confidential Treatment Requested
(o) Securities Offerings. Sell or offer to sell any securities, or permit
any of its Subsidiaries to offer or sell any securities, in one or more related
transactions, unless
(i) the consideration for such disposition consists of cash, and
(ii) ***** of the Net Available Securities Offering Proceeds from such
offering or sale are applied by the Borrower (or such Subsidiary, as the case
may be), within 48 hours of the receipt thereof, to prepayment of Loans pursuant
to Section 2.04.
*****Confidential Treatment Requested
(p) Surplus Cashflows. Fail to apply to the prepayment of Loans pursuant to
Section 2.04 at least ***** of the amount (the "Surplus") by which EBITDA in any
calendar quarter exceeds *****.
*****Confidential Treatment Requested
Section VII.3 Financial Covenants. Until satisfaction in full of all the
obligations of the Borrower under the Credit Documents, the Borrower will not:
(a) Shareholders' Equity. Permit Shareholders' Equity as of the last day of
any calendar quarter designated below to be less than the amount set forth
opposite such quarter below.
Calendar quarter ending Shareholders' Equity
March 31, 1999 *****
June 30, 1999 *****
September 30, 1999 *****
December 31, 1999 *****
March 31, 2000 *****
June 30, 2000 *****
Each calendar quarter
ending after June 30, 2000 *****
*****Confidential Treatment Requested
(b) Current Ratio. Permit the ratio of Current Assets to Current
Liabilities to be less than ***** at any time.
*****Confidential Treatment Requested
(c) *****
(d) *****
*****Confidential Treatment Requested
ARTICLE VIII
Events of Default
Section VIII.1. Events of Default. If one or more of the following events
(each, an "Event of Default") shall occur:
(a) the Borrower shall fail duly to pay any principal of any Loan when due,
whether at maturity, by notice of intention to prepay or otherwise; or
(b) the Borrower shall fail duly to pay any interest, fee or any other
amount payable under the Credit Documents within five Business Days after the
same shall be due, in the manner set forth in this Agreement; or
(c) the Borrower shall fail duly to observe or perform any term, covenant,
or agreement contained in Section 7.02 or 7.03; or
(d) the Borrower shall fail duly to observe or perform any other term,
covenant or agreement contained in this Agreement, and such failure shall have
continued unremedied for a period of 30 days following written notice to the
Borrower thereof; or
(e) any representation or warranty made or deemed made by the Borrower in a
Credit Document, or any statement or representation made in any certificate,
report or opinion delivered by or on behalf of the Borrower in connection with a
Credit Document, shall prove to have been false or misleading in any material
respect when so made or deemed made; or
(f) the Borrower or any of its Subsidiary shall fail to pay any
Indebtedness (other than obligations hereunder) in an amount of ***** or more
when due; or any such Indebtedness having an aggregate principal amount
outstanding of ***** or more shall become or be declared to be due prior to the
expressed maturity thereof; or
*****Confidential Treatment Requested
(g) an involuntary case or other proceeding shall be commenced against the
Borrower or any of its Subsidiaries seeking liquidation, reorganization or other
relief with respect to it or its debts under any applicable bankruptcy,
insolvency, reorganization or similar law or seeking the appointment of a
custodian, receiver, liquidator, assignee, trustee, sequestrator or similar
official of it or any substantial part of its property, and such involuntary
case or other proceeding shall remain undismissed and unstayed for a period of
more than 60 days; or an order or decree approving or ordering any of the
foregoing shall be entered and continued unstayed and in effect; or
(h) the Borrower or any of its Subsidiaries shall commence a voluntary case
or proceeding under any applicable bankruptcy, insolvency, reorganization or
similar law or any other case or proceeding to be adjudicated a bankrupt or
insolvent, or any of them shall consent to the entry of a decree or order for
relief in respect of the Borrower or any such Subsidiary in an involuntary case
or proceeding under any applicable bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against any of them, or any of them shall file a petition or answer
or consent seeking reorganization or relief under any applicable law, or any of
them shall consent to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of the Borrower or any such Subsidiary or any
substantial part of their respective property, or any of them shall make an
assignment for the benefit of creditors, or any of them shall admit in writing
its inability to pay its debts generally as they become due, or the Borrower or
any Subsidiary shall take corporate action in furtherance of any such action; or
(i) one or more judgments against the Borrower or any of its Subsidiaries
or attachments against its property, which in the aggregate exceed *****, or the
operation or result of which could be to interfere materially and adversely with
the conduct of the business of the Borrower or any such Subsidiary remain
unpaid, unstayed on appeal, undischarged, unbonded, or undismissed for a period
of more than 30 days; or
*****Confidential Treatment Requested
(j) notice of intent to terminate a Pension Plan shall have been filed with
any affected party (as defined in Section 4001 of ERISA), or notice of an
application by the PBGC to institute proceedings to terminate a Pension Plan
pursuant to Section 4042 of ERISA shall have been received by any member of the
ERISA Group, in each case only if the amount of unfunded benefit liabilities (as
defined in Section 4001(a)(18) of ERISA) as of the date such notice is filed or
received exceeds $500,000; any member of the ERISA Group incurs liability under
Sections 4062(e), 4063 or 4064 of ERISA in respect of a Pension Plan in an
amount in excess of $1,000,000; an amendment is adopted to a Pension Plan which
would require security to be given to such Pension Plan pursuant to Section
401(a)(29) of the Code or Section 307 of ERISA in an amount in excess of
$1,000,000; any member of the ERISA Group fails to make a payment to a Pension
Plan which would give rise to a Lien in favor of such Plan under Section 302(f)
of ERISA in an amount in excess of $500,000; or
(k) any court or governmental or regulatory authority shall have enacted,
issued, promulgated, enforced or entered any statute, rule, regulation,
judgment, decree, injunction or other order (whether temporary, preliminary or
permanent) which is in effect and which prohibits, enjoins or otherwise
restricts, in a manner that, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect, any of the transactions
contemplated under the Credit Documents; or
(l) any person or group of persons (within the meaning of Section 13 or 14
of the Securities Exchange Act of 1934, as amended), other than the Lender and
its Affiliates and other than any person or group of persons which has
beneficial ownership of 5% or more of the outstanding shares of Common Stock as
of the date of this Agreement, shall have acquired beneficial ownership (within
the meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission
under said Act) of 19.9% or more of the outstanding shares of Common Stock; or,
during any period of 24 consecutive calendar months, individuals who were
directors of the Borrower on the first day of such period shall cease to
constitute a majority of the board of directors of the Borrower; then, and at
any time during the continuance of such Event of Default, the Lender may, by
written notice to the Borrower declare any Loans then outstanding to be due,
whereupon the principal of the Loans so declared to be due, together with
accrued interest thereon and any unpaid amounts accrued under the Credit
Documents, shall become forthwith due, without presentment, demand, protest or
any other notice of any kind (all of which are hereby expressly waived by the
Borrower).
Section VIII.2. Assignments. (a) Upon reasonable prior notice having been
given to the Borrower, the Lender may at any time assign to one or more of The
Pharmacia & Upjohn Company, Pharmacia & Upjohn B.V., Pharmacia & Upjohn AB or
Pharmacia & Upjohn S.p.A. (any such entity, an "Approved Subsidiary") all, or a
proportionate part of all, of its rights and obligations under this Agreement,
and such Approved Subsidiary shall assume such rights and obligations, pursuant
to a written instrument executed by such Approved Subsidiary and the Lender. If
there shall have occurred an Event of Default that is continuing, the Lender may
assign to any Person, other than a Person which engages in, as its principal
business or one of its principal businesses, the development of photoselective
drugs or light producing and light delivery medical devices (any such assignee,
or any Approved Subsidiary referred to in the previous sentence being referred
to as an "Assignee"), all, or a proportionate part of all, of its rights and
obligations under this Agreement, and such Assignee shall assume such rights and
obligations, pursuant to a written instrument executed by such Assignee and the
Lender. Any such Assignee shall have all the rights and obligations of the
Lender, and the Lender shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by any party shall be
required.
(b) No Assignee of the Lender's rights shall be entitled to receive any
greater payment under Section 4.03 or 4.04 than the Lender would have been
entitled to receive with respect to the rights transferred, and amounts payable
under this Agreement shall not be increased in respect of any Taxes required to
be withheld or deducted solely as a consequence of the Lender's status as a
nonresident alien, as such term is defined in the Code.
Section VIII.3. Certain Pledges. Notwithstanding any other provision in
this Agreement, any Lender may at any time create a security interest in, or
pledge, all or any portion of its rights under this Agreement and any Note held
by it in favor of any Person.
ARTICLE IX
Miscellaneous
SECTION IX.1. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
SECTION IX.2. WAIVER OF JURY. THE BORROWER AND THE LENDER EACH HEREBY
WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, THE NOTES OR
THE RELATIONSHIPS ESTABLISHED HEREUNDER.
Section IX.3. Jurisdiction and Venue; Service of Process. (a) The Borrower
and the Lender each hereby irrevocably submits to the non-exclusive jurisdiction
of any state or federal court in the Borough of Manhattan, The City of New York
for the purpose of any suit, action, proceeding or judgment relating to or
arising out of any Credit Document and to the laying of venue in the Borough of
Manhattan, The City of New York. The Borrower and the Lender each hereby
irrevocably waives, to the fullest extent permitted by applicable law, any
objection to the laying of the venue of any such suit, action or proceeding
brought in the aforesaid courts and hereby irrevocably waives any claim that any
such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.
(b) The Borrower agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in Section 9.07 or at such other address of
which the Lender shall have been notified pursuant thereto. The Borrower further
agrees that nothing herein shall affect the right to effect service of process
in any other manner permitted by law or shall limit the right to sue any other
jurisdiction.
(c) Each of the Borrower and the Lender waives, to the maximum extent not
prohibited by law, any right it may have to claim or recover in any legal action
or proceeding referred to in this Section 9.03 any special, exemplary, punitive
or consequential damages. The waiver set forth in this Section 9.03(c) shall
terminate automatically upon the occurrence of a "Separation Event" as defined
in that certain stockholder rights protection plan of Pharmacia & Upjohn, Inc.
in effect on the date of this Agreement, as it may from time to time be amended.
Section IX.4. Set-off. The Borrower hereby authorizes the Lender and each
of its Affiliates, upon the occurrence of an Event of Default and at any time
and from time to time during the continuance thereof, to the fullest extent
permitted by law, to set-off and apply any and all sums payable by such Lender
or any such Affiliate to or for the credit or the account of the Borrower or any
of its Affiliates against any of the obligations of the Borrower or any of its
Affiliates, now or hereafter existing under any Credit Document, irrespective of
whether the Lender shall have made any demand under this Agreement and although
such obligations may be unmatured. The rights of the Lender and its Affiliates
under this Section 9.04 are in addition to other rights and remedies (including
other rights of set-off) which the Lender and its Affiliates may have.
Section IX.5. Amendments and Waivers. (a) Any provision of this Agreement
may be amended, modified, supplemented or waived, but only by a written
amendment or supplement, or written waiver, signed by the Borrower and the
Lender.
(b) Except to the extent expressly set forth therein, any waiver shall be
effective only in the specific instance and for the specific purpose for which
such waiver is given.
Section IX.6. Cumulative Rights; No Waiver. Each and every right granted to
the Lender hereunder or under any other document delivered in connection
herewith, or allowed the Lender by law or equity, shall be cumulative and not
exclusive and may be exercised from time to time. No failure on the part of the
Lender to exercise, and no delay in exercising, any right will operate as a
waiver thereof, nor will any single or partial exercise by the Lender of any
right preclude any other or future exercise thereof or the exercise of any other
right.
Section IX.7. Notices. (a) Any communication, demand or notice to be given
hereunder will be duly given when delivered in writing or by telecopy to a party
at its address as indicated below or such other address as such party may
specify in a notice to each other party hereto. A communication, demand or
notice given pursuant to this Section 9.07 shall be addressed:
If to the Borrower, to
Miravant Medical Technologies
7408 Hollister Avenue
Santa Barbara, California 93117
Telecopy: (805) 685-6038
Attention: Gary S. Kledzik
with copies (which, in and of themselves, shall not constitute notice) to
Nida & Maloney PC
800 Anacapa Street
Santa Barbara, California 93101
Telecopy: (805) 568-1955
Attention: Joseph E. Nida
and
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94304
Telecopy: (650) 493-6811
Attention: John T. Sheridan
If to the Lender, to
Pharmacia & Upjohn, Inc.
95 Corporate Drive
Bridgewater, New Jersey 08807
Telecopy: (908) 470-8047
Attention: Treasurer
and
Pharmacia & Upjohn, Inc.
95 Corporate Drive
Bridgewater, New Jersey 08807
Telecopy: (908) 306-4485
Attention:Senior Vice President of Business Development
and
Pharmacia & Upjohn, Inc.
95 Corporate Drive
Bridgewater, New Jersey 08807
Telecopy: (908) 306-4489
Attention: General Counsel
with a copy (which, in and of itself, shall not constitute notice) to
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Telecopy: (212) 558-3588
Attention: Neil T. Anderson,
Matthew G. Hurd
and Martin J. Travers
This Section 9.07 shall not apply to notices referred to in Article II of
this Agreement, except to the extent set forth therein.
(b) Unless otherwise provided to the contrary herein, any notice which is
required to be given in writing pursuant to the terms of this Agreement may be
given by telecopy.
Section IX.8. Certain Acknowledgments. The Borrower hereby confirms and
acknowledges that the Lender does not have any fiduciary or similar relationship
to the Borrower and that the relationship established by the Credit Documents
between the Lender and the Borrower is solely that of creditor and debtor and
(b) that no joint venture exists between the Borrower and the Lender.
Section IX.9. Separability. In case any one or more of the provisions
contained in any Credit Document shall be invalid, illegal or unenforceable in
any respect under any law, the validity, legality and enforceability of the
remaining provisions contained herein or in any other Credit Document shall not
in any way be affected or impaired thereby.
Section IX.10. Parties in Interest. This Agreement shall be binding upon
and inure to the benefit of the Borrower and the Lender and their respective
successors and assigns, except that the Borrower may not assign any of its
rights hereunder without the prior written consent of the Lender, and any
purported assignment by the Borrower without such consent shall be void.
Section IX.11. Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all the counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
MIRAVANT MEDICAL TECHNOLOGIES
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
Subsidiaries of the Borrower
Exhibit A
Form of Borrowing Request
[Date]*
Pharmacia & Upjohn, Inc.
95 Corporate Drive
Bridgewater, New Jersey 08807
Attention: Treasurer
Borrowing Request
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of o, 1999 (as amended,
modified or supplemented from time to time, the "Credit Agreement"), between
Miravant Medical Technologies and o. Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to such terms in the
Credit Agreement.
The Borrower hereby gives you notice, pursuant to Section 2.02(a) of the
Credit Agreement, that it requests a Quarterly Loan in a principal amount equal
to the Borrowing Amount set forth below, to be made on the Borrowing Date set
forth below.
Borrowing Date:** _________, ____
Borrowing Amount:*** $___________
A-4
Warrant Number:**** ___________
A duly executed Note in the form of Exhibit B to the Credit Agreement,
dated as of the Borrowing Date set forth above and evidencing a Quarterly Loan
in a principal amount equal to the Borrowing Amount set forth above, is
enclosed.
A duly executed Warrant Certificate evidencing a number of Warrants equal
to the Warrant Number is enclosed. The Exercise Price for each such Warrant is
$______, and the closing bid prices for the 10 Trading Days preceding this bid
request and a calculation of the Exercise Price are set out below. The Exercise
Price is the sum of [A] plus [B].
Trading Day Closing Bid Price
1. $
2.
3.
4.
5.
6.
7.
8.
9.
10.
Total ____________________
/ 10 ____________________ [A]
x 0.40 ____________________ [B]
[A]+[B] ____________________
Very truly yours,
MIRAVANT MEDICAL TECHNOLOGIES
By:
Name:
Title:
Form of Note
PROMISSORY NOTE
$[Principal Amount] [Date]
MIRAVANT MEDICAL TECHNOLOGIES, a Delaware corporation (the
"Borrower"), for value received, promises to pay to the order of o (the
"Lender"), on [MATURITY DATE], the principal sum of $[PRINCIPAL AMOUNT] pursuant
to and in the manner contemplated by that certain Credit Agreement, dated as of
o, 1999 (as amended, modified or supplemented from time to time, the "Credit
Agreement"), between the Borrower and the Lender.
The Borrower also promises to pay interest on the unpaid
principal amount hereof from time to time outstanding, from the date hereof
until the date of repayment, at the rate or rates per annum and on the date or
dates determined pursuant to the Credit Agreement.
Payments of both principal and interest are to be made in
lawful money of the United States of America in funds immediately available to
the Lender at its office or offices designated in accordance with the Credit
Agreement, or, if and only if specifically permitted by Section 2.01(b) of the
Credit Agreement, in the manner set forth in such Section 2.01(b).
All parties hereto, whether as makers, endorsers, or
otherwise, severally waive diligence, presentment, demand, protest and notice of
any kind whatsoever. The failure or forbearance by the holder to exercise any of
its rights hereunder in any particular instance shall in no event constitute a
waiver thereof.
The Credit Agreement, among other things, contains provisions
for the acceleration of the maturity hereof upon the happening of certain events
and for the amendment or waiver of certain provisions of the Credit Agreement
and/or this Note, all upon the terms and conditions therein specified.
Capitalized terms used and not otherwise defined herein have the meanings
ascribed thereto in the Credit Agreement.
THIS NOTE HAS BEEN DELIVERED IN NEW YORK, NEW YORK AND SHALL
BE DEEMED TO BE A CONTRACT MADE UNDER, GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
B-[PG NUMBER]
This Note is not negotiable and may be assigned only upon the
terms and conditions specified in the Credit Agreement.
MIRAVANT MEDICAL TECHNOLOGIES
By:
Name:
Title:
Exhibit C
Form of Opinion of Counsel for the Borrower
to be Delivered Upon Payment of Shares
[TO COME]
Form of Opinion of Counsel for the
Borrower to be Delivered at the Effective Time
[Effective Date]
Pharmacia & Upjohn, Inc.
95 Corporate Drive
Bridgewater, New Jersey 08807
Ladies and Gentlemen:
In connection with the execution and delivery today of the
Credit Agreement, dated as of o, 1999 (the "Credit Agreement"), between Miravant
Medical Technologies, Inc., a Delaware corporation (the "Borrower"), and o, a
Swedish corporation (the "Lender"), the Security Agreement, dated as of o, 1999
(the "Security Agreement"), among the Borrower, as debtor, and the Lender, as
Secured Party, and [add references to other Credit Documents] (collectively with
the Credit Agreement and the Security Agreement, the "Credit Documents"), we, as
counsel for the Borrower, have examined such corporate records, certificates and
other documents, and such questions of law, as we have considered necessary or
appropriate for the purposes of this opinion. Upon the basis of such
examination, it is our opinion that:
(1) The Borrower has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware.
(2) Each of the Credit Documents has been duly authorized,
executed and delivered, and, if and when duly executed and delivered in
accordance with the terms of the Credit Agreement, any Notes will be
duly authorized, executed and delivered by the Borrower; and each of
the Credit Documents (other than any Notes) constitutes, and each Note
(if and when duly executed and delivered in accordance with the terms
of the Credit Agreement) will constitute, the valid and legally binding
obligation of the Borrower enforceable in accordance with its
respective terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles.
D-[PG NUMBER]
(3) [Opinion on the Warrants and Exercise Shares]
(4) All regulatory consents, authorizations, approvals and
filings required to be obtained or made by the Borrower under the
Federal laws of the United States and the laws of the State of New York
for the borrowing by the Borrower from the Lender under the Credit
Agreement, the execution and delivery of each of the Credit Documents
to the Lender and the performance by the Company of its obligations
thereunder have been obtained or made; provided, however, that, insofar
as performance by the Borrower of its obligations under each of the
Credit Documents is concerned, we express no opinion as to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors'
rights or as to general equity principles.
(5) The Borrower is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940.
For purposes of this letter, terms defined in the Credit
Agreement have the meanings set forth therein.
The foregoing opinion is limited to the Federal laws of the
United States and the laws of the State of New York, and we are expressing no
opinion as to the effect of the laws of any other jurisdiction.
With your approval, we have relied as to certain matters on
information obtained from public officials, officers of the Borrower and other
sources believed by us to be responsible, and we have assumed that each of the
Credit Documents has been duly authorized, executed and delivered by the parties
thereto other than the Borrower and its Affiliates, and that the signatures on
all documents examined by us are genuine, assumptions which we have not
independently verified.
This letter is delivered by us as counsel for the Borrower to
you, and is solely for your benefit.
Very truly yours,
NIDA & MALONEY PC
Form of Compliance Certificate
COMPLIANCE CERTIFICATE
[For the Fiscal Quarter ending ________]
[For the Fiscal Year ending ________]
Reference is made to the Credit Agreement, dated as of o, 1999
(as amended, modified or supplemented from time to time, the "Credit
Agreement"), between Miravant Medical Technologies (the "Borrower") and o.
Pursuant to Section 7.01(a)(iii) of the Credit Agreement, the undersigned
Responsible Officer of the Borrower hereby certifies on behalf of the Borrower
that:
(a) During the period of four consecutive fiscal quarters
ended on ____________, __, such Responsible Officer has obtained no knowledge of
any Default or Event of Default except as follows: [Specify with particularity].
The financial statements referred to in Section 7.01(a) of the
Credit Agreement which are delivered concurrently with the delivery of this
Compliance Certificate fairly present the financial position, results of
operations, cash flows and changes in shareholders' equity of the Borrower and
its Subsidiaries, subject to normal year-end audit adjustments which are not
expected to be material in amount.*
(b) The covenant calculations set forth below are based on the
Borrower's [audited] balance sheet and statements of earnings, cash flows and
shareholders' equity for the fiscal [quarter] [year] ended ___________, ____
(the "Period-End Date").
[Insert calculations demonstrating compliance with Section 7.03 of the Credit
Agreement]
IN WITNESS WHEREOF, on behalf of the Borrower, the undersigned has
hereto set his or her hand.
Dated:_________, ___
MIRAVANT MEDICAL TECHNOLOGIES
By: _______________________________
A Responsible Officer
CREDIT AGREEMENT
dated as of
o, 1999
between
MIRAVANT MEDICAL TECHNOLOGIES
and
o
-vii-
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE IDefinitions
Section 1.01. Definitions........................................................................................1
(a) Terms Generally.................................................................................1
(b) Accounting Terms................................................................................2
(c) Other Terms.....................................................................................2
ARTICLE IIThe Credit Facility
Section 2.01. Loans.............................................................................................15
Section 2.02. Borrowing Procedure...............................................................................16
Section 2.03. Repayment.........................................................................................16
Section 2.04. Prepayment........................................................................................17
ARTICLE IIIInterest
Section 3.01. Interest on Loans.................................................................................18
Section 3.02. Interest on Overdue Amounts.......................................................................19
Section 3.03. Day Counts........................................................................................19
Section 3.04. Maximum Interest Rate.............................................................................19
ARTICLE IVDisbursement and Payment
Section 4.01. Method and Time of Payments.......................................................................20
---------------------------
Section 4.02. Compensation for Losses...........................................................................20
-----------------------
Section 4.03. Withholding.......................................................................................21
-----------
Section 4.04. Expenses; Indemnity...............................................................................21
-------------------
Section 4.05. Survival..........................................................................................22
--------
ARTICLE VRepresentations and Warranties
Section 5.01. Representations and Warranties....................................................................23
------------------------------
(a) Subsidiaries...................................................................................23
------------
(b) Good Standing and Power........................................................................23
-----------------------
(c) Corporate Authority............................................................................23
-------------------
(d) Authorizations.................................................................................23
--------------
(e) Binding Obligation.............................................................................23
------------------
(f) Litigation.....................................................................................24
----------
(g) No Conflicts...................................................................................24
------------
(h) Financial Condition............................................................................24
-------------------
(i) Taxes..........................................................................................25
-----
(j) Use of Proceeds................................................................................25
---------------
(k) Margin Regulations.............................................................................25
------------------
(l) Compliance with ERISA..........................................................................25
---------------------
(m) Not an Investment Company......................................................................26
-------------------------
(n) Properties.....................................................................................26
----------
(o) Compliance with Laws and Charter Documents.....................................................26
------------------------------------------
(p) Environmental Protection.......................................................................27
------------------------
(q) Insurance......................................................................................28
---------
(r) Adverse Contracts..............................................................................28
-----------------
(s) Solvency.......................................................................................28
--------
(t) Disclosure.....................................................................................28
----------
Section 5.02 Survival...........................................................................................29
ARTICLE VIConditions Precedent
Section 6.01. Conditions to the Availability of the
Commitment............................................................................29
----------
(a) This Agreement.................................................................................29
--------------
(b) Evidence of Corporate Action...................................................................29
----------------------------
(c) Opinions of Counsel............................................................................30
-------------------
(d) Representations and Warranties.................................................................30
------------------------------
(e) Other Documents................................................................................30
---------------
Section 6.02. Conditions to All Quarterly Loans.................................................................30
---------------------------------
(a) Borrowing Request..............................................................................30
-----------------
(b) Note...........................................................................................30
----
(c) Warrant Certificate............................................................................30
-------------------
(d) No Default.....................................................................................31
----------
(e) Representations and Warranties; Covenants......................................................31
-----------------------------------------
Section 6.03. Satisfaction of Conditions Precedent..............................................................31
ARTICLE VIICovenants
Section 7.01. Affirmative Covenants.............................................................................31
---------------------
(a) Financial Statements; Compliance Certificates..................................................31
---------------------------------------------
(b) Corporate Existence............................................................................33
-------------------
(c) Conduct of Business............................................................................33
-------------------
(d) Authorizations.................................................................................33
--------------
(e) Taxes..........................................................................................34
-----
(f) Insurance......................................................................................34
---------
(g) Inspection.....................................................................................34
----------
(h) Maintenance of Records.........................................................................34
----------------------
(i) Maintenance of Property........................................................................35
-----------------------
(j) ERISA..........................................................................................35
-----
(k) Notice of Defaults and Adverse Developments....................................................36
-------------------------------------------
(l) Environmental Matters..........................................................................37
---------------------
Section 7.02. Negative Covenants................................................................................37
------------------
(a) Mergers, Consolidations and Sales of Assets....................................................37
-------------------------------------------
(b) Liens..........................................................................................38
-----
(c) Indebtedness...................................................................................38
------------
(d) Contingent Liabilities.........................................................................38
----------------------
(e) Loans and Investments..........................................................................39
---------------------
(f) Capital Expenditures...........................................................................40
--------------------
(g) Redemptions, etc...............................................................................41
-----------------
(h) Dividends and Purchase of Stock................................................................41
-------------------------------
(i) Stock of Subsidiaries..........................................................................42
---------------------
(j) Distributions by Subsidiaries..................................................................42
-----------------------------
(k) Related Agreements.............................................................................42
------------------
(l) Sale and Leaseback Transactions................................................................43
-------------------------------
(m) Transactions with Affiliates and Related Persons...............................................43
------------------------------------------------
(n) Asset Dispositions.............................................................................43
------------------
(o) Securities Offerings...........................................................................43
--------------------
(p) Surplus Cashflows..............................................................................44
-----------------
Section 7.03 Financial Covenants................................................................................44
-------------------
(a) Shareholders' Equity...........................................................................44
--------------------
(b) Current Ratio..................................................................................44
-------------
(c) Minimum Operating Income.......................................................................44
------------------------
(d) Ophthalmology Expense..........................................................................44
---------------------
ARTICLE VIIIEvents of Default
Section 8.01. Events of Default.................................................................................45
-----------------
(a) ...............................................................................................45
(b) ...............................................................................................45
(c) ...............................................................................................45
(d) ...............................................................................................45
(e) ...............................................................................................45
(f) ...............................................................................................45
(g) ...............................................................................................45
(h) ...............................................................................................46
(i) ...............................................................................................46
(j) ...............................................................................................46
(k) ...............................................................................................47
(l) ...............................................................................................47
Section 8.02. Assignments.......................................................................................47
(b) ...............................................................................................48
Section 8.03. Certain Pledges...................................................................................48
ARTICLE IXMiscellaneous
SECTION 9.01. APPLICABLE LAW....................................................................................48
--------------
SECTION 9.02. WAIVER OF JURY....................................................................................49
--------------
Section 9.03. Jurisdiction and Venue; Service of Process........................................................49
------------------------------------------
Section 9.04. Set-off...........................................................................................49
-------
Section 9.05. Amendments and Waivers............................................................................50
----------------------
Section 9.06. Cumulative Rights; No Waiver......................................................................50
----------------------------
Section 9.07. Notices...........................................................................................50
-------
Section 9.08. Certain Acknowledgments...........................................................................52
-----------------------
Section 9.09. Separability......................................................................................52
------------
Section 9.10. Parties in Interest...............................................................................52
-------------------
Section 9.11. Execution in Counterparts.........................................................................53
-------------------------
SCHEDULES
Schedule 5.01(a) Subsidiaries of the Borrower
EXHIBITS
Exhibit A Form of Borrowing Request
Exhibit B Form of Note
Exhibit C Form of Opinion of Counsel for the Borrower to be Delivered Upon Payment of Shares
Exhibit D Form of Opinion of Counsel for the Borrower to be Delivered at the Effective Time
Exhibit E Form of Compliance Certificate
- --------
* See Section 2.02 the Credit Agreement.
** See the definition of "Borrowing Date" in Section 1.01(c) of the Credit Agreement.
*** See Section 2.01 and the definition of "Maximum Quarterly Amount" in Section 1.01(c) of the Credit Agreement.
**** See the definition of "Warrant Number" in Section 1.01(c) of the Credit Agreement.
* Insert only in Compliance Certificates accompanying quarterly financial statements delivered pursuant to Section 7.01(a) of
the Credit Agreement.
</TABLE>
WARRANT AGREEMENT
WARRANT AGREEMENT (this "Agreement"), dated as of o, 1999, between MIRAVANT
MEDICAL TECHNOLOGIES, a Delaware corporation (the "Company"), and PHARMACIA &
UPJOHN, INC., a Delaware corporation (the "Initial Holder").
W I T N E S S E T H :
WHEREAS, Sections 2.02 and 6.02(b) of the Credit Agreement, of even date
herewith, between the Company and o (the "Credit Agreement") provide that in
connection with the making of each Borrowing Request contemplated thereby, the
Company shall deliver to the Initial Holder a Warrant Certificate representing a
number of Warrants equal to the Warrant Number and having the terms herein set
forth;
NOW, THEREFORE, the parties agree as follows:
ARTICLE 1
Definitions
Section I.1. Terms Generally. The definitions ascribed to terms in this
Agreement apply equally to both the singular and plural forms of such terms.
Whenever the context may require, any pronoun shall be deemed to include the
corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be interpreted as if followed by the phrase
"without limitation". All references herein to the Preamble, Recitals, Articles,
Sections and Exhibits shall be deemed references to the Preamble and Recitals,
Articles and Sections of, and Exhibits to, this Agreement unless the context
shall otherwise require. The headings and captions herein shall not be given
effect in interpreting or construing the provisions of this Agreement. Except as
otherwise expressly provided herein, all references to "dollars" or "$" shall be
deemed references to the lawful money of the United States of America.
Section I.2. Definitions. The following terms have the meanings ascribed to
them below:
"Affiliate" of any Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person. For purposes of this definition, "control" when used with respect
to any Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Average Price" means, with respect to the Exercise Price for any Warrant,
the average of the Closing Prices of the Common Stock for the 10 Trading Days
immediately preceding the date of the dispatch to the Initial Holder of the
Borrowing Request that accompanies the Warrant Certificate evidencing such
Warrant.
"Board of Directors" means the board of directors of the Company.
"Borrowing Request" has the meaning assigned to such term in the Credit
Agreement.
"Business Day" means any day that is not a Saturday, Sunday or other day on
which commercial banks in The City of New York or in Los Angeles, California are
authorized by law to close.
"Cash Amount" means, with respect to any Warrant, an amount of cash equal
to the product of (i) 95% of the Closing Price of the Common Stock as of the
date of exercise of such Warrant multiplied by (ii) the Shares Amount in effect
on such date.
"Close of Business" means, for any day, 5:00 p.m., New York City time, on
such date.
"Closing Price" means the last reported sale price regular way on the day
in question or, in case no such sale takes place on such day, the reported
closing bid price regular way of the Common Stock, in each case on the principal
national securities exchange on which the Common Stock is listed or admitted to
trading, or, if not listed or admitted to trading on any national securities
exchange, the closing bid price of the Common Stock on the Nasdaq National
Market, or if not listed or admitted to trading on any national securities
exchange and not quoted on the Nasdaq National Market, the closing bid price of
the Common Stock in the over-the-counter market on the day in question as
reported by the National Quotation Bureau Incorporated, or a similarly generally
accepted reporting service, or, if not so available in such manner, as furnished
by any New York Stock Exchange, Inc. member firm selected from time to time by
the Board of Directors for such purpose. In the case of a closing price of
Common Stock on the Nasdaq National Market System, such price shall mean the
closing price reported in the New York City edition of The Wall Street Journal
or, if not so reported, another authoritative source.
"Commission" means the Securities and Exchange Commission (or any successor
Governmental Authority).
"Common Stock" means the common stock, par value $.01 per share, of the
Company and any other stock of the Company into which such common stock may be
converted or reclassified (other than stock of the Company into which unissued
Common Stock has been reclassified) or that may be issued in respect of, in
exchange for, or in substitution of, such common stock by reason of any stock
splits, stock dividends, distributions, mergers, consolidations,
recapitalizations or other like events.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exercise Price" means, with respect to any Warrant, the price equal to
140% of the Average Price.
"Expiration Date" means, with respect to each Warrant, the fifth
anniversary of the date on which a Warrant Certificate evidencing such Warrant
is first received by the Initial Holder, provided that if such anniversary is
not a Business Day, the next Business Day thereafter.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Holder" means any holder from time to time of Warrant Certificates.
"Person" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation,
institution, public benefit corporation, entity or government (whether Federal,
state, county, city, municipal or otherwise, including any instrumentality,
division, agency, body or department thereof).
"Quarterly Loan" has the meaning assigned to such term in the Credit
Agreement.
"SEC Reports" means the annual and quarterly reports and the information,
documents, and other reports that the Company is required to file with the
Commission pursuant to Section 13(a) or 15(d) of the Exchange Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares Amount" means, with respect to any Warrant, one share of Common
Stock, subject to all adjustments made pursuant to Article V hereof on or prior
to the date of exercise of such Warrant.
"Trading Day" means a day on which the principal national securities
exchange on which the shares of Common Stock are listed or admitted to trading
is open for the transaction of business or, if the shares of Common Stock are
not listed or admitted to trading on any national securities exchange, a day on
which the Nasdaq National Market is open for the transaction of business.
"Warrant" means a warrant to purchase Common Stock at a price per share of
Common Stock equal to the Exercise Price for such Warrant.
"Warrant Number" has the meaning assigned to such term in the Credit
Agreement.
Section I.3. Tie Sheet. The following terms are defined in the Sections set
forth below:
Term Section
---- -------
Agreement Preamble
Applicable Price 5.06
Call Notice 3.07(b)
Called Warrants 3.07(a)
Common Stock Fundamental Change 5.06
Company Preamble
Credit Agreement Recitals
Current Event 5.01(g)
Expiration Time 5.01(f)
Indemnitee 9.02
Initial Holder Preamble
Non-Stock Fundamental Change 5.06
Other Event 5.01(g)
Purchased Shares 5.01(f)
Purchaser Stock Price 5.06
Reference Date 5.01(d)
Registrar 2.04(a)
Transfer Agent 7.01
Trigger Date 3.07(a)
Warrant Certificates 2.02
Warrant Register 2.04(a)
ARTICLE II
Issuance and Grant of Warrants;
Form, Execution, Delivery and
Registration of Warrant Certificates
Section II.1. Issuance and Grant of Warrants. In connection with the
delivery by the Company of each Borrowing Request pursuant to Section 2.02 of
the Credit Agreement, the Company will issue and grant to the Initial Holder a
number of Warrants equal to the Warrant Number. In the event that the Company
has complied with its obligations pursuant to the Credit Agreement and o fails
to make the Quarterly Loan contemplated by Section 2.02 of the Credit Agreement,
the Warrants evidenced by the Warrant Certificate that accompanies the related
Borrowing Request shall be null and void; provided, however, that if o fails to
make such Quarterly Loan as a result of the Company's cancellation or revocation
of such Borrowing Request or as a result of the Company's failure to comply with
its obligations under the Credit Agreement, such Warrants and such Warrant
Certificate shall not be rendered null, void or otherwise invalid.
Section II.2. Form of Warrant Certificates. The certificates evidencing the
Warrants (the "Warrant Certificates") shall be in registered form only, in the
form set forth in Exhibit A hereto and may represent any whole number of
Warrants. Each Warrant Certificate shall be dated the date of the Borrowing
Request accompanying such Warrant Certificate and may have imprinted or
otherwise reproduced thereon such letters, numbers or other marks of
identification as may, consistent with the provisions of this Agreement, be
determined by the officers executing any such Warrant Certificate.
Section II.3. Execution and Delivery of Warrant Certificates. Each Warrant
Certificate shall be executed on behalf of the Company by (a) its chairman,
chief executive officer, president, or chief operating officer, and (b) its
chief financial officer, in any case either manually or by facsimile signature
printed thereon.
Section II.4. Registration; Registration of Transfers and Exchanges. (a)
The Company will keep a register or registers in which the Company shall
maintain a master list of names and addresses of the Holders (the "Warrant
Register") and shall provide for the registration of, and registration of
transfer and exchange of, Warrant Certificates as provided in this Article. Each
person designated by the Company from time to time as a person having custody of
the Warrant Register and register the transfer and exchange of the Warrant
Certificates is hereinafter called, individually and collectively, the
"Registrar". The Company hereby appoints the Chief Financial Officer of the
Company as Registrar. Upon written notice to the Initial Holder and any acting
Registrar, the Company may appoint a successor Registrar for such purposes.
(b) Upon due presentation for registration of transfer of any Warrant
Certificate to the Registrar, the Company shall execute and deliver in the name
of the transferee or transferees a new Warrant Certificate or Warrant
Certificates in authorized denominations for a like aggregate number of Warrants
bearing numbers or other distinguishing symbols not contemporaneously
outstanding.
(c) Any Warrant Certificate or Warrant Certificates may be exchanged for a
Warrant Certificate or Warrant Certificates in other authorized denominations,
representing in the aggregate a like number of Warrants. A Warrant Certificate
or Warrant Certificates to be so exchanged shall be surrendered to the
Registrar, and the Company shall execute and deliver in exchange therefor the
Warrant Certificate or Warrant Certificates bearing numbers or other
distinguishing symbols not contemporaneously outstanding.
(d) The Company and the Registrar may deem and treat the person in whose
name any Warrant Certificate shall be registered in the Warrant Register as the
absolute owner of such Warrant Certificate for the purpose of any exercise
thereof or any distribution to the Holder thereof and for all other purposes.
(e) All Warrants presented for registration of transfer or exchange shall
(if so required by the Company or the Registrar) be duly endorsed by the
registered Holder or Holders thereof or by the duly appointed legal
representative thereof or by a duly authorized attorney and shall be accompanied
by a written instrument or instruments of transfer or exchange.
(f) No service charge shall be made for any transfer or exchange of Warrant
Certificates, but the Company may require payment from the Holder(s) of such
Warrant Certificates of a sum sufficient to cover any stamp or other
governmental charge or tax that may be imposed in connection with any such
transfer or exchange.
Section II.5. Lost, Stolen, Destroyed, Defaced or Mutilated
Warrant Certificates. Upon receipt by the Registrar of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, defacement, or
mutilation of any Warrant Certificate and, in the case of mutilation or
defacement, upon surrender thereof to the Registrar for cancellation, then the
Company shall execute and deliver, in exchange for or in lieu of the lost,
stolen, destroyed, defaced or mutilated Warrant Certificate, a new Warrant
Certificate having the same tenor and for a like number of Warrants, bearing a
number or other distinguishing symbol not contemporaneously outstanding. Upon
the issuance of any new Warrant Certificate pursuant to this Section 2.05, the
Company may require the payment from the Holder of such Warrant Certificate of a
sum sufficient to cover any tax, stamp tax or other governmental charge that may
be imposed in relation thereto and may require (if the Holder of such Warrant
Certificate is the Initial Holder or any of its Affiliates) a written instrument
executed and delivered by the Initial Holder or The Pharmacia & Upjohn Company,
a Delaware corporation, undertaking to indemnify and defend the Company against
all claims in respect of the lost, stolen, destroyed, defaced or mutilated
Warrant Certificate or (if the Holder is not the Initial Holder or any of its
Affiliates) a lost instrument bond providing customary coverage. Every
substitute Warrant Certificate executed and delivered pursuant to this Section
in lieu of any lost, stolen or destroyed Warrant Certificate shall constitute an
additional contractual obligation of the Company, whether or not the lost,
stolen or destroyed Warrant Certificate shall be at any time enforceable by
anyone, and shall be entitled to the benefits of (but shall be subject to all
the limitations of rights set forth in) this Agreement equally and
proportionately with any and all other Warrant Certificates duly executed and
delivered hereunder.
ARTICLE III
Exercise of Warrants
Section III.1. Duration of Exercise Rights. Each Warrant shall
be exercisable as provided in this Article III from time to time on any Business
Day prior to the Close of Business on the Expiration Date for such Warrant.
Section III.2. Right to Purchase. When exercised in accordance
with Section 3.03 or 3.07, each Warrant shall entitle the Holder to purchase,
and the Company shall be required to issue and deliver, a number of shares of
Common Stock equal to the Shares Amount in effect on the day such Warrant is
exercised in accordance with Section 3.03 or on the Trigger Date, in the case of
an exercise pursuant to Section 3.07, at the Exercise Price for such Warrant;
provided, however, that in the case of an exercise pursuant to Section 3.03, the
Company may, at its sole election, pay to the Holder of each Warrant so
exercised in respect of any one or more of such Warrants cash in an amount equal
to the Cash Amount in lieu of delivering the shares of Common Stock.
Section III.3. Exercise Procedures. In order to exercise a
Warrant, the Holder must surrender the Warrant Certificate evidencing such
Warrant to the Registrar, with the form of election on the reverse of or
attached to the Warrant Certificate duly executed, together with payment of the
Exercise Price. Any such payment of the Exercise Price shall be by certified or
official bank check or wire transfer to the Company of same day funds.
Section III.4. Delivery of Shares. In the event the Company
elects to deliver the Shares Amount as provided in Section 3.02, then upon
surrender of the Warrant Certificate in accordance with Section 3.03 the Company
shall promptly issue or cause to be issued to or upon the written order of the
Holder of such Warrant Certificate, a certificate or certificates evidencing the
share or shares of Common Stock to which such Holder is entitled, in fully
registered form, registered in such name or names as may be directed by such
Holder pursuant to the form of election on the reverse of or attached to the
Warrant Certificate. Such certificate or certificates evidencing such share or
shares shall be deemed to have been issued and any persons who are designated to
be named therein shall be deemed to have become the holder of record of such
share or shares as of the Close of Business on the date on which the Exercise
Price for the related Warrant or Warrants shall have been paid.
Section III.5. Payment of Cash. If the Company elects to
deliver the Cash Amount as provided in Section 3.02, then upon surrender of the
Warrant Certificate in accordance with Section 3.03, the Company shall make
prompt payment of the Cash Amount in same day funds to the account specified on
the form of election on the reverse of or attached to the Warrant Certificate.
Section III.6. Certificate for Unexercised Warrants. If fewer
than all the Warrants represented by a Warrant Certificate are exercised, such
Warrant Certificate shall be surrendered to the Registrar with instructions for
the issuance of a new Warrant Certificate and the Company shall promptly execute
and deliver a new Warrant Certificate for the Warrants that were not exercised
bearing numbers or other distinguishing symbols not contemporaneously
outstanding.
Section III.7. Mandatory Exercise. (a) If and only if the
average of the Closing Prices of the Common Stock for the 30 Trading Days
immediately preceding a particular date (the "Trigger Date") exceeds the
Exercise Price set forth in the Warrant Certificate representing one or more
Warrants, the Company shall be entitled, at its option exercised within 30 days
following the Trigger Date, to cause the Holder of such Warrant Certificate to
exercise all, but not fewer than all, of the related Warrants (the "Called
Warrants") as provided herein.
(b) If the Company elects to cause the Holder to exercise the
Called Warrants, it shall furnish to the Holder, within 30 calendar days
following the Trigger Date, a written notice thereof, (the "Call Notice"),
specifying the identifying number of the Warrant Certificate evidencing the
Called Warrants and the Trigger Date.
(c) Not later than three Business Days following the later of
(i) the date of the Call Notice, and (ii) the expiration or termination of any
waiting period (and any extension thereof) applicable to the acquisition by the
Holder thereof of the shares of Common Stock issuable upon exercise of the
Called Warrants under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended and the receipt of all governmental and contractual permits, consents
and approvals necessary in connection with such acquisition, the Company shall
deliver to the Holder of the Called Warrants a certificate evidencing a number
of shares of Common Stock equal to the product of (x) Shares Amount in effect on
the Trigger Date, multiplied by (y) the number of Called Warrants.
(d) Not later than three Business Days following the receipt
of the certificate referred to in Section 3.07(c), the Holder of the Called
Warrants shall deliver to the Company the certificate representing the Called
Warrants and a check for the product of (i) the Exercise Price, multiplied by
(ii) the number of Called Warrants.
ARTICLE IV
Compliance With the Securities Act and
Restrictions on Transfer of Shares
Section IV.1. Acknowledgment. The Initial Holder hereby
acknowledges that the Warrants and the shares of Common Stock that may be
received by the Initial Holder upon exercise of any Warrant are and will be
subject to certain restrictions on transfers under the Securities Act and the
regulations promulgated thereunder.
Section IV.2. Representation. The Initial Holder hereby represents to the
Company that it is acquiring the Warrants for its own account for investment and
not with a view to the resale or distribution of any interest therein.
Section IV.3. Restrictions on Transfer of Shares. Prior to the
thirtieth calendar day following the issuance of shares of Common Stock upon the
exercise of Warrants, the Initial Holder shall not, and shall cause its
Affiliates not to, sell, assign, transfer or otherwise dispose of such shares,
except that the Initial Holder may transfer any such shares to any of its wholly
owned subsidiaries. The provisions of this Section 4.03 shall not prohibit or
restrict the sale, assignment, transfer or disposition at any time of any shares
of Common Stock acquired pursuant to Section 3.07.
ARTICLE V
Adjustments
Section V.1. Adjustment upon Certain Transactions. The Shares
Amount (and, by virtue thereof, the Cash Amount) shall be subject to adjustment
from time to time on and subsequent to the date of this Agreement as follows:
(a) In case the Company shall pay or make a dividend or other
distribution on its Common Stock exclusively in Common Stock or shall pay or
make a dividend or other distribution on any other class or series of stock of
the Company which dividend or distribution includes Common Stock, the Shares
Amount in effect at the opening of business on the date following the date fixed
for the determination of stockholders entitled to receive such dividend or other
distribution shall be increased by multiplying such Shares Amount by a fraction
of which the denominator shall be the number of shares of Common Stock
outstanding at the Close of Business on the date fixed for such determination
and the numerator shall be the sum of such number of shares plus the total
number of shares constituting such dividend or other distribution, such increase
to become effective immediately after the opening of business on the day
following the date fixed for such determination. For the purposes of this
Section 5.01(a), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company. The Company shall
not pay any dividend or make any distribution on shares of Common Stock held in
the treasury of the Company.
(b) In case the Company shall pay or make a dividend or other
distribution on its Common Stock consisting exclusively of, or shall otherwise
issue to all holders of its Common Stock, rights or warrants entitling the
holders thereof to subscribe for or purchase shares of Common Stock at a price
per share less than the current market price per share (determined as provided
in Section 5.01(g)) of the Common Stock on the date fixed for the determination
of stockholders entitled to receive such rights or warrants, the Shares Amount
in effect at the opening of business on the day following the date fixed for
such determination shall be increased by multiplying the Shares Amount by a
fraction of which the denominator shall be the number of shares of Common Stock
outstanding at the Close of Business on the date fixed for such determination
plus the number of shares of Common Stock which the aggregate of the offering
price of the total number of shares of Common Stock so offered for subscription
or purchase would purchase at such current market price and the numerator shall
be the number of shares of Common Stock outstanding at the Close of Business on
the date fixed for such determination plus the number of shares of Common Stock
so offered for subscription or purchase, such increase to become effective
immediately after the opening of business on the day following the date fixed
for such determination. For the purposes of this Section 5.01(b), the number of
shares of Common Stock at any time outstanding shall not include shares held in
the treasury of the Company. The Company shall not issue any rights or warrants
in respect of shares of Common Stock held in the treasury of the Company. In
case any rights or warrants referred to in this Section 5.01(b) in respect of
which an adjustment shall have been made shall expire unexercised within 60 days
after the same shall have been distributed or issued by the Company, the Shares
Amount shall be readjusted at the time of such expiration to the Shares Amount
that would have been in effect if no adjustment had been made on account of the
distribution or issuance of such expired rights or warrants.
(c) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the Shares Amount in
effect at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately increased, and
conversely, in case outstanding shares of Common Stock shall each be combined
into a smaller number of shares of Common Stock, the Shares Amount in effect at
the opening of business on the day following the day upon which such combination
becomes effective shall be proportionately decreased, such reduction or
increase, as the case may be, to become effective immediately after the opening
of business on the day following the day upon which such subdivision or
combination becomes effective. No reduction in the Shares Amount may occur
except pursuant to this Section 5.01(c) or the last sentence of Section 5.01(b).
(d) Subject to the last two sentences of this Section 5.01(d),
in case the Company shall, by dividend or otherwise, distribute to all holders
of its Common Stock evidences of its indebtedness, shares of any class or series
of stock, cash or assets (including securities, but excluding any rights or
warrants referred to in Section 5.01(b), any dividend or distribution paid
exclusively in cash and any dividend or distribution referred to in Section
5.01(a)), the Shares Amount shall be increased so that the same shall equal the
number determined by multiplying the Shares Amount in effect immediately prior
to the effectiveness of the Shares Amount increase contemplated by this Section
5.01(d) by a fraction of which the numerator shall be the current market price
per share (determined as provided in Section 5.01(g)) of the Common Stock on the
date fixed for the payment of such distribution (the "Reference Date") plus the
fair market value (as determined in good faith by the Board of Directors and
described in a resolution of the Board of Directors), on the Reference Date of
the portion of the evidences of indebtedness, shares of stock, cash and assets
so distributed applicable to one share of Common Stock and the denominator shall
be such current market price per share of the Common Stock, such increase to
become effective immediately prior to the opening of business on the day
following the Reference Date. If the Board of Directors determines the fair
market value of any distribution for purposes of this Section 5.01(d) by
reference to the actual or when issued trading market for any securities
comprising such distribution, it must in doing so consider the prices in such
market over the same period used in computing the current market price per share
of Common Stock pursuant to Section 5.01(g). For purposes of this Section
5.01(d), any dividend or distribution that includes shares of Common Stock or
rights or warrants to subscribe for or purchase shares of Common Stock shall be
deemed instead to be (1) a dividend or distribution of the evidences of
indebtedness, cash, assets or shares of stock other than such shares of Common
Stock or such rights or warrants (making any Shares Amount increase required by
this Section 5.01(d)) immediately followed by (2) a dividend or distribution of
such shares of Common Stock or such rights or warrants (making any further
Shares Amount increase required by Section 5.01(a) or (b) except (A) the
Reference Date of such dividend or distribution as defined in this Section
5.01(d) shall be substituted as "the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution", "the date
fixed for the determination of stockholders entitled to receive such rights or
warrants" and "the date fixed for such determination" within the meaning of
Section 5.01(a) or (b) and (B) any shares of Common Stock included in such
dividend or distribution shall not be deemed "outstanding at the Close of
Business on the date fixed for such determination" within the meaning of Section
5.01(a) or (b)).
(e) In case the Company shall pay or make a dividend or other
distribution on the Common Stock exclusively in cash the Shares Amount shall be
increased so that the same shall equal the number determined by multiplying the
Shares Amount in effect immediately prior to the effectiveness of the Shares
Amount increase contemplated by this Section 5.01(e) by a fraction of which the
numerator shall be the current market price per share (determined as provided in
Section 5.01(g)) of the Common Stock on the date fixed for the payment of such
distribution plus the amount of cash so distributed applicable to one share of
Common Stock and the denominator shall be such current market price per share of
Common Stock, such increase to become effective immediately prior to the opening
of business on the day following the date fixed for the payment of such
distribution.
(f) In case a tender or exchange offer made by the Company or
by any subsidiary of the Company for all or any portion of the Common Stock
shall expire and such tender or exchange offer shall involve the payment by the
Company or such subsidiary of consideration per share of Common Stock having a
fair market value (as determined in good faith by the Board of Directors and
described in a resolution of the Board of Directors) at the last time (the
"Expiration Time") shares of Common Stock may be tendered into to such tender or
exchange offer (as it shall have been amended) that exceeds the current market
price per share (determined as provided in Section 5.01(g)) of the Common Stock
on the Trading Day next succeeding the Expiration Time, the Shares Amount shall
be increased so that the same shall equal the number determined by multiplying
the Shares Amount in effect immediately prior to the effectiveness of the Shares
Amount increase contemplated by this Section 5.01(f) by a fraction of which the
denominator shall be the number of shares of Common Stock outstanding (including
any tendered or exchanged shares) at the Expiration Time multiplied by the
current market price per share (determined as provided in Section 5.01(g)) of
the Common Stock on the Trading Day next succeeding the Expiration Time and the
numerator shall be the sum of (x) the fair market value (determined as
aforesaid) of the aggregate consideration payable to stockholders based on the
acceptance (up to any maximum specified in the terms of the tender or exchange
offer) of all shares validly tendered or exchanged and not withdrawn as of the
Expiration Time (the shares deemed so accepted, up to any such maximum, being
referred to as the "Purchased Shares") and (y) the product of the number of
shares of Common Stock outstanding (less any Purchased Shares) at the Expiration
Time and the current market price per share (determined as provided in Section
5.01(g)) of the Common Stock on the Trading Day next succeeding the Expiration
Time, such increase to become effective immediately prior to the opening of
business on the day following the Expiration Time.
(g) For the purpose of any computation under Section 5.01(b),
(d), (e) and (f), the "current market price" per share of Common Stock on any
date in question shall be deemed to be the average of the daily Closing Prices
for the five consecutive Trading Days prior to and including the date in
question; provided, however, that (1) if the "ex" date (as hereinafter defined)
for any event (other than the issuance or distribution requiring such
computation) that requires an adjustment to the Shares Amount pursuant to
Section 5.01(a), (b), (c), (d), (e), (f) or (h) ("Other Event") occurs after the
fifth Trading Day prior to the day in question and prior to the "ex" date for
the issuance or distribution requiring such computation (the "Current Event"),
the Closing Price for each Trading Day prior to the "ex" date for such Other
Event shall be adjusted by multiplying such Closing Price by the reciprocal of
the fraction by which the Shares Amount is so required to be adjusted as a
result of such Other Event, (2) if the "ex" date for any Other Event occurs
after the "ex" date for the Current Event and on or prior to the date in
question, the Closing Price for each Trading Day on and after the "ex" date for
such Other Event shall be adjusted by multiplying such Closing Price by the
fraction by which the Shares Amount is so required to be adjusted as a result of
such Other Event, (3) if the "ex" date of any Other Event occurs on the "ex"
date for the Current Event, one of those events shall be deemed for purposes of
clauses (1) and (2) of this proviso to have an "ex" date occurring prior to the
"ex" date for the other event, and (4) if the "ex" date for the Current Event is
on or prior to the date in question, after taking into account any adjustment
required pursuant to clause (2) of this proviso, the Closing Price for each
Trading Day on or after such "ex" date shall be adjusted by adding thereto the
amount of any cash and the fair market value on the date in question (as
determined in good faith by the Board of Directors in a manner consistent with
any determination of such value for purposes of Section 5.01(d) or (e), and
described in a resolution of the Board of Directors) of the portion of the
rights, warrants, evidences of indebtedness, shares of stock or assets being
distributed applicable to one share of Common Stock. For the purpose of any
computation under Section 5.01(f), the current market price per share of Common
Stock on any date in question shall be deemed to be the average of the daily
Closing Prices for such date in question and the next two succeeding Trading
Days; provided, however, that if the "ex" date for any event (other than the
tender or exchange offer requiring such computation) that requires an adjustment
to the Shares Amount pursuant to Section 5.01(a), (b), (c), (d), (e), (f) or (h)
occurs after the Expiration Time for the tender or exchange offer requiring such
computation and on or prior to the second Trading Day following the date in
question, the Closing Price for each Trading Day on and after the "ex" date for
such other event shall be adjusted by multiplying such Closing Price by the
fraction by which the Shares Amount is so required to be adjusted as a result of
such other event. For purposes of this paragraph, the term "ex" date, (1) when
used with respect to any issuance or distribution, means the first date on which
the Common Stock trades regular way on the relevant exchange or in the relevant
market from which the Closing Price was obtained without the right to receive
such issuance or distribution, (2) when used with respect to any subdivision or
combination of shares of Common Stock, means the first date on which the Common
Stock trades regular way on such exchange or in such market after the time at
which such subdivision or combination becomes effective, and (3) when used with
respect to any tender or exchange offer, means the first date on which the
Common Stock trades regular way on such exchange or in such market after the
Expiration Time of such offer.
(h) The Company may make such increase in the Shares Amount,
in addition to those required by Section 5.01(a), (b), (c), (d), (e) and (f) as
it considers to be advisable to avoid or diminish an income tax to holders of
Common Stock or rights to purchase Common Stock resulting from any dividend or
distribution of stock (or rights to acquire stock) or from any event treated as
such for income tax purposes. The Company from time to time may increase the
Shares Amount by any amount for any period of time if the period is at least
twenty days, the increase is irrevocable during the period, and the Board of
Directors shall have made a determination that such increase would be in the
best interest of the Company. Whenever the Shares Amount is increased pursuant
to the preceding sentence, the Company shall mail to Holders a notice of the
increase at least fifteen days prior to the date the increased Shares Amount
takes effect, and such notice shall state the increased Shares Amount and the
period it will be in effect.
(i) No adjustment in the Shares Amount shall be required
unless such adjustment would require an increase or decrease of at least 1% in
the Shares Amount; provided, however, that any adjustments which by reason of
this Section 5.01(i) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment.
(j) Whenever the Shares Amount is adjusted as herein provided,
the Company shall compute the adjusted Shares Amount and shall prepare a
certificate signed by the Chief Financial Officer of the Company setting forth
the adjusted Shares Amount and showing in reasonable detail the facts upon which
such adjustment is based, and a copy of such certificate shall forthwith be
delivered to each Holder.
Section V.2. No Fractional Shares. No fractional shares of
Common Stock shall be issued upon exercise of the Warrants. If more than one
Warrant is exercised by the same Holder at one time, the number of full shares
issuable upon such exercise shall be computed on the basis of the aggregate
number of Warrants so exercised. Instead of any fractional share of Common Stock
that would otherwise be issuable to a holder upon exercise of the Warrants, the
Company shall pay a cash adjustment in respect of such fractional share in an
amount equal to the same fraction of the Closing Price per share of Common Stock
as of the date of such exercise.
Section V.3. Reclassification, Consolidation, Merger or Sale
of Assets. In the event that the Company shall be a party to any transaction
(including without limitation any recapitalization or reclassification of the
Common Stock (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination of the Common Stock and other than the reclassification of unissued
Common Stock into other stock of the Company), any consolidation of the Company
with, or merger of the Company into, any other Person, any merger of another
person into the Company (other than a merger which does not result in a
reclassification, conversion, exchange or cancellation of outstanding shares of
Common Stock of the Company), any sale or transfer of all or substantially all
of the assets of the Company or any compulsory share exchange) pursuant to which
the Common Stock is converted into the right to receive other securities, cash
or other property, then lawful provisions shall be made as part of the terms of
such transaction whereby the holder of each Warrant then outstanding shall have
the right thereafter to exercise such Warrant only for (i) in the case of any
such transaction other than a Common Stock Fundamental Change (as defined in
Section 5.06(b)) and subject to funds being legally available for such purpose
under applicable law at the time of such exercise, the kind and amount of
securities, cash and other property receivable upon such transaction by a holder
of the number of shares of Common Stock of the Company for which such Warrant
could have been exercised immediately prior to such transaction, and (ii) in the
case of a Common Stock Fundamental Change, common stock of the kind received by
holders of Common Stock as a result of such Common Stock Fundamental Change in
an amount determined pursuant to the provisions of Section 5.05. The Company or
the Person formed by such consolidation or resulting from such merger or which
acquires such assets or which acquires the Company's shares, as the case may be,
shall execute an agreement in form and substance reasonably acceptable to the
Holders evidencing such right. Such agreement shall provide for adjustments
which, for events subsequent to the effective date of such agreement, shall be
as nearly equivalent as may be practicable to the adjustments provided for in
this Article VI. The above provisions shall similarly apply to each and every
successive transaction of the foregoing type.
Section V.4. Prior Notice of Certain Events. In case:
(a) the Company shall (i) declare any dividend (or any other
distribution) on its Common Stock, other than (A) a dividend payable
in shares of Common Stock or (B) a dividend payable in cash in an
amount not greater than its retained earnings other than any special
or nonrecurring or other extraordinary dividend or (ii) declare or
authorize a redemption or repurchase of in excess of 10% of the
then-outstanding shares of Common Stock; or
(b) the Company shall authorize the granting to all holders of
Common Stock of rights or warrants to subscribe for or purchase any
share of stock of any class or series or of any other rights or
warrants; or
(c) of any reclassification of Common Stock (other than a
subdivision or combination of the outstanding Common Stock, or a
change in par value, or from par value to no par value, or from no par
value to par value and other than the reclassification of unissued
Common Stock into other stock of the Company), or of any consolidation
or merger to which the Company is a party and for which approval of
any shareholders of the Company shall be required, or of the sale or
transfer of all or substantially all of the assets of the Company or
of any compulsory share exchange whereby the Common Stock is converted
into other securities, cash or other property; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then the Company shall cause to be delivered to the Holders, at least 10 days
prior to the applicable record or effective date hereinafter specified, a notice
stating (x) the date on which a record (if any) is to be taken for the purpose
of such dividend, distribution, redemption, repurchase, rights or warrants or,
if a record is not to be taken, the date as of which the holders of Common Stock
of record to be entitled to such dividend, distribution, redemption, rights or
warrants are to be determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
or winding up is expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, sale, transfer, share
exchange, dissolution, liquidation or winding up (but no failure to mail such
notice or any defect therein or in the mailing thereof shall affect the validity
of the corporate action required to be specified in such notice).
Section V.5. Adjustments in Case of Fundamental Changes. (a)
Notwithstanding any other provision in this Article 6 to the contrary, if any
Fundamental Change (as defined in Section 5.06(c)) occurs, then the Shares
Amount in effect will be adjusted immediately after such Fundamental Change as
described in Section 5.05(c). In addition, in the event of a Common Stock
Fundamental Change (as defined in Section 5.06(b)), each Warrant shall be
exercisable solely in exchange for common stock of the kind and amount received
by holders of Common Stock as a result of such Common Stock Fundamental Change
as more specifically provided in Section 5.05(b).
(b) For purposes of calculating any adjustment to be made
pursuant to this Section 5.05 in the event of a Fundamental Change, immediately
after such Fundamental Change in the case of a Common Stock Fundamental Change,
the Shares Amount in effect immediately prior to such Common Stock Fundamental
Change, but after giving effect to any other prior adjustments effected pursuant
to this Article V, shall thereupon be adjusted by multiplying such Shares Amount
by a fraction of which the denominator shall be the Purchaser Stock Price (as
defined in Section 5.06(e)) and the numerator shall be the Applicable Price (as
defined in Section 5.06(a)); provided, however, that in the event of a Common
Stock Fundamental Change in which (A) 100% by value of the consideration
received by a holder of Common Stock is common stock of the successor, acquiror
or other third party (and cash, if any, is paid with respect to any fractional
interests in such common stock resulting from such Common Stock Fundamental
Change) and (B) all of the Common Stock shall have been exchanged for, converted
into or acquired for common stock (and cash with respect to fractional
interests) of the successor, acquiror or other third party, the Shares Amount in
effect immediately prior to such Common Stock Fundamental Change shall thereupon
be adjusted by multiplying such Shares Amount by the number of shares of common
stock of the successor, acquiror, or other third party received by a shareholder
for one share of Common Stock as a result of such Common Stock Fundamental
Change.
Section V.6. Definitions. The following definitions shall apply to terms
used in this Article V:
(a) "Applicable Price" means (1) in the event of a Non-Stock
Fundamental Change in which the holders of the Common Stock receive only cash,
the amount of cash received by a shareholder for one share of Common Stock and
(2) in the event of any other Non-Stock Fundamental Change or any Common Stock
Fundamental Change, the average of the daily Closing Prices of the Common Stock
for the ten consecutive Trading Days prior to and including the record date for
the determination of the holders of Common Stock entitled to receive securities,
cash or other property in connection with such Non-Stock Fundamental Change or
Common Stock Fundamental Change, or, if there is no such record date, the date
upon which the holders of the Common Stock shall have the right to receive such
securities, cash or other property, in each case, as adjusted in good faith by
the Board of Directors of the Company to appropriately reflect any of the events
referred to in Section 5.01(a), (b), (c), (d), (e), (f) and (h).
(b) "Common Stock Fundamental Change" means any Fundamental
Change in which more than 50% by value (as determined in good faith by the Board
of Directors) of the consideration received by holders of Common Stock consists
of common stock that for each of the ten consecutive Trading Days referred to
with respect to such Fundamental Change in Section 5.05(i) above has been
admitted for listing or admitted for listing subject to notice of issuance on a
national securities exchange or quoted on the NASDAQ National Market System;
provided, however, that a Fundamental Change shall not be a Common Stock
Fundamental Change unless either (1) the Company continues to exist after the
occurrence of such Fundamental Change and the outstanding Warrants continue to
exist as outstanding Warrants, or (2) not later than the occurrence of such
Fundamental Change, the outstanding Warrants are converted into or exchanged for
warrants of a corporation succeeding to the business of the Company, which
warrants have terms identical to those of the Warrants.
(c) "Fundamental Change" means the occurrence of any
transaction or event in connection with a plan pursuant to which all or
substantially all of the Common Stock shall be exchanged for, converted into,
acquired for or constitute solely the right to receive securities, cash or other
property (whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or
otherwise); provided, however, in the case of a plan involving more than one
such transaction or event, for purposes of adjustment of the Shares Amount, such
Fundamental Change shall be deemed to have occurred when substantially all of
the Common Stock of the Company shall be exchanged for, converted into, or
acquired for or constitute solely the right to receive cash, securities,
property or other assets, but the adjustment shall be based upon the highest
weighted average of consideration per share which a holder of Common Stock could
have received in such transactions or events as a result of which more than 50%
of the Common Stock shall have been exchanged for, converted into, or acquired
for or constitute solely the rights to receive cash, securities, property or
other assets.
(d) "Non-Stock Fundamental Change" means any Fundamental
Change other than a Common Stock Fundamental Change.
(e) "Purchaser Stock Price" means, with respect to any Common
Stock Fundamental Change, the average of the daily Closing Prices of the common
stock received in such Common Stock Fundamental Change for the ten consecutive
Trading Days prior to and including the record date for the determination of the
holders of Common Stock entitled to receive such common stock, or, if there is
no such record date, the date upon which the holders of the Common Stock shall
have the right to receive such common stock, in each case, as adjusted in good
faith by the Board of Directors to appropriately reflect any of the events
referred to in Section 5.01(a), (b), (c), (d), (e), (f) and (h); provided,
however, if no such Closing Prices of the common stock for such Trading Days
exist, then the Purchaser Stock price shall be set at a price determined in good
faith by the Board of Directors.
Section V.7. Certain Additional Rights. In case the Company
shall, by dividend or otherwise, declare or make a distribution on the Common
Stock referred to in Section 5.01(d) or 5.01(e) (including, without limitation,
dividends or distributions referred to in the last two sentences of Section
5.01(d)), the holder of each Warrant, upon the exercise thereof subsequent to
the Close of Business on the date fixed for the determination of shareholders
entitled to receive such distribution and prior to the effectiveness of the
Shares Amount adjustment in respect of such distribution, shall also be entitled
to receive for each share of Common Stock for which such Warrant is exercised,
the portion of the shares of Common Stock, rights, warrants, evidences of
indebtedness, shares of stock, cash and assets so distributed applicable to one
share of Common Stock; provided, however, that, at the election of the Company
(whose election shall be evidenced by a resolution of the Board of Directors)
with respect to all holders so exercising, the Company may, in lieu of
distributing to such holder any portion of such distribution not consisting of
cash or securities of the Company, pay such holder an amount in cash equal to
the fair market value thereof (as determined in good faith by the Board of
Directors and described in a resolution of the Board of Directors). If any
exercise of a Warrant described in the immediately preceding sentence occurs
prior to the payment date for a distribution to holders of Common Stock which
the holder of the Warrant so exercised is entitled to receive in accordance with
the immediately preceding sentence, the Company may elect (such election to be
evidenced by a resolution of the Board of Directors) to distribute to such
holder a due bill for the shares of Common Stock, rights, warrants, evidences of
indebtedness, shares of stock, cash or assets to which such holder is so
entitled, provided that such due bill (i) meets any applicable requirements of
the principal national securities exchange or other market on which the Common
Stock is then traded and (ii) requires payment or delivery of such shares of
Common Stock, rights, warrants, evidences of indebtedness, shares of stock, cash
or assets no later than the date of payment or delivery thereof to holders of
shares of Common Stock receiving such distribution.
Section V.8. Reservation of Shares, etc. (a) The Company shall
at all times reserve and keep available, free from preemptive rights out of its
authorized and unissued stock, solely for the purpose of allowing the exercise
of the Warrants, such number of shares of its Common Stock as shall from time to
time be sufficient to permit the Company to deliver the Shares Amount in the
event all of the Warrants from time to time outstanding were exercised. The
Company shall from time to time, in accordance with the laws of the State of
Delaware, increase the authorized number of shares of Common Stock if at any
time the number of shares of authorized and unissued Common Stock shall not be
sufficient to permit the Company to deliver the Shares Amount upon the exercise
of all of the then-outstanding Warrants (taking into account the adjustments to
the Shares Amount that are provided for herein).
(b) If any shares of Common Stock required to be reserved for
purposes of the exercise of the Warrants hereunder require registration with or
approval of any governmental authority under any Federal or State law before
such shares may be issued upon exercise, and an exemption under Section 3(a)(9)
of the Securities Act or similar exemption is not available, the Company will in
good faith and as expeditiously as possible endeavor to cause such shares to be
duly registered or approved as the case may be. If the Common Stock is quoted on
the NASDAQ National Market System or listed on any U.S. national securities
exchange, the Company will, if permitted by the rules of such exchange, list and
keep listed on such exchange, upon official notice of issuance, all shares of
Common Stock issuable upon exercise of the Warrants. The second sentence of this
paragraph shall apply only when the Warrants shall have become freely
transferable pursuant to Rule 144(k) under the Securities Act or if the shares
of Common Stock issuable upon exercise of the Warrants are exempt from the
registration requirements of the Securities Act by operation of an exemption
referred to in the first sentence of this paragraph.
Section V.9. Dividend or Interest Reinvestment Plans or Other
Plans. Notwithstanding the foregoing provisions, the issuance of any shares of
Common Stock pursuant to any plan providing for the reinvestment of dividends or
interest payable on securities of the Company and the investment of additional
optional amounts in shares of Common Stock under any such plan (i.e., a "DRIP"),
and the issuance of any shares of Common Stock or options or rights to purchase
such shares pursuant to any employee or director benefit plan or program of the
Company or pursuant to any option, warrant, right or exercisable, exchangeable
or convertible security outstanding as of the date hereof shall not be deemed to
constitute an issuance of Common Stock or exercisable, exchangeable or
convertible securities by the Company to which any of the adjustment provisions
described above applies. In addition, no adjustment to the Shares Amount or Cash
Amount pursuant to this Article V shall be made in respect of any transaction
expressly permitted by Section 7.02(h)(iii) of the Credit Agreement. If any
action would require adjustment of the Shares Amount pursuant to more than one
of the provisions described in this Article V only one adjustment shall be made
and such adjustment shall be the amount of adjustment which has the highest
absolute value to holders of the Warrants.
ARTICLE VI
Representations and Warranties
The Company hereby represents and warrants, as of the date of
this Agreement, as follows:
Section VI.1. Good Standing and Power. The Company is a corporation, duly
incorporated and validly existing in good standing under the laws of the
jurisdiction of its incorporation.
Section VI.2. Corporate Authority. The Company has full
corporate power and authority to execute and deliver, and to incur and perform
its obligations under, this Agreement and each Warrant Certificate, all of which
have been duly authorized and will have been duly authorized by all proper and
necessary corporate action. No consent or approval of stockholders is required
or will be required as a condition to the validity or performance of, or the
exercise by any Holder of any of its rights or remedies under, this Agreement or
any Warrant Certificate.
Section VI.3. Authorizations. All authorizations, consents,
approvals, registrations, notices, exemptions and licenses with or from any
Governmental Authority or other Person necessary for the execution, delivery and
performance by the Company of, and the incurrence and performance of each of its
obligations under, this Agreement and each Warrant Certificate, and the exercise
by any Holder of its remedies under this Agreement or any Warrant Certificate
have been effected or obtained and are and will be in full force and effect.
Section VI.4. Binding Obligation. This Agreement constitutes
and, when issued in accordance with the terms hereof, each Warrant Certificate
will constitute, a valid and legally binding obligation of the Company
enforceable in accordance with its terms, subject as to enforcement to
bankruptcy, insolvency, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
Section VI.5. No Conflicts. There is no statute, regulation,
rule, order or judgment, and no provision of any agreement or instrument binding
upon the Company or any of its subsidiaries, or affecting their properties, and
no provision of the certificate of incorporation or bylaws of the Company or any
of its subsidiaries, that would prohibit, conflict with or in any way impair the
execution or delivery of, or the incurrence or performance of any obligations of
the Company under, this Agreement or any Warrant Certificate, or result in or
require the creation or imposition of any lien, charge or encumbrance of any
type on property of the Company or any of its subsidiaries as a consequence of
the execution, delivery and performance of this Agreement or any Warrant
Certificate.
Section VI.6. Reservation. The Board of Directors has unanimously adopted
the resolutions set forth in Exhibit B.
ARTICLE VII
Covenants
Section VII.1. Reservation of Common Stock for Issuance on
Exercise of Warrants. The Company covenants that it will at all times reserve
and keep available, free from preemptive rights, out of its authorized but
unissued shares of Common Stock, solely for the purpose of issue upon exercise
of Warrants, as herein provided, such number of shares of Common Stock as shall
then be issuable upon the exercise of all Warrants issued hereunder. The
transfer agent for the Common Stock (the "Transfer Agent") will be irrevocably
authorized and directed at all times to reserve such number of authorized shares
as shall be required for such purpose. The Company will keep a copy of this
Agreement on file with the Transfer Agent. The Warrant Agent is hereby
irrevocably authorized to requisition from time to time from such Transfer Agent
the stock certificates required to honor outstanding Warrants upon exercise
thereof in accordance with the terms of this Agreement. The Company represents,
warrants and covenants that, upon payment therefor, all shares of Common Stock
issued upon the exercise of warrants shall be duly authorized, validly issued,
fully paid and nonassessable, free of preemptive rights and free from all taxes,
liens, charges and security interests with respect to the issuance thereof.
Section VII.2. Notice of Dividends. At any time when and if
the Company declares any dividend on Common Stock, it shall give notice to the
Holders of all the then outstanding Warrants of any such declaration not fewer
than 10 days prior to the related record date for payment of the dividend so
declared.
Section VII.3. Reports. For so long as any Warrants remain
outstanding and not expired by their terms, the Company shall furnish to the
Holders the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act. In addition, the Company shall furnish to the Initial
Holder within ten days after it files them with the Commission copies of its SEC
Reports. In the event the Company shall cease to be required to file SEC Reports
pursuant to the Exchange Act, the Company shall nevertheless mail such SEC
Reports to Holders upon their request.
ARTICLE VIII
Holders
Section VIII.1. Holder Not Deemed a Shareholder. No Holder, as
such, shall be entitled to vote, receive dividends or be deemed for any purpose
the holder of Common Stock or any other securities of the Company which may at
any time be issuable on the exercise or conversion of the Warrants represented
thereby, nor shall anything contained herein or in any Warrant Certificate be
construed to confer upon a Holder, as such, any of the rights of a stockholder
of the Company or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as specifically provided herein), or to
receive dividends or subscriptions rights, or otherwise, until the Warrant or
Warrants evidenced by such Warrant Certificate shall have been exercised and the
Company shall have elected to deliver Common Stock (and not cash) upon such
exercise.
Section VIII.2. Right of Action. All rights of action in
respect of this Agreement are vested in the Holders, and any Holder of any
Warrant, without consent of any other Holder, may on such Holder's own behalf
and for such Holder's own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company suitable to enforce, or otherwise
in respect of, such Holder's right to exercise or exchange such Holder's
Warrants in the manner provided in this Agreement.
ARTICLE IX
Miscellaneous
Section IX.1. Payment of Taxes. The Company shall pay all
transfer, stamp and other similar taxes that may be imposed in respect of the
issuance or delivery of Warrants, or in respect of the issuance or delivery of
any securities upon exercise of Warrants, and any and all filing fees incurred
by a Holder in connection with the matters described in Section 3.07(c)(ii). The
Company shall not be required, however, to pay any tax or other charge imposed
in connection with any transfer involved in the issue of any certificate for
shares of Common Stock or other securities underlying the Warrants or payment of
cash to any Person other than the Holder of a Warrant Certificate surrendered
upon the exercise or purchase of a Warrant, and in case of such transfer or
payment, the Company shall not be required to issue any stock certificate or pay
any cash until such tax or charge has been paid or it has been established to
the Company's reasonable satisfaction that no such tax or other charge is due.
Section IX.2. Expenses; Indemnity. (a) The Company agrees to
pay or reimburse the Initial Holder for all reasonable costs and expenses
incurred in connection with the enforcement or preservation of any rights under
this Agreement, any Warrant, any Warrant Certificate, and any such other
documents, including, without limitation, the reasonable fees and disbursements
of counsel to the Initial Holder (but excluding fees and disbursements incurred
on or prior to the date hereof in negotiating and preparing this Agreement and
the related documents); provided, however, that in the event of any litigation
between the Company and any Holder initiated prior to any Event of Default
specified in Section 8.01(g) or (h) of the Credit Agreement and arising out of
the matters set forth in Section 9.04(b)(i), the fees and disbursements of
counsel to the Initial Holder shall be borne by the Company if and only if the
Initial Holder is the prevailing party.
(b) The Company agrees to indemnify the Initial Holder and its
directors, officers, employees, agents and Affiliates (each, an "Indemnitee")
against, and to hold each Indemnitee harmless from, any and all claims,
liabilities, damages, losses, costs, charges and expenses (including fees and
expenses of counsel) incurred by or asserted against any Indemnitee arising out
of, in any way connected with, or as a result of (i) the execution or delivery
of this Agreement or any agreement or instrument contemplated by this Agreement,
the performance by the parties hereto of their respective obligations under this
Agreement, any Warrant or any Warrant Certificate or the consummation of the
transactions and the other transactions contemplated hereby or thereby, (ii) the
use of the proceeds of the exercise of Warrants or (iii) any claim, litigation,
investigation or proceeding relating to any of the foregoing, whether or not any
Indemnitee is a party thereto. The provisions of this Section 9.04(b) shall not
operate or be construed to indemnify the Initial Holder against, or hold it
harmless from, any claims, liabilities, damages, losses, costs, charges and
expenses (including fees and expenses of counsel) incurred by or asserted
against the Initial Holder arising out of or connected with any litigation
initiated prior to any Event of Default specified in Section 8.01(g) or (h)
solely between the Company and the Initial Holder in which the Initial Holder is
not the prevailing party.
(c) All amounts due under this Section 9.02 shall be payable in immediately
available funds upon written demand therefor.
Section IX.3. APPLICABLE LAW. THIS AGREEMENT, EACH WARRANT
CERTIFICATE, EACH WARRANT ISSUED HEREUNDER AND ALL RIGHTS ARISING HEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH
STATE.
SECTION IX.4. WAIVER OF JURY. THE COMPANY AND THE INITIAL
HOLDER EACH HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS
AGREEMENT, ANY WARRANT CERTIFICATE, ANY WARRANT ISSUED HEREUNDER AND ANY RIGHT
ARISING HEREUNDER.
Section IX.5. Jurisdiction and Venue; Service of Process. (a)
The Company and the Initial Holder each hereby irrevocably submits to the
non-exclusive jurisdiction of any state or federal court in the Borough of
Manhattan, The City of New York for the purpose of any suit, action, proceeding
or judgment relating to or arising out of this Agreement, any Warrant
Certificate, any Warrant issued hereunder and any right arising hereunder, and
to the laying of venue in the Borough of Manhattan, The City of New York. The
Company and the Initial Holder each hereby irrevocably waives, to the fullest
extent permitted by applicable law, any objection to the laying of the venue of
any such suit, action or proceeding brought in the aforesaid courts and hereby
irrevocably waives any claim that any such suit, action or proceeding brought in
any such court has been brought in an inconvenient forum.
(b) The Company agrees that service of process in any such
action or proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage prepaid, to
the Company at its address set forth in Section 9.08 or at such other address of
which the Initial Holder shall have been notified pursuant thereto. The Company
further agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue any
other jurisdiction.
(c) Each of the Initial Holder and the Company waives, to the
maximum extent not prohibited by law, any right it may have to claim or recover
in any legal action or proceeding referred to in this Section 9.05 any special,
exemplary, punitive or consequential damages.
Section IX.6. Amendments and Waivers. (a) Any provision of this Agreement
may be amended, modified, supplemented or waived, but only by a written
amendment or supplement, or written waiver, signed by the Company and the
Initial Holder.
(b) Except to the extent expressly set forth therein, any
waiver shall be effective only in the specific instance and for the specific
purpose for which such waiver is given.
Section IX.7. Cumulative Rights; No Waiver. Each and every
right granted to any Holder hereunder or under any Warrant Certificate, or
allowed such Holder by law or equity, shall be cumulative and not exclusive and
may be exercised from time to time. No failure on the part of any Holder to
exercise, and no delay in exercising, any right will operate as a waiver
thereof, nor will any single or partial exercise by any Holder of any right
preclude any other or future exercise thereof or the exercise of any other
right.
Section IX.8. Notices. (a) Any communication, demand or notice
to be given hereunder will be duly given when delivered in writing or by
telecopy to a party at its address as indicated below or such other address as
such party may specify in a notice to each other party hereto. A communication,
demand or notice given pursuant to this Section 9.08 shall be addressed:
If to the Company, to
Miravant Medical Technologies
7408 Hollister Avenue
Santa Barbara, California 93117
Telecopy: (805) 685-6038
Attention: Gary S. Kledzik
with a copy (which, in and of itself, shall not constitute notice) to
Nida & Maloney PC
800 Anacapa Street
Santa Barbara, California 93101
Telecopy: (805) 568-1955
Attention: Joseph E. Nida
and
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94304
Telecopy: (650) 493-6811
Attention: John T. Sheridan
If to the Initial Holder, to
Pharmacia & Upjohn, Inc.
95 Corporate Drive
Bridgewater, New Jersey 08807
Telecopy: (908) 470-8047
Attention: Treasurer
and
Pharmacia & Upjohn, Inc.
95 Corporate Drive
Bridgewater, New Jersey 08807
Telecopy: (908) 306-4485
Attention: Senior Vice President of Business Development
and
Pharmacia & Upjohn, Inc.
95 Corporate Drive
Bridgewater, New Jersey 08807
Telecopy: (908) 306-4489
Attention: General Counsel
with a copy (which, in and of itself, shall not constitute notice) to
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Telecopy: (212) 558-3588
Attention: Neil T. Anderson,
Matthew G. Hurd
and Martin J. Travers
(b) Unless otherwise provided to the contrary herein, any
notice which is required to be given in writing pursuant to the terms of this
Agreement may be given by telecopy.
Section IX.9. Separability. In case any one or more of the
provisions contained in this Agreement or any Warrant Certificate shall be
invalid, illegal or unenforceable in any respect under any law, the validity,
legality and enforceability of the remaining provisions contained in this
Agreement or any Warrant Certificate shall not in any way be affected or
impaired thereby.
Section IX.10. Persons Benefitting. This Agreement shall be
binding upon and inure to the benefit of any Holders (each of whom is an
intended third party beneficiary) and the Company, and their respective
successors, assigns, beneficiaries, executors and administrators. Nothing in
this Agreement is intended or shall be construed to confer upon any Person,
other than the Company and the Holders (and such successors, assigns,
beneficiaries, executors and administrators), any right, remedy or claim under
or by reason of this Agreement or any part hereof.
Section IX.11. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
together constitute one and the same instrument.
Section IX.12. Headings. The descriptive headings of the several Sections
of this Agreement are inserted for convenience and shall not control or affect
the meaning or construction of any of the provisions hereof.
Section IX.13. Remedies. In the event of a breach by the
Company or by a Holder of any of their obligations under this Agreement or any
Warrant Certificate, each Holder or the Company, as the case may be, in addition
to being entitled to exercise all rights granted by law, including recovery of
damages, will be entitled to specific performance of its rights under this
Agreement and such Warrant Certificate. The Company and the Initial Holder agree
that monetary damages would not be adequate compensation for any loss incurred
by reason of a breach by it of any of the provisions of this Agreement or any
Warrant Certificate and hereby further agrees that, in the event of any action
for specific performance in respect of such breach, it shall waive the defense
that a remedy at law would be adequate.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the date first above written.
MIRAVANT MEDICAL TECHNOLOGIES
By:________________________________
Name:
Title:
PHARMACIA & UPJOHN, INC.
By:________________________________
Name:
Title:
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT
BE SOLD OR OFFERED FOR SALE UNLESS REGISTERED PURSUANT
TO THERETO OR UNLESS AN EXEMPTION THEREFROM IS
AVAILABLE.
WARRANTS TO PURCHASE COMMON STOCK
OF MIRAVANT MEDICAL TECHNOLOGIES
No._______ Certificate for ______ Warrants
This certifies that , or registered assigns, is the registered
holder of the number of Warrants set forth above. Each Warrant entitles the
holder thereof (a "Holder"), subject to the provisions contained herein and in
the Warrant Agreement referred to below, to purchase, from Miravant Medical
Technologies, a Delaware corporation (the "Company"), the number of shares of
the Company's common stock, par value $.01 per share (the "Common Stock"),
provided in the Warrant Agreement, at an exercise price of $__________ per
Warrant and subject to all of the terms and conditions set forth in the Warrant
Agreement. At the sole election of the Company, upon the exercise of any
Warrant, the Company may pay to the Holder a certain amount of cash, as provided
in the Warrant Agreement, in lieu of delivering the shares of Common Stock.
This Warrant Certificate is issued under and in accordance
with the Warrant Agreement, dated as of o, 1999 (the "Warrant Agreement"),
between the Company and Pharmacia & Upjohn, Inc. (the "Initial Holder"), and is
subject to the terms and provisions contained in the Warrant Agreement, to all
of which terms and provisions the Holder of this Warrant Certificate consents by
acceptance hereof. The Warrant Agreement is hereby incorporated herein by
reference and made a part hereof. Reference is hereby made to the Warrant
Agreement for a full statement of the respective rights, limitations of rights,
duties, obligations and immunities thereunder of the Company and the Holders of
the Warrants.
This Warrant Certificate shall terminate and be void as of the
Close of Business on _________, 200__.
As provided in the Warrant Agreement and subject to the terms
and conditions therein set forth, the Warrants shall be exercisable from time to
time on any Business Day ending on the Expiration Date.
The number of shares of Common Stock issuable, and the amount
of cash payable, upon the exercise of each Warrant are subject to adjustment as
provided in the Warrant Agreement.
Upon payment therefor, all shares of Common Stock issued upon
the exercise of Warrants shall be duly authorized, validly issued, fully paid
and nonassessable free of preemptive rights and free from all taxes, liens,
charges and security interests with respect to the issuance thereof.
In order to exercise a Warrant, the registered holder hereof
must surrender this Warrant Certificate to the Registrar for the Warrants (the
"Registrar") with the form of election on the reverse hereof or attached hereto
duly executed, together with payment of the Exercise Price then in effect for
the share(s) of Common Stock as to which the Warrant(s) represented by this
Warrant Certificate are submitted for exercise, all subject to the terms and
conditions hereof and of the Warrant Agreement. Any such payment of the cash
Exercise Price shall be by certified or official bank check or wire transfer to
the Company of same day funds.
The Company shall pay all transfer, stamp and other similar
taxes that may be imposed in respect of the issuance or delivery of Warrants, or
in respect of the issuance or delivery of any securities upon exercise of
Warrants. The Company shall not be required, however, to pay any tax or other
charge imposed in connection with any transfer involved in the issuance of any
certificate for shares of Common Stock or other securities underlying the
Warrants or payment of cash to any Person other than the Holder of a Warrant
Certificate surrendered upon the exercise or purchase of a Warrant, and in case
of such transfer or payment, the Company shall not be required to issue any
stock certificate or pay any cash until such tax or other charge has been paid
or it has been established to the Company's reasonable satisfaction that no such
tax or other charge is due.
Subject to the Warrant Agreement, this Warrant Certificate and
all rights hereunder are transferable by the registered holder hereof, in whole
or in part, on the Warrant Register of the Company, upon surrender of this
Warrant Certificate to the Registrar, duly endorsed by, or accompanied by a
written instrument of transfer in form reasonably satisfactory to the Company
duly executed by the Holder hereof or his attorney duly authorized in writing.
Upon any partial transfer, the Company will issue and deliver to such holder a
new Warrant Certificate or Certificates with respect to any portion not so
transferred.
No service charge shall be made for any transfer or exchange
of this Warrant Certificate, but the Company may require payment from the Holder
of this Warrant Certificate of a sum sufficient to cover any stamp or other
governmental charge or tax that may be imposed in connection with any such
transfer or exchange.
Each taker and holder of this Warrant Certificate, by taking
or holding the same, consents and agrees that this Warrant Certificate, when
duly endorsed in blank, shall be deemed negotiable and that when this Warrant
Certificate shall have been so endorsed, the holder hereof may be treated by the
Company, the Registrar and all other persons dealing with this Warrant
Certificate as the absolute owner hereof for any purpose and as the person
entitled to exercise the rights represented hereby, or to the transfer hereof on
the register of the Company maintained by the Registrar, any notice to the
contrary notwithstanding, but until such transfer on such register, the Company
and the Registrar may treat the registered Holder hereof as the owner for all
purposes.
This Warrant Certificate and the Warrant Agreement are subject
to amendment as provided in the Warrant Agreement.
All terms used in this Warrant Certificate that are defined in
the Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
Copies of the Warrant Agreement are on file at the office of the Company
and may be obtained by writing to the Company at the following address: 7408
Hollister Avenue, Santa Barbara, California 93117, Attention: Chief Financial
Officer.
Dated: __________.
MIRAVANT MEDICAL TECHNOLOGIES
By:
Name:
Title:
By:
Name:
Title:
ELECTION TO EXERCISE
(To be executed only upon exercise of Warrant)
TO MIRAVANT MEDICAL TECHNOLOGIES:
The undersigned irrevocably exercises __________ of the
Warrants for, at your election, either (i) the Shares Amount or (ii) the Cash
Amount, and herewith makes payment of $__________ (such payment being by
certified or official bank check payable to the order of Miravant Medical
Technologies), all at the Exercise Price and on the terms and subject to the
conditions specified in the within Warrant Certificate and the Warrant Agreement
therein referred to, surrenders this Warrant Certificate and all right, title
and interest therein to Miravant Medical Technologies, Inc. and directs that any
shares of Common Stock deliverable upon the exercise of such Warrants be
registered in the name and delivered at the address specified on the following
page, or any Cash Amount be wired to the account specified on the following
page.
Date:
(Signature of Holder)
(Street Address)
(City) (State) (Zip Code)
Securities and/or check to be issued to:
Taxpayer identification number:
Name:
Street Address:
City, State and Zip Code:
Any unexercised Warrants evidenced by the within Warrant Certificate to be
issued to:
Taxpayer identification number:
Wire transfer instructions:
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned registered holder of the
within Warrant Certificate hereby sells, assigns, and transfers unto the
Assignee(s) named below (including the undersigned with respect to any Warrants
constituting a part of the Warrants evidenced by the within Warrant Certificate
not being assigned hereby) all of the rights of the undersigned under the within
Warrant Certificate, with respect to the number of Warrants set forth below:
Social Security or
Names of Address Taxpayer Identification Number of Warrants
Assignees Number of Assignee(s)
and does hereby irrevocably constitute and appoint the
undersigned's attorney to make such transfer on the books
of maintained for that purpose, with full power of
substitution in the premises.
Dated: __________.
(Signature of Holder)
(Street Address)
(City)(State) (Zip Code)
EXHIBIT B
[BOARD RESOLUTIONS]
[To come]
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of ___, 1999, between MIRAVANT MEDICAL
TECHNOLOGIES, a Delaware corporation ("Debtor"), and __, a Swedish corporation
("Secured Party").
1. Grant of Security Interest. Debtor, for valuable consideration, receipt
of which is hereby acknowledged, hereby grants to Secured Party, in order to
secure the payment when due, whether by acceleration or otherwise, of the
Indebtedness (as that term is defined below):
(a) A security interest in, and Debtor agrees and acknowledges that Secured
Party has and shall continue to have a security interest in any and all of the
following property of Debtor, whenever acquired or arising and wherever located
(collectively, the "Trademarks"):
(i) each of the trademarks, and rights and interests
protectible as trademarks which are presently, or in the
future may be, owned, created, acquired, or used (whether
pursuant to a license or otherwise) by Debtor, in whole or
in part, and all trademark rights with respect thereto
throughout the world, including all proceeds thereof
(including license royalties and proceeds of infringement
suits), and rights to renew and extend such trademarks and
trademark rights;
(ii) all of Debtor's right, title and interest in and
to the trademarks and trademark registrations listed on
Schedule 1 attached hereto, as the same may be updated
hereafter from time to time;
(iii) all of Debtor's rights to register trademark
claims under any state or federal trademark law or
regulation of any foreign country and to apply for, renew
and extend trademark registrations and trademark rights, all
of Debtor's rights (but not obligations) to sue or bring
opposition or cancellation proceedings in the name of Debtor
or in the name of Secured Party for past, present and future
infringements of trademarks, registrations, or trademark
rights and all of Debtor's rights (but not obligations)
corresponding thereto in the United States and any foreign
country, and the associated goodwill;
(iv) all general intangibles relating to the
Trademarks; and
(v) the products, proceeds and accessions of any and
all of the foregoing (including, without limitation, license
royalties and proceeds of infringement suits) and, to the
extent not otherwise included, all payments under insurance,
or any indemnity, warranty, or guaranty payable by reason of
loss or damage to or otherwise with respect to the
Trademarks.
(b) A security interest in and assignment of, and Debtor agrees and
acknowledges that Secured Party has and shall continue to have a security
interest in and assignment of, any and all of the following property of Debtor,
whenever acquired or arising and wherever located (together with the Trademarks,
the "Collateral"):
(i) any and all of Debtor's Tangibles (as that term is defined below);
(ii) any and all of Debtor's Intangibles (as that term is defined below);
and
(iii) the products, proceeds and accessions of any and all of the
foregoing.
Notwithstanding the foregoing and only to the extent such prohibition is
enforceable under applicable law, the security interest granted herein shall not
extend to and the term "Collateral" shall not include any property, rights or
licenses to the extent the granting of a security interest therein (1) would be
contrary to applicable law or (2) is prohibited by or would constitute a default
under any agreement or document governing such property, rights or licenses that
is in effect on the date of this Agreement.
2. Definitions. (a) The term "Credit Agreement" shall mean the Credit
Agreement, of even date herewith, between Debtor, as borrower, and Secured
Party, as lender, as the same may be amended from time to time.
(b) The term "Credit Documents" shall have the meaning assigned to such
term in the Credit Agreement.
(c) The term "Event of Default" shall have the meaning assigned to such
term in the Credit Agreement.
(d) The term "Indebtedness" as used herein shall mean the following:
(i) Any and all obligations of Debtor with respect to the payment of
principal and interest or otherwise to Secured Party on the loans made
by Secured Party (and the promissory notes evidencing such loans) under
the Credit Agreement, and any extension or renewals of such loans; and
(ii) any and all other obligations of Debtor to Secured Party arising solely
under the Credit Agreement and the other Credit Documents and excluding
any other agreements between the parties and their affiliates, however
created or evidenced, whether now existing or hereafter arising and any
extension or renewals thereof.
(e) The term "Intangibles" as used herein includes and shall be deemed to
mean "accounts," "instruments," "documents," "chattel paper," "drafts,"
"checks," and "general intangibles" and each of them, as the foregoing terms are
defined in the Uniform Commercial Code as in effect in the State of New York,
excluding the Trademarks, and, without limitation, shall include:
(i) the following securities (the "Securities") hereby delivered and pledged to
Secured Party:
Miravant Cardiovascular, Inc.
Miravant Systems, Inc.
Miravant Pharmaceuticals, Inc.
Ramus Medical Technologies
Xillix Technologies Corporation
(ii) the following rights and interests in and to patents (collectively, the
"Patents"):
(A) each of the patents and patent applications
which are presently, or in the future may be, owned, issued,
acquired, or used (whether pursuant to a license or otherwise)
by Debtor, in whole or in part, and all patent rights with
respect thereto throughout the world, including all proceeds
thereof (including license royalties and proceeds of
infringement suits), foreign filing rights, and rights to
extend such patents and patent rights;
(B) all of Debtor's right, title and interest in
and to the patents and patent applications listed on Schedule
2 attached hereto, as the same may be updated hereafter from
time to time;
(C) all of Debtor's right, title and interest in
and to all patentable inventions, all of Debtor's rights to
file applications for patents under United States federal
patent law or the laws or regulations of any foreign country,
all of Debtor's rights to request reexamination and/or reissue
of patents, all of Debtor's rights (but not obligations) to
sue or bring infringement or interference proceedings in the
name of Debtor or in the name of Secured Party for past,
present, or future infringements of patents, and all of
Debtor's rights (but not obligations) corresponding thereto in
the United States and any foreign country;
(D) all general intangibles relating to the
Patents; and
(E) all proceeds of any and all of the foregoing
(including without limitation, license royalties and proceeds
of infringement suits) and, to the extent not otherwise
included, all payments under insurance, or any indemnity,
warranty, or guaranty payable by reason of loss or damage to
or otherwise with respect to the Patents.
(iii) the following rights and interests in and to trade secrets (collectively,
the "Trade Secrets"):
(A) each of the trade secrets and proprietary
information which are presently, or in the future may be,
owned, created, acquired, or used (whether pursuant to a
license or otherwise) by Debtor, in whole or in part,
including all proceeds thereof (including license royalties
and proceeds of misappropriation suits), and all tangible
property embodying the trade secrets (including documents,
records, computer tapes or disks, customer lists,
sales/pricing information, photographs, flow diagrams,
specification sheets, source codes, object codes and other
physical manifestations of the foregoing);
(B) all of Debtor's right to sue in the name of
Debtor or in the name of Secured Party for past, present, and
future misappropriation of the trade secrets and all rights
(but not obligations) corresponding thereto in the United
States and any foreign country;
(C) all general intangibles relating to the Trade
Secrets; and
(D) all proceeds of any and all of the foregoing
(including, without limitation, license royalties and proceeds
of infringement suits) and, to the extent not otherwise
included, all payments under insurance, or any indemnity,
warranty, or guaranty payable by reason of loss or damage to
or otherwise with respect to the Trade Secrets.
(f) The term "Permitted Liens" shall have the meaning
assigned to such term in the Credit Agreement.
(g) The term "Tangibles" as used herein includes and
shall be deemed to mean "inventory" and "equipment" as
defined in the Uniform Commercial Code as in effect in the
State of New York and all goods and tangible personal
property now owned or hereafter acquired by Debtor.
(h) Terms not expressly defined herein which are
defined in the Uniform Commercial Code as in effect in the
State of New York have the same meaning herein as in said
Code.
(i) As used in this Security Agreement and when required by
the context, each number (singular and plural) shall include all numbers, and
each gender shall include all genders; and unless the context otherwise
requires, the word "person" shall include "corporation, firm or association."
3. Warranties, Covenants and Agreements of Debtor. Debtor warrants,
covenants and agrees that:
(a) Except for the security interest granted hereby and except as permitted
by the agreements under which the Indebtedness is being incurred, Debtor is, and
as to Collateral acquired after the date hereof Debtor shall and will be at the
time of acquisition the owner and holder of the Collateral free from any adverse
claim, security interest, encumbrance, lien, charge, or other right, title or
interest of any person other than Secured Party and other than Permitted Liens,
and covenants that at all times the Collateral will be and remain free of all
such adverse claims, security interests, or other liens or encumbrances other
than Permitted Liens. Debtor has full power and lawful authority to sell, assign
and transfer the Collateral to Secured Party and to grant to Secured Party a
first and prior security interest therein, prior to all liens other than
Permitted Liens, as herein provided; the execution and delivery and the
performance hereof are not in contravention of any charter or by-law provision
or of any indenture, agreement or undertaking to which Debtor is a party or by
which Debtor or its property are bound; and Debtor will defend the Collateral
against all claims and demands of all persons at any time claiming the same or
any interest therein. Any officer, agent or representative acting for or on
behalf of Debtor in connection with this Security Agreement or any aspect
thereof, or entering into or executing this Security Agreement or any financing
statement on behalf of Debtor, has been duly authorized to do so, and is fully
empowered to act for and represent Debtor in connection with this Security
Agreement and all matters related thereto or in connection therewith.
(b)(i) Except for financing statements or security agreements evidencing
Permitted Liens, Debtor has not heretofore signed any financing statement or
security agreement which covers any of the Collateral, and no such financing
statement or security agreement is now on file in any public office.
(ii) As long as any amount remains unpaid on any of the Indebtedness or any
additional borrowings may be made by Debtor under any agreements entered into in
connection with the Indebtedness, except as expressly permitted by any such
agreements, (i) Debtor will not enter into or execute any security agreement or
any financing statement covering the Collateral, other than those security
agreements and financing statements in favor of Secured Party hereunder and
except for those evidencing Permitted Liens, and further (ii) there will not be
on file in any public office any financing statement or statements (or any
documents or papers filed as such) covering the Collateral, other than financing
statements in favor of Secured Party hereunder and except for those evidencing
Permitted Liens, unless in any case the prior written consent of Secured Party
shall have been obtained.
(iii) Debtor authorizes Secured Party to file, in jurisdictions where this
authorization will be given effect, a financing statement signed only by Secured
Party covering the Collateral, and hereby appoints Secured Party as Debtor's
attorney-in-fact to sign and file any such financing statements covering the
Collateral. At the request of Secured Party, Debtor will join Secured Party in
executing such documents as Secured Party may reasonably determine, from time to
time to be necessary or desirable under provisions of any applicable Uniform
Commercial Code in effect where the Collateral is located or where the Debtor
conducts business; without limiting the generality of the foregoing, Debtor
agrees to join Secured Party, at Secured Party's request, in executing one or
more financing statements in form satisfactory to Secured Party, and Debtor will
pay the costs of filing or recording the same, or of filing or recording this
Security Agreement, in all public offices at any time and from time to time,
whenever filing or recording of any such financing statement or of this Security
Agreement is deemed by Secured Party to be necessary or desirable and Secured
Party will provide Debtor with "as-filed" copies of all such filings or
recordings. In connection with the foregoing, it is agreed and understood
between the parties hereto (and Secured Party is hereby authorized to carry out
and implement this agreement and understanding and Debtor hereby agrees to pay
the costs thereof) that Secured Party may, at any time or times, file as a
financing statement any counterpart, copy, or reproduction of this Security
Agreement.
(c) Except as specifically otherwise permitted or provided herein, Debtor's
Tangibles shall remain in Debtor's possession and control at all times at
Debtor's risk of loss, and are now kept and at all times shall be kept at the
addresses and locations set forth on Schedule 3 hereto. If Debtor is using or
will use all or any part of the advances made, obligations incurred, or credit
extended by Secured Party to acquire rights in, possession of, or use of
Tangibles, then Debtor agrees that, within 30 days after Debtor first receives
possession thereof, such Tangibles will be brought to and kept at one of the
addresses and locations set forth on Schedule 1 hereto.
(d) Debtor will promptly notify Secured Party of any change in any of
addresses or locations set forth on Schedule 1 hereto and of any new addresses
or locations where Tangibles or other goods, documents, or instruments are or
may be kept, and Debtor will not remove (except in the ordinary course of its
business) the Tangibles or such goods, documents, or instruments, or any part
thereof, from the addresses and locations described and specified above without
the prior written notice to Secured Party.
(e) With respect to accounts, general intangibles and chattel paper
included in the Collateral, Debtor represents and warrants and agrees that
Debtor's books and records with respect to such Collateral are and will be kept
at Debtor's office located at 7408 Hollister Avenue, Santa Barbara, California
93117, and such address is that of Debtor's chief executive offices; and Debtor
further covenants and agrees that Debtor will not change such address without
first notifying Secured Party in writing of such change, filing such new or
additional financing statements and making such other filings or recordings as
Secured Party shall deem necessary or appropriate, and providing Secured Party
with "as-filed" copies of all such filings or recordings.
(f) Debtor further covenants and agrees that, if any certificates of title
or similar documents are at any time issued or outstanding with respect to any
of the Collateral, Debtor will promptly advise Secured Party thereof, and Debtor
will promptly cause the interest of Secured Party to be properly noted thereon,
and if any certificates of title or similar documents are so issued or
outstanding at the time this Security Agreement is executed by or on behalf of
Debtor, then Debtor shall have caused the interest of Secured Party so to have
been properly noted at or before the time of such execution; and Debtor will
further promptly deliver to Secured Party any such certificate of title or
similar document.
(g) Except as permitted in the Credit Agreement and except in the case of
sales of inventory in the ordinary course of business for cash or on payment
terms customary in Debtor's business which give rise to accounts constituting
Collateral hereunder, Debtor will not sell or offer to sell or otherwise
transfer or encumber or dispose of the Collateral or any interest therein
without the prior written consent of Secured Party.
(h) Debtor will not release or surrender any guaranty, suretyship agreement
or security for any of Debtor's Intangibles at any time or times except incident
to payment in full thereof.
(i) Debtor will take all action reasonably necessary to maintain and
preserve all security for Debtor's Intangibles at all times as valid, subsisting
and perfected as to all the property affected and covered thereby and to
maintain the priority and validity of the security for the Intangibles as
against the rights, claims and interests of all other persons; provided that if
Debtor, in its prudent business judgment, determines that (A) such rights are
immaterial or unneeded in its business or (B) it is in Debtor's business
interest not to maintain or preserve such rights, Debtor shall so notify Secured
Party and Secured Party shall have the opportunity to review the proposed
inaction and, where appropriate, to take action on Debtor's behalf to prevent
such lapse or require Debtor to transfer such rights to Secured Party.
(j) Notwithstanding anything to the contrary contained herein, it is
understood and agreed that if for any reason Tangibles are at any time kept or
located at locations other than those specified or which may hereafter be
consented to by Secured Party, Secured Party shall nevertheless have and retain
a security interest therein.
4. Special Provisions - Intangibles.
(a) Secured Party shall have the right, exercisable at any time following
the occurrence and during the continuance of an Event of Default, to take
control of all proceeds of the Collateral (whether cash proceeds or non-cash
proceeds) and to notify any and all account debtors, lessees, or other obligors
to make payment on any and all accounts, leases, or obligations directly to
Secured Party; and, in such circumstances, Debtor will upon request of Secured
Party likewise notify any and all such account debtors, lessees or other
obligors to make payment directly to Secured Party. Upon demand by Secured Party
following the occurrence and during the continuance of an Event of Default, all
proceeds of Intangibles, whether such proceeds be cash proceeds or non-cash
proceeds, received by Debtor shall be held in trust by Debtor for the account of
Secured Party, shall not be commingled with any other funds, accounts, monies or
property of Debtor, and shall be forthwith accounted for, paid over, transmitted
and delivered to Secured Party in the form as received by Debtor promptly upon
receipt thereof by Debtor.
(b) At any time after demand as hereinabove provided, and in any event,
without demand, after any of the Indebtedness shall become due, whether by
acceleration or otherwise (and so long as such Indebtedness shall remain
unpaid), and at any time after the occurrence of an Event of Default (and so
long as such Event of Default shall be continuing), Secured Party shall have the
right in its own name or in the name of Debtor to demand, collect, receive,
receipt for, sue for, compound and give acquittance for, any and all amounts due
or to become due on the Intangibles and to endorse the name of Debtor on all
checks, drafts, commercial paper and other instruments given in payment or part
payment thereof, and in its discretion to settle, compromise, prosecute or
defend any action, claim or proceeding with respect thereto which Secured Party
may deem necessary or appropriate to protect and preserve and realize upon the
security interest and collateral assignment of Secured Party in the Intangibles
and the proceeds thereof and security therefor including, without limitation,
the right to sell, assign, pledge, transfer and make any agreement respecting or
otherwise deal with the Intangibles; provided, however, that all dispositions of
Intangibles shall be made in a commercially reasonable manner in accordance with
the Uniform Commercial Code and other applicable law.
(c) Returned or repossessed goods arising from or relating to any of
Debtor's Intangibles shall be and become a part of the Tangibles included in the
Collateral hereunder.
(d) Until the Indebtedness shall become due, whether by acceleration or
otherwise (and so long as such Indebtedness shall remain unpaid), or there shall
occur an Event of Default (and so long as such Event of Default shall be
continuing), Debtor shall be entitled to vote the Securities and to receive all
cash distributions thereon. Debtor covenants and agrees to deliver promptly to
Secured Party all securities or other property of any kind distributed as a
dividend or otherwise with respect to the Securities, said additional property
to be held as Collateral hereunder. Debtor agrees that at any time after any of
the Indebtedness shall have become due, whether by acceleration or otherwise
(and so long as such Indebtedness shall remain unpaid), and at any time after
the occurrence of an Event of Default (and so long as such Event of Default
shall be continuing), Secured Party may transfer Securities into the name of
Secured Party or its nominee.
(e) If, before the Indebtedness shall have been satisfied in full, Debtor
shall obtain rights to any new Patent, Trade Secret or Trademark, or become
entitled to the benefit of any Patent, Trade Secret or Trademark, the provisions
of Section 1 of this Security Agreement shall automatically apply thereto and
Debtor shall give to Secured Party prompt notice thereof in writing.
(f) Upon notice of new Patent or Trademark rights or entitlements, Debtor
authorizes Secured Party to modify this agreement by amending Schedules 1 and 2
hereof to include such Patents or Trademarks and agrees to execute and file any
such reports, records or documents reasonably deemed necessary by Secured Party
to perfect its interest in such property.
5. Special Provisions - Tangibles. (a) Any of Debtor's Tangibles in the
possession of persons other than Debtor must be represented by documents issued
by the person in possession thereof, in form acceptable to Secured Party, which
documents must, upon the reasonable request of the Secured Party, be delivered
to Secured Party and must be either negotiable documents issued in the name of
Debtor or non-negotiable documents issued in the name of Secured Party or on
which the security interest of Secured Party has been noted by the issuer
thereof. Debtor warrants that all such documents are and shall be genuine, valid
and in all respects what they purport to be and that the Tangibles described
therein will be identified or fungible portions of an identified mass, and that
said documents are and will be subject to no terms or conditions other than is
noted therein or thereon.
(b) At any time after any of the Indebtedness shall become due, whether by
acceleration or otherwise (and so long as such Indebtedness shall remain
unpaid), and at any time after the occurrence of an Event of Default (and so
long as such Event of Default shall be continuing), all proceeds of Debtor's
Tangibles, whether cash proceeds or non-cash proceeds, and including, without
limitation, proceeds that constitute Intangibles or that are included in the
Collateral as Intangibles, and proceeds that represent the proceeds of
Intangibles, shall be received and held by Debtor in trust for Secured Party,
shall not be commingled with any other funds, accounts, monies or property of
Debtor, and shall be promptly accounted for, paid over and delivered to Secured
Party in the form as received by Debtor upon receipt thereof by Debtor.
(c) Debtor will promptly report to Secured Party any occurrence or
condition known to or which becomes known to Debtor having any material adverse
effect upon Debtor's Tangibles.
6. Further Agreements Between the Debtor and Secured Party. (a) Secured
Party shall never be under any obligation to collect, attempt to collect,
protect or enforce the Collateral or any security therefor, which Debtor agrees,
and undertakes to do at Debtor's expense, but Secured Party may do so in its
discretion at any time after any of the Indebtedness shall become due, whether
by acceleration or otherwise (and so long as such Indebtedness shall remain
unpaid), and at any time after the occurrence of an Event of Default (and so
long as such Event of Default shall be continuing), and at any such time Secured
Party shall have the right to take any steps by judicial process or otherwise it
may deem proper to effect the collection of all or any portion of the Collateral
or to protect or to enforce the Collateral or any security therefor. All
expenses (including, without limitation, attorneys' fees and expenses) incurred
or paid by Secured Party in connection with or incident to any such collection
or attempt to collect the Collateral or actions to protect or enforce the
Collateral or any security therefor shall be borne by Debtor or reimbursed by
Debtor to Secured Party upon demand. The proceeds of collection of the
Intangibles or other proceeds received by Secured Party as a result of any such
actions in collecting or enforcing or protecting the Collateral shall be held by
Secured Party without liability for interest thereon and may be applied by
Secured Party as Secured Party may deem appropriate toward payment of any of the
Indebtedness secured hereby in such order or manner as Secured Party may elect.
(b) In the event Secured Party shall pay any such taxes, assessments,
interests, costs, penalties or expenses incident to or in connection with the
collection of the Collateral or protection or enforcement of the Collateral or
any security therefor, Debtor, upon demand of Secured Party, shall pay to
Secured Party the full amount thereof with interest at a rate per annum equal to
10% per annum in excess of the rate of interest on loans made pursuant to the
Credit Agreement; and so long as Secured Party shall be entitled to any such
payment, this Security Agreement shall operate as security therefor as fully and
to the same extent as it operates as security for payment of the other
Indebtedness secured hereunder, and for the enforcement of such repayment
Secured Party shall have every right and remedy provided for enforcement of
payment of the Indebtedness.
(c) In the event that the Collateral or any part thereof shall now or
hereafter become so related to particular real estate that an interest in it may
arise under the real estate laws of the state in which such real estate is
located, then Debtor shall immediately notify Secured Party of such fact and
take all steps and furnish all information as Secured Party shall reasonably
request for the purpose of creating or extending (as the case may be) a valid
and enforceable lien in such Collateral, including making such additional
filings or recordings, at Debtor's expense, as Secured Party shall deem
necessary or appropriate.
7. Remedies. (a) At any time after any of the Indebtedness shall become
due, whether by acceleration or otherwise (and so long as such Indebtedness
shall remain unpaid), and at any time after the occurrence of an Event of
Default (and so long as such Event of Default shall be continuing), in addition
to any other remedies provided for in any of the agreements relating to any of
the Indebtedness or available under applicable law, Secured Party shall have and
may exercise with reference to the Collateral and Indebtedness any or all of the
rights and remedies of a secured party under the Uniform Commercial Code in
effect in the State of New York, and as otherwise granted herein or under any
other applicable law or under any other agreement executed by Debtor, including,
without limitation, the right and power to sell, at public or private sale or
sales, or otherwise dispose of, lease or otherwise utilize the Collateral and
any part or parts thereof in any manner authorized or permitted under said
Uniform Commercial Code after default by a debtor, and to apply the proceeds
thereof toward payment of any costs and expenses and attorneys' fees and
expenses thereby incurred by Secured Party and toward payment of the
Indebtedness in such order or manner as Secured Party may elect. Specifically
and without limiting the foregoing, Secured Party may require Debtor to assemble
the Collateral or any security therefor and make it available to Secured Party
at a place to be designated by Secured Party; and Secured Party shall have the
right to take possession of all or any part of the Collateral or any security
therefor and of all books, records, papers and documents of Debtor or in
Debtor's possession or control relating to the Collateral which are not already
in Secured Party's possession, and for such purpose may enter upon any premises
upon which any of the Collateral or any security therefor or any of said books,
records, papers and documents are situated and remove the same therefrom without
any liability for trespass or damages thereby occasioned. To the extent
permitted by law, Debtor expressly waives any notice of sale or other
disposition of the Collateral and all other rights or remedies of Debtor or
formalities prescribed by law relative to sale or disposition of the Collateral
or exercise of any other right or remedy of Secured Party existing after default
hereunder; and to the extent any such notice is required and cannot be waived,
Debtor agrees that if such notice is given in the manner provided in Section 8
hereof at least 10 days before the time of the sale or disposition, such notice
shall be deemed reasonable and shall fully satisfy any requirement for giving of
said notice.
(b) At any time after any of the Indebtedness shall become due, whether by
acceleration or otherwise (and so long as such Indebtedness remains unpaid), and
at any time after the occurrence of an Event of Default (and so long as such
Event of Default shall be continuing), Secured Party is expressly granted the
right, at its option, to transfer at any time to itself or to its nominee the
Collateral, or any part thereof, and to receive the payments, collections,
monies, income, proceeds or benefits attributable or accruing thereto and to
hold the same as security for the Indebtedness or to apply it on the principal
and interest or other amounts owing on any of the Indebtedness in such order or
manner as Secured Party may elect.
(c) All rights to marshalling of assets of Debtor, including any such right
with respect to the Collateral, are hereby waived by Debtor.
8. General. (a) No Impairment, etc. The execution and delivery of this
Security Agreement in no manner shall impair or affect any other security (by
endorsement or otherwise) for the payment or performance of the Indebtedness and
no security taken hereafter as security for payment or performance of the
Indebtedness shall impair in any manner or affect this Security Agreement, all
such present and future additional security to be considered as cumulative
security. Any of the Collateral may be released from this Security Agreement
without altering, varying or diminishing in any way the force, effect, lien,
security interest, or charge of this Security Agreement as to the Collateral not
expressly released, and, except for Permitted Liens, this Security Agreement
shall continue as a first and prior lien, security interest and charge on all of
the Collateral not expressly released until all the Indebtedness secured hereby
has been paid or performed in full. Any future assignment of the interest of
Debtor in and to any of the Collateral shall not deprive Secured Party of the
right to sell or otherwise dispose of or utilize all or any part of the
Collateral as above provided or necessitate the sale or disposition thereof in
parcels or in severality.
(b) Liability for Deficiency. This Security Agreement shall not be
construed as relieving Debtor from full liability on the Indebtedness and any
and all future and other indebtedness secured hereby and for any deficiency
thereon.
(c) Powers of Secured Party. After any of the Indebtedness shall become
due, whether by acceleration or otherwise (and so long as such Indebtedness
shall remain unpaid), and after the occurrence of an Event of Default (and so
long as such Event of Default shall be continuing), in protecting, exercising or
assuring its interests, rights and remedies under this Security Agreement,
Secured Party may receive, open and dispose of mail addressed to Debtor and
execute, sign and endorse negotiable and other instruments for the payment of
money, documents of title and other evidences of payment, shipment or storage
for any form of Collateral or proceeds on behalf of and in the name of Debtor.
(d) Subrogation. After any of the Indebtedness shall become due, whether by
acceleration or otherwise (and so long as such Indebtedness shall remain
unpaid), and after the occurrence of an Event of Default (and so long as such
Event of Default shall be continuing), Secured Party will be hereby subrogated
to all of Debtor's interests, rights and remedies in respect to the Collateral
and all security now or hereafter existing with respect thereto and all
guaranties and endorsements thereof and with respect thereto.
(e) Any communication, demand or notice to be given hereunder will be duly
given when delivered in writing or by telecopy to a party at its address as
indicated below or such other address as such party may specify in a notice to
each other party hereto. A communication, demand or notice given pursuant to
this Security Agreement shall be addressed:
If to Debtor, to
Miravant Medical Technologies
7408 Hollister Avenue
Santa Barbara, California 93117
Telecopy: (805) 685-6038
Attention: Gary S. Kledzik
with copies (which, in and of themselves, shall not constitute notice) to
Nida & Maloney PC
800 Anacapa Street
Santa Barbara, California 93101
Telecopy: (805) 568-1955
Attention: Joseph E. Nida
and
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94304
Telecopy: (650) 493-6811
Attention: John T. Sheridan
If to Secured Party, to
Pharmacia & Upjohn, Inc.
95 Corporate Drive
Bridgewater, New Jersey 08807
Telecopy: (908) 470-8047
Attention: Treasurer
and
Pharmacia & Upjohn, Inc.
95 Corporate Drive
Bridgewater, New Jersey 08807
Telecopy: (908) 306-4485
Attention: Senior Vice President
of Business Development
and
Pharmacia & Upjohn, Inc.
95 Corporate Drive
Bridgewater, New Jersey 08807
Telecopy: (908) 306-4489
Attention: General Counsel
with a copy (which, in and of itself, shall not constitute notice) to
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Telecopy: (212) 558-3588
Attention: Neil T. Anderson,
Matthew G. Hurd
and Martin J. Travers
or, as to any party, to such other address as shall be designated by such party
in a prior written notice to each other party similarly given.
(f) Severability. The provisions of this Security Agreement are severable,
and if any clause or provision shall be held invalid and unenforceable in whole
or in part in any jurisdiction, then such invalidity or unenforceability shall
affect only such clause or provision, or part thereof, in such jurisdiction, and
shall not in any manner affect such clause or provision in any other
jurisdiction, or any other clause or provision of this Security Agreement in any
jurisdiction.
(g) No Duty to Preserve Collateral. Secured Party shall not be obligated to
take any steps necessary to preserve any rights in the Collateral or in any
security therefor against any other party, which obligation Debtor hereby
assumes.
(h) No Waiver. No delay or omission on the part of Secured Party in
exercising any right hereunder shall operate as a waiver of any such right or
any other right. A waiver on any one or more occasions shall not be construed as
a bar to or waiver of any right or remedy on any future occasion. The remedies
of Secured Party hereunder are cumulative, and the exercise of any one or more
of the remedies provided for herein shall not be construed as an election or as
a waiver of any of the other remedies of Secured Party provided for herein or
existing by law or otherwise.
(i) Assignment. All rights of Secured Party hereunder shall inure to the
benefit of its successors and assigns; and all obligations of Debtor shall bind
its successors and assigns.
(j) GOVERNING LAW. THIS SECURITY AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT AS
REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT THE
VALIDITY OR PERFECTION OF ANY OF THE SECURITY INTERESTS HEREUNDER, OR REMEDIES
HEREUNDER, ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
NEW YORK.
IN WITNESS WHEREOF, the Debtor has duly executed and delivered this
Security Agreement as of the date first above written.
MIRAVANT MEDICAL TECHNOLOGIES
By: ______________________________
Name:
Title:
By: ______________________________
Name:
Title:
Schedule 1
Trademarks
REGISTERED TRADEMARKS
Registration Issue
Country Number Date Owner/Assignee
[To Be Provided By Debtor]
PENDING TRADEMARK APPLICATIONS
Serial File Attorney/
Country Number Date Owner/Assignee Agent
[To Be Provided By Debtor]
Schedule 2
Patents
ISSUED PATENTS
Patent Issue Expiration
Country Number Date Date Owner/Assignee
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of o, 1999 (this "Agreement") by
and between Miravant Medical Technologies, a Delaware corporation (the
"Company"), and Pharmacia & Upjohn, Inc., a Delaware Corporation (collectively
with its Affiliates, the "Purchaser").
W I T N E S S E T H:
WHEREAS, in connection with the Equity Investment Agreement, of even date
herewith, between the Company and the Purchaser (the "Equity Investment
Agreement") and the Warrant Agreement, of even date herewith, between the
Company and the Purchaser (the "Warrant Agreement" and, together with the Equity
Investment Agreement, the "Purchase Agreements"), the Company has agreed, upon
the terms and subject to the conditions of said Purchase Agreements, to issue
and sell to the Purchaser shares of common stock of the Company, par value $.01
per share (the "Common Stock") and warrants to purchase Common Stock, the shares
of Common Stock and the shares of Common Stock issuable upon exercise of the
Warrants being collectively referred to herein as the "Securities"; and
WHEREAS, to induce the Purchaser to execute and deliver the Purchase
Agreements, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the "Securities
Act"), and applicable state securities laws with respect to the Securities.
NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Purchaser
hereby agree as follows:
ARTICLE I
Definitions
Section I.1. Definitions. Capitalized terms used herein shall have the
respective meanings set forth in the Purchase Agreement. As used in this
Agreement, the following terms shall have the following meanings:
"Affiliate" means any other Person directly or indirectly controlling,
controlled by, or under common control with, that Person.
"Commission" means the Securities and Exchange Commission.
"Person" means and includes natural persons, corporations, limited
liability companies, limited partnerships, general partnerships, joint stock
companies, joint ventures, associations, companies, trusts or other
organizations, whether or not legal entities, and governments and agencies and
political subdivisions thereof.
"Qualified Public Offering" means an underwritten registered public
offering of equity securities of the Company, which offering yields minimum
gross proceeds of US$20,000,000.
"1933 Act" means the Securities Act of 1933, as amended and as it may be
amended from time to time, including the rules and regulations thereunder.
"1934 Act" means the Securities Exchange Act of 1934, as amended and as it
may be amended from time to time, including the rules and regulations
thereunder.
ARTICLE II
Registration Rights
Section II.1. Demand Rights. (a) Upon written demand of holders of a
majority of the Securities, the Company shall prepare and file a registration
statement under the 1933 Act covering an offering of such number of Securities
as shall have been requested by such holder(s) in such demand, and shall use its
diligent efforts to cause such registration statement to become effective, all
in accordance with the provisions of this Agreement; provided, that if the
Company's Board of Directors determines in good faith that it would be seriously
detrimental to the Company to file such a registration statement at the time of
such demand, the Company shall have the right to defer filing such registration
statement for 120 days. The Company shall only be required to cause up to three
(3) registration statements to become effective under this Section 2.01.
(b) Whenever the Company shall have received a demand pursuant to this
Section 2.01 to effect the registration of any Securities, the Company shall
promptly give written notice of such proposed registration to all other holders
of Securities. Any such holder may, within 30 days after receipt of such notice,
request in writing that all of such holder's Securities, or any portion thereof
designated by such holder, be included in the offering.
(c) The Company shall proceed as expeditiously as possible after receipt of
a demand pursuant to this Section 2.01 to file a registration statement and use
its best efforts to effect, within 120 days after the giving of such written
demand (or, in the case of a demand made within 60 days prior to the end of the
Company's then fiscal year, within 210 days after the giving of such written
demand) the registration of an offering under the 1933 Act. Such offering shall
include:
(i) the Securities specified in the demand given pursuant to Section
2.01(a); and
(ii) all other Securities that the holders thereof have requested be
included in the offering pursuant to Section 2.01(b);all of the extent required
to permit the holders of the Securities to dispose of such Securities in
compliance with applicable law. Unless otherwise recommended by the managing
underwriter to facilitate such offering, the Company shall have the right to
include in such offering authorized but unissued shares of its Common Stock and
shares of its Common Stock held in its treasury that together constitute no more
than 20% of the aggregate number of Securities to be offered. No other
outstanding securities of the Company shall be included in such registration
statement unless, and then only to the extent that, in the opinion of the
representative of the underwriters participating in the sale and distribution of
the shares of Common Stock covered by such registration statement, such other
outstanding securities may be included in such registration statement and sold
without adversely affecting the sale of Securities otherwise included therein.
The Purchaser shall select the representative, if any, of the underwriters to be
engaged in connection with any such registration, subject to the consent of the
Company, which shall not unreasonably be withheld or delayed.
Section II.2. Piggyback Rights. (a) If at any time the Company shall
propose to register any of its shares for sale or disposition, for its own
account for cash under the 1933 Act in a Qualified Public Offering (including,
for this purpose, a registration effected by the Company for stockholders other
than Purchaser) and if all of the Securities have not been registered under
Section 2.01 above, the Company shall:
(i) Promptly give to the Purchaser at least thirty (30) days'
written notice prior to the filing thereof (which shall include, if
then determined, the proposed date on which the registration statement
is to be filed, the proposed price and registration price per share,
the number of shares proposed to be included in such registration, the
identity of any proposed selling stockholders and a list of the
jurisdictions in which the Company intends to attempt to qualify such
securities under the applicable blue sky or other state securities
laws); and
(ii) Include in such registration (and any related
qualification under blue sky laws or other compliance), and in any
underwriting involved therein, a portion of the Securities which are
specified in a written request, or requests, made by the Purchaser
within ten (10) days after receipt of such written notice from the
Company by the Purchaser.
(b) The rights of the Purchaser to registration pursuant to this section
shall be conditioned upon the Purchaser's participation in any underwriting
relating to the Company's registered public offering. The Purchaser shall
(together with the Company) enter into an underwriting agreement in customary
form with the underwriter or underwriters selected by the Company. The Company
will use its best efforts to include the Purchaser's Securities in the Qualified
Public Offering. Notwithstanding any provision of this section, if the
underwriter, in its sole discretion, determines that marketing factors require a
limitation of the number of securities to be underwritten, or that the Qualified
Public Offering be limited to shares offered by the Company only, the
underwriter may exclude some or all of the Purchaser's shares for which the
Purchaser seeks registration from inclusion in the registration and
underwriting, which reduction shall be pro rata among the Purchaser and any
other stockholder whose shares are sought to be included in the public offering.
Section II.3. Termination of Registration Rights. The Company shall have no
obligation under Section 2.01 or 2.02 to register any Securities if the Company
shall deliver to the holders requesting such registration an opinion of counsel
reasonably satisfactory to such holders and their counsel to the effect that the
proposed sale or disposition for which registration was requested does not
require registration under the 1933 Act. The Company hereby agrees to indemnify
the holders of Securities, and each of them, against, and to hold them harmless
from, all damages, losses, liabilities (including liability for rescission),
costs and expenses that they may incur under the 1933 Act or otherwise by reason
of their proceeding in accordance with such opinion of counsel.
Section II.4. Actions to be Taken by the Company. If and whenever the
Company is obligated by the provisions of this Agreement to effect the
registration of any offering of Securities under the 1933 Act, as expeditiously
as possible the Company will, or will use its best efforts to, as the case may
be:
(a) Prepare and file with the Commission a registration statement with
respect to such Securities and cause such registration statement to become
effective; provided, however, that before filing a registration statement or
prospectus or any amendments or supplements thereto, the Company shall furnish
to the holders of the Securities covered by such registration statement, their
counsel and the representative of the underwriters, if any, copies of all such
documents proposed to be filed, which documents will be subject to the review of
such holders, their counsel and the representative of the underwriters, if any,
and the Company shall not file any registration statement or prospectus or any
amendments or supplements thereto to which the holders of a majority of the
Securities covered by such registration statement, their counsel, or the
representative of the underwriters, if any, shall reasonably object on a timely
basis.
(b) Prepare and file with the Commission such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement effective until the earlier
of the sale of all Securities covered thereby or the expiration of a period of
270 days after its effective date, and comply with the provisions of the 1933
Act with respect to the disposition of all Securities covered by such
registration statement; provided, however, that if maintaining the effectiveness
of the registration statement would require the filing of a post-effective
amendment including new financial statements (other than financial statements
which the Company would be required to include in a current report on Form 10-Q
under Section 13 or 15(d) of the 1934 Act) the Company shall be obligated
hereunder to use its best efforts to maintain the effectiveness of the
registration statement for 90 days. In the event that any Securities included in
a registration statement subject to, or required by, this Agreement remain
unsold at the end of the period during which the Company is obligated to use its
best efforts to maintain the effectiveness of such registration statement, the
Company, if and when a further amendment or supplement would be required to
comply with Section 10 of the 1933 Act, may file a post-effective amendment to
the registration statement for the purpose of removing such shares from
registered status.
(c) Furnish to holders for whom Securities are registered or are to be
registered so many copies of a prospectus, including a preliminary prospectus,
in conformity with the requirements of the 1933 Act, and such other documents,
as such holders may reasonably request.
(d) Register or qualify the Securities covered by such registration
statement under such other securities or blue sky laws of such jurisdictions as
the holders for whom Securities are registered shall request, and do any and all
other acts and things that may be reasonably necessary or advisable to enable
such holders to consummate the disposition in such jurisdictions of such
Securities; provided, however, that the Company shall not be obligated, by
reason thereof, to qualify as a foreign corporation or file any general consent
to service of process under the laws of any such jurisdiction or subject itself
to taxation as doing business in any such jurisdiction.
(e) Notify the holders for whom Securities are registered or are to be
registered and their counsel promptly after the Company shall receive notice
that any registration statement, supplement or amendment has become effective,
any registration statement is required to be amended or supplemented, or any
stop order with respect thereto has been issued.
(f) Enter into such agreements (including an underwriting agreement in
form, scope and substance as is customary in underwritten offerings) and take
all such other actions in connection therewith (including those reasonably
requested by the representative of the underwriters or the holders of a majority
of the Securities subject to the registration statement) in order to expedite or
facilitate the disposition of the Securities and in such connection, (i) make
such representations and warranties to the underwriters with respect to the
business of the Company and its subsidiaries, the registration statement, the
prospectus and the documents, if any, incorporated or deemed to be incorporated
by reference in the registration statement, in each case in form, substance and
scope as are customarily made by issuers to underwriters in underwritten
secondary offerings and confirm the same if and when requested; (ii) obtain
opinions of counsel to the Company and updates thereof, which counsel and
opinions (in form, scope and substance) shall be reasonably satisfactory to the
representative of the underwriters, addressed to each of the underwriters,
covering the matters customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by such
underwriters, including without limitation, the matters referred to in clause
(i) above; (iii) obtain "cold comfort" letters and updates thereof from the
independent certified public accountants of the Company (and, if necessary, any
other independent certified public accountants of any subsidiary of the Company
or of any business acquired by the Company for which financial statements and
financial data is or is required to be included in the registration statement)
addressed to each of the underwriters, such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort" letters to
underwriters in connection with underwritten offerings; and (iv) deliver such
documents and certificates as may be requested by the representative of the
underwriters to evidence the continued validity of the representations and
warranties made pursuant to clause (i) above and to evidence compliance with any
customary conditions contained in the underwriting agreement or other agreement
entered into by the Company. The above shall be done at each closing under such
underwriting or similar agreement, or as and to the extent required thereunder.
(g) Make available for inspection by any underwriter and any attorney or
accountant retained by such underwriter, all financial and other records,
pertinent corporate documents and properties of the Company and its
Subsidiaries, and cause the officers, directors and employees of the Company and
its Subsidiaries to supply all information reasonably requested by any such
underwriter, attorney or accountant in connection with such registration
statement; provided, however, that any records, information or documents that
are designated by the Company in writing as confidential shall be kept
confidential by such Persons unless (i) disclosure of such records, information
or documents is required by court or administrative order, or (ii) disclosure of
such records, information or documents, in the opinion of counsel to such
Person, is required by law (including, without limitation, pursuant to the
requirements of the 1933 Act) or (iii) such records, information or documents
are in the public domain or otherwise publicly available.
Section II.5. Costs and Expenses. The costs and expenses (other than
underwriting discounts or commissions and such fees for counsel, printing,
registration and other fees as state securities officials may require that the
holders of Securities pay) of all registrations and qualifications under the
1933 Act, and of all other actions that the Company is required to take or
effect pursuant to this Agreement, shall be paid by the Company (including,
without limitation, all registration and filing fees, printing expenses, costs
of special audits incident to or required by any such registration, fees and
disbursements of counsel for the Company and up to $20,000 of fees and
disbursements of one special counsel acting for the holders of Securities being
included in any registration) except that all such expenses in connection with
any amendment or supplement to the registration statement or the prospectus used
in connection therewith required to be filed more than 270 days after the date
on which such registration statement becomes effective under the 1933 Act
because any holder has not effected the disposition of Securities covered by
such registration statement shall be borne pro rata by such holder or holders
and provided that all such costs and expenses shall be borne pro rata by the
Company and all holders if required by any state securities commissioner as a
condition to qualification of securities in such jurisdiction.
Section II.6. Indemnification. In the event of any registration under the
1933 Act of any offering of Securities, the Company hereby agrees to indemnify
and hold harmless each holder of Securities and each other Person, if any, who
controls such holder (within the meaning of the 1933 Act) and each other Person
(including each underwriter, and each other Person, if any, who controls such
underwriter) who participates in the offering of such Securities against any
losses, claims, damages or liabilities ("Losses"), joint or several, to which
such holder or controlling Person or participating Person may become subject
under the 1933 Act or otherwise, insofar as such Losses (or proceedings in
respect thereof) arise out of or are based upon (a) any untrue statement or
alleged untrue statement of any material fact contained, on the effective date
thereof, in any registration statement under which Securities were registered
under the 1933 Act, in any preliminary prospectus or final prospectus contained
therein, or in any amendment or supplement thereto, (b) the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading or (c) any violation or
alleged violation by the Company of the 1933 Act, the 1934 Act, any state
securities law or any rule or regulation promulgated under the 1933 Act, the
1934 Act or any state securities law, and will reimburse such holder and each
such controlling Person or participating Person for any legal or other expenses
reasonably incurred by such holder or such controlling Person or participating
Person in connection with investigating or defending any such Loss; provided
that the Company will not be liable in any such case to the extent that any such
Loss arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
such preliminary or final prospectus or such amendment or supplement in reliance
upon and in conformity with written information furnished by an instrument duly
executed by such holder or such controlling or participating Person, as the case
may be, specifically for use in the preparation thereof. The Company shall also
indemnify underwriters participating in the distribution, their officers,
directors, agents and employees and each Person who controls such Persons
(within the meaning of Section 15 of the 1933 Act or Section 20 of the Exchange
Act) to the same extent as provided above with respect to the indemnification of
the holders of Securities.
Section II.7. Additional Indemnification. In the event of any registration
under the 1933 Act of any offering of Securities, each holder of such Securities
hereby severally agrees to indemnify and hold harmless the Company, each other
holder and each other Person, if any, who controls the Company within the
meaning of the 1933 Act and each other Person (including each underwriter, and
each other Person, if any, who controls such underwriter) who participates in
the offering of such Securities against any Losses, joint or several, to which
the Company, such holder or controlling Person or participating Person may
become subject under the 1933 Act or otherwise, insofar as such Losses (or
proceedings in respect thereof) arise out of or are based upon (a) any untrue
statement or alleged untrue statement of any material fact contained, on the
effective date thereof, in any registration statement under which an offering of
such Securities was registered under the 1933 Act, in any preliminary prospectus
or final prospectus contained therein, or in any amendment or supplement
thereto, (b) the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statement therein not
misleading or (c) any violation or alleged violation by the Purchaser of the
1933 Act, the 1934 Act, any state securities law or any rule or regulation
promulgated under the 1933 Act, the 1934 Act or any state securities law, and
will reimburse the Company, such holder and each such controlling Person or
participating Person for any legal or other expenses reasonably incurred by the
Company, such holder or such controlling or participating Person in connection
with investigating or defending any such Loss or proceeding; provided that such
holder will be liable in any such case to the extent, and only to the extent,
that any such Loss arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in such registration
statement, such preliminary or final prospectus or such amendment or supplement
in reliance upon and in conformity with written information furnished in an
instrument duly executed by such holder specifically for use in the preparation
thereof. The Company shall be entitled to receive indemnities from underwriters
participating in the distribution to the same extent as provided above with
respect to information so furnished in writing by such Persons specifically for
inclusion in any registration statement or prospectus.
Section II.8. Indemnification Procedures. If any action or proceeding
(including any governmental investigation or inquiry) shall be brought or any
claim shall be asserted against any Person entitled to indemnity hereunder (an
"indemnified party"), such indemnified party shall promptly notify the party
from which such indemnity is sought (the "indemnifying party") in writing, and
the indemnifying party shall assume and control the defense thereof, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses incurred in connection with the defense
thereof. Any such fees and expenses borne by the indemnified party (including
any fees and expenses incurred in connection with investigating or preparing to
defend such action or proceeding) shall be paid to the indemnified party, as
incurred, within 15 days of written notice thereof to the indemnifying party
(regardless of whether it is ultimately determined that an indemnified party is
not entitled to indemnification hereunder; provided the indemnified party shall
reimburse such fees and expenses if it is finally determined that such
indemnified party is not entitled to indemnity hereunder). Any such indemnified
party shall have the right to employ separate counsel in any such action, claim
or proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be the expenses of such indemnified party unless
(a) the indemnifying party has agreed to pay such fees and expenses, or (b) the
indemnifying party shall have failed to assume promptly the defense of such
action, claim or proceeding, or (c) the named parties to any such action, claim
or proceeding (including any impleaded parties) include both such indemnified
party and the indemnifying party, and such indemnified party shall have been
advised by counsel that there may be one or more legal defenses available to it
which are different from or in addition to those available to the indemnifying
party and that the assertion of such defenses would create a conflict of
interest such that counsel employed by the indemnified party could not
faithfully represent the indemnified party (in which case, if such indemnified
party notifies the indemnifying party in writing that it elects to employ
separate counsel at the expense of the indemnifying party, the indemnifying
party shall not have the right to assume the defense of such action, claim or
proceeding on behalf of such indemnified party; it being understood, however,
that the indemnifying party shall not, in connection with any one such action,
claim or proceeding or separate but substantially similar or related actions,
claims or proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys (together with appropriate local
counsel) at any time for all such indemnified parties, unless in the reasonable
judgment of such indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
action, claim or proceeding, in which event the indemnifying party shall be
obligated to pay the fees and expenses of such additional counsel or counsels).
The indemnifying party shall not be liable for any settlement of any such action
or proceeding effected without its written consent.
Section II.9. Contribution. If the indemnification provided for in this
Agreement is unavailable to an indemnified party under Section 2.06 or 2.07
(other than by reason of exceptions provided in those Sections) in respect of
any Losses, then each applicable indemnifying party in lieu of indemnifying such
indemnified party shall contribute to the amount paid or payable by such
indemnified party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the indemnifying party and
indemnified parties in connection with the actions, statements or omissions
which resulted in such Losses as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and the
indemnified party shall be determined by reference to, among other things,
whether any action in question, including any untrue statement or alleged untrue
statement of a material fact or omission or alleged omission of a material fact,
has been taken or made by, or relates to information suppled by, such
indemnifying party or indemnified party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a result
of any Losses shall be deemed to include, subject to the limitations set forth
in this Section 2.09, any legal or other fees or expenses reasonably incurred by
such party in connection with any action, suit, claim, investigation or
proceeding. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation.
Section II.10. Form S-3. The Company represents and warrants that it meets
the requirements for the use of Form S-3 for registration of the sale by the
Purchaser of the Securities, and the Company shall file all reports required to
be filed by the Company with the SEC in a timely manner so as to maintain such
eligibility for the use of Form S-3.
ARTICLE III
Miscellaneous
Section III.1. APPLICABLE LAW. THIS AGREEMENT AND ALL RIGHTS ARISING
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY
WITHIN SUCH STATE.
Section III.2. WAIVER OF JURY. THE COMPANY AND THE PURCHASER EACH HEREBY
WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT AND ANY RIGHT
ARISING HEREUNDER.
Section III.3. Jurisdiction and Venue; Service of Process. (a) The Company
and the Purchaser each hereby irrevocably submits to the non-exclusive
jurisdiction of any state or federal court in the Borough of Manhattan, The City
of New York for the purpose of any suit, action, proceeding or judgment relating
to or arising out of this Agreement and any right arising hereunder, and to the
laying of venue in the Borough of Manhattan, The City of New York. The Company
and the Purchaser each hereby irrevocably waives, to the fullest extent
permitted by applicable law, any objection to the laying of the venue of any
such suit, action or proceeding brought in the aforesaid courts and hereby
irrevocably waives any claim that any such suit, action or proceeding brought in
any such court has been brought in an inconvenient forum.
(b) The Company agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Company at its address set forth in Section 3.06 or at such other address of
which the Purchaser shall have been notified pursuant thereto. The Company
further agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue any
other jurisdiction.
(c) Each of the Purchaser and the Company waives, to the maximum extent not
prohibited by law, any right it may have to claim or recover in any legal action
or proceeding referred to in this Section 3.03 any special, exemplary, punitive
or consequential damages. The waiver set forth in this Section 3.03(c) shall
terminate automatically upon the occurrence of a "Separation Event", as defined
in that certain stockholder rights protection plan of Pharmacia & Upjohn, Inc.
in effect on the date of this Agreement, as it may from time to time be amended.
Section III.4. Amendments and Waivers.
(a) Any provision of this Agreement may be amended, modified, supplemented
or waived, but only by a written amendment or supplement, or written waiver,
signed by the Company and the Purchaser.
(b) Except to the extent expressly set forth therein, any waiver shall be
effective only in the specific instance and for the specific purpose for which
such waiver is given.
Section III.5. Cumulative Rights; No Waiver. Each and every right granted
to the Purchaser or allowed the Purchaser by law or equity, shall be cumulative
and not exclusive and may be exercised from time to time. No failure on the part
of the Purchaser to exercise, and no delay in exercising, any right will operate
as a waiver thereof, nor will any single or partial exercise by the Purchaser of
any right preclude any other or future exercise thereof or the exercise of any
other right.
Section III.6. Notices. (a) Any communication, demand or notice to be given
hereunder will be duly given when delivered in writing or by telecopy to a party
at its address as indicated below or such other address as such party may
specify in a notice to each other party hereto. A communication, demand or
notice given pursuant to this Section 3.06 shall be addressed:
If to the Company, to
Miravant Medical Technologies
7408 Hollister Avenue
Santa Barbara, California 93117
Telecopy: (805) 685-6038
Attention: Gary S. Kledzik
with a copy (which, in and of itself, shall not constitute notice) to
Nida & Maloney PC
800 Anacapa Street
Santa Barbara, California 93101
Telecopy: (805) 568-1955
Attention: Joseph E. Nida
and
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94304
Telecopy: (650) 493-6811
Attention: John T. Sheridan
If to the Purchaser, to
Pharmacia & Upjohn, Inc.
95 Corporate Drive
Bridgewater, New Jersey 08807
Telecopy: (908) 470-8047
Attention: Treasurer
and
Pharmacia & Upjohn, Inc.
95 Corporate Drive
Bridgewater, New Jersey 08807
Telecopy: (908) 306-4485
Attention: Senior Vice President
of Business Development
and
Pharmacia & Upjohn, Inc.
95 Corporate Drive
Bridgewater, New Jersey 08807
Telecopy: (908) 306-4489
Attention: General Counsel
with a copy (which, in and of itself, shall not constitute notice) to
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Telecopy: (212) 558-3588
Attention: Neil T. Anderson,
Matthew G. Hurd
and Martin J. Travers
(b) Unless otherwise provided to the contrary herein, any notice which is
required to be given in writing pursuant to the terms of this Agreement may be
given by telecopy.
Section III.7. Separability. In case any one or more of the provisions
contained in this Agreement shall be invalid, illegal or unenforceable in any
respect under any law, the validity, legality and enforceability of the
remaining provisions contained in this Agreement shall not in any way be
affected or impaired thereby.
Section III.8. Persons Benefitting. This Agreement shall be binding upon
and inure to the benefit of the Purchaser and the Company, and their respective
successors, assigns, beneficiaries, executors and administrators. Nothing in
this Agreement is intended or shall be construed to confer upon any Person,
other than the Company and the Purchaser (and such successors, assigns,
beneficiaries, executors and administrators), any right, remedy or claim under
or by reason of this Agreement or any part hereof. This Agreement may not be
assigned without the written consent of the parties hereto, and any purported
assignment made in violation of this provision shall be null and void. The
provisions of the previous sentence notwithstanding, the Purchaser may assign
its rights and obligations under this letter agreement to any of its wholly
owned subsidiaries without the consent of the Company.
Section III.9. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
together constitute one and the same instrument.
Section III.10. Headings. The descriptive headings of the several Sections
of this Agreement are inserted for convenience and shall not control or affect
the meaning or construction of any of the provisions hereof.
Section III.11. Remedies. In the event of a breach by the Company or by the
Purchaser of any of their obligations under this Agreement, the Purchaser or the
Company, as the case may be, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Company and the
Purchaser agree that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the date first above written.
MIRAVANT MEDICAL TECHNOLOGIES
By:________________________________
Name:
Title:
PHARMACIA & UPJOHN, INC.
By:________________________________
Name:
Title:
AMENDED AND RESTATED OPHTHALMOLOGY
DEVELOPMENT & LICENSE AGREEMENT
between
PHARMACIA & UPJOHN AB
and
MIRAVANT MEDICAL TECHNOLOGIES
o , 1999
AMENDED and RESTATED
OPHTHALMOLOGY DEVELOPMENT AND LICENSE AGREEMENT
THIS AMENDED and RESTATED OPHTHALMOLOGY DEVELOPMENT AND LICENSE AGREEMENT
(the "Agreement") is made and entered into as of o, 1999, by and between
PHARMACIA & UPJOHN AB, a company organized and existing under the laws of
Sweden, (hereinafter referred to as "P&U AB"), and MIRAVANT MEDICAL
TECHNOLOGIES, INC., a company organized and existing under the laws of the State
of Delaware, with its head offices at 7408 Hollister Avenue, Santa Barbara,
California 93117, U.S.A. (hereinafter referred to as "Miravant").
WITNESSETH THAT:
WHEREAS, on 8 June 1998, P&U AB and Miravant entered an Amended and
Restated Development and License Agreement for the field of ophthalmology (the
"1998 AB License Agreement"); and
WHEREAS, P&U AB and Miravant desire to amend the 1998 AB License Agreement
to provide for the transfer to P&U AB of certain clinical, regulatory and
manufacturing responsibilities with respect to the Development Program (as
defined herein) and to modify inter alia the rights and obligations of the
parties accordingly;
NOW, THEREFORE, in consideration of the above premises and the covenants
contained herein, the parties hereby amend and restate the 1998 AB License
Agreement in its entirety as follows, effective as of the date hereof:
ARTICLE 1 - DEFINITIONS
The following capitalized terms used herein shall have the meanings set forth
below:
1.1 Affiliate. "Affiliate" shall mean, with respect to any specified party,
any person or entity that directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the party specified. For purposes of this definition, "Control" including with
correlative meanings, the terms "controlled by" and "under common control with"
means ownership directly or indirectly of more than fifty percent (50%) of the
equity capital having the right to vote for election of directors (or in the
case of an entity other than a corporation, the equivalent management
authority).
1.2 Agreement. "Agreement" shall mean this Amended and Restated Development
and License Agreement.
1.3 Aggregate Borrowings. "Aggregate Borrowings" shall mean the aggregate
principal amount of Quarterly Loans made pursuant to the Credit Agreement, dated
as of January o, 1999, between P&U AB and Miravant, without giving effect to any
repayments or prepayments thereof.
1.4 Clinical Tests. "Clinical Tests" shall mean any tests, performed on
humans in preparation and support of regulatory submissions.
1.5 Development Program. "Development Program" shall mean the program to be
conducted by Miravant and P&U AB to develop Product (as hereinafter defined) and
obtain regulatory approvals for the sale of Product in the Territory (as
hereinafter defined) in accordance with the provisions of Article 4 hereof.
1.6 Effective Date. The term "Effective Date" shall mean the date on which
this Agreement has been duly executed by both parties.
1.7 FDA. "FDA" shall mean the United States Food and Drug Administration or
the equivalent governmental authority in any other country, or any successor
agency having the administrative authority to regulate the approval for testing
or marketing of human pharmaceutical or biological medical products and/or
medical devices.
1.8 Field. "Field" shall mean the field of Ophthalmology, including for the
avoidance of doubt all current and future indications in the Field.
1.9 Gross Sales. "Gross Sales" shall mean the final gross invoiced price
from the sale of Product by P&U AB and its Affiliates or Sublicensees; provided,
that Gross Sales shall exclude sales of Product intended for resale between P&U
AB and its Affiliates and Sublicensees. Gross Sales from the sale of the Product
in Eastern Europe, the Middle East, Africa and Central America by Sublicensees
which are not Affiliates of P&U AB shall be measured by the F.O.B. invoiced
price from P&U AB or one of its Affiliates to such distributors.
1.10 GCP. "GCP" shall mean current "good clinical practices" for carrying
out clinical studies in humans as set forth in regulations promulgated by the
FDA, as such may be amended from time to time or, where appropriate, the
equivalent regulations promulgated by the equivalent governmental authority in
any other country.
1.11 GLP. "GLP" shall mean current "good laboratory practices" for
conducting nonclinical laboratory studies as set forth in regulations (21 CFR
Part 58) promulgated by the FDA, as such may be amended from time to time or,
where appropriate, the equivalent regulations promulgated by the equivalent
governmental authority in any other country.
1.12 GMP. "GMP" shall mean current "good manufacturing practices" for the
preparation of drug products as set forth in regulations (21 CFR Parts 210 and
211) promulgated by the FDA, as such may be amended from time to time, or where
appropriate, the equivalent regulations promulgated by the equivalent
governmental authority in any other country.
1.13 IND. "IND" shall mean all governmental approvals required to commence
clinical testing in humans, including an "investigational new drug application"
submitted to the FDA under 21 CFR ss.312 for the purpose of conducting clinical
investigations of Product or the equivalent in any other country.
1.14 Light Devices. "Light Devices" shall mean the instruments that
produce, deliver or measure light for use with Product.
1.15 *****
***** Confidential Treatment Requested
1.16 Major Indication. "Major Indication" shall mean the indications in the
Field as set forth in Schedule 1.16.
1.17 Minor Indication. "Minor Indication" shall mean the indications in the
Field as set forth in Schedule 1.17.
1.18 Net Sales. "Net Sales" shall mean Gross Sales less the following:
trade, cash and quantity discounts; returns, normal trade allowances,
charge-backs, federal, state, or other governmental rebates and adjustments;
taxes on the sale or transportation of the Products absorbed by P&U AB.
1.19 *****
***** Confidential Treatment Requested
1.20 NDA. "NDA" shall mean all approvals (including, where applicable,
pricing and reimbursement) to sell a pharmaceutical product in any country,
including a "New Drug Application" or other premarket approval application for
Product, and any supplement or abbreviated application relating thereto,
submitted to the FDA or the equivalent in any other country.
1.21 Other Indications. "Other Indications" shall mean the indications in
the Field set forth in Schedule 1.21.
1.22 Out-of-Pocket Expenses. "Out-of Pocket Expenses" shall mean actual
expenses, including expenses for outside consultants and CRO's, in relation to
Product paid after the Effective Date by Miravant or its Affiliates to third
parties who are not Affiliates of Miravant.
1.23 Patent Rights. "Patent Rights" shall mean all patent applications, as
well as continuation, divisional or continuation-in-part applications, and all
patents issuing therefrom, including reissue or reexamination patents,
containing at least one claim covering Product, its use or sale, and only to the
extent such Patent Rights are directed to Product, which are now or hereafter
owned or acquired by Miravant or any of its Affiliates, or licensed to Miravant
or any of its Affiliates, and all extensions and supplementary protection
certificates relating thereto. Patent Rights licensed to Miravant will only be
granted to P&U AB to the extent permitted by Miravant's license agreement and
P&U AB will do nothing to disturb such agreement.
1.24 Photodynamic Therapy. "Photodynamic Therapy" shall mean the technique
of diagnosis and/or treatment of abnormal or normal biological or medical
conditions, either in-vivo or ex-vivo, through the use of drugs activated by any
type of electromagnetic radiation or magnetic field.
1.25 Preclinical Tests. "Preclinical Tests" shall mean any nonhuman tests
performed in preparation and support of regulatory submissions.
1.26 Product. "Product" shall mean pharmaceutical products for Photodynamic
Therapy containing tin ethyl etiopurpurin as the active drug substance and any
isomers and derivatives thereof, in any formulation, for use in the Field.
1.27 Project Team. "Project Team" shall have the meaning set forth in
Section 4.4.
1.28 SnET2. "SnET2" shall mean the Photodynamic Therapy drug designated by
Miravant as tin ethyl etiopurpurin in any formulation or strength for use in the
Field.
1.29 Steering Committee. "Steering Committee" shall have the meaning set
forth in Section 4.2.
1.30 Sublicensee. "Sublicensee" shall mean a third party to whom P&U AB or
any of its Affiliates has granted, in whole or in part, the right to market or
comarket the Product in one or more countries in the Territory and who performs
selling activities such as invoicing customers in one or more countries in the
Territory.
1.31 Technology. "Technology" shall mean all information and data,
including, but not limited to, technical, pharmacological, toxicological and
clinical information, know-how, inventions and improvements possessed by
Miravant as of the Effective Date or generated or obtained by Miravant during
the term of this Agreement relating to the registration, manufacture, use or
sale of Product, in each case to the extent Miravant has the right to provide
the same to P&U AB hereunder; provided, that "Technology" shall not include any
such information or data regarding the design or manufacture of any Light
Device.
1.32 Territory. "Territory" shall mean the entire world.
1.33 Unit. "Unit" shall mean *****
***** Confidential Treatment Requested
1.34 Schedules. The Schedules which are attached to this Agreement and
which are herein incorporated, are as follows:
Schedule Description
1.16 Major Indications
1.17 Minor Indications
1.21 Other Indications
3.3 Key Countries
ARTICLE 2 - INTENTIONALLY OMITTED
ARTICLE 3 - LICENSE GRANT AND ROYALTIES
3.1 License. Subject to the terms of this Agreement, Miravant hereby grants
to P&U AB and P&U AB's Affiliates an exclusive worldwide, royalty-bearing,
license under the Patent Rights and the Technology, not to mean devices, to
manufacture or have manufactured, use, distribute and sell Product for diagnosis
or treatment in the Field in the Territory. P&U AB may sublicense, totally or in
part, the license rights granted under this Section 3.1; provided, that (i) P&U
AB must notify Miravant in writing of any such sublicense at least thirty (30)
days in advance; (ii) P&U AB remains responsible to Miravant for all contractual
obligations of the Sublicensee, including, but not limited to, payment of
royalties, keeping of records and reporting of sales, as if the Sublicensee's
sales were P&U AB's sales; and (iii) the Sublicensee agrees to be bound by the
terms of this Agreement to the same extent as P&U AB to the extent applicable to
the Sublicensee.
3.2 Term of License. With respect to Product, the license rights granted
under Section 3.1 shall remain in effect in each country in the Territory for
the duration of the Patent Rights or for a period of ten (10) years from the
first commercial sale of Product on a country-by-country basis, whichever shall
be longer. After this period, P&U AB shall have an irrevocable, fully paid-up,
nonexclusive license under the Technology in such country.
3.3 Milestone Payments. For Major and Minor Indications, P&U AB shall pay
Miravant only the following sums upon achievement of the stated milestones:
(i) if, after conducting ***** for any Major and Minor Indication, the
Steering Committee decides to proceed with ***** for such indication *****, P&U
AB shall pay Miravant: ***** for each Major Indication; and ***** for each Minor
Indication; provided, that in the event ***** are not required for any
indication and the Steering Committee decides to proceed with *****, P&U AB
shall not owe Miravant a ***** milestone payment for each such indication;
***** Confidential Treatment Requested
(ii) for each Major and Minor Indication, at the ***** in one or more of
the Key Countries listed in Schedule 3.3, P&U AB shall pay Miravant ***** for
each Major Indication so approved, and ***** for each Minor Indication so
approved.
***** Confidential Treatment Requested
(iii) P&U AB shall not owe Miravant any milestone payments for ***** or for
Other Indications (as defined in Section 1.21).
***** Confidential Treatment Requested
3.4 Royalties.
(i) P&U AB shall, for the term of the license specified by Section 3.2, pay
Miravant royalties on Net Sales of such Products to third parties at the rate of
***** on total Net Sales of Product of ***** per calendar year, and a royalty of
***** on the part of total Net Sales of such Products ***** per calendar year.
***** Confidential Treatment Requested
(ii) *****
***** Confidential Treatment Requested
3.5 Sublicense Fees. P&U AB shall pay Miravant ***** of any up-front or
lump-sum fees received by P&U AB in consideration of the grant of a sublicense
to Product, other than to an Affiliate.
***** Confidential Treatment Requested
3.6 Payment of Milestone Payments and Out-of- Pocket Expenses. All amounts
of money due pursuant to Section 3.4 and for the payment of Out-of-Pocket
Expenses described in Article 4 shall be paid to Miravant or its designated
Affiliate within thirty (30) days from receipt by P&U AB of the relevant
Miravant invoice.
3.7 Payment of Royalties. The royalties due pursuant to Section 3.4 shall
be reported quarterly within thirty (30) days after March 31, June 30, September
30 and December 31. Such royalties shall be paid to Miravant or its designated
Affiliate quarterly within sixty (60) days after March 31, June 30, September 30
and December 31. Each payment to Miravant or its designated Affiliate shall be
accompanied by a report containing sufficient information to enable Miravant or
its designated Affiliate to verify the accuracy of the calculation of Net Sales
on which such payment was based during the payment period, including a statement
of Gross Sales and Net Sales and a reconciliation of the credits, allowances,
rebates and other deductions contemplated by Section 1.14 to calculate Net Sales
from Gross Sales.
3.8 Payment of Royalties, Fees, and Expenses. The milestone payments
specified by Section 3.3 herein shall be paid to Miravant in US dollars. For the
purpose of converting and paying royalties, Out-of-Pocket Expenses and
sublicense fees specified by Section 3.5 herein, monies shall be first computed
in the currency of the country where the sales took place or the expense was
incurred, and then, unless another currency is designated by Miravant, converted
into US dollars at the most favorable buying exchange rates prevailing on the
day P&U AB converts the local currency into US dollars for payment to Miravant.
3.9 P&U AB Ceases to Market or Sell Product. Unless otherwise mutually
agreed to by the parties and provided that a particular Product is sold or is to
be sold in a Major Country by one entity only, be it P&U AB or its Affiliate or
a Sublicensee, should P&U AB or its Affiliates or Sublicensees cease to market
or sell a Product in that Major Country or fail to launch a particular Product
in that Major Country within ***** from the occurrence of the latest to occur of
the following events (if applicable in such Major Country): (i) issuance of
Product's NDA approval in that country, (ii) governmental price approval, (iii)
reimbursement of the social security (if any), and (iv) NDA approval of all
relevant Light Devices, P&U AB shall have no further rights to the Product in
that country nor shall P&U AB have any further obligations for the Product in
that country, except such obligations which accrued prior to divestment from P&U
AB of rights to the Product. In the event rights to a Product are divested from
P&U AB in any country pursuant to this Section 3.9 and upon Miravant's request,
P&U AB shall immediately transfer the NDA approval and IND in that country to
Miravant or to an appointee of Miravant, provide to Miravant all data in P&U
AB's possession or control relating to that Product and take all such other
actions as are necessary or useful to permit Miravant to obtain regulatory
approvals to market Product in such country. If P&U AB fails to comply with the
foregoing within thirty (30) business days after such Miravant request, P&U AB
hereby irrevocably appoints Miravant as its attorney-in-fact to secure the
transfer of the NDA approval and IND to Miravant. Miravant shall market the
Product under its own tradenames or brands and shall not use P&U AB's tradenames
or brands. Failure by P&U AB to launch a Product or interruption of marketing or
sale of a Product pursuant to this Section 3.9 shall not be considered a breach
of this Agreement within the meaning of Article 10. For the avoidance of doubt,
it is understood between the parties hereto that the provision of this Section
3.9 shall not apply in the event that P&U AB or its Affiliates or Sublicensees
cease to sell a Product or fail to launch a Product in a Major Country for
reasons related to the safety and efficacy of a Product.
***** Confidential Treatment Requested
3.10 Books and Records. P&U AB shall keep, and shall cause its Affiliates
and Sublicensees to keep, complete and accurate books of accounts and other
records, for a period of ***** from the relevant sale, containing sufficient
detail as may be necessary for Miravant to properly ascertain and verify the
royalties payable to it hereunder in accordance with generally accepted
accounting principles. Upon Miravant's request, P&U AB shall permit an
independent certified accountant selected by Miravant (except one to whom P&U AB
has some reasonable objection) to have access once each year during ordinary
business hours to such P&U AB records as may be necessary to determine the
correctness of any report and payment made under this Agreement. If the audit
shows that P&U AB has underpaid any royalties by ten percent (10%) or more, for
any period covered by the audit, P&U AB shall, in addition to immediately
remitting to Miravant the amount of underpayment, pay for the cost of such
audit. In the event the audit shows that P&U AB has overpaid any royalties due
pursuant to Section 3.4, P&U AB shall be allowed to deduct the amount of such
overpayment from the next semiannual royalty payment due to Miravant.
***** Confidential Treatment Requested
ARTICLE 4 - STRATEGIC PLAN, DEVELOPMENT AND FUNDING
4.1 Strategic Plan. The parties shall develop a written plan in respect to
the Field of Ophthalmology, by March 31, 1999. This plan shall be called the
"Strategic Plan".
4.2 Steering Committee. The direction and activities to be conducted under
the Strategic Plan are under the oversight of a Steering Committee consisting of
***** members. The *****. Each of the parties shall have***** representatives on
the Steering Committee. Responsibilities of the Steering Committee shall be
limited to recommendation of additions and deletions to the indications to the
Strategic Plan, amendment and approval of the Development Program including
schedules and budgets. If the Steering Committee recommends to add any
indication not identified in Schedules 1.16, 1.17 or 1.21, it shall also
determine whether it is a Major, Minor or Other Indication, based on criteria
including but not limited to, ***** and *****. Any addition or deletion of an
indication shall be made by the parties as an amendment of this Agreement. Each
party may replace any of its respective members without the consent of the other
party.
***** Confidential Treatment Requested
4.3 Voting. Each member of the Steering Committee shall have one (1) vote
and all decisions of the Steering Committee shall require a majority vote. *****
***** Confidential Treatment Requested
4.4 Project Team. The details of the planning and conduct of the activities
under the Strategic Plan shall be supervised by a Project Team (the "Project
Team"). The membership of the Project Team shall be chosen by P&U AB in
consultation with Miravant and shall contain up to four representatives of
Miravant.
4.5 Reporting of Results. Within ten (10) days after March 31 and September
30 of each year, each party shall provide the other party with a detailed
progress report on its implementation of the Strategic Plan, including
experimental results and Phase I, Phase II and Phase III Clinical Test data. The
parties shall also consult periodically and at such times as determined by the
Steering Committee
4.6 *****
***** Confidential Treatment Requested
4.7 SnET2 for Ophthalmology. Unless otherwise determined by the Project
Team, P&U AB shall be responsible for conducting all necessary Preclinical and
Clinical Tests for SnET2 to be used in any indications in the Field. The
Out-of-Pocket Expenses associated with Preclinical and Clinical Tests being
conducted by Miravant on the Effective Date, or conducted by Miravant
thereafter, shall be reimbursed by P&U AB; provided, that these studies were
conducted in accordance with the protocols and budget approved by the Project
Team and Steering Committee. P&U AB shall be responsible for conducting all
post-NDA approval studies which may be necessary. The Steering Committee has the
right to determine, in its reasonable judgment, whether to proceed to Clinical
Tests for any indication in the Field. All Clinical Tests shall be conducted in
accordance with the protocols approved by the Project Team. Miravant shall
supply to P&U AB SnET2 and Light Devices to enable P&U AB to carry out such
Tests conducted by it. The actual costs of SnET2 and Light Devices for all Test
phases shall be shared equally by the parties hereto.
4.8 Submission of NDA. P&U AB shall be responsible for assembling the NDA
for a Product and to submit it to the concerned health authorities of the
Territory. All such NDAs shall be filed in the name of, and shall remain the
sole and exclusive property of, P&U AB, subject to Section 3.9 hereof. Before an
NDA is submitted to the concerned health authorities, it shall be reviewed and
approved by the Steering Committee. Following the submission of the NDA to the
concerned health authorities, P&U AB will prosecute such NDA diligently in
accordance with the time schedule set forth in the Strategic Plan.
4.9 Audit of Out-of-Pocket Expenses. Miravant shall keep, or cause its
Affiliates to keep, complete and accurate records of Out-of-Pocket Expenses in
sufficient detail for P&U AB to verify the accuracy of any invoices submitted to
P&U AB by Miravant for payment of Out-of-Pocket Expenses pursuant to Section
4.7. P&U AB shall have the right to audit such records on an annual basis, using
an independent certified accountant, at a date and time acceptable to Miravant
during normal business hours. If as a result of the audit, it is determined that
P&U AB has been overcharged by Miravant during a calendar year by more than ten
percent (10%) of the actual expenses, Miravant shall pay for the cost of the
audit, and P&U AB shall, at its discretion, either deduct the amount of the
overcharge from the next semiannual royalty payment or take a credit against
payment of future invoices for Out-of-Pocket Expenses.
ARTICLE 5 - DUTIES OF THE PARTIES
5.1 Promotion and Customer Service. As Miravant's exclusive licensee for
Product in the Territory, P&U AB agrees to use all reasonable efforts to
introduce, promote, market and sell Product in the Territory. P&U AB shall
maintain adequate facilities, Product inventory and personnel to ensure prompt
handling and servicing of customers' inquiries and orders and prompt shipment
and servicing of Product.
5.2 Care of Product. P&U AB shall comply with all applicable regulatory
requirements regarding acceptable methods for the care, handling, storage and
shipment of Product. Each party hereby agrees that it shall promptly provide to
the other, on request, all information known to it which is necessary for
compliance with the applicable laws and regulations concerning the care,
handling, storage, labeling, packaging and shipment of Product.
5.3 Exclusive. During the term of this Agreement, unless otherwise agreed
to by Miravant, P&U AB shall not, directly, or indirectly, develop or sell other
Photodynamic Therapy drugs for use in the Field. P&U AB agrees that it shall
secure the same agreement from its Affiliates and Sublicensees.
5.4 Authorization. P&U AB and Miravant each warrant that it has the legal
capacity to enter into this Agreement and that it has secured all necessary
approvals.
5.5 Obligations to Miravant's Licensor. To the extent relating to Patent
Rights or Products in the Field, P&U AB agrees to undertake all sublicensee
obligations set forth in any license agreement between Miravant and third
parties which was fully disclosed to P&U AB on or prior to July 10, 1996.
5.6 Sale of Product by Miravant. Subject to the terms of this Agreement,
while the license granted to P&U AB under Article III hereof with respect to any
Product is in effect in any country in the Territory, Miravant shall not license
or appoint any other licensee, distributor or marketing representative in or for
such country for such Product in the Field, sell such Product in or for use in
such country, nor accept orders for such Product from purchasers located within
such country or from any purchasers Miravant has reason to believe will sell
such Product within or for use in such country except as provided for in Section
3.9.
5.7 Right to License Patent Rights, Product and Technology. Miravant hereby
represents and warrants that it owns or has rights to use the Technology and
Patent Rights described herein, and that it has the right to grant sublicenses
under any license to SnET2 or covering Product held by Miravant.
5.8 Access to Information Relating to Light Devices. Both parties agree to
provide the other with access to information or data relating to Light Devices
which either party may need for regulatory approval to market Product in the
Field and which Miravant may need for regulatory purposes for products other
than Product in the Field.
5.9 Access to Light Devices. The parties mutually acknowledge that an
essential feature of the development of Product for marketing hereunder is
access by P&U AB to Light Devices. Miravant agrees that it shall undertake all
necessary action (i) to enable P&U AB to enter a supply relationship among P&U
AB, Miravant and Iridex Corporation for the supply of the Light Devices to P&U
AB and its Affiliates or Sublicensees and (ii) to insure that P&U AB has
continued access to Light Devices during the term of the license rights
specified by Section 3.2.
5.10 Compliance with Applicable Law. In exercising the rights and in
carrying out the duties and obligations set forth in this Agreement, each party
represents and warrants that it shall comply with all applicable state, federal
and country laws or rules. Each party further represents and warrants that it
shall comply with all applicable rules and regulations governing the
manufacture, distribution, promotion, marketing and sale of Product in the
Territory and that it shall specifically comply with GLP's, GCP's, GMP's or
other equivalent regulatory requirements of any country. Unless otherwise
disclosed, Miravant represents and warrants that all studies which were done
prior to the Effective Date and which are included in the IND or NDA for KS
and/or BCC have been conducted in accordance with GLP's, GCP's, and GMP's where
applicable.
5.11 Duty to Develop Product. Each party agrees that it shall use
reasonable efforts to develop Product in the Field in accordance with the
Strategic Plan.
5.12 Patent Filing, Prosecution and Maintenance; Trademarks. (i) Miravant
shall be responsible for all decisions relating to and all costs associated with
preparing, filing, prosecuting and maintaining Patent Rights. Miravant shall
timely notify P&U AB about each patent application filed which relates to
Product, its progress and subsequent disposition and consult with P&U AB prior
to taking any significant action with respect to Patent Rights. Miravant shall
not voluntarily abandon or forfeit any Patent Rights, without the prior approval
of P&U AB, such approval shall not be unreasonably withheld or delayed. (ii) P&U
AB shall own all trademarks, logos and/or trade dress which it registers for use
or otherwise uses in connection with the Product.
5.13 Miravant's Representations. Miravant hereby represents and warrants
that:
(i) It is not party to any agreement, arrangement or understanding with any
third party which in any material way conflicts with its ability to fulfill any
of its obligations under this Agreement.
(ii) It will not knowingly commit any material act or fail to take any act
which would cause a material omission or permit any acts or omissions to occur
which would be in conflict with its obligations under this Agreement or diminish
in any material respect the potential scope of the grant of rights to P&U AB
under this Agreement.
(iii) It has no knowledge that the license rights granted to P&U AB with
respect to the Product shall not be subject to any material retained rights of
any state, federal or foreign government or governmental entity, except for the
rights of the United States government under the Bayh-Dole Act and except as
disclosed to P&U AB prior to July 10, 1996.
(iv) It has no knowledge that making, using or selling any Products (alone
or in combination with any Light Devices) may infringe the patent rights of any
third party nor does it have any knowledge that any third party is infringing
the Patent Rights.
(v) It has no agreement, understanding or undertaking, with any third
parties regarding the ownership or disposition of tin ethyl etiopurpurin,
isomers and derivatives thereof or any Product.
5.14 Complaints. Miravant and P&U AB shall share with each other all data
on complaints in respect of Product subject to this Agreement including, but not
limited to, complaints or information regarding performance or allegations or
reports of any effects on a patient from use of such Product, as soon as such
data is available. To the extent that it has knowledge thereof, each party shall
promptly notify the other in writing of any defect in, or condition of, Product
subject to this Agreement which may cause any such Product to violate the
applicable laws and regulations of any country in the Territory where such
Product is being sold by P&U AB.
5.15 Recall. In the event of a total or partial recall of Product sold by
Miravant to P&U AB under this Agreement, whether voluntary or mandated by law,
the parties agree to cooperate fully to effect the recall. In the event such
recall results from the gross negligence or willful misconduct of Miravant,
Miravant shall bear all the expenses associated with such recall. In the event
such recall results from the gross negligence or willful misconduct of P&U AB,
P&U AB shall bear all the expenses associated with such recall. If any recall
results without gross negligence or willful misconduct of either party, then
Miravant and P&U AB shall equally bear the expenses of such recall. P&U AB
agrees to maintain adequate sales and service records to enable it to carry out
any Product recall and to conduct such recall.
5.16 Adverse Reactions. Each party shall be responsible for maintaining
such records and making such reports as may be required in connection with any
regulatory approval held by the party. Each party shall immediately inform the
other of all adverse drug experience reports and other information relating to
the safety or effectiveness of product which come to its attention.
ARTICLE 6 - *****
***** Confidential Treatment Requested
ARTICLE 7 - PUBLICATION AND CONFIDENTIALITY
7.1 Publication. At least thirty (30) days prior to the time either party
submits any data or articles related to Product or Technology for publication or
presentation, the proposed publication or presentation must be sent to the
Project Team for review and clearance. If the Project Team so decides, such
publication or presentation can be delayed as long as necessary to preserve US
or foreign patent or other property rights.
7.2 Disclosure. Miravant shall disclose to P&U AB from time to time all
information relating to the Patent Rights, Technology and Product for the Field
which was not previously disclosed; provided, that Miravant shall only be
required to disclose such information to P&U AB as is necessary for P&U AB to
fulfill its obligations under this Agreement. All information disclosed by one
party to the other under this Section 7.2 shall be deemed "Confidential
Information" and treated as provided in Section 7.3 hereof. P&U AB shall
disclose to Miravant, or Miravant shall have access to, information developed by
P&U AB related to Product including, but not limited to, the NDA's and other
regulatory data including clinical data and investigators' reports, applications
and licenses.
7.3 Confidential Information. Unless otherwise mutually agreed to by the
parties, the parties agree to maintain in confidence all Confidential
Information disclosed to the other pursuant to Section 7.2 and shall not, during
the term of this Agreement and for a period of five (5) years thereafter, use
such Confidential Information, except as permitted by this Agreement or disclose
the same to anyone other than those of its officers, directors, employees,
Affiliates and Sublicensees to the extent necessary in connections with either
party's activities as contemplated in this Agreement. Each party shall use its
reasonable efforts to ensure that its officers, directors, employees, Affiliates
and Sublicensees do not disclose or make any unauthorized use of such
Confidential Information.
7.4 Limitations on Confidentiality. The obligation of confidentiality
contained in Section 7.3 shall not apply to the extent that (i) a party is
required to disclose information by applicable law, such as pursuant to
Securities and Exchange Commission rules and regulations, or order of a
governmental agency or a court of competent jurisdiction, (ii) a party can
demonstrate that the disclosed information was, at the time of disclosure,
already in the public domain other than as a result of actions or failure to act
of a party, its officers, directors, employees, Affiliates and Sublicensees in
violation hereof; (iii) the disclosed information was rightfully known by a
party or its Affiliates or sublicensees (as shown by its written records) prior
to the date of disclosure to the other party in connection with this Agreement;
or (iv) the disclosed information was received by a party or its Affiliates or
Sublicensees on an unrestricted basis from a third party source which is not the
other party or an Affiliate of the other party and not under a duty of
confidentiality, and which was rightfully known to said source.
ARTICLE 8 - TERM AND TERMINATION
8.1 Term. Subject to the provisions of this Article 8, the term of this
Agreement shall continue so long as P&U AB shall be obligated to pay royalties
on the sale of any Product in the Territory.
8.2 Termination for Breach. In the event either party shall materially
breach any of the terms, conditions and agreements contained herein to be kept,
observed and performed by it, then the other party may terminate this Agreement,
at its option and without prejudice to any of its other legal and equitable
rights and remedies, by giving the party which committed the breach sixty (60)
days' notice of its intent to terminate, particularly specifying the breach,
unless the notified party within such 60 day period shall have cured the breach.
The 60 day period shall be extended for a period not exceeding an additional
ninety (90) days for breaches which cannot be reasonably cured within the 60 day
period if the party has commenced to cure the breach within that period.
8.3 Termination by Bankruptcy. In the event either party shall file a
voluntary petition or any answer admitting the jurisdiction of the Court and the
material allegations of, or shall consent to, an involuntary petition pursuant
to or purporting to be pursuant to any reorganization or insolvency law of any
jurisdiction, or shall make an assignment of substantially all of its assets for
the benefit of creditors, or shall apply for or consent to the appointment of a
receiver or trustee of a substantial part of its property (such party, upon the
occurrence of any such event, a "Bankrupt Party"), then to the extent permitted
by law the other party hereto may thereafter immediately terminate this
Agreement by giving notice of termination to the Bankrupt Party, unless the
proceeding is dismissed within ninety (90) days of its filing.
8.4 Effect of Termination. It is understood and agreed that the termination
of this Agreement shall not affect the rights or obligations of the parties
which (i) by the terms hereof, continue after the termination of this Agreement,
or (ii) have accrued prior to such termination including, but not limited to,
the rights of Miravant to receive any amounts then owing from P&U AB for
royalties due hereunder, all of which amounts shall be immediately due and
payable on such date.
ARTICLE 9 - PATENT INFRINGEMENT
9.1 Infringement by Third Parties. If, during the term of this Agreement,
either Miravant or P&U AB shall acquire knowledge or have reasonable cause to
believe that any of the Patent Rights claiming a Product, or its use or
manufacture, shall be infringed or used without authorization by any other
person in the Territory, such party shall promptly notify the other of such
knowledge. Miravant and P&U AB shall promptly meet to discuss the commercial
impact of such third party infringement and the most efficient and expeditious
manner to proceed against said third party.
9.2 Initiation of Action by Miravant or P&U AB. Miravant may take all steps
in its name which are necessary or advisable including, without limitation, the
institution of any action or proceeding for the obtaining of damages or the
enjoinment of any such infringement and to prosecute, settle, compromise or
otherwise dispose of the same. Miravant shall be entitled to the full recovery
of any money or other property collected by way of judgment, settlement (whether
prior to or after the institution of any action or proceeding) or otherwise on
any action initiated by Miravant. If Miravant does not commence such an action
within one hundred eighty (180) days after a request to do so by P&U AB, then
P&U AB may initiate an action or proceeding for the obtaining of damages or the
enjoinment of any such infringement and to prosecute, settle, compromise or
otherwise dispose of the same. P&U AB shall be entitled to the full recovery of
any money or other property collected by way of judgment, settlement (whether
prior to or after the institution of any action or proceeding) or otherwise on
any action initiated by P&U AB. Each party agrees to reasonably cooperate with
the other party in any legal proceeding and to pay all of its own costs taken
pursuant to this Section 9.2.
9.3 Claims Against P&U AB or Miravant. If any claim is made or action
brought against P&U AB or Miravant based on the claim that P&U AB or Miravant is
infringing any third party patent rights by virtue of the manufacture, use or
sale of Product hereunder, P&U AB or Miravant shall promptly so notify the
other. The parties shall then consult with each other as to the most efficient
and reasonable course of action to take relative to such third party claim. Each
party hereto shall pay its own expenses in defending any such third party claim.
P&U AB shall solely be responsible for any trademark infringement claims and for
all damages claimed against P&U AB and its Affiliates by any third party.
9.4 Damages Paid to Third Party. If, in any such action described in
Section 9.3, a court of competent jurisdiction determines that P&U AB or
Miravant is obligated to pay damages to any third person (excluding trademark
claims) because P&U AB or Miravant's manufacture, use or sale of a Product was
held to be an infringement of a third party right, *****.
***** Confidential Treatment Requested
9.5 Reduction of Royalties. In the event the legal proceedings described in
Section 9.3 result in a settlement or other final action which requires P&U AB
to pay a royalty to a third party in order to continue to use or sell Product,
the royalty paid by P&U AB to Miravant for such Product shall be reduced by an
amount equal to ***** of the rate of the royalty that P&U AB is required to pay
to such third party, not to exceed ***** of the royalties which would otherwise
be payable to Miravant.
***** Confidential Treatment Requested
ARTICLE 10 - INDEMNIFICATION
10.1 Indemnification. Except for matters relating to indemnification for
infringement of intellectual property rights, as to which Article 9 shall be the
sole and exclusive provisions, each party to this Agreement shall indemnify and
hold the other party hereto harmless from and against any and all action, causes
of action, claims, demands, suits, controversies, damages, verdicts, judgments,
executions and all cost and expenses in connection therewith including, but not
limited to, reasonable attorneys' fees, whether or not well founded in fact or
in law, brought or claimed by any third persons, which and to the extent thereof
shall arise from any breach of this Agreement by, or from the negligent acts or
omissions of, the indemnifying party under this Agreement (a "Liability").
10.2 Notice of Defense of Actions. Each party shall give the other prompt
notice of any potential Liability, and promptly after receipt by a party
claiming indemnification under this Section 10.2 of notice of the commencement
of any action, such indemnified party will notify the indemnifying party of the
commencement of the action and generally summarize such action. The indemnifying
party shall have the right to participate in and to assume the defense of such
action with counsel of its choosing. An indemnifying party shall not have the
right to direct the defense of such an action of an indemnified party if counsel
to such indemnified party has reasonably concluded that there may be defenses
available to it that are different from or additional to those available to the
indemnifying party; provided, that in such event, the indemnifying party shall
bear the fees and expenses of separate counsel reasonably satisfactory to the
indemnifying party. The failure to notify an indemnifying party promptly of the
commencement of any such action, if prejudicial to the ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 10.2, but the omission so to notify the
indemnifying party will not relieve such party of any liability that such party
may have to any indemnified party otherwise than under this Section. No
settlement of any claim or action may be made without the consent of the
indemnifying party (which shall not be unreasonably withheld or delayed).
ARTICLE 11 - RESOLUTION OF DISPUTES
11.1 Resolution of Disputes by Parties' Presidents. The parties recognize
that a bona fide dispute as to certain matters may from time to time arise
during the term of this Agreement which relate to either party's rights or
obligations hereunder. In the event of the occurrence of such a dispute, either
party may, by written notice to the other, have such dispute referred to their
respective officer designated below or their successors, for attempted
resolution by good faith negotiations within sixty (60) days after such notice
is received. Said designated officers are as follows:
For Miravant - President
For P&U AB- Managing Director or his designate
In the event the designated officers are not able to resolve such
dispute within such sixty (60) day period, any party may invoke the provisions
in Section 11.2 below, other than for matters within the scope of the Steering
Committee.
11.2 Arbitration. Except as expressly provided in Section 11.1, any and all
disputes arising out of or in connection with the performance of this Agreement
shall be finally settled by arbitration in accordance with the rules of the
American Arbitration Association, except that each party will be entitled to
select one (1) arbitrator and the two (2) arbitrators so selected shall select a
third arbitrator and if they cannot agree, then the third arbitrator who shall
not be a citizen of the United States or of Sweden, will be selected by the
American Arbitration Association. The arbitration shall be held in New York, New
York. The award rendered shall be final and binding upon the parties. Judgment
on any award may be entered in any court having jurisdiction over the parties or
their assets. To the extent any claims relate to the validity, construction,
scope, enforceability or infringement of any Patent Rights, such claim shall not
be required to be submitted to arbitration hereunder and shall be resolved by a
court of competent jurisdiction. The costs of arbitration shall be shared
equally by the parties.
ARTICLE 12 - MISCELLANEOUS
12.1 Force Majeure. Neither P&U AB nor Miravant shall be in default under
this Agreement nor liable for any failure to perform or for delay in performance
resulting from any cause beyond its reasonable control or due to compliance with
any regulations, order or act of any federal, provincial, state or municipal
government, or any department or agency thereof, civil or military authority,
acts of God, fires, floods or weather; strikes or lockouts; factory shutdowns,
embargoes, wars, hostilities or riots.
12.2 Taxes. Each of the parties hereto shall be responsible for its own
taxes imposed as a result of the performance by such party under this Agreement
including, but not restricted to, any sales tax, any tax on or measured by any
royalty or other payment required to be made by it hereunder, any registration
tax, any tax imposed with respect to the granting of or transfer of licenses or
other rights hereunder or the payment or receipt of royalties hereunder. For the
avoidance of any doubt, it is agreed that any withholding tax levied on a
payment required to be made pursuant to this Agreement, shall be the
responsibility of the party receiving such payment. The parties shall cooperate
fully with each other in obtaining and filing all requisite certificates and
documents with the appropriate authorities and shall use their best efforts to
take such further action as may reasonably be necessary to avoid the deduction
of any withholding or similar taxes from any remittance of funds by P&U AB to
Miravant hereunder; provided, that P&U AB may withhold any tax it is required to
collect or pay on behalf of Miravant.
12.3 Notices. All notices, proposals, submissions, offers, approvals,
agreements, elections, consents, acceptances, waivers, reports, plans, requests,
instructions and other communications required or permitted to be made or given
hereunder (all of the foregoing hereinafter collectively referred to as
"Communications") shall be in writing, in the English language, and shall be
deemed to have been duly made or given when (i) delivered personally with
receipt acknowledged, (ii) mailed in any post office, enclosed in a registered
or certified postage-paid envelope, return receipt requested, (iii) sent by
facsimile, telex or cablegram (which shall promptly be confirmed by a writing
sent by registered or certified mail, return receipt requested) or (iv) sent by
a recognized courier (e.g. DHL, Federal Express, etc.), in each case addressed
or sent to the parties at the following addresses and facsimile numbers or to
such other or additional address or facsimile number as any party shall
hereafter specify by Communication to the other party:
P&U AB: Pharmacia & Upjohn AB
Lindhagensgatan 133
S-112 87 STOCKHOLM
SWEDEN
Attention: Associate General Counsel
Fax: +46 8 695 47 08
With a copy to: Pharmacia & Upjohn, Inc.
95 Corporate Drive
Bridgewater, NJ 08807
Fax # 908-306-4489
Attention: General Counsel
Miravant: Miravant, Inc.
7408 Hollister Avenue
Santa Barbara, CA 93117
U.S.A.
Attn: President
Fax # 805-685-2959
With a copy to: Nida & Maloney, P.C.
800 Anacapa Street
Santa Barbara, CA 93101
U.S.A.
Attn: Joseph E. Nida
Fax # 805-568-1955
Notice of a change of address shall be deemed given when actually received. All
other Communications shall be deemed to have been given, received and dated on
the earlier of: (i) when actually received or on the date when delivered
personally or (ii) one (1) day after being sent by facsimile, cable, telex (each
promptly confirmed by a writing as aforesaid) or courier and seven (7) business
days after mailing.
12.4 Relationship. The relationship between the parties shall be governed
by the terms of this Agreement and shall not extend to other activities,
transactions or contracts. Neither party hereto is in any way the agent,
venturer of partner of the other party.
12.5 Governing Law. The provisions of this Agreement shall be governed in
all respects by the laws of New York without regard to conflicts of laws
principles.
12.6 Other Instruments. The parties hereto covenant and agree that they
will execute such other and further instruments and documents as may become
reasonably necessary or convenient to effectuate and carry out the provisions of
this Agreement or may be reasonably requested by the other party.
12.7 Legal Construction. In case any one or more of the provisions
contained in this Agreement shall be invalid or unenforceable in any respect,
the validity and enforceability of the remaining provisions contained herein
shall not in any way be affected or impaired thereby and the parties will
attempt to agree upon a valid and enforceable provision which shall be a
reasonable substitute for such invalid and unenforceable provision in light of
the tenor of this Agreement and, upon so agreeing, shall incorporate such
substitute provision in this Agreement.
12.8 Entire Agreement, Modification, Consents and Waivers. This Agreement
contains the entire agreement of the parties with respect to the subject matter
hereof and no interpretation, change, termination or waiver of or extension of
time for performance under any provision of this Agreement shall be binding upon
any party, unless in writing and signed by the party intended to be bound
thereby. Receipt by any party of money or other consideration due under this
Agreement, with or without knowledge of breach, shall not constitute a waiver of
such breach or any provision of this Agreement. Except as otherwise provided in
this Agreement, no waiver of or other failure to exercise any right under or
default or extension of time for performance under any provision of this
Agreement shall affect the right of any party to exercise any subsequent right
under any provision of this Agreement or otherwise enforce said provision or any
other provision hereof or to exercise any right or remedy in the event of any
other default, whether or not similar.
12.9 Agreements Read as a Whole. It is the intent of the parties that the
terms of this Agreement and the terms of any other agreements between the
parties related to the Product and/or the Strategic Plan be read as a whole and
as being consistent with one another. In the event of an inconsistency between
the terms of this Agreement and any of such other agreements, which
significantly impacts the parties' ability to carry out the Strategic Plan, such
inconsistency shall be resolved by the Steering Committee.
12.10 Section Headings; Construction. The section headings and titles
contained herein are each for reference only and shall not be deemed to affect
the meaning or interpretation of this Agreement. The singular shall include the
plural, the conjunctive shall include the disjunctive and the masculine gender
shall include the feminine and neuter, and vice versa, unless the context
otherwise requires.
12.11 Amendment. This Agreement may only be amended in writing by an
agreement designated as an amendment and executed by the parties hereto.
12.12 Survival. Articles 7 and 10 shall survive the expiration or
termination of this Agreement.
ARTICLE 13 - BINDING EFFECT: ASSIGNMENT
13.1 Binding Effect and Assignment. This Agreement shall inure to the
benefit of and be binding upon each of the parties hereto and their respective
successors and assigns. Neither this Agreement, nor any of the rights and
obligations under this Agreement, may be assigned, transferred or otherwise
disposed of by either party without the prior consent of the other party, unless
such assignment, transfer or disposition is to a successor to substantially all
the business or assets of the transferor; provided, that, such successor shall
in any event agree in writing with the other party to assume all obligations of
the transferor under this Agreement in a manner satisfactory to the other party.
Subject to the foregoing limitations, the Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of the parties.
13.2 Right to Seek Assurance. In the event all or substantially all of the
assets of either P&U AB or Miravant are acquired by a third party, the
non-acquired party shall have the right pursuant to Section 13.1 to receive a
written assurance from such third party that the third party intends to
faithfully perform all of the duties and obligations of the acquired party set
forth in this Agreement. The acquired party shall take all action necessary to
enable the non-acquired party to obtain such written assurance.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officer thereunder duly authorized as
of the date first hereinabove written.
MIRAVANT MEDICAL TECHNOLOGIES PHARMACIA & UPJOHN AB
By ________________________________ By _________________________
Gary S. Kledzik, Chairman of the Board Title: _______________________
and Chief Executive Officer
By ____________________________
SCHEDULE 1.16
Major Indications
*****
***** Confidential Treatment Requested
SCHEDULE 1.17
*****
*****
*****
*****
***** Confidential Treatment Requested
SCHEDULE 1.21
Other Indications
*****
***** Confidential Treatment Requested
SCHEDULE 3.3
Key Countries
*****
*****
*****
*****
*****
*****
***** Confidential Treatment Requested
[Pharmacia & Upjohn, Inc. Letterhead]
January o, 1999
Miravant Medical Technologies
7408 Hollister Avenue
Santa Barbara, California 93117
Dear Sirs:
This letter will confirm our agreement as follows:
1. In the event that Miravant Medical Technologies
("Miravant") develops SnET2 (as defined in Section 1.28 of the Amended and
Restated Development & License Agreement, of even date herewith, between
Pharmacia & Upjohn AB and Miravant (the "Ophthalmology Agreement")) within the
field of cardiovascular medicine (the "Field") or acquires such rights,
Pharmacia & Upjohn, Inc. ("P&U") shall have a right of first negotiation to
acquire exclusive marketing rights to SnET2 in the Field, to the extent that
Miravant has a right to grant such rights. The parties contemplate conducting a
feasibility evaluation concerning SnET2 in the Field. Thereafter, if the parties
hereto execute and deliver an agreement providing for additional development and
commercialization of SnET2 in the Field, such agreement shall extend to P&U the
same right of first negotiation with respect to any photodynamic drugs developed
by Miravant for use in the Field as are extended to P&U in respect of SnET2
pursuant to this letter agreement, subject to such termination provisions as the
parties may agree. Miravant will provide P&U's General Counsel, at 95 Corporate
Drive, Bridgewater, New Jersey 08807 with written notice that Miravant has
developed or acquired SnET2 in the Field, together with the preclinical and
clinical data then available to Miravant, or any other written notices required
herein.
2. *****
3. *****
4. *****
5. *****
*****Confidential Treatment Requested
6. THIS LETTER AGREEMENT AND ALL RIGHTS ARISING HEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH
STATE.
7. This letter agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together constitute one and the same instrument.
8. This letter agreement may not be assigned without the
written consent of the parties hereto, and any purported assignment made in
violation of this provision shall be null and void. The provisions of the
previous sentence notwithstanding, P&U may assign its rights and obligations
under this letter agreement to any of its wholly owned subsidiaries without the
consent of Miravant.
Very truly Yours,
PHARMACIA & UPJOHN, INC.
By:___________________________
Name:
Title:
Agreed and accepted as of the date hereof.
MIRAVANT MEDICAL TECHNOLOGIES
By:_______________________
Name:
Title:
