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Exhibit 10.8
BIOFACTORS, INC.
SECURED NOTE AND STOCK PURCHASE AGREEMENT
As of DECEMBER 1, 1995
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BIOFACTORS, INC.
SECURED NOTE AND STOCK PURCHASE AGREEMENT
DECEMBER 1, 1995
Table of Contents
Page
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1. Purchase, Sale and Terms of the Notes............................ 1
1.1 Sale and Issuance of the Notes........................ 1
1.2 Closing............................................... 1
1.3 Subsequent Closings................................... 1
2. Maturity......................................................... 2
3. Conversion Rights................................................ 2
4. Common Stock..................................................... 2
4.1 Sale, Issuance and Price of Common Stock.............. 2
4.2 Registration Rights................................... 2
5. Security Agreement............................................... 2
6. Certain Tax Consequences......................................... 2
8. Conditions of Purchaser's Obligations at Closing................. 5
8.1 Performance........................................... 5
8.2 Qualifications........................................ 5
8.3 Consents and Waivers.................................. 5
8.4 Security Agreement.................................... 5
9. Miscellaneous.................................................... 5
9.1 Survival of Warranties................................ 5
9.2 Successors and Assigns................................ 6
9.3 Governing Law......................................... 6
9.4 Counterparts.......................................... 6
9.5 Titles and Subtitles.................................. 6
9.6 Notices............................................... 6
9.7 Entire Agreement; Amendments and Waivers.............. 6
9.8 Severability.......................................... ▇
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▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ A Schedule of New Purchasers
EXHIBITS
EXHIBIT A Form of Secured Promissory Note
EXHIBIT B Form of Pledge and Security Agreement
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SECURED NOTE AND STOCK PURCHASE AGREEMENT
THIS SECURED NOTE AND STOCK PURCHASE AGREEMENT dated as of December 1,
1995 (this "Agreement"), is by and among the purchasers listed on Schedule A
hereto (as such Schedule may be amended from time to time, individually a
"Purchaser" and collectively the "Purchasers"), and BioFactors, Inc., a Delaware
corporation (the "Company").
NOW, THEREFORE, in consideration of the following mutual covenants and
agreements, the Purchasers and the Company hereby agree as follows:
AGREEMENT
1. Purchase, Sale and Terms of the Notes.
1.1 Sale and Issuance of the Notes.
(a) The Company has authorized the issuance and sale to the
Purchasers of the Company's secured promissory notes in the maximum aggregate
original principal amount of up to $350,000, bearing interest at the rate of 10%
per annum (computed on the basis of a 365-day year for the actual number of days
elapsed), substantially in the form set forth in Exhibit A hereto (herein
referred to individually as a "Note" and collectively as the "Notes," which
terms shall also include any notes delivered in exchange or replacement
therefor).
(b) Subject to the terms and conditions of this Agreement, each
Purchaser agrees, severally, but not jointly, to purchase at the Closing (as
defined below), and the Company agrees to sell and issue to each Purchaser at
the Closing, a Note in the principal amount set forth opposite each such
Purchaser's name on the Schedule of Purchasers attached hereto as Schedule A at
a purchase price equal to the original principal amount of such Note.
1.2 Closing. The initial purchase and sale of the Notes shall take
place at 10:00 a.m. on December 8, 1995, at the offices of ▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇▇, L.L.C., ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, or at such other date,
time and place as shall be designated by the Company (the "Closing," which term
also shall include any subsequent closing pursuant to the provisions of Section
1.3). At or promptly after the Closing, the Company will execute and deliver
Notes, each dated the date of the Closing and payable to the order of the
respective Purchasers, in the respective principal amounts set forth on Schedule
A, against delivery of the full purchase price for the Notes by wire transfer of
the purchase price to an account designated in writing by the Company.
1.3 Subsequent Closings. If the Notes issued or sold at the Closing
represent, in the aggregate, less than the maximum aggregate original principal
amount as set forth in Section 1.1(a), the Company may issue additional Notes at
one or more subsequent closings held within thirty (30) days of the Closing;
provided, however, that the Company, in its sole discretion, at any time after
the initial Closing, may terminate this offering and accept no additional
purchases. Upon execution of counterpart signature pages to each of this
Agreement and the Security Agreement (as
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defined herein), any additional purchaser purchasing a Note at any such
subsequent closing shall be added to Schedule A and shall be deemed to be a
Purchaser for purposes of this Agreement. The date of the final purchase and
sale of the Notes shall be referred to herein as the "Final Closing."
2. Maturity. Unless previously converted pursuant to Section 3 hereof,
the Notes shall mature and become due and payable in full at the close of
business on March 31, 1996.
3. Conversion Rights. The Notes are subject to either mandatory or
voluntary conversion upon the occurrence of certain events as provided in the
Notes.
4. Common Stock.
4.1 Sale, Issuance and Price of Common Stock.
(a) The Company has authorized the issuance and sale to the
Purchasers of a maximum aggregate of 35,000 shares of the Company's common
stock, $.01 par value per share (the "Shares").
(b) At the Closing, and at any subsequent closing up to and
including the Final Closing, the Company shall issue to each Purchaser
purchasing a Note against receipt of the Purchase Price (as defined in Section
4.1(c)), the number of shares of Common Stock set forth opposite such
Purchaser's name on Schedule A.
(c) The purchase price for the Shares shall be $.01 per share
(the "Purchase Price"), which is hereby agreed to be the fair market value of
such Shares.
4.2 Registration Rights. The Company covenants and agrees to
enter into, with each of the Purchasers, a registration rights agreement
substantially in the form of the registration rights agreement to be entered
into by it in connection with the Whale Transaction, which agreement shall
provide for the registration under the Act (as defined below) of the resale of
the Shares by the Purchasers, subject to the conditions and limitations of such
agreement. As to any Purchaser, the Company's obligation to enter into such
agreement shall be conditioned upon such Purchaser's execution and delivery of a
counterpart copy of such agreement, which will provide for a "lock-up" of the
Purchaser's Shares and such other customary provisions as may be required by
Whale.
5. Security Agreement. Upon the execution of the Pledge and Security
Agreement of even date herewith, by and among the Company and the Holders named
therein, attached hereto as Exhibit C (the "Security Agreement"), the Purchasers
will become parties to the Security Agreement and the Company's obligations
under the Notes shall be secured thereby.
6. Certain Tax Consequences. Each Purchaser hereby acknowledges that
for federal income tax purposes he or it is purchasing investment units
consisting of a Note and Shares and that the allocation of consideration made
herein between the Note and the Shares shall be binding upon each Purchaser
unless such Purchaser explicitly discloses on its tax return that it is making a
different allocation. It is further understood that such allocation does not
bind the Internal Revenue Service, and in the event the fair market value of
the Shares is determined to be greater than the Purchase Price of
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the Shares set forth in Section 4.1(c), the cost basis of the Notes would have
to be reduced by the amount of such excess and the Notes would be deemed to be
issued at a discount. Individual cash basis holders of Notes would then report
the difference between the allocated cost of the Notes and the aggregate
principal and interest received as ordinary income upon payment of the Notes.
Gain on the sale or exchange of a discounted Note would be ordinary income up
to the accrued portion of the discount and interest. Other Note holders would
be subject to the rules under Internal Revenue Code Sections 1281-1283
regarding the ratable accrual of the discount and interest on short-term
obligations.
7. Representations and Warranties of the Purchasers. Each Purchaser
severally, but not jointly, hereby represents and warrants to the Company that:
7.1 Such Purchaser is aware that the investment in the Note and
the Shares involves a high degree of risk.
7.2 Such Purchaser understands and acknowledges that there is no
assurance as to the future performance of the Company.
7.3 Such Purchaser understands and acknowledges that there may be
certain adverse tax consequences to him or it in connection with his or its
purchase of the Note and the Shares (including but not limited to the tax
consequences described in Section 6), that the Company is not giving and has not
given any advice on the tax consequences of the investment and that the Company
has advised all Purchasers to seek the advice of their own experts in such areas
prior to making this investment.
7.4 Each of this Agreement and the Security Agreement has been duly
executed and delivered by such Purchaser and constitutes the Purchaser's valid
and legally binding obligation, enforceable in accordance with its terms. Each
Purchaser represents that he or it has full power and authority to enter into
this Agreement and the Security Agreement.
7.5 The Confidential Investor Questionnaire being delivered by the
Purchaser to the Company simultaneously herewith is true, complete and correct
in all material respects; and the Purchaser understands that the Company has
determined that the exemption of the Note and the Shares from the registration
provisions of the Securities Act pursuant to Regulation D thereof, which is
available for non-public offerings, is applicable to the offer and sale of the
Note and the Shares, and that such determination is based in part upon the
representations, warranties and agreements made by the Purchaser herein and in
the Confidential Investor Questionnaire.
7.6 The Note and the Shares to be received by such Purchaser
pursuant to the terms hereof, and the Whale Note or Alternative Note to be
received by such Purchaser upon conversion of the Note (collectively, the
"Securities"), will be acquired for investment for such Purchaser's own account,
not as a nominee or agent, and not with a view to the resale or distribution of
any part thereof, and such Purchaser has no present intention of selling,
granting any participation in, or otherwise distributing the same.
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7.7 Such Purchaser understands that the Securities he or it is
receiving hereunder are characterized as "restricted securities" under the
federal securities laws inasmuch as they are being acquired from the Company in
a transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Securities Act of 1933, as amended (the "Act"), only in certain limited
circumstances.
7.8 Each Purchaser represents and warrants that he or it has such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of an investment in the Notes and the Shares and
has obtained, in his or its own judgment, sufficient information from the
Company to evaluate the merits and risks of an investment in the Company. Each
Purchaser further represents and warrants that he or it has not utilized any
person as a purchaser representative as such term is defined in Regulation D in
connection with evaluating such merits and risks, but rather has relied solely
upon his or its own investigation in making a decision to invest in the Company.
7.9 No representations or warranties have been made to the
Purchaser by the Company or any of its directors, agents, employees or
affiliates; and in entering into this transaction the Purchaser is not relying
upon any information other than that obtained as the result of independent
investigations, if any, by the Purchaser.
7.10 Each Purchaser represents and warrants that he or it has had a
reasonable opportunity to ask questions and to receive satisfactory answers
concerning the offering and other matters pertaining to his or its investment
and all such questions have been answered to the Purchaser's full satisfaction;
the Purchaser further represents and warrants that he or it has had reasonable
opportunity to obtain all the information he or it considers necessary or
appropriate for deciding whether to purchase the Note and the Shares.
7.11 Each Purchaser represents and warrants that he or it is an
"accredited investor" within the meaning of Rule 501(a) of Regulation D,
promulgated under the Act.
7.12 The address set forth below is the Purchaser's true and correct
domicile, and the Purchaser has no present intention of becoming a resident of
any other state or jurisdiction.
7.13 Without in any way limiting the representations set forth
above, such Purchaser further agrees not to make any disposition of the
Securities unless there is then in effect a registration statement under the Act
covering such proposed disposition and such disposition is made in accordance
with such registration statement; or such Purchaser shall have notified the
Company of the proposed disposition and shall have furnished the Company with a
statement of the circumstances surrounding the proposed disposition, and, if
reasonably requested by the Company, such Purchaser shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company, that
such disposition will not require registration of such shares under the Act. It
is agreed that the Company will not require opinions of counsel for transactions
made pursuant to Rule 144 except if reasonably requested by the Company.
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7.14 It is understood that the Securities may bear one or all of the
following legends:
(a) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES LAWS. THEY MAY
NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT
OR APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS
SOLD PURSUANT TO RULE 144 PROMULGATED UNDER SUCH ACT."
(b) Any legend required by the laws of the State of Delaware or
applicable state securities laws.
8. Conditions of Purchaser's Obligations at Closing. The obligations of
each Purchaser under subsection 1.1(b) of this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions, the
waiver of which shall not be effective against any Purchaser who does not
consent in writing thereto:
8.1 Performance. The Company shall have performed and complied with
all agreements, obligations, and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing.
8.2 Qualifications. The Company shall have obtained all necessary
Blue Sky law permits and qualifications, or secured exemptions therefrom,
required by any state for the offer and sale of the Notes and the Shares.
8.3 Consents and Waivers. The Company shall have obtained any and
all consents and waivers necessary or appropriate for consummation of the
transactions contemplated by this Agreement. The parties expressly acknowledge
that, as a condition to closing, a majority of the holders of the Company's
secured promissory notes issued pursuant to that certain Secured Note and
Warrant Purchase Agreement dated as of December 1, 1994, between the Company and
the Purchaser's named therein, as amended, and secured by that certain Security
Agreement dated as of December 1, 1994 between the Company and the Holders named
therein, shall have consented to the creation of a prior lien on the assets of
the Company pledged pursuant to the Security Agreement.
8.4 Security Agreement. The Company and the Purchasers shall have
executed and delivered the Security Agreement.
9. Miscellaneous.
9.1 Survival of Warranties. The warranties, representations, and
covenants of the Company and the Purchasers contained in or made pursuant to
this Agreement shall survive the
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execution and delivery of this Agreement and the Closing and shall in no way be
affected by any investigation of the subject matter thereof made by or on
behalf of the Purchasers or the Company.
9.2 Successors and Assigns. Except as otherwise provided herein,
the terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties. Nothing in
this Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
9.3 Governing Law. This Agreement shall be governed by and
construed under the laws of the State of Colorado, disregarding any Colorado
principles of conflicts of laws that otherwise would provide for the application
of the substantive laws of another jurisdiction.
9.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement.
9.5 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
9.6 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or four (4)
days after deposit with the United States Post Office or air courier in the case
of non-U.S. Purchasers, by registered or certified mail, postage prepaid and
addressed to the party to be notified at the address indicated for such party on
the signature page hereof, or at such other address as such party may designate
by ten (10) days' advance written notice to the other parties.
9.7 Entire Agreement; Amendments and Waivers. This Agreement, the
Notes and the Security Agreement constitute the full and entire understanding
and agreement between the parties with regard to the subject matter hereof. Any
term of this Agreement or the Notes may be amended and the observance of any
term of this Agreement or the Notes may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the holders of a majority of the debt
represented by the Notes then outstanding. Any amendment or waiver effected in
accordance with this Section 9.7 shall be binding upon each holder of any
securities acquired under this Agreement at the time outstanding (including
securities for which any such securities are convertible or exercisable), each
future holder of all such securities, and the Company.
9.8 Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.
[The remainder of this page is intentionally left blank]
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IN WITNESS WHEREOF, the parties have executed this Secured
Note and Stock Purchase Agreement as of the date first above written.
BIOFACTORS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------
Title: President and Chief Executive Officer
--------------------------------------
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
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Signature Page
Biofactors, Inc.
Secured Note and Stock Purchase Agreement
Dated December 1, 1995
PURCHASER:
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Title:
----------------------------------
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Amount Subscribed for $50,000
PURCHASER:
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Title:
----------------------------------
Address: ▇▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Amount Subscribed for $50,000
PURCHASER:
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Title:
----------------------------------
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Amount Subscribed for $75,000
PURCHASER:
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
-----------------------------------
Title:
----------------------------------
Address: ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Amount Subscribed for $12,500
PURCHASER:
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇, /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Title:
----------------------------------
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇. #▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Amount Subscribed for $37,500
PURCHASER:
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Title:
----------------------------------
Address: ▇▇▇▇ (▇▇▇▇▇▇▇▇▇) ▇▇▇▇., #▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Amount Subscribed for $50,000
PURCHASER:
SAGAX FUND II, LTD.
Amount Subscribed for $
By: /s/ (NOT LEGIBLE)
-------------------------------------
Name: (Not Legible)
-----------------------------------
Title:
----------------------------------
Address: ▇▇ ▇▇▇-▇▇-▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇
Amount Subscribed for $50,000
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Schedule A
Biofactors, Inc.
Secured Note and Stock Purchase Agreement
Dated December 1, 1995
SCHEDULE OF PURCHASERS
PRINCIPAL
NAME OF AMOUNT OF NO. OF SHARES OF
PURCHASER NOTE COMMON STOCK
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BIOFACTORS, INC.
FIRST AMENDMENT TO
SECURED NOTE AND STOCK PURCHASE AGREEMENT
This FIRST AMENDMENT TO SECURED NOTE AND STOCK PURCHASE
AGREEMENT (this "Amendment") is entered into as of March 22, 1996, by and among
BioFactors, Inc., a Delaware corporation (the "Company") and the parties named
on the signature pages hereto (all of such parties other than the Company,
collectively, the "Majority Noteholders") and amends that certain Secured Note
and Stock Purchase Agreement dated as of December 1, 1995, by and among the
Company and the Purchasers named therein (the "Note Agreement").
WHEREAS, the Majority Noteholders are the holders of the
secured promissory notes (the "Notes") issued pursuant to the Note Agreement
and, collectively, are the holders of Notes representing in excess of fifty
percent of the aggregate principal amount of all the Notes outstanding as of
the date hereof and, pursuant to Section 9.7 of the Note Agreement, can bind
each holder of the Notes outstanding as of the date of this Agreement;
WHEREAS, the Company has entered into a letter of intent with
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Company, L.P. ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇") pursuant to which ▇▇▇▇▇▇
▇▇▇▇▇▇▇ has agreed to underwrite the Company's IPO and to place promissory
notes of the Company having a minimum aggregate principal amount of $500,000
(the "▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Bridge"); and
WHEREAS, it being acknowledged that the placement of the
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Bridge and the subsequent underwriting of the IPO will be of
substantial benefit to the Company and the Majority Noteholders, the Company
and the Majority Noteholders desire to enter into this Amendment to extend the
maturity date of the Notes to accommodate the placement of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Bridge, to conform the repayment terms of the Notes consistent with the terms
of the notes issued in connection with the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Bridge (the "▇▇▇▇▇▇
▇▇▇▇▇▇▇ Notes") and to terminate the security interest of the Notes, all in
consideration for the issuance of additional shares of common stock of the
Company.
NOW THEREFORE, in consideration of the above and the following
mutual covenants and agreements, the parties agree as follows:
1. Definitions. Unless otherwise defined herein,
capitalized terms shall have the meanings given such terms in the Note
Agreement.
2. Amendments. The Majority Noteholders hereby agree to
amend the Note Agreement as follows:
a. Definitions. The term "Whale Transaction"
shall be replaced wherever it appears by the term "▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Bridge" which
term shall have the following meaning: the placement by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ of the
Company's promissory notes having a minimum aggregate principal amount of
$500,000.
b. Maturity Date. Section 2 is amended in its
entirety as follows:
"2. Maturity. Unless the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Bridge
shall have been previously consummated, in which event the provisions
of Section 3 shall supersede the provisions of this Section 2, the
Notes shall mature and become due and payable in full at the close of
business on June 30, 1996."
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c. Repayment Terms. Section 3 is amended in its
entirety as follows:
"3. Repayment Terms. Upon the closing of the
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Bridge, the repayment terms of the Notes issued
hereunder shall automatically conform to the repayment terms of the
notes issued in connection with the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Bridge (the "▇▇▇▇▇▇
▇▇▇▇▇▇▇ Notes"), as follows: the Notes shall mature and become due and
payable in full on the earlier of (i) one year from the date of
issuance of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Notes or (ii) the consummation of a
financing in which the Company receives gross proceeds of at least
$1,500,000."
3. Release of Pledged Collateral. The Majority
Noteholders hereby agree, upon the closing of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Bridge, to
release and terminate the security interest in that certain Promissory Note
(the "▇▇▇▇▇▇ Note") in the original principal amount of $950,000, dated August
30, 1995, between ▇▇▇▇▇▇ International Associates, Inc., the "Maker" thereof,
and the Company and any proceeds therefrom (the "Pledged Collateral"), granted
and delivered pursuant to that certain Pledge and Security Agreement (the
"Security Agreement"), dated as of December 1, 1995, by and among the Company
and the Secured Parties named therein. The Majority Noteholders further agree
to cause ▇▇▇▇ ▇▇▇▇▇, as Representative of the Secured Parties and holder of the
▇▇▇▇▇▇ Note on behalf of the Secured Parties pursuant to Section 8 of the
Security Agreement, to deliver the ▇▇▇▇▇▇ Note to the Company as promptly as
possible upon the Representative's receipt of notice from the Company of the
closing of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Bridge and to cause the Representative to take
all such other actions on behalf of the Secured Parties as may be necessary
under applicable law to release the security interest in the Pledged
Collateral.
4. Issuance of Shares. In consideration of the
foregoing, the Company hereby agrees that, upon the closing of the ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Bridge and the receipt by the Company of (i) the ▇▇▇▇▇▇ Note, together
with a statement by the Representative in form and substance satisfactory to
the Company that a complete release of the Pledged Collateral has been
effected, and (ii) subscription and registration rights agreements executed by
each of the holders of the Notes, the Company shall, for no additional
consideration, issue and deliver to each such holder, two-tenths (0.2) of a
fully-paid and nonassessable share of its Common Stock (subject to adjustment
for stock splits and combinations affecting such shares) for each One Dollar
($1.00) in original principal amount of such holder's Notes. All such shares
shall have the benefit of, and be subject to the conditions and limitations of,
the registration rights agreement described in Section 4.2 of the Note
Agreement.
5. Construction of Waiver. The Note Agreement shall be
deemed amended only to the extent set forth herein and remains in full force
and effect.
6. Counterparts. This Amendment may be executed in any
number of counterparts, each of which when so executed and delivered shall be
an original, but all of which together shall constitute one and the same
instrument.
(The remainder of this pace intentionally left blank.)
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IN WITNESS WHEREOF, the parties hereto have caused this First
Amendment to Secured Note and Stock Purchase Agreement to be duly executed as
of the day and year first above written.
BIOFACTORS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------
Title: President and CEO
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SIGNATURE PAGE TO FIRST AMENDMENT TO
SECURED NOTE AND STOCK PURCHASE AGREEMENT
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name of Noteholder
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------
Name of Noteholder
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Name of Noteholder
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
----------------------------------------
Name of Noteholder
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
Name of Noteholder
SAGAX FUND II LTD
/s/ [NOT LEGIBLE]
----------------------------------------
Name of Noteholder
/s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
Name of Noteholder
17
BIOFACTORS, INC.
SECOND AMENDMENT TO
SECURED NOTE AND STOCK PURCHASE AGREEMENT
This SECOND AMENDMENT TO SECURED NOTE AND STOCK PURCHASE
AGREEMENT (this "Amendment") is entered into as of July 1, 1996, by and among
BioFactors, Inc., a Delaware corporation (the "Company") and the parties named
on the signature pages hereto (all of such parties other than the Company,
collectively, the "Majority Noteholders") and amends that certain Secured Note
and Stock Purchase Agreement dated as of December 1, 1995, as amended, by and
among the Company and the Purchasers named therein (the "Note Agreement").
WHEREAS, the Majority Noteholders are the holders of the
secured promissory notes (the "Notes") issued pursuant to the Note Agreement
and, collectively, are the holders of Notes representing in excess of fifty
percent of the aggregate principal amount of all the Notes outstanding as of
the date hereof and, pursuant to Section 9.7 of the Note Agreement, can bind
each holder of the Notes outstanding as of the date of this Agreement;
WHEREAS, the Company has entered into a letter of intent with
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Company, L.P. ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇") pursuant to which ▇▇▇▇▇▇
▇▇▇▇▇▇▇ has agreed to underwrite the Company's IPO and to place promissory
notes of the Company having a minimum aggregate principal amount of $500,000
and warrants to purchase common stock of the Company (the "▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Bridge"); and
WHEREAS, in order to induce the customers of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ to
purchase the notes and warrants comprising the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Bridge, and as a
condition precedent to such purchases, the Company is required to enter into
this Amendment providing for (i) a waiver of the current default on the Notes
and (ii) the extension of the maturity of the Notes; and
WHEREAS, the Company and the Majority Noteholders desire to
waive the current default on the Notes and to amend the Note Agreement to
provide for an extension of the maturity date of the Noted, it being
acknowledged that the closing of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Bridge will be of
substantial benefit to the Company and the Majority Noteholders;
NOW THEREFORE, in consideration of the above and the following
mutual covenants and agreements, the parties agree as follows:
1. Definitions. Unless otherwise defined herein,
capitalized terms shall have the meanings given such terms in the Note
Agreement.
2. Waiver. The Majority Noteholders hereby agree to
waive the current default on the Notes and to extend the maturity date thereof
as set forth herein.
3. Amendment. Section 2 is amended as follows: the term
"June 30, 1996" shall be replaced by the term "November 30, 1996."
4. Construction of Waiver. The Note Agreement shall be
deemed amended only to the extent set forth herein and remains in full force
and effect.
18
5. Counterparts. This Amendment may be executed in any
number of counterparts, each of which when so executed and delivered shall be
an original, but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to Secured Note and Stock Purchase Agreement to be duly executed as
of the day and year first above written.
BIOFACTORS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President and
Chief Executive Officer
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SIGNATURE PAGE TO SECOND AMENDMENT TO
SECURED NOTE AND STOCK PURCHASE AGREEMENT
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇
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20
BIOFACTORS, INC.
THIRD AMENDMENT
SECURED NOTE AND STOCK PURCHASE AGREEMENT
THIS THIRD AMENDMENT TO SECURED NOTE AND STOCK PURCHASE
AGREEMENT (this "Amendment") is entered into as of the 1st day of October,
1996, by and among BioFactors, Inc. a Delaware corporation ("BioFactors" or the
"Company") and the parties named on the signature pages hereto (all of such
parties other than the Company, collectively, the "Majority Holders") and
amends that certain Secured Note and Stock Purchase Agreement dated as of
December 1, 1995, by and among the Company and the Purchasers named therein, as
previously amended (the "Note Agreement").
RECITALS
WHEREAS, the Majority Holders are the holders of secured
promissory notes of the Company (the "Notes") and shares (the "Shares") of
common stock of the Company (the "Common Stock"), $0.01 par value per share,
issued pursuant to the Note Agreement and, collectively, are the holders of
Notes representing in excess of fifty percent of the aggregate principal amount
of all the Notes outstanding as of the date hereof and, pursuant to Section 9.7
of the Note Agreement, can bind each holder of Notes or Shares outstanding as
of the date of this Agreement;
WHEREAS, the Company has entered into a letter of intent with
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & Co. ("▇▇▇▇▇▇▇▇▇ ▇▇▇▇"), providing for underwriting and
financial advisory services (the "Underwriting");
WHEREAS, as a condition precedent to the Underwriting, the
Company is required to enter into a definitive agreement with Voice Plus, Inc.,
a California corporation ("Voice Plus"), for the formation of a holding company
("Registrant") and the merger of each of BioFactors (the "BFI Merger") and
Voice Plus with and into separate, wholly-owned subsidiaries of Registrant,
concurrently with ▇▇▇▇▇▇▇▇▇ ▇▇▇▇'▇ Underwriting of the initial public offering
of Registrant's securities pursuant to a registration statement filed under the
Securities Act of 1933 (the "IPO");
WHEREAS, upon the consummation of the BFI Merger, the
Company's stockholders, including the Majority Holders, are to receive shares
of common stock of Registrant ("Registrant Common Stock") in exchange for the
BioFactors Common Stock held by them in a three-for-four (three shares of
common stock of Registrant for every four shares of BioFactors Common Stock)
conversion, or such other ratio as ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ may determine is necessary;
WHEREAS, as a further condition precedent to the Underwriting,
the Company is required to enter into agreements amending the terms of
outstanding securities including, in particular, this Amendment providing for
the consent of the Majority Holders (a) to extend the Maturity date of the
Notes to provide additional time to accomplish the IPO, (b) to effect the
mandatory conversion at the IPO of all accrued interest on the Notes into
common stock of Registrant, (c) to amend and coordinate the registration rights
granted in connection with the Shares and certain other shares of its Common
Stock and securities convertible into or exercisable for its Common Stock, and
(d) to effect certain other amendments to the Note Agreement;
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21
WHEREAS, as consideration for the agreements herein, the
Company will cause Registrant to issue warrants to holders of the Notes; and
WHEREAS, the Company and the Majority Holders desire to enter
into this Amendment to facilitate the Underwriting, it being acknowledged that
the Underwriting will be of substantial benefit to the Company and to the
Majority Holders.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the
following mutual covenants and agreements, the parties hereby agree as follows:
1. Definitions. All capitalized terms used herein and
not otherwise defined shall have the meanings given such terms in the Note
Agreement.
2. Amendments. The Majority Holders hereby agree to
amend the Note Agreement as follows:
a. Maturity Date Extension. Section 2 of the
Note Agreement is hereby amended in its entirety, as follows:
"2. Maturity Date. The Notes shall mature and become due and
payable in full at the close of business on March 31, 1997
(the "Maturity Date")."
b. Prepayment and Conversion of Accrued
Interest. Section 3 of the Note Agreement is hereby amended in its entirety,
as follows:
"3. Prepayment and Conversion of Accrued Interest. In
the event the IPO (defined below) is consummated prior to the
Maturity Date, the principal of the Notes shall be paid in
full within five business days of the receipt by Registrant
(defined below) of the proceeds of the IPO and all accrued
interest on the Notes calculated through the IPO closing date
shall be converted into common stock of Registrant at a
conversion price equal to the price per share to the public in
the IPO (the "IPO Price"). In connection with such
conversion, no fractional shares of common stock shall be
issued; instead, the number of shares of common stock
otherwise issuable will be rounded up to the next whole
share."
c. Registration Rights. Addendum A (which set
forth the former registration rights) is hereby deleted in its entirety.
Section 4.2 of the Note Agreement is hereby amended in its entirety, as
follows:
"4.2 Planned Initial Public Offering: Registration Rights.
(a) The term "IPO" as used herein shall mean the
proposed initial public offering of the Company's securities,
or the securities of a holding company formed to hold the
capital stock of BioFactors (such entity, whether the Company
or a holding company, being referred to
- 2 -
22
herein as, the "Registrant"), pursuant to an effective
registration statement under the Securities Act of 1933, as
amended. The undersigned understands and agrees that there
can be no assurances that a registration statement will be
filed or, if filed, will be declared effective by the
Securities and Exchange Commission (the "Commission") or, if
the registration statement is declared effective by the
Commission, that the Registrant will be able to consummate
such IPO.
(b) Registration Rights. Upon the execution of the
Registration Rights Agreement, substantially in the form
attached hereto as EXHIBIT B (the "Rights Agreement"), the
Purchasers will become parties to the Rights Agreement and the
Shares, and any shares of common stock issuable upon the
exercise or conversion of any securities issued pursuant to
this Agreement, shall become subject thereto."
d. Security Interest. Section 5 is hereby
deleted in its entirety, it being understood that the security interest of the
Purchasers has terminated.
3. Automatic Conversion. The Majority Holders hereby
consent to the automatic conversion upon the consummation of the IPO of all
accrued interest on the Notes, at a conversion price and calculated as set
forth in Section 3 of the Note Agreement, into common stock of the Registrant.
4. Issuance of Additional Warrants. In consideration of
the agreements herein, the Company hereby agrees that, upon the closing of the
IP0, the payment of the principal of the Notes and the conversion of the
accrued interest thereon, the Company shall, for no additional monetary
consideration, cause the Registrant to issue and deliver to each holder of
Notes, a warrant to purchase seventy-five (75) shares of Registrant common
stock (the "Warrant Shares") for each One Thousand Dollars ($1,000) in original
principal amount of such holder's Notes at an exercise price equal to 120% of
the IPO Price (the "Warrants").
5. Termination of Security Interest and Agreement. The
Majority Holders hereby acknowledge that the security interest in the ▇▇▇▇▇▇
Note has been terminated and the Pledged Collateral released. Accordingly, the
Majority Holders hereby terminate that certain Pledge and Security Agreement
dated as December 1 1995, as subsequently amended, by and among the Company and
the Secured Parties named therein (being also the parties to the Note
Agreement).
6. Proxy. The undersigned hereby irrevocably appoints
▇▇▇▇ ▇▇▇▇▇ as the undersigned's attorney and proxy, with full power of
substitution, to vote or to consent in writing in lieu of a vote or meeting
with respect to all of the Shares held by the undersigned which the undersigned
is entitled to vote at any meeting of stockholders (whether annual or special
and whether or not an adjourned meeting) of the Company, or pursuant to written
action taken in lieu of any such meeting or otherwise, in such manner as to
cause the BFI Merger and any agreement effecting the BFI Merger to be approved.
This proxy is irrevocable, is coupled with an interest sufficient in law to
support an irrevocable proxy and is granted in consideration of and as an
inducement to cause the Company to issue the Warrants. In connection with
giving this proxy, the undersigned understands and agrees that the BFI Merger
effectively will cause a reverse split of the Company's capital stock in that
every four (4) shares of BioFactors Common Stock issued and outstanding or held
in treasury
- 3 -
23
immediately prior to the effective time of the BFI Merger shall, automatically
and without any action of the part of the respective holders thereof, be
converted into approximately three (3) shares of Registrant Common Stock (or
such other number of shares as ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and the Company shall determine).
7. Construction of Waiver. The Note Agreement shall be
deemed amended only to the extent set forth herein and remains in full force
and effect.
8. Counterparts. This Amendment may be executed in any
number of counterparts, each of which when so executed and delivered shall be
an original, but all of which together shall constitute one and the same
instrument.
(The remainder of this page intentionally left blank.)
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24
IN WITNESS WHEREOF, the parties hereto have caused this THIRD
AMENDMENT TO SECURED NOTE AND STOCK PURCHASE AGREEMENT to be duly executed as
of the day and year first above written.
BIOFACTORS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------
Title: President and CEO
HOLDER:
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
(Signature)
▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
(Print Name)
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
---------------------------------
(Signature)
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
---------------------------------
(Print Name)
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
(Signature)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
(Print Name)
/s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
(Signature)
▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
(Print Name)
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
(Signature)
▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
(Print Name)
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25
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES LAWS.
THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN
EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144
PROMULGATED UNDER THE ACT.
BIOFACTORS, INC
SECURED PROMISSORY NOTE
$________________ No. ____
December __, 1995
FOR VALUE RECEIVED, the undersigned, BIOFACTORS, INC., a
Delaware corporation ("Maker"), hereby promises to pay to the order of
_______________________, or registered assigns ("Holder") at such place as the
Holder may from time to time designate in writing, the principal sum of
_____________________________ THOUSAND DOLLARS ($______________), and to pay
simple interest on the unpaid balance of said principal from the date hereof
through maturity at the rate of ten percent (10%) per annum.
1. Maturity.
(a) Principal and accrued interest under this
Note shall be due and payable at the close of business on March 31, 1996 (the
"Maturity Date"). If payment of the principal amount hereof or interest accrued
thereon is not made within five (5) days of the Maturity Date, then interest
shall accrue on such unpaid amount from the date of nonpayment to the date of
payment at the rate of 18% per annum thereafter. Interest shall be calculated on
the basis of a 365-day year for the actual number of days elapsed.
(b) Principal and interest payments hereunder
shall be made in money of the United States of America, lawful at such times for
the satisfaction of public and private debts.
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2. Prepayment. The Company may prepay this note in whole at
any time, or in part from time to time, without penalty or premium, upon thirty
(30) days' written notice to the holder. Each partial prepayment shall first be
applied to interest accrued through the date of prepayment and then to
principal.
3. Note Agreement. This Note is the Maker's "Note" and is
issued pursuant to and entitled to the benefit of that certain Secured Note and
Warrant Purchase Agreement dated as of December 1, 1995, between Maker and the
Purchasers named therein, as the same may be amended, modified or supplemented
from time to time as permitted thereby (the Note Agreement"). Capitalized terms
used herein without definition shall have the meanings set forth in the Note
Agreement.
4. Registered Note. This Note is a registered Note and is
transferable only by surrender thereof at the principal offices of the Company,
duly endorsed or accompanied by a written instrument of transfer duly executed
by the registered holder of this Note or his attorney duly authorized in
writing. The Maker may treat the person whose name appears in the Note register
as the owner hereof for the purpose of receiving payment as herein provided.
Transfers are subject to the restrictions set forth in the Note Agreement.
5. Conversion Rights. Prior to the Maturity Date, this Note
is subject to conversion as follows:
(a) Mandatory Conversion. Upon the closing of a private
placement (the "Whale Transaction") of the Company's secured promissory notes
(the "Whale Notes") for which Whale Securities Co., LP ("Whale") is acting as
placement Agent, all of the outstanding principal amount and accrued interest on
the Notes shall be converted into the Whale Notes on the same terms and
conditions as may be offered to the investors in the Whale Transaction.
(b) Voluntary Conversion. In the event the Whale
Transaction is not consummated and the Company consummates a private placement
of its promissory notes with or without the assistance of another placement
agent (the "Alternate Notes"), all or any part of the outstanding principal
amount and accrued interest on any Note may, at the option of the holder
thereof, be converted into the Alternate Notes on the same terms and conditions
as may be offered to the investors in such private placement.
6. Security Agreement; Default. This Note is secured by a
certain Pledge and Security Agreement dated as of December 1, 1995, by and
between the Maker and the Secured Parties named therein, as the same may be
amended, modified or supplemented from time to time as permitted thereby (the
"Security Agreement"). Upon the occurrence of an Event of Default (as defined in
the Security Agreement), the unpaid balance of the principal amount of this Note
may become due, or may be declared to be, due and payable in the manner, upon
the conditions and with the effect provided in the Security Agreement.
7. Waiver of Demand, Protest, etc. Maker hereby waives
diligence, presentment, demand, protest and notice of any kind whatsoever. Maker
promises to pay costs of collection and reasonable attorneys' fees if default is
made in the payment of this Note, or in the terms and provisions
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27
of the Security Agreement. The right to plead any and all statutes of
limitation as a defense to this Note or to any agreement to pay the same, is
hereby expressly waived by the undersigned to the full extent permitted by law.
8. Notice. Any notice required or permitted hereunder shall
be given in accordance with the Note Agreement.
9. Governing Law. THE MAKER AND THE HOLDER AGREE THAT THIS
NOTE AND THE LEGAL RELATIONS BETWEEN THE MAKER AND THE HOLDER, AND ALL RIGHTS
AND OBLIGATIONS HEREUNDER, INCLUDING MATTERS OF CONSTRUCTION, VALIDITY, AND
PERFORMANCE, SHALL BE GOVERNED BY AND INTERPRETED, CONSTRUED, APPLIED, AND
ENFORCED IN ACCORDANCE WITH THE LAW OF THE STATE OF COLORADO WITHOUT REFERENCE
TO THE LAW OF ANOTHER JURISDICTION.
IN WITNESS WHEREOF, the undersigned has caused this Note to be
executed as of the ____ day of December, 1995.
MAKER:
BIOFACTORS, INC.
By: ___________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Its: Vice President and
Secretary
(Corporate Seal)
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