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Title: |
Common Stock and Warrant Purchase Agreement |
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Entities: |
DLJ Capital Corp.; ISTA Pharmaceuticals Inc.; Mellon Investor Services LLC; Brobeck Phleger & Harrison LLP; Wilson Sonsini Goodrich & Rosati |
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Date: |
2002 |
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Size: |
Preview shows 19KB of 203KB total |
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Price: |
$50 |
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ID: |
#282015 |
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ISTA PHARMACEUTICALS, INC.
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
SEPTEMBER 19, 2002
{PAGE}
TABLE OF CONTENTS
{TABLE}
{CAPTION}
PAGE
----
{S} {C}
Section 1 Definitions............................................................................1
Section 2 Purchase and Sale of the Common Shares and Warrants...................................11
2.1 Purchase and Sale of the Common Shares and Warrants at the Closing...............11
2.2 Legends; Stop Transfer Orders....................................................12
Section 3 Representations and Warranties of the Company.........................................13
3.1 Organization; Qualification......................................................13
3.2 Subsidiaries and Affiliates......................................................13
3.3 Capitalization...................................................................14
3.4 Authorization, Validity of Agreement, Company Action.............................15
3.5 Vote Required....................................................................15
3.6 Consents and Approvals, No Violations............................................15
3.7 Reports and Financial Statements.................................................15
3.8 Books and Records................................................................16
3.9 No Undisclosed Liabilities.......................................................16
3.10 Interim Operations...............................................................17
3.11 Absence of Certain Changes.......................................................17
3.12 Litigation.......................................................................19
3.13 Employee Benefit Plans...........................................................20
3.14 Tax Matters......................................................................22
3.15 Title to Properties; Encumbrances................................................23
3.16 Leases...........................................................................23
3.17 Environmental Laws...............................................................24
3.18 Intellectual Property............................................................24
3.19 Employment Matters...............................................................27
3.20 Compliance with Laws.............................................................28
3.21 Contracts and Commitments........................................................28
3.22 Regulatory Compliance............................................................29
3.23 Studies..........................................................................31
3.24 Rights Agreement; Delaware 203 Approval..........................................31
3.25 Absence of Questionable Payments.................................................32
3.26 Insider Interests................................................................32
3.27 Brokers or Finders...............................................................32
Section 4 Representations, Warranties and Covenants of the Investors............................32
4.1 Authorization....................................................................32
{/TABLE}
-i-
{PAGE}
TABLE OF CONTENTS
(CONTINUED)
{TABLE}
{CAPTION}
PAGE
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{S} {C}
4.2 Investment Experience............................................................32
4.3 Investment Intent................................................................33
4.4 Registration or Exemption Requirements...........................................33
4.5 No Legal, Tax or Investment Advice...............................................33
Section 5 Conditions to Closing of the Investors................................................33
5.1 Conditions to Investors' Obligations at the Closing..............................33
Section 6 Conditions to Company's Obligations...................................................35
6.1 Conditions to Company's Obligations at the Closing...............................35
Section 7 Covenants of the Company..............................................................36
7.1 Registration Rights..............................................................36
7.2 Reports Under Securities Exchange Act of 1934....................................42
7.3 Assignment of Rights.............................................................42
7.4 Stockholders' Meeting............................................................42
7.5 Proxy Statement..................................................................43
7.6 Election of Directors............................................................43
7.7 Nasdaq Listing...................................................................45
7.8 Purchase in Event of No Stockholder Approval.....................................45
7.9 Financial Results................................................................46
7.10 Lock-Up..........................................................................46
7.11 D&O Insurance....................................................................46
7.12 Indemnification Agreements.......................................................46
7.13 Board of Directors; Powers; Committees...........................................46
7.14 Board Observers..................................................................48
7.15 Indemnification..................................................................49
7.16 Operation of Business............................................................49
7.17 No-Solicitation..................................................................50
7.18 Reasonable Efforts; Notification; Representations................................50
7.19 Termination......................................................................51
Section 8 Termination...........................................................................51
8.1 Termination Events...............................................................51
8.2 Effect of Termination............................................................52
Section 9 Miscellaneous.........................................................................52
9.1 Waivers and Amendments...........................................................52
9.2 Governing Law....................................................................52
9.3 Waiver of Jury Trial; Trial Costs................................................52
9.4 Survival.........................................................................52
{/TABLE}
-ii-
{PAGE}
TABLE OF CONTENTS
(CONTINUED)
{TABLE}
{CAPTION}
PAGE
----
{S} {C}
9.5 Successors and Assigns...........................................................52
9.6 Entire Agreement.................................................................53
9.7 Notices, etc.....................................................................53
9.8 Interpretation...................................................................53
9.9 Severability of this Agreement...................................................54
9.10 Counterparts.....................................................................54
9.11 Further Assurances...............................................................54
9.12 Public Announcements.............................................................54
9.13 Expenses.........................................................................54
9.14 California Commissioner of Corporations..........................................55
{/TABLE}
Exhibit A Schedule of Investors
Exhibit B Form of Warrant
Exhibit C Opinion of Company Counsel
Exhibit D Amended and Restated Certificate of Incorporation
Exhibit E Form of Indemnification Agreement
-iii-
{PAGE}
ISTA PHARMACEUTICALS, INC.
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
This Agreement (the "Agreement") is made as of September 19, 2002 by and
among ISTA Pharmaceuticals, Inc., a Delaware corporation (the "Company"), and
those investors listed on Exhibit A hereto (the "Investors").
Recital
In order to induce the Investors to enter into this Agreement and to
consummate the Transactions, concurrently with the execution and delivery of
this Agreement, certain stockholders, directors and officers of the Company are
executing voting agreements in favor of the Investors.
Section 1
Definitions
"AcSentient" has the meaning ascribed to it in Section 5.1(i).
"AcSentient Agreement" has the meaning ascribed to it in Section 5.1(i).
"Acquisition Proposal" has the meaning set forth in Section 7.17.
"Action or Proceeding" has the meaning set forth in Section 7.15.
"Affiliate" shall have the meaning set forth in Rule 12b-2 of the rules
and regulations promulgated under the Exchange Act; provided, however, that for
purposes of this Agreement, (i) the Investors and their respective Affiliates,
on the one hand, and the Company and its Affiliates, on the other, shall not be
deemed to be Affiliates of one another, and (ii) none of the Investor Groups
shall be deemed to be an Affiliate of any other Investor Group.
"Aggregate Purchase Price" has the meaning ascribed to it in Section
2.1(a)(i).
"Agreement" has the meaning ascribed to it in the forepart of this
Agreement.
"Appointment Time" means the time any director is appointed or elected
to the Company's board of directors pursuant to Section 7.6.
"Associate" has the meaning set forth in Rule 12b-2 of the Exchange Act.
"Balance Sheet" means the most recent unaudited consolidated balance
sheet of the Company and its Subsidiaries included in the Financial Statements.
{PAGE}
"Balance Sheet Date" means June 30, 2002, the date of the Balance Sheet.
"Beneficially Own" or "Beneficial Ownership" shall have the meaning set
forth in Rules 13d-3 and 13d-5 of the rules and regulations promulgated under
the Exchange Act.
"Benefit Plan" means any employee benefit fund, plan, program,
arrangement or contract (including any "pension" plan, fund or program, as
defined in Section 3(2) of ERISA, and any "employee benefit plan", as defined in
Section 3(3) of ERISA and any plan, program, arrangement or contract providing
for severance; medical, dental or vision benefits; life insurance or death
benefits; disability benefits, sick pay or other wage replacement; vacation,
holiday or sabbatical; pension or profit-sharing benefits; stock options or
other equity compensation; bonus or incentive pay or other material fringe
benefits), whether written or not.
"Board Consent" has the meaning ascribed to it in Section 3.24.
"Bridge Effectiveness Termination Date" has the meaning ascribed to it
in Section 7.1(a)(i).
"Bridge Investor" has the meaning ascribed to it in Section 7.1(a)(i).
"Bridge Loan Agreement" means the Note and Warrant Purchase Agreement,
dated as of the date of this Agreement, by and among certain of the Investors
and the Company, pursuant to which the Company shall issue Bridge Notes and
Bridge Warrants to such Investors on the terms and subject to the conditions set
forth therein.
"Bridge Notes" means the promissory notes issued pursuant to the Bridge
Loan Agreement.
"Bridge Registrable Securities" means shares of Common Stock issued upon
conversion of the Bridge Notes and issued or issuable upon exercise of the
Bridge Warrants, and any other shares of Common Stock issued as (or issuable
upon conversion or exercise of any warrant, right or other security which is
issued as) a dividend or other distribution with respect to, in exchange for or
in replacement of such shares.
"Bridge Registration Statement" has the meaning ascribed to it in
Section 7.1(a)(i).
"Bridge Warrants" means the warrants issued pursuant to the Bridge Loan
Agreement.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which commercial banks in The City of New York are (or are permitted or required
by law, rule, regulation, order or state of emergency to be) closed.
"Clarifying Request" has the meaning set forth in Section 7.17.
"Class I Director", "Class II Director" or "Class III Director" has the
meaning ascribed to it in the Company's amended and restated certificate of
incorporation in effect as of the date of this Agreement.
-2-
{PAGE}
"Closing" means the closing referred to in Section 2.1(b).
"Closing Date" has the meaning ascribed to it in Section 2.1(b).
"Common Shares" has the meaning ascribed to it in Section 2.1(a)(i).
"Common Stock" means shares of the Common Stock of the Company.
"Company" has the meaning ascribed to it in the forepart of this
Agreement.
"Company Agreement" means any note, bond, mortgage, indenture, lease,
license, contract, agreement, arrangement, or other instrument or obligation to
which the Company or any of its Subsidiaries is a party or by which any of them
or any of their properties or assets may be bound.
"Company Copyrights" means all Copyrights owned by the Company or any of
its Subsidiaries as of the date of this Agreement.
"Company Disclosure Schedule" means the disclosure letter, dated the
date of this Agreement, prepared and signed by the Company and delivered to the
Investors simultaneously with the execution of this Agreement.
"Company ERISA Affiliate" means any other person or entity under common
control with the Company within the meaning of Sections 414(b) or (c) of the
Code.
"Company ESPP" has the meaning ascribed to it in Section 3.3(a).
"Company Intellectual Property" means all Intellectual Property owned by
the Company or any of its Subsidiaries as of the date of this Agreement.
"Company Material Adverse Effect" means any circumstance affecting,
change in, or effect on the Company and its Subsidiaries that is, or imminently
will be, materially adverse to the business, properties, assets, liabilities
(absolute, accrued, or contingent), operations, or results of operation of the
Company and its Subsidiaries, taking the Company together with its Subsidiaries
as a whole, provided, that none of the following shall be deemed, in themselves,
either alone or in combination, to constitute a Company Material Adverse Effect,
and none of the following shall be taken into account in determining whether
there has been or will be a Company Material Adverse Effect: (a) any change in
the market price or trading volume of the Common Stock after the date of this
Agreement; (b) any adverse circumstance, change or effect resulting directly
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