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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement") is made and
entered into this 16th day of June, 1997, between PERIMMUNE
HOLDINGS, INC., a Delaware corporation ("Holdings"), and MENTOR
CORPORATION, a Minnesota Corporation ("Purchaser").
WHEREAS, Holdings has authorized the issuance of up to
20 shares of its Series B Convertible Preferred Stock, par value
$0.01 per share having the rights, designations and preferences
set forth in the Certificate of Designation (as defined herein)
(the "Preferred Stock"), with an aggregate liquidation preference
of One Million Dollars ($1,000,000);
WHEREAS, subject to, and in accordance with, the terms
hereof, Holdings desires to issue and sell to Purchaser, and
Purchaser desires to purchase and acquire from Holdings, 20
shares of the Preferred Stock (the "Preferred Shares"); and
WHEREAS, Holdings holds all of the issued and
outstanding shares of capital stock of PERIMMUNE, INC., a
Delaware corporation.
Accordingly, in consideration of the foregoing and of
the mutual promises, covenants, and conditions set forth below,
the parties hereby agree as follows:
1. DEFINITIONS. As used herein, the terms below shall
have the following meanings:
"Affiliate" shall mean any entity controlling,
controlled by or under common control with a Person. For the
purposes of this definition, "control" shall have the meaning
presently specified for that word in Rule 405 promulgated by the
SEC under the Securities Act.
"Agreement" shall mean this Stock Purchase Agreement,
together with all schedules and exhibits referenced herein.
"Applicable Law" means any statute, law, rule, or
regulation or any judgment, order, writ, injunction or decree of
any Governmental Entity to which a specified person or property
is subject.
"Certificate of Designations" means the Certificate of
Designations, Preferences and Relative, Participating, Optional
and Other Special Rights of Preferred Stock and Qualifications,
Limitations and Restrictions Thereof, of Series B Convertible
Preferred Stock of PerImmune Holdings, Inc., substantially in the
form attached hereto as Exhibit A.
"Claim" has the meaning set forth in Section 8.6 of the
Agreement.
"Claim Notice" has the meaning set forth in Section 8.6
of the Agreement.
"Closing" has the meaning set forth in Section 5.1 of
the Agreement.
"Closing Date" has the meaning set forth in Section 5.1
of the Agreement.
"Code" means the Internal Revenue Code of 1986, as
amended. All citations to the Code or to the regulations
promulgated thereunder shall include any amendments or any
substitute or successor provisions thereto.
"Common Stock" has the meaning set forth in Section 3.3
of the Agreement.
"Encumbrance" means any claim, lien, pledge, option,
charge, easement, security interest, right-of-way, encumbrance or
other rights of third parties, and, with respect to any
securities, any agreements, understandings or restrictions
affecting the voting rights or other incidents of record or
beneficial ownership pertaining to such securities.
"Governmental Entity" means any court or tribunal in
any jurisdiction (domestic or foreign) or any public,
governmental, or regulatory body, agency, department, commission,
board, bureau, or other authority or instrumentality (domestic or
foreign).
"Holdings Indemnified Parties" has the meaning set
forth in Section 8.3 of the Agreement.
"Indemnified Parties" means Holdings Indemnified
Parties and Purchaser Indemnified Parties.
"Losses" has the meaning set forth in Section 8.2 of
the Agreement.
"Material Adverse Effect" with respect to any person or
entity shall mean an event, occurrence or condition that has had
or reasonably would be expected to have a material adverse effect
on the business, condition (financial or otherwise), assets,
liabilities, working capital or operations of such person or
entity and its Subsidiaries (if any), taken as a whole.
"Material Agreement" means, with respect to Holdings or
PerImmune:
(a) any contract which involves performance of services or
delivery of goods and/or materials, by or to Holdings or
PerImmune of an amount or value in excess of $500,000;
(b) any note, debenture, other evidence of indebtedness,
guarantee, loan, letter of credit, surety-bond or financing
agreement or instrument or other contract for money
borrowed, including any agreement or commitment for future
loans, credit or financing;
(c) any lease, rental or occupancy agreement, license,
installment and conditional sale agreement, and other
contract affecting the ownership of, leasing of, title to,
use of, or any leasehold or other interest in, any real
property;
(d) any material licensing agreement or other contract with
respect to patents, trademarks, copyrights, or other
intellectual property, including agreements with current or
former employees, consultants or contractors regarding the
exploitation, appropriation or the nondisclosure of
Intellectual Property;
(e) any employment agreement, collective bargaining agreement or
other contract to or with any employee or any labor union or
other employee representative of a group of employees
relating to wages, hours, and other conditions of
employment;
(f) any bonus, pension, profit sharing, retirement, stock
purchase, stock option, deferred compensation, medical,
hospitalization or life insurance plan, contract,
understanding with respect to any or all of the employees of
Holdings or PerImmune;
(g) any joint venture contract, partnership agreement, limited
liability company or other contract (however named);
(h) any agreement granting any preemptive right, right of first
refusal or similar right to any Person;
(i) any covenant not to compete or other restriction on the
ability of Holdings or PerImmune to conduct its business or
engage in any other activity;
(j) any agreement not made in the ordinary course of business
that is material to Holdings or PerImmune; and
(k) any amendment, supplement, and modification (whether written
or oral) in respect of any of the foregoing.
"Permits" shall mean all licenses, permits, orders,
consents, approvals, registrations, authorizations,
qualifications and filings required by any federal, state, local
or foreign laws or governmental or regulatory bodies and all
industry or other non-governmental self-regulatory organizations.
"Permitted Encumbrances" means (i) any mechanic's or
materialmen's lien or similar Encumbrances with respect to
amounts not yet due and payable or which are being contested in
good faith by appropriate proceedings and for which appropriate
reserves have been established, (ii) Encumbrances for Taxes not
yet due and payable or which are being contested in good faith by
appropriate proceeding, for which appropriate reserves have been
established, or (iii) easements, licenses, covenants, rights of
way and similar Encumbrances which, individually or in the
aggregate, would not materially and adversely affect the
marketability or value of the property encumbered thereby or
materially interfere with the operations of Holdings or
PerImmune, as applicable.
"Person" means any individual, copartner, association,
partnership, joint venture, limited liability company, trust,
estate or other entity or organization.
"Preferred Shares" has the meaning set forth in the
Recital hereto.
"Preferred Stock" has the meaning set forth in the
Recital hereto.
"Proprietary Right" has the meaning set forth in
Section 3.15 of the Agreement.
"Purchase Price" has the meaning set forth in Section 2
of the Agreement.
"Purchaser Indemnified Party" has the meaning set forth
in Section 8.2 of the Agreement.
"Registration Rights Agreement" means the Registration
Rights Agreement by and among Holdings and Purchaser
substantially in the form attached hereto as Exhibit B.
"Return" or "Returns" means all returns, declarations,
reports, statements, and other documents required to be filed in
respect of Taxes.
"Securities Act" means the Securities Act of 1933, as
amended.
"Subsidiary" means, with respect to any Person, (a) any
corporation of which at least a majority in interest of the
outstanding voting stock (having by the terms thereof voting
power under ordinary circumstances to elect a majority of the
directors of such corporation, irrespective of whether or not at
the time stock of any other class or classes of such corporation
shall have or might have voting power by reason of the happening
of any contingency) is at the time, directly or indirectly, owned
or controlled by such Person, by one or more Subsidiaries of such
Person, or by such Person and one or more of its Subsidiaries, or
(b) any corporate or non-corporate entity in which such Person,
one or more Subsidiaries of such Person, or such Person and one
or more Subsidiaries of such Person, directly or indirectly, at
the date of determination thereof, has an ownership interest and
100% of the revenue of which is included in the consolidated
financial reports of such Person consistent with generally
accepted accounting principles.
"Tax" or "Taxes" means any federal, state, local,
foreign and other net income, gross income, gross receipts,
sales, use, ad valorem, transfer, franchise, profits, license,
lease, service, service use, withholding, payroll, employment,
excise, severance, stamp, occupation, premium, property, windfall
profits, customs, duties or other taxes, fees, assessments, or
charges of any kind whatever, together with any interest and any
penalties, additions to tax, or additional amounts with respect
thereto.
"Third Party Notice" has the meaning set forth in
Section 8.6 of the Agreement.
2. ISSUANCE AND SALE OF THE PREFERRED SHARES. At the
Closing, Holdings will issue and sell to Purchaser, and Purchaser
will purchase and acquire from Holdings, the Preferred Shares for
an aggregate purchase price of One Million Dollars ($1,000,000)
(the "Purchase Price"). The Preferred Shares will have the
respective rights, preferences and privileges set forth in
Holdings' Certificate of Incorporation as amended by the
Certificate of Designations.
3. REPRESENTATIONS AND WARRANTIES OF HOLDINGS. Holdings
makes the following representations and warranties to Purchaser:
3.1. Organization. Holdings is a corporation duly
organized, validly existing, and in good standing under the laws
of the State of Delaware and has full power and authority to
conduct its business as currently conducted and to enter into and
perform this Agreement.
3.2. Authorization. The execution, delivery and performance
of this Agreement and the filing of the Certificate of
Designations by Holdings have been duly authorized by all
necessary corporate action on the part of Holdings. This
Agreement has been duly executed by Holdings and delivered to
Purchaser and constitutes the legal, valid and binding obligation
of Holdings, enforceable in accordance with its terms except as
its enforceability may be limited by bankruptcy, insolvency, or
other laws affecting creditors' rights generally and the exercise
of judicial discretion in accordance with general equitable
principles and as provisions for indemnification, contribution or
waiver of statutory or other rights or remedies may be limited by
public policy considerations.
3.3. Authorization of Issuance. Upon issuance by Holdings
as contemplated herein and payment by Purchaser of the
consideration therefor described herein, the Preferred Shares
will be duly authorized, validly issued, fully paid and
nonassessable. Upon completion of the transaction contemplated
hereunder, the shares of common stock, par value $0.01 per share
of Holdings (the "Common Stock") will be duly authorized and
reserved for issuance and, upon conversion in accordance with the
terms of the Preferred Stock, will be validly issued, fully paid
and nonassessable and will not be subject to any preemptive or
similar rights, except as set forth on Schedule 3.3.
3.4. No Breach. None of (i) the execution, delivery and
performance of this Agreement by Holdings, (ii) the consummation
of this Agreement and all other documents or instruments related
thereto or executed in connection therewith or in contemplation
of the transaction hereunder, or (iii) Holdings' compliance with
the terms and conditions hereof will, with or without the giving
of notice or the lapse of time or both, conflict with, breach the
terms and conditions of, constitute a default under, or violate
Holdings' Certificate of Incorporation or Bylaws or any judgment,
decree, order or Material Agreement to which Holdings is a party
or by which Holdings is legally bound, or any law, rule or
regulation applicable to Holdings.
3.5. Capitalization.
(a) The authorized capital stock of Holdings consists of 3,000
shares of Common Stock and 1,000 shares of preferred stock, of
which 100 shares have been designated Series A Convertible
Preferred Stock and 20 shares have been designated Preferred
Stock. As of the date hereof, 593.5 shares of Common Stock are
outstanding and 100 shares of preferred stock (which have been
designated Series A Convertible Preferred Stock) are outstanding.
As of the date hereof, 255 shares of Common Stock are reserved
for issuance upon exercise of outstanding options to purchase
shares of Common Stock and 100 shares of Common Stock are
reserved for issuance upon the conversion of the 100 shares of
outstanding Series A Convertible Preferred Stock. Except as set
forth on Schedule 3.5 hereto, Holdings does not have outstanding
any other stock or securities convertible or exchangeable for any
shares of its capital stock or containing any profit
participation features, nor does it have outstanding any rights,
options or warrants to subscribe for or to purchase its capital
stock or any stock or securities convertible into or exchangeable
for its capital stock or any stock appreciation rights or phantom
stock plans, nor has it reserved any shares of capital stock for
issuance upon exercise or conversion of any rights, options or
warrants to subscribe for or to purchase its capital stock or any
stock or securities convertible into or exchangeable for its
capital stock. Holdings is not a party to any agreement which
requires Holdings to repurchase or otherwise acquire or retire
any shares of its capital stock or any warrants, options or other
rights to acquire its capital stock, except as set forth on the
Schedule 3.5.
(b) Except as set forth on Schedule 3.5, there are no statutory
or contractual stockholders' preemptive rights or rights of
refusal with respect to the issuance of capital stock of
Holdings. Except as set forth on Schedule 3.5, there are no
agreements to which Holdings or any holders of the capital stock
of Holdings is a party with respect to the voting or transfer of
the capital stock of Holdings.
(c) All of the outstanding shares of Holdings' capital stock are
duly authorized, validly issued, fully paid and nonassessable
with the rights specified in Holdings' Certificate of
Incorporation, and free of liens or restrictions other than as
stated herein.
3.6. Consents and Approvals. Except as set forth on
Schedule 3.6, no consent, approval, order, authorization of, or
declaration, filing, or registration with, any Governmental
Entity is required to be obtained or made by Holdings in
connection with the execution and delivery by Holdings of this
Agreement or the consummation of the transaction contemplated
hereby, other than any such consent, approval, order,
authorization, declaration, filing or registration , the failure
of which to seek or maintain does not individually or in the
aggregate, have a Material Adverse Effect on Holdings. No
consent or approval of any person other than any Governmental
Entity is required to be obtained or made by Holdings in
connection with the execution and delivery by Holdings of this
Agreement or the consummation of the transaction contemplated
hereby.
3.7. Subsidiaries.
(a) Other than PerImmune, Inc., Holdings does not own, directly
or indirectly, capital stock or other securities of any
corporation or partnership or have any direct or indirect equity
ownership interest in any other Person.
(b) PerImmune, Inc. is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Delaware and has full power and authority to conduct its business
as currently conducted.
(c) The authorized capital stock of PerImmune, Inc. consists of
100,000 shares of Common Stock. As of the date hereof, 1,000
shares of Common Stock are outstanding. Except as set forth on
Schedule 3.7, PerImmune, Inc. does not have outstanding any other
stock or securities convertible or exchangeable for any shares of
its capital stock or containing any profit participation
features, nor does it have outstanding any rights, options or
warrants to subscribe for or to purchase its capital stock or any
stock or securities convertible into or exchangeable for its
capital stock or any stock appreciation rights or phantom stock
plans, nor has it reserved any shares of capital stock for
issuance upon exercise or conversion of any rights, options or
warrants to subscribe for or to purchase its capital stock or any
stock or securities convertible into or exchangeable for its
capital stock. PerImmune, Inc. is not a party to any agreement
which requires it to repurchase or otherwise acquire or retire
any shares of its capital stock or any warrants, options or other
rights to acquire its capital stock.
3.8. Private Offering. No form of general solicitation or
general advertising was used by Holdings or its representatives
in connection with the offer or sale of the Preferred Shares.
Assuming the accuracy of the representations and warranties of
Purchaser in Section 4.5 hereof, no registration of the Preferred
Shares pursuant to the provisions of the Securities Act or any
state securities or "blue sky" laws will be required by the
offer, sale or issuance of the Preferred Shares pursuant to this
Agreement.
3.9. Liabilities. Except as set forth on Schedule 3.9,
Holdings has no material liabilities or obligations of any nature
(whether absolute, accrued, contingent or otherwise and whether
matured or unmatured) relating to its business that are of a
nature required to be set forth on a balance sheet in accordance
with GAAP, except (i) liabilities or obligations reflected and
reserved for on the balance sheet dated December 31, 1996, (ii)
liabilities or obligations incurred since December 31, 1996 in
the ordinary course of business, (iii) liabilities which have
been disclosed herein or in the schedules hereto, or (iv)
liabilities arising under or contemplated by this Agreement.
3.10. Compliance With Laws. Except as set forth on
Schedule 3.10, (i) each of Holdings and PerImmune is in
compliance with all Applicable Laws other than violations which
do not, and will not, individually or in the aggregate, have a
Material Adverse Effect on Holdings or PerImmune, as the case may
be; (ii) each of Holdings and PerImmune has obtained and holds
all material permits, licenses, variances, exemptions, orders,
franchises, approvals and authorizations of all Governmental
Entities necessary for the lawful conduct of its business or the
lawful ownership, use and operation of its assets, except when
the failure to do so does not and will not, individually or in
the aggregate, have a Material Adverse Effect on Holdings or
PerImmune, as the case may be; and (iii) neither Holdings nor
PerImmune has received any written notice of violation of any
Applicable Law, which has not been dismissed or otherwise
disposed of, that Holdings or PerImmune (as applicable) has not
so complied other than with respect to violations of Applicable
Law which do not, and will not, individually or in the aggregate,
have a Material Adverse Effect on Holdings or PerImmune, as the
case may be.
3.11. Litigation. Except as set forth on Schedule 3.11,
(i) neither Holdings or PerImmune nor any of their respective
assets is a party or subject to any filed litigation or
arbitration proceeding; and (ii) neither Holdings nor PerImmune
has received written notice of any governmental investigation or
proceeding involving Holdings, PerImmune or any of their
respective assets, nor to their knowledge is any litigation
threatened.
3.12. Tax Matters. Except as otherwise set forth on
Schedule 3.12,
(a) There have been properly completed and filed on a timely
basis and in correct form all Returns required to be filed on or
prior to the date hereof, except for any Returns, the failure of
which to file, would not have a Material Adverse Effect on
Holdings or PerImmune, as applicable. As of the time of filing,
the foregoing Returns correctly reflected the facts regarding the
income, business, assets, operations, activities, status, or
other matters of Holdings or PerImmune, as applicable, or any
other information required to be shown thereon.
(b) With respect to all amounts in respect of Taxes imposed on
Holdings or PerImmune or for which Holdings or PerImmune is or
could be liable, whether to taxing authorities (as, for example,
under law) or to other persons or entities (as, for example,
under tax allocation agreements), with respect to all taxable
periods or portions of periods ending on or before the date
hereof, all applicable tax laws and agreements have been fully
complied with, and all such amounts required to be paid by
Holdings or PerImmune, as applicable, to taxing authorities or
others on or before the date hereof have been paid, except for
such laws and agreements, the failure with which to comply, and
such amounts the failure of which to pay, would not have a
Material Adverse Effect on Holdings or PerImmune, as applicable.
3.13. Title to Assets, Etc. Except for Permitted
Encumbrances, each of Holdings and PerImmune has good and
marketable title to or valid and subsisting leasehold interests
in all assets material to their businesses as currently
conducted and, except as set forth on Schedule 3.13, none of the
material assets is subject to any Encumbrance, except for
Encumbrances which, individually or in the aggregate, are not
substantial in amount and do not materially detract from the
value of the property or assets of Holdings or PerImmune (as
applicable) or interfere with the present use of such property or
assets (taken as a whole) and have not arisen other than in the
ordinary course of business. Each of Holdings and PerImmune has
in all material respects performed all the obligations required
to be performed by it with respect to all material assets leased
by it through the date hereof, except where the failure to
perform would not have a Material Adverse Effect on Holdings or
PerImmune (as applicable). All such leases are valid, binding
and enforceable with respect to Holdings or PerImmune (as
applicable) in accordance with their terms and are in full force
and effect; no event of default has occurred which constitutes a
default thereunder on the part of Holdings or PerImmune (as
applicable) and neither Holdings nor PerImmune has knowledge of
the occurrence of any event of default which constitutes a
default thereunder by any other party which defaults are
reasonably likely to have a Material Adverse Effect on it.
3.14. Contracts; No Defaults.
(a) Schedule 3.14 contains a listing of each Material Agreement.
True, correct and complete copies of each Material Agreement have
been delivered to or made available to Purchaser and its agents
and representatives.
(b) Except as set forth on Schedule 3.14, all of the Material
Agreements of Holdings and PerImmune are (i) in full force and
effect, (ii) represent the legal, valid and binding obligations
of Holdings or PerImmune, as applicable, and are enforceable
against Holdings or PerImmune, as applicable, in accordance with
their terms and (iii) to the best knowledge of Holdings or
PerImmune, as applicable, represent the legal, valid and binding
obligations of the other parties thereto and are enforceable
against such parties in accordance with their terms. Except as
set forth on Schedule 3.14, no condition exists or event has
occurred which, with notice or lapse of time or both, would
constitute a material default or a basis for force majeure or the
claim of excusable delay or nonperformance under such Material
Agreements.
3.15. Intellectual Property.
(a) Each of Holdings and PerImmune either owns or has valid
licenses or other rights to use all patents, copyrights,
trademarks, software, databases, data, other technical
information used in their businesses as presently conducted
("Proprietary Rights"), subject to the limitations contained in
the agreements governing the use of the same, with such
exceptions as would not result in a Material Adverse Effect on
Holdings. There are no limitations contained in the agreements of
the type described in the immediately preceding sentence which,
upon consummation of the transaction contemplated hereunder, will
alter or impair any such rights, breach any such agreement with
any third party vendor, or require payments of additional sums
thereunder, except any such limitations that would not have a
Material Adverse Effect on Holdings or PerImmune, as applicable.
Each of Holdings and PerImmune is in compliance in all material
respects with such licenses and agreements and, except as set
forth on Schedule 3.15, there are no pending or, to the best
knowledge of Holdings, threatened proceedings challenging or
questioning the validity or effectiveness of any license or
agreement relating to such property or the right of Holdings or
PerImmune to use, copy, modify or distribute the same.
(b) No person has a right, other than those set forth on
Schedule 3.15 to receive a royalty or similar payment in respect
of any material Proprietary Rights whether or not pursuant to any
contractual arrangements entered into by Holdings or PerImmune.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser
makes the following representations and warranties to Holdings:
4.1. Organization. Purchaser is a corporation duly
organized, validly existing, and in good standing under the laws
of the State of Minnesota, and has full power and authority to
conduct its business as currently conducted and to enter into and
perform this Agreement.
4.2. Authorization. The execution, delivery and performance
of this Agreement by Purchaser have been duly authorized by all
necessary corporate action on the part of Purchaser. This
Agreement has been duly executed by Purchaser and delivered to
Holdings and constitutes the legal, valid and binding obligation
of Purchaser, enforceable in accordance with its terms except as
its enforceability may be limited by bankruptcy, insolvency or
other laws affecting creditors' rights generally and the exercise
of judicial discretion in accordance with general equitable
principles.
4.3. No Breach. None of (i) the execution, delivery and
performance of this Agreement by Purchaser, (ii) the consummation
of this Agreement and all other documents or instruments related
thereto or executed in connection therewith or in contemplation
of the transaction hereunder, or (iii) Purchaser's compliance
with the terms and conditions hereof will, with or without the
giving of notice or the lapse of time or both, conflict with,
breach the terms and conditions of, constitute a default under,
or violate Purchaser's charter or Bylaws, or any judgment,
decree, order or material agreement to which Purchaser is a party
or by which Purchaser is legally bound, or any law, rule or
regulation applicable to Purchaser.
4.4. Consents and Appeals. Except as set forth on Schedule
4.4, no consent, approval, order or authorization of, or
declaration, filing or registration with, any Government Entity
is required to be obtained or made by Purchaser in connection
with the execution and delivery by Purchaser of this Agreement or
the consummation of the transaction contemplated hereby. No
consent or approval of any person other than any Governmental
Entity is required to be obtained or made by Purchaser in
connection with the execution and delivery by Purchaser of this
Agreement or the consummation of the transaction contemplated
hereby.
4.5. Sophistication, Purchase for Own Account.
(a) Sophistication, etc. Purchaser is knowledgeable,
sophisticated and experienced in business and financial matters;
is able to bear the economic risks of its investment in the
Preferred Shares and is presently able to afford the complete
loss of such investment; and has been afforded access to
information about Holdings and its financial condition, results
of operations, business, property, management and prospects
sufficient to enable it to evaluate its investment in Holdings.
Purchaser represents that it is an "accredited investor" as such
term is defined in Rule 501(a) of Regulation D under the
Securities Act of 1933, as amended (the "Securities Act").
(b) Purchase for Own Account. The Preferred Shares, and the
shares of Common Stock to be issued upon conversion of the
Preferred Shares, are being or will be acquired by Purchaser (as
applicable) for its own account and with no intention of
distributing or reselling such securities or any part thereof in
any transaction that would be in violation of the Securities Act
or the securities laws of any state, without prejudice, however,
to the rights of Purchaser at all times to sell or otherwise
dispose of all or any part of the Preferred Shares or the shares
of Common Stock issuable upon conversion of the Preferred Shares
under an effective registration statement under the Securities
Act or pursuant to an exemption from such registration available
under the Securities Act, and subject, nevertheless, to the
disposition of such Purchaser's property being at all times
within its control. If Purchaser should in the future decide to
dispose of any of the Preferred Shares or the shares of Common
Stock issuable upon conversion of the Preferred Shares, Purchaser
understands and agrees that it may do so only in compliance with
the Securities Act and applicable state securities laws, as then
in effect. Such Purchaser agrees to the imprinting, so long as
required by law, of a legend on certificates representing all of
the Preferred Shares or the shares of Common Stock to be issued
upon conversion of the Preferred Shares to the following effect:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN
APPLICABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS
OF SUCH ACT OR SUCH LAWS.
5. CLOSING.
5.1. Closing Date. The consummation of the purchase of the
Preferred Shares contemplated hereby (the "Closing") shall take
place within thirty days of the date hereof (the "Closing Date").
The Closing shall take place at the offices of PerImmune
Holdings, Inc. at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, and
shall be effective as of 12:01 a.m. on the Closing Date.
5.2. Performance at Closing. The following deliveries shall
be made at Closing:
5.2.1. By Purchaser. Purchaser shall deliver to
Holdings:
(a) To an account designated by Holdings, the Purchase
Price by wire transfer of immediately available funds; and
(b) Such other documents as may be reasonably requested by
Holdings' counsel.
5.2.2. By Holdings. Holdings shall deliver to Purchaser:
(a) A certificate evidencing the Preferred Shares, which
shall be registered in Purchaser's name; and
(b) Such other documents as may be reasonably requested by
Purchaser's counsel.
5.3. Other Documents and Acts.
(a) The parties will execute such other documents and perform
such other acts, after the Closing Date, as may be necessary for
the complete implementation and consummation of this Agreement.
(b) At Closing, Holdings and the Purchaser will execute and
deliver the Registration Rights Agreement.
5.4. Certificates; Opinions. At Closing, the Purchaser and
Holdings will deliver the certificates and opinion of counsel
specified in Sections 6.1(c) and 6.2(c)-(d), respectively, in
form and substance reasonably satisfactory to the parties'
respective counsel.
6. CONDITIONS TO CLOSING.
6.1. Conditions to Holdings' Obligations. The obligations
of Holdings to consummate the transaction contemplated hereby on
the Closing Date is subject to the satisfaction or waiver on or
prior to the Closing Date, of each of the following conditions:
(a) Consents. All Permits and waivers from Governmental
Entities and all consents, approvals, permits and waivers from
other parties necessary to permit Purchaser and Holdings to
consummate the transaction contemplated hereby, shall have been
obtained, unless the failure to obtain any such Permit or waiver
from a Governmental Entity or any other consent, approval, permit
or waiver would not have a Material Adverse Effect upon Holdings.
(b) No Governmental or Other Proceedings or Litigation. There
shall be no injunction or court order restraining consummation of
the transaction contemplated hereunder and there shall be no
pending or threatened action or proceeding by or before a court
or governmental body brought by or on behalf of any Governmental
Entity seeking to restrain or invalidate all or any portion of
the transactions contemplated hereunder, and there shall not have
been adopted any law or regulation making all or any portion of
the transaction contemplated hereunder illegal.
(c) Certificates. Purchaser will furnish Holdings with such
certificates, in form and substance satisfactory to Holdings, of
the Chief Executive Officer and the Secretary of Purchaser and
others to evidence compliance with the conditions set forth in
this Article 6.
6.2. Conditions to Purchaser's Obligations. The obligation
of Purchaser to consummate the transaction contemplated hereby on
the Closing Date is subject to the satisfaction or waiver on or
prior to the Closing Date of each of the following conditions:
(a) Consents. All Permits and waivers from Governmental
Entities and all consents, approvals, permits and waivers from
other parties necessary to permit Purchaser and Holdings to
consummate the transaction contemplated hereby, shall have been
obtained, unless the failure to obtain any such Permit or waiver
from a Governmental Entity or any other consent, approval, permit
or waiver would not have a Material Adverse Effect upon Holdings
or Purchaser.
(b) No Governmental or Other Proceedings or Litigation. There
shall be no injunction or court order restraining consummation of
the transaction contemplated hereunder and there shall be no
pending or threatened action or proceeding by or before a court
or governmental body brought by or on behalf of any Governmental
Entity seeking to restrain or invalidate all or any portion of
the transactions contemplated hereunder, and there shall not have
been adopted any law or regulation making all or any portion of
the transaction contemplated hereunder illegal.
(c) Opinion of Counsel. Holdings shall have delivered to
Purchaser the opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to Holdings,
with respect to the matters set forth on Exhibit C hereto.
(d) Certificates. Holdings shall furnish Purchaser with such
certificates, in form and substance satisfactory to Purchaser, of
the Chief Executive Officer and the Secretary of Holdings and
others to evidence compliance with the conditions set forth in
this Article 6.
(e) Certificate of Designations. Holdings shall have adopted
the Certificate of Designations, the Certificate of Designations
shall have been appropriately filed with the Secretary of State
of Delaware and Holdings shall have provided the Purchaser with
evidence of such adoption and filing.
7. ADDITIONAL AGREEMENTS OF PURCHASER AND HOLDINGS.
7.1. Prohibition on Sale; Right of First Offer.
(a) Purchaser hereby covenants and agrees that it will not sell,
transfer, convey, assign, pledge, hypothecate or otherwise
dispose of the Preferred Shares (or any interest therein) without
the prior written consent of Holdings (which consent will not be
unreasonably withheld).
(b) Notwithstanding Section 7.1(a) above, in the event that a
Qualifying IPO (as defined in the Certificate of Designations),
does not occur within nine months after the date hereof,
Purchaser may at any time thereafter offer to sell or otherwise
dispose of all or any portion of the Preferred Shares to any
Person other than Holdings in accordance with the provisions
below. If Purchaser finds a buyer ("Buyer") for the Preferred
Shares, Purchaser shall notify Holdings of its intent to sell or
otherwise dispose of the Preferred Shares to Buyer. Purchaser
shall set forth in the notice to Holdings the name of Buyer and
the terms and conditions of the proposed sale or other
disposition, and Holdings shall thereafter have fifteen days
after delivery of such notice to notify Purchaser whether or not
it will purchase the Preferred Shares on the same terms and
conditions set forth in the notice. If Holdings accepts the
offer, then Holdings shall purchase the Preferred Shares under
the same terms and conditions offered to Buyer, except that
Holdings must make the payment for the Preferred Shares within
thirty days after accepting the offer to purchase the Preferred
Shares. If Holdings declines to accept the offer or if it
accepts the offer but fails to purchase the Preferred Shares
within the requisite time frame, then Purchaser may sell the
Preferred Shares to Buyer or any other buyer at any time
thereafter so long as the terms and conditions of such sale or
other disposition are no more favorable to Buyer or other buyer
as set forth in the notice to Holdings. In the event that the
proposed purchase price to Buyer or other buyer is later adjusted
to a price lower than the price originally set forth in the
written notice to Holdings, Purchaser must provide a second
written notice to Holdings setting forth the lower price and
giving Holdings another opportunity to purchase the Offered
Shares for the lower price; if Holdings accepts the new offer to
purchase the Preferred Shares at the lower price it must pay the
purchase price within ten days after receipt of the second notice
from Purchaser.
7.2. Lock-Up Agreement; Sale After Lock-Up Period.
(a) Purchase hereby covenants and agrees that it will sign any
reasonable "lock-up" letter with terms and conditions
substantially the same as any lock-up letter that certain
officers, directors or other significant stockholders are
requested to sign restricting Purchaser's ability to sell,
transfer, convey, assign, pledge, hypothecate, or otherwise
dispose of securities of Holdings for a period of up to 180 days
after a Qualifying IPO (the "Lock-Up Period"), as may be
requested by underwriters in connection with such Qualifying IPO.
(b) After the Lock-Up Period, if any, Purchaser may sell or
otherwise dispose of Common Stock of Holdings at any time without
restriction (other than under applicable law) so long as: (i)
the net proceeds of any such sale or sales do not exceed the
Purchase Price, (ii) Purchaser provides ten days' prior written
notice to Holdings prior to any such sale, and (iii) Holdings is
given the opportunity to purchase the subject securities from
Purchaser at the prevailing market price during such ten-day
period.
(c) After the Lock-Up Period and so long as the distribution
agreement, dated June 16, 1997, between Holdings and Purchaser
remains in effect, Purchaser may also sell or otherwise dispose
of additional securities of Holdings (beyond the number of shares
allowed under Section 7.2(b)) at the prevailing market price so
long as: (i) Purchaser provides Holdings with three business
days' prior notice each time it intends to sell any additional
securities, (ii) Holdings is given the opportunity to purchase
such additional securities during said three business day period,
and (iii) following any such sale, Purchaser continues to hold at
least fifty percent (50%) of the shares of Common Stock initially
held by Purchaser upon conversion of the Preferred Stock in
connection with the Qualifying IPO. Upon termination or
expiration of said distribution agreement or in the event that
Holdings is in material default thereunder and the default is not
cured within 30 days, Purchaser may at any time sell any
additional securities of Holdings in its possession without the
restrictions set forth above.
(d) For the purpose of this Section 7.2, the term "market price"
shall mean (i) the average of the closing price of a share of
common stock on the principal exchange on which shares of common
stock are then trading, if any, during such ten-day period, or
(ii) if such common stock is not traded on an exchange but is
quoted on Nasdaq or a successor quotation system, (1) the
average, during such ten day period, of the last sales price (if
the common stock is then listed as a National Market Issue under
the Nasdaq National Market System) or (2) the average of the mean
between the closing representative bid and asked prices for each
day during such ten-day period (in all other cases) for common
stock as reported by Nasdaq or such successor quotation system,
or (iii) if the common stock is not publicly traded on an
exchange and not quoted on Nasdaq or a successor quotation
system, the average of the mean between the closing bid and asked
prices for the common stock for each day during the ten day
period.
7.3. Reservation of Shares. Until all Preferred Shares are
no longer outstanding due to conversion or otherwise, Holdings
shall at all times reserve and keep available out of its
authorized Common Stock, solely for the purpose of issue or
delivery upon conversion of the Preferred Shares as provided in
the Certificate of Designations, the maximum number of shares of
Common Stock that may be issuable or deliverable upon such
conversion. Such shares of Common Stock shall, when issued or
delivered in accordance with the provisions of the Certificate of
Designations, be duly authorized, validly issued and fully paid
and non-assessable. Holdings shall issue such Common Stock in
accordance with the provisions of the Certificate of Designations
and shall otherwise comply with the terms thereof.
7.4. Registration Rights Agreement. On the Closing Date,
Holdings and Purchaser shall enter into the Registration Rights
Agreement.
8. INDEMNIFICATION.
8.1. Survival of Representations, Etc. The representations,
warranties, covenants and agreements of the parties hereto
contained herein, shall survive the Closing, but, other than
those contained in Section 3.1, 3.3, 3.5 and 7.1 through 7.4,
shall terminate on the date twelve months from the Closing Date;
provided, however, that there shall be no such termination with
respect to any representation or warranty as to which a bona fide
claim has been asserted prior to such date.
8.2. Indemnification by Holdings. Holdings shall indemnify
and hold harmless Purchaser and its Affiliates, directors,
officers, advisors, agents and employees (the "Purchaser
Indemnified Parties") to the fullest extent lawful, from and
against any and all demands, losses, damages, penalties, claims,
liabilities, obligations, actions, causes of action, and
reasonable expenses (including without limitation, costs of
investigating, preparing or defending any such claim or action
and reasonable legal fees and expenses) (collectively, "Losses"),
arising by reason of or resulting from any breach of any
warranty, representation, covenant or agreement of Holdings
contained in this Agreement or in any certificate delivered
pursuant thereto; provided, however, that no Purchaser
Indemnified Party shall be entitled to indemnification by
Holdings hereunder with respect to any Losses arising solely from
the bad faith or gross negligence (as finally determined by a
court of competent jurisdiction) of such Purchaser Indemnified
Party or any Affiliate, director, officer, agent, or employee of
such Purchaser Indemnified Party.
8.3. Indemnification by Purchaser. Purchaser shall
indemnify and hold harmless Holdings and its Affiliates,
directors, officers, advisors, agents and employees (the
"Holdings Indemnified Parties") to the fullest extent lawful,
from and against any and all Losses arising by reason of or
resulting from any breach of any warranty, representation,
covenant or agreement of such Purchaser contained in this
Agreement or in any certificate delivered pursuant thereto,
provided, however, that no Holdings Indemnified Party shall be
entitled to indemnification by Purchaser hereunder with respect
to any Losses arising solely from the bad faith or gross
negligence (as finally determined by a court of competent
jurisdiction) of such Holdings Indemnified Party, or any
Affiliate, director, officer, agent or employee of such Holdings
Indemnified Party.
8.4. Losses. The term "Losses" as used in this Section 8 is
not limited to matters asserted by third parties, but includes
Losses incurred or sustained by an Indemnified Party in the
absence of third party claims. Payments by an Indemnified Party
of amounts for which such Indemnified Party is indemnified
hereunder shall not necessarily be a condition precedent to
recovery.
8.5. Defense of Claims. If a claim for Losses (a "Claim")
is to be made by an Indemnified Party, such Indemnified Party
shall give written notice (a "Claim Notice") to the indemnifying
party as soon as practicable after such Indemnified Party becomes
aware of any fact, condition or event which may give rise to
Losses for which indemnification may be sought under this Section
8. If any lawsuit or enforcement action is filed against any
Indemnified Party hereunder, notice thereof (a "Third Party
Notice") shall be given to the indemnifying party as promptly as
practicable (and in any event within fifteen (15) calendar days
after the service of the citation or summons). The failure of
any Indemnified Party to give timely notice hereunder shall not
affect rights to indemnification hereunder, except to the extent
that the indemnifying party demonstrates actual damage caused by
such failure. After receipt of a Third Party Notice, if the
indemnifying party shall acknowledge in writing to the
Indemnified Party that the indemnifying party shall be obligated
under the terms of its indemnity hereunder in connection with
such lawsuit or action, then the indemnifying party shall be
entitled, if it so elects, (i) to take control of the defense and
investigation of such lawsuit or action, (ii) to employ and
engage attorneys of its own choice to handle and defend the same,
at the indemnifying party's cost, risk and expense unless the
named parties to such action or proceeding include both the
indemnifying party and the Indemnified Party and the Indemnified
Party has been advised in writing by counsel that there may be
one or more legal defenses available to such Indemnified Party
that are different from or additional to those available to the
indemnifying party, and (iii) to compromise or settle such claim,
which compromise or settlement shall be made only with the
written consent of the Indemnified Party, such consent not to be
unreasonably withheld. The Indemnified Party shall cooperate in
all reasonable respects with the indemnifying party and such
attorneys in the investigation, trial and defense of such lawsuit
or action and any appeal arising therefrom; and the Indemnified
Party may, at its own cost, participate in the investigation,
trial and defense of such lawsuit or action and any appeal
arising therefrom and appoint its own counsel therefor, at its
own cost. The parties shall also cooperate with each other in
any notifications to insurers. If the indemnifying party fails
to assume the defense of such claim within fifteen (15) calendar
days after receipt of the Third Party Notice, the Indemnified
Party against which such claim has been asserted will (upon
delivering notice to such effect to the indemnifying party) have
the right to undertake the defense, compromise or settlement of
such claim and the indemnifying party shall have the right to
participate therein at its own cost; provided, however, that such
claim shall not be compromised or settled without the written
consent of the indemnifying party, which consent shall not be
unreasonably withheld. In the event the Indemnified Party
assumes the defense of the claim the Indemnified Party will keep
the indemnifying party reasonably informed of the progress of any
such defense, compromise or settlement. Notwithstanding the
foregoing, the indemnifying party shall not be liable for the
reasonable fees and expenses of more than one separate firm of
attorneys at any time for any and all Indemnified Parties (which
firm shall be designated in writing by such Indemnified Party or
Parties) in connection with any one such action or proceeding
arising out of the same general allegations or circumstances.
8.6. Tax Treatment of Indemnity. The parties agree that any
indemnification payments made pursuant to this Agreement shall be
treated for Tax purposes as an adjustment to the consideration
for the purchase of the Preferred Shares, unless otherwise
required by applicable law, in which event indemnification
payments shall be made in an amount sufficient to indemnify the
party on a net after-Tax basis.
9. GENERAL PROVISIONS.
9.1. Expenses. Except as otherwise provided herein, all
expenses involved in the preparation and consummation of this
Agreement shall be borne by the party incurring the same whether
or not the transaction contemplated hereby is consummated.
9.2. Notices. All notices, requests, demands, and other
communications pertaining to this Agreement shall be in writing
and shall be deemed duly given when delivered personally (which
shall include delivery by Federal Express or other nationally
recognized, reputable overnight courier service that issues a
receipt or other confirmation of delivery) to the party for whom
such communication is intended, or three (3) business days after
the date mailed by certified or registered U.S. mail, return
receipt requested, postage prepaid, addressed as follows:
(a) If to Purchaser:
Mentor Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
(b) If to Holdings:
PerImmune, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Ph.D.
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Any party may change its address for notices by notice to the
other given pursuant to this Section 9.
9.3. Brokers. Each party represents and warrants to the
other that no agent, broker, investment banker, or other person
or firm acting on behalf of such party or any of its affiliates
or under the authority of any of them is or will be entitled to
any broker's or finder's fee or any other commission or similar
fee in connection with the transaction contemplated hereby, other
than Craigie Incorporated, whose fees will be solely the
responsibility of Holdings.
9.4. Waiver. Unless otherwise specifically agreed in
writing to the contrary: (i) the failure of either party at any
time to require performance by the other of any provision of this
Agreement shall not affect such party's right thereafter to
enforce the same; (ii) no waiver by either party of any default
by any other shall be valid unless in writing and acknowledged by
an authorized representative of the non-defaulting party, and no
such waiver shall be taken or held to be a waiver by such party
of any other preceding or subsequent default; and (iii) no
extension of time granted by either party for the performance of
any obligation or act by any other party shall be deemed to be an
extension of time for the performance of any other obligation or
act hereunder.
9.5. Entire Agreement. This Agreement, the exhibits and
schedules hereto (which are incorporated by reference herein)
constitute the entire agreement between the parties with respect
to the subject matter hereof and referenced herein, supersede and
terminate any prior agreements between the parties (written or
oral). This Agreement may not be altered or amended except by an
instrument in writing signed by the party against whom
enforcement of any such change is sought.
9.6. Counterparts. This Agreement may be signed in any
number of counterparts with the same effect as if the signatures
on each such counterpart were on the same instrument.
9.7. Construction. The Section headings of this Agreement
are for convenience only and in no way modify, interpret or
construe the meaning of specific provisions of the Agreement.
9.8. Severability. If any one or more of the provisions
contained in this Agreement should be found invalid, illegal or
unenforceable in any respect, the validity, legality, and
enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby. Any illegal or
unenforceable term shall be deemed to be void and of no force and
effect only to the minimum extent necessary to bring such term
within the provisions of applicable law and such term, as so
modified, and the remaining provisions of this Agreement shall
then be fully enforceable.
9.9. Choice of Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Maryland
without regard to the choice of law rules utilized in that
jurisdiction.
IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be executed by a respective duly authorized officer
as of the date first written above.
PERIMMUNE HOLDINGS, INC.
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
MENTOR CORPORATION
By: /s/▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman, CEO
SCHEDULES AND EXHIBITS
The Registrant will make the following schedules and
exhibits available upon request:
Schedule 3.3 Pre-emptive Rights
Schedule 3.5 Capitalization
Schedule 3.6 Consent and Approvals
Schedule 3.7 Subsidiaries
Schedule 3.9 Liabilities
Schedule 3.10 Non-compliance with Laws
Schedule 3.11 Litigation
Schedule 3.12 Tax Matters
Schedule 3.13 Title to Assets
Schedule 3.14 Contracts
Schedule 3.15 Intellectual Property
Exhibit A Form of Certificate of
Designations, Preferences and
Relative, Participating
Optional and other Special
Rights and Qualifications,
Limitations and Restrictions
Thereof of Series B
Convertible Preferred Stock of
Perimmune Holdings, Inc.
Exhibit B Form of Registration Rights
Agreement.
