EXHIBIT 2
INVESTMENT AGREEMENT
BY
AND BETWEEN
MALLINCKRODT, INC.
AND
MOLECULAR BIOSYSTEMS, INC.
DATED AS OF DECEMBER 7, 1988
TABLE OF CONTENTS
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Page
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ARTICLE 1 DEFINITIONS
1.01 Affiliate..............................................-1-
1.02 Agreement..............................................-1-
1.03 Balance Sheet..........................................-1-
1.04 Balance Sheet Date.....................................-2-
1.05 Business Day...........................................-2-
1.06 Closing................................................-2-
1.07 Commission.............................................-2-
1.08 Common Stock...........................................-2-
1.09 Distribution Agreement.................................-2-
1.10 Employee Plans.........................................-2-
1.11 ERISA..................................................-2-
1.12 Exchange Act...........................................-2-
1.13 Holder or Holders......................................-2-
1.14 Indebtedness...........................................-2-
1.15 Mallinckrodt...........................................-3-
1.16 MBI....................................................-3-
1.17 Intentionally Left Blank...............................-3-
1.18 Person.................................................-3-
1.19 Registrable Shares.....................................-3-
1.20 Registration Expenses..................................-3-
1.21 Registration Statement.................................-3-
1.22 Reportable Event.......................................-3-
1.23 Restricted Payments....................................-3-
1.24 Securities Act.........................................-3-
1.25 Subsidiary.............................................-3-
ARTICLE 2 PURCHASE AND SALE OF COMMON STOCK
2.01 Common Stock...........................................-4-
2.02 Purchase Price.........................................-4-
2.03 Stock Certificate......................................-4-
ARTICLE 3 REPRESENTATIONS AND WARRANTIES
3.01 Organization, Subsidiary...............................-4-
3.02 Authorization and Binding Effect.......................-5-
3.03 Consolidated Financial Statements: Other
Information............................................-5-
3.04 Litigation.............................................-6-
3.05 Real and Personal Property Leased......................-6-
3.06 Access to Real Property................................-6-
3.07 Personal Property Owned................................-6-
3.08 Condition of Real and Personal Property................-6-
3.09 Material Contracts.....................................-7-
3.10 Accounts Receivable: Inventories.......................-8-
3.11 Taxes..................................................-8-
3.12 Investment Company.....................................-8-
3.13 Fringe Benefits and Personal Service Agreements........-8-
3.14 Capitalization.........................................-9-
3.15 Compliance With Instruments, Laws; Governmental
Authorizations........................................-10-
3.16 Insurance.............................................-11-
3.17 Patents, Trademarks and Technology Rights.............-11-
3.18 Certain Transactions..................................-12-
3.19 Absence of Changes....................................-12-
3.20 Restrictions on Personnel.............................-13-
3.21 Certain Payments......................................-13-
3.22 Disclosure............................................-13-
3.23 Brokers...............................................-14-
ARTICLE 4 CONDITIONS PRECEDENT TO PURCHASE OF COMMON STOCK
4.01 Opinion of Counsel....................................-14-
4.02 Representations and Warranties True and Correct.......-14-
4.03 Closing Certificates..................................-14-
4.04 Proceedings Satisfactory to Mallinckrodt..............-14-
ARTICLE 5 AFFIRMATIVE COVENANTS
5.01 Annual Audited Consolidated Financial Statements......-15-
5.02 Periodic Consolidated Financial Statements............-15-
5.03 Audit Reports.........................................-15-
5.04 Books and Records.....................................-15-
5.05 Board of Directors' Representation....................-15-
5.06 Meeting and Minutes...................................-16-
ARTICLE 6 ANTI-DILUTION RIGHTS AND LIMITATIONS ON OWNERSHIP
6.01 Anti-Dilution Rights..................................-16-
6.02 Private Offering......................................-16-
6.03 Public Offering.......................................-17-
6.04 Stock Options.........................................-17-
6.05 Limitations...........................................-18-
6.06 Limitations on Mallinckrodt's Ownership...............-18-
ARTICLE 7 RIGHTS OF FIRST REFUSAL
7.01 General Limitation on Transfer........................-19-
7.02 Transfer Notice.......................................-19-
7.03 Exercise by MBI.......................................-19-
7.04 Procedures............................................-19-
7.05 Survival..............................................-20-
ARTICLE 8 REGISTRATION RIGHTS
8.01 MBI Registration......................................-20-
8.02 Obligations of MBI....................................-21-
8.03 Holders' Obligation to Furnish Information............-23-
8.04 Expenses of Registration..............................-23-
8.05 Indemnification.......................................-23-
8.06 Reports Under Exchange Act............................-25-
8.07 Certain Limitations in Connection with Future
Grants of Registration Rights; Priority with
Other Shares Entitled to Registration Rights..........-25-
ARTICLE 9 REPRESENTATIONS OF MALLINCKRODT
9.01 Investment Purpose....................................-25-
9.02 Authorization and Binding Effect......................-26-
9.03 Brokers...............................................-26-
ARTICLE 10 MISCELLANEOUS
10.01 Survival of Representations and Warranties............-26-
10.02 Intentionally Left Blank..............................-26-
10.03 Assignment............................................-26-
10.04 Notice................................................-26-
10.05 Governing Law.........................................-27-
10.06 Validity of Agreement.................................-27-
10.07 Waiver................................................-27-
10.08 Entire Agreement......................................-28-
10.09 Headings and References; Incorporation of
Exhibits..............................................-28-
10.10 Counterparts..........................................-28-
(*Asterisk indicates registered trademark.)
INVESTMENT AGREEMENT
This Investment Agreement, is made as of the 7th day of December,
1988, by and between MALLINCKRODT, INC., a Delaware corporation with
an address at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ("Mallinckrodt"), and MOLECULAR BIOSYSTEMS, INC., a Delaware
corporation with an address at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("MBI").
RECITALS
--------
1. MBI is engaged in activities to commercialize certain
valuable technology relating to products which are designated by MBI
as "ALBUNEX*" and owns or controls certain patents and patent
applications related thereto.
2. ALBUNEX is not now commercially available, but the parties
contemplate that ALBUNEX will become commercially available in the
near future.
3. Mallinckrodt desires to invest in MBI to provide capital to
commercialize ALBUNEX and to provide its regulatory and marketing
expertise.
NOW THEREFORE, in consideration of the promises and mutual
covenants contained herein, the parties agree as follows:
ARTICLE 1
DEFINITIONS
-----------
As used in this Agreement, the following terms shall have the
meanings specified below:
1.01 "Affiliate" shall mean with respect to a corporation,
association, partnership, individual, trust or unincorporated
organization, any other corporation, association, partnership,
individual, trust or unincorporated organization that, directly or
indirectly, controls, is controlled by or under common control with
such corporation, association, partnership, individual, trust or
unincorporated organization.
1.02 "Agreement" shall mean this Investment Agreement, as
amended from time to time.
1.03 "Balance Sheet" shall mean the March 31, 1988, balance
sheet of MBI.
1.04 "Balance Sheet Date" shall mean March 31, 1988.
1.05 "business day" shall mean any day of the week except
Saturday, Sunday and any legal holiday observed by a national banking
association or one of the parties.
1.06 "Closing" shall mean on or before December 14, 1988, at
such time and place as Mallinckrodt and MBI may agree.
1.07 "Commission" shall mean the Securities and Exchange
Commission, or any other federal agency at the time administering the
Securities Act.
1.08 "Common Stock" shall mean all shares of common stock of
MBI issued to Mallinckrodt pursuant to this Agreement.
1.09 "Distribution Agreement" shall mean the Distribution
Agreement dated the date hereof by and between Mallinckrodt and MBI.
1.10 "Employee Plans" shall mean the employee benefit plans
described in Section 3.13.
1.11 "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
1.12 "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended, or any similar Federal statute, and the rules and
regulations of the Commission issued under such Act, as they each may,
from time to time, be in effect.
1.13 "Holder" or "Holders" shall mean Mallinckrodt and its
Affiliates.
1.14 "Indebtedness" of any Person shall mean all obligations
of such Person which in accordance with generally accepted accounting
principles are normally classified upon a balance sheet of such Person
as liabilities of such Person, and in any event shall include all (a)
obligations of such Person for borrowed money or which have been
incurred in connection with the acquisition of property or assets, (b)
obligations secured by any lien or other charge upon property or
assets owned by such Person, even though such Person has not assumed
or become liable for the payment of such obligations, (c) obligations
created or arising under any conditional sale, or other title
retention agreement with respect to property where remedies of the
seller, lender or lessor under such agreement in the event of default
are limited to repossession or sale of property and (d) capitalized
rentals.
1.15 "Mallinckrodt" shall mean Mallinckrodt, Inc., a
Delaware corporation.
1.16 "MBI" shall mean Molecular Biosystems, Inc., a Delaware
corporation.
1.17 Intentionally Left Blank.
1.18 "Person" shall mean a corporation, association,
partnership, individual, trust, unincorporated organization and a
government agency or political subdivision thereof.
1.19 "Registrable Shares" shall mean (i) the Common Stock,
and (ii) any other shares of common stock of MBI owned by Mallinckrodt
or issued in respect of the Common Stock (because of stock splits,
stock dividends, reclassifications, recapitalizations, or similar
events), provided however, that shares of Common Stock that are
Registrable Shares shall cease to be Registrable Shares upon any sale
pursuant to a Registration Statement, Section 4(1) of the Securities
Act or Rule 144 under the Securities Act.
1.20 "Registration Expenses" shall mean the expenses
described in Section 8.04 of this Agreement.
1.21 "Registration Statement" shall mean a registration
statement filed by MBI with the Commission for a public offering and
sale of securities of MBI (other than a registration statement on Form
S-8 or Form S-4, or their successors, or any other form for a limited
purpose, or any registration statement covering only securities
proposed to be issued in exchange for securities or assets of another
corporation).
1.22 "Reportable Event" shall mean a reportable event as
that term is defined in Title IV of ERISA.
1.23 "Restricted Payments" shall mean dividends or other
distributions in respect of the stock of MBI or its Subsidiary (except
intercorporate dividends and dividends payable solely in stock of MBI)
and purchases, redemptions and other acquisitions, direct or indirect,
of stock of MBI or any Subsidiary.
1.24 "Securities Act" shall mean the Securities Act of 1933,
as amended, or any similar Federal statute, and the rules and
regulations of the Commission issued under such Act, as they each may,
from time to time, be in effect.
1.25 "Subsidiary" shall mean as of a particular date any
corporation more than 50% of whose outstanding stock having ordinary
voting power for the election of directors shall at the time be owned
or controlled by Mallinckrodt or MBI or by a Subsidiary of either
party.
ARTICLE 2
PURCHASE AND SALE OF COMMON STOCK
---------------------------------
2.01 Common Stock. At the Closing, MBI will issue and sell,
and Mallinckrodt will purchase the Common Stock subject to the terms
and conditions set forth in this Agreement.
2.02 Purchase Price. The aggregate purchase price of the
Common Stock shall be $2,999,997 United States dollars in immediately
available funds to be delivered by Mallinckrodt to MBI at the Closing.
The price per share shall be $16.50.
2.03 Stock Certificate. At the Closing, MBI shall deliver
to Mallinckrodt one stock certificate registered in Mallinckrodt's
name representing the Common Stock.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
------------------------------
In order to induce Mallinckrodt to purchase the Common Stock
described in Article 2, MBI represents and warrants to Mallinckrodt as
follows:
3.01 Organization, Subsidiary. MBI is a corporation legally
organized, validly existing and in good standing under the laws of the
State of Delaware and has all necessary corporate power and authority
to carry on its business as now conducted and as proposed to be
conducted and to own or lease and operate its properties. MBI's sole
Subsidiary, Syngene, Inc., is a corporation legally organized, validly
existing and in good standing under the laws of the State of Delaware
and has all necessary corporate power and authority to carry on its
business as now conducted and as proposed to be conducted and to own,
lease and operate its properties. MBI owns all of the issued and
outstanding stock of Syngene, Inc. free and clear of all liens,
claims, security interests or encumbrances. MBI and its Subsidiary
are duly licensed or qualified to do business and are in good standing
in every jurisdiction in which the nature of its business or the
ownership of their properties require such qualification. Except for
cash equivalents and marketable securities held for investment
purposes, MBI does not control, or have any contract or commitment to
own or control, any capital stock, bonds or other securities of and
does not have a proprietary interest in, any corporation, partnership,
proprietorship or other business organization. MBI and its Subsidiary
have delivered to Mallinckrodt complete and correct copies of their
Certificates of Incorporation and By-Laws as amended and in effect on
the date hereof.
3.02 Authorization and Binding Effect. The execution and
delivery of this Agreement and the performance by MBI of its
obligations hereunder are within MBI's corporate power, have been duly
authorized by proper corporate action on the part of MBI, are not in
violation of, or constitute a default under any existing law, rule or
regulation of any governmental agency or authority, any order or
decision of any court, the Certificate of Incorporation or By-Laws of
MBI or the terms of any agreement, restriction or undertaking to which
MBI is a party or by which it is bound, and do not require the
approval or consent of the shareholders of MBI, any governmental body,
agency or authority or any other person or entity.
3.03 Consolidated Financial Statements: Other Information.
MBI has previously delivered to Mallinckrodt true, accurate and
complete copies of the following documents, including, the exhibits
and schedules thereto:
(i) Annual Report on Form 10-K for the year ended
March 31, 1988 as filed with the Commission, which contains
the audited consolidated balance sheets of MBI as of March
31, 1986, 1987 and 1988, and audited consolidated statements
of operations, cash flows and shareholders' investment for
the years ended March 31, 1986, 1987 and 1988 (together the
"Financial Statements"), certified by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co.
and heretofore furnished to Mallinckrodt, which were pre-
pared in accordance with generally accepted principles of
accounting consistently applied throughout the periods
involved, and to the best of MBI's knowledge, are correct
and complete and fairly present the financial condition of
MBI, as of those dates and the results of its operations for
the years then ended;
(ii) Quarterly Report on Form 10-Q for the three
months ended June 30, 1988, as filed with the Commission;
(iii) Proxy statement in definitive form for its 1988
annual meeting of stockholders as filed with the Commission
(the "Proxy Statement"); and
(iv) Unaudited Consolidated Balance Sheet, dated
September 30, 1988 (the "Unaudited Balance Sheet").
Except for a registration statement filed on Form S-8 on
September 30, 1988, MBI has filed no other reports or registration
statements with the Commission since June 30, 1988. MBI has timely
filed all reports and other documents required to be filed by it under
the Exchange Act, the Securities Act, and any applicable state
securities or corporation statutes and regulations. The documents
provided pursuant to this Section 3.03 did not contain at the time of
filing thereof any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading.
3.04 Litigation. To the best of MBI's knowledge, except as
set forth in MBI's March 31, 1988 Form 10-K, there are no judicial or
administrative actions, suits, proceedings or investigations pending
or threatened against MBI or in respect to the business, condition,
properties, assets or operations of MBI or which questions the
validity of this Agreement or of any action taken or to be taken
pursuant to or in connection with the provisions of this Agreement,
and to the best of MBI's knowledge, no facts exist which would
constitute a basis for any such action, suit, proceeding or
investigation, which if concluded adversely against MBI would have a
materially adverse affect on the business or financial condition of
MBI.
3.05 Real and Personal Property Leased. MBI does not own
any real property. To the best of MBI's knowledge, all material
contracts, agreements, leases and commitments with respect to real or
personal property to which MBI is a party are legally valid and
binding and in full force and effect, and there are no material
defaults thereunder. None of the rights of MBI under any such
leasehold or other interest in such property will be materially
impaired by the consummation of the transaction contemplated by this
Agreement. MBI enjoys peaceful and undisturbed possession under all
material leases under which it operates.
3.06 Access to Real Property. To the best of MBI's
knowledge, neither the whole nor a portion of any real property leased
or occupied by MBI has been condemned, requisitioned or otherwise
taken by any public authority, and to the best of MBI's knowledge, no
such condemnation, requisition or taking is threatened or
contemplated.
3.07 Personal Property Owned. Except as specifically
disclosed on the Balance Sheet and footnotes thereto, MBI has good,
indefeasible and marketable title to all personal property which it
purports to own including, but not limited to, that reflected on the
Balance Sheet (except as disposed of since the Balance Sheet Date in
the ordinary course of business), and, except as may be reflected on
UCC-1 statements filed in the appropriate office in the State of
California, free and clear of all security interests, liens,
encumbrances and restrictions.
3.08 Condition of Real and Personal Property. All buildings
and other structures and all machinery, equipment, tools, dies,
fixtures, vehicles, spare parts and other properties owned, leased or
used by MBI are, to the best of MBI's knowledge, in good operating
condition and repair and are adequate and sufficient for all material
operations conducted by it. To the best of MBI's knowledge, none of
the real or personal properties owned, leased, occupied or operated by
MBI, or the ownership, leasing, occupancy or operation thereof, is in
violation of any law or any zoning, environmental or other ordinance,
code, rule or regulation, where such violation would have a materially
adverse affect on the business or financial condition of MBI, and no
notice from any governmental body or other person has been served upon
MBI or, to the best of MBI's knowledge, upon any property owned,
leased, occupied or operated by MBI claiming any material violation of
any such law, ordinance, code, rule or regulation or requiring, or
calling attention to the need for, any work, repairs, construction,
alterations or installation on or in connection with such property
which has not been complied with, where failure to comply therewith
would have a materially adverse affect on the business or financial
condition of MBI.
3.09 Material Contracts. Except as disclosed in the
Financial Statements and MBI's March 31, 1988 Form 10-K, Appendix 3.09
contains a complete and correct list as of the date hereof of all
material agreements, contracts and commitments of the following types,
written or oral, to which MBI is a party or by which it or any of its
property is bound as of the date hereof: (a) mortgages, indentures,
security agreements and other agreements and instruments including
guarantees relating to the borrowing of money by or extension of
credit to MBI; (b) bonus, profit sharing, compensation, stock
purchases, stock option, pension, insurance, retirement, deferred
compensation or other plans, agreements, trusts, funds or arrangements
for the benefit of employees (whether or not legally binding); (c)
licenses of patent, trademark and other intellectual property rights;
(d) agreements or commitments for capital expenditures (other than
agreements or commitments relating to the expansion of MBI's current
facilities); (e) joint venture agreements and partnership agreements
in which MBI or any Affiliate is a limited or general partner or joint
venturer and all management agreements, development agreements,
operating agreements and other commitments and agreements relative
thereto; and (f) material agreements with distributors, sales
representatives or other agents concerning the marketing, distribution
or sale of products of MBI. To the best of MBI's knowledge, such
material agreements, contracts and commitments are in full force and
effect and, to the best of MBI's knowledge, all parties to such
material agreements, contracts and commitments have performed all
obligations required to be performed by them to date, are not in
default and do not have a right of rescission relative thereto. MBI
does not have outstanding powers of attorney, except routine powers of
attorney relating to representation before governmental agencies or
given in connection with qualification to conduct business in another
jurisdiction. No employees of MBI are covered by any collective
bargaining agreement.
3.10 Accounts Receivable: Inventories. The accounts
receivable reflected in the Unaudited Balance Sheet (except those
collected since June 30, 1988 in the ordinary course of business) and
such additional accounts receivable as are reflected on the books of
MBI on the date of Closing have arisen in the ordinary course of
business. Since the date of the Unaudited Balance Sheet to the date
of Closing, there have been no material changes in the amount of
accounts receivable or such allowances from that reflected in the
Unaudited Balance Sheet.
3.11 Taxes. MBI has filed when due all federal, state and
local income and other tax returns, reports and declarations which are
required to have been filed by it and has, to the best of MBI's
knowledge, paid all taxes which have become due pursuant thereto and
all other taxes, assessments and other governmental charges imposed by
law upon it or any of its properties, assets, income, receipts,
payrolls, transactions, capital, net worth or franchises other than
those not delinquent. All such tax returns are complete and correct
in all material respects as filed. To the best of MBI's knowledge,
there is no tax lien upon any property or asset of MBI, whether owned
or leased, except for liens for taxes not yet payable. To the extent
that tax liabilities have accrued on or before the Balance Sheet Date
but have not become payable, to the best of MBI's knowledge, they have
been adequately reflected as liabilities on the Balance Sheet and
adequate provision for payment thereof has been made. There have been
no examinations by any state or federal taxing authority of the books
and financial statements of MBI. The accruals and reserves for
federal, state or local taxes, as shown on the Balance Sheet are
adequate in the opinion of MBI has not granted any waiver of any
statute of limitation with respect to, or any extension of a period
for the assessment of, any federal, state or local tax. To the best
of MBI's knowledge, MBI has withheld and duly paid to the appropriate
governmental authority all taxes required to be withheld by it
pursuant to any ordinance, statute or other law.
3.12 Investment Company. MBI is not an "Investment Company"
or a company controlled by an "Investment Company" within the meaning
of the Investment Company Act of 1940, as amended.
3.13 Fringe Benefits and Personal Service Agreements. MBI
does not maintain or contribute to, nor is it a Plan Administrator (as
defined in ERISA) of, any Employee Pension Benefit Plan or any
Employee Welfare Benefit Plan (as such terms are defined in Title I of
ERISA) except for MBI's 401K plan and medical, group term life and
long term disability insurance provided for current employees of MBI.
Except for the Employee Plans described in MBI's March 31, 1988 Form
10-K or Proxy Statement, MBI does not maintain, sponsor, and is not
Plan Administrator of, any of the following types of plans,
arrangements or practices for or on behalf of any officer, director or
employee of MBI: pension, retirement, profit sharing, thrift-savings,
deferred compensation, stock bonus, stock option, cash bonus, employee
stock ownership, material severance pay or welfare plan or any other
Employee Pension Benefit Plan or Employee Welfare Benefit Plan of any
kind or any combination of the foregoing. Except as described in
MBI's March 31, 1988 Form 10-K or Proxy Statement, MBI does not have
(1) any deferred compensation, stock bonus, stock option, cash bonus,
severance pay, vacation or other similar material plan, arrangement or
practice, which, though not an Employee Pension Benefit Plan or an
Employee Welfare Benefit Plan, constitutes a fringe benefit for any
officer, director or employee of MBI; or (2) any material written
management, employment, consulting, agency or other material written
agreement or commitment for personal services to be rendered by any
person (including, without limitation, any dealer, distributor or
sales representative agreement or any agreement with respect to
accounting, legal, investment banking (except for Vector Securities
International, Inc.) or advertising services). The Employee Plans
have been authorized by the Board of Directors or Executive Committee
of the Board of Directors of MBI and those Employee Plans which are
qualified plans are qualified in form and operation under Sections
401(a) and 501(a) of the Internal Revenue Code. All reports, filings
and other documents with respect to the Employee Plans required to be
filed or distributed under ERISA, including without limitation, all
returns and reports to be filed with the Department of Labor, Internal
Revenue Service and Pension Benefit Guaranty Corporation, and all
distributions to participants, beneficiaries and others, have been
made on a proper and timely basis. No Reportable Event (within the
meaning of the Section 4043(b) of ERISA) has occurred with respect to
any Employee Plan as to which MBI was required to file a report with
the Pension Benefit Guaranty Corporation, and no material unfunded
liability exists under any Employee Plan. None of the Employee Plans
meet the definition of a "Multiemployer plan" under ERISA as amended
by The Multiemployer Pension Plan Amendments Act of 1980, Pub. L. No.
96-364, as amended. No action will be taken by MBI prior to the date
of Closing with respect to terminating any Employee Plan. MBI is not
a party to any pending, or to the best of the knowledge of MBI,
threatened action, claim, suit or proceeding by any person or
governmental instrumentality concerning the Employee Plans. All
payments due from MBI (on account of employment contracts or
otherwise) for Employee Plans and employee health and welfare
insurance have been paid for all periods ended on or prior to March
31, 1988, or for the period since April 1, 1988 through the date of
Closing, accrued as a liability on the books of MBI in accordance with
generally accepted accounting principles consistently applied.
3.14 Capitalization. The total number of shares of capital
stock, all of which is voting common stock of one class and not
divided into any series or other subdivisions, and the par value
thereof which MBI is authorized to issue and the number of such shares
which are issued and outstanding immediately prior to Closing are as
follows:
Issued and
Authorized Par Outstanding
Shares Value Shares
---------- ----- -----------
20,000,000 $.01 9,031,916
The issued and outstanding shares of MBI have been duly and validly
issued and are fully paid and nonassessable, and the Common Stock,
when issued, will be duly and validly issued and fully paid and
nonassessable. MBI holds no shares of its common stock in its
treasury. Except as disclosed in Appendix 3.14, there are no
outstanding options, warrants or other rights in existence, other than
under this Agreement, to acquire from MBI any of its shares of capital
stock. Since the Balance Sheet Date there have been no dividends,
Restricted Payments or other distributions declared or paid in respect
of the shares of capital stock of MBI.
3.15 Compliance With Instruments, Laws; Governmental
Authorizations. MBI is not in violation of any term or provision of
its Certificate of Incorporation or By-Laws or, to the best of MBI's
knowledge, any governmental license or permit or in violation or
default under any material contract, agreement or other instrument or,
to the best of MBI's knowledge, subject to enforcement or threat of
enforcement or in violation of any statute, law, ordinance, rule,
regulation, judgment, order, decree, permit, concession, grant,
franchise, license or other governmental authorization or approval or,
to the best of MBI's knowledge, applicable to it or to any of its
properties or operations. All material permits, concessions, grants,
franchises, licenses and other governmental authorizations and
approvals necessary for the conduct of the business of MBI have been
duly obtained and are in full force and effect, and, to the best of
MBI's knowledge, there are no proceedings pending or threatened which
may result in the revocation, cancellation or suspension, or any
adverse modification, of any permit, concession, grant, franchise,
license or other governmental authorization which would have a
materially adverse affect on the business or financial condition of
MBI. To the best of MBI's knowledge, there have been no citations,
fines or penalties heretofore assessed against MBI and MBI has
complied with in all material respects any and all federal, state or
local laws, including but not limited to laws relating to air or water
pollution, solid waste disposal or other environmental protection
matters, or relating to occupation, health or safety, and, to the best
of MBI's knowledge, no such citations, fines or penalties have been
assessed or have been threatened since the Balance Sheet Date or are
now being threatened. To the best of MBI's knowledge, there exists no
default nor has any act or omission occurred which, with the giving of
notice or the passage of time, would constitute a default under the
provisions of any instrument evidencing Indebtedness or liability or
any agreement relating thereto or any other agreement or instrument to
which MBI is a party, and which would have a materially adverse affect
on the business or financial condition of MBI.
3.16 Insurance. MBI maintains insurance on its properties,
business and personnel, with responsible companies in such amounts and
against such risks as MBI deems reasonably advisable. All insurance
policies maintained by MBI are in full force and effect, all premiums
due thereon have been paid or are not delinquent, and MBI has complied
with the provisions of such policies. MBI has not, within the last
three fiscal years, had any application for insurance rejected or any
insurance policy cancelled or withdrawn, which has resulted in MBI
failing to have insurance in such amounts as MBI reasonably determines
to be acceptable.
3.17 Patents, Trademarks and Technology Rights.
(a) All of MBI's United States patents, trademarks,
trade names, service marks, copyrights, and pending United States
applications for such patents, trademarks, trade names, service marks,
trade designations and copyrights are described in Appendix 3.17.
(b) To the best of MBI's knowledge, MBI and its
successors and assigns have a right (1) to practice all processes and
process steps as now practiced or planned to be practiced by MBI, and
(2) to make, use and sell throughout the world, intermediate and other
products now made, used or sold or planned to be made, used or sold by
MBI without substantial risk of infringement of any right, interest,
or patent of any third party.
(c) MBI owns and possesses, or is licensed as to, all
patents, trademarks, copyrights and such pending applications therefor
and trade secrets, technologies, know-how, processes and other
proprietary rights necessary for conducting its business operations.
(d) MBI does not have knowledge of, or any reason to
believe that there exists, any contest, litigation, infringement,
fraud, misappropriation, or misuse, pending, threatened.or in prospect
of, any patent, trademark, trade name, service ▇▇▇▇, copyrights,
application therefore, or any license or agreement therefor (including
but not limited to the License Agreement dated as of November 5, 1986
between MBI and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, M.D., as amended) which is
necessary for or related to the conduct of its business.
3.18 Certain Transactions. To the best of MBI's knowledge,
no Affiliate of MBI is presently a party to any material transaction
with MBI (other than for services as employees, officers and
directors), including, without limitation, any material contract,
agreement or other material arrangement providing for the furnishing
of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from, any
such Affiliate or any member of a family of any Affiliate. To the
best of MBI's knowledge, no Affiliate is an official or employee of or
is otherwise connected with any labor organization having dealings
with MBI. To the best of MBI's knowledge, no Affiliate of MBI owns or
controls, directly or indirectly, in whole or in part, any property,
asset or right, tangible or intangible (including but not limited to,
any patent, trademark, service ▇▇▇▇, trade name, brand name,
copyright, or pending application for any patent, trademark, service
▇▇▇▇, or copyright, invention, process, know-how, formula, design or
trade secret), which is associated with any property, asset or right
owned by MBI or which MBI is presently operating or using or the use
of which is necessary for its business.
3.19 Absence of Changes. Since the Balance Sheet Date,
except as disclosed on MBI's March 31, 1988 Form 10-K, the
registration statement filed on Form S-8 on September 30, 1988 or as
specified in Appendix 3.19, MBI has not:
(a) undergone any changes in its condition (financial
or other), properties, assets, liabilities, business or operations
which are in the aggregate materially adverse;
(b) declared, set aside, made or paid any Restricted
Payment;
(c) incurred any Indebtedness or issued or sold any
debt securities except for Indebtedness incurred in connection with
the purchase of property in the ordinary course of business which in
the aggregate is not materially adverse to MBI;
(d) mortgaged, pledged, licensed, sublicensed or
subjected to any lien, lease, security interest or other charge or
encumbrance any of its properties or assets, tangible or intangible
(including but not limited to the License Agreement dated as of
November 5, 1986 between MBI and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, M.D., as
amended);
(e) acquired or disposed of any assets or properties
(except for common stock of MBI) in any transaction with any officer,
director or shareholder or acquired or disposed of any assets or
properties (except for sales of inventory in the ordinary course of
business) of material value in any transaction with any other person;
(f) forgiven or cancelled any debts or claims, or
waived any rights except in the ordinary course of business which in
the aggregate is not materially adverse to MBI;
(g) adopted, or amended in any material respect, any
bonus, profit sharing, compensation, stock option, pension,
retirement, deferred compensation or other plan, agreement, trust,
fund or arrangement for the benefit of employees (whether or not
legally binding);
(h) suffered any damage, destruction or loss (whether
or not covered by insurance) which in the aggregate materially
adversely affects the financial condition, properties, assets,
business or operations of MBI;
(i) suffered any strike or, to the best of MBI's
knowledge, other organized labor trouble which adversely affects MBI
relations with its employees or, to the best of MBI's knowledge, has
been the subject of any effort to organize its workforce, or any part
thereof, into a bargaining unit; or
(j) incurred any liability or obligation (whether
absolute, accrued, contingent or otherwise), exceeding, in any case,
or in the aggregate, $1,000,000.
3.20 Restrictions on Personnel. No officer or employee of
MBI has entered into any agreement which is now in effect with any
person, corporation, partnership or business organization other than
MBI (a) requiring such officer or employee to assign any interest in
any invention or trade secrets developed while employed by MBI or (b)
containing any prohibition or restriction of competition or
solicitation of customers which if enforced against such officer or
employee would have a materially adverse affect on the business or
financial condition of MBI.
3.21 Certain Payments. Neither the Internal Revenue
Service, the Commission nor any other federal, state, local or foreign
government agency or entity has, to the best of MBI's knowledge,
initiated or threatened any investigation of any payments made by MBI
and alleged to have been of the type covered by Section 162(c) of the
Internal Revenue Code.
3.22 Disclosure. Neither this Agreement nor any exhibit or
schedule hereto, nor any statement, list or certificate delivered to
Mallinckrodt pursuant to this Agreement contains any untrue statement
of a material fact or omits to state a material fact necessary in
order to make the statements contained herein and therein in the
context in which they were made not misleading.
3.23 Brokers. This Agreement was not induced or incurred
through any person, firm or corporation acting as a broker or finder
except for Vector Securities International, Inc. MBI agrees to hold
Mallinckrodt harmless from any loss, damage, cost or expense resulting
from any claim by any person, firm or corporation, including Vector
Securities International, Inc., based upon any such person, firm or
corporation having acted as a broker or finder for MBI or any other
Person in connection with the transaction contemplated by this
Agreement.
ARTICLE 4
CONDITIONS PRECEDENT TO PURCHASE OF COMMON STOCK
------------------------------------------------
The obligation of Mallinckrodt to purchase the Common Stock
described in Article 2, is at the option of Mallinckrodt, subject to
the satisfaction of the following conditions:
4.01 Opinion of Counsel. Mallinckrodt shall have received
an opinion addressed to Mallinckrodt and dated as of the Closing, of
▇▇▇▇▇▇▇ and Colmar, counsel for MBI, satisfactory in substance and
form to Mallinckrodt and its counsel.
4.02 Representations and Warranties True and Correct. The
representations and warranties in Article 3 hereof shall be true and
correct on the date of Closing. Mallinckrodt shall have received from
the President of MBI an officer's certificate to the foregoing effect
dated as of the Closing.
4.03 Closing Certificates. Mallinckrodt shall have received
copies, certified by the Secretary or Assistant Secretary of MBI to be
true and correct and in full force and effect, of (a) the Certificate
of Incorporation and By-Laws of MBI; (b) resolutions of the Board of
Directors of MBI authorizing the issuance of the Common Stock, the
execution and delivery of this Agreement and any other documents to be
executed by or on behalf of MBI pursuant to this Agreement; and (c) a
statement containing the names and titles of the officer or officers
of MBI authorized to sign this Agreement and other documents required
by this Agreement, together with true signatures of such officers.
4.04 Proceedings Satisfactory to Mallinckrodt. All
proceedings taken in connection with the transaction contemplated by
this Agreement and all instruments, authorizations and other documents
applicable thereto shall be satisfactory in form and content to
Mallinckrodt and Mallinckrodt shall have received copies of all such
documents reasonably required by it.
ARTICLE 5
AFFIRMATIVE COVENANTS
---------------------
So long as Mallinckrodt is the exclusive distributor of ALBUNEX
(as defined in the Distribution Agreement), MBI covenants that it
will:
5.01 Annual Audited Consolidated Financial Statements.
Furnish to Mallinckrodt within 90 days after the end of each fiscal
year an audited consolidated balance sheet of MBI as of the close of
such fiscal year and related audited consolidated statements of
operations, cash flows and shareholders' investment for such year,
setting forth in each case in comparative form corresponding figures
from the preceding annual audit, all in reasonable detail, prepared in
accordance with generally accepted principles of accounting applied on
a consistent basis, certified with an unqualified opinion by a
nationally recognized or major regional independent certified public
accountant selected by MBI. The annual audited financial statements,
and the financial statements described in Section 5.02, shall be
furnished in consolidated form for MBI and all Subsidiaries which it
may have at the time.
5.02 Periodic Consolidated Financial Statements. Furnish to
Mallinckrodt promptly upon preparation (a) monthly financial
statements, if any, provided to the President or Chairman of the Board
of MBI, (b) quarterly financial statements provided to the President
or Chairman of the Board of MBI, and (c) Quarterly Reports on Form 10-
Q as filed with the Commission.
5.03 Audit Reports. Furnish to Mallinckrodt, promptly upon
receipt, copies of all detailed audit reports submitted to MBI by
independent accountants in connection with each annual audit of the
books of MBI and copies of any and all management reports and
recommendations given by its independent accountants to MBI if such
management reports and recommendations relate to or question the
viability of MBI to manufacture or sell ALBUNEX or relate to or
question the viability of MBI to conduct its business as an on-going
concern.
5.04 Books and Records. Keep proper, complete and accurate
books of record and account and, at Mallinckrodt's request, meet with
Mallinckrodt from time to time at a reasonably convenient time and
place for both parties to discuss the financial condition of MBI.
5.05 Board of Directors' Representation. Upon meeting the
milestone as set forth in Section 4.01(c) of the Distribution
Agreement, cause its management (a) to recommend to MBI's Board of
Directors and shareholders, if necessary, that MBI's By-laws be
amended to increase by one person the number of directors that
constitutes its Board of Directors, and (b) upon a vacancy on the
Board of Directors, or at the next earliest election for a seat on the
Board of Directors, nominate and recommend the election to MBI's Board
of Directors of one representative designated by Mallinckrodt and
acceptable to MBI, which acceptance shall not be unreasonably
withheld. For purposes of this Section 5.05, meeting the milestone as
set forth in Section 4.01(c) of the Distribution Agreement shall mean
the date the obligation to make the payments required thereunder
commences and not when all required payments have been made.
5.06 Meeting and Minutes. Furnish to Mallinckrodt promptly
upon preparation a copy of the minutes of each directors' meeting and
each shareholders' meeting.
ARTICLE 6
ANTI-DILUTION RIGHTS AND LIMITATIONS ON OWNERSHIP
-------------------------------------------------
6.01 Anti-Dilution Rights. If at any time MBI agrees to
sell shares of its common stock or other voting securities ("MBI
Securities") in a private or public offering, Mallinckrodt shall have
the right, but not the obligation, to acquire all or any portion of
the MBI Securities sufficient for Mallinckrodt to maintain after the
offering the same percentage of ownership of issued and outstanding
MBI Securities that Mallinckrodt possessed immediately prior to the
offering (the "Pre-Offering Percentage").
6.02 Private Offering. With respect to a private offering,
MBI shall within five (5) business days after the execution of any
agreement entered into in connection with such private offering notify
Mallinckrodt in writing of the proposed offering and provide
Mallinckrodt with copies of all related documentation, including, for
example, any letter of intent and the final contract. Mallinckrodt
shall have twenty (20) business days from the date of receipt of MBI's
notice in which to advise MBI whether Mallinckrodt elects to exercise
its rights under Section 6.01. If Mallinckrodt does not respond, or if
Mallinckrodt indicates that it will not exercise its rights,
Mallinckrodt shall be considered irrevocably to have waived its rights
under Section 6.01 with respect to the private offering. If
Mallinckrodt timely advises MBI that Mallinckrodt will exercise its
rights under Section 6.01, Mallinckrodt shall have the right to
acquire all or any portion of the necessary amount of the MBI
Securities to maintain Mallinckrodt's Pre-Offering Percentage at the
price specified in the private offering agreement entered into between
MBI and the purchaser. Closing shall be in accordance with the terms
of the private offering agreement, and Mallinckrodt shall make such
investment representations to MBI and shall provide MBI with such
other documentation at closing as is reasonably required by MBI to
comply with applicable securities laws.
6.03 Public Offering. With respect to a public offering,
MBI shall notify Mallinckrodt no later than five (5) business days
after MBI has entered into a letter of intent with its underwriters,
and shall provide Mallinckrodt with a copy of the letter of intent.
Mallinckrodt shall have twenty (20) business days from the date of
receipt of MBI's notice in which to advise MBI whether Mallinckrodt
elects to exercise its rights under Section 6.01. If Mallinckrodt
does not respond or if Mallinckrodt indicates that it will not
exercise its rights, Mallinckrodt shall be considered irrevocably to
have waived its rights under Section 6.01 with respect to the public
offering. If Mallinckrodt timely advises MBI that Mallinckrodt
desires to retain its rights under Section 6.01, then when MBI files a
registration statement containing a preliminary prospectus with the
Commission. MBI shall provide Mallinckrodt with copies of the
preliminary prospectus and all subsequent amendments. Mallinckrodt
shall have twenty (20) business days from its receipt of the
preliminary prospectus in which to exercise its rights under Section
6.01 by making an offer to acquire all or any portion of the necessary
amount of MBI Securities to maintain Mallinckrodt's Pre-Offering
Percentage based on the price and the other terms contained in the
final prospectus. No such offer to buy shall be accepted prior to the
time that the registration statement becomes effective. The
registration statement shall indicate that Mallinckrodt has anti-
dilution rights to purchase MBI Securities on the terms offered to the
public.
6.04 Stock Options. With respect to the issuance of MBI
Securities pursuant to a MBI stock option plan, MBI shall notify
Mallinckrodt no later than twenty (20) business days after each
anniversary date of this Agreement and within twenty (20) business
days of the record date for a shareholder meeting and for dividend
payments for MBI Securities of the number of shares and issuance price
of MBI Securities issued pursuant to MBI's stock option plans
subsequent to the last notice given pursuant to this Section 6.04, or
if none, during the preceding twelve month (12) month period.
Mallinckrodt shall have twenty (20) business days from the date of
receipt of MBI's notice in which to advise MBI whether Mallinckrodt
elects to exercise its rights under Section 6.01. If Mallinckrodt
does not respond, or if Mallinckrodt indicates that it will not
exercise its rights, Mallinckrodt shall be considered irrevocably to
have waived its rights under Section 6.01 with respect to such
issuance of MBI Securities. If Mallinckrodt timely advises MBI that
Mallinckrodt will exercise its rights, Mallinckrodt shall have the
right to acquire all or any portion of the necessary amount of the MBI
Securities to maintain Mallinckrodt's Pre-Offering Percentage at a
price per share equal to the market price on the date Mallinckrodt
advises MBI that it will exercise its rights to acquire additional MBI
Securities. Closing shall be as soon as practicable after
Mallinckrodt advises MBI that it will exercise its rights to acquire
additional MBI Securities.
6.05 Limitations. Notwithstanding the preceding provisions
of this Article 6, MBI shall not be required to issue any fractional
shares as a result of Mallinckrodt's exercise of its rights under
Section 6.01. MBI shall not be required to transfer any MBI Securities
to Mallinckrodt under this Article 6, if to do so would result in the
violation of any applicable law, rule or regulation.
6.06 Limitations on Mallinckrodt's Ownership. Except for
purchases of MBI Securities made in accordance with this Article 6,
during the term of this Agreement neither Mallinckrodt nor any of its
Affiliates shall directly or indirectly acquire any MBI Securities
(except by way of stock dividends, stock splits, or similar events
affecting holders of MBI Securities generally) if the effect of the
acquisition would be to increase the aggregate voting power in the
election of directors of all MBI Securities owned by Mallinckrodt and
its Affiliates to more than fifteen percent (15%) of the total
combined voting power of all MBI Securities then outstanding.
Notwithstanding this limitation:
(a) Mallinckrodt or any of its Affiliates may acquire
MBI Securities if any of the following events occur:
(i) A tender or exchange offer is made by any
person or 13D Group (other than an Affiliate of or person
acting in concert with Mallinckrodt) to acquire MBI
Securities that, if added to the MBI Securities already
owned by that person or 13D Group, would represent more than
fifteen percent (15%) of the total combined voting power of
all MBI Securities issued and outstanding; or
(ii) There is public disclosure or Mallinckrodt
otherwise learns that MBI Securities representing more than
fifteen percent (15%) of the total combined voting power of
all MBI Securities issued and outstanding have been acquired
or are proposed to be acquired by any person or 13D Group;
or
(iii) Any person or 13D Group shall beneficially
own MBI Securities representing more than fifteen percent
(15%) of the total combined voting power of all issued and
outstanding MBI Securities.
(b) Neither Mallinckrodt nor any of its Affiliates
shall be required to dispose of any shares of MBI Securities if
their aggregate percentage ownership is increased as a result of
MBI's recapitalization or any other action taken by MBI.
As used herein, "13D Group" means any group of persons formed for the
purpose of acquiring, holding, voting or disposing of securities that
would be required under Section 13(d) of the Exchange Act and the
related rules and regulations (as now in effect, and based on present
legal interpretations) to file a statement on Schedule 13D or 13G with
the Commission as a "person" within the meaning of Section 13(d)(3) of
the Exchange Act if the group beneficially owned common stock
representing more than five percent (5%) of the total combined voting
power of all MBI Securities then issued and outstanding.
ARTICLE 7
RIGHTS OF FIRST REFUSAL
-----------------------
7.01 General Limitation on Transfer. Except for sales under
the Commission's Rule ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ shall not directly or
indirectly offer for sale, or transfer any Common Stock which has not
been registered under the Securities Act without offering MBI a right
of first refusal as provided in this Article 7.
7.02 Transfer Notice. Mallinckrodt shall give MBI notice of
Mallinckrodt's intention (the "Transfer Notice"), specifying the
number of shares of Common Stock proposed to be sold or transferred
and the proposed price. The proposed price of a bona fide third party
tender or exchange offer pursuant to Regulation 14D of the Exchange
Act shall be considered the cash price offered in the case of a cash
offer, or the cash price plus the value of the offered securities in
the case of a partial cash and exchange offer or the value of the
offered securities in an exchange offer, without regard to any
provisions with respect to proration or any conditions to the
offeror's obligation to purchase.
7.03 Exercise by MBI. Except as qualified under Sections
7.04(b) and 7.04(c), MBI shall have fifteen (15) business days from
the date of the Transfer Notice in which to exercise its right of
first refusal, by written notice to Mallinckrodt, with respect to all
or a portion of the Common Stock specified in the Transfer Notice. (In
the case of a tender or exchange offer pursuant to Regulation 14D,
however, MBI shall have until no later than twenty-four (24) hours
prior to the latest time by which Common Stock must be tendered in
order to be accepted or to qualify for any proration.) The purchase
price shall be the price specified in the Transfer Notice and shall be
paid in cash.
7.04 Procedures. Except where property or securities
offered in exchange for Common Stock has a readily ascertainable fair
market value, the following procedures shall be followed with respect
to a Transfer Notice which includes any property other than cash:
(a) The value of the offered securities or property
shall be determined by MBI and Mallinckrodt jointly, or if they
are unable to agree, the determination shall be made by a
nationally or regionally recognized investment banking or
consulting firm selected by two such firms respectively chosen by
MBI and Mallinckrodt, and its determination shall be conclusive.
MBI and Mallinckrodt shall use their best efforts to cause this
determination to be made no later than fifteen (15) days after
the date of the Transfer Notice, and MBI and Mallinckrodt shall
each pay one-half of fees of the firm making the determination;
(b) The period in which MBI may exercise its right of
first refusal shall be extended to the date five (5) business
days after the date that the value of the offered securities or
property is determined as provided in subparagraph (a);
(c) If MBI exercises its right of first refusal, the
closing of its purchase of the Common Stock with respect to which
it has exercised its right of first refusal shall take place
within thirty (30) calendar days after the date that MBI gives
notice of its exercise, or within twenty (20) calendar days after
MBI has obtained any necessary government approval or
nonobjection, if any, whichever is later. MBI shall make
application for any necessary governmental approval as soon as
practicable after exercising its right of first refusal; and
(d) If MBI does not timely exercise its right of first
refusal, Mallinckrodt shall be free during the ninety (90) days
following the expiration of MBI's right of first refusal to sell
the Common Stock specified in the Transfer Notice to the offeror
identified in the notice at the price specified in the notice or
at any greater price. MBI's right of first refusal shall survive
with respect to any Common Stock that is not sold by
Mallinckrodt.
7.05 Survival. MBI's right of first refusal granted under
Section 7.01 shall survive the term of this Agreement.
ARTICLE 8
REGISTRATION RIGHTS
-------------------
8.01 MBI Registration. If at any time MBI proposes to
register any of its common stock under the Securities Act in
connection with the public offering of such securities on a form that
would also permit the registration of the Registrable Shares, MBI
shall, at such time, promptly give the Holders written notice of such
determination. Upon the written request of any Holder given within 20
business days after receipt of any such notice by the Holder, MBI
shall use its best efforts to cause to be registered under the
Securities Act all of the Registrable Shares that each such Holder has
requested be registered.
If the registration of which MBI gives notice is for a registered
public offering involving an underwriting, then MBI shall so advise
the Holders as a part of such written notice. In such event, the
right of any Holder to registration pursuant to this Section 8.01
shall be conditioned upon such Holder's agreeing to participate in
such underwriting and the inclusion of such Holder's Registrable
Shares in the underwriting to the extent provided herein. All Holders
proposing to distribute their securities through such underwriting
shall (together with MBI and the other holders distributing their
securities through such underwriting) enter into an underwriting
agreement in customary form, and upon the terms agreed upon between
MBI and the underwriter, with the underwriter selected for such
underwriting by MBI. Notwithstanding any other provision of this
Section 8.01, if the underwriter reasonably determines that inclusion
of such shares will jeopardize the success of the offering, then the
underwriter may exclude some or all Registrable Shares from such
registration and underwriting in accordance with the provisions of
this Section 8.01. MBI shall so advise all Holders and the other
holders distributing their securities through such underwriting, and
the number of Registrable Shares and other securities that may be
included in the registration and underwriting shall be allocated among
the Holders and the other holders (excluding MBI), in proportion, as
nearly as practicable, to the respective amounts of securities
proposed for inclusion in such registration by MBI, each such Holder
and other holders at the time of filing the Registration Statement;
provided, however, in no event shall the number of Registrable Shares
included in the offering be reduced below 25% of the number of shares
of MBI common stock that Mallinckrodt requests MBI to include in the
offering. If any Holder or other holder disapproves of the terms of
any such underwriting, then he may elect to withdraw therefrom by
written notice to MBI and the underwriter. Any securities excluded or
withdrawn from such underwriting shall be withdrawn from such
registration. Subject to the foregoing, MBI and the underwriter
selected by MBI shall make all determinations with respect to the
timing, pricing and other matters relating to the offering.
8.02 Obligations of MBI. Whenever required under Section
8.01 that MBI use its best efforts to effect the registration of any
Registrable Shares, MBI shall, as expeditiously as possible:
(a) Prepare and file with the Commission a
Registration Statement with respect to such Registrable Shares and use
its best efforts to cause such Registration Statement to become and
remain effective;
(b) Prepare and file with the Commission such
amendments and supplements to such Registration Statement and the
prospectus used in connection with such Registration Statement as may
be necessary to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such
Registration Statement;
(c) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they
may reasonably request in order to facilitate the disposition of
Registrable Shares owned by them;
(d) Use its best efforts to register and qualify the
securities covered by such Registration Statement under such other
securities or Blue Sky laws of such jurisdictions as shall be
reasonably appropriate for the distribution of the securities covered
by the Registration Statement, provided that MBI shall not be required
in connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service or process in any
such states or jurisdictions. The Holders shall pay all of the
expenses of qualifying in jurisdictions where MBI's underwriters have
not requested qualification; and
(e) Furnish, at the request of the Holders on the date
that such Registrable Shares are delivered to the underwriters for
sale pursuant to such registration or, if such Registrable Shares are
not being sold through underwriters, on the date the Registration
Statement with respect to such Registrable Shares becomes effective
(1) an opinion dated such date, of independent counsel representing
MBI for the purposes of such registration, addressed to the
underwriters, if any, and to the Holders stating that such
Registration Statement has become effective under the Securities Act
and covering substantially the same matters with respect to the
Registration Statement (and the prospectus included therein) as are
customarily covered (at the time of such registration) in the opinions
of issuer's counsel delivered to underwriters in connection with
underwritten public offerings of securities; and (2) a letter dated
such date from the independent certified public accountants of MBI,
addressed to the underwriters, if any, and the Holders, stating that
they are independent certified public accountants within the meaning
of the Securities Act and that in the opinion of such accountants, the
financial statements and other financial data of the corporation
included in the Registration Statement or the prospectus, or any
amendment or supplement thereto, comply as to form in all material
respects with the applicable accounting requirements of the Securities
Act. Such opinion of counsel shall additionally cover such other
legal matters with respect to the registration in respect of which
such opinion is being given as the Holders may reasonably request.
Such letter from the independent certified public accountants shall
additionally cover such other financial matters (including information
as to the period ending not more than five business days prior to the
day of such letter) with respect to the registration in respect of
which such letter is being given as Holders may reasonably request.
8.03 Holders' Obligation to Furnish Information. It shall
be a condition precedent to the obligation of MBI to take any action
pursuant to this Article 8 that the Holders shall furnish to MBI such
information regarding them, the Registrable Shares held by them and
the intended method of disposition of such securities as MBI shall
reasonably request and as shall be required in connection with the
action to be taken by MBI.
8.04 Expenses of Registration. All expenses incurred in
connection with all registrations pursuant to Section 8.01 (excluding
underwriters, discounts and commissions), including without limitation
all registration and qualification fees, printers' and accounting
fees, and fees and disbursements of counsel for MBI shall be borne by
MBI.
8.05 Indemnification. In the event any Registrable Shares
are included in a Registration Statement under this Article 8:
(a) To the extent permitted by law, MBI shall
indemnify and hold harmless each Holder requesting or joining in a
registration, and each person, if any, who controls such Holder within
the meaning of the Securities Act, against any losses, claims, damages
or liabilities, joint or several, to which such person may become
subject under the Securities Act, the Exchange Act, state securities
laws (including reasonable counsel fees), or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based on any untrue or alleged untrue
statement of any material fact contained in such Registration
Statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, or arise
out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading or arise out of any
violation by MBI of any rule or regulation promulgated under the
Securities Act applicable to MBI and relating to any action or
inaction required of MBI in connection with any such registration; and
MBI will reimburse each such Holder, such underwriter or controlling
person for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the indemnity
agreement contained in this Section 8.05 shall not apply to any such
loss, claim, damage, liability or action to the extent that it arises
out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in connection with such
Registration Statement, preliminary prospectus, final prospectus, or
amendments or supplements thereto, in reliance upon and in conformity
with written information furnished expressly for use in connection
with such registration by any such Holder or controlling person;
(b) To the extent permitted by law, each Holder
requesting or joining in a registration will indemnify and hold
harmless MBI, each of its directors, each of its officers who have
signed the Registration Statement, each person, if any, who controls
MBI within the meaning of the Securities Act, and each agent and any
underwriter for MBI within the meaning of the Securities Act) against
any losses, claims, damages or liabilities (including reasonable
counsel fees), to which MBI or any such director, officer, controlling
person, agent, or underwriter may become subject, under the Securities
Act, the Exchange Act, state securities laws or otherwise insofar as
such losses, claims, damages or liabilities (or actions in respect
thereto) arise from or are based upon any untrue statement or alleged
untrue statement of any material fact contained in such Registration
Statement, including any preliminary prospectus or final prospectus
contained therein or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in such
Registration Statement, preliminary or final prospectus, or any
amendment or supplement thereto, in reliance upon and in conformity
with written information furnished by such Holder expressly for use in
connection with such registration; and each such Holder will reimburse
any legal or other expenses reasonably incurred by MBI or any such
director, officer, controlling person, agent, or underwriter in
connection with investigating or defending any such loss, claim,
damage, liability or action; and
(c) Promptly after receipt by an indemnified party
under this Section 8.05 of notice of the commencement of any action,
such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 8.05 notify the
indemnifying party in writing of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof
with counsel mutually satisfactory to the parties. The failure to
notify an indemnifying party promptly of the commencement of any
action, if prejudicial to his ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified
party under this Section 8.05, but the omission so to notify the
indemnifying party will not relieve him of any liability that he may
have to any indemnified party otherwise than under this Section 8.05.
8.06 Reports Under Exchange Act. With a view to making
available to the Holders the benefits of Rule 144 promulgated under
the Securities Act and any other rule or regulation of the Commission
that may at any time permit a Holder to sell securities of MBI to the
public without registration, MBI agrees to use its best efforts to:
(a) file with the Commission in a timely manner all
reports and other documents required of MBI under the Securities Act
and the Exchange Act; and
(b) furnish to any Holder so long as such Holder owns
any Registrable Shares upon request at any time a written statement by
MBI that it has complied with the reporting requirements of Rule 144
and of the Securities Act and the Exchange Act, a copy of the most
recent annual or quarterly report of MBI, and such other reports and
documents so filed by MBI as may be reasonably requested in availing
any Holder of any rule or regulation of the Commission permitting the
selling of any such securities without registration.
8.07 Certain Limitations in Connection with Future Grants of
Registration Rights; Priority with Other Shares Entitled to
Registration Rights. MBI shall not enter into any agreement with any
holder or prospective holder of any securities of MBI providing for
the granting to such holder of registration rights unless such
agreement:
(a) includes the equivalent of this Section 8.07 as a
term; and
(b) includes a provision that, in the case of a public
offering involving an underwritten registered offering, protects the
Holders if marketing factors require a limitation on the number of
securities to be included in the underwriting in the manner in which
the Holders are protected under Section 8.01.
ARTICLE 9
REPRESENTATIONS OF MALLINCKRODT
--------------------------------
To induce MBI to sell the Common Stock described in Article 2,
Mallinckrodt represents and warrants to MBI as follows:
9.01 Investment Purpose. Mallinckrodt is acquiring the
Common Stock issued pursuant to this Agreement for purposes of
investment and not with a view to the sale or other distribution
thereof as such terms are defined in the Securities Act, as amended,
and the regulations of the Commission promulgated thereunder.
9.02 Authorization and Binding Effect. The execution and
delivery of this Agreement and the performance by Mallinckrodt of its
obligations hereunder are within Mallinckrodt's corporate power, have
been duly authorized by proper corporate action on the part of
Mallinckrodt, are not in violation of, or default under any existing
law, rule or regulation of any governmental agency or authority, any
order or decision of any court, the Certificate of Incorporation or
By-Laws of Mallinckrodt or the terms of any agreement, restriction or
undertaking to which Mallinckrodt is a party or by which it is bound,
and do not require the approval or consent of the shareholders of
Mallinckrodt, any governmental body, agency or authority or any other
person or entity.
9.03 Brokers. This Agreement was not induced or procured
through any person, firm or corporation acting as a broker or finder
for Mallinckrodt. Mallinckrodt agrees to hold MBI harmless from any
lose, damage, cost or expense resulting from any claim by any person,
firm or corporation based upon any such person, firm or corporation
having acted as a broker or finder for Mallinckrodt or any other
Person in connection with the transaction contemplated by this
Agreement.
ARTICLE 10
MISCELLANEOUS
-------------
10.01 Survival of Representations and Warranties. MBI's
representations and warranties contained in Article 3 hereof shall
survive the Closing for a period of 2 years after the Launch Date (as
defined in the Distribution Agreement), provided, however, MBI's
representations and warranties contained in Sections 3.02 and 3.14
shall survive indefinitely.
10.02 Intentionally Left Blank.
10.03 Assignment. This Agreement shall be assignable by
either party only with the written consent of the other party, except
that either party may assign this Agreement, without such consent, to
the purchaser of all its assets, or of all the assets of its business
to which this Agreement or the Distribution Agreement relates, and
Mallinckrodt may assign this Agreement or its rights hereunder to any
Affiliate.
10.04 Notice. All notices, communications, demands and
payments required or permitted to be given or made hereunder or
pursuant hereto shall be effective upon receipt or upon mailing by
certified or registered mail, postage prepaid, and addressed as
follows:
If to Mallinckrodt:
Mallinckrodt, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President-Diagnostic Division
with a copy to
Mallinckrodt, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President-Legal Affairs
If to MBI:
Molecular Biosystems, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ and Colmar
▇▇▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Either party may change the address designated by notifying the
other party in writing.
10.05 Governing Law. This Agreement is deemed to have been
entered into in the State of Missouri, and its interpretation,
construction, and the remedies for its enforcement or breach are to be
applied pursuant to and in accordance with the laws of the State of
Missouri.
10.06 Validity of Agreement. If any provision of this
Agreement is, becomes, or is deemed invalid or unenforceable in any
jurisdiction, such provision shall be deemed amended to conform to
applicable law so as to be valid, legal and enforceable in such
jurisdiction so deeming. The validity, legality and enforceability of
such provision shall not in any way be affected or impaired thereby in
any other jurisdiction. if such provision cannot be so amended without
materially altering the intention of the parties, it shall be stricken
in the jurisdiction so deeming, and the remainder of this Agreement
shall remain in full force and effect.
10.07 Waiver. No waiver of any right under this Agreement
shall be deemed effective unless contained in a writing signed by the
party charged with such waiver, and no waiver of any right arising
from any breach or failure to perform shall be deemed to be a waiver
of any future such right or of any other right arising under this
Agreement.
10.08 Entire Agreement. This Investment Agreement,
together with the Distribution Agreement, set forth and constitute the
entire agreement between the parties hereto with respect to the
subject matter hereof, and supersedes any and all prior agreements,
understandings, promises and representations made by either party to
the other concerning the subject matter hereof and the terms
applicable hereto.
10.09 Headings and References; Incorporation of Exhibits.
The headings contained in this Agreement are inserted for convenience
of reference only and shall not be a part, control or affect the
meaning hereof. All references herein to Articles and Sections are to
the Articles and Sections of this Agreement. All references herein to
Appendices are to the Appendices hereto, each of which shall be
incorporated into and deemed a part of this Agreement.
10.10 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereunto have executed this
Agreement as to be effective as of the date first written above.
MALLINCKRODT, INC.
By: /s/ ▇.▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇.▇. ▇▇▇▇▇▇
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Title: Group Vice President
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MOLECULAR BIOSYSTEMS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.
-----------------------------------
Title: Chairman of the Board
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