Exhibit 99.1
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CONVERTIBLE NOTE AND WARRANT PURCHASE AGREEMENT
by
MGI PHARMA, Inc.
and
Deerfield Partners, L.P.,
and
Deerfield International Limited
dated
November 27, 2002
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CONVERTIBLE NOTE AND WARRANT PURCHASE AGREEMENT
This CONVERTIBLE NOTE AND WARRANT PURCHASE AGREEMENT (this "Agreement")
is made as of November 27, 2002, by MGI PHARMA, Inc., a Minnesota corporation
(the "Company"), Deerfield Partners, L.P., a Delaware limited partnership
("Deerfield Partners"), and Deerfield International Limited, a corporation
formed under the laws of the British Virgin Islands ("Deerfield International")
(Deerfield Partners and Deerfield International are referred to herein as the
"Investors").
Recitals
WHEREAS, the Company desires to sell, and Investors desire to buy,
convertible notes and warrants to purchase shares of the Company on the terms
and subject to the conditions set forth in this Agreement and in the promissory
notes and warrants executed and delivered concurrently with this Agreement.
NOW, THEREFORE, in consideration of the mutual representations,
warranties and agreements contained in this Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
I. Issuance and Purchase of Notes and Warrants
Subject to the terms and conditions of this Agreement, the Company
shall issue and sell to each of the Investors, and each Investor shall purchase
from the Company as follows:
(a) a convertible promissory note in the aggregate principal amount set
forth opposite such Investor's name on Schedule 1 attached hereto ("Schedule
1"), subject to any adjustment as provided in such note, bearing interest at the
rate of 3% per annum, due December 1, 2007, convertible into the number of
shares of the Company's Common Stock, par value $.01 per share (the "Common
Stock") set forth opposite such Investor's name on Schedule 1 at a conversion
price per share of $7.00, in substantially the form attached hereto as Exhibit
A;
(b) a convertible promissory note in the aggregate principal amount set
forth opposite such Investor's name on Schedule 1, subject to any adjustment as
provided in such note, bearing interest at the rate of 3% per annum, due
December 1, 2007, convertible into the number of shares of Common Stock set
forth opposite such Investor's name on Schedule 1 at a conversion price per
share of $8.75, in substantially the form attached hereto as Exhibit A, together
with a warrant to purchase the number of shares of Common Stock set forth
opposite such Investor's name on Schedule 1 at an exercise price per share of
$8.75, subject to any adjustment as provided in such warrant, in substantially
the form attached hereto as Exhibit B; and
(c) a convertible promissory note in the aggregate principal amount set
forth opposite such Investor's name on Schedule 1, subject to any adjustment as
provided in such note, bearing interest at the rate of 3% per annum, due
December 1, 2007, convertible into the number of shares of Common Stock set
forth opposite such Investor's name on Schedule 1 at a conversion price per
share of $10.50, in substantially the form attached hereto as Exhibit A,
together with a warrant to purchase the number shares of Common Stock set forth
opposite such Investor's name
on Schedule 1 at an exercise price per share of $10.50, subject to any
adjustment as provided in such warrant, in substantially the form attached
hereto as Exhibit B.
The convertible promissory notes issued by the Company and purchased by the
Investor pursuant to subparagraphs (a) - (c) above are collectively referred to
herein as the "Notes." The warrants issued by the Company and purchased by
Investor pursuant to subparagraphs (b) and (c) above are collectively referred
to herein as the "Warrants." Any shares of Common Stock issuable upon conversion
of the Notes and upon exercise of the Warrants are referred to herein as the
"Conversion Shares" and the "Warrant Shares," respectively, and collectively as
the "Shares." The Notes, the Warrants, the Conversion Shares and the Warrant
Shares are collectively referred to herein as the "Securities." This Agreement,
the Notes and the Warrants are collectively referred to herein as the
"Agreements." The aggregate consideration of the Notes and the Warrants shall be
$21 million (the "Purchase Price").
II. Closing
2.1 At the Closing (as defined in Section 2.2 below), the Company will
sell to each of the Investors, and each of the Investors will purchase from the
Company, upon the terms and conditions hereinafter set forth, the Notes and the
Warrants for the Purchase Price as set forth opposite each such Investor's name
on Schedule 1.
2.2 The completion of the purchase and sale of the Notes and the
Warrants (the "Closing") will occur on a date and at a time to be specified (the
"Closing Date") by the Company and the Investors. The Investors will be notified
of the Closing Date in advance of the Closing. The Closing will occur on the
Closing Date at the offices of the Company's counsel or at such other place as
may be agreed upon by the Company and the Investors. At the Closing, the Company
will deliver to the Investors, or a representative of the Investors, the Notes
and the Warrants each to be registered in the name of the Investor and executed
on behalf of the Company by a duly authorized officer of the Company.
The Company's obligation to issue the Notes and the Warrants to the
Investors will be subject to the following conditions, any one or more of which
may be waived by the Company: (a) prior receipt by the Company of a wire
transfer of funds in the full amount of Purchase Price; (b) the accuracy of the
representations and warranties made by the Investors as of the Closing; (c) the
fulfillment of those undertakings of the Investors to be fulfilled at or prior
to the Closing; and (d) the Closing Date shall have occurred no later than
December 4, 2002.
The Investors' obligation to purchase the Notes and the Warrants will
be subject to the following conditions, any of which may be waived by the
Investors: (a) the representations and warranties of the Company set forth
herein shall be true and correct as of the Closing Date in all material
respects, except that, to the extent that any representation or warranty already
contains a qualification as to materiality, such representation or warranty
shall be true and correct as of the Closing Date, and (b) the Investors shall
have received such documents from the Company as Investors will reasonably have
requested, including an opinion of counsel to the Company as to the matters set
forth in Sections 3.1, 3.2, 3.3 and 3.4 and as to exemption from the
registration requirements of the Securities Act of 1933, as amended (the
"Securities Act") of the sale of the notes and warrants.
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III. Representations, Warranties and Covenants of the Company.
The Company hereby represents and warrants to, and covenants with, the
Investors, as follows:
3.1 Organization. The Company is duly incorporated and validly existing
in good standing under the laws of the jurisdiction of its incorporation. The
Company has full power and authority to own, operate and occupy its properties
and to conduct its business as presently conducted and as described in the
documents filed by the Company under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), since the end of its most recently completed
fiscal year through the date hereof, including, without limitation, its annual
report on Form 10-K for the year ended December 31, 2001, its quarterly reports
on Form 10-Q for the quarters ending September 30, 2002, June 30, 2002 and March
31, 2002, and its current report on Form 8-K filed with the Securities and
Exchange Commission (the "SEC") on April 17, 2002, (the "Exchange Act
Documents") and is registered or qualified to do business and in good standing
in each jurisdiction in which the nature of the business conducted by it or the
location of the properties owned or leased by it requires such qualification and
where the failure to be so qualified would have a material adverse effect upon
the financial condition, earnings, business or business prospects, properties or
operations of the Company (a "Material Adverse Effect"), and no proceeding has
been instituted in any such jurisdiction, revoking, limiting or curtailing, or
seeking to revoke, limit or curtail, such power and authority or qualification.
3.2 Due Authorization. The Company has all requisite power and
authority to execute, deliver and perform its obligations under the Agreements,
and the Agreements have been duly authorized and validly executed and delivered
by the Company and constitute legal, valid and binding agreements of the Company
enforceable against the Company in accordance with their terms, except as rights
to indemnity and contribution may be limited by state or federal securities laws
or the public policy underlying such laws, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' and contracting parties' rights generally and
except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
3.3 Valid Issuance. The Notes being purchased by the Investors
hereunder, the Conversion Shares, upon issuance in accordance with the Notes,
and the Warrant Shares, upon issuance in accordance with the Warrants, will,
upon issuance and payment therefor pursuant to the terms of the Agreements, be
duly authorized, validly issued, fully-paid and nonassessable.
3.4 Non-Contravention. The execution and delivery of the Agreements,
the issuance and sale of the Securities to be sold by the Company thereunder,
the fulfillment of the terms thereof and the consummation of the transactions
contemplated thereby will not: (a) conflict with or constitute a violation of,
or default (with the passage of time or otherwise) under, (i) any material bond,
debenture, note or other evidence of indebtedness, lease, contract, indenture,
mortgage, deed of trust, loan agreement, joint venture or other agreement or
instrument to which the Company is a party or by which its properties are bound,
(ii) the charter, by-laws or other organizational documents of the Company, or
(iii) any law, administrative regulation, ordinance or order of any court or
governmental agency, arbitration panel or authority applicable to the
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Company or its properties, except in the case of clauses (i) and (iii) for any
such conflicts, violations or defaults which are not reasonably likely to have a
Material Adverse Effect; or (b) result in the creation or imposition of any
lien, encumbrance, claim, security interest or restriction whatsoever upon any
of the material properties or assets of the Company or an acceleration of
indebtedness pursuant to any obligation, agreement or condition contained in any
material bond, debenture, note or any other evidence of indebtedness or any
material indenture, mortgage, deed of trust or any other agreement or instrument
to which the Company is a party or by which any of them is bound or to which any
of the material property or assets of the Company is subject. No consent,
approval, authorization or other order of, or registration, qualification or
filing with, any regulatory body, administrative agency, or other governmental
body in the United States or any other person is required for the execution and
delivery of the Agreements and the valid issuance and sale of the Securities to
be sold pursuant to the Agreements, other than such as have been made or
obtained, and except for any post-closing securities filings or notifications
required to be made under federal or state securities laws.
3.5 Capitalization. The capitalization of the Company as of September
30, 2002 is as set forth in the most recent applicable Exchange Act Document,
increased as set forth in the next sentence. The Company has not issued any
capital stock since that date other than pursuant to (a) employee benefit plans
disclosed in the Exchange Act Documents, or (b) outstanding warrants, options or
other securities disclosed in the Exchange Act Documents. The outstanding shares
of capital stock of the Company have been duly and validly issued and are fully
paid and nonassessable, have been issued in compliance with all federal and
state securities laws, and were not issued in violation of any preemptive rights
or similar rights to subscribe for or purchase securities. Except as set forth
in or contemplated by the Exchange Act Documents, there are no outstanding
rights (including, without limitation, preemptive rights), warrants or options
to acquire, or instruments convertible into or exchangeable for, any unissued
shares of capital stock or other equity interest in the Company, or any
contract, commitment, agreement, understanding or arrangement of any kind to
which the Company is a party or of which the Company has knowledge and relating
to the issuance or sale of any capital stock of the Company, any such
convertible or exchangeable securities or any such rights, warrants or options.
Without limiting the foregoing, except for the registration rights contemplated
in this Agreement, no preemptive right, co-sale right, right of first refusal,
registration right, or other similar right exists with respect to the Securities
or the issuance and sale thereof. No further approval or authorization of any
shareholder, the Board of Directors of the Company or others is required for the
issuance and sale of the Securities. Except as disclosed in the Exchange Act
Documents, there are no shareholder agreements, voting agreements or other
similar agreements with respect to the capital stock of the Company to which the
Company is a party or, to the knowledge of the Company, between or among any of
the Company's shareholders.
3.6 Legal Proceedings. There is no material legal or governmental
proceeding pending or, to the knowledge of the Company, threatened to which the
Company is or may be a party or of which the business or property of the Company
is subject that is required to be disclosed and that is not so disclosed in the
Exchange Act Documents. To the knowledge of the Company, there are no facts
which, if known by a potential claimant, governmental authority or self
regulatory organization, would give rise to a claim or proceeding which would be
reasonably likely to have a Material Adverse Effect.
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3.7 No Violations. The Company is not in violation of its charter,
bylaws, or other organizational document, or in violation of any law,
administrative regulation, ordinance or order of any court, self regulatory
organization or governmental agency, arbitration panel or authority applicable
to the Company, which violation, individually or in the aggregate, would be
reasonably likely to have a Material Adverse Effect, or in default (and there
exists no condition which, with the passage of time or otherwise, would
constitute a default) in any material respect in the performance of any bond,
debenture, note or any other evidence of indebtedness in any indenture,
mortgage, deed of trust or any other material agreement or instrument to which
the Company is a party or by which the Company is bound or by which the
properties of the Company are bound, which would be reasonably likely to have a
Material Adverse Effect.
3.8 Governmental Permits, Etc. With the exception of the matters which
are dealt with separately in Sections 3.1, 3.12, 3.13, and 3.14 the Company has
all necessary franchises, licenses, certificates and other authorizations from
any foreign, federal, state or local government or governmental agency,
department, or body that are currently necessary for the operation of the
business of the Company as currently conducted and as described in the Exchange
Act Documents except where the failure to currently possess such documents or
authorizations could not reasonably be expected to have a Material Adverse
Effect.
3.9 Intellectual Property. Except as specifically disclosed in the
Exchange Act Documents (a) the Company owns or possesses sufficient rights to
use all material patents, patent rights, trademarks, copyrights, licenses,
inventions, trade secrets, trade names, know-how, confidential information and
other intellectual property (collectively, "Intellectual Property") described or
referred to in the Exchange Act Documents as owned or possessed by it or that
are necessary for the conduct of its business as now conducted or as proposed to
be conducted as described in the Exchange Act Documents except where the failure
to currently own or possess such Intellectual Property would not have a Material
Adverse Effect, (b) the Company is not, to its knowledge, infringing, and has
not received any notice of, nor has any knowledge of, any asserted infringement
by the Company of, any rights of a third party with respect to any Intellectual
Property that, individually or in the aggregate, would have a Material Adverse
Effect and (c) the Company has not received any notice of, or has any knowledge
of, infringement by a third party with respect to any Intellectual Property
rights of the Company that, individually or in the aggregate, would have a
Material Adverse Effect.
3.10 Financial Statements; Accountants. The financial statements of the
Company and the related notes contained in the Exchange Act Documents present
fairly and accurately in all material respects the financial position of the
Company as of the dates indicated, and the results of its operations and cash
flows for the periods therein specified, and such financial statements have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods specified therein, except as may be
included in the notes to such financial statements, or in the case of unaudited
financial statements, as may be permitted by the rules of the SEC for Form 10-Q
under the Exchange Act and except as disclosed in the Exchange Act Documents.
The other financial information contained in the Exchange Act Documents has been
prepared on a basis consistent with the financial statements of the Company. No
other financial statements or schedules are required to be included in the
Exchange Act Documents. Except for the transactions contemplated by this
Agreement, the Company has no indebtedness or long-term commitments not
disclosed in the Exchange Act
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Documents. KPMG, LLP, who the Company expects will consent to the inclusion in
the Registration Statement of its opinion with respect to the financial
statements to be incorporated by reference from the Company's Annual Report on
Form 10-K for the year ended December 31, 2001 into the Registration Statement
and the prospectus which forms a part thereof, are independent accountants as
required by the Securities Act and the rules and regulations promulgated
thereunder.
3.11 No Material Adverse Change. Except as disclosed in the Exchange Act
Documents, since September 30, 2002, there has not been (a) any material adverse
change in the financial condition, earnings, business, properties or operations
of the Company, (b) any material adverse event affecting the Company, (c) any
obligation, direct or contingent, that is material to the Company considered as
one enterprise, incurred by the Company, except obligations incurred in the
ordinary course of business, (d) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company, or (e) any loss or
damage (whether or not insured) to the physical property of the Company which
has been sustained that is material to the Company.
3.12 Nasdaq Compliance. The Company's Common Stock is registered pursuant
to Section 12(g) of the Exchange Act and is listed on the National Market of The
Nasdaq Stock Market, Inc. (the "Nasdaq National Market"), and the Company has
taken no action designed to, or likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act or de-listing the Common
Stock from the Nasdaq National Market, nor has the Company received any
notification that the SEC or the National Association of Securities Dealers,
Inc. ("NASD") is contemplating terminating such registration or listing.
3.13 Reporting Status. The Company has filed in a timely manner all
documents that the Company was required to file under the Exchange Act during
the 12 months preceding the date of this Agreement. The Company's Exchange Act
Documents and the following documents complied in all material respects with the
SEC's requirements as of their respective filing dates, and the information
contained therein as of the date thereof, and such information, together with
any information which may have otherwise been provided to the Investors in
connection with this Agreement or made publicly available, taken as a whole as
of the date hereof, did not contain an 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: the proxy statement filed pursuant to Section 14(a) of the
Exchange Act on March 29, 2002, and all other documents filed by the Company
with the SEC during the 12 months preceding the date of this Agreement pursuant
to the reporting requirements of the Exchange Act. The Company is eligible to
register the resale of the Shares on a registration statement on Form S-3 under
the Act.
3.14 Listing. The Company will comply with all of the requirements of the
NASD with respect to the issuance of the Shares and the listing thereof on the
Nasdaq National Market no later than the earlier of (a) the effective date of
the Registration Statement (as defined in Section 6.1), and (b) the first
anniversary of the Closing Date.
3.15 No Manipulation of Stock. The Company has not taken and will not, in
violation of applicable law, take, any action designed to or that might
reasonably be expected to cause or
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result in stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Shares.
3.16 Company not an "Investment Company". The Company has been advised of
the rules and requirements under the Investment Company Act of 1940, as amended
(the "Investment Company Act"). The Company is not, and immediately after
receipt of payment for the Securities will not be, an "investment company" or an
entity "controlled" by an "investment company" within the meaning of the
Investment Company Act and will conduct its business in a manner so that it will
not become subject to the Investment Company Act.
3.17 Foreign Corrupt Practices. Neither the Company, nor to the knowledge
of the Company, any agent or other person acting on behalf of the Company, has
(a) directly or indirectly, used any funds for unlawful contributions, gifts or
entertainment or to pay other unlawful expenses related to foreign or domestic
political activity, (b) made any unlawful payments to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (c) failed to disclose fully any
contribution made by the Company (or made by any person acting on its behalf of
which the Company is aware) which is in violation of law, or (d) violated in any
material respect any provision of the Foreign Corrupt Practices Act of 1977, as
amended.
3.18 Contracts. The contracts that are described in the Exchange Act
Documents as current contracts are in full force and effect on the date hereof,
and neither the Company nor, to the Company's knowledge, any other party to such
contracts is in breach of or default under any of such contracts which would
have a Material Adverse Effect.
3.19 Taxes. The Company has filed all necessary federal, state and foreign
income and franchise tax returns and has paid or accrued all taxes shown as due
thereon, and the Company has no knowledge of a tax deficiency which has been or
might be asserted or threatened against it which would have a Material Adverse
Effect.
3.20 Transfer Taxes. On the Closing Date, all stock transfer or other taxes
(other than income taxes) which are required to be paid in connection with the
sale and transfer of the Securities to be sold to the Investors hereunder will
be, or will have been, fully paid or provided for by the Company and all laws
imposing such taxes will be or will have been fully complied with.
3.21 Private Offering, Offering Materials. Assuming that the
representations and warranties of the Investors set forth in Section 4.1 are
accurate, the offer and sale of Securities pursuant to the Agreements are exempt
from registration under the Securities Act. The Company has not conducted any
general solicitation or general advertising as those terms are defined in
Regulation D under the Securities Act in connection with the offer and sale of
Securities and has not distributed and will not distribute prior to the Closing
Date any offering material in connection with the sale of the Securities other
than the documents of which this Agreement is a part or the Exchange Act
Documents. The Company has not in the past nor will it hereafter take any action
to sell, offer for sale or solicit offers to buy any securities of the Company
which would bring the offer, issuance or sale of the Securities as contemplated
by the
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Agreements, within the provisions of Section 5 of the Securities Act, unless
such offer or sale was or will be within the exemptions under Section 4 of the
Securities Act.
IV. Representations, Warranties and Covenants of the Investors
4.1 Accredited Investor. Each of the Investors represents and warrants to,
and covenants with, the Company that: (a) the Investor is an "accredited
investor" as defined in Regulation D under the Securities Act and the Investor
is also knowledgeable, sophisticated and experienced in making, and is qualified
to make decisions with respect to, investments in securities presenting an
investment decision like that involved in the purchase of the Securities,
including investments in securities issued by the Company and investments in
comparable companies, and has had the opportunity to request, receive, review
and consider all information that it deemed relevant in making an informed
decision to purchase the Securities; (b) the Investor is acquiring the
Securities in the ordinary course of its business and for its own account for
investment only and with no present intention of distributing any of such
Securities or any arrangement or understanding with any other persons regarding
the distribution of such Securities; (c) the Investor will not, directly or
indirectly, offer, sell, pledge, transfer or otherwise dispose of (or solicit
any offers to buy, purchase or otherwise acquire or take a pledge of) any of the
Securities except in compliance with the Securities Act, applicable state
securities laws and the respective rules and regulations promulgated thereunder
or exemptions therefrom; and (d) the Investor has, in connection with its
decision to purchase the Securities, relied only upon the Exchange Act
Documents, any materials requested and received pursuant to clause (a) above and
the representations and warranties of the Company contained herein. Each of the
Investors understand that neither the offering nor the acquisition of the
Securities has been registered under the Securities Act or registered or
qualified under any state securities law in reliance on specific exemptions
therefrom, which exemptions may depend upon, among other things, the bona fide
nature of the Investor's investment intent as expressed herein.
4.2 No Offshore Offering. Each of the Investors acknowledges, represents
and agrees that no action has been or will be taken in any jurisdiction outside
the United States by the Company that would permit an offering of the
Securities, or possession or distribution of offering materials in connection
with the issue of the Securities, in any jurisdiction outside the United States
where legal action by the Company for that purpose is required. Each Investor
outside the United States will comply with all applicable laws and regulations
in each foreign jurisdiction in which it purchases, offers, sells or delivers
Securities or has in its possession or distributes any offering materials in all
cases at its own expense.
4.3 Compliance With Prospectus Delivery Requirements. Each of the
Investors hereby covenants with the Company not to make any sale of the
Securities without complying with the provisions of the Agreements and without
causing the prospectus delivery requirement, if any, under the Securities Act,
or an exemption therefrom, to be satisfied, and each of the Investors
acknowledges that the Notes and Warrants will be imprinted with a legend that
prohibits their transfer except in accordance therewith. Each of the Investors
acknowledges that there may occasionally be times when the Company determines
that it must suspend the use of the prospectus forming a part of the
Registration Statement, as set forth in Section 6.2(c).
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4.4 Authority. Each of the Investors further represents and warrants to,
and covenants with, the Company that (a) the Investor has full right, power,
authority and capacity to enter into the Agreements and to consummate the
transactions contemplated thereby and has taken all necessary action to
authorize the execution, delivery and performance of the Agreements, and (b) the
Agreements constitute the valid and binding obligations of the Investor
enforceable against the Investor in accordance with their terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and contracting
parties' rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and except as the indemnification agreements
of the Investor herein may be legally unenforceable.
4.5 Short Positions. The Investors will not use any of the Shares to cover
any short position in the Common Stock if doing so would be in violation of
applicable securities laws.
4.6 No Investment Advice. Each of the Investors understands that nothing in
the Exchange Act Documents, the Agreements or any other materials presented to
the Investor in connection with the purchase and sale of the Securities
constitutes legal, tax or investment advice. Each of the Investors has consulted
such legal, tax and investment advisors as it, in its sole discretion, has
deemed necessary or appropriate in connection with its purchase of the
Securities.
4.7 Confidential Information. Each of the Investors represents to the
Company that, at all times during the Company's offering of the Securities, the
Investor has maintained in confidence all non-public information regarding the
Company received by the Investor from the Company or its agents, including
information about the offering of the Securities under the Agreements, and
covenants that it will continue to maintain in confidence such information until
such information (a) becomes generally publicly available other than through a
violation of this provision by the Investor or its agents or (b) is required to
be disclosed in legal proceedings (such as by deposition, interrogatory, request
for documents, subpoena, civil investigation demand, filing with any
governmental authority or similar process); provided, however, that before
making any use or disclosure in reliance on this Section 4.7, the Investor will
give the Company prior written notice (or as otherwise required by law)
specifying the circumstances giving rise thereto and will furnish only that
portion of the non-public information which is legally required and will
exercise its best efforts to obtain reliable assurance that confidential
treatment will be accorded any non-public information so furnished. Each of the
Investors further understands that by virtue of this Section 4.7 and the
provisions of Section 5.2, it may be prohibited from selling any Shares while it
is in possession of material non-public information regarding the Company.
V. Additional Agreements
5.1 Survival of Representations, Warranties and Agreements. Notwithstanding
any investigation made by any party to this Agreement, all covenants,
agreements, representations and warranties made by the Company and the Investors
herein will survive the execution of this Agreement, the delivery to the
Investors of the Securities being purchased and the payment therefor.
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5.2 Limitations on Future Issuances. Unless otherwise waived by the
Investors in writing, commencing on the date of this Agreement, the Company will
not consummate any agreement or arrangement to raise additional capital through
public or private offerings of either debt or equity until the earlier to occur
of: (a) the Company's disclosure of Phase 3 clinical trial data relating to its
product candidate palonosetron at the annual meeting of the American Society of
Clinical Oncology to be held May 31--June 3, 2003; or (b) December 31, 2003.
Notwithstanding the foregoing, the Company may conduct an equity offering
provided the per share offering price shall be at or above $9.00. None of the
foregoing provisions shall limit the Company's ability to enter into licensing
or co-promotion agreements or arrangements entered into in the ordinary course
of business.
5.3 Reservation of Shares. The Company shall at all times during the period
the Notes and the Warrants are outstanding reserve from its authorized and
unissued Common Stock, solely for the purpose of issuance, directly or
indirectly, upon the conversion of the Notes and exercise of the Warrants, a
sufficient number of shares of Common Stock to provide for the issuance of
Common Stock upon conversion of all outstanding Notes and exercise of all
outstanding Warrants.
5.4 Press Release. The Company shall provide to Investors a copy of any
press release describing the transactions contemplated by this Agreement in
order to provide Investors with an opportunity to comment on the content therof
prior to the issuance by the Company of such press release.
VI. Registration of the Securities; Compliance with the Securities Act.
6.1 Registration Procedures and Other Matters. The Company will:
(a) Subject to receipt of necessary information from the Investors, prepare
and file with the SEC, within 10 business days after the Closing Date, a
registration statement on Form S-3 (the "Registration Statement"), a copy of
which such Registration Statement shall be provided to the Investors prior to
filing in order to provide Investors with an opportunity to comment on the Plan
of Distribution Section thereof, to enable the resale of the Shares by the
Investors, or a permitted transferee of an Investor, from time to time through
the automated quotation system of the Nasdaq National Market, in
privately-negotiated transactions or in other transactions permitted under the
Registration Statement;
(b) Use its best efforts, subject to receipt of necessary information from
the Investors, to cause the Registration Statement to become effective within 30
days (or 90 days in the event that the Registration Statement is selected for
review by the staff of the SEC) after the Registration Statement is filed by the
Company (or, if such 30th or 90th day is not a business day, the first business
day thereafter), such efforts to include, without limiting the generality of the
foregoing, preparing and filing with the SEC in such 30-day or 90-day period any
financial statements that are required to be filed prior to the effectiveness of
such Registration Statement;
(c) Use its best efforts to prepare and file with the SEC such amendments
and supplements to the Registration Statement and the prospectus used in
connection therewith as may be necessary to keep the Registration Statement
current, effective and free from any
10
material misstatement or omission to state a material fact until such time as
the Investors may sell any remaining Shares without restriction by the volume
limitations of Rule 144(e) of the Securities Act;
(d) Furnish to the Investors such number of copies of the Registration
Statement, prospectus and preliminary prospectus in conformity with the
requirements of the Securities Act and such other documents as the Investors may
reasonably request, in order to facilitate the public sale or other disposition
of all or any of the Shares by the Investors; provided, however, that the
obligation of the Company to deliver copies of the prospectus or preliminary
prospectus to the Investors will be subject to the receipt by the Company of
reasonable assurances from the Investors that the Investors will comply with the
applicable provisions of the Securities Act and of such other securities or blue
sky laws as may be applicable in connection with any use of such prospectuses or
preliminary prospectuses;
(e) File documents required of the Company for normal blue sky clearance
in states specified in writing by the Investors and use its best efforts to
maintain such blue sky qualifications during the period the Company is required
to maintain the effectiveness of the Registration Statement pursuant to Section
6.1(c); provided, however, that the Company will not be required to qualify to
do business or consent to service of process in any jurisdiction in which it is
not now so qualified or has not so consented;
(f) Bear all expenses in connection with the procedures in paragraph (a)
through (e) of this Section 6.1 and the registration of the Shares pursuant to
the Registration Statement;
(g) Advise the Investors, promptly after it receives notice or obtains
knowledge of the issuance of any stop order by the SEC delaying or suspending
the effectiveness of the Registration Statement or of the initiation or threat
of any proceeding for that purpose; and it will promptly use its best efforts to
prevent the issuance of any stop order or to obtain its withdrawal at the
earliest possible moment if such stop order should be issued; and
(h) Will timely file the reports required to be filed by it under the
Securities Act and the Exchange Act and the rules and regulations adopted by the
SEC thereunder (or, if the Company is not required to file such reports, it
will, upon the request of the Investors made after the first anniversary of the
Closing Date, make publicly available such information as necessary to permit
sales pursuant to Rule 144 under the Securities Act), and it will take such
further action as the Investors may reasonably request, all to the extent
required from time to time to enable the Investors to sell Shares without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144 under the Securities Act, as such Rule may be amended from
time to time, or any similar rule or regulation hereafter adopted by the SEC.
Upon the request of the Investors, the Company will deliver to such holder a
written statement as to whether it has complied with such information and
requirements.
Notwithstanding anything to the contrary herein, the Registration
Statement shall cover only the Shares, plus any shares deemed to be covered by
the Registration Statement pursuant to Rule 416 under the Securities Act.
6.2 Transfer of Securities After Registration; Suspension.
11
(a) Each of the Investor agrees that it will not effect any disposition
of the Securities or its right to purchase the Securities that would constitute
a sale within the meaning of the Securities Act except as contemplated in the
Registration Statement and as described below or as otherwise permitted by law,
and that it will promptly notify the Company of any changes in the information
set forth in the Registration Statement regarding the Investor or its plan of
distribution.
(b) Except in the event that paragraph (c) below applies, the Company
will (i) if deemed necessary by the Company, prepare and file from time to time
with the SEC a post-effective amendment to the Registration Statement or a
supplement to the related prospectus or a supplement or amendment to any
document incorporated therein by reference or file any other required document
so that the Registration Statement will not contain an 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 not misleading, and so that, as
thereafter delivered to purchasers of the Shares being sold thereunder, the
prospectus will not contain an 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 the light of the circumstances under which they were
made, not misleading, (ii) provide to the Investors copies of any documents
filed pursuant to Section 6.2(b)(i), and (iii) inform each Investor that the
Company has complied with its obligations in Section 6.2(b)(i) (or that, if the
Company has filed a post-effective amendment to the Registration Statement which
has not yet been declared effective, the Company will notify the Investors to
that effect, will use its best efforts to secure the effectiveness of such
post-effective amendment as promptly as possible and will promptly notify the
Investors when the amendment has become effective).
(c) Subject to paragraph (d) below, in the event (i) of any request by
the SEC or any other federal or state governmental authority during the period
of effectiveness of the Registration Statement for amendments or supplements to
the Registration Statement or related prospectus or for additional information,
(ii) of the issuance by the SEC or any other federal or state governmental
authority of any stop order suspending the effectiveness of a Registration
Statement or the initiation of any proceedings for that purpose, (iii) of the
receipt by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Shares for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose, or (iv) of any event or circumstance which, upon the advice of its
counsel, necessitates the making of any changes in the Registration Statement or
prospectus, or any document incorporated or deemed to be incorporated therein by
reference, so that, in the case of the Registration Statement, it will not
contain any untrue statement of a material fact or any omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the prospectus, it will not
contain any untrue statement of a material fact or any omission to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, then the Company will deliver a certificate in writing to the
Investors (the "Suspension Notice") to the effect of the foregoing and, upon
receipt of such Suspension Notice, the Investors will refrain from selling any
Shares pursuant to the Registration Statement (a "Suspension") until the
Investors receive copies of a supplemented or amended prospectus prepared and
filed by the Company, or until the Investors are advised in writing by the
Company that the current prospectus may be used, and have received copies of any
additional or supplemental filings that are incorporated or deemed incorporated
by reference
12
in any such prospectus. In the event of any Suspension, the Company will use its
best efforts to cause the use of the prospectus so suspended to be resumed
within twenty (20) business days after the delivery of a Suspension Notice to
the Investors. In addition to and without limiting any other remedies
(including, without limitation, at law or at equity) available to the Investors,
the Investors will be entitled to specific performance in the event that the
Company fails to comply with the provisions of this Section 6.2(c).
(d) Notwithstanding the foregoing paragraphs of this Section 6.2, the
Investors will not be prohibited from selling Shares under the Registration
Statement as a result of Suspensions on more than three occasions of not more
than twenty (20) days each in any twelve-month period, unless, in the good faith
judgment of the Company's Board of Directors, upon the written advice of
counsel, the sale of Shares under the Registration Statement in reliance on this
paragraph 6.2(d) would be reasonably likely to cause a violation of the
Securities Act or the Exchange Act and result in liability to the Company.
(e) Provided that a Suspension is not then in effect, the Investors may
sell Shares under the Registration Statement, provided that they comply with all
applicable prospectus delivery requirements. Upon receipt of a request therefor,
the Company has agreed to provide, at its own expense, an adequate number of
current prospectuses to the Investors and to supply copies to any other parties
requiring such prospectuses.
(f) In the event of a sale of Shares by an Investor pursuant to the
Registration Statement, the Investor shall deliver to the Company's transfer
agent, with a copy to the Company, a Certificate of Subsequent Sale
substantially in the form attached hereto as Exhibit C, and its certificate
evidencing the Shares, so that the Shares may be properly transferred.
6.3 Indemnification. For the purpose of this Section 6.3 only, the term
"Selling Shareholder" will include the Investors and any officer, director,
employee or affiliate of an Investor, the term "Registration Statement" will
include the prospectus in the form first filed with the SEC pursuant to Rule 424
(b) of the Securities Act or filed as part of the Registration Statement at the
time of effectiveness if no Rule 424(b) filing is required, and any exhibit,
supplement or amendment included in or relating to the Registration Statement
referred to in Section 6.1, and the term "untrue statement" will include any
untrue statement or alleged untrue statement, or any omission or alleged
omission to state in the Registration Statement a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(a) The Company agrees to indemnify and hold harmless each Selling
Shareholder from and against any losses, claims, damages or liabilities to which
such Selling Shareholder may become subject (under the Securities Act or
otherwise) insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon (i) any breach
of the representations or warranties of the Company contained herein or failure
to comply with the covenants and agreements of the Company contained herein,
(ii) any untrue statement of a material fact contained in the Registration
Statement or any omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (iii) any failure by
the Company to fulfill any undertaking included in the Registration Statement,
and the Company will reimburse such Selling Shareholder for any
13
reasonable legal expenses and any other actual, accountable out-of-pocket
expenses reasonably incurred in investigating, defending or preparing to defend
any such action, proceeding or claim; provided, however, that the Company will
not be liable in any such case to the extent that such loss, claim, damage or
liability arises out of, or is based upon, an untrue statement made in such
Registration Statement or any omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of such Selling Shareholder specifically for use in preparation of the
Registration Statement or the failure of such Selling Shareholder to comply with
its covenants and agreements contained in Section 6.2 hereof or any statement or
omission in any prospectus that is corrected in any subsequent prospectus that
was delivered to the Selling Shareholder prior to the pertinent sale or sales by
the Selling Shareholder. The Company will reimburse each Selling Shareholder for
the amounts provided for herein within a reasonable period of time after demand
thereof.
(b) Each of the Investors agrees to indemnify and hold harmless the
Company (and each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act, each officer of the Company who signs the
Registration Statement and each director of the Company) from and against any
losses, claims, damages or liabilities to which the Company (or any such
officer, director or controlling person) may become subject (under the
Securities Act or otherwise), insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or are
based upon, (i) any failure to comply with the covenants and agreements
contained in Section 6.2 hereof, or (ii) any untrue statement of a material fact
contained in the Registration Statement or any omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading if such untrue statement or omission was made in reliance upon and in
conformity with written information furnished by or on behalf of the Investor
specifically for use in preparation of the Registration Statement, and the
Investor will reimburse the Company (or such officer, director or controlling
person), as the case may be, for any reasonable legal expenses and any other
actual, accountable out-of-pocket expenses reasonably incurred in investigating,
defending or preparing to defend any such action, proceeding or claim.
(c) Promptly after receipt by any indemnified person of a notice of a
claim or the beginning of any action in respect of which indemnity is to be
sought against an indemnifying person pursuant to this Section 6.3, such
indemnified person will notify the indemnifying person in writing of such claim
or of the commencement of such action, but the omission to so notify the
indemnifying person will not relieve it from any liability which it may have to
any indemnified person under this Section 6.3 (except to the extent that such
omission materially and adversely affects the indemnifying person's ability to
defend such action) or from any liability otherwise than under this Section 6.3.
Subject to the provisions hereinafter stated, in case any such action will be
brought against an indemnified person, the indemnifying person will be entitled
to participate therein, and, to the extent that it will elect by written notice
delivered to the indemnified person promptly after receiving the aforesaid
notice from such indemnified person, will be entitled to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified person. After
notice from the indemnifying person to such indemnified person of its election
to assume the defense thereof, such indemnifying person will not be liable to
such indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof; provided, however,
that if there exists or will exist a conflict
14
of interest that would make it inappropriate, in the opinion of counsel to the
indemnified person, for the same counsel to represent both the indemnified
person and such indemnifying person or any affiliate or associate thereof, the
indemnified person will be entitled to retain its own counsel at the expense of
such indemnifying person; provided, however, that no indemnifying person will be
responsible for the fees and expenses of more than one separate counsel
(together with appropriate local counsel) for all indemnified parties. In no
event will any indemnifying person be liable in respect of any amounts paid in
settlement of any action unless the indemnifying person will have approved the
terms of such settlement, provided that such consent will not be unreasonably
withheld. No indemnifying person will, without the prior written consent of the
indemnified person, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified person is or could have been a
party and indemnification could have been sought hereunder by such indemnified
person, unless such settlement includes an unconditional release of such
indemnified person from all liability on claims that are the subject matter of
such proceeding.
(d) If the indemnification provided for in this Section 6.3 is
unavailable to or insufficient to hold harmless an indemnified person under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying person will contribute to the amount paid or payable by
such indemnified person as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative fault of the Company on the one hand and the Investor,
as well as any other Selling Shareholders under the Registration Statement on
the other hand in connection with the statements or omissions or other matters
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative fault will be determined by reference to, among other things, in the
case of an untrue statement, whether the untrue statement relates to information
supplied by the Company on the one hand or an Investor or other Selling
Shareholder on the other hand and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement. The Company and the Investors agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by pro
rata allocation (even if the Investors and other Selling Shareholders were
treated as one entity for such purpose) or by any other method of allocation
which does not take into account the equitable considerations referred to above
in this subsection (d). The amount paid or payable by an indemnified person as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (d) will be deemed to include any
legal or other expenses reasonably incurred by such indemnified person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), an Investor will not be
required to contribute any amount in excess of the amount by which the net
amount received by the Investor from the sale of the Shares to which such loss
relates exceeds the amount of any damages which such Investor has otherwise been
required to pay by reason of such untrue statement. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) will be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
(e) Each of the Investors hereby acknowledges that it is a sophisticated
business person who was represented by counsel during the negotiations regarding
the provisions hereof including, without limitation, the provisions of this
Section 6.3, and is fully informed regarding
15
said provisions. Each of the Investors further acknowledges that the provisions
of this Section 6.3 fairly allocate the risks involved in the transactions
contemplated by this Agreement. Each of the Investors and the Company are
advised that federal or state public policy as interpreted by the courts in
certain jurisdictions may be contrary to certain of the provisions of this
Section 6.3, and each of the Investor and the Company hereby expressly waive and
relinquish any right or ability to assert such public policy as a defense to a
claim under this Section 6.3 and further agree not to attempt to assert any such
defense.
6.4 Termination of Conditions and Obligations. The conditions
precedent imposed by Section 5 or this Section 6 upon the transferability of the
Shares will cease and terminate as to any particular number of the Shares when
such Shares will have been effectively registered under the Securities Act and
sold or otherwise disposed of in accordance with the intended method of
disposition set forth in the plan of distribution disclosed in the Registration
Statement covering such Shares or at such time as an opinion of counsel
reasonably satisfactory to the Company will have been rendered to the effect
that such conditions are not necessary in order to comply with the Securities
Act.
6.5 Information Available. So long as the Registration Statement is
effective covering the resale of Shares owned by an Investor, the Company will
furnish to such Investor:
(a) As soon as practicable after it is available, one copy of (i) its
Annual Report to Shareholders (which Annual Report will contain financial
statements audited in accordance with generally accepted accounting principles
by a national firm of certified public accountants), (ii) its Annual Report on
Form 10-K and (iii) its Quarterly Reports on Form 10-Q (the foregoing, in each
case, excluding exhibits);
(b) Upon the request of an Investor, all exhibits excluded by the
parenthetical to subparagraph (a) of this Section 6.5 as filed with the SEC and
all other information that is made available to shareholders of the Company; and
(c) Upon the reasonable request of an Investor, an adequate number of
copies of the prospectuses to supply to any other party requiring such
prospectuses; and upon the reasonable request of the Investor, an executive
officer of the Company (or an appropriate designee identified by the Company)
will meet with the Investor or a representative thereof at the Company's
headquarters to discuss all information relevant for disclosure in the
Registration Statement covering the Shares and will otherwise cooperate with any
Investor conducting an investigation for the purpose of reducing or eliminating
such Investor's exposure to liability under the Securities Act, including the
reasonable production of information at the Company's headquarters; provided,
however, that the Company will not be required to disclose any confidential
information to or meet at its headquarters with any Investor until and unless
the Investor will have entered into a confidentiality agreement in form and
substance reasonably satisfactory to the Company with the Company with respect
thereto.
(d) The documents required to be delivered by the Company pursuant to
this Agreement, except for the prospectus or preliminary prospectus required to
be delivered pursuant to Section 6.1(d) herein, may be delivered to an Investor
in electronic form to the e-mail address provided to the Company by the
Investor.
16
6.6 Form D Filing. The Company will file with the SEC a Notice of
Sale of Securities on Form D with respect to the Securities, as required under
Regulation D under the Securities Act, no later than fifteen (15) days after the
Closing Date, and will file on a timely basis, as applicable, a Form D with all
states that require such a filing.
VII. Notices
All notices, requests, consents and other communications hereunder
will be in writing, will be mailed (a) if within the United States by
first-class registered or certified airmail, or nationally recognized overnight
express courier, postage prepaid, by facsimile or e-mail, or (b) if delivered
from outside the United States, by international express courier, facsimile or
e-mail. All such notices will be deemed given (i) if delivered by first-class
registered or certified mail, three business days after so mailed, (ii) if
delivered by nationally recognized overnight carrier, one business day after so
mailed, (iii) if delivered by International Federal Express, two business days
after so mailed, and (iv) if delivered by facsimile or e-mail, upon electronic
confirmation of receipt and will be delivered as addressed to the e-mail address
furnished by the parties to each other or by mail as follows:
(A) If to the Company, to:
MGI PHARMA, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chief Financial Officer
(B) With a copy to:
▇▇▇▇▇▇ & Whitney, LLP
Suite 1500
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
(C) If to the Investors, to:
Deerfield Management Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇--▇▇/▇▇/ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
17
(D) With a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇, Esq.
VIII. Miscellaneous
8.1 Changes. This Agreement may not be modified or amended except
pursuant to an instrument in writing signed by the Company and the Investors.
8.2 Headings. The headings of the various sections and subsections of
this Agreement have been inserted for convenience of reference only and will not
be deemed to be part of this Agreement and do not affect its interpretation.
8.3 Severability. In case any provision contained in this Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein will
not in any way be affected or impaired thereby.
8.4 Governing Law; Jurisdiction and Venue. This Agreement will be
governed by, and construed in accordance with, the internal laws of the State of
Minnesota, without giving effect to the principles of conflicts of law. The
Company hereby consents to the non-exclusive jurisdiction of any court in the
State of New York, County of New York and waives any objection based on venue or
forum non conveniens with respect to any action arising under or related to this
Agreement.
8.5 Counterparts. This Agreement may be executed in two or more
counterparts, each of which will constitute an original, but all of which, when
taken together, will constitute but one instrument, and will become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.
18
IN WITNESS WHEREOF, the Company and the Investors have executed this
Convertible Note and Warrant Purchase Agreement as of the date first above
written.
MGI PHARMA, INC. DEERFIELD PARTNERS, L.P.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------- -------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------- -----------------------------
Title: CFO Title: General Partner
---------------------------- ----------------------------
DEERFIELD INTERNATIONAL LIMITED
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Title: General Partner
----------------------------
19
Schedule 1
CONVERTIBLE PROMISSORY NOTES
----------------------------
Conversion price per share: $ 7.00 $ 8.75 $ 10.50
Deerfield Partners, L.P.
Number of shares: 743,856 297,143 297,144
Principal amount: $ 5,206,992.00 $ 2,600,001.00 $ 3,120,012.00 $ 10,927,005.00
Deerfield International Limited
Number of shares: 684,714 274,285 274,286
Principal amount: $ 4,792,998.00 $ 2,399,994.00 $ 2,880,003.00 $ 10,072,995.00
---------------------------------------------------------------------------------
Total
------
Number of shares: 1,428,570 571,428 571,430 2,571,428
Principal amount: $ 9,999,990.00 $ 4,999,995.00 $ 6,000,015.00 $ 21,000,000.00
Weighted average price per share: $ 8.17
WARRANTS
--------
Exercise price per share: $ 8.75 $ 10.50
Deerfield Partners, L.P.
Number of shares: 104,000 104,000
Deerfield International Limited
Number of shares: 96,000 96,000
20
Exhibits
Exhibit A Form of Convertible Promissory Note
Exhibit B Form of Common Stock Purchase Warrant
Exhibit C Certificate of Subsequent Sale