EXHIBIT 10.25
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT dated as of November 10, 1998, between
MEDI-JECT CORPORATION, a Minnesota corporation (the "Company"), and ELAN
INTERNATIONAL SERVICES, LTD., a Bermuda corporation ("EIS").
R E C I T A L S :
A. The Company desires to issue and sell to EIS, and EIS desires to
purchase from the Company, on the Closing Date (as defined below), 1,000 shares
of the Company's Series A Convertible Preferred Stock (the "Series A Preferred
Stock") and the Company's Warrant for the purchase of shares of Common Stock of
the Company (the "Warrant") which shall be issued to EIS for aggregate
consideration of US$1,000,000 (one million United States dollars), to be paid by
EIS to the Company on the Closing Date.
B. The Company and Elan Corporation have entered into a License and
Development Agreement of even date herewith (the "License Agreement"), for the
purpose of researching, developing and commercializing the Auto-Injector
Technology (as that term is defined therein). Capitalized terms used herein
which are not otherwise defined shall have the same meanings as ascribed to them
in the License Agreement. The parties intend, as provided herein, that the
proceeds of the issuance of Series A Preferred Stock shall be applied by the
Company solely for the payment of the license fee by the Company for the Auto-
Injector Technology.
A G R E E M E N T :
NOW THEREFORE, the parties agree as follows:
SECTION 1. Closing. (a) Time and Place. The closing of the
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transactions contemplated hereby (the "Closing") shall occur simultaneous with
the execution of this Agreement on the date hereof (the "Closing Date"), at the
offices of counsel to EIS or such other place as the parties may agree.
(b) Issuance of the Series A Preferred Stock. At the Closing,
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the Company shall issue and sell to EIS, and EIS shall purchase from the
Company, 1,000 shares of Series A Preferred Stock, and a warrant to purchase
280,000 shares of Common Stock of the Company for an aggregate purchase price of
US $1,000,000 (one million United States dollars).
(c) Delivery. At the Closing, EIS shall pay the purchase price
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for the Series A Preferred Stock by wire transfer of immediately available funds
in accordance with the Company's instructions, and the parties hereto shall
execute and deliver to each other, as applicable: (i) a certificate or
certificates for the shares of the Series A Preferred Stock (against payment of
the purchase price therefor); (ii) certificates as to the incumbency of the
officers executing this Agreement and each of the other documents or instruments
executed in connection herewith; (iii) the Warrant for the issuance of shares of
Common Stock to EIS and (iii) each of the other documents or instruments
executed in connection herewith (together, with this Agreement, the "Transaction
Documents"). In addition, at the Closing, the Company shall cause to be
delivered to EIS an opinion of counsel, from Xxxxxx & Xxxxxxx LLP, in the form
and substance reasonable acceptable to EIS. As a condition precedent for the
transactions contemplated herein, prior to or simultaneous with the Closing, the
Company and Elan Corporation shall have executed and delivered the to each other
the License Agreement.
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(d) Exemption from Registration. The Series A Preferred Stock
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will be issued under an exemption or exemptions from registration under the
Securities Act of 1933, as amended; accordingly, the certificates evidencing the
Series A Preferred Stock shall, upon issuance, contain the following legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND MAY NOT UNDER ANY CIRCUMSTANCES BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933 AND ANY
APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY
TO THE CORPORATION THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR
APPLICABLE STATE SECURITIES LAWS. THE TRANSFER OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE IS ALSO SUBJECT TO THE RESTRICTIONS
CONTAINED IN THAT CERTAIN SECURITIES PURCHASE AGREEMENT, DATED
NOVEMBER 10, 1998, BY AND BETWEEN MEDI-JECT CORPORATION AND ELAN
INTERNATIONAL SERVICES, LTD.
SECTION 2. Representations and Warranties of the Company. Except as
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set forth in the Schedule of Exceptions attached hereto as Exhibit 1, the
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Company hereby represents to EIS on behalf of itself and, as applicable, its
subsidiaries and affiliates:
(a) Organization and Qualification. The Company is duly
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organized, validly existing and in good standing under the laws of the State of
Minnesota and has all requisite corporate power and authority to own and lease
its properties, to carry on its business as presently conducted and as proposed
to be conducted and to consummate the transactions contemplated hereby. The
Company is qualified and in good standing to do business in each jurisdiction in
which the nature of the business conducted or the property owned by it requires
such qualification, except where the failure to so qualify would not have a
Material Adverse Effect (as defined below) on the business, prospects,
properties or condition (financial or otherwise) of the Company. Annexed hereto
as Exhibit A is true and complete copy of the Company's Articles of
Incorporation, as amended, as of the date hereof, together with all certificates
of designations related thereto. Annexed hereto as Exhibit B is a true and
complete copy of the Company's bylaws, as amended, as of the date hereof.
Annexed hereto as Exhibit C is a true and complete copy of the Certificate of
Designations related to the Series A Preferred Stock (the "Certificate of
Designations") which the Company represents and warrant contains all of the
designations, rights and preferences of the Series A Preferred Stock and has
been filed and is effective as of the date hereof.
(b) Capitalization. (i) Immediately prior to the Closing of the
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transactions contemplated hereby: the authorized capital stock of the Company
consisted of 17,000,000 shares of Common Stock and 1,000,000 shares of Preferred
Stock; of the authorized Common Stock, 7,123,762 shares are issued and
outstanding; of the authorized Preferred Stock, 10,000 are designated Series A
Preferred Stock. and no other shares of Preferred Stock have been designated;
and as of the date hereof, there are no shares of Preferred Stock issued and
outstanding. Simultaneously herewith, the Company is issuing 1,000 shares of
Series A Preferred Stock to EIS.
(ii) As of the Closing Date: the Company has reserved (A)
1,415,101 shares of Common Stock for issuance upon exercise of outstanding
option grants to employees, directors and consultants of the Company, (B)
429,949 shares of Common Stock for future option grants to employees, directors
and consultants of the Company, (C) 2,787,893 shares of Common Stock for
issuance upon exercise of outstanding warrants, including 280,000 shares of
Common Stock issuable upon exercise of the Warrant, dated of
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even date herewith, issued by the Company to EIS and (D) 2,000,000 shares of
Common Stock for issuance upon conversion of the Series A Preferred Stock. In
addition, the Company has reserved (E) 9,000 shares of Series A Preferred Stock
for issuance as dividend distributions in the event the Company does not have
sufficiently legally available funds for payment of a cash distribution on a
dividend payment date. Other than the foregoing, there are no preemptive rights,
voting agreements, rights of first offer or refusal, options, warrants or other
conversion privileges or rights presently outstanding to purchase, subscribe for
or otherwise acquire, or any securities into or exercisable for or into, any of
the Company's authorized but unissued capital stock. Except as otherwise
provided herein, there are no agreements to register any of the Company's
outstanding securities under the U.S. federal securities laws.
(iii) All of the outstanding shares of capital stock of the
Company have been issued in accordance with applicable state and federal laws
and regulations governing the sale and purchase of securities, all of such
shares have been duly and validly issued and are fully paid and non-assessable,
and none of such shares carries preemptive or similar rights.
(c) Authorization of Transaction Documents. The Company has full
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corporate power and authority to execute and deliver this Agreement, and each of
the other Transaction Documents, and to perform its obligations hereunder and
thereunder. The execution, delivery and performance by the Company of the
Transaction Documents (including the issuance and sale of the Series A Preferred
Stock) have been authorized by all requisite corporate actions by the Company;
and the Transaction Documents (including the issuance and sale of the Series A
Preferred Stock) have been duly executed and delivered by the Company, are the
valid and binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting the enforcement of creditors' rights generally, and except
as enforcement of rights to indemnity and contribution hereunder and thereunder
may be limited by U.S. federal or state securities laws.
(d) No Conflicts. The execution, delivery and performance by the
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Company of the Transaction Documents (including the issuance and sale of the
Series A Preferred Stock), and compliance with the provisions thereof by the
Company, will not (i) violate any provision of applicable law, statute, rule or
regulation applicable to the Company or, to the Company's knowledge, any ruling,
writ, injunction, order, judgment or decree of any court, arbitrator,
administrative agency or other governmental body applicable to the Company or
any of their respective properties or assets or (ii) conflict with or result in
a breach of any of the terms, conditions or provisions of, or constitute (with
notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under, or result in the creation of,
any Encumbrance (as defined below) upon any of the properties or assets of the
Company under its Articles of Incorporation, as amended and restated, any other
or similar certificates of designations or Bylaws, or any material contract to
which the Company is a party, except where such violation, conflict or breach
would not, individually or in the aggregate, have a material adverse effect on
the business properties, condition (financial or otherwise), operations or
prospects of the Company ("Material Adverse Effect"). As used herein,
"Encumbrance" shall mean any lien, charge, encumbrance,
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equity, claim, option, proxy, pledge, security interest, or other similar right
of any nature, except for such conflicts, breaches or defaults that would not,
individually or in the aggregate, have a Material Adverse Effect.
(e) Approvals. No material permit, authorization, consent or
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approval of or by, or any notification of or filing with, any person or entity
(governmental or otherwise) is required in connection with the execution,
delivery or performance of the Transaction Documents (including the issuance and
sale of the Securities or the filing of the Certificate of Designations) by the
Company except for the filing of a Form D with the Securities and Exchange
Commission and any required notices or filings and with the Nasdaq Stock Market.
(f) Filings and Financial Statements. (i) The Company has filed
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its annual report on Form 10-K for the year ended December 31, 1997, its related
proxy materials and its quarterly reports on Form 10-Q for the quarters ended
March 31 and June 30, 1998 (collectively, including all exhibits and schedules
required to be filed in connection therewith, the "SEC Filings") with the
Securities and Exchange Commission, the Nasdaq Stock Market and any other
required person or entity (governmental or otherwise) in a timely manner and as
otherwise required by applicable laws and regulations, including the federal
securities acts. The audited financial statements of the Company for the fiscal
year ended December 31, 1997 included in the SEC Filings (the "Audited Financial
Statements"), and the Company's unaudited balance sheet for the period ending
June 30, 1998, together with the accompanying statements of operations and cash
flows including the notes thereto (the "June Financial Statements";
collectively, with the Audited Financial Statements, the "Financial Statements")
are accurate and complete in all material respects and fairly present the
financial condition of the Company as at the dates thereof and have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods indicated (except as may be otherwise
indicated in such financial statements or the notes thereto), subject, in the
case of the June Financial Statements, to normal year-end audit adjustments
(which shall not be material in the aggregate) and the absence of footnote
disclosures.
(g) Taxes and Plans. (i) The Company has filed in a timely
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manner all material federal, state, local and foreign tax returns, reports and
filings (collectively, "Returns"), including income, franchise, property and
other taxes, and has paid or accrued the appropriate amounts reflected on such
Returns. None of the Returns have been audited or challenged, nor has the
Company received any notice of challenge nor have any of the amounts or other
data included in the Returns been challenged or reviewed by any governmental
authority.
(ii) The Company does not maintain, sponsor, is not required
to make contributions to or otherwise have any liability with respect to any
pension, profit sharing, thrift or other retirement plan, employee stock
ownership plan, deferred compensation, stock ownership, stock purchase,
performance share, bonus or other incentive plan, severance plan, health or
group insurance plan, welfare plan, or other similar plan, agreement, policy or
understanding (whether written or oral), whether or not such plan is intended to
be qualified under Section 401(a) of the Code, within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended, which
plan covers
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any employee or former employee of the Company.
(h) Absence of Changes. Since December 31, 1997, there has not
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been (a) any Material Adverse Effect on the Company; (b) any damage, destruction
or loss, whether or not covered by insurance, resulting in a Material Adverse
Effect on the Company; (c) any declaration, setting aside or payment of any
dividend or other distribution or payment (whether in cash, stock or property)
in respect of the capital stock of the Company, or any redemption or other
acquisition of such stock by the Company (other than the repurchase of unvested
shares of Common Stock held by employees of or consultants to the Company upon
termination of employment or consultancy in accordance with the provisions of
the Company's equity incentive plan and agreements); (d) any disposal or lapse
of any trade secret, invention, patent, patent application or continuation (in
whole or in part), trademark, trademark registration, service xxxx, service xxxx
registration, copyright, copyright registration, or any application therefor or
filing in respect thereof (collectively, and together with any and all know-how,
trade secrets and proprietary business or technology information, the
"Intellectual Property"); (e) loss of the services of any of the key officers or
key employees of the Company; (f) any incurrence of or entry into any liability
or Encumbrance, commitment or transaction, including without limitation, any
borrowing (or assumption or guarantee thereof) or guarantee of a third party's
obligations, or capital expenditure (or lease in the nature of a conditional
purchase of capital equipment) in excess of $100,000; or (g) any material change
by the Company in accounting methods or principles or (h) any change in the
assets, liabilities, condition (financial or otherwise), results or operations
or prospects of the Company from those reflected on the Company's financial
statements as of or for the year ended December 31, 1997 (the "Financial
Statements"), as furnished to EIS in writing, except changes in the ordinary
course of business that have not, individually or in the aggregate, had a
Material Adverse Effect or changes reflected in the SEC Filings.
(i) No Liabilities. Except as set forth in the SEC Filings,
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since June 30, 1998 the Company has not incurred or suffered any liability or
obligation, matured or unmatured, contingent or otherwise, except in the
ordinary course of business and that have not, individually or in the aggregate,
had a Material Adverse Effect.
(j) Properties and Assets; Etc. (a) The Company does not own any
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interest in real property, and (b) the Company owns or has the right to use
pursuant to license, sub-license, agreement or permission all Intellectual
Property necessary for the operation of its business as presently conducted,
including patents, patent applications, continuations, continuations-in-part,
extensions, trademarks and trademark applications, know-how and other
Intellectual Property, as reflected in the Financial Statements, subject in each
case, to no Encumbrances required to be disclosed in the Financial Statements
except as set forth therein. All of the Company's Intellectual Property which is
owned by the Company is owned free and clear of all liens, claims and
encumbrances; none of the Company's rights in or use of such Intellectual
Property has been or is currently being threatened to be, challenged; to the
Company's knowledge, without making any inquiry other than those, if any,
routinely conducted by the Company in the ordinary course of business, no
current or currently planned product based upon the Company's Intellectual
Property would infringe any patent, trademark, service xxxx, trade name or
copyright of any other person or entity issued or pending on the Closing Date if
the Company were to distribute, sell, market or manufacture
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such products; and the Company is not aware, after due inquiry, of any actual or
threatened claim by any person or entity alleging any infringement by the
Company of a patent, trademark, service xxxx, trade name or copyright possessed
by such person or entity. None of such Intellectual Property, whether foreign or
domestic, has been canceled, abandoned, or otherwise terminated. All of the
Company's patent applications, trademark applications, service xxxx
applications, trade name applications and copyright applications have been duly
filed with the appropriate regulatory authorities.
(k) The Company has and maintains fire and casualty insurance
policies, sufficient in amount, subject to reasonable deductibles, to allow it
to replace any of its properties that may become damaged or destroyed.
(l) The Company, its business and properties and assets are in
compliance, in all material respects, with all applicable laws and regulations,
including without limitation, those relating to (a) health, safety and employee
relations, (b) environmental matters, including the discharge of any hazardous
or potentially hazardous materials into the environment, and (c) the
development, commercialization and sale of pharmaceutical and biotechnology
products, including all applicable regulations of the U.S. Food and Drug
Administration and comparable, applicable foreign regulatory authorities.
(m) Legal Proceedings, etc. Except as set forth in the Company's
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SEC Filings, there is no legal, administrative, arbitration or other action or
proceeding or governmental investigation pending or, to the Company's knowledge,
threatened against the Company.
(n) Disclosure. The representations and warranties set forth
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herein do not contain any untrue statement of a material fact or omit to state
any material fact necessary to make the statements contained herein and therein
not misleading, in light of the circumstances under which they were made.
(o) Brokers or Finders. The Company has not retained any
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investment banker, broker or finder in connection with the transactions
contemplated by the Transaction Documents; and no person or entity is entitled
to any fee or compensation in respect thereof.
SECTION 3. Representations, Warranties and Covenants of EIS. EIS
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hereby represents, warrants and covenants to the Company as follows:
(a) Organization. EIS is a corporation duly organized, validly
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existing and in good standing under the laws of Bermuda and has all requisite
corporate power and authority to own and lease its properties, to carry on its
business as presently conducted and as proposed to be conducted and to
consummate the transactions contemplated hereby. EIS is qualified and in good
standing to do business in each jurisdiction in which the nature of the business
conducted or the property owned by it requires such qualification, except where
the failure to so qualify would not reasonably be expected to have a material
adverse effect on the business or condition (financial or otherwise) of EIS.
(b) Authorization of Agreement. EIS has full legal right, power
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and authority to enter into this Agreement and purchase and accept the Series A
Preferred Stock, and perform its obligations hereunder, which have been duly
authorized by all requisite corporate action. This Agreement has been duly
executed and delivered by EIS and is the valid and binding obligations of EIS,
enforceable against EIS in accordance with its terms.
(c) No Conflicts. The execution, delivery and performance by EIS
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of this Agreement, the purchase and acceptance of the Series A Preferred Stock
and compliance with provisions hereof by EIS, will not (i) violate any
provisions of applicable law, statute, rule or regulation or, to the best of
EIS's knowledge, any ruling, injunction, order, judgment or decree of any court,
arbitration, administrative agency of other governmental body applicable to EIS
of any of its properties or assets or (ii) conflict with or result in any breach
of any of the terms, conditions or provisions of, or constitute (with notice or
lapse of time to both) a default (or give rise to any right of termination,
cancellation or acceleration) under, or result in the creation of any
Encumbrance upon any of the properties or assets of EIS under the organizational
documents of EIS or any material contract to which EIS is party, except where
such violation conflict or breach would not, individually or in the aggregate,
have a material adverse effect on EIS.
(d) Approvals. No permit, authorization, consents or approval of
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or by, or any notification of or filing with, any person or entity (governmental
or otherwise) is required in connection with the execution, delivery or
performance of this Agreement by EIS.
(e) Investment Representations.
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(i) EIS has not been formed solely for the purpose of
entering into the transactions described herein and is acquiring the
Securities for investment for its own account, not as a nominee or agent,
and not with the view to, or for sale in connection with, any distribution
of any part thereof.
(ii) EIS understands that the offer and sale of the Series
A Preferred Stock has not been, and will not be, registered under the
Securities Act of 1933 as amended, (the "Securities Act"), by reason of a
specific exemption from the Registration provisions of the Securities Act
that depends, among other things, the bona fide nature of EIS's investment
intent and the accuracy of EIS's representations as expressed herein and in
response to the Company's inquiries. EIS further understands that no public
market now exists for the Series A Preferred Stock, and the Company has
made no assurances that such a public market will ever exist for the Series
A Preferred Stock.
(iii) EIS has had the opportunity to ask questions of, and
receive answers from, representatives of the Company concerning the Company
and the terms and conditions of this transaction. All questions raised by
EIS have been answered to its satisfaction, and all information requested
by EIS has been supplied.
(iv) EIS's decision to enter into the transactions
contemplated hereby is based on its own evaluation of the risk and merits
of the purchase and the Company's proposed business activities. EIS
acknowledges that the Series A Preferred Stock or the Common Stock issuable
upon conversion thereof must
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be held indefinitely unless subsequently registered under the Securities
Act or an exemption from such registration is available. EIS is aware of
the provisions of Rule 144 promulgated under the Securities Act, which may
permit resale of the Series A Preferred Stock, subject to the satisfaction
of certain conditions.
(v) Nothing contained in this Section 3(e) shall limit any
of the Company's representations or warranties or limit EIS's recourse in
respect thereof.
(vi) EIS has not retained any investment banker, broker or
finder in connection with the transactions contemplated by the Transaction
Documents; and no person or entity is entitled to any fee or compensation
in respect thereof.
(vii) EIS has a net worth in excess of US $5,000,000 (five
million United States dollars).
SECTION 4. Covenants.
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(a) Fully-Diluted Stock Ownership. (i) Notwithstanding any other
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provision of this Agreement, in the event that EIS shall have determined that at
any time it (together with its Affiliates, if applicable) holds or has the right
to receive or the obligation to accept from the Company Common Stock (or
securities or rights, options or warrants exercisable, exchangeable or for or
into Common Stock) representing in the aggregate in excess of 19.9% of the
Company's outstanding Common Stock (assuming any such exercise, exchange or
conversion, but not the exercise, exchange or conversion of any other similar
securities), EIS shall have the right, in its sole discretion, rather than
acquiring such securities from the Company, to exchange such number of
securities as are necessary to bring its holdings to below 19.9% of the voting
securities of the Company, for non-voting, no liquidation preference equity
securities of the Company (which shall be reasonably satisfactory to the Company
and EIS), which equity securities shall be entitled to all of the other rights
and benefits of the Common Stock. In the event that EIS shall undertake to
exercise such right, the Company shall use its good faith best efforts to obtain
the approval of the terms of such equity securities by its shareholders if so
required by law, and EIS shall retain the additional right to exchange such new
class of equity security for Common Stock, in its discretion. In the event the
Company has exercised its rights under Section 4(e) hereof and such approval is
required but not obtained, the Company's rights under such Section 4(e) shall be
deemed null and void.
(ii) Notwithstanding anything contained herein to the
contrary, the Company shall not issue a number of shares of Common Stock upon
conversion of the Series A Preferred Stock in excess of 20% of the number of
shares of Common Stock outstanding on the date the Series A Preferred Stock was
first issued (1,424,752 shares) unless and until the Company shall have received
the approval of its shareholders of such issuance as and to the extent required
by Nasdaq Rule 4460(i)(1)(d)(ii). At any time that the Series A Preferred Stock
is convertible pursuant to its terms and the number of shares that would be
issuable upon conversion of the Series A Preferred Stock shall exceed such
number of shares, the Company, upon the request of a holder of Series A
Preferred Shares, shall submit the approval of such issuance to its shareholders
for approval to the extent required by Nasdaq Rule 4460(i)(1)(d)(ii).
(b) Use of Proceeds. The Company shall use the proceeds of the
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sale of the Series A Preferred Stock solely for the purpose of paying the
license fee to Elan Corporation pursuant to the License and Development
Agreement, dated as of the date hereof.
(c) Registration. The Company covenants and agrees that all
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shares of Common Stock issuable upon conversion of the Series A Preferred Stock,
whether converted by the holder or by the Company, shall at the time of issuance
be registered under the Securities Act or shall be freely transferable without
volume restriction by EIS pursuant to an exemption from the registration
requirements of the Securities Act. The Company shall bear all expenses with
respect to any such registration.
(d) Further Assurances. From and after the date hereof, each of
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the parties hereto agrees to do or cause to be done such further acts and things
and deliver or cause to be delivered to each other such additional assignments,
agreements, powers and instruments, as each may reasonably require or deem
advisable to carry into effect the purposes of the Transaction Documents or to
better to assure and confirm unto each other their respective rights, powers and
remedies hereunder and thereunder.
SECTION 5. Entire Agreement. This Agreement and the other
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Transaction Documents contain the entire understanding of the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings among the parties with respect thereto.
SECTION 6. Survival and Indemnification.
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(a) Survival Period. The representations and warranties of the
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Company contained herein shall survive until the redemption of all shares of the
Series A Preferred Stock or their conversion into shares of Common Stock (the
"Survival Period").
(b) Indemnification. In addition to all rights and remedies
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available to the parties hereunder at law or in equity, the Company shall
indemnify EIS, and its respective affiliates, and EIS' and its respective
affiliates' stockholders, officers, directors, employees, agents,
representatives, successors and assigns (collectively, the "Indemnified
Person"), and save and hold EIS harmless from and against and pay on behalf of
or reimburse each such Indemnified Person, as and when incurred, for any and all
losses, cost, or damages, arising out of claims by or on behalf of such
Indemnified Person or any third party, (collectively, "Losses"), that any such
Indemnified Person may suffer, sustain incur or become subject to, as a result
of, in connection with or relating to:
(i) any misrepresentation or breach of warranty on the part
of the Company under Section 2 of this Agreement; or
(ii) any breach or failure to perform of any covenant or
agreement on the part of the Company under Section 4 of this Agreement;
(c) Investigation. All indemnification rights hereunder shall
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survive the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby to the extent provided in Section 6(b) above,
irrespective of any investigation, inquiry or examination made for or on behalf
of, or any knowledge of the Indemnified Person or the acceptance of any
certificate or opinion.
(d) Contribution. If the indemnity provided for the this Section
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6 shall be, in whole or in part, unavailable to any Indemnified Person, due to
Section 6(b) being declared unenforceable by a court of competent jurisdiction
based upon reasons of public
9
policy, so that Section 6(b) shall be insufficient to hold each such Indemnified
Person harmless from Losses which would otherwise be indemnified hereunder, then
the Indemnifying Party and the Indemnified Person shall each contribute to the
amount paid or payable for such Loss in such proportion as is appropriate to
reflect not only the relative benefits received by the Indemnifying Party on the
one hand and the Indemnified Person on the other, but also the relative fault of
the Indemnifying Party and be in addition to any liability that the Indemnifying
Party may otherwise have. The indemnity, contribution and expense reimbursement
obligations that the Indemnifying Party has under this Section 6 shall survive
the expiration of the Transaction Documents. The parties hereto further agree
that the indemnification and reimbursement commitments set forth in this
Agreement shall apply whether or not the Indemnified Person is a formal part to
any such lawsuit, claims or other proceedings.
(e) Limitation. No claim shall be brought by an Indemnified
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Person in respect of any misrepresentation or breach of warranty under this
Agreement after the Survival Period unless written notice thereof shall have
been provided prior to the expiration of the Survival Period, in which case such
surviving claims shall be limited to those in such notice; and any claim for
nonfulfillment, default or breach of any covenant shall be brought within one
year of the date of that such Indemnified Person became aware or should have
become aware of the nonfulfillment, default or breach, unless written notice
thereof shall have been provided prior to such one -year period, in which case
such surviving claims shall be limited to those in such notice. Except as set
forth in the previous sentence and in Section 6(c) above, this Section 6 is not
intended to limit the rights or remedies otherwise available to any party hereto
with respect to this Agreement or the Transaction Documents.
SECTION 7. Notices. All notices, demands and requests of any kind to
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be delivered to any party in connection with this Agreement shall be in writing
and shall be deemed to have been duly given if personally delivered or if sent
by nationally-recognized overnight courier or by registered or certified first-
class mail, return receipt requested and postage prepaid, or by facsimile
transmission, addressed as follows:
(i) if to the Company, to:
Medi-Ject Corporation
000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Chief Executive Officer
with a copy to:
Xxxxxx & Xxxxxxx LLP
0000 Xxxxx Xxxx Xxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Facsimile: (000)000-0000
Attention: Xxxxx Xxxxxx, Esq.
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(ii) if to EIS, to:
Elan International Services, Ltd.
000 Xx. Xxxxx Xxxxx
Xxxxxx, Xxxxxx Xxxxxx
Xxxxxxx, XX00
Facsimile: (000) 000-0000
Attention: Director
with a copy to:
Xxxxx & Xxxxxx LLP
1350 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxxx Xxxxxx
or to such other address as the party to whom notice is to be given may have
furnished to the other party hereto in writing in accordance with provisions of
this Section 7. Any such notice or communication shall be deemed to have been
received (i) in the case of personal delivery or facsimile transmission, on the
date of such delivery, (ii) in the case of nationally-recognized overnight
courier, on the second business day after the date when sent and (iii) in the
case of mailing, on the fifth business day following that day on which the piece
of mail containing such communication is posted. Notice hereunder may be given
on behalf of the parties by their respective attorneys.
SECTION 8. Amendments. This Agreement may not be modified or
----------
amended, or any of the provisions hereof waived, except by written agreement of
the Company and EIS.
SECTION 9. Withholding. The Company agrees to pay to any holder of
-----------
the Series A Preferred Stock that is not a U.S. Person such additional amounts
as are necessary in order that the net payment of any amount due with respect to
any dividend payment being made to such person with respect thereto, after
deduction for or withholding in respect of any U.S. taxes imposed with respect
to any such dividend payment (or, in lieu thereof, payment of such U.S. taxes by
such non-U.S. person), will not be less than the amount which would otherwise be
distributed to such non-U.S. person, absent such deduction, withholding or
payment.
SECTION 10. Counterparts and Facsimile. The Transaction Documents
--------------------------
may be executed in any number of counterparts, and each such counterpart hereof
shall be deemed to be an original instrument, but all such counterparts together
shall constitute one agreement. Each of the Transaction Documents may be signed
and delivered to the other party by facsimile transmission; such transmission
shall be deemed a valid signature.
SECTION 11. Headings. The section and paragraph headings contained
--------
in this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of the Agreement.
SECTION 12. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the internal laws of the State of New York, without
giving
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effect to principles of conflicts of laws.
SECTION 13. Expenses. Each of the parties shall be responsible for
--------
its own costs and expenses incurred in connection with the transactions
contemplated hereby and by the other Transaction Documents.
SECTION 14. Public Releases; Etc. The parties shall reasonably agree
--------------------
in writing upon the contents of any press release or releases and other public
disclosure in respect of the transactions contemplated hereby, and no such press
release or disclosure shall be made except as so agreed, except as may otherwise
be required by applicable law or judicial or administrative process or pursuant
to arrangements with financial, accounting or legal advisors.
SECTION 15. Schedules, etc. All statements contained in any exhibit
--------------
or schedule delivered by or on behalf of the parties hereto, or in connection
with the transactions contemplated hereby, are an integral part of this
Agreement and shall be deemed representations and warranties hereunder.
SECTION 16. Assignments. This Agreement and all of the provisions
-----------
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns. EIS may transfer and assign
its rights hereunder and to the Shares to any of its Affiliates without the
prior consent of the Company. EIS may not transfer or assign its rights
hereunder and to the Series A Preferred Stock to any other party without the
prior consent of the Company, which consent shall not be unreasonably withheld
or delayed.
[Signature page follows]
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IN WITNESS WHEREOF, each of the undersigned has duly executed this
Securities Purchase Agreement as of the date first written above.
MEDI-JECT CORPORATION.
By: ______________________________________
Xxxxx Pass
President and Chief Executive Officer
ELAN INTERNATIONAL SERVICES, LTD.
By: ______________________________________
Xxxxx Xxxxxx, President
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