-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D27Nn8Yeb7iQt7Ps5OeFr0wfpGFKR0phIROew5QbmX2Y4OzjKsamQs17fF+UaFHt OfyS3PCvDDGUMaiAcdVJcQ== 0000933745-01-500004.txt : 20010601 0000933745-01-500004.hdr.sgml : 20010601 ACCESSION NUMBER: 0000933745-01-500004 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20010524 ITEM INFORMATION: FILED AS OF DATE: 20010531 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MIRAVANT MEDICAL TECHNOLOGIES CENTRAL INDEX KEY: 0000933745 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 770222872 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-25544 FILM NUMBER: 1651117 BUSINESS ADDRESS: STREET 1: 336 BOLLAY DRIVE CITY: SANTA BARBARA STATE: CA ZIP: 93117 BUSINESS PHONE: 8056859880 MAIL ADDRESS: STREET 1: 336 BOLLAY DRIVE CITY: SANTA BARBARA STATE: CA ZIP: 93117 FORMER COMPANY: FORMER CONFORMED NAME: PDT INC /DE/ DATE OF NAME CHANGE: 19941214 EX-10 1 f8kmay242001exb10_4.txt EXHIBIT 10.4 APA ESCROW AGREEMENT ESCROW AGREEMENT, dated as of May 31, 2001 (this "Agreement"), among Pharmacia & Upjohn Company, a Delaware corporation ("Buyer"), Miravant Medical Technologies, a Delaware corporation ("Seller") and Sanwa Bank California, as the Escrow Agent (the "Escrow Agent"). WHEREAS, Buyer and Seller have entered into an Asset Purchase Agreement, dated as of May 24, 2001 (the "Asset Purchase Agreement") pursuant to which, among other things, Buyer shall purchase certain assets of Seller (the "Purchase"); WHEREAS, pursuant to the terms of the Asset Purchase Agreement, Buyer Indemnified Parties (as defined below) are to be indemnified by Seller for certain events or occurrences specified in the Asset Purchase Agreement, including breaches of representations, warranties, covenants and agreements made, entered into or to be performed pursuant to the terms of the Asset Purchase Agreement; NOW THEREFORE, in consideration of mutual promises and good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows: 1. Definitions. The following terms, as used herein, have the following meaning: "business day" means any day that is not a Saturday, Sunday or other day on which commercial banks in Los Angeles, California, are authorized by law to close. "Buyer Indemnified Party" means Buyer and any of its affiliates entitled to indemnification pursuant to Section 13 of the Asset Purchase Agreement. "Closing" means the meaning specified in Section 5.2 of the Asset Purchase Agreement. "Closing Date" means the meaning specified in Section 5.2 of the Asset Purchase Agreement. "Escrow Account" means a separate account established by the Escrow Agent for the purpose of holding the funds constituting the Purchase Price delivered to it pursuant to Section 5.3 of the Asset Purchase Agreement. "Officer's Certificate" means a certificate signed by any Vice President of Buyer substantially in the form attached hereto as Exhibit A stating that a Buyer Indemnified Party has incurred or suffered any damages, losses, liabilities and expenses (including reasonable attorney fees and expenses) as a result of certain events or occurrences specified in Article X of the Asset Purchase Agreement, including a breach of any representation, warranty, covenant or agreement set forth in the Asset Purchase Agreement, for which indemnification is available pursuant to the Asset Purchase Agreement in the aggregate amount set forth in such Officer's Certificate (the "Indemnity Amount") that is delivered by Buyer to the Escrow Agent and Seller. "Person" means any individual, sole proprietorship, partnership, joint venture, trust, unincorporated organization, association, corporation, institution, public benefit corporation, entity or government (whether Federal, state, county, city, municipal or otherwise, including any instrumentality, division, agency, body or department thereof). "Purchase Price" has the meaning set forth in the Asset Purchase Agreement. 2. Appointment of the Escrow Agent. Buyer and Seller hereby appoint the Escrow Agent on the terms and conditions set forth herein and the Escrow Agent hereby accepts such appointment on such terms and conditions. 3. Deposit of Proceeds. On the terms and subject to the conditions set forth in the Asset Purchase Agreement, Buyer shall deposit the Purchase Price with the Escrow Agent at the Closing. 4. Escrow Account. The Escrow Agent shall deposit the Purchase Price, upon receipt, into the Escrow Account and shall hold, safeguard and distribute such Purchase Price in accordance with and subject to the terms of this Agreement. 5. Purpose. It is understood and agreed that (i) the Escrow Account and the Escrow Amount are for the purpose of satisfying the indemnification obligations owed to Buyer by Seller and no assets shall be used for any other purpose except as explicitly set forth in this Agreement and (ii) interest or other earnings on the assets, if any shall be added to the Escrow Account. 6. Rights to the Escrow Account. In accordance with and subject to the terms of this Agreement, Buyer Indemnified Parties shall be entitled to recover from the Escrow Account the Indemnity Amount or the Final Indemnity Amount (as defined below), as the case may be. 7. Indemnity Payments by the Escrow Agent. (a) Subject to Section 7(b), on the tenth business day after receipt by the Escrow Agent of an Officer's Certificate, the Escrow Agent shall deliver to Buyer from the Escrow Account in a manner specified in writing by Buyer the Indemnity Amount or (ii) to the extent that the Indemnity Amount exceeds the amount held in the Escrow Account (the amount of such excess being the "Shortfall Amount"), an amount in cash equal to the lesser of the cash in the Escrow Account or the Shortfall Amount. (b) If Seller shall, within ten business days after the Escrow Agent's and Seller's receipt of the Officer's Certificate, notify the Escrow Agent and Buyer in writing that Seller objects to the Indemnity Amount, (i) the Indemnity Amount shall not be delivered to Buyer, (ii) Buyer and Seller shall (A) endeavor in good faith to agree on the amount the Buyer Indemnified Party shall be entitled to recover from the Escrow Account or have such amount determined by a court of competent jurisdiction pursuant to the Asset Purchase Agreement (such amount being the "Final Indemnity Amount") and (B) either deliver to the Escrow Agent a certificate signed by any Vice President of Buyer and Seller setting forth the Final Indemnity Amount (the "Joint Certificate") or deliver to the Escrow Agent the court order or judgment by a court of competent jurisdiction, certified by either Seller or Buyer as an original (or as a true and complete copy thereof) (a "Final Judgment") and (iii) the Escrow Agent shall deliver to Buyer the Final Indemnity Amount from the Escrow Account in the manner set forth in Section 7(a). If Seller fails so to notify Buyer and the Escrow Agent of Seller's objection to the Indemnity Amount within such ten business day period, the Indemnity Amount shall be deemed conclusive and binding on all the parties hereto, whereupon the Escrow Agent shall make distributions from the Escrow Account in the manner set forth in Section 7(a). 8. Termination of the Escrow Account. Within five days after the first anniversary of the Closing Date (the "Termination Date"), Seller shall notify the Escrow Agent in writing to deliver all assets then remaining, together with all interest accruing thereon (except a sufficient amount of assets to satisfy any unsatisfied claim specified in any Officer's Certificate, Joint Certificate or Final Judgment theretofore delivered to the Escrow Agent) to Seller; provided, however, that if the Escrow Agent shall receive a certificate signed by any Vice President of Buyer instructing the Escrow Agent not to distribute such assets until any unsatisfied indemnification claim hereunder has been resolved, the Escrow Agent shall hold such assets until such time as it receives a certificate signed by any Vice President of Buyer and Seller and dispose of such assets in accordance with the instructions set forth therein. 9. Notices. Any communication, demand or notice to be given hereunder will be duly given when delivered in writing or by telecopy to a party at its address as indicated below or such other address as such party may specify in a notice to each other party hereto. A communication, demand or notice given pursuant to this Agreement shall be addressed: If to Buyer: Pharmacia Corporation 100 Route 206 North Peapack, New Jersey 07977 Attn: General Counsel Fax: (908) 901-1830 with a copy (which, in and of itself, shall not constitute notice) to: Matthew G. Hurd Sullivan & Cromwell 1870 Embarcadero Road Palo Alto, California 94303 Fax: (650) 461-5700 If to Seller: Miravant Medical Technologies 336 Bollay Drive Santa Barbara, California 93117 Attn: Gary S. Kledzik Fax: (805) 685-6038 with a copy (which, in and of itself, shall not constitute notice) to: Joseph E. Nida Nida & Maloney, LLP 800 Anacapa Street Santa Barbara, California 93101 Fax: (805) 568-1955 If to the Escrow Agent: Robert W. Rainey Vice President and Manager Sanwa Bank California Wealth Management Division Santa Barbara Trust Office Post Office Box 1539 1036 State Street, No. 240 Santa Barbara, CA 93102 Fax: (805) 966-3006 or, as to any party, to such other address as shall be designated by such party in a prior written notice to each other party similarly given. 10. The Escrow Agent. (a) This Agreement sets forth the exclusive duties of the Escrow Agent with respect to any and all matters pertinent hereto, and no implied duties whatsoever on the part of the Escrow Agent shall be read into this Agreement. Upon the complete disbursement of the Escrow Account in accordance with the terms and conditions of this Agreement, the Escrow Agent shall be fully released from all further duties and obligations hereunder. The Escrow Agent shall have no duty or obligation hereunder other than to take such specific actions as are required of it from time to time under the provisions hereof, and it shall incur no liability hereunder or in connection herewith for anything whatsoever other than as a result of its own gross negligence or willful misconduct. The party primarily responsible for causing any and all losses, claims, liabilities and expenses, including the reasonable fees of counsel, to the Escrow Agent shall indemnify, hold harmless and defend the Escrow Agent from and against any and all losses, claims, liabilities and expenses, including the reasonable fees of counsel, which it may suffer or incur hereunder, or in connection herewith, except such as shall result solely and directly from the Escrow Agent's own gross negligence or willful misconduct; provided, however, that if no party is primarily responsible for causing such losses, claims, liabilities and expenses, including the reasonable fees of counsel, Buyer and Seller shall jointly and severally indemnify the Escrow Agent in accordance with this Section 10. The Escrow Agent shall not be bound in any way by any agreement or contract among Buyer and Seller (whether or not the Escrow Agent has knowledge thereof) and the only duties and responsibilities of the Escrow Agent shall be to hold the assets in accordance with the terms of this Escrow Agreement. All reasonable fees and expenses of the Escrow Agent shall be paid by Seller. (b) Notwithstanding any provision contained herein to the contrary, the Escrow Agent, including its officers, directors, employees and agents, shall: (i) have no responsibility to inquire into or determine the genuineness, authenticity, or sufficiency of any securities, checks, or other documents or instruments submitted to it in connection with its duties hereunder; (ii) be entitled to deem the signatories of any documents or instruments submitted to it hereunder as being those purported to be authorized to sign such documents or instruments on behalf of the parties hereto, and shall be entitled to rely upon the genuineness of the signature of such signatories without inquiry and without requiring substantiating evidence of any kind; (iii) have no responsibility or liability for any diminution in value of any assets held hereunder which may result from any investments or reinvestments made in accordance with any provision which may be contained herein; (iv) be entitled to compensation for its services hereunder and for reimbursement of its out-of-pocket expenses including, but not by way of limitation, the fees and costs of attorneys or agents which it may find necessary to engage in performance of its duties hereunder, and the Escrow Agent shall have, and is hereby granted, a prior lien upon the Escrow Amount with respect to its unpaid fees and non reimbursed expenses, superior to the interests of any other persons or entities; and (v) invest the deposited funds or the income generated thereby in [money market mutual funds] unless Seller and Buyer shall have jointly instructed the Escrow Agent in writing to invest such funds in some other specified investment or investments. If Seller and Buyer jointly instruct the Escrow Agent in writing to invest such funds in some other specified investment or investments, then the Escrow Agent shall invest such funds as instructed. Earnings on the Escrow Account shall be for the account of Seller (Federal Tax I.D. No. 770-222 872). The Escrow Agent shall report such earnings to the appropriate tax authorities on Form 1099 or such other substitute form as applicable. The Escrow Agent shall have no liability or responsibility whatsoever for any loss resulting from any investment made in compliance with the terms and provisions of this Agreement. 11. Further Assurances. Subject to the terms and conditions of this Agreement, the parties hereto shall use their reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary or desirable to perform their obligations hereunder including, without limitation, determining the amount a Buyer Indemnified Party shall be entitled to recover from the Escrow Account and delivering to the Escrow Agent a Joint Certificate or a Final Judgment upon such determination. 12. Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, that no party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the written consent of each other party hereto. Notwithstanding the foregoing sentence, Buyer may, at its option, upon notice to Seller at least two days prior to the Closing Date, designate one or more direct or indirect subsidiaries or Affiliates of the Buyer (the "Substituted Subsidiaries") to be substituted as Buyer hereunder in such Buyer's place. Upon such designation, and the execution and delivery by the Substituted Subsidiaries to Seller of an instrument pursuant to which the Substituted Subsidiaries shall assume all of such Buyer's obligations hereunder, the Substituted Subsidiaries shall succeed to all of Buyer's rights hereunder, and, for the purposes of this Agreement, all references to the "Buyer" shall, as applied on or after the date of such designation, apply to the Substituted Subsidiaries; provided, however, that the original "Buyer" shall be liable for the Substituted Subsidiaries' performance of the Buyer's obligations hereunder. Except as set forth above, this Agreement may not be assigned by the parties hereto prior to Closing. Any such purported assignment, delegation or transfer made in contravention of the foregoing shall be null and void. 13. Governing Law. The validity, performance and enforcement of this Agreement shall be governed by the laws of the State of California (regardless of the laws that might otherwise govern under California principles of conflicts of laws). 14. Arbitration. (a) Any dispute among any of the parties hereto arising out of or in connection with this Agreement, including any question regarding the existence, validity or termination thereof, or any claim of fraud or intentional misrepresentation, shall be exclusively referred to and finally resolved by arbitration in accordance with the Commercial Arbitration Rules (the "Rules") of the American Arbitration Association (the "AAA"), which Rules are deemed to be incorporated by reference into this Section. Any such arbitration shall be (i) brought in the City and County of San Francisco, California, (ii) conducted in English, and (iii) to the maximum extent permitted by applicable law, final, binding and conclusive upon the parties thereto. If the arbitrators deem it necessary or appropriate, the parties to any dispute may be permitted limited discovery based on the United States Federal Rules of Civil Procedure then in effect, subject to such limitations as the arbitrators may impose consistent with the objective of expediting the resolution of the dispute; provided, however, that in any dispute submitted to arbitration hereunder that relates to whether any person or entity is required to furnish indemnity under this Agreement discovery rights in accordance with the United States Federal Rules of Civil Procedure then in effect shall be applicable and available in all events. The parties agree that service of any notice in the course of any such arbitration at their respective addresses for notice and in the manner provided herein shall be valid and sufficient notice for purposes of such arbitration. Each of the parties agrees to be bound by such arbitration. (b) In any arbitration pursuant hereto, the award shall be rendered by a majority of the members of an arbitral tribunal consisting of three arbitrators. One arbitrator shall be appointed by Buyer and one arbitrator shall be appointed by Seller each within 30 days after the commencement of the arbitration. The third arbitrator shall be appointed by mutual agreement of the two arbitrators selected by Buyer, on the one hand, and Seller, on the other hand, and shall be experienced in corporate contractual matters relating to transactions of the nature contemplated by this Agreement. The third arbitrator shall act as Chair of the arbitral tribunal. In the event of the failure of said two arbitrators to agree as to the third arbitrator within 20 days after the appointment of the last of the two arbitrators, the third arbitrator shall be appointed by the AAA as administrator under the Rules within 15 days thereafter in accordance with its then existing Rules upon application by any of the parties to the arbitration. Notwithstanding the foregoing, if either Buyer or Seller fail to appoint the arbitrators they are respectively required to appoint within the specified time period, such arbitrator and the third arbitrator shall be appointed by the AAA in accordance with the Rules. The AAA shall not appoint all three arbitrators unless both Buyer, on the one hand, and Seller, on the other hand, fail to appoint an arbitrator within the specified time. (c) Awards, decisions and rulings of the arbitral tribunal shall be in writing, and shall set forth the reasons therefor and, to the extent applicable, the manner in which the amount of any damages or other monetary recovery was calculated. Any monetary award shall be in U.S. dollars. Judgment upon any award, decision or ruling may be entered in any court having jurisdiction thereof. 15. Counterparts. This Agreement may be executed in any number of counterparts, each of which, when executed, shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument. 16. Resignation or Removal of the Escrow Agent. (a) The Escrow Agent may resign as such upon 30 days' prior written notice to the other parties hereto. The Escrow Agent may be removed and replaced upon 30 days' prior written notice to the Escrow Agent from Buyer and Seller. If the Escrow Agent resigns or is removed, the duties of the Escrow Agent shall terminate 30 days after receipt of such notice (or as of such earlier date as may be agreed by the parties hereto) and the Escrow Agent shall then deliver the balance of the Escrow Account then in its possession to a successor escrow agent as shall be appointed by the other parties hereto as evidenced by a written notice filed with the Escrow Agent. (b) If the other parties hereto are unable to agree upon a successor to the Escrow Agent or shall have failed to appoint such successor prior to the expiration of 30 days following receipt of the notice of resignation or removal, the Escrow Agent may petition any court of competent jurisdiction for the appointment of a successor escrow agent or for other appropriate relief, and any such resulting appointment shall be binding upon all of the parties hereto. Costs incurred by the Escrow Agent in petitioning any court to appoint a successor pursuant to the foregoing sentence shall be borne by the Escrow Account. Upon acknowledgment by any successor escrow agent of the receipt of the balance of the assets in escrow, the Escrow Agent shall be fully released and relieved of all duties, responsibilities, and obligations under this Agreement. 17. Entire Agreement; Amendments. This Agreement contains the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, oral or written, with respect to such transactions. This Agreement may not be modified or amended except by a written instrument signed by all parties hereto. 18. Headings. The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. 19. Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application thereof to any person or entity or any circumstance, is invalid or unenforceable, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other persons, entities or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction. 20. Specific Performance. Each party acknowledges that one party will have no adequate remedy at law if the other party fails to perform any of its obligations under this Agreement. In such event, each party agrees that the other party shall have the right, in addition to any other rights it may have, to specific performance of this Agreement and agrees to take no action to oppose the other party's seeking such remedy. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. PHARMACIA & UPJOHN COMPANY By: ______________________________ Name: Title: MIRAVANT MEDICAL TECHNOLOGIES By:______________________________ Name: Title: SANWA BANK CALIFORNIA By: ______________________________ Name: Title: By: ______________________________ Name: Title: Form of Officer's Certificate Miravant Medical Technologies 336 Bollay Drive Santa Barbara, California 93117 Attn: Gary S. Kledzik Sanwa Bank California Wealth Management Division Santa Barbara Trust Office Post Office Box 1539 1036 State Street, No. 240 Santa Barbara, CA 93102 Attn: Robert W. Rainey Dear Ladies and Gentlemen: Please be advised that there [has occurred an event] / [exists a condition or circumstance] entitling [insert name], a Buyer Indemnified Party (as defined in the Escrow Agreement, dated as of May 31, 2001 among [BUYER], a Delaware corporation (the "Buyer"), Miravant Medical Technologies, a Delaware corporation ("Seller") and Sanwa Bank California, as the Escrow Agent (the "Escrow Agent")) to indemnification pursuant to the Asset Purchase Agreement, dated as of May 24, 2001, among Buyer and Seller. [Describe the event, condition or circumstance giving rise to the indemnity claim]. The aggregate amount of damages, losses, liabilities and expenses (including reasonable attorney fees and expenses) incurred or suffered by the Buyer Indemnified Party as a result of such [event]/[condition or circumstance] is $_________. Sincerely, ----------------------------- Name: Title: EX-10 2 f8kmay242001exb10_3.txt EXHIBIT 10.3 SITE ACCESS LICENSE AGREEMENT THIS SITE ACCESS LICENSE AGREEMENT is made this 31st day of May, 2001 (the "Effective Date"), by and between Miravant Medical Technologies, a Delaware corporation ("Licensee"), and The Pharmacia & Upjohn Company, a Delaware corporation ("Licensor"). W I T N E S S E T H: WHEREAS, Licensor and Licensee have executed and delivered, each to the other, a Sublease Assignment Agreement, dated as of the date of this Agreement (the "Sublease Assignment Agreement"), in which Licensee has agreed to assign to Licensor, through the Sublease Termination Date (as defined in the Sublease Assignment Agreement), Licensee's entire right, title and interest in and to that certain Sublease, dated June 10, 1992 (as amended), between Raytheon Corporation and Licensee, relating to the Premises (as hereinafter defined). NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows: ARTICLE I Definitions As used in this Agreement, the following terms shall mean as follows: "Agreement" shall mean, collectively, this Site Access License Agreement and the Site Access Protocols. "Bankruptcy" shall mean with respect to any Party: (i) such Party making an assignment for the benefit of creditors or admitting in writing its inability to pay its debts when due; (ii) the commencement by or against such Party of any liquidation, dissolution, bankruptcy, reorganization, insolvency or other proceeding for the relief of financially distressed debtors, or the appointment for such Party of a receiver, liquidator, custodian or trustee; (iii) the entry of an order for relief against such Party under Title 11 of the United States Bankruptcy Code or any successor provisions; or (iv) if any of the events referred to in this paragraph occur involuntarily, the failure of same to be dismissed, stayed or discharged within ninety (90) days. "Environmental Claim" shall mean any written claim, proceeding, suit, complaint, or notice of violation alleging violation of, or liability under, any Environmental Laws. "Environmental Costs" shall mean any and all Losses which may be imposed upon, incurred by or asserted or awarded against any person in connection with or arising from (i) any failure or alleged failure of the Premises or Licensee's activities or operations at or on the Premises to comply with any Environmental Law, (ii) the presence or alleged presence of any Hazardous Materials on, in, under, emitted from, or alleged exposure affecting all or any portion of, the Premises (or any condition resulting therefrom) or (iii) the transportation or presence at any other location of Hazardous Materials relating to the Premises (or any condition resulting therefrom), including any such Costs incurred as a result of any natural resource damages, or any violation of Environmental Laws or any investigation, site monitoring, containment, clean-up, removal, restoration or other remedial work. "Environmental Laws" shall mean any applicable federal, state or local laws, statutes, regulations, codes, ordinances, permits, decrees, orders or common law relating to, or imposing standards regarding, the protection, health or safety (in either case as relating to the environment) or the protection of the environment. "Environmental Liability" shall mean any Environmental Costs arising out of any claim, legal action, suit, arbitration, governmental investigation, action or other legal or administrative proceeding related to the ownership or operation of the Premises under any Environmental Law and arising from an event or condition constituting a violation of Environmental Law or a Release or alleged Release of a Hazardous Material at or on the Premises. "Hazardous Materials" shall mean any hazardous or toxic substance or any material or waste defined, listed, or classified as such or otherwise regulated under any Environmental Law, including friable asbestos, lead, petroleum, and polychlorinated biphenyls. "Licensee Indemnified Parties" shall have the meaning specified in Section 4.1(b). "Licensor Indemnified Parties" shall have the meaning specified in Section 4.1(a). "Loss" shall mean any damage, claim, loss, charge, action, suit, proceeding, deficiency, tax, interest, penalty and reasonable costs and expenses (including reasonable attorneys' fees). "Party" shall mean any signatory to this Agreement or its assignees or successors. "Person" shall mean any individual, sole proprietorship, partnership, joint venture, trust, unincorporated organization, association, corporation, institution, public benefit corporation, entity or government (whether Federal, state, county, city, municipal or otherwise, including any instrumentality, division, agency, body or department thereof). "Premises" shall mean that certain free standing industrial building located at 7408 Hollister Avenue, Goleta, California, comprising approximately 18,900 square feet. "Release" shall be defined as that term is defined in 42 U.S.C.ss.9601 (22). "Site Access Protocols" shall have the meaning specified in Section 2.2. "Sublease Assignment Agreement" has the meaning set forth in the Recitals. "Third Party Claim" shall mean a claim or demand made against Licensor by any Person who is not a Party. ARTICLE II License and Site Access Protocols 2.1 Grant of License. Licensor hereby grants to Licensee and its employees and visitors a fully paid license, for the term of this Agreement, to enter upon and conduct the business activities of Licensee in and upon the Premises, subject to the Site Access Protocols. 2.2 Site Access Protocols. During the 30 days following the date of this Agreement, Licensor and Licensee shall cause their respective representatives to negotiate in good faith and to develop jointly a set of written, reasonable and mutually acceptable terms, conditions, rules, guidelines, protocols and arrangements concerning Licensee's access to and activities upon the Premises (such terms, conditions, rules, guidelines, protocols and arrangements collectively, as they may be from time to time amended, the "Site Access Protocols"). Licensee and Licensor intend that the Site Access Protocols will address, among other things, security, safety and signage issues and will delineate the portions of the Premises used primarily by Licensee and the portions of the Premises used primarily by Licensor. Licensee and Licensor shall negotiate in good faith, from time to time, concerning any amendments or modifications to the Site Access Protocols. ARTICLE III Term and Termination 3.1 Term. The term of this Agreement shall commence on June 1, 2001 and end on the earlier of December 31, 2003 and the date as of which this Agreement is terminated in accordance with Section 3.2. 3.2 Termination. This Agreement may be terminated as follows: a. Licensor may terminate this Agreement (i) at will, on 180 days' written notice, or (ii) in the event of any of the following occurrences: (A) a breach of this Agreement by Licensee which has not been cured within 30 days following the giving of written notice of such breach to Licensee by Licensor; or (B) the bankruptcy of Licensee or any of its subsidiaries. b. Licensee may terminate this Agreement (i) at will, on 180 days' written notice, or (ii) in the event of any of the following occurrences: (A) a breach of this Agreement by Licensor which has not been cured within 30 days of written notice of such breach to Licensor by Licensee; or (B) the bankruptcy of Licensor or any of its subsidiaries. ARTICLE IV Indemnification 4.1 Indemnification. (a) Licensee agrees to indemnify, defend and hold Licensor and its affiliates and their respective directors, officers, employees, agents and representatives (collectively, the "Licensor Indemnified Parties") harmless from and against any Loss to which Licensor may become subject arising out of, by reason of or otherwise in connection with (i) any Third Party Claims arising out of the grant of the license contemplated by this Agreement, (ii) the use by Licensee of, or activities performed by Licensee on, the Premises, (iii) Licensee's breach of this Agreement, (iv) any and all Environmental Costs and Environmental Liabilities, except those directly attributable to the acts of the Licensor Indemnified Parties while on the Premises, and (v) any and all Third Party Claims made by directors, officers, employees or invitees of Licensee or its affiliates made with respect to events occurring on the Premises. Notwithstanding any provision in this Agreement to the contrary, Licensee shall not be liable under this Section 4.1 for any consequential, special or punitive damages (including but not limited to lost profits), except to the extent that such consequential, special or punitive damages relate to a Loss resulting from a Third Party Claim. (b) Licensor agrees to indemnify, defend and hold Licensee and its affiliates and their respective directors, officers, employees, agents and representatives (collectively, the "Licensee Indemnified Parties") harmless from and against any Loss to which Licensee may become subject arising out of, by reason of or otherwise in connection with (i) the use by Licensor of, or activities performed by Licensor on, the Premises, (ii) Licensor's breach of this Agreement, and (iii) any and all Third Party Claims made by directors, officers, employees or invitees of Licensor or its affiliates made with respect to events occurring on the Premises. Notwithstanding any provision in this Agreement to the contrary, Licensor shall not be liable under this Section 4.1 for any consequential, special or punitive damages (including but not limited to lost profits), except to the extent that such consequential, special or punitive damages relate to a Loss resulting from a Third Party Claim. 4.2 Third Party Claims. If a Third Party Claim is made against any Licensor Indemnified Party or Licensee Indemnified Party (any, an "Indemnitee") with respect to which such Indemnitee is entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Party which is or may be required pursuant to Section 4.1 hereof to make such indemnification (the "Indemnifying Party") in writing, and in reasonable detail, of the Third Party Claim promptly (and in any event within 15 days) after receipt by such Indemnitee of written notice of the Third Party Claim; provided, however, that failure to give such notification shall not affect the indemnification provided hereunder except to the extent the Indemnifying Party shall have been actually prejudiced as a result of such failure. Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within 10 days) after the Indemnitee's receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third Party Claim. If a Third Party Claim is made against an Indemnitee, the Indemnifying Party shall be entitled to participate in the defense thereof and, if it so chooses and acknowledges in writing its obligation to indemnify the Indemnitee therefor, to assume the defense thereof with counsel selected by the Indemnifying Party; provided that such counsel is not reasonably objected to by the Indemnitee. Should the Indemnifying Party so elect to assume the defense of a Third Party Claim, the Indemnifying Party shall, within 30 days (or sooner if the nature of the Third Party Claim so requires), notify the Indemnitee of its intent to do so, and the Indemnifying Party shall thereafter not be liable to the Indemnitee for legal or other expenses subsequently incurred by the Indemnitee in connection with the defense thereof; provided, that such Indemnitee shall have the right to employ counsel to represent such Indemnitee if, in such Indemnitee's reasonable judgment, a conflict of interest between such Indemnitee and such Indemnifying Party exists in respect of such claim which would make representation of both such parties by one counsel inappropriate, and in such event the fees and expenses of such separate counsel shall be paid by such Indemnifying Party. If the Indemnifying Party assumes such defense, the Indemnitee shall have the right to participate in the defense thereof and to employ counsel, subject to the proviso of the preceding sentence, at its own expense, separate from the counsel employed by the Indemnifying Party, it being understood that the Indemnifying Party shall control such defense. The Indemnifying Party shall be liable for the fees and expenses of counsel employed by the Indemnitee for any period during which the Indemnifying Party has failed to assume the defense thereof (other than during the period prior to the time the Indemnitee shall have given notice of the Third Party Claim as provided above). If the Indemnifying Party so elects to assume the defense of any Third Party Claim, all of the Indemnitees shall cooperate with the Indemnifying Party in the defense or prosecution thereof, including by providing or causing to be provided agreements, documents, books, records, files and witnesses as soon as reasonably practicable after receiving any request therefor from or on behalf of the Indemnifying Party. If the Indemnifying Party acknowledges in writing responsibility under this Section 4.2 for a Third Party Claim, then in no event will the Indemnitee admit any liability with respect to, or settle, compromise or discharge, any Third Party Claim without the Indemnifying Party's prior written consent; provided, however, that the Indemnitee shall have the right to settle, compromise or discharge such Third Party Claim without the consent of the Indemnifying Party if the Indemnitee releases the Indemnifying Party from its indemnification obligation hereunder with respect to such Third Party Claim and such settlement, compromise or discharge would not otherwise adversely affect the Indemnifying Party. If the Indemnifying Party acknowledges in writing liability for a Third Party Claim, the Indemnitee will agree to any settlement, compromise or discharge of a Third Party Claim that the Indemnifying Party may recommend and that by its terms obligates the Indemnifying Party to pay the full amount of the liability in connection with such Third Party Claim and releases the Indemnitee completely in connection with such Third Party Claim and that would not otherwise adversely affect the Indemnitee. Notwithstanding the foregoing, the Indemnifying Party shall not be entitled to assume the defense of any Third Party Claim (and shall be liable for the fees and expenses of counsel incurred by the Indemnitee in defending such Third Party Claim) if the Third Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee which the Indemnitee reasonably determines, after conferring with its counsel, cannot be separated from any related claim for money damages. If such equitable relief or other relief portion of the Third Party Claim can be so separated from that for money damages, the Indemnifying Party shall be entitled to assume the defense of the portion relating to money damages. 4.2 Remedies and Payments. The remedies provided in this Article IV shall be cumulative and shall not preclude assertion by Indemnitee of any other rights or the seeking of any and all other remedies against the Indemnifying Party. Indemnification required by this Article IV shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or any Loss is incurred. If Indemnifying Party fails to make an indemnification payment required by this Article IV within 30 days after receipt of a bill therefore, the Indemnifying Party shall also be required to pay interest on the amount of such indemnification payment, from the date of receipt of the bill to, but not including the date of payment, at the prime lending rate announced from time to time by Citibank, N.A. 4.3 Survival. The Parties' obligations under this Article IV shall survive the termination of this Agreement. ARTICLE V Miscellaneous 5.1. Specific Performance. Each Party acknowledges that one Party will have no adequate remedy at law if the other Party fails to perform any of its obligations under this Agreement. In such event, each Party agrees that the other Party shall have the right, in addition to any other rights it may have, to specific performance of this Agreement and agrees to take no action to oppose the other Party's seeking such remedy. 5.2. Waivers. No action taken pursuant to this Agreement, including any investigation by or on behalf of any Party hereto, shall be deemed to constitute a waiver by the Party taking such action of compliance with any representation, warranty, covenant, or agreement contained herein. Any waiver by any Party hereto of a breach of any provision of this Agreement must be in writing and shall not operate or be construed as a waiver of any subsequent breach. 5.3. Notices. Any communication, demand or notice to be given hereunder will be duly given when delivered in writing or by telecopy to a Party at its address as indicated below or such other address as such Party may specify in a notice to each other Party hereto. A communication, demand or notice given pursuant to this Agreement shall be addressed: If to Licensor: Pharmacia Corporation 100 Route 206 North Peapack, New Jersey 07977 Attn: General Counsel Fax: (908) 901-o with a copy (which, in and of itself, shall not constitute notice) to: Matthew G. Hurd Sullivan & Cromwell 1870 Embarcadero Road Palo Alto, California 94303 Fax: (650) 461-5700 If to Licensee: Miravant Medical Technologies 336 Bollay Drive Santa Barbara, California 93117 Attn: Gary S. Kledzik Fax: (805)685-6038 with a copy (which, in and of itself, shall not constitute notice) to: Joseph E. Nida Nida & Maloney, LLP 800 Anacapa Street Santa Barbara, California 93101 Fax: (805) 568-1955 or, as to any Party, to such other address as shall be designated by such Party in a prior written notice to each other Party similarly given. 5.4. Parties in Interest. This Agreement shall inure to the benefit of and be binding upon the Parties named herein and their respective successors and assigns. Nothing in this Agreement, express or implied, is intended to confer upon any person other than the Parties or their successors or assigns, any rights or remedies under or by reason of this Agreement. 5.5. Entire Agreement; Amendments. This Agreement contains the entire agreement between the Parties hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, oral or written, with respect to such transactions. This Agreement may not be changed, amended or modified orally, but only by an agreement in writing signed by the Party against whom any waiver, change, amendment, modification or discharge may be sought. 5.6. Headings. The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. 5.7. Counterparts. This Agreement may be executed in any number of counterparts, each of which, when executed, shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument. 5.8. Governing Law. The validity, performance and enforcement of this Agreement shall be governed by the laws of the State of California (regardless of the laws that might otherwise govern under California principles of conflicts of laws). 5.9. Relationship. Nothing in this Agreement shall be construed to render Licensor and Licensee partners or joint venturers or to impose upon any of them any liability as such. IN WITNESS WHEREOF, this Agreement has been duly executed as of the date herein above indicated. MIRAVANT TECHNOLOGIES By: _________________________ Name: Title: THE PHARMACIA & UPJOHN COMPANY By: _________________________ Name: Title: EX-10 3 f8kmay242001exb10_2.txt EXHIBIT 10.2 MANUFACTURING FACILITY ASSET PURCHASE AGREEMENT between PHARMACIA & UPJOHN COMPANY and MIRAVANT MEDICAL TECHNOLOGIES Dated as of May 24, 2001
TABLE OF CONTENTS Page 1. Definitions..........................................................................................1 1.1. General Terms.............................................................................1 1.2. Other Terms...............................................................................8 1.3. Other Provisions..........................................................................8 1.4. Knowledge.................................................................................8 2. Purchase and Sale of the Purchased Assets............................................................8 2.1. Transfer at Closing.......................................................................8 3. Assets...............................................................................................8 3.1. Purchased Assets..........................................................................8 4. Liabilities..........................................................................................9 4.1. Assumed Liabilities.......................................................................9 4.2. Excluded Liabilities......................................................................9 5. Purchase Price and Closing..........................................................................11 5.1. Purchase Price...........................................................................11 5.2. Closing..................................................................................11 5.3. Delivery and Payment by Buyer............................................................11 5.4. Deliveries by the Company................................................................12 5.5. Transfer Fees............................................................................12 5.6. Notices of Sale..........................................................................13 6. Representations and Warranties of the Company.......................................................13 6.1. Organization, Qualification, Powers and Authority........................................13 6.2. Organization.............................................................................13 6.3. Adequacy and Sufficiency of Purchased Assets.............................................14 6.4. Title to Personal Property...............................................................14 6.5. Absence of Undisclosed Liabilities.......................................................14 6.6. Compliance with Instruments; No Defaults.................................................15 6.7. Operations; Governmental Licenses........................................................15 6.8. Taxes Paid...............................................................................15 6.9. Contracts................................................................................16 6.10. Consents................................................................................17 6.11. Litigation and Claims...................................................................17 6.12. Business Intellectual Property..........................................................17 6.13. Binding Commitments.....................................................................18 6.14. Insurance and Insurance Requirements....................................................19 6.15. No Labor Commitments....................................................................19 6.16. Books and Records.......................................................................19 6.17. Powers of Attorney......................................................................19 6.18. Adverse Change..........................................................................20 6.19. Brokers' Fees...........................................................................20 6.20. Disclosure..............................................................................20 6.21. Environmental Matters...................................................................20 6.22. Actual Knowledge of Buyer...............................................................20 6.23. No Other Representations or Warranties..................................................20 7. Representations and Warranties of Buyer.............................................................20 7.1. Organization, Qualification, Powers and Authority........................................20 7.2. Compliance with Instruments; No Default..................................................21 7.3. Consents.................................................................................21 7.4. Litigation and Claims....................................................................21 7.5. Brokers' Fees............................................................................22 7.6. No Other Representations or Warranties...................................................22 8. Covenants as to the Business........................................................................22 8.1. Interim Conduct of Business..............................................................22 8.2. Affirmative Covenants....................................................................23 9. Additional Covenants................................................................................24 9.1. Tax and Other Matters....................................................................24 9.2. Undertakings.............................................................................25 9.3. Filings..................................................................................25 9.4. Access to Employees After Closing........................................................25 9.5. Records and Documents of Buyer...........................................................25 9.6. Records and Documents of the Company.....................................................25 9.7. Nonassignable Rights.....................................................................26 9.8. Existing Agreements......................................................................26 10. Conditions to the Obligations of Both Parties......................................................26 10.1. Regulatory Approvals, Consents, Authorizations, Etc.....................................26 10.2. Legal Proceedings.......................................................................27 11. Conditions to Buyer's Obligations..................................................................27 11.1. Accuracy of Warranties; Performance of Covenants; Officer's Certificates.........................................................................27 11.2. Agreements..............................................................................27 11.3. Consents................................................................................27 11.4. Building Lease..........................................................................27 12. Conditions to the Company's Obligations............................................................27 12.1. Accuracy of Warranties; Performance of Covenants; Officer's Certificates.........................................................................28 12.2. Agreements..............................................................................28 12.3. Consents................................................................................28 13. Indemnification....................................................................................28 13.1. Indemnified Claims......................................................................28 13.2. Claims Indemnified by the Company.......................................................29 13.3. Claims Indemnified by Buyer.............................................................29 13.4. Procedure...............................................................................30 13.5. Limitations on Losses...................................................................31 13.6. Interest................................................................................31 13.7. Adjustment to Purchase Price............................................................31 14. Termination........................................................................................31 14.1. Termination.............................................................................31 14.2. Effect of Termination...................................................................32 15. General............................................................................................32 15.1. Specific Performance....................................................................32 15.2. Waivers.................................................................................32 15.3. Further Assurances......................................................................32 15.4. Notices.................................................................................33 15.5. Parties in Interest.....................................................................33 15.6. Litigation Arising from the Business Activities.........................................34 15.7. Entire Agreement; Amendments............................................................34 15.8. Substitution of Buyer's Affiliates; Assignment..........................................34 15.9. Bulk Transfers..........................................................................34 15.10. Press Releases.........................................................................35 15.11. Confidentiality........................................................................35 15.12. Severability...........................................................................35 15.13. Headings...............................................................................35 15.14. Counterparts...........................................................................35 15.15. Governing Law..........................................................................36 15.16. Arbitration............................................................................36 15.17. Successors and Assigns.................................................................37
Exhibit A Bill of Sale Exhibit B APA Escrow Agreement Exhibit C API Escrow Agreement Exhibit D Site Access License Agreement Exhibit E Sublease Assignment Agreement Schedules Schedule 3.1(a) Personal Property Schedule 3.1(g) Additional Personal Property Schedule 4.1 Assumed Liabilities Schedule 6.1 Jurisdictions Schedule 6.2 Jurisdictions of Subsidiaries Schedule 6.7 Governmental Licenses Schedule 6.9 Contracts Schedule 6.11 Company Litigation and Claims Schedule 6.12(a) Intellectual Property Schedule 9.1 Allocation of Purchase Price -1- MANUFACTURING FACILITY ASSET PURCHASE AGREEMENT THIS MANUFACTURING FACILITY ASSET PURCHASE AGREEMENT, dated as of May 24, 2001 (this "Agreement"), by and between Pharmacia & Upjohn Company, a Delaware corporation ("Buyer"), and Miravant Medical Technologies, a Delaware corporation (the "Company"). W I T N E S S E T H: WHEREAS, the Company and/or its Subsidiaries are engaged in the manufacture of the active pharmaceutical ingredient utilized in the formulation of tin ethyl-etiopurpurin (as conducted by the Company and/or its Subsidiaries on or prior to the date hereof, the "Business"); and WHEREAS, except as otherwise specifically provided herein, the Company desires to sell, transfer and assign to Buyer and Buyer desires to purchase from the Company all of the Purchased Assets (as defined herein), in each case on the terms, subject to the conditions and to the extent herein set forth; WHEREAS, contemporaneously with the Closing contemplated hereby, it is contemplated that the Escrow Agreements, the Site Access License Agreement and the Sublease Assignment Agreement (each as defined herein) will be executed and delivered by the parties thereto; and WHEREAS, contemporaneously with the execution and delivery of this Agreement, Buyer has tendered and Seller has accepted one or more purchase orders providing for the purchase of the Company's current inventory of API at Company's cost of manufacturing, $2,245,000, and the purchase of at least 3.5 kilograms of API at a cost of $800 per gram. NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: NY12528: 141148.8 -38- 1. Definitions. 1.1. General Terms. For purposes of this Agreement, the following terms have the meanings hereinafter indicated: "Active Pharmaceutical Ingredient" or "API"means the active ingredient utilized in the formulation of tin ethyl-etiopurpurin. "Affiliate" means, with respect to any Person, any other Person directly or indirectly Controlling, Controlled by or under common Control with such Person. "Ancillary Documents" means the exhibits and schedules referred to in this Agreement, the Assignment, the Bill of Sale, the Escrow Agreements, the Site Access License Agreement, the Sublease Assignment Agreement and any documents, instruments or certificates to be delivered at the Closing. "Assumed Liabilities" means, with respect to Buyer, only those liabilities and obligations that are disclosed and set forth in Section 4.1. "Benefit Arrangement" means any employment, severance or similar contract, arrangement or policy, or any plan or arrangement providing for severance benefits, insurance coverage, workers' compensation, disability benefits, supplemental unemployment benefits, vacation benefits, retirement benefits, deferred compensation, profit-sharing, bonuses, stock options, stock appreciation rights or other forms of incentive compensation or post-retirement insurance, compensation or benefits that (i) is not an Employee Plan and (ii) is entered into or maintained, as the case may be, by the Company or any of its ERISA Affiliates. "Bill of Sale" means the General Bill of Sale, Assignment and Assumption of Liabilities in substantially the form attached hereto as Exhibit A. "Building Lease" has the meaning set forth in the Recitals. "Business" is the manufacturing business specified in the Recitals. "Business Intellectual Property" has the meaning specified in Section 6.12. "Buyer" has the meaning specified in the Preamble. "Closing" has the meaning specified in Section 5.2. "Closing Date" has the meaning specified in Section 5.2. "Commitments" has the meaning specified in Section 6.13. "Company" has the meaning specified in the Preamble. "Confidential Information" means any and all data and information of a proprietary or confidential nature that is owned or controlled by any party hereto or its respective Affiliates and is made available by one party or its Affiliates to any other party or its Affiliates prior to, during or after the term of this Agreement and that is directly or indirectly related to the Business, including without limitation, formulations, processing information, technical reports and specifications. Confidential Information shall not include information which: (a) was known or used by the receiving party or its Affiliates prior to its date of disclosure to the receiving party, as evidenced by the prior written records of the receiving party or its Affiliates, unless previously disclosed on a confidential basis to a party or its Affiliates under an Existing Agreement; (b) either before or after the date of the disclosure to the receiving party, is lawfully disclosed without restriction on disclosure to the receiving party or its Affiliates by an independent, unaffiliated third party whose disclosure of such information does not violate any obligation to or right of the party owning or controlling the Confidential Information, unless previously disclosed on a confidential basis to a party or its Affiliates under an Existing Agreement; (c) either before or after the date of the disclosure to the receiving party, becomes published or generally known through no fault or admission on the part of the receiving party or its Affiliates or their employees or agents; (d) can be shown by written documents to have been independently developed by the receiving party or its Affiliates without breach of any of the provisions of this Agreement; (e) is disclosed by the receiving party pursuant to oral questions, interrogatories, requests for information or documents, subpoena, or a civil investigative demand of a court or governmental agency; provided that (i) the receiving party notifies the other party immediately upon receipt thereof, (ii) the receiving party furnishes only that portion of the information which it is advised by counsel is legally required, and (iii) the receiving party imposes such obligations of secrecy as are possible with respect to such information; or (f) is required to be disclosed by the receiving party under any statutory, regulatory or similar legislative requirement or any rule of any stock exchange to which it or any of its Affiliates is subject; provided that the receiving party uses reasonable efforts to obtain confidential treatment of the Confidential Information. "Control" when used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by contract or otherwise, and the terms "Controlling," "Controlled by" and "under common Control with" have correlative meanings. "Costs" means all Losses, liabilities, penalties, claims, fines, damages, disbursements or expenses of any kind and nature whatsoever (including, without limitation, reasonable attorneys', accountants', consultants' or experts' fees and disbursements (in each case, including, without limitation, any such amounts that are incurred either as a result of third-party claims or in connection with proceedings to enforce this Agreement)). "Employee Benefit Plan Costs" means any costs that may be imposed by reason of the establishment, maintenance or operation of any Employee Plan or Benefit Arrangement. "Employee Plan" means any "employee benefit plan," as defined in Section 3(3) of ERISA, that (i) is subject to any provision of ERISA and (ii) is maintained, administered or contributed to by the Company or any of its ERISA Affiliates. "Encumbrance" means liens, charges, mortgages, pledges, encumbrances, security interests, options, restrictions or any other claims or third-party rights, excluding those due to Buyer or any affiliate of Buyer. "Environmental Costs" means any and all Costs (as defined above) that may be imposed upon, incurred by or asserted or awarded against the Company, Buyer, or any Affiliate, Subsidiary, employee, agent, successor or assign of any of the foregoing in connection with or arising from (i) the presence of any Hazardous Substances on, in, under, emitted from or affecting all or any portion of the Purchased Assets (or any condition resulting therefrom) or (ii) the transportation or presence at any location of Hazardous Substances relating to the Business (or any condition resulting therefrom), including any such Costs incurred as a result of any natural resource damages, or any violation of Environmental Laws or any investigation, site monitoring, containment, clean-up, removal, restoration or other remedial work. "Environmental Laws" means the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.ss.ss.9601 et seq., as amended, the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C.ss.ss.11001 et seq., the Resource Conservation and Recovery Act, 42 U.S.C.ss.ss.6901 et seq., the Toxic Substances Control Act, 15 U.S.C.ss.ss.2601 et seq., the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.ss.ss.136 et seq., the Clean Air Act, 42 U.S.C.ss.ss. 7401 et seq., the Clean Water Act (Federal Water Pollution Control Act), 33 U.S.C.ss.ss.1251 et seq., the Safe Drinking Water Act, 42 U.S.C.ss.ss.300f et seq., the Occupational Safety and Health Act, 29 U.S.C.ss.ss.651 et seq., the Hazardous Materials Transportation Act, 49 U.S.C.ss.ss.1801 et seq., as any of the above statutes have been amended as of the date hereof, all rules and regulations promulgated pursuant to any of the above statutes, and any other foreign, Federal, state or local law, statute, ordinance, rule or regulation governing Environmental Matters, as the same have been amended as of the date hereof. "Environmental Matters" means any matter arising out of or relating to the environment, human safety or health or the production, storage, handling, use, presence, emission, release, discharge or disposal of Hazardous Substances. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. "ERISA Affiliate" means any other entity which, together with the Company, would be treated as a single employer under Section 414 of the Internal Revenue Code of 1986 (the "Code"). "Escrow Agent" means Sanwa Bank, acting as escrow agent pursuant to the Escrow Agreements. "Escrow Agreements" means the escrow agreements attached hereto as Exhibit B and Exhibit C. "Existing Agreements" means the following agreements between the Company and the Buyer, or affiliates of the Buyer: Equity Investment Agreement dated January 15, 1999; Supply Agreement Side Letter dated January 15, 1999; Right of First Negotiation Side Letter dated January 15, 1999; Advance Agreement dated January 15, 1999; Agreement and Amendment to the Equity Investment Agreement dated February 17, 1999; Amended and Restated Ophthalmology and License Agreement, dated February 18, 1999; Credit Agreement dated February 18, 1999; Warrant Agreement dated February 18, 1999; Security Agreement dated February 18, 1999; Grant of Security Interest in and Assignment of Trademarks and Patents dated February 18, 1999 and Registration Rights Agreement dated February 18, 1999. "Governmental Authority" means any administrative or legislative body, agency, authority, bureau, commission, court, department or other instrumentality of any federal, state or local government, foreign or domestic, unless otherwise indicated in this Agreement. "Hazardous Substances" means any pollutants, contaminants or toxic or hazardous substances or materials that are regulated by, or form the basis of liability under, any Environmental Laws. "Indemnified Party" has the meaning specified in Section 13.4. "Indemnifying Party" has the meaning specified in Section 13.4. "Intellectual Property" means all United States and foreign patents and patent applications, supplementary protection certificates and patent extensions, continuations in whole or in part, divisionals, trademarks and trademark applications, service mark and service mark registrations, logos, commercial symbols, business name registrations, trade names, copyrights and copyright registrations, computer software, mask works and mask work registration applications, industrial designs and applications for registration of such industrial designs, including, without limitation, any and all applications for renewal, extensions, reexaminations, applications claiming priority thereto or therefrom and reissues of any of the foregoing intellectual property rights where applicable, inventions, biological materials, trade secrets, formulae, know-how, technical information, research data, research raw data, laboratory notebooks, procedures, designs, proprietary technology and information, and all other intellectual property relating to the assets, research and development and any and all other property and rights related thereto, whether or not registered, owned or licensed, directly or indirectly, by the Company or any Subsidiary and all proprietary data and technical, manufacturing or marketing know-how or information in the possession of the Company as well as such data, know-how or information as is in the possession of employees of the Company or in the possession of vendors to the Company or customers of the Company, including new developments, discoveries, inventions, ideas and trade secrets and documentation thereof (including related papers, drawings, chemical compositions, formulae, diaries, notebooks, specifications, methods of manufacture, data processing cards, discs and tapes and all data contained therein or thereon) and all rights thereto related which are exclusively and only related to the Business. "Interest Rate" means, for any day, a rate per annum equal to the rate of interest from time to time publicly announced by Citibank, N.A. in The City of New York as its prime commercial loan rate in effect on such day. The Interest Rate shall change as and when the foregoing rate shall change. Any change in the Interest Rate shall become effective as of the opening of business on the day of such change. "Landlord" has the meaning specified in the Recitals. "Laws" has the meaning specified in Section 6.7. "Losses" means any liability, loss, cost, damage, penalty, fine, interest, obligation or expense of any kind whatsoever (including, without limitation, reasonable attorneys', accountants', consultants' or experts' fees and disbursements (in each case, including, without limitation, any such amounts that are incurred either as a result of third-party claims or in connection with proceedings to enforce this Agreement)). "Material Adverse Effect" means any material adverse effect on the condition or use of, or any material impairment of or Encumbrance on, the Purchased Assets, taken as a whole. "Nonassignable Rights" means, without limitation, any outstanding contracts, sales orders or purchase orders, inventories, machinery, equipment, tools, instruments, warranties, claims, permits, certificates, licenses, sublicenses, Intellectual Property, approvals and other authorizations of all Governmental Authorities, insurance claims, security devices or systems, accounts and notes receivable, trade secrets, inventions, know-how, formulae and computer software that cannot be assigned without the consent of a person, entity or Governmental Authority that is not a party to this Agreement. "Permitted Liens" means liens in favor of the Buyer or any affiliate of the Buyer, liens for current Taxes or assessments not delinquent; builders', mechanics', warehousemen's, workmen's, repairmen's, carriers' liens, or other similar liens arising and continuing in the ordinary course of business for obligations which are not delinquent; and other similar common law or statutory liens which are immaterial and do not reduce the value or affect the use of the Purchased Assets so subject; and liens arising from claims being contested in good faith ("Contest Liens"), which Contest Liens, alone or in the aggregate, are not reasonably likely to have a Material Adverse Effect. "Person" means any individual, sole proprietorship, partnership, joint venture, trust, unincorporated organization, association, corporation, institution, public benefit corporation, entity or government (whether Federal, state, county, city, municipal or otherwise, including any instrumentality, division, agency, body or department thereof). "Personal Property" has the meaning specified in Section 3.1. "Proceedings" has the meaning specified in Section 6.11. "Purchase Price" means the sum of $863,071. "Purchased Assets" has the meaning specified in Section 3.1. "Receiving Party" has the meaning specified in Section 15.11. "Related Permits" has the meaning specified in Section 6.7. "Site Access License Agreement" means the site access license agreement attached hereto as Exhibit D. "Sublease Assignment Agreement" means the sublease assignment agreement attached hereto as Exhibit E. "Subsidiary" means any corporation or other entity which the Company, directly or through one or more intermediaries, Controls, which, for purposes of this Agreement, shall be deemed to include any corporation or other entity in which the Company or such intermediary (i) owns at least a majority of the outstanding voting securities or similar evidences of ownership or (ii) has the contractual power to designate at least a majority of the directors of a corporation, or in the case of unincorporated entities, of individuals exercising similar functions. "Survival Date" has the meaning specified in Section 13.1. "Taxes" means any federal, state, local or foreign taxes, including but not limited to income, gross receipts, windfall profits, value added, severance, property, production, sales, use, license, excise, franchise, employment, withholding or similar taxes together with any interest, additions or penalties with respect thereto and any interest in respect of such penalties. "Third-Party Intellectual Property" has the meaning specified in Section 6.12. 1.2. Other Terms. Other terms may be defined elsewhere in the text of this Agreement and, unless otherwise indicated, shall have such meaning throughout this Agreement. 1.3. Other Provisions. The words "hereof", "herein", and "hereunder" and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The terms defined in the singular shall have a comparable meaning when used in the plural, and vice versa. 1.4. Knowledge. References herein to the "Company's knowledge," "knowledge of the Company" or "to the knowledge or information of the Company" refer to the actual knowledge of the officers of the Company. 2. Purchase and Sale of the Purchased Assets. 2.1. Transfer at Closing. At the Closing, the Company shall sell, convey, transfer, deliver and assign to Buyer free and clear of all Encumbrances (other than Permitted Liens existing as of the date hereof), subject to and in accordance with the provisions of this Agreement, all of the Purchased Assets and Buyer shall assume the Assumed Liabilities. 3. Assets. 3.1. Purchased Assets. The "Purchased Assets" shall constitute all of the following: (a) all of the Company's and its Affiliates' entire right, title and interest, of whatever kind or nature, in and to the items of personal property specified on Schedule 3.1(a) (collectively with the personal property specified on Schedule 3.1(g), the "Personal Property"); (b)all of the Company's and its Affiliates' entire right, title and interest, of whatever kind or nature, in and to any warranties or claims against third parties relating to or arising from any of the Purchased Assets; (c) all of the Company's and its Affiliates' entire right, title and interest, of whatever kind or nature, in and to all supplier lists, parts lists, vendor lists, and all other information and data that relate to or arise from or are used in connection with the Business; (d) all of the Company's and its Affiliates' entire right, title and interest, of whatever kind or nature, in and to any proceeds from any insurance claims received by the Company or any Subsidiary at or after the Closing that relate to or arise from a casualty loss or impairment of the Personal Property; (e) all of the Company's and its Affiliates' entire right, title and interest, of whatever kind or nature, in and to the supplier contracts, service agreements relating to the Purchased Assets, and purchase orders or other agreements that relate to the Purchased Assets, including without limitation, those described in Schedule 6.10; (f) true and correct copies, if, as and when requested by Buyer, of all books, records and documents relating to the Business, other than financial statements, accounting records or accountants' work papers; (g) all of the Company's and its Affiliates' entire right, title and interest, of whatever kind or nature, in and to the items of personal property specified on Schedule 3.1(g), and the purchase orders, contracts and arrangements relating thereto; and (h) all other assets of the Company and its Subsidiaries used at the Company's manufacturing site in connection with the Business. 4. Liabilities. 4.1. Assumed Liabilities. The Assumed Liabilities are limited to the encumbrances, claims, liabilities, duties and obligations disclosed in Schedule 4.1. 4.2. Excluded Liabilities. Except as specifically set forth in Section 4.1, Buyer shall not be responsible for or assume any debts, liabilities or obligations of the Company or any of its Subsidiaries, known, unknown, contingent or otherwise (herein called the "Excluded Liabilities"), whether or not relating to the Purchased Assets or the Business, and all such Excluded Liabilities shall remain the sole obligation of the Company or its Subsidiaries (but only if and to the extent that any party to this Agreement or any of their respective Affiliates is or would otherwise be liable for or obligated in respect of such Excluded Liabilities), including without limitation, any of the following liabilities: (a) any liability of the Company or any Subsidiary relating to or arising out of the operation or conduct by the Company or any of its Subsidiaries of any business, including the Business; (b) all interest expense and indebtedness for borrowed money or guarantees thereof or agreements to be responsible therefor other than as specifically described in Schedule 4.1(a); (c) all liabilities and obligations under any Benefit Arrangement or Employee Plan; (d) all liabilities and obligations for any and all Taxes, duties, assessments and FICA contributions relating to the Business; (e) any liability with respect to the Purchased Assets arising from accidents, events, occurrences, misconduct, breach of fiduciary duty or actions taken or omitted to be taken prior to the Closing, whether or not covered by insurance or in effect either at the time of the accident, event, occurrence or relevant conduct or at the time at which the claim with respect thereto is made, or any product liability claims for injuries, property damage or other losses arising with respect to inventory or products produced by the Company or any of its Subsidiaries; (f) any liability with respect to the Purchased Assets arising from tort, contract or otherwise to employees or agents of the Company or any of its Affiliates, or persons asserting claims on their behalf, or in respect of their condition, injury or death, in any case arising from or related to a condition in existence or an occurrence, whether or not covered by workers' compensation or insurance in effect either at the time of the accident, occurrence or relevant conduct or at the time at which the claim with respect thereto is made, including any liability relating to: (i) any claim relating to employee compensation, benefits and similar matters, (ii) the termination of employment of any Employee with the Company or any of its Affiliates prior to, at or subsequent to the Closing, (iii) any claim for any injury suffered, illness contracted, condition developed, or exposure received, by any employee or agent of the Company or any of its Affiliates (including liability incurred after the Closing for continuation of any such pre-existing injury, illness, condition or exposure) or (iv) any claim based on alleged discrimination, harassment, or violation of any Law; (g) any liability for any Environmental Costs incurred prior to the Closing; (h) any liability for payment with respect to services performed or goods acquired relating to the Purchased Assets or the Business at or prior to Closing, or any liability arising out of a breach occurring prior to the Closing of any provision of a contract, and any misrepresentation or omission to make any statement at or prior to the Closing related to any contract; (i) any liabilities for any claim, or arising in any Proceeding, to the extent relating to periods prior to the Closing, whether or not asserted, pending or threatened at or prior to the Closing; (j) any liability for any failure by the Company or any of its Affiliates or employees to comply with, or any violation of any Law relating to the Purchased Assets or the Business; (k) any liability for any infringement by the Company or any of its Affiliates of the rights of any other Person relating to the use of the Intellectual Property; (l) any liability of the Company or any Affiliate to any broker, finder or agent for any brokerage fees, finder's fees or commission with respect to the transactions contemplated by this Agreement; and (m) any liability for any Employee Benefit Plan Costs. 5. Purchase Price and Closing. 5.1. Purchase Price. The purchase price for the Purchased Assets shall be the Purchase Price. 5.2. Closing. The transfer of the Purchased Assets by the Company to Buyer (the "Closing") shall occur at the offices of the Company, 336 Bollay Drive, Santa Barbara, California 93117, at 10:00 a.m., Pacific time, on the later of (i) May 31, 2001, (ii) the day on which the last to be satisfied or waived of the conditions set forth in Sections 10, 11 and 12 has been so satisfied or waived, and (iii) such later date as Buyer and the Company shall agree (the "Closing Date"). The Closing shall be deemed to take place as of 11:59 P.M., Pacific time, on the Closing Date. 5.3. Delivery and Payment by Buyer. At the Closing, Buyer shall deliver, in form and substance satisfactory to the Company, the following: (a) the Purchase Price in immediately available funds to an account designated by the Escrow Agent all pursuant to the terms of the Escrow Agreements. Release of the Purchase Price will be permitted only in accordance with the terms and conditions of the Escrow Agreements; (b) such instruments of assumption or other instruments, filings or documents, in form and substance reasonably acceptable to the Company, as may be required to assume the Assumed Liabilities; (c) copies of any consents to be obtained by Buyer in connection with this Agreement; (d) the opinions, certificates and other documents to be delivered pursuant to Section 12; and (e) the Ancillary Documents not theretofore executed and delivered by Buyer, duly executed and delivered by Buyer. 5.4. Deliveries by the Company. At the Closing, the Company shall, and shall cause its Subsidiaries to, deliver, in form and substance satisfactory to Buyer, the following documents: (a) such assignments and other documents, with all consents deemed necessary by Buyer, in form and substance acceptable to Buyer, in order to assign to Buyer all tangible and intangible property included in the Purchased Assets, including all rights appurtenant thereto; (b) copies of any consents required to be obtained by the Company in connection with this Agreement; (c) the opinions, certificates and other documents to be delivered pursuant to Section 11; (d) the Ancillary Documents not theretofore executed and delivered by the Company, duly executed and delivered by the Company; and (e) such other instruments, filings or documents as may be required by this Agreement or requested by Buyer as reasonably necessary to carry out the transfers contemplated by this Agreement and to comply with the terms hereof. 5.5. Transfer Fees. At the Closing, the Company shall pay, or shall reimburse Buyer for the payment of, all transfer taxes, conveyance taxes and sales taxes in connection with the transactions contemplated hereby. Except as otherwise provided in Section 14.2, whether the transactions contemplated by this Agreement are consummated or fail to be consummated for any reason whatsoever, each of the parties hereto shall pay its own expenses and the fees and expenses of its counsel and accountants and other experts, except as otherwise specifically provided in this Agreement. 5.6. Notices of Sale. The Company will prepare and mail on the Closing Date such notices to the other party or parties as to Personal Property and other agreements assigned by the Company and assumed by Buyer as are necessary or desirable or as may be reasonably requested by Buyer, advising such other party or parties that such agreements have been assigned and directing such party or parties to send to Buyer all future notices and correspondence relating to such agreements. 6. Representations and Warranties of the Company. The Company hereby represents and warrants to Buyer as follows: 6.1. Organization, Qualification, Powers and Authority. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to own, lease and operate the Purchased Assets and to carry on the Business as now conducted and is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction where the character of the Purchased Assets or the nature of the Business makes such qualifications necessary. Each such jurisdiction is set forth in Schedule 6.1. The Company has all requisite corporate power and authority to execute and deliver this Agreement and the Ancillary Documents and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the Ancillary Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby have been duly authorized and approved by the Board of Directors of the Company and no other corporate proceeding with respect to the Company is necessary to authorize this Agreement or any Ancillary Document or any transaction contemplated hereby or thereby. Each of this Agreement and the Ancillary Documents executed and delivered contemporaneously herewith has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable in accordance with its terms, subject (as to enforcement) to bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors' rights generally and to general equity principles. When executed and delivered by the Company, each Ancillary Document not executed and delivered contemporaneously herewith will have been duly executed and delivered by the Company and will constitute a valid and binding obligation of the Company, enforceable in accordance with its terms, subject (as to enforcement) to bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors' rights generally and to general equity principles. 6.2. Organization. All of the wholly owned Subsidiaries of the Company are duly organized, validly existing and in good standing under the laws of the State of Delaware or California and have all requisite corporate power and authority to own, lease and operate the Purchased Assets and to carry on the Business as now conducted and are duly qualified to do business as foreign corporations and are in good standing in each jurisdiction where the character of the Purchased Assets or the nature of the Business makes such qualifications necessary. Each such jurisdiction is set forth in Schedule 6.2. All of the wholly owned Subsidiaries of the Company have all requisite corporate power and authority to execute and deliver this Agreement and the Ancillary Documents and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the Ancillary Documents by the wholly owned Subsidiaries of the Company and the consummation by the wholly owned Subsidiaries of the Company of the transactions contemplated hereby and thereby have been duly authorized and approved by the Board of Directors of the wholly owned Subsidiaries of the Company and no other corporate proceeding with respect to the wholly owned Subsidiaries of the Company is necessary to authorize this Agreement or any Ancillary Document or any transaction contemplated hereby or thereby. Each of this Agreement and the Ancillary Documents executed and delivered contemporaneously herewith has been duly executed and delivered by the wholly owned Subsidiaries of the Company and constitutes a valid and binding obligation of the wholly owned Subsidiaries of the Company, enforceable in accordance with its terms, subject (as to enforcement) to bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors' rights generally and to general equity principles. When executed and delivered by the wholly owned Subsidiaries of the Company, each Ancillary Document not executed and delivered contemporaneously herewith will have been duly executed and delivered by the wholly owned Subsidiaries of the Company and will constitute a valid and binding obligation of the wholly owned Subsidiaries of the Company, enforceable in accordance with its terms, subject (as to enforcement) to bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors' rights generally and to general equity principles. 6.3. Adequacy and Sufficiency of Purchased Assets. This Agreement and the instruments and documents to be delivered by the Company to Buyer at or following the Closing shall be adequate and sufficient to vest in Buyer all of the Company's rights, titles and interests in or to the Purchased Assets. The Purchased Assets will represent all of the personal property and the right to use all of the Intellectual Property that is used or has been developed by the Company in connection with the Business. There is no Personal Property or Intellectual Property that the Company or any of its Affiliates is using or has the right to use and that is material to the operation of the Business that is not included in the Purchased Assets. 6.4. Title to Personal Property. The Company or a wholly owned Subsidiary has good and marketable title to, or a valid leasehold interest in, all Personal Property included in the Purchased Assets, free and clear of any Encumbrances (other than Permitted Liens existing as of the date hereof). 6.5. Absence of Undisclosed Liabilities. Except as disclosed in Schedule 6.5, the Company and its Subsidiaries have no liabilities or obligations (whether known or unknown, absolute, accrued, contingent or otherwise) relating to or arising with respect to the Purchased Assets or the Business, except liabilities or obligations that are not being assumed by Buyer. Non-payment, non-satisfaction or any other breach or default by or on behalf of the Company or any Subsidiary with respect to any Excluded Liability will not result in any lien, charge or encumbrance on any of the Purchased Assets. 6.6. Compliance with Instruments; No Defaults. Except as disclosed in Schedule 6.6, subject to the receipt of the consents set forth on Schedule 6.7, neither the execution and delivery of this Agreement nor the consummation at the Closing by the Company of the transactions contemplated hereby will violate or conflict with, result in the acceleration or termination of, loss of a material benefit with respect to, or constitute a default under (i) the certificate of incorporation or bylaws (or equivalent governing instrument) of the Company or any Subsidiary or (ii) any term or provision of any note, bond, indenture, mortgage, license, permit, approval, agreement, contract, lease, understanding or other instrument or any statute, rule, regulation, writ, judgment, ordinance, decree, order or other material restriction binding upon or applicable to the Company or any Subsidiary or the Business or any of the Purchased Assets. 6.7. Operations; Governmental Licenses. The Business is being conducted, and the Purchased Assets are being used and operated, in substantial compliance with all applicable laws, statutes, ordinances, rules, regulations, policies and orders of any Governmental Authority ("Laws"), except as disclosed in Schedule 6.8. Schedule 6.7 lists all of the permits, certificates, licenses, orders, approvals and other authorizations of all Governmental Authorities that are used in the ownership, maintenance or operation of the Purchased Assets and the conduct of the Business (the "Related Permits") and, with respect to each Related Permit, whether such Related Permit is transferable to Buyer. The Company is not aware of any action, pending or threatened, to cancel, modify or fail to renew any Related Permit as a result of the transactions contemplated by this Agreement, any Ancillary Document or otherwise. The Company will convey to Buyer each Related Permit that is transferable to Buyer. (b) The API is being manufactured, tested, distributed, held and/or marketed by the Company or any of its Subsidiaries in material compliance with all applicable requirements under the Federal Food, Drug and Cosmetic Act, the Prescription Drug Marketing Act and the Comprehensive Drug Abuse Prevention and Control Act of 1970, including, but not limited to, those relating to investigational use, premarket clearance, good clinical practices, good manufacturing practices, good laboratory practices, labeling, promotion and advertising, record keeping, filing of reports and security. 6.8. Taxes Paid. All Taxes, duties and assessments, payable or incurred by the Company prior to the Closing Date that could result in an Encumbrance upon any of the Purchased Assets have been or will be timely paid by the Company, except for a pending use tax audit. All federal, state, local and foreign tax returns and tax reports required to be filed by or with respect to the Company or any of its Subsidiaries have been duly filed. No issues have been raised (nor are currently pending) by any Governmental Authority in connection with any of the returns or reports referred to in this Section 6.8. No waivers of statutes of limitations as to any tax matters have been given or requested with respect to the Company or any of its Subsidiaries. The Federal income tax returns of the Company or any of its Subsidiaries have not been examined by the Internal Revenue Service. 6.9. Contracts. Schedule 6.9 sets forth a complete and accurate list of the following: (a) agreements licensing or granting to others or to the Company or any Subsidiary the right to manufacture or distribute products of the Purchased Assets, including sales agency agreements; (b) agreements with suppliers for the purchase or sale of any products, materials or supplies or services relating to the Business or the Purchased Assets, except (i) individual purchase or sale orders involving less than $10,000 each and incurred in the ordinary course of business and (ii) agreements, each of which provides for aggregate payments of less than $10,000 and which are terminable without liability to the Company upon notice to the other party thereto of not more than 30 days; (c) joint venture or partnership agreements with any other entity relating to the Business or the Purchased Assets; (d) agreements granting any person an Encumbrance on any of the Purchased Assets; (e) agreements (including consent orders) which would restrict Buyer from doing any type of business anywhere in the world; (f) any agreements which would give anyone any right to use any of the Purchased Assets; (g) all agreements and documents relating to the use in connection with the Business that are not Business Intellectual Property; and (h) all other agreements relating to the Purchased Assets or relating to the settlement of claims or disputes with respect thereto, other than the Ancillary Documents. 6.10. Consents. Except the filings referred to in Section 9.3 of this Agreement, no consents, approvals or authorizations of, or designations, declarations or filings with, any Governmental Authority or any other Person are required in connection with the execution, delivery or performance by the Company of this Agreement or any Ancillary Document or the transactions contemplated hereby or thereby. 6.11. Litigation and Claims. Except as disclosed in Schedule 6.11, (a) there is no claim, action, suit, proceeding, arbitration, or investigation (collectively, "Proceedings"), pending or, to the knowledge of the Company, threatened, by or before any Governmental Authority or private arbitration tribunal against the Company or any of its Subsidiaries, or which seeks to prohibit, restrict or delay consummation of this Agreement, any Ancillary Document or any transaction contemplated hereby or thereby or to limit in any manner the right of Buyer to control any Purchased Assets or to conduct any material aspect of the Business; (b) neither the Company nor any Subsidiary nor any of its officers or employees is currently charged with, or is currently under investigation with respect to, any violation of any provision of any applicable Law that relates to the Business; and (c) neither the Company nor any Subsidiary is a party to or is bound by any judgment, decree, injunction, ruling, award or order of any Governmental Authority, arbitrator or any other person. Except as disclosed in Schedule 6.11, there are no facts known to the Company that could give rise to any investigation of the Business by any Governmental Authority or any proceeding or litigation that is reasonably likely to have a Material Adverse Effect. Schedule 6.11 also lists all judgments, orders, decrees, or injunctions (other than minor infractions) of any Governmental Authority outstanding against or binding on the Company or any Subsidiary which pertain to the Purchased Assets or the Business. 6.12. Business Intellectual Property. (a) Schedule 6.12(a) sets forth all United States and foreign patents, patent applications, service marks, product registrations, trademarks (including service marks), trademark applications, trade names, trade rights, whether or not registered, that are used in connection with the Business and any licenses, agreements, contracts or other legal arrangements or understandings pursuant to which the Company or any Subsidiary has authorized any person to use any of the Intellectual Property that is used or has been developed in connection with the Business (such Intellectual Property, the "Business Intellectual Property"). The Company and/or each of its Subsidiaries owns, or is licensed or otherwise possesses legally enforceable rights to use all Business Intellectual Property that is used in the business of the Company and its Subsidiaries as currently conducted, and to the knowledge of the Company all material patents, trademarks, trade names, service marks and copyrights held by the Company and/or its Subsidiaries are valid and subsisting. (b) Except as disclosed in Company Reports filed prior to the date hereof: (i) the Company is not, nor will it be as a result of the execution and delivery of this Agreement or the performance of its obligations hereunder, in violation of any Business Intellectual Property pursuant to which the Company is authorized to use any third-party patents, trademarks, service marks, copyrights, trade secrets or computer software (collectively, "Third-Party Intellectual Property"); (ii) no claims with respect to the Business Intellectual Property or the Third-Party Intellectual Property are currently pending or, to the knowledge of the Company, are threatened by any Person; (iii) to the knowledge of the Company there are no valid grounds for any bona fide claims (A) to the effect that the manufacture, sale, licensing or use of API as now used, sold or licensed or proposed for use, sale or license by the Company or any of its Subsidiaries, infringes on any copyright, patent, trademark, service mark or trade secret of any Person; (B) against the use by the Company or any of its Subsidiaries, of any Business Intellectual Property or Third-Party Intellectual Property as currently conducted or as proposed to be conducted; (C) challenging the ownership, validity or enforceability of any of the Business Intellectual Property; or (D) challenging the license or legally enforceable right to use of the Third-Party Intellectual Rights by the Company or any of its Subsidiaries; and (iv) to the knowledge of the Company, there is no unauthorized use, infringement or misappropriation of any of the Business Intellectual Property by any third party, including any employee or former employee of the Company or any of its Subsidiaries. 6.13. Binding Commitments. Except as disclosed in such Schedule, each contract, lease, agreement and understanding listed in Schedule 6.9 (hereinafter referred to as the "Commitments") is valid and binding and in full force and effect and the Company or a Subsidiary has fulfilled, or taken all action reasonably necessary to enable it to substantially fulfill, when due, all of its obligations under the Commitments. There has not occurred any default by the Company or any Subsidiary and, to the knowledge of the Company, there has not occurred any default by others, under any of the Commitments and neither the Company or any Subsidiary nor, to the knowledge of the Company, any other party, is in arrears in respect of the performance or satisfaction of the terms or conditions on its part to be performed or satisfied under any of the Commitments and no waiver or indulgence has been granted by any of the parties thereto. No consent or approval of any party to the Commitments is required for the execution, delivery and performance by the Company of the transactions contemplated by this Agreement. Complete and correct copies of all Commitments (or, where they are oral, true and complete written summaries thereof), have been delivered to Buyer by the Company or will be delivered within ten days of the date hereof. 6.14. Insurance and Insurance Requirements. (a) All physical Purchased Assets material to the business and operations of the Business are covered by insurance with responsible companies against casualty and other losses customarily obtained to cover comparable properties and assets by businesses in the region in which such properties and assets are located, in amounts and coverage that are reasonable and customary in light of the business conducted by the Company; (b) All insurance policies in effect on the date hereof which relate to product liability are with responsible companies in amounts and coverage that are reasonable and customary in light of the business conducted by the Company; and (c) All insurance claims with respect to the Purchased Assets, including, without limitation, claims relating to or arising from casualty loss or impairment of the Purchased Assets, have been timely made by the Company or on behalf of the Company and no further action is required by Buyer in order for such insurance claims to be processed or rights arising under such insurance claims to accrue. 6.15. No Labor Commitments. The Business is not obligated by or subject to any collective bargaining agreement, selection of a collective bargaining representative for employees, order of the National Labor Relations Board or other labor board of administration, or any unfair labor practice decision, nor has the Company or any Subsidiary received notice of its being a party to any labor dispute or unfair practice proceeding with respect to claims of, or obligations to, employees of the Business nor does the Company have any knowledge of events which might eventuate the foregoing. 6.16. Books and Records. The books and records of which copies will be transferred to Buyer are complete and correct, have been maintained in accordance with good business practice and accurately present and reflect in all material respects all of the matters therein described. 6.17. Powers of Attorney. Neither the Company nor any Subsidiary has any powers of attorney outstanding in connection with the Purchased Assets or the business or operations of the Business which would be or will become binding on Buyer. 6.18. Adverse Change. Since December 31, 2000 there has not occurred any Material Adverse Effect and there have not occurred any events or circumstances that, individually or in the aggregate, are reasonably likely to have a Material Adverse Effect. 6.19. Brokers' Fees. The Company has engaged no broker and has incurred no obligation or liability for brokerage services in connection with the transaction contemplated by this Agreement. 6.20. Disclosure. No representation or warranty of the Company contained, and no factual statement made by the Company, in this Agreement, any Ancillary Document or any exhibit or schedule hereto or thereto contains any untrue statement of a material fact or contains any statement of a material fact that is materially misleading. 6.21. Environmental Matters. (i) The Business and the Purchased Assets are not in violation of and have not violated any Environmental Law, (ii) the Purchased Assets are not contaminated with any Hazardous Substances, (iii) the Company and its Subsidiaries have not received any claims or notices relating to the Business or the Purchased Assets alleging liability under any Environmental Law, and (iv) to the Company's knowledge there are no circumstances or conditions involving the Business or the Purchased Assets that could result in any claims, liabilities, costs or restrictions on the ownership, use or transfer of any Purchased Asset in connection with any Environmental Law. 6.22. Actual Knowledge of Buyer. Each of the foregoing representations and warranties is hereby modified to the extent that such representations are contradicted by materials furnished in writing to Buyer by the Company prior to the date hereof. 6.23. No Other Representations or Warranties. Except for the representations and warranties contained in this Section 6, none of the Company or any other person makes any other express or implied representation or warranty (including any implied warranty of merchantability) on behalf of the Company. 7. Representations and Warranties of Buyer. Buyer hereby represents and warrants to the Company as follows: 7.1. Organization, Qualification, Powers and Authority. Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to purchase the Purchased Assets. Buyer has all requisite corporate power and authority to execute and deliver this Agreement and the Ancillary Documents and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the Ancillary Documents by Buyer and the consummation by Buyer of the transactions contemplated hereby and thereby have been duly authorized and approved by Buyer and no other corporate proceeding with respect to Buyer is necessary to authorize this Agreement or any Ancillary Document or any transaction contemplated hereby or thereby. Each of this Agreement and the Ancillary Documents executed and delivered contemporaneously herewith has been duly executed and delivered by Buyer and constitutes a valid and binding obligation of Buyer, enforceable in accordance with its terms subject (as to enforcement) to bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors' rights generally and to general equity principles. When executed and delivered by Buyer, each Ancillary Document not executed and delivered contemporaneously herewith will have been duly executed and delivered by Buyer and will constitute a valid and binding obligation of Buyer, enforceable in accordance with its terms, subject (as to enforcement) to bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors' rights generally and to general equity principles. 7.2. Compliance with Instruments; No Default. Neither the execution and delivery of this Agreement nor the consummation at the Closing by Buyer of the transactions contemplated hereby will violate or conflict with, result in the acceleration or termination of, loss of a material benefit with respect to, or constitute a default under (i) the certificate of incorporation or bylaws (or equivalent governing instrument) of Buyer or (ii) any term or provision of any note, bond, indenture, mortgage, license, permit, approval, agreement, contract, lease, understanding or other instrument or any statute, rule, regulation, writ, judgment, ordinance, decree, order or other material restriction binding upon or applicable to Buyer. 7.3. Consents. Except for the filings referred to in Section 9.3 of this Agreement, no consents, approvals or authorizations of, or designations, declarations or filings with, any Governmental Authority or any other Person are required in connection with the execution, delivery or performance by Buyer of this Agreement or any Ancillary Document or the transactions contemplated hereby or thereby. 7.4. Litigation and Claims. (a) There is no Proceeding pending or, to the knowledge of Buyer, threatened, by or before any Governmental Authority or private arbitration tribunal against Buyer which seeks to prohibit, restrict or delay consummation of this Agreement, any Ancillary Document or any transaction contemplated hereby or thereby or to limit in any manner the right of Buyer to acquire the Purchased Assets; (b) Neither Buyer nor any of its officers or employees is currently charged with, or is currently under investigation with respect to, any violation of any provision of any applicable Law that would limit in any manner the right of Buyer to acquire the Purchase Assets; and (c) Buyer is not a party to nor is bound by any judgment, decree, injunction, ruling, award or order of any Governmental Authority, arbitrator or any other person that would limit in any manner the right of Buyer to acquire the Purchased Assets. 7.5. Brokers' Fees. Buyer has engaged no broker and has incurred no obligation or liability for brokerage services in connection with the transaction contemplated by this Agreement. 7.6. No Other Representations or Warranties. Except for the representations and warranties contained in this Section 7, neither Buyer nor any other person makes any other express or implied representation or warranty on behalf of Buyer. 8. Covenants as to the Business. 8.1. Interim Conduct of Business. Except as Buyer may otherwise consent in writing, from the date hereof until the Closing Date, neither the Company nor any Subsidiary shall take any of the following actions which would affect the Purchased Assets or the Business: (a)subject to any Encumbrance (other than Permitted Liens existing as of the date hereof) any of the Purchased Assets or in any way create or consent to the creation of any title condition affecting the Purchased Assets except as would be permitted under Section 6.4 of this Agreement; (b) directly or indirectly, through any officer, director, agent or otherwise, solicit, initiate or encourage the initiation of inquiries or proposals that constitute, or could lead to a proposal or offer from, provide any confidential information to, or participate in any discussions or negotiations or cooperate with, any corporation, partnership, person or other entity or group (other than Buyer and its subsidiaries and their respective officers, employees, representatives and agents) that involves, directly or indirectly, any sale or other disposition of any Purchased Assets or any similar transaction involving the Company or otherwise facilitate or encourage any effort or attempt to do or seek any of the foregoing, other than, in any such case, in the ordinary course of business, consistent with past practice and in a manner which will not affect the nature or extent of the rights to be transferred in accordance with this Agreement or any Ancillary Document. The Company will immediately (no later than 24 hours) advise Buyer of, and communicate to Buyer the terms of, any such inquiry or proposal the Company may receive and will cease and cause to be terminated any existing activities or negotiations with any parties conducted heretofore with respect to any of the foregoing and advise all parties that have previously entered into confidentiality agreements with the Company that all confidential information shall be returned to the Company and that any consents or invitations to make any proposals of the type prohibited herein are withdrawn and no further consents or invitations for such proposals shall be granted; (c) transfer, sell or otherwise convey any part of the Purchased Assets or make any material acquisition of assets which would become part of the Purchased Assets, except in the ordinary course of business; (d) grant or sell any option or right to purchase any of the Purchased Assets, except in the ordinary course of business; (e) enter into or terminate any Commitments or other agreement, plan or lease, or make any change in any of its Commitments or other agreements, plans or leases, other than in the ordinary course of business and consistent with past practice; (f) sell, transfer or otherwise dispose of any Business Intellectual Property; (g) license any Business Intellectual Property, other than in the ordinary course of business, consistent with past practice and in such a manner as will not affect the nature or extent of the rights to be transferred in accordance with this Agreement or any Ancillary Document; (h) enter into any collective bargaining agreements covering employees of the Business; or (i) discuss, negotiate or assent to any such transactions. 8.2. Affirmative Covenants. Except as Buyer may otherwise consent in writing, from the date hereof until the Closing Date, the Company shall: (a) operate the Business only in the usual, regular, and ordinary course and in a manner consistent with past practice and, to the extent consistent with such operation, use reasonable best efforts to: (i) preserve the present business organization intact; (ii) keep available the services of the employees; and (iii) preserve any beneficial business relationships with all suppliers, and others having business dealings with the Business or otherwise with respect to the Purchased Assets; (b) maintain (i) all the Purchased Assets in good condition and repair, ordinary wear and tear excepted; and (ii) insurance upon all of the Purchased Assets and with respect to the conduct of the Business in full force and effect with responsible companies, comparable in amount, scope, and coverage to that in effect on the date of this Agreement and as of the date of this Agreement; (c) give to Buyer and to its counsel, accountants, and other representatives full access during normal business hours to all of the Purchased Assets and the personnel, books, financial data, tax returns, contracts, commitments and other records of the Company related thereto and furnish to Buyer and such representatives all such additional documents, financial information and information with respect to the Purchased Assets as Buyer may from time to time reasonably request; (d) use its reasonable best efforts to obtain in writing as promptly as possible all approvals and consents required to be obtained by it in order to effectuate the transactions contemplated hereby, keep Buyer informed as to its efforts and will deliver to Buyer copies, satisfactory in form and substance to Buyer, of such approvals and consents; (e) keep Buyer informed as to the Purchased Assets and the Business and consult with Buyer on all important matters pertaining to such Business; and (f) advise Buyer promptly in writing of any fact which, if existing or known on the date of this Agreement, would have been required to be set forth in this Agreement or disclosed pursuant to it. 9. Additional Covenants. 9.1. Tax and Other Matters. (a) As soon as practicable following the Closing, but in no event later than 60 days thereafter, Buyer shall deliver to the Company, at the Company's expense for the reasonable out-of-pocket expenses incurred by Buyer, such information and data as the Company may reasonably request, including that required by the Company's customary tax and accounting questionnaires, in order to enable the Company to complete and file all tax forms which may be required to be filed by it and to otherwise enable the Company to satisfy its internal accounting, tax and other requirements. (b) The Company shall timely pay all Taxes, duties and assessments accrued prior to the Closing Date that could result in an encumbrance upon any of the Purchased Assets. (c) For tax purposes, the parties agree that they will report an allocation of the respective Purchase Price for the Purchased Assets on IRS Form 8594 consistent with the allocation set forth in Schedule 9.1. 9.2. Undertakings. Subject to the terms and conditions of this Agreement, each of the Company and Buyer agrees to use its commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary or desirable to consummate the transactions contemplated by this Agreement. Buyer and the Company will cooperate with one another in connection with their efforts to satisfy the closing conditions set forth in Sections 10, 11 and 12 hereof. Without limiting the generality of the foregoing, each of the parties agrees to use its reasonable best efforts to satisfy or avoid the effects of any action by any Governmental Authority or other third party to prevent or delay completion of the transactions contemplated by this Agreement. 9.3. Filings. Buyer and the Company shall prepare and file as promptly as practicable any reports, documents or other information required to be filed in order to consummate the transactions contemplated by this Agreement under any federal, state or local statute or regulation, domestic or foreign. 9.4. Access to Employees After Closing. From time to time on or after the Closing Date, upon request of Buyer, the Company shall allow Buyer reasonable access to the Company's employees with respect to matters related to the Purchased Assets or the Business. 9.5. Records and Documents of Buyer. For five years following the Closing Date, Buyer will grant to the Company and its representatives, at the Company's request, access to and the right to make copies of those records and documents, possession of which is transferred to Buyer, as may be necessary or useful in connection with the Company's business and affairs after the Closing (except any proprietary data or Intellectual Property not subject to any agreement with the Company permitting such access). If, during such period, Buyer determines to dispose of such records, Buyer shall first give the Company 60 days' written notice during which period the Company shall have the right to take such records. 9.6. Records and Documents of the Company. For five years following the Closing Date, the Company will grant to Buyer and its representatives, at Buyer's request, access to and the right to make copies of those records and documents related to the Business, possession of which is retained by the Company, as may be necessary or useful in connection with Buyer's conduct of the Business after the Closing. If, during such period, the Company determines to dispose of such records, the Company shall first give Buyer 60 days' written notice during which period Buyer shall have the right to take possession of such records. 9.7. Nonassignable Rights. To the extent that the assignment by the Company of any of the Nonassignable Rights is required pursuant to this Agreement and is not permitted without the consent of a third party, this Agreement shall not be deemed to constitute an undertaking to assign the same if consent of a third party or Governmental Authority is not given; however, the Company will use its best efforts to obtain any and all such consents by Governmental Authorities and its reasonable best efforts to obtain any and all consents and assignments of third parties and, where possible, to secure novations with respect to such Nonassignable Rights where required by such third parties as appropriate, unless specifically requested by Buyer not to seek such consent or novation. If any consent or novation is required and is not obtained (whether at the request of Buyer or otherwise), the Company will cooperate with Buyer in any arrangement designed to provide to Buyer the benefits under instruments governing such Nonassignable Rights, including, in the case of a product sales order, the undertaking by Buyer of the work necessary to perform under the contract and to ship the products called for thereunder as the agent of the Company with the understanding that the Company will then invoice the purchaser for products shipped and promptly remit the amount of the receivable when collected by it to Buyer. In any such arrangement, Buyer shall have the sole responsibility with respect to the performance of the instrument governing such Nonassignable Right following Closing; shall bear all costs and expenses with respect thereto arising or occurring after the Closing Date; shall be solely entitled to the benefits and shall be solely responsible for any breach of warranties or guarantees with respect to products shipped after the Closing Date; and shall indemnify the Company and hold the Company harmless from any cost, claim, suit, demand, damage (including consequential and incidental damages) or expenses (including attorneys' fees) arising out of any work performed by or for the account of Buyer, its agents or subcontractors or any act on the part of or for the account of Buyer or its employees, agents or subcontractors on any such instrument governing a Nonassignable Right. 9.8. Existing Agreements. Nothing herein is intended to amend any of the Existing Agreements. 10. Conditions to the Obligations of Both Parties. Each and all of the obligations of the parties hereto to consummate the transactions contemplated by this Agreement are subject to fulfillment, prior to or at the Closing, of the following conditions: 10.1. Regulatory Approvals, Consents, Authorizations, Etc. All consents, approvals, authorizations of, or designations, declarations or filings with, any Governmental Authority, or any other person that are required for or in connection with the execution and delivery of this Agreement and of the Ancillary Documents and the consummation by each party hereto of the transactions contemplated on its part hereby, or that are required in order to avoid violation or termination of any Commitment, shall have been obtained or made, in form and substance reasonably satisfactory to Buyer, or the Company, if so requested by Buyer, shall have made arrangements satisfactory to Buyer pursuant to Section 9.7 hereof to provide it with benefits comparable to that provided under any contracts for which consents have not been so obtained. 10.2. Legal Proceedings. No Law shall have been enacted or promulgated and no permanent injunction or preliminary injunction or other order shall have been entered, and not vacated, by any Governmental Authority of competent jurisdiction in any Proceeding that enjoins, restrains, makes illegal or prohibits consummation of the transactions contemplated hereby or places material restrictions on Buyer's or the Company's ownership or conduct of the Business and no action by any Governmental Authority shall be pending or threatened which seeks to do any of the foregoing. 10.3 Credit Agreement. The Effective Time (as defined in the Amended and Restated Credit Agreement, dated as of the date hereof, between the Company and Pharmacia Treasury Services AB) shall have occurred. 11. Conditions to Buyer's Obligations. Each and all of the obligations of Buyer to consummate the transactions contemplated by this Agreement are subject to fulfillment, prior to or at the Closing, of the following conditions: 11.1. Accuracy of Warranties; Performance of Covenants; Officer's Certificates. (a) The representations and warranties of the Company contained herein or in any Ancillary Document shall be true and correct in all material respects as if made on and as of the Closing Date, as well as on the date when made. The Company shall have performed in all material respects each and all of the obligations and complied with each and all of the covenants specified in this Agreement or in any Ancillary Document to be performed or complied with on or prior to the Closing. (b) Buyer shall have received a certificate executed by the chief executive officer and chief financial officer of the Company, dated the Closing Date, reasonably satisfactory in form and substance to Buyer, certifying that the conditions specified in this Section 11.1 have been satisfied. 11.2. Agreements. The Ancillary Documents shall have been duly executed and delivered by the parties thereto. 11.3. Consents. The Company shall have delivered to Buyer any consents of Governmental Entities and third parties to be obtained by the Company in connection with the Agreement. 11.4. Sublease Assignment Agreement. The Landlord shall have executed and delivered to Buyer the consent set forth in the Sublease Assignment Agreement. 12. Conditions to the Company's Obligations. Each and all of the obligations of the Company to consummate the transactions contemplated by this Agreement are subject to fulfillment, prior to or at the Closing, of the following conditions: 12.1. Accuracy of Warranties; Performance of Covenants; Officer's Certificates. (a) The representations and warranties of Buyer contained herein or in any Ancillary Document shall be true and correct in all material respects as if made on and as of the Closing Date, as well as on the date when made. Buyer shall have performed in all material respects each and all of the obligations and complied with each and all of the covenants specified in this Agreement or in any Ancillary Document to be performed or complied with on or prior to the Closing. (b) The Company shall have received a certificate executed by a vice president of Buyer, dated the Closing Date, reasonably satisfactory in form and substance to the Company, certifying that the conditions specified in this Section 12.1 have been satisfied. (c) Buyer shall have duly paid the Purchase Price. 12.2. Agreements. The Ancillary Documents shall have been duly executed and delivered by the parties thereto. 12.3. Consents. The Company shall have obtained all required consents. 13. Indemnification. 13.1. Indemnified Claims. (a) The covenants, agreements and indemnities in connection therewith contained in this Agreement shall survive the Closing until the expiration of the relevant statutes of limitations (including extension thereof), the representations and warranties set forth in Section 6.1, 6.2, 6.4 and 7.1 (Title and Due Authorization) shall survive until the fifth anniversary of the Closing and the other representations and warranties contained in this Agreement shall survive until the second anniversary of the Closing (the "Survival Date"). Each party's indemnification obligations with respect to representations, warranties, covenants, and obligations in this Agreement, the schedules and any other certificate or document delivered pursuant to this Agreement shall terminate when the applicable representation, warranty, covenant, obligation terminates pursuant to this Section; provided, however, that such obligations to indemnify shall not terminate with respect to a particular item as to which, before the expiration of the applicable survival period, the party seeking indemnification has made a claim by delivering a notice of such claim (in accordance with the terms of this Section) to the parties from which indemnification is sought. (b) Except as otherwise set forth in this Section 13, the right to indemnification, payment of Damages or other remedy based on such representations, warranties, covenants and obligations shall not be affected by any investigation conducted with respect to, or any knowledge acquired (or capable of being acquired) at any time, whether before or after the execution and delivery of this Agreement or the Closing Date, with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant or obligation. A written waiver of the satisfaction of any of the conditions set forth in Section 11.1 or 12.1 insofar as any such condition may not be satisfied by reason of the failure to be true and correct at Closing of any representation or warranty specified in such waiver as a result of the facts specified in such waiver shall preclude the waiving party from exercising its rights to indemnification pursuant to this Section 13 with respect to any breach of such representation or warranty arising from such facts, but shall not preclude the waiving party from exercising its rights to indemnification pursuant to this Section 13 with respect to any breach of such representation or warranty not arising from such facts or with respect to any breach of a representation or warranty not specified in such waiver. 13.2. Claims Indemnified by the Company. To the extent any claim for indemnity is not made pursuant to a specific provision of this Agreement or any Ancillary Document, which, in that instance, shall control such claim, from and after the Closing Date, the Company shall indemnify and hold Buyer, its respective Affiliates and officers and directors, agents and representatives and any person claiming by and through it harmless from and against all Losses arising out of or otherwise related to: (a) any breach or inaccuracy of any representation or warranty made by the Company in this Agreement or in any Ancillary Document or any breach of any covenant or agreement by the Company contained in this Agreement or in any Ancillary Document of which Buyer gives notice to the Company prior to the Survival Date; or (b) any obligation or liability of the Company or any Affiliate of the Company or the Business of any nature, other than an Assumed Liability, relating to matters or events arising at or prior to Closing including, without limitation, liabilities arising with respect to the Excluded Liabilities; or (c) any Proceeding, settlement, assessment, or judgment directly or indirectly arising out of or incident to any of the matters indemnified against in this Section 13.2. 13.3. Claims Indemnified by Buyer. To the extent any claim for indemnity is not made pursuant to a specific provision of this Agreement or any Ancillary Document, which, in that instance, shall control such claim, from and after the Closing, Buyer shall indemnify and hold the Company, its respective Affiliates and officers and directors, agents and representatives and any person claiming by and through it harmless from and against all Losses, arising out of or otherwise related to: (a) any breach or inaccuracy of any representation or warranty made by Buyer in this Agreement or in any Ancillary Document or any breach of any covenant or agreement by Buyer contained in this Agreement or in any Ancillary Document of which the Company gives notice to the Company prior to the Survival Date; or (b) any obligation or liability of the Business that is an Assumed Liability; or (c) any Proceeding, settlement, assessment, or judgment directly or indirectly arising out of or incident to any of the matters indemnified against in this Section 13.3. 13.4. Procedure. (a) Promptly after receipt by any party entitled to be indemnified hereunder (the "Indemnified Party") of notice of the assertion of any claim or the commencement of any Proceeding with respect to any matter referred to in Section 13.2 or 13.3, the Indemnified Party will give written notice thereof to the party from whom indemnity is sought (the "Indemnifying Party") and will thereafter keep the Indemnified Party reasonably informed with respect thereto, provided that failure of the Indemnified Party to give the Indemnifying Party prompt notice as provided herein shall not relieve the Indemnifying Party of its obligation hereunder except to the extent, if any, that it shall have been irreparably prejudiced thereby. In case any such Proceeding is brought against any Indemnified Party, the Indemnifying Party shall be entitled to participate in (and, if it shall wish, to assume) the defense thereof with counsel reasonably satisfactory to the Indemnified Party. The Indemnifying Party will not settle any Proceeding unless such settlement includes as an unconditional term thereof the giving by the claimant or the plaintiff of a release, reasonably satisfactory to the Indemnified Party, from all liability in respect to such claim or litigation. If the Indemnifying Party assumes the defense of any claim or litigation as provided in this subsection, the Indemnified Party shall be permitted to join in the defense of such claim or litigation, with counsel of its own selection and at its own expense, provided that the Indemnified Party may choose its own counsel (at the Indemnifying Party's expense) if representation by or on behalf of the Indemnified Party would be inappropriate due to actual or potential differing interests between the Indemnified Party and the Indemnifying Party. (b) If the Indemnifying Party shall not assume the defense of any such claim or litigation, the Indemnified Party may defend (at the Indemnifying Party's expense) against such Proceeding in such manner as it may deem appropriate, provided that no Indemnified Party will settle any Proceeding which would give rise to the Indemnifying Party's liability under this Section 13 without the Indemnifying Party's prior written consent, such consent not to be unreasonably withheld. (c) Amounts payable by the Indemnifying Party to the Indemnified Party in respect of any claims under this Section 13 shall be payable as incurred. 13.5. Limitations on Losses. The amount of any Losses for which indemnification is provided under Section 13.2 or Section 13.3, respectively, shall not be payable hereunder unless the aggregate of all Losses, on a cumulative basis, exceeds an amount equal to 50% of the Purchase Price, except to the extent that such Losses may be incurred by virtue of or result from (i) an Encumbrance upon any of the Purchased Assets as a result of the Company's failure to pay any Taxes, duties or assessments, (ii) any liabilities to brokers or finders of either party, or (iii) fraud or intentional misrepresentation; provided, however, that if the aggregate amount of Losses exceeds an amount equal to 50% of the Purchase Price, then all Losses shall be indemnified against pursuant hereto. 13.6. Interest. The Indemnified Party receiving payment with respect to any Loss shall also be entitled to receive interest on such Loss, accruing from the date which is thirty days after a claim for indemnification is made to the date of payment therefor, at the Interest Rate. 13.7. Adjustment to Purchase Price. Any payments under this Section 13 will be treated as an adjustment to the Purchase Price. 14. Termination. 14.1. Termination. This Agreement may, by notice given on or prior to the Closing Date, in the manner hereinafter provided, be terminated and abandoned: (a) by either the Company or Buyer if there has been a material misrepresentation or a material default or breach by the other party with respect to its representations in this Agreement or the due and timely performance by the other party of any of its covenants and agreements contained in this Agreement, and such misrepresentation, default or breach shall have not been cured within ten days after receipt of notice specifying particularly such misrepresentation, default or breach; (b) (i) by either Buyer or the Company if any of the conditions set forth in Section 10 shall become incapable of being satisfied; (ii) by Buyer, if any of the conditions set forth in Section 11 shall become incapable of being satisfied; or (iii) by the Company, if any of the conditions set forth in Section 12 shall become incapable of being satisfied; (c) by mutual consent of the parties hereto; (d) by either the Company or Buyer if the Closing shall not have occurred on or before June 30, 2001; (e) by either Buyer or the Company, if any Governmental Authority shall have issued an order, decree or ruling or taken any other action permanently enjoining, restraining or otherwise prohibiting the transactions contemplated by this Agreement and such order, decree, ruling or other action shall have become final and nonappealable; or 14.2. Effect of Termination. In the event this Agreement is terminated pursuant to Section 14.1, all further obligations of the parties hereunder shall terminate, and nothing in this Section 14 shall relieve any party hereto of any liability for willful breach of this Agreement. 15. General. 15.1. Specific Performance. Each party acknowledges that one party will have no adequate remedy at law if the other party fails to perform any of its obligations under this Agreement. In such event, each party agrees that the other party shall have the right, in addition to any other rights it may have, to specific performance of this Agreement and agrees to take no action to oppose the other party's seeking such remedy. 15.2. Waivers. No action taken pursuant to this Agreement, including any investigation by or on behalf of any party hereto, shall be deemed to constitute a waiver by the party taking such action of compliance with any representation, warranty, covenant, or agreement contained herein or in any Ancillary Document. Any waiver by any party hereto of a breach of any provision of this Agreement must be in writing and shall not operate or be construed as a waiver of any subsequent breach. The waiver by Buyer or the Company of any of the conditions precedent to its respective obligations under this Agreement shall not preclude it, respectively, from seeking redress for breach of this Agreement. 15.3. Further Assurances. From time to time, whether at or after the Closing, the Company will execute and deliver such further instruments of conveyance, transfer and assignment and take such other action as Buyer may reasonably require to more effectively convey and transfer to Buyer any of the Purchased Assets or the Business and Buyer will execute and deliver such further instruments and take such other action as the Company may reasonably require to more effectively assume the Assumed Liabilities. 15.4. Notices. Any communication, demand or notice to be given hereunder or under the Ancillary Documents will be duly given when delivered in writing or by telecopy to a party at its address as indicated below or such other address as such party may specify in a notice to each other party hereto. A communication, demand or notice given pursuant to this Agreement or the Ancillary Documents shall be addressed: If to Buyer: Pharmacia Corporation 100 Route 206 North Peapack, New Jersey 07977 Attn: General Counsel Fax: (908) 901-1810 with a copy (which, in and of itself, shall not constitute notice) to: Matthew G. Hurd Sullivan & Cromwell 1870 Embarcadero Road Palo Alto, California 94303 Fax: (650) 461-5700 If to the Company: Miravant Medical Technologies 336 Bollay Drive Santa Barbara, California 93117 Attn: Gary S. Kledzik Fax: (805) 685-6038 with a copy (which, in and of itself, shall not constitute notice) to: Joseph E. Nida Nida & Maloney, LLP 800 Anacapa Street Santa Barbara, California 93101 Fax: (805) 568-1955 or, as to any party, to such other address as shall be designated by such party in a prior written notice to each other party similarly given. 15.5. Parties in Interest. This Agreement shall inure to the benefit of and be binding upon the parties named herein and their respective successors and assigns. Nothing in this Agreement, express or implied, is intended to confer upon any person other than the Company, Buyer or their successors or assigns, any rights or remedies under or by reason of this Agreement. 15.6. Litigation Arising from the Business Activities. It is recognized that, in the future, litigation may arise relating to the Purchased Assets or the Business and the conduct thereof, which may relate directly or indirectly to the period prior to the Closing or the period subsequent to the Closing, or both. Each of the parties agrees, therefore, that, to the extent reasonable under the circumstances, it will assist and provide information, records and documents to any other party with respect to any such litigation or potential litigation in which such other party is or may be involved. 15.7. Entire Agreement; Amendments. This Agreement, the Ancillary Documents and each agreement between the Company and Buyer which makes specific reference to this Section 15.7 collectively contain the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, oral or written, with respect to such transactions. This Agreement may not be changed, amended or modified orally, but only by an agreement in writing signed by the party against whom any waiver, change, amendment, modification or discharge may be sought. 15.8. Substitution of Buyer's Affiliates; Assignment. Buyer may, at its option, upon notice to the Company at least two days prior to the Closing Date, designate one or more direct or indirect subsidiaries of Pharmacia Corporation, a Delaware corporation (the "Substituted Subsidiaries"), to be substituted as Buyer hereunder and under the Ancillary Documents, in such Buyer's place. Upon such designation, and the execution and delivery by the Substituted Subsidiaries to the Company of an instrument pursuant to which the Substituted Subsidiaries shall assume all of Buyer's obligations hereunder and under the Ancillary Documents, the Substituted Subsidiaries shall succeed to all of Buyer's rights hereunder and under the Ancillary Documents, and, for the purposes of this Agreement and the Ancillary Documents, all references to the "Buyer" shall, as applied on or after the date of such designation, apply to the Substituted Subsidiaries; provided, however, that the original "Buyer" shall be liable for the Substituted Subsidiaries' performance of Buyer's obligations hereunder and under the Ancillary Documents. Except as set forth above, neither this Agreement nor the Ancillary Documents may be assigned by the parties hereto prior to Closing. 15.9. Bulk Transfers. The parties hereto waive compliance with the requirements of the Bulk Sales Law of any jurisdiction in connection with the sale of the Purchased Assets to Buyer. The Company shall indemnify and hold harmless Buyer against all liabilities, other than the Assumed Liabilities which may be asserted by third parties against Buyer as a result of noncompliance. 15.10. Press Releases. The parties hereto agree that, to the maximum extent feasible, they will advise and confer with each other prior to the issuance of any reports, statements or releases pertaining to this Agreement, the transactions contemplated hereby or the implementation hereof and no press release or other significant written statement hereto relating to this Agreement, the transactions contemplated hereby or the implementation hereof shall be disseminated publicly or delivered to any other person without the specific, written consent of the other parties, which shall not be unreasonably withheld or delayed, except as required by law (as advised in writing by counsel). 15.11. Confidentiality. Notwithstanding any other provision of this Agreement or any Ancillary Document that may be to the contrary, each party (the "Receiving Party") will keep confidential any and all Confidential Information furnished to it by any other party or such other party's Affiliates, representatives, sublicensees or independent public accountants and neither party nor any of its Affiliates, representatives, sublicensees or independent public accountants shall use or disclose the Confidential Information except as expressly permitted in this Agreement. Each party acknowledges that the Confidential Information is highly valuable, proprietary and confidential and that any disclosure to any officer, employee, or agent of such party or any of its Affiliates shall be made only to the extent necessary to carry out its responsibilities under this Agreement and only if such officer, employee or agent shall be bound by an Agreement to maintain such information in confidence. 15.12. Severability. It is the intention of the parties that the provisions of this Agreement shall be deemed severable and that the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application thereof to any person or entity or any circumstance, is invalid or unenforceable, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other persons, entities or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction. 15.13. Headings. The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. 15.14. Counterparts. This Agreement may be executed in any number of counterparts, each of which, when executed, shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument. 15.15. Governing Law. The validity, performance and enforcement of this Agreement shall be governed by the laws of the State of New York (regardless of the laws that might otherwise govern under New York principles of conflicts of laws). 15.16. Arbitration. (a) Any dispute among any of the parties hereto arising out of or in connection with this Agreement, including any question regarding the existence, validity or termination thereof, or any claim of fraud or intentional misrepresentation, shall be exclusively referred to and finally resolved by arbitration in accordance with the Commercial Arbitration Rules (the "Rules") of the American Arbitration Association (the "AAA"), which Rules are deemed to be incorporated by reference into this Section. Any such arbitration shall be (i) brought in the City and County of San Francisco, California, (ii) conducted in English, and (iii) to the maximum extent permitted by applicable law, final, binding and conclusive upon the parties thereto. If the arbitrators deem it necessary or appropriate, the parties to any dispute may be permitted limited discovery based on the United States Federal Rules of Civil Procedure then in effect, subject to such limitations as the arbitrators may impose consistent with the objective of expediting the resolution of the dispute; provided, however, that in any dispute submitted to arbitration hereunder that relates to whether any person or entity is required to furnish indemnity under this Agreement discovery rights in accordance with the United States Federal Rules of Civil Procedure then in effect shall be applicable and available in all events. The parties agree that service of any notice in the course of any such arbitration at their respective addresses for notice and in the manner provided herein shall be valid and sufficient notice for purposes of such arbitration. Each of the parties agrees to be bound by such arbitration. (b) In any arbitration pursuant hereto, the award shall be rendered by a majority of the members of an arbitral tribunal consisting of three arbitrators. One arbitrator shall be appointed by Buyer and one arbitrator shall be appointed by the Company each within 30 days after the commencement of the arbitration. The third arbitrator shall be appointed by mutual agreement of the two arbitrators selected by Buyer, on the one hand, and the Company, on the other hand, and shall be experienced in corporate contractual matters relating to transactions of the nature contemplated by this Agreement. The third arbitrator shall act as Chair of the arbitral tribunal. In the event of the failure of said two arbitrators to agree as to the third arbitrator within 20 days after the appointment of the last of the two arbitrators, the third arbitrator shall be appointed by the AAA as administrator under the Rules within 15 days thereafter in accordance with its then existing Rules upon application by any of the parties to the arbitration. Notwithstanding the foregoing, if either Buyer or the Company fails to appoint the arbitrators they are respectively required to appoint within the specified time period, such arbitrator and the third arbitrator shall be appointed by the AAA in accordance with the Rules. The AAA shall not appoint all three arbitrators unless both Buyer, on the one hand, and the Company, on the other hand, fail to appoint an arbitrator within the specified time. (c) Awards, decisions and rulings of the arbitral tribunal shall be in writing, and shall set forth the reasons therefor and, to the extent applicable, the manner in which the amount of any damages or other monetary recovery was calculated. Any monetary award shall be in U.S. dollars. Judgment upon any award, decision or ruling may be entered in any court having jurisdiction thereof. 15.17. Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, that no party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the written consent of each other party hereto. Notwithstanding the foregoing sentence, Buyer may, at its option, upon notice to Seller at least two days prior to the Closing Date, designate one or more direct or indirect subsidiaries or Affiliates of Buyer (the "Substituted Subsidiaries") to be substituted as Buyer hereunder in such Buyer's place. Upon such designation, and the execution and delivery by the Substituted Subsidiaries to the Company of an instrument pursuant to which the Substituted Subsidiaries shall assume all of such Buyer's obligations hereunder, the Substituted Subsidiaries shall succeed to all of Buyer's rights hereunder, and, for the purposes of this Agreement, all references to the "Buyer" shall, as applied on or after the date of such designation, apply to the Substituted Subsidiaries; provided, however, that the original "Buyer" shall be liable for the Substituted Subsidiaries' performance of Buyer's obligations hereunder. Except as set forth above, this Agreement may not be assigned by the parties hereto prior to Closing. Any such purported assignment, delegation or transfer made in contravention of the foregoing shall be null and void. IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be executed by their proper officers, duly authorized so to do all as of the date of this Agreement. PHARMACIA & UPJOHN COMPANY By: ______________________________ Name: Title: MIRAVANT MEDICAL TECHNOLOGIES By: ______________________________ Name: Title: A-1 EXHIBIT A TO ASSET PURCHASE AGREEMENT GENERAL BILL OF SALE, ASSIGNMENT AND ASSUMPTION OF LIABILITIES This GENERAL BILL OF SALE, ASSIGNMENT AND ASSUMPTION OF LIABILITIES is made, executed and delivered on May 31, 2001 by Miravant Medical Technologies, a Delaware corporation ("Seller"), to Pharmacia & Upjohn Company, a Delaware corporation ("Buyer"). WITNESSETH: WHEREAS, Seller and Buyer are parties to an Asset Purchase Agreement, dated as of May 24, 2001 (the "Asset Purchase Agreement"), providing for, among other things, the sale, conveyance, transfer, assignment and delivery to Purchaser of all of Seller's right, title and interest in and to the Purchased Assets (such term and all other capitalized terms used but not defined herein having the same meanings ascribed to them in the Asset Purchase Agreement), all as more fully described in the Asset Purchase Agreement, for consideration in the amount and on the terms and conditions provided in the Asset Purchase Agreement; WHEREAS, the parties now desire to carry out the intent and purpose of the Asset Purchase Agreement by Seller's execution and delivery to Buyer of this instrument evidencing the sale, conveyance, transfer, assignment and delivery to Purchaser of the Purchased Assets; NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration to Seller, the receipt and adequacy of which are hereby acknowledged, Seller hereby sells, conveys, transfers, assigns and delivers unto Purchaser, its successors and assigns in accordance with the terms and provisions of the Asset Purchase Agreement, TO HAVE AND TO HOLD all of Seller's right, title and interest in and to the Purchased Assets FOREVER. Seller, its officers and agents, for itself and its successors and assigns, covenants that it and they will from time to time after the date hereof and without further consideration, upon the reasonable request of Buyer, make, execute and deliver without further compensation any and all instruments in writing, further applications, papers, affidavits, powers of attorney, assignments and other documents which may be reasonably required to more effectively secure to and vest in said Buyer, its successors and assigns, the entire right, title and interest in and to the Purchased Assets, as contemplated by the Asset Purchase Agreement. Buyer hereby assumes and agrees to pay, discharge, and perform or satisfy the Assumed Liabilities. Pursuant to Article 13 of the Asset Purchase Agreement, Buyer has agreed, among other things, to indemnify and hold harmless Seller in respect of the Assumed Liabilities. Seller has agreed, among other things, to indemnify Buyer in respect of the Excluded Liabilities. This General Bill of Sale, Assignment and Assumption of Liabilities is intended to implement the provisions of the Asset Purchase Agreement and shall not be construed to enhance, extend or limit the rights or obligations of Seller or Buyer. The validity, performance and enforcement of this General Bill of Sale, Assignment and Assumption of Liabilities shall be governed by the laws of the State of New York (regardless of the laws that might otherwise govern under New York principles of conflicts of laws). This General Bill of Sale, Assignment and Assumption of Liabilities may be executed in any number of counterparts, each of which shall be deemed to be an original, and all of which shall constitute one and the same instrument. IN WITNESS WHEREOF, Seller and Buyer have caused this General Bill of Sale, Assignment and Assumption of Liabilities to be duly executed effective as of May 31, 2001. MIRAVANT MEDICAL TECHNOLOGIES By: __________________________ Name: Title: PHARMACIA & UPJOHN COMPANY By: __________________________ Name: Title: STATE OF CALIFORNIA ) ) ss.: COUNTY OF SANTA BARBARA ) On this ___________ day of _____ 2001, there appeared before me ______________________________________, personally known to me, who acknowledged that _he signed the foregoing Assignment as his/her voluntary act and deed on behalf and with full authority of Miravant Medical Technologies. ------------------------------ Notary Public STATE OF CALIFORNIA ) ) ss.: COUNTY OF SANTA BARBARA ) On this ___________ day of _____ 2001, there appeared before me ______________________________________, personally known to me, who acknowledged that _he signed the foregoing Assignment as his/her voluntary act and deed on behalf and with full authority of Pharmacia & Upjohn Company. ------------------------------ Notary Public EX-4 4 f8kmay242001exb4_1.txt EXHIBIT 4.1 AMENDMENT NO. 1 MIRAVANT MEDICAL TECHNOLOGIES PREFERRED STOCK RIGHTS AGREEMENT WHEREAS: The undersigned, U.S. Stock Transfer Corporation, (the "Rights Agent"), and Miravant Medical Technologies a Delaware corporation, (the "Company") are parties to the Miravant Medical Technologies Preferred Stock Rights Agreement originally dated July 13, 2000, hereinafter called the "Agreement". WHEREAS: The Rights Agent and the Company wish to amend the definition of "Acquiring Person" contained in Section 1 of the Agreement. NOW, THEREFORE, the Rights Agreement is hereby amended as follows 1. The definition of "Acquiring Person" contained in Section 1 of the Agreement is hereby amended to read as follows: "Acquiring Person" shall mean any Person, who or which, together with all Affiliates and Associates of such Person, shall be the Beneficial Owner of 20% or more of the Common Shares then outstanding, but shall not include the Company, any Subsidiary of the Company or any employee benefit plan of the Company or of any Subsidiary of the Company, or any entity holding Common Shares for or pursuant to the terms of any such plan, nor shall it include the acquisition of 20% or more of the Common Shares then outstanding by Pharmacia Corporation or any subsidiary owned or controlled by Pharmacia Corporation (collectively "Pharmacia Group"): (i) acquired by the Pharmacia Group after an Event of Default, as defined in the Amended and Restated Credit Agreement , between the Company and Pharmacia Treasury Services AB as amended, modified or supplemented ("Credit Agreement"), (ii) acquired by the Pharmacia Group which, when taken together with the number of Common Shares held by the Pharmacia Group as of the date of such acquisition, do not exceed 25% of the aggregate number of Common Shares outstanding as of the date of such acquisition or (iii) acquired by the Pharmacia Group pursuant to Section 2.03 of the Credit Agreement or upon exercise of any Warrants held by the Pharmacia Group or acquired by the Pharmacia Group pursuant to the Credit Agreement or that certain Warrant Agreement, dated February 19, 1999, between the Company and Pharmacia Treasury Services AB, as amended, modified or supplemented. Notwithstanding the foregoing, no Person shall be deemed to be an Acquiring Person as the result of an acquisition of Common Shares by the Company which, by reducing the number of shares outstanding, increases the proportionate number of shares beneficially owned by such Person to 20% or more of the Common Shares of the Company then outstanding; provided, however, that if a Person shall become the Beneficial Owner of 20% or more of the Common Shares of the Company then outstanding by reason of share purchases by the Company and shall, after such share purchases by the Company, become the Beneficial Owner of any additional Common Shares of the Company (other than pursuant to a dividend or distribution paid or made by the Company on the outstanding Common Shares in Common Shares or pursuant to a split or subdivision of the outstanding Common Shares), then such Person shall be deemed to be an Acquiring Person unless upon becoming the Beneficial Owner of such additional Common Shares of the Company such Person does not beneficially own 20% or more of the Common Shares of the Company then outstanding. Notwithstanding the foregoing, (i) if the Company's Board of Directors determines in good faith that a Person who would otherwise be an "Acquiring Person," as defined pursuant to the foregoing provisions of this paragraph (a), has become such inadvertently (including, without limitation, because (A) such Person was unaware that it beneficially owned a percentage of the Common Shares that would otherwise cause such Person to be an "Acquiring Person," as defined pursuant to the foregoing provisions of this paragraph (a), or (B) such Person was aware of the extent of the Common Shares it beneficially owned but had no actual knowledge of the consequences of such beneficial ownership under this Agreement) and without any intention of changing or influencing control of the Company, and if such Person divested or divests as promptly as practicable a sufficient number of Common Shares so that such Person would no longer be an "Acquiring Person," as defined pursuant to the foregoing provisions of this paragraph (a), then such Person shall not be deemed to be or to have become an "Acquiring Person" for any purposes of this Agreement; and (ii) if, as of the date hereof, any Person is the Beneficial Owner of 20% or more of the Common Shares outstanding, such Person shall not be or become an "Acquiring Person," as defined pursuant to the foregoing provisions of this paragraph (a), unless and until such time as such Person shall become the Beneficial Owner of additional Common Shares (other than pursuant to a dividend or distribution paid or made by the Company on the outstanding Common Shares in Common Shares or pursuant to a split or subdivision of the outstanding Common Shares), unless, upon becoming the Beneficial Owner of such additional Common Shares, such Person is not then the Beneficial Owner of 20% or more of the Common Shares then outstanding. 2. In all other respects, the Miravant Medical Technologies Preferred Rights Agreement is ratified as issued by the Company and by the Rights Agent. 3. The Effective Date of this Amendment is April 24, 2001. IN WITNESS WHEREOF, the parties hereto have executed this Amendment to be effective on the date written above. Miravant Medical Technologies The "Rights Agent": a Delaware Corporation By: _____________________________ _____________________________ Gary S. Kledzik U.S. Stock Transfer Corporation CEO William Garza Vice President 8-K 5 f8kmay2420018k.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): May 24, 2001 MIRAVANT MEDICAL TECHNOLOGIES (Exact name of registrant as specified in its charter) Delaware 0-25544 77-0222872 (State or other jurisdiction of (Commission (IRS Employer Identification incorporation) File Number) Number) 336 Bollay Drive Santa Barbara, California 93117 (Address of principal executive offices) (Zip Code) - -------------------------------------------------------------------------------- Registrant's telephone number, including area code: (805) 685-9880 N/A (Former Name or Former Address, if Changed Since Last Report) ITEM 5. Other Events On May 24, 2001, Miravant Medical Technologies and Pharmacia Corporation finalized funding arrangements that could provide Miravant up to $20.0 million in funding and are expected to be effective May 31, 2001. The $20.0 million funding consists of the following arrangements: * The purchase of Miravant's current clinical inventory of SnET2 active pharmaceutical ingredient, or SnET2, and certain future quantities of SnET2 to be produced by Miravant through March 2002 for approximately $5.0 million; * The purchase of Miravant's SnET2 manufacturing equipment for $863,000; * The assumption by Pharmacia of certain lease expenses in the amount of $950,000; and * An available line of credit of approximately $13.2 million, subject to certain contingencies as discussed below. SnET2 is the PhotoPoint(TM) drug under investigation in the Phase III clinical trials for `wet' age-related macular degeneration, or wet AMD. The details of this funding are summarized below and can be further reviewed from the attached exhibits to this filing. Manufacturing Facility Asset Purchase Agreement: Under this agreement, Miravant has agreed to sell its existing clinical inventory of SnET2 at cost to Pharmacia for $2.245 million. Pharmacia has committed to purchase up to an additional $2.8 million of SnET2 which will be manufactured by Miravant through March 2002. Additionally, Pharmacia has agreed to purchase all of the equipment necessary to produce SnET2. The manufacturing equipment is to be purchased for $863,000, its fair market value as appraised by an independent appraisal firm. On May 31, 2001, the purchase price for the existing SnET2 inventory and the manufacturing equipment, of $3.108 million, will be deposited into two separate escrow accounts, an inventory escrow account and an equipment escrow account. The future quantities of SnET2 produced and shipped through December 31, 2001, which is estimated at approximately $2.0 million, will be paid by Pharmacia directly into the inventory escrow account within thirty (30) days of receipt. The remaining quantities of SnET2 purchased by Pharmacia after December 31, 2001, which is expected to be approximately $800,000, is to be paid directly to Miravant within thirty (30) days of receipt. The inventory escrow account, which is estimated to be approximately $4.2 million by December 31, 2001, is to be released to Miravant in full on January 7, 2002. The equipment escrow account, containing up to $863,000, is expected to be released on June 5, 2002. The interest earned by these accounts will accrue to Miravant and will also be available upon the release of each escrow account. The escrow accounts will secure certain indemnification obligations with respect to the purchase of manufacturing equipment. Amended and Restated Credit Agreement: Under this agreement, which amends and restates the existing $22.5 million Credit Agreement entered into with Pharmacia in February 1999, Pharmacia will provide up to $13.142 million in funding to Miravant beginning in January 2002. The loans available under the Amended and Restated Credit Agreement are subject to certain conditions and are allocated into two separate borrowing amounts. Up to $3.142 million will be available to Miravant beginning January 2, 2002. Up to an additional $10.0 million will be available to Miravant beginning July 1, 2002 only if one of the following criteria has been met: (i) Pharmacia has filed a New Drug Application with the U.S. Food and Drug Administration for the SnET2 PhotoPoint therapy for AMD; or (ii) the SnET2 Phase III clinical trial data meet certain clinical statistical standards as defined by the clinical trial protocols. The Amended and Restated Credit Agreement will provide for borrowing requests to be made twice in a quarter with no more than $5.0 million in total available in each calendar quarter and any unused amounts will be available to be carried forward. The Amended and Restated Credit Agreement will accrue interest based on the prime rate and, under conditions similar to those in the original Credit Agreement, promissory notes may be issued for the interest due. The amounts available for borrowing under the Amended and Restated Credit Agreement will be available to Miravant until June 30, 2003. Miravant will be required to issue one warrant to purchase a share of Miravant Common Stock for every $62.50 in principal borrowed. The warrant price will be equal to 140% of the average closing price for the ten days prior to any borrowing request. Miravant will also be subject to certain affirmative and negative financial covenants. Additionally, as part of the funding arrangement, Pharmacia will assume the lease obligations and related building property taxes through December 31, 2003 for the 7408 Hollister Avenue, Goleta CA facility, where Miravant currently manufactures SnET2. The total value of the rental and property tax payments due through December 31, 2003 is approximately $950,000. Additionally, under an operating site license provided by Pharmacia to Miravant, Miravant will be allowed access to and use of the manufacturing facility and equipment purchased by Pharmacia. Under the provisions of these agreements, the amounts and availability of the funding are summarized below:
Approximate Description Amounts Availability Date ----------- ------- ------------------ Purchase of SnET2 (existing and produced and delivered through 12/31/01) $ 4,245,000 01/07/02 Purchase of SnET2 (produced and delivered subsequent to 12/31/01) $ 800,000 As produced and delivered SnET2 manufacturing equipment $ 863,000 06/05/02 Assumption of lease and property taxes of the manufacturing facility $ 950,000 Amount to be paid ratably over 31 months through 12/31/03 Line of Credit - part I $ 3,142,000 Available beginning 01/02/02* Line of Credit - part II $ 10,000,000 After NDA filing for AMD; or ----------- Achievement of certain clinical statistical standards* Total $20,000,000 =========== * Total amount available per quarter is subject to certain restrictions as contained within the Amended and Restated Credit Agreement.
Item 7. Exhibits Exhibit Number Exhibit 10.1 Amended and Restated Credit Agreement dated May 24, 2001 between the Registrant and Pharmacia Treasury Services AB.** 10.2 Manufacturing Facility Asset Purchase Agreement dated May 24, 2001 between the Registrant and Pharmacia & Upjohn Company. 10.3 Site Access License Agreement dated May 31, 2001 between the Registrant and Pharmacia & Upjohn Company. 10.4 APA Escrow Agreement dated May 31, 2001 between the Registrant and Pharmacia & Upjohn Company. 10.5 API Escrow Agreement dated May 24, 2001 between the Registrant and Pharmacia & Upjohn Company. 4.1 Amendment No. 1 Miravant Medical Technologies Preferred Stock Rights Agreement. ** Confidential Treatment has been requested for certain portions of this exhibit. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. MIRAVANT MEDICAL TECHNOLOGIES By: /s/ John M. Philpott ----------------------------------- John M. Philpott Chief Financial Officer Date: May 24, 2001 INDEX TO EXHIBITS Exhibit Number Exhibit 10.1 Amended and Restated Credit Agreement dated May 24, 2001 between the Registrant and Pharmacia Treasury Services AB.** 10.2 Manufacturing Facility Asset Purchase Agreement dated May 24, 2001 between the Registrant and Pharmacia & Upjohn Company. 10.3 Site Access License Agreement dated May 31, 2001 between the Registrant and Pharmacia & Upjohn Company. 10.4 APA Escrow Agreement dated May 31, 2001 between the Registrant and Pharmacia & Upjohn Company. 10.5 API Escrow Agreement dated May 24, 2001 between the Registrant and Pharmacia & Upjohn Company. 4.1 Amendment No. 1 Miravant Medical Technologies Preferred Stock Rights Agreement. ** Confidential Treatment has been requested for certain portions of this exhibit. EX-10 6 f8kmay242001exb10_1.txt EXHIBIT 10.1 AMENDED AND RESTATED CREDIT AGREEMENT dated as of May 24, 2001 between MIRAVANT MEDICAL TECHNOLOGIES and PHARMACIA TREASURY SERVICES AB TABLE OF CONTENTS
Page ARTICLE I Definitions Section 1.01. Definitions........................................................................................1 (a) Terms Generally.................................................................................1 (b) Accounting Terms................................................................................2 (c) Other Terms.....................................................................................2 ARTICLE II The Credit Facility Section 2.01. Loans.............................................................................................19 Section 2.02. Borrowing Procedure...............................................................................19 Section 2.03. Repayment.........................................................................................20 Section 2.04. Prepayment........................................................................................21 ARTICLE III Interest Section 3.01. Interest on Loans.................................................................................21 Section 3.02. Interest on Overdue Amounts.......................................................................22 Section 3.03. Day Counts........................................................................................23 Section 3.04. Maximum Interest Rate.............................................................................23 ARTICLE IV Disbursement and Payment Section 4.01. Method and Time of Payments.......................................................................23 Section 4.02. Compensation for Losses...........................................................................24 Section 4.03. Withholding.......................................................................................24 Section 4.04. Expenses; Indemnity...............................................................................25 Section 4.05. Survival..........................................................................................26 ARTICLE V Representations and Warranties Section 5.01. Representations and Warranties....................................................................26 (a) Subsidiaries...................................................................................26 (b) Good Standing and Power........................................................................26 (c) Corporate Authority............................................................................27 (d) Authorizations.................................................................................27 (e) Binding Obligation.............................................................................27 (f) Litigation.....................................................................................27 (g) No Conflicts...................................................................................27 (h) Financial Condition............................................................................28 (i) Taxes..........................................................................................29 (j) Use of Proceeds................................................................................29 (k) Margin Regulations.............................................................................29 (l) Compliance with ERISA..........................................................................29 (m) Not an Investment Company......................................................................30 (n) Properties.....................................................................................30 (o) Compliance with Laws and Charter Documents.....................................................30 (p) Environmental Protection.......................................................................31 (q) Insurance......................................................................................32 (r) Adverse Contracts..............................................................................32 (s) Solvency.......................................................................................32 (t) Disclosure.....................................................................................32 Section 5.02 Survival...........................................................................................33 ARTICLE VI Conditions Precedent Section 6.01. Conditions to the Availability of the Commitment..................................................33 (a) This Agreement.................................................................................33 (b) Evidence of Corporate Action...................................................................33 (c) Opinions of Counsel............................................................................34 (d) Representations and Warranties.................................................................34 (e) Other Documents................................................................................34 Section 6.02. Conditions to All Loans...........................................................................34 (a) Borrowing Request..............................................................................34 (b) Note...........................................................................................34 (c) Warrant Certificate............................................................................35 (d) No Default.....................................................................................35 (e) Representations and Warranties; Covenants......................................................35 Section 6.03. Additional Condition to Post-Event Loans..........................................................35 Section 6.04. Satisfaction of Conditions Precedent..............................................................35 ARTICLE VII Covenants Section 7.01. Affirmative Covenants.............................................................................36 (a) Financial Statements; Compliance Certificates..................................................36 (b) Corporate Existence............................................................................38 (c) Conduct of Business............................................................................38 (d) Authorizations.................................................................................38 (e) Taxes..........................................................................................38 (f) Insurance......................................................................................39 (g) Inspection.....................................................................................39 (h) Maintenance of Records.........................................................................39 (i) Maintenance of Property........................................................................39 (j) ERISA..........................................................................................40 (k) Notice of Defaults and Adverse Developments....................................................41 (l) Environmental Matters..........................................................................42 Section 7.02. Negative Covenants................................................................................42 (a) Mergers, Consolidations and Sales of Assets....................................................42 (b) Liens..........................................................................................43 (c) Indebtedness...................................................................................43 (d) Contingent Liabilities.........................................................................44 (e) Loans and Investments..........................................................................44 (f) Capital Expenditures...........................................................................46 (g) Redemptions, etc...............................................................................46 (h) Dividends and Purchase of Stock................................................................46 (i) Stock of Subsidiaries..........................................................................48 (j) Distributions by Subsidiaries..................................................................48 (k) Related Agreements.............................................................................48 (l) Sale and Leaseback Transactions................................................................48 (m) Transactions with Affiliates and Related Persons...............................................48 (n) Asset Dispositions.............................................................................49 (o) Securities Offerings...........................................................................49 (p) Surplus Cashflows..............................................................................50 Section 7.03 Financial Covenants................................................................................50 (a) Shareholders' Equity...........................................................................50 (b) Current Ratio..................................................................................50 (c) Minimum Operating Income.......................................................................51 (d) Ophthalmology Expense..........................................................................51 (e) Cash Balance...................................................................................51 ARTICLE VIII Events of Default Section 8.01. Events of Default.................................................................................51 Section 8.02. Assignments.......................................................................................54 Section 8.03. Certain Pledges...................................................................................55 ARTICLE IX Miscellaneous SECTION 9.01. APPLICABLE LAW....................................................................................55 SECTION 9.02. WAIVER OF JURY....................................................................................55 Section 9.03. Jurisdiction and Venue; Service of Process........................................................56 Section 9.04. Set-off...........................................................................................56 Section 9.05. Amendments and Waivers............................................................................57 Section 9.06. Cumulative Rights; No Waiver......................................................................57 Section 9.07. Notices...........................................................................................57 Section 9.08. Certain Acknowledgments...........................................................................59 Section 9.09. Separability......................................................................................60 Section 9.10. Parties in Interest...............................................................................60 Section 9.11. Execution in Counterparts.........................................................................60
SCHEDULES
Schedule 5.01(a) Subsidiaries of the Borrower EXHIBITS Exhibit A Form of Borrowing Request Exhibit B Form of Note Exhibit C Form of Opinion of Counsel for the Borrower to be Delivered Upon Payment of Shares Exhibit D Form of Opinion of Counsel for the Borrower to be Delivered at the Effective Time Exhibit E Form of Compliance Certificate
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of May 31, 2001, between Miravant Medical Technologies, a Delaware corporation (the "Borrower") and Pharmacia Treasury Services AB, a Swedish corporation (the "Lender"). W I T N E S S E T H : WHEREAS, the Borrower and Lender entered into a Credit Agreement, dated as of February 18, 1999 (the "Original Agreement"), pursuant to which, among other things, the Lender has previously loaned to the Borrower, for general corporate purposes, the principal amount of $22,500,000 and has made Additional Loans to the Borrower; and WHEREAS, the Borrower has requested the Lender to commit to lend to the Borrower, on the terms and subject to the conditions set forth in this Agreement, for general corporate purposes, an additional amount not to exceed $3,136,092 (the "Maximum Pre-Event Amount"), in the form of up to twelve Term Loans (the "Pre-Event Loans"), with not more than two Term Loans to be made in each Calendar Quarter; and WHEREAS, the Borrower has requested the Lender to commit to lend to the Borrower, on the terms and subject to the conditions set forth in this Agreement (including the additional condition set forth in Section 6.03), for general corporate purposes, in addition to the amount referred to in the previous Recital, an amount not to exceed $10,000,000 (the "Maximum Post-Event Amount"), in the form of up to eight Term Loans (the "Post-Event Loans"), with not more than two Term Loans to be made in each Calendar Quarter. NOW, THEREFORE, the parties agree that the Original Agreement is hereby amended and restated in its entirety, effective as of the Effective Time, as follows: ARTICLE I Definitions Section I.1. Definitions. ----------- (a) Terms Generally. The definitions ascribed to terms in this Agreement apply equally to both the singular and plural forms of such terms. Whenever the context may require, any pronoun shall be deemed to include the corresponding masculine, feminine and neuter forms. The words "include", "includes" and "including" shall be interpreted as if followed by the phrase "without limitation". The phrase "individually or in the aggregate" shall be deemed general in scope and not to refer to any specific Section or clause of this Agreement. All references herein to the Preamble, Recitals, Articles, Sections, Exhibits and Schedules shall be deemed references to the Preamble and Recitals, Articles and Sections of, and Exhibits and Schedules to, this Agreement unless the context shall otherwise require. The table of contents, headings and captions herein shall not be given effect in interpreting or construing the provisions of this Agreement. Except as otherwise expressly provided herein, all references to "dollars" or "$" shall be deemed references to the lawful money of the United States of America. (b) Accounting Terms. Except as otherwise expressly provided herein, the term "consolidated" and all other terms of an accounting nature shall be interpreted and construed in accordance with GAAP, as in effect from time to time; provided, however, that, for purposes of determining compliance with any covenant set forth in Article VII, such terms shall be construed in accordance with GAAP as in effect on the date of this Agreement, applied on a basis consistent with the construction thereof applied in preparing the Borrower's audited financial statements referred to in Section 5.01(h). (c) Other Terms. The following terms have the meanings ascribed to them below or in the Sections of this Agreement indicated below: "Active Treatment Group Results" ***** "Additional Loans" means, collectively, Loans made pursuant to Section 3.01(b). "Affiliate" means, with respect to any Person, any other Person that controls, is controlled by, or is under common control with, such Person. "Agreement" means this amended and restated credit agreement, as it may be further amended, modified or supplemented from time to time. "Approved Subsidiary" has the meaning assigned to such term in Section 8.02(a). *****Confidential Treatment Requested. "Asset Disposition" by any Person means any transfer, conveyance, sale, lease or other disposition by such Person or any of its Subsidiaries (including a consolidation or merger or other sale of any such Subsidiary with, into or to another Person in a transaction in which such Subsidiary ceases to be a Subsidiary, but excluding a disposition by a Subsidiary of such Person to such Person or a Wholly Owned Subsidiary of such Person or by such Person to a Wholly Owned Subsidiary of such Person) of (i) shares of capital stock (other than directors' qualifying shares) or other ownership interests of a Subsidiary of such Person, (ii) substantially all of the assets of such Person or any of its Subsidiaries representing a division or line of business or (iii) other assets or rights of such Person or any of its Subsidiaries transferred, conveyed, sold, leased or disposed of on or subsequent to the date of this Agreement for cash consideration not in excess of, and having a book value or fair market value not in excess of, $1,000,000 in the aggregate. "Assignee" has the meaning assigned to such term in Section 8.02(a). "Average Price" means the average of the Closing Prices of the Common Stock for the 10 Trading Days immediately preceding the Maturity Date. "Base Rate" means, for any day, a rate per annum equal to the rate of interest from time to time publicly announced by Citibank, N.A. in The City of New York as its prime commercial loan rate in effect on such day. The Base Rate shall change as and when the foregoing rate shall change. Any change in the Base Rate shall become effective as of the opening of business on the day of such change. "Board of Directors" means the board of directors of the Borrower. "Borrower" has the meaning assigned to such term in the Preamble. "Borrowing Amount" has the meaning set forth in Section 2.02. "Borrowing Date" means, with respect to any Term Loan, the Business Day set forth in the relevant Borrowing Request as the date upon which the Borrower desires to borrow such Term Loan; provided, however, that such Borrowing Date shall be not fewer than 10 Business Days and not more than 20 Business Days following the Lender's receipt of such Borrowing Request; provided, further, that the first Borrowing Date in any Calendar Quarter shall occur not earlier than twenty (20) Business Days after the immediately preceding Borrowing Date. "Borrowing Request" means a request by the Borrower for a Term Loan, which shall specify (i) the requested Borrowing Date, (ii) the Borrowing Amount for such Term Loan, and (iii) a calculation of the Exercise Price of the related Warrants. "Business Day" means any day that is not a Saturday, Sunday or other day on which commercial banks in The City of New York or in Los Angeles, California, are authorized by law to close. "Capital Expenditures" means, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities and including that portion of Capital Lease Obligations that is capitalized on the consolidated balance sheet of the Borrower and its Subsidiaries) by the Borrower and its Subsidiaries during such period that are included in the property, plant or equipment reflected in the consolidated balance sheet of the Borrower and its Subsidiaries. "Calendar Quarter" means each three-month period commencing on January 1, April 1, July 1 and October 1 of each calendar year. "Capital Lease Obligations" means, with respect to any Person, the obligation of such Person to pay rent or other amounts under any lease with respect to any property (whether real, personal or mixed) acquired or leased by such Person that is required by GAAP to be accounted for as a liability on a consolidated balance sheet of such Person. "Cash Balance" means, at any date of determination, the sum of (i) all cash of the Borrower and its Subsidiaries exclusive of any cash held in escrow pursuant to the escrow agreement, of even date herewith, between Borrower, Lender and Sanwa Bank California, as escrow agent (the "Escrow Agreement"), and (ii) all Marketable Securities of the Borrower and its Subsidiaries. "Clinical Studies" means the two identical twenty-four month Phase III Studies numbers 98EA001 and 98EA004, which use rostaporfin/SnEt2 photodynamic therapy for the treatment of choroidal neovascularization associated with age-related macular degeneration. "Closing Price" means the last reported sale price regular way on the day in question or, in case no such sale takes place on such day, the reported closing bid price regular way of the Common Stock, in each case on the principal national securities exchange on which the Common Stock is listed or admitted to trading, or, if not listed or admitted to trading on any national securities exchange, the closing bid price of the Common Stock on the Nasdaq National Market. In the case of a closing price of Common Stock on the Nasdaq National Market, such price shall mean the closing price reported in the New York City edition of The Wall Street Journal or, if not so reported, another authoritative source. "Code" means the Internal Revenue Code of 1986, as amended from time to time. "Commitment Termination Date" means June 30, 2003. "Common Stock" means the common stock, par value $.01 per share, of the Company and any other stock of the Borrower into which such common stock may be converted or reclassified (other than stock of the Borrower into which unissued Common Stock has been reclassified) or that may be issued in respect of, in exchange for, or in substitution of, such common stock by reason of any stock splits, stock dividends, distributions, mergers, consolidations, recapitalizations or other like events. "Credit Documents" means, collectively, this Agreement; all of the Notes; that certain Security Agreement, dated as of February 18, 1999, between the Borrower, as debtor, and the Lender, as secured party, as it may be further amended, modified or supplemented (the "Security Agreement") and any documents executed and delivered, or filings made, pursuant to or in connection with such Security Agreement, including any financing statements filed by the Lender pursuant to the Uniform Commercial Code and any filings made by the Lender with the Patent and Trademark Office. "Current Assets" means, at any date of determination, the sum of (i) all cash of the Borrower and its Subsidiaries, exclusive of any cash held in escrow pursuant to the Escrow Agreement, and (ii) all Marketable Securities of the Borrower and its Subsidiaries. "Current Liabilities" means, at any date of determination, consolidated current liabilities of the Borrower and its Subsidiaries, less the amount of the current portion of, and any accrued interest on, Indebtedness of the Borrower and its Subsidiaries. "Default" means any event or circumstance which, with the giving of notice or the passage of time, or both, would be an Event of Default. "Disclosure Package" has the meaning assigned to such term in Section 5.01(h). "dollars" and "$" shall mean lawful money of the United States of America. "EBITDA" means, for any period, the sum of (i) consolidated net income of the Borrower and its Subsidiaries for such period, adjusted to exclude non-recurring gains and losses on unusual items and (ii) consolidated income taxes, interest income, Interest Expense, depreciation, and amortization (including, without limitation, amortization associated with goodwill, deferred debt expenses, restricted stock and option costs and non-competition agreements) of the Borrower and its Subsidiaries for such period. "Effective Time" has the meaning assigned to such term in Section 6.01. "Endpoint" ***** "Environmental Claim" means any claim, assertion, demand, notice of violation, suit, administrative or judicial proceeding, regulatory action, investigation, information request or order involving any hazardous substance, Environmental Law, noise or odor pollution or any injury or threat of injury to human health, property or the environment. "Environmental Law" means any federal, state, local or foreign statute or common law, regulation, order, decree, opinion or agency requirement as now in effect or hereinafter adopted relating to (i) the handling, use, presence, disposal or release of any hazardous substance or (ii) the protection, preservation or restoration of the environment, natural resources or human health or safety. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time. "ERISA Group" means the Borrower and all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Borrower, are treated as a single employer under Section 414 of the Code or are considered to be one employer under Section 4001 of ERISA. "Event of Default" has the meaning assigned to such term in Section 8.01. *****Confidential Treatment Requested. "Excluded Taxes" means all present and future taxes, levies, imposts, duties, deductions, withholdings, fees, liabilities and similar charges imposed on or measured by the overall net income of the Lender (or any office, branch or Subsidiary of the Lender) or any franchise taxes, taxes on doing business or taxes measured by capital or net worth imposed on the Lender (or any office, branch or Subsidiary of the Lender), in each case imposed by the United States of America or any political subdivision or taxing authority thereof or therein, or taxes on or measured by the overall net income of any office, branch or Subsidiary of the Lender or any taxes, levies, imposts, duties, deductions, withholdings, fees, liabilities and similar changes imposed by any foreign country or subdivision thereof. "Exercise Price" has the meaning assigned to such term in the Warrant Agreement. "External Scaleup Costs" means the costs incurred by the Borrower associated with the development of the scale-up of raw materials, the active pharmaceutical ingredient and final dose formulation necessary to permit the Product (as defined in that certain Amended and Restated Ophthalmology Development & License Agreement, dated as of February 18, 1999, between the Borrower and an affiliate of the Lender, as it may be further amended, modified or supplemented) to be manufactured by an entity other than the Borrower. Such costs include, but are not limited to, the costs of development work performed, raw materials used in development and stability and equipment needed. "Federal Reserve Board" means the Board of Governors of the Federal Reserve System (or any successor Governmental Authority). "GAAP" means generally accepted accounting principles, as set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entities as may be approved by a significant segment of the accounting profession of the United States of America. "Governmental Authority" means any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. "Guaranty" means, with respect to any Person, any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness of any other Person (the "primary obligor") in any manner, whether directly or indirectly, and including any obligation of such Person, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or to purchase (or to advance or supply funds for the purchase of) any security for the payment of such Indebtedness, (ii) to purchase property, securities or services for the purpose of assuring the holder of such Indebtedness of the payment of such Indebtedness or (iii) to maintain working capital, equity capital or the financial condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness. The terms "Guaranteed", "Guaranteeing" and "Guarantor" shall have corresponding meanings. "Hazardous Substance" means any substance, in any concentration or mixture, that is (i) listed, classified or regulated pursuant to any Environmental Law, (ii) petroleum product or by-product, asbestos containing material, polychlorinated biphenyls, radioactive material or radon or (iii) any waste or other substance regulated by any Governmental Authority or any Environmental Law. "Indebtedness" means, with respect to any Person, (i) all obligations of such Person for borrowed money or for the deferred purchase price of property or services (including all obligations, contingent or otherwise, of such Person in connection with letters of credit, bankers' acceptances, Interest Rate Protection Agreements or other similar instruments, including currency swaps) other than indebtedness to trade creditors and service providers incurred in the ordinary course of business and payable on usual and customary terms, (ii) all obligations of such Person evidenced by bonds, notes, debentures or other similar instruments, (iii) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the remedies available to the seller or lender under such agreement are limited to repossession or sale of such property), (iv) all Capital Lease Obligations of such Person, (v) all obligations of the types described in clauses (i), (ii), (iii) or (iv) above secured by (or for which the obligee has an existing right, contingent or otherwise, to be secured by) any Lien upon or in any property (including accounts, contract rights and other intangibles) owned by such Person (up to the value of such property), even though such Person has not assumed or become liable for the payment of such Indebtedness, (vi) all preferred stock issued by such Person or any Subsidiary of such Person, valued at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends, excluding the Preferred Stock Rights Agreement, dated as of June 13, 2000, by and between Miravant Medical Technologies and U.S. Stock Transfer Corporation, as Rights Agent, as amended, (the "Rights Plan") (vii) all Indebtedness of others Guaranteed by such Person and (viii) all Indebtedness of any partnership of which such Person is a general partner. "Indemnitee" has the meaning assigned to such term in Section 4.04(b). "Interest Expense" means, for any period, consolidated interest expense (including that attributable to Capital Lease Obligations) whether paid or accrued, of the Borrower and its Subsidiaries with respect to all outstanding Indebtedness of the Borrower and its Subsidiaries, including all commissions, discounts and other fees and charges owed with respect to letter of credit and bankers' acceptance financing and net costs under Interest Rate Protection Agreements. "Interest Rate Protection Agreement" means any interest rate swap agreement, interest rate cap agreement or similar hedging arrangement used by a Person to fix or cap a floating rate of interest on Indebtedness to a negotiated maximum rate or amount. "Investment" by any Person means any direct or indirect loan, advance or other extension of credit or capital contribution to (by means of transfers of cash or other property to others or payments for property or services for the account or use of others, or otherwise), or purchase or acquisition of capital stock, bonds, notes, debentures or other securities or evidence of Indebtedness or other obligations of or issued by any other Person. "Key Agreements" means, collectively, the License Agreement, effective July 1, 1989, between the University of Toledo, the Medical College of Ohio, St. Vincent Medical Center and the Borrower, as amended prior to the date hereof, and the Development and Distribution Agreement, dated May 28, 1996, between Iridex Corporation and the Borrower, as amended prior to the date hereof. "Lender" has the meaning assigned to such term in the Preamble. "Lien" means, with respect to any asset of a Person, (i) any mortgage, deed of trust, lien, pledge, encumbrance, charge or security interest in or on such asset, (ii) the interest of a vendor or lessor under any conditional sale agreement, capital lease or title retention agreement relating to such asset, and (iii) in the case of securities, any purchase option, call or similar right of any other Person with respect to such securities. "Loans" means, collectively, the Term Loans, the Original Quarterly Loans and the Additional Loans. "Marketable Securities" means all governmental securities, banker's acceptances, commercial paper and other highly liquid investments readily convertible to known amounts of cash and subject to insignificant risk of changes in value, all valued at cost or market value, whichever is lower. "Material Adverse Effect" means any material and adverse effect on (i) the consolidated business, properties, condition (financial or otherwise) or operations, present or prospective, of the Borrower and its Subsidiaries, (ii) the ability of the Borrower timely to perform any of its material obligations, or of the Lender to exercise any remedy, under any Credit Document or (iii) the legality, validity, binding nature or enforceability of any Credit Document. "Maturity Date" means June 9, 2004. "Maximum Quarterly Amount" means, for each Calendar Quarter commencing after December 31, 2001, an aggregate principal amount of Term Loans up to but not exceeding $5,000,000. "Multiemployer Plan" means a multiemployer plan as defined in Section 4001(a)(3) of ERISA to which any member of the ERISA Group is making or accruing an obligation to make contributions or has within the preceding five plan years made or accrued contributions. "Net Available Asset Disposition Proceeds" means, with respect to any Asset Disposition by any Person, all cash or readily marketable cash equivalents received (including by way of sale or discounting of a note, instalment receivable or other receivable, but excluding any other consideration received in the form of assumption by the acquiree of Indebtedness or other obligations relating to such properties or assets or received in any other noncash form) therefrom by such Person, net of (i) all legal, title and recording tax expenses, commissions and other fees and expenses incurred and all federal, state, provincial, foreign and local taxes required to be accrued as a liability as a consequence of such Asset Disposition, (ii) all payments made by such Person or its Subsidiaries on any Indebtedness which is secured by such assets in accordance with the terms of any Lien upon or with respect to such assets or which must by the terms of such Lien, or in order to obtain a necessary consent to such Asset Disposition or by applicable law be repaid out of the proceeds from such Asset Disposition, and (iii) all distributions and other payments made to minority interest holders in Subsidiaries of such Person or joint ventures as a result of such Asset Disposition. "Net Available Securities Offering Proceeds" means, with respect to any offer or sale of securities by any Person, all cash or readily marketable cash equivalents received therefrom by such Person, net of all underwriting discounts and commissions, SEC filing fees, legal fees and disbursements, printing fees, fees of national securities exchanges or the Nasdaq National Market and auditing fees incurred by such Person in connection with such offer or sale. "New Site" means that certain light industrial complex located at 6100 Hollister Avenue, Santa Barbara, California, 93111. "Note" means a promissory note of the Borrower in the form set forth in Exhibit B, executed and delivered in accordance with Section 2.02, 3.01(b) or 6.02(b) in order to evidence a Loan. "Operating Income" of any Person means, for any period, the consolidated operating income (or loss) of such Person for such period determined on a consolidated basis in accordance with generally accepted accounting principles; provided that there shall be excluded therefrom (a) noncash expense items, including but not limited to depreciation, amortization, noncash compensation costs and reserves, (b) the operating income (or loss) of any Person acquired by such Person or a Subsidiary of such Person in a pooling-of-interests transaction for any period prior to the date of such transaction, (c) the operating income (but not operating loss) of any Subsidiary of such Person which is subject to restrictions which prevent the payment of dividends or the making of distributions to such Person to the extent of such restrictions, (d) the operating income (or loss) of any Person that is not a Subsidiary of such Person except to the extent of the amount of dividends or other distributions actually paid to such Person by such other Person during such period, (e) gains or losses on Asset Dispositions by such Person or its Subsidiaries and (f) all extraordinary gains and extraordinary losses. "Ophthalmology Expense" means, for any period, the direct and indirect costs incurred by the Company associated with the field of ophthalmology for research, pharmaceutical, device and manufacturing development and preclinical and clinical costs, including, (but not limited to) general and administrative costs, internal scale-up costs, preclinical costs as required for NDA filing, clinical and regulatory costs, drug and device development and manufacturing costs and consultants, but excluding External Scaleup Costs. "Original Agreement" has the meaning assigned to such term in the Recitals. "Original Current Assets" means, at any date of determination, consolidated current assets of the Borrower and its Subsidiaries. "Original Effective Time" means February 19, 1999. "Original Quarterly Loan" has the meaning assigned to the term "Quarterly Loan" in Section 2.01 of the Original Agreement. "PBGC" means the Pension Benefit Guaranty Corporation (or any successor Governmental Authority). "Pension Plan" means a Plan that (i) is an employee pension benefit plan, as defined in Section 3(3) of ERISA (other than a Multiemployer Plan) and (ii) is subject to the provisions of Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Code. "Permitted Liens" means, collectively, the following: (i) Liens for taxes, assessments or charges not yet due or that are being contested in good faith by appropriate proceedings and (unless the amount thereof is not material to the Borrower's consolidated financial condition) for which adequate reserves are being maintained (in accordance with GAAP); (ii) deposits or pledges to secure obligations under workers' compensation, social security or similar laws, or under unemployment insurance; (iii) deposits or pledges to secure bids, tenders, contracts (other than contracts constituting Indebtedness), leases, statutory obligations, surety and appeal bonds and other obligations of like nature arising in the ordinary course of business; (iv) mechanics', workers', materialmen's or similar Liens arising in the ordinary course of business with respect to obligations which are not overdue for a period of more than 30 days or which are being contested in good faith by appropriate proceedings; (v) Liens securing judgments in an amount and for a period not constituting an Event of Default under Section 8.01(i); (vi) minor imperfections of title on real estate that do not interfere materially with the use of such property or render title unmarketable; (vii) any Lien upon or in any property hereafter acquired by the Borrower or a Subsidiary of the Borrower, provided that such Lien is created contemporaneously with such acquisition to secure or provide for the payment or financing of any part of the cost (including construction costs) thereof, and provided, further, that such Lien attaches only to the property so acquired and fixed improvements thereon, accessions thereto, replacements and proceeds thereof, and substitutions therefor; (viii) Liens existing on the date hereof; (ix) Liens on equipment leased by the Borrower or any Subsidiary of the Borrower pursuant to a capital lease in the ordinary course of business (including replacements and proceeds thereof, substitutions therefor and accessions thereto) incurred solely for the purpose of financing the lease of such equipment; (x) leases or subleases granted to others in the ordinary course of Borrower's or its Subsidiary's business not interfering in any material respect with the business of Borrower and its Subsidiaries taken as a whole, and any interest or title of a lessor under any lease; (xi) Liens on assets that existed at the time such assets were acquired by Borrower or any Subsidiary (including Liens on assets of any corporation that existed at the time it became or becomes a Subsidiary of the Borrower); provided such Liens were not granted in contemplation of or in connection with the acquisition of such asset by Borrower or any such Subsidiary; (xii) Liens in favor of customs and revenue authorities arising as a matter of law to secure payments of customs duties in connection with the importation of goods; (xiii) Liens which constitute rights of set-off of a customary nature or banker's Liens with respect to amounts on deposit, whether arising by operation of law or by contract, in connection with arrangement entered into with banks in the ordinary course of business; (xiv) Liens on insurance proceeds in favor of insurance companies granted solely as security for financed premiums; (xv) the issuance of stock options pursuant to Borrower's 2000 Stock Compensation Plan as in effect on the date hereof and warrants; (xvi) Liens created or existing in favor of Borrower pursuant to the Credit Documents; and (xvii) any Lien renewing, extending or refinancing a Lien permitted by the foregoing, provided that the principal amount secured is not increased and the Lien is not extended to other property (other than by a substitution of like property). "Person" means any individual, sole proprietorship, partnership, joint venture, trust, unincorporated organization, association, corporation, institution, public benefit corporation, entity or government (whether Federal, state, county, city, municipal or otherwise, including any instrumentality, division, agency, body or department thereof). "Placebo Group Results" ***** "Plan" means an employee benefit plan as defined in Section 3(3) of ERISA (other than a Multiemployer Plan) which is maintained or contributed to by the Borrower or any member of the ERISA Group. *****Confidential Treatment Requested. "Post-Event Loan" has the meaning assigned to such term in the Recitals. "Pre-Event Loan" has the meaning assigned to such term in the Recitals. "Related Person" of any Person means, without limitation, any officer or director of such Person or any other Person owning 5% or more of the outstanding common stock of such Person or 5% or more of the Voting Stock of such Person. For purpose of this Agreement, the Lender and its Affiliates shall not be deemed to be Related Persons of the Borrower or any of its Subsidiaries. "Repayment Shares" has the meaning assigned to such term in Section 2.03(b). "Responsible Officer" means the chief executive officer, president, chief financial officer, chief accounting officer or treasurer of the Borrower. "Sale and Leaseback Transaction" of any Person means an arrangement with any lender or investor or to which such lender or investor is a party providing for the leasing by such Person of any property or asset of such Person which has been or is being sold or transferred by such Person after the acquisition thereof or the completion of construction or commencement of operation thereof to such lender or investor or to any person to whom funds have been or are to be advanced by such lender or investor on the security of such property or asset. "SEC" means the Securities and Exchange Commission (or any successor Governmental Authority). "Share Repayment Amount" has the meaning assigned to such term in Section 2.03(b). "Shareholders' Equity" means, as of any date of determination, the total consolidated shareholders' equity (determined without duplication) of the Borrower and its Subsidiaries at such date. "Solvent" means, with respect to a Person and a specified date of determination, that at such date: (a) the present fair saleable value of such Person's assets is in excess of the total amount of such Person's probable liabilities on its existing debts and obligations (including contingent liabilities) as they become absolute and matured; (b)such Person is able to pay its debts as they become due; and (c) such Person does not have unreasonably small capital to carry on such Person's business as theretofore operated and all businesses in which such Person then is about to engage. "Subsidiary" means, at any time and with respect to any Person, any other Person the shares of stock or other ownership interests of which having ordinary voting power to elect a majority of the board of directors or other matters of such Person are at the time owned, or the management or policies of which is otherwise at the time controlled, directly or indirectly through one or more intermediaries (including other Subsidiaries) or both, by such first Person. Unless otherwise qualified or the context indicates clearly to the contrary, all references to a "Subsidiary" or "Subsidiaries" in this Agreement refer to a Subsidiary or Subsidiaries of the Borrower. "Surplus" has the meaning assigned to such term in Section 7.02(p). "Taxes" has the meaning assigned to such term in Section 4.03. "Term Loans" means, collectively, the Pre-Event Loans and the Post-Event Loans. "Trading Day" means a day on which the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading is open for the transaction of business or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange, a day on which the Nasdaq National Market is open for the transaction of business. "Visual Acuity Loss Criterion" means 15 letters in visual acuity, as measured using an Early Treatment Diabetic Retinopathy Study protocol. "Voting Stock" of any Person means capital stock of such Person which ordinarily has voting power for the election of directors (or persons performing similar functions) of such Person. "Warrant" has the meaning assigned to such term in the Warrant Agreement. "Warrant Agreement" means the Warrant Agreement, dated as of February 19, 1999, between the Borrower and the Lender, as amended by the letter agreement, dated as of May 24, 2001, as it may be further amended, modified or supplemented. "Warrant Certificate" has the meaning assigned to such term in the Warrant Agreement. "Warrant Number" means, with respect to any Term Loan or Original Quarterly Loan, a number of Warrants equal to the product of (i) the Borrowing Amount for such Term Loan or Original Quarterly Loan, divided by (ii) 62.50. "Wholly Owned Subsidiary" means, at any time and with respect to any Person, a Subsidiary, all the shares of stock of all classes of which (other than directors' qualifying shares) or other ownership interests at the time are owned directly or indirectly by such Person and/or one or more other Wholly Owned Subsidiaries of such Person. ARTICLE II The Credit Facility Section II.1. Loans. (a) Subject to the terms and conditions of this Agreement, the Lender agrees to make Pre-Event Loans in dollars to the Borrower not more than twice in each Calendar Quarter during the period commencing on January 1, 2002 and ending on the Commitment Termination Date; provided, however, that (i) the aggregate principal amount of all Pre-Event Loans made by the Lender to the Borrower shall not exceed the Maximum Pre-Event Amount and (ii) the aggregate principal amount of Term Loans made by the Lender to the Borrower during any Calendar Quarter shall not exceed the Maximum Quarterly Amount. (b) Subject to the terms and conditions of this Agreement (including, without limitation, Section 6.03), the Lender agrees to make Post-Event Loans in dollars to the Borrower not more than twice in each Calendar Quarter during the period commencing on July 1, 2002 and ending on the Commitment Termination Date; provided, however, that (i) the aggregate principal amount of all Post-Event Loans made by the Lender to the Borrower shall not exceed the Maximum Post-Event Amount and (ii) the aggregate principal amount of Term Loans made by the Lender to the Borrower during any Calendar Quarter shall not exceed the Maximum Quarterly Amount. (c) Subject to the terms and conditions of this Agreement, each Term Loan shall be made on the applicable Borrowing Date only in a principal amount of $1,000,000 or an integral multiple of $250,000 in excess thereof. To the extent that the Maximum Pre-Event Amount or the Maximum Post-Event Amount exceed the Pre-Event Loans outstanding or the Post-Event Loans outstanding, respectively, by an amount less than $1,000,000, then any Borrowing Request for a Pre-Event Loan or Post-Event Loan, as the case may be, shall be issued by the Borrower for such amount. Section II.2. Borrowing Procedure. In order to borrow a Term Loan, the Borrower shall deliver a Borrowing Request in respect of such Term Loan to the treasurer of Lender. Each Borrowing Request shall be accompanied by (i) a duly executed Note in the form of Exhibit B, dated as of the Borrowing Date and evidencing a loan in the principal amount set forth in the Borrowing Request (the "Borrowing Amount", which shall be $1,000,000 or an integral multiple of $250,000 in excess thereof (except as otherwise specified in Section 2.01(c)) but shall not, when aggregated with all other Term Loans made by Lender to Borrower during the Calendar Quarter to which such Term Loan relates, exceed the Maximum Quarterly Amount for such Calendar Quarter), and (ii) a duly executed Warrant Certificate evidencing a number of Warrants equal to the Warrant Number. Subject to satisfaction, or waiver by the Lender in writing, of each of the applicable conditions precedent contained in Article VI, on the applicable Borrowing Date the Lender shall make available to the Borrower the Borrowing Amount. Section II.3. Repayment. (a) The aggregate outstanding principal of the Loans shall be repaid in full, together with any accrued interest as of the date of repayment, not later than the Maturity Date. Except as permitted by Section 2.03(b), such principal and interest shall be repaid in cash. Repaid Loans may not be reborrowed. (b) If and only if the Common Stock shall have been listed or admitted to trading on a national securities exchange or quoted on the Nasdaq National Market on each of the 180 calendar days preceding and including the Maturity Date, then on, but not following, the Maturity Date, the Borrower may, at its option, repay all or a portion of the aggregate principal of the Loans, together with any accrued interest as of the Maturity Date, by delivering to the office of the Lender theretofore designated in writing to the Borrower not later than 12:00 Noon, New York time, on the Maturity Date, (i) an unlegended certificate for the number of shares of Common Stock (the "Repayment Shares") equal to the product, rounded up to the nearest whole number, of (A) the portion of the aggregate principal of the Loans to be repaid pursuant to this Section 2.03(b), together with any accrued interest thereon as of the Maturity Date (the "Share Repayment Amount"), divided by (B) the Average Price; (ii) an opinion of counsel for the Borrower (which counsel shall be satisfactory to the Lender) in the form of Exhibit C; (iii) evidence satisfactory to the Lender of the previous expiration or termination of any waiting period (and any extension thereof) applicable to the acquisition by the Lender of the Repayment Shares under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the previous receipt of all governmental and contractual permits, consents and approvals necessary in connection with such acquisition; (iv) evidence satisfactory to the Lender of Borrower's compliance with Section 2.03(c); and (v) a certified or official bank check in same day funds equal to the difference of (A) the aggregate principal amount of the Loans, together with any accrued interest as of the Maturity Date, minus (B) the Share Repayment Amount. (c) The Borrower shall pay all transfer, stamp and other similar taxes that may be imposed in respect of the issuance or delivery of the Repayment Shares pursuant to Section 2.03(b) and any and all filing fees incurred by the Lender pursuant to Section 2.03(b)(iv). Section II.4. Prepayment. The Borrower may prepay portions of the Loans by giving notice to the treasurer of the Lender, by telephone, telecopy or in writing, not later than 12:00 Noon (if not in writing, to be so confirmed not later than 2:00 P.M.), New York time, on the Business Day preceding the proposed date of prepayment. Each such prepayment shall be in an aggregate principal amount of ***** or integral multiples of *****in excess thereof (or if the aggregate amount of outstanding Loans is less than *****, then all of such lesser amount), together with accrued interest on the principal being prepaid to the date of prepayment; provided, however, that in the case of any prepayment pursuant to Section 7.02(n), 7.02(o) or 7.02(p), such prepayment shall be in an aggregate principal amount equal to ***** of the Net Available Asset Disposition Proceeds, ***** of the Net Available Securities Offering Proceeds or ***** of the amount of the Surplus, as the case may be, in any such case together with accrued interest on the principal being repaid to the date of prepayment, up to but not in excess of the aggregate principal amount of, and accrued interest on, the outstanding Loans. Each partial prepayment shall be applied to the principal amount of the Loan or Loans designated by the Lender in its sole discretion, and the Lender will provide Borrower with reasonable notice concerning such designation. Prepaid Loans may not be reborrowed. ARTICLE III Interest Section III.1. Interest on Loans. (a) Each Loan shall bear interest from the date made until the date repaid, payable pursuant to Section 3.01(b), at a rate per annum equal to the Base Rate in effect from time to time, which rate shall change as and when said Base Rate shall change. (b) Interest on the Loans shall be payable in arrears on the last day of each Calendar Quarter of each year (each such day, a "Quarterly Payment Date"), commencing with the first such Quarterly Payment Date after the Original Effective Time, and on the date such Loan is repaid or prepaid, in the manner set forth in Section 4.01 or, if and only if permitted below, by the delivery of a Note evidencing an additional loan made pursuant to this Agreement and having a principal amount equal to the amount of such interest, as set forth below. *****Confidential Treatment Requested. (i) All interest on Loans (including Additional Loans) payable on any Quarterly Payment Date shall be paid in the manner set forth in Section 4.01; provided that if and only if EBITDA for the Calendar Quarter ending on such Quarterly Payment Date does not exceed the amount of such interest as is payable on such Quarterly Payment Date, then, subject to Section 3.01(b)(ii), on or prior to the fifth Business Day following such Quarterly Payment Date, the Borrower shall execute and deliver to the treasurer of the Lender a Note having a principal amount equal to the aggregate amount of all interest on Loans (including Additional Loans) payable on such Quarterly Payment Date. Each such Note shall evidence an additional loan made pursuant to this Agreement and shall bear interest in the manner and at the rate set forth in Section 3.01(a), which interest shall be payable in the manner set forth in this Section 3.01(b). (ii) The Borrower shall not be entitled to pay interest on Loans in the manner set forth in Section 3.01(b)(i) in respect of interest payable on any of: (A) the two Quarterly Payment Dates immediately following the closing of a primary offering or sale of securities by the Borrower in which the Net Available Securities Offering Proceeds from such offering or sale equals or exceeds $5,000,000 but is less than $10,000,000; (B) the three Quarterly Payment Dates immediately following the closing of a primary offering or sale of securities by the Borrower in which the Net Available Securities Offering Proceeds from such offering or sale equals or exceeds $10,000,000 but is less than $15,000,000; and (C) the four Quarterly Payment Dates immediately following the closing of a primary offering or sale of securities by the Borrower in which the Net Available Securities Offering Proceeds from such offering or sale equals or exceeds $15,000,000. (c) No Warrants shall be issuable in connection with any Additional Loan. Section III.2. Interest on Overdue Amounts. All overdue amounts (including principal, interest and fees) hereunder, and, during the continuance of any Event of Default that shall have occurred, each Loan shall bear interest, payable on demand, at a rate per annum equal to the sum of (i) 10% and (ii) the rate of interest applicable to such Loan, changing as and when such rate shall change. Section III.3. Day Counts. Interest on Loans shall be calculated on the basis of (a) a 365- or, if applicable, a 366-day year for the actual number of days elapsed. Section III.4. Maximum Interest Rate. (a) Nothing in this Agreement shall require the Borrower to pay interest at a rate exceeding the maximum rate permitted by applicable law. (b) If the amount of interest payable to the Lender on any interest payment date in respect of the immediately preceding interest computation period, computed pursuant to this Article III, would exceed the maximum amount permitted by applicable law to be charged by the Lender, the amount of interest payable for its account on such interest payment date shall automatically be reduced to such maximum permissible amount. (c) If the amount of interest payable to the Lender in respect of any interest computation period is reduced pursuant to Section 3.04(b) and the amount of interest payable for its account in respect of any subsequent interest computation period would be less than the maximum amount permitted by law to be charged by the Lender, then the amount of interest payable in respect of such subsequent interest computation period shall be automatically increased to such maximum permissible amount; provided that at no time shall the aggregate amount by which interest paid to the Lender has been increased pursuant to this Section 3.04(c) exceed the aggregate amount by which interest paid to the Lender has theretofore been reduced pursuant to Section 3.04(b). ARTICLE IV Disbursement and Payment Section IV.1. Method and Time of Payments. (a) Except as specifically permitted by Section 3.01(b), and except in the case of payments pursuant to Sections 3.02, 4.02, 4.03, 4.04 or payments otherwise specified as payable upon demand, which payments shall be made forthwith upon written demand therefor, all payments by the Borrower hereunder shall be made without setoff or counterclaim to the Lender in dollars and in immediately available funds at the office of the Lender theretofore designated in writing to the Borrower not later than 2:00 p.m., New York time, on the date when due. (b) Whenever any payment from the Borrower shall be due on a day that is not a Business Day, the date of payment thereof shall be extended to the next succeeding Business Day. If the date for any payment of principal is extended by operation of law or otherwise, interest thereon shall be payable for such extended time. (c) Promptly upon receipt of a request by the Borrower therefor (which request may be made by telephone to the treasurer or any assistant treasurer of Pharmacia Corporation) the Lender shall confirm the Lender's calculation of the amount of any payment due on a particular date. Section IV.2. Compensation for Losses. If the Borrower revokes any Borrowing Request, then the Borrower shall reimburse the Lender, promptly upon demand therefor, for all fees and costs actually incurred or paid by the Lender to third parties in respect of funds obtained by the Lender for the purpose of making or maintaining the related Loan, or any portion thereof. If requested by the Borrower, Lender shall provide to the Borrower reasonable documentation concerning such fees and costs. Section IV.3. Withholding. All payments under this Agreement and under the Notes (including payments of principal and interest) shall be payable to the Lender free and clear of any and all present and future taxes, levies, imposts, duties, deductions, withholdings, fees, liabilities and similar charges other than Excluded Taxes (collectively, "Taxes"). If any Taxes are required to be withheld or deducted from any amount payable under this Agreement, then the amount payable under this Agreement shall be increased to the amount which, after deduction from such increased amount of all Taxes required to be withheld or deducted therefrom, will yield to the Lender the amount stated to be payable under this Agreement; provided, however, that amounts payable under this Agreement shall not be increased in respect of any Taxes required to be withheld or deducted solely as a consequence of the Lender's status as a nonresident alien, as such term is defined in the Code. The Borrower shall also hold the Lender harmless and indemnify it for any stamp or other taxes with respect to the preparation, execution, delivery, recording, performance or enforcement of the Credit Documents (all of which shall be included within "Taxes"). If any of the Taxes specified in this Section 4.03 are paid by the Lender, the Borrower shall, upon demand of the Lender, promptly reimburse the Lender for such payments, together with any interest, penalties and expenses incurred in connection therewith. The Borrower shall deliver to the Lender certificates or other valid vouchers for all Taxes or other charges deducted from or paid with respect to payments made by the Borrower hereunder. Section IV.4. Expenses; Indemnity. (a) The Borrower agrees to pay or reimburse the Lender for all reasonable costs and expenses incurred in connection with the enforcement or preservation of any rights under this Agreement, any other Credit Documents, and any such other documents, including, without limitation, the reasonable fees and disbursements of counsel to the Lender (but excluding fees and disbursements incurred on or prior to the date hereof in negotiating and preparing the Credit Documents); provided, however, that in the event of any litigation between the Borrower and the Lender initiated prior to any Event of Default specified in Section 8.01(g) or (h) and arising out of the matters set forth in Section 4.04(b)(i), the fees and disbursements of counsel to the Lender shall be borne by the Borrower if and only if the Lender is the prevailing party. The Borrower also agrees to indemnify the Lender against any transfer taxes, documentary taxes, assessments or charges made by any Governmental Authority by reason of the execution and delivery of any Credit Document. (b) The Borrower agrees to indemnify the Lender and its directors, officers, employees, agents and Affiliates (for purposes of this paragraph, each, an "Indemnitee") against, and to hold each Indemnitee harmless from, any and all claims, liabilities, damages, losses, costs, charges and expenses (including fees and expenses of counsel) incurred by or asserted against any Indemnitee arising out of, in any way connected with, or as a result of (i) the execution or delivery of any Credit Document or any agreement or instrument contemplated by any Credit Document, the performance by the parties hereto or thereto of their respective obligations under any Credit Document, the enforcement or preservation by the parties thereto of their respective rights under any Credit Document or the consummation of the transactions contemplated by any Credit Document, (ii) the use of the proceeds of the Loans or (iii) any claim, litigation, investigation or proceeding relating to any of the foregoing, whether or not any Indemnitee is a party thereto. The provisions of this Section 4.04(b) shall not operate or be construed to indemnify the Lender against, or hold it harmless from, any claims, liabilities, damages, losses, costs, charges and expenses (including fees and expenses of counsel) incurred by or asserted against the Lender arising out of or connected with any litigation initiated prior to any Event of Default specified in Section 8.01(g) or (h) solely between the Borrower and the Lender in which the Lender is not the prevailing party. (c) All amounts due under this Section 4.04 shall be payable in immediately available funds upon written demand therefor within two Business Days of such written demand; provided, however, that all amounts due under this Section 4.04 shall bear interest at the Base Rate from the date of such written demand. Section IV.5. Survival. The provisions of Sections 4.02, 4.03, 4.04 and this Section 4.05 shall remain operative and in full force and effect regardless of the termination of this Agreement or expiration of the term of this Agreement, the consummation of the transactions contemplated hereby, the repayment of any of the Loans, the invalidity or unenforceability of any term or provision of any Credit Document, or any investigation made by or on behalf of the Lender. ARTICLE V Representations and Warranties Section V.1. Representations and Warranties. The Borrower represents and warrants to the Lender as follows: (a) Subsidiaries. At the date hereof, the Borrower has no Subsidiaries other than those Persons listed on Schedule 5.01(a). (b) Good Standing and Power. The Borrower and each of its Subsidiaries is a corporation, duly incorporated and validly existing in good standing under the laws of the jurisdiction of its incorporation; each has the corporate power to own its property and to carry on its business as now being conducted; and each is duly qualified to do business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it therein or in which the transaction of its business makes such qualification necessary, except where the failure to be so qualified, or to be in good standing, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. (c) Corporate Authority. The Borrower has full corporate power and authority to execute and deliver, and to incur and perform its obligations under, each of the Credit Documents, all of which have been duly authorized by all proper and necessary corporate action. No consent or approval of stockholders is required as a condition to the validity or performance of, or the exercise by the Lender of any of its rights or remedies under, any Credit Document. (d) Authorizations. All authorizations, consents, approvals, registrations, notices, exemptions and licenses with or from any Governmental Authority or other Person necessary for the execution, delivery and performance by the Borrower of, and the incurrence and performance of each of its obligations under, each of the Credit Documents, and the exercise by the Lender of its remedies under each of the Credit Documents have been effected or obtained and are in full force and effect. (e) Binding Obligation. This Agreement constitutes and, when issued in accordance with the terms hereof, each Note will constitute the valid and legally binding obligation of the Borrower enforceable in accordance with its terms, subject as to enforcement to bankruptcy, insolvency, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. (f) Litigation. There are no proceedings or investigations now pending or, to the knowledge of the Borrower, threatened before any court or arbitrator or before or by any Governmental Authority which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. (g) No Conflicts. There is no statute, regulation, rule, order or judgment, and no provision of any agreement or instrument binding upon the Borrower or any of its Subsidiaries, or affecting their properties, and no provision of the certificate of incorporation or bylaws (or similar constitutive instruments) of the Borrower or any of its Subsidiaries, that would prohibit, conflict with or in any way impair the execution or delivery of, or the incurrence or performance of any obligations of the Borrower under, any Credit Document, or result in or require the creation or imposition of any Lien on property of the Borrower or any of its Subsidiaries as a consequence of the execution, delivery and performance of any Credit Document. (h) Financial Condition. (i) Except as disclosed in filings made by the Borrower with the SEC prior to the date hereof or in that certain letter, dated the date hereof, from an officer of the Borrower to an employee of the Lender making reference to this Section (such filings and such press releases collectively, the "Disclosure Package"), the consolidated balance sheet of the Borrower as of December 31, 2000, together with consolidated statements of income, shareholders' equity and cash flows for the fiscal year then ended, reported upon by Ernst & Young LLP, heretofore delivered to the Lender, present fairly, in all material respects, the Borrower's consolidated financial condition and consolidated results of operations as of the dates and for the periods referred to and have been prepared in accordance with GAAP consistently applied throughout the period involved. There are no material liabilities (whether known or unknown, direct or indirect, fixed or contingent, and of any nature whatsoever) of the Borrower or any of its Subsidiaries as of the date of such balance sheet that are not reflected therein or in the notes thereto. (ii) Except as disclosed in the Disclosure Package, there has been no material adverse change in the business, properties, condition (financial or otherwise) or operations, present or prospective, of the Borrower and its Subsidiaries since December 31, 2000. Except as disclosed in the Disclosure Package, since December 31, 2000, there has not occurred or arisen any event, condition or circumstance that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. (i) Taxes. Each of the Borrower and its Subsidiaries has filed or caused to be filed all tax returns that are required to be filed and paid all taxes that are required to be shown to be due and payable on said returns or on any assessment made against it or any of its property and all other taxes, assessments, fees, liabilities, penalties or other charges imposed on it or any of its property by any Governmental Authority, except for any taxes, assessments, fees, liabilities, penalties or other charges which are being contested in good faith and (unless the amount thereof is not material to the Borrower's consolidated financial condition) for which adequate reserves have been established in accordance with GAAP. (j) Use of Proceeds. The proceeds of the Loans will be used by the Borrower for general corporate purposes. (k) Margin Regulations. The making of the Loans and the use of the proceeds thereof as contemplated by the Credit Documents will not violate or be inconsistent with any of the provisions of Regulation U, T or X (or any successor regulation or regulations) of the Federal Reserve Board. (l) Compliance with ERISA. Each member of the ERISA Group is in compliance with the applicable provisions of ERISA and the Code with respect to each Plan, except for any failure so to comply that, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. No member of the ERISA Group has (i) an accumulated funding deficiency under Section 412 of the Code in respect of any Pension Plan, whether or not waived, (ii) failed to make any contribution or payment to any Pension Plan, or made any amendment to any Pension Plan, which has resulted or could result in the imposition of a Lien or the posting of a bond or other security under Section 302(f) of ERISA or Section 401(a)(29) of the Code, (iii) incurred any liability under Title IV of ERISA other than a liability to the PBGC for premiums under Section 4007 of ERISA, all of which have been paid or (iv) engaged in a transaction with respect to a Plan, which (assuming the taxable period of such transaction, within the meaning of Section 4975(f)(2) of the Code, to have expired as of the date hereof) has resulted or could reasonably be expected to result in such member being subject to a material tax or penalty imposed by Section 4975 of the Code or Section 502 of ERISA. (m) Not an Investment Company. Neither the Borrower nor any of its Subsidiaries is (i) an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended, or (ii) subject to regulation under the Public Utility Holding Company Act of 1935, the Federal Power Act, each as amended, or any foreign, federal, state or local statute or regulation limiting its ability to incur indebtedness for money borrowed as contemplated hereby. (n) Properties. Each of the Borrower and its Subsidiaries has good and marketable title to, or valid leasehold interests in, all of its respective properties and assets (excluding intellectual property) that are reflected on the consolidated balance sheet of the Borrower as of December 31, 2000 referred to in Section 5.01(h), except for such immaterial properties and assets as have been disposed of in the ordinary course of business and except for minor defects in title that do not interfere with the ability of the Borrower or any of its Subsidiaries to conduct its business as now conducted. Except as set forth in the Disclosure Package, the Borrower and its Subsidiaries own or are licensed to use or otherwise have the right to use (or could obtain such ownership or licences or rights on terms not materially adverse to the Borrower and its Subsidiaries, taken as a whole) all of the intellectual property rights that are reasonably necessary for the operation of their respective businesses. All such assets and properties are so owned or held free and clear of all Liens, except Permitted Liens. (o) Compliance with Laws and Charter Documents. (i) As a result of the Borrower's performing any of its obligations under the Credit Documents, neither the Borrower nor any of its Subsidiaries will be in violation of (a) any law, statute, rule, regulation or order of any Governmental Authority (including Environmental Laws) applicable to it or its properties or assets or (b) its certificate of incorporation or bylaws. (ii) Neither the Borrower nor any of its Subsidiaries is in violation of (A) any law, statute, rule, regulation or order of any Governmental Authority (including Environmental Laws) applicable to it or its properties, except for any violations which could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, or (B) its certificate of incorporation or bylaws. (iii) Each of the Borrower and its Subsidiaries has all authorizations, consents, approvals, registrations, franchises, licenses and permits, with or from Governmental Authorities and other Persons as are necessary for it to own its properties and conduct its business as now conducted and the absence of which could reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. (p) Environmental Protection. To the Borrower's knowledge, based upon reasonable investigation, all real property owned or leased by the Borrower or any of its Subsidiaries is free of contamination from any substance that could result in the incurrence of material liabilities, or constituent thereof, currently identified or listed as hazardous or toxic pursuant to the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. 9601, et seq., or any other Environmental Laws, or any other substance which has in the past or could at any time in the future cause or constitute a health, safety or environmental hazard to any person or property, including asbestos in any building, petroleum products, PCBs, pesticides, or radioactive materials. To the Borrower's knowledge, based upon reasonable investigation, neither the Borrower nor any of its Subsidiaries has caused or suffered to occur any release of any Hazardous Substance into the environment or any other conditions that, individually or in the aggregate, could reasonably be expected to result in the incurrence of material liabilities or any material violations of any Environmental Laws. To the Borrower's knowledge, based upon reasonable investigation, neither the Borrower nor any of its Subsidiaries has caused or suffered to occur any condition on any of their property that could give rise to the imposition of any lien under the Environmental Laws. Except as disclosed in the Disclosure Package, to the Borrower's knowledge, based on reasonable investigation, neither the Borrower nor any Subsidiary is engaged in any manufacturing or any other operations, other than the use of petroleum products for vehicles, that require the use, handling, transportation, storage or disposal of any Hazardous Substance, where such operations require permits or are otherwise regulated pursuant to the Environmental Laws. (q) Insurance. All of the properties and operations of the Borrower and each of its Subsidiaries of a character usually insured by companies of established reputation engaged in the same or a similar business similarly situated are adequately insured, by financially sound and reputable insurers, against loss or damage of the kinds and in amounts customarily insured against by such Persons, and the Borrower and each of its Subsidiaries carry, with such insurers in customary amounts, such other insurance as is usually carried by companies of established reputation engaged in the same or a similar business similarly situated. (r) Adverse Contracts. Except as disclosed in the Disclosure Package, neither the Borrower nor any of its Subsidiaries is a party to, nor is it or any of its property subject to or bound by, any agreement or instrument which restricts its ability to conduct its business, or could reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. (s) Solvency. After giving effect to Loans and the other transactions contemplated hereby, and after payment of all estimated legal, investment banking, accounting and other fees related thereto, the Borrower and its Subsidiaries on a consolidated basis will be Solvent. After giving effect to Loans and the other transactions contemplated hereby, and after payment of all estimated legal, investment banking, accounting and other fees related thereto, the Borrower and its Subsidiaries on a consolidated basis will not be insolvent (as defined in any of Uniform Laws Annotated, Uniform Fraudulent Transfer Actss. 2 (West 1985); Cal. Civ. Codess. 3439.02; and Del. Code Ann. tit. 6,ss. 1302. (t) Disclosure. All information relating to the Borrower or its Subsidiaries delivered in writing to the Lender in connection with the negotiation, execution and delivery of this Agreement and the other Credit Documents, taken together with the information set forth in the Disclosure Package, is true and complete in all material respects. There is no material fact of which the Borrower is aware which, individually or in the aggregate, would reasonably be expected adversely to influence the Lender's credit analysis relating to the Borrower and its Subsidiaries which has not been disclosed to the Disclosure Package. Section V.2 Survival. All representations and warranties made by the Borrower in this Agreement, and in the certificates or other instruments prepared or delivered in connection with or pursuant to this Agreement, shall (i) be considered to have been relied upon by the Lender, (ii) survive the making of Loans regardless of any investigation made by, or on behalf of, the Lender, and (iii) continue in full force and effect so long as any Loan, or other amount payable under any Credit Document remains unpaid. ARTICLE VI Conditions Precedent Section VI.1. Conditions to the Availability of the Commitment. The obligations of the Lender under the Original Credit Agreement were subject to the conditions precedent set forth in Section 6.01 and Section 6.02 of the Original Credit Agreement, and no Original Quarterly Loans were made until the Original Effective Time. The obligations of the Lender pursuant to Section 2.01 are subject to, and no Term Loans shall be made until, the earliest time (the "Effective Time") on which each of the following conditions precedent shall have been either satisfied or waived in writing by the Lender: (a) This Agreement. This Agreement shall have been duly executed and delivered by each of the Lender and the Borrower and each of the other Credit Documents shall have been duly executed and delivered by each of the parties thereto. (b) Evidence of Corporate Action. The Lender shall have received the following: (i) a copy of the Certificate of Incorporation, of the Borrower, as in effect on the Effective Time, certified by the Secretary of State of the State of Delaware, and a certificate from such Secretary of State as to the good standing of the Borrower, in each case as of a date reasonably close to the Effective Time; and (ii) a certificate of the Secretary or an Assistant Secretary of the Borrower, dated the Effective Time, and stating (A) that attached thereto is a true and complete copy of the bylaws of the Borrower as in effect on such date and at all times since the date of the resolutions described in clause (B) below, (B) that attached thereto is a true and complete copy of resolutions duly adopted by the Board of Directors of the Borrower authorizing the execution, delivery and performance of this Agreement, and that such resolutions have not been modified, rescinded or amended and are in full force and effect, (C) that the certificate of incorporation of the Borrower has not been amended since the date of the last amendment thereto shown on the certificate of good standing furnished pursuant to clause (i) above, and (D) as to the incumbency and signature of each officer executing this Agreement or any document delivered in connection herewith on behalf of the Borrower. (c) Opinions of Counsel. The Lender shall have received a favorable written opinion, dated the Effective Time, of Nida & Maloney LLP, counsel for the Borrower, in substantially the form of Exhibit D. (d) Representations and Warranties. The representations and warranties contained in Section 5.01 shall be true and correct on the Effective Time, and the Lender shall have received a certificate, signed by a Responsible Officer of the Borrower, to that effect. (e) Other. The Lender shall have received such other certificates, opinions and other documents as the Lender reasonably may require, and the closing contemplated by the Asset Purchase Agreement, dated as of the date hereof, between the Company and Pharmacia & Upjohn Company, shall have occurred. Section VI.2. Conditions to All Loans. The obligation of the Lender to make each Loan are subject to the conditions precedent that, on the date of each Loan and after giving effect thereto, each of the following conditions precedent shall have been satisfied, or waived in writing by the Lender: (a) Borrowing Request. The Lender shall have received a Borrowing Request in accordance with the terms of this Agreement. (b) Note. The Lender shall have received a duly executed Note in the form of Exhibit B, dated as of the Borrowing Date and evidencing a Loan in an aggregate principal equal to the Borrowing Amount. (c) Warrant Certificate. The Borrower shall have duly issued to the Lender a number of Warrants equal to the Warrant Number in connection with such Loan and shall have duly executed and delivered to the Lender a Warrant Certificate evidencing such Warrants. (d) No Default. No Default or Event of Default shall have occurred and be continuing, nor shall any Default or Event of Default occur as a result of the making of such Loan. (e) Representations and Warranties; Covenants. The representations and warranties contained in Section 5.01 shall have been true and correct when made and (except to the extent that any representation or warranty speaks as of a date certain, in which case such representation and warranty shall be true and correct as of such date) shall be true and correct on the Borrowing Date with the same effect as though such representations and warranties were made on such Borrowing Date; and the Borrower shall have complied with all of its covenants and agreements under the Credit Documents. (f) Monthly Statements. Lender shall have timely received all financial statements prepared by Borrower for Lender pursuant to Section 7.01(a)(viii). Section VI.3. Additional Condition to Post-Event Loans. The obligation of the Lender to make each Post-Event Loan is subject to the conditions precedent set forth in Section 6.02 and the additional condition precedent that, prior to the date of such Post-Event Loan, (i) the Borrower, the Lender or one of their respective Affiliates shall have reached the Endpoint in the Clinical Studies or (ii) the Lender or one of its Affiliates shall have filed a New Drug Application with respect the Clinical Studies. Section VI.4. Satisfaction of Conditions Precedent. Each of (i) the delivery by the Borrower of a Borrowing Request (unless the Borrower notifies the Lender in writing to the contrary prior to the Borrowing Date) and (ii) the acceptance of the proceeds of a Loan shall be deemed to constitute a certification by the Borrower that, as of the Borrowing Date, each of the conditions precedent contained in Sections 6.02(d), (e) and (f) has been satisfied with respect to any Loans then being made. ARTICLE VII Covenants Section VII.1. Affirmative Covenants. Until satisfaction in full of all the obligations of the Borrower under the Credit Documents, the Borrower will: (a) Financial Statements; Compliance Certificates. Furnish to the Lender: (i) as soon as available, but in no event more than 60 days following the end of each of the first three quarters of each fiscal year, copies of the Borrower's Quarterly Report on Form 10-Q being filed with the SEC, which shall include a consolidated balance sheet and consolidated income statement of the Borrower and its Subsidiaries for such quarter; (ii) as soon as available, but in no event more than 100 days following the end of each fiscal year, a copy of the Borrower's Annual Report on Form 10-K being filed with the SEC, which shall include the consolidated financial statements of the Borrower and its Subsidiaries, together with a report thereon by Ernst & Young LLP (or another firm of independent certified public accountants reasonably satisfactory to the Lender), for such year; (iii) together with each report delivered pursuant to Sections 7.01(a)(i) and (ii), a certificate of the Borrower, signed by a Responsible Officer, in substantially the form of Exhibit E, stating whether, as of the last date of the financial statements included in such report, any event has occurred or circumstance existed which, individually or in the aggregate, constituted a Default or Event of Default (and, if so, detailing the facts with respect thereto) and whether the Borrower was in compliance with the covenants set forth in this Article VII, together with calculations to establish the Borrower's compliance with the covenants contained in Section 7.03; (iv) promptly upon the filing by the Borrower with the SEC or any national securities exchange or national quotation system of any registration statement (other than a registration statement on Form S-8 or an equivalent form) or regular periodic report (other than the reports referred to in Sections 7.01(a)(i) and (ii)), notification of such filing; and, at the request of any Lender, the Borrower shall deliver to such Lender a copy of such filing (excluding exhibits); (v) promptly upon the mailing thereof to the shareholders of the Borrower generally copies of all financial statements, reports and proxy statements so mailed; (vi) within five Business Days of any Responsible Officer of the Borrower obtaining knowledge of any Default or Event of Default of any type specified in Section 8.01(a), (b), (d), (f), (g), (h) or (l), if such Default or Event of Default is then continuing, a certificate of a Responsible Officer of the Borrower stating that such certificate is a "Notice of Default" and setting forth the details thereof and the action which the Borrower is taking or proposes to take with respect thereto; (vii) within ten Business Days of any Responsible Officer of the Borrower obtaining knowledge of any Default or Event of Default of any type specified in Section 8.01(c),(e), (i), (j) or (k), if such Default or Event of Default is then continuing, a certificate of a Responsible Officer of the Borrower stating that such certificate is a "Notice of Default" and setting forth the details thereof and the action which the Borrower is taking or proposes to take with respect thereto; (viii) following the Effective Time, within ten Business Days after the end of each calendar month, Borrower shall deliver to the Treasurer or any assistant treasurer and to the Vice President, Research and Development Finance of Pharmacia Corporation financial statements prepared based on the accrual method of accounting and prepared in accordance with the same GAAP principles and format used by Borrower in preparation of the financial statements it files with the SEC; and (ix) such additional information, reports or statements, regarding the business, financial condition or results of operations of the Borrower and its Subsidiaries, as the Lender from time to time may reasonably request. (b) Corporate Existence. Except as permitted by Section 7.02(a), maintain, and cause each Subsidiary to maintain, its corporate existence in good standing and qualify and remain qualified to do business in each jurisdiction in which the character of the properties owned or leased by it therein or in which the transaction of its business is such that the failure to qualify, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. (c) Conduct of Business. Engage in as its principal business the development of photoselective drugs and light producing and light delivery medical devices and related or ancillary businesses, including but not limited to the businesses of the Borrower described in the Disclosure Package; preserve, renew and keep in full force and effect, and cause each of its Subsidiaries to preserve, renew and keep in full force and effect, all franchises and licenses necessary or desirable in the normal conduct of its and its Subsidiaries' business and the loss of which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect; and comply, and cause each of its Subsidiaries to comply, with all applicable laws, orders, rules and regulations of all Governmental Authorities the failure with which so to comply, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. (d) Authorizations. Obtain, make and keep in full force and effect all authorizations from and registrations with Governmental Authorities required for the validity or enforceability of the Credit Documents. (e) Taxes. Pay and discharge, and cause each of its Subsidiaries to pay and discharge, all taxes, assessments and governmental charges upon it, its income and its properties prior to the date on which penalties are attached thereto, except to the extent that (i) such taxes, assessments and governmental charges shall be contested in good faith and by appropriate proceedings by the Borrower or such Subsidiary, as the case may be, (ii) unless the amount thereof is not material to the Borrower's consolidated financial condition, adequate reserves are maintained (in accordance with GAAP) by the Borrower or such Subsidiary, as the case may be, with respect thereto, and (iii) any failure to pay and discharge such taxes, assessments and governmental charges could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. (f) Insurance. Maintain, and cause each of its Subsidiaries to maintain, insurance with reputable insurance companies against such risks, of such types (including general liability), on such properties and in such amounts as is customarily maintained by similar businesses similarly situated, and provide to the Lender a certificate or certificates of insurance showing that the Lender has been named as loss payee by endorsement to the policies for such insurance. (g) Inspection. Permit, and cause each of its Subsidiaries to permit, upon no fewer than five Business Days' notice, the Lender to have one or more of their officers and employees, or any other Person designated by the Lender, to visit and inspect any of the properties of the Borrower and such Subsidiary and to examine the minute books, books of account and other corporate and financial records of the Borrower and such Subsidiary, and discuss its affairs, finances and accounts with its officers and with the Borrower's independent accountants, during normal business hours and at such other reasonable times, for the purpose of monitoring the Borrower's compliance with its obligations under agreements to which the Lender is a party and for no other purpose. (h) Maintenance of Records. For the Borrower and each of its Subsidiaries (i) keep proper books of record and account in which entries sufficient to provide financial statements in accordance with GAAP will be made of all dealings or transactions of or in relation to its business and affairs; (ii) set up on its books reserves with respect to all taxes, assessments, charges, reviews and claims; and (iii) on a current basis, set up on its books, from its earnings, appropriate reserves against doubtful accounts receivable, advances and investments and all other proper reserves (including by reason of enumeration, reserves for premiums, if any, due on required prepayments and reserves for depreciation, obsolescence, or amortization of properties), which should be set aside from such earnings in connection with its business. (All determinations pursuant to this Section 7.01(h) shall be made in accordance with, or as required by, GAAP.) (i) Maintenance of Property. Maintain, keep and preserve and cause each of its Subsidiaries to maintain, keep and preserve all of its properties in good repair, working order and condition and from time to time make all necessary and proper repairs, renewals, replacements, and improvements thereto, except to the extent that any failure so to maintain, keep and preserve such properties, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. (j) ERISA. Furnish to the Lender: (i) within ten days after a Responsible Officer learns that any "reportable event" (as defined in Section 4043(c) of ERISA), other than a reportable event for which the 30-day notice requirement has been waived by the PBGC, has occurred with respect to a Pension Plan, a statement setting forth details as to such reportable event and the action proposed to be taken with respect thereto; (ii) within ten days after receipt thereof, a copy of any notice that any member of the ERISA Group may receive from the PBGC relating to the intention of the PBGC to terminate any Pension Plan or to appoint a trustee to administer any Plan; (iii) within ten days after filing with any affected party (as such term is defined in Section 4001 of ERISA) of a notice of intent to terminate a Pension Plan, a copy of such notice and a statement setting forth the details of such termination, including the amount of liability, if any, of any member of the ERISA Group under Title IV of ERISA; (iv) within ten days after the adoption of a material amendment to a Pension Plan if, after giving effect to such amendment, the Pension Plan is a plan described in Section 4021(b) of ERISA, a statement setting forth the details thereof; (v) within 30 days after withdrawal from a Pension Plan during a plan year for which any member of the ERISA Group could be subject to liability under Section 4063 or 4064 of ERISA, a statement setting forth the details thereof, including the amount of such liability; (vi) within 30 days after cessation of operations by any member of the ERISA Group at a facility under the circumstances described in Section 4062(e) of ERISA, a statement setting forth the details thereof, including the amount of liability of the Borrower or a member of the ERISA Group under Title IV of ERISA; (vii) within ten days after adoption of an amendment to a Pension Plan which would require security to be given to the Pension Plan pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA, a statement setting forth the details thereof, including the amount of such security; (viii) within ten days after failure by any member of the ERISA Group to make payment to a Pension Plan which would give rise to a lien in favor of the Plan under Section 302(f) of ERISA, a statement setting forth the details thereof, including the amount of such lien; (ix) within ten days after the due date for filing with the PBGC, pursuant to Section 412(n) of the Code, of a notice of failure to make a required installment or other payment with respect to a Pension Plan, a statement setting forth details as to such failure and the action proposed to be taken with respect thereto; and (x) within 30 days after receipt thereof by any member of the ERISA Group from the sponsor of a Multiemployer Plan, a copy of each notice concerning the imposition of withdrawal liability or the termination or reorganization of a Multiemployer Plan. (k) Notice of Defaults and Adverse Developments. Promptly notify the Lender upon the discovery by any Responsible Officer of the occurrence of (i) any Default or Event of Default; (ii) any event, development or circumstance whereby the financial statements most recently furnished to the Lender fail to present fairly, in all material respects, and in accordance with GAAP, the financial condition and operating results of the Borrower and its Subsidiaries as of the date of such financial statements; (iii) any material litigation or proceedings that are instituted or threatened (to the knowledge of the Borrower) against the Borrower or any of its Subsidiaries or any of their respective assets; (iv) any event, development or circumstance which, individually or in the aggregate, could reasonably be expected to result in an event or default (or, with the giving of notice or lapse of time or both, an event of default) under any Indebtedness and the amount hereof; and (v) any other development in the business or affairs of the Borrower or any of its Subsidiaries if the effect thereof would reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect; in each case describing the nature thereof and the action the Borrower proposes to take with respect thereto. (l) Environmental Matters. (i) Comply, and cause each of its Subsidiaries to comply, in all material respects with all applicable Environmental Laws, (ii) notify the Lender promptly after becoming aware of any Environmental Claim, or any fact or circumstance that is reasonably likely to result in an Environmental Claim or a material violation of any Environmental Law, with respect to the Borrower's or any of its Subsidiaries' properties or facilities, and (iii) promptly forward to the Lender a copy of any material order, notice, permit, application, or any other communication or report received in connection with any such matters as they may affect such premises. Section VII.2. Negative Covenants. Until satisfaction in full of all the obligations of the Borrower under the Credit Documents, the Borrower will not: (a) Mergers, Consolidations and Sales of Assets. Enter into any merger, consolidation or share exchange, or acquire assets of any Person, or sell, lease or otherwise dispose of any of its assets, or permit any of its Subsidiaries so to do, except that (i) any such Subsidiary may merge or consolidate (A) with or into the Borrower, if the Borrower shall be the continuing or surviving corporation, or (B) with or into any one or more Wholly Owned Subsidiary of the Borrower, (ii) the Borrower or any Subsidiary of the Borrower may make any Asset Disposition to the extent permitted by Section 7.02(n), (iii) on or following the date of the Original Agreement and before the Effective Time, the Borrower or any Subsidiary of the Borrower may acquire assets for cash consideration which, together with all other cash consideration paid by the Borrower or any Subsidiary for assets on or following the date of the Original Agreement and before the Effective Time, does not exceed *****, and may acquire assets in exchange for shares of Common Stock having a market value at the time of issuance which, together with the market value at time of issuance of all other shares of Common Stock issued by the Borrower in consideration for or in connection with the acquisition of assets on or following the date of the Original Agreement and before the Effective Time, does not exceed *****; provided that the amount of Indebtedness assumed or incurred by the Borrower or any Subsidiary of the Borrower in connection with the acquisition of assets on or following the date of this Agreement pursuant to this Section 7.02(a)(iii) may not exceed ***** of the sum of the cash consideration paid, and the market value at time of issuance of Common Stock issued, in consideration therefor or in connection therewith, and (iv) on or following the Effective Time, the Borrower or any Subsidiary of the Borrower may acquire assets for cash consideration which, together with all other cash consideration paid by the Borrower or any Subsidiary for assets on or following the Effective Time, does not exceed *****, and may acquire assets in exchange for shares of Common Stock having a market value at the time of issuance which, together with the market value at time of issuance of all other shares of Common Stock issued by the Borrower in consideration for or in connection with the acquisition of assets on or following the Effective Time, does not exceed *****; provided that the amount of Indebtedness assumed or incurred by the Borrower or any Subsidiary of the Borrower in connection with the acquisition of assets on or following the date of this Agreement pursuant to this Section 7.02(a)(iv) may not exceed ***** of the sum of the cash consideration paid, and the market value at time of issuance of Common Stock issued, in consideration therefor or in connection therewith. ***** Confidential Treatment Requested. (b) Liens. Create, incur, assume or suffer to exist any Lien, other than Permitted Liens, upon or in any of its or any of its Subsidiaries' property or assets, whether now owned or hereafter acquired. (c) Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, or permit any of its Subsidiaries so to do, except: (i) Indebtedness to the Lender under the Credit Documents, (ii) Indebtedness of Borrower or any of its Subsidiaries secured by Liens specifically permitted by Section 7.02(b), (iii) Guaranties to the extent permitted by Section 7.02(d). (iv) Indebtedness existing on the date hereof, (v) Indebtedness of Borrower to any Subsidiary, and Indebtedness of any Subsidiary to Borrower or any other Subsidiary, and (vi) Extension, refinancings, modifications, amendments and restatements of any of items of Permitted Indebtedness (i) through (v) above, provided that the principal amount thereof is not increased. (d) Contingent Liabilities. Assume, Guaranty, endorse, contingently agree to purchase or otherwise become liable upon the obligation of any other Person, or permit any of its Subsidiaries to do so, except: (i) in connection with a merger or consolidation permitted by Section 7.02(a), (ii) by the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business, (iii)Guaranties by the Borrower of contractual obligations ( other that for the payment of Indebtedness) of any of its Wholly Owned Subsidiaries, and (iv) Guaranties existing on the date hereof, but not extensions thereof. (e) Loans and Investments. Manke any Investment or permit any of its Subsidiaries to do so, except: (i) Investments existing on the date of the Original Agreement, (ii) Investments consisting of the endorsement of negotiable instrument for deposit or collection or similar transaction in ordinary course of business, (iii)Investments accepted in connection with asset dispositions permitted by Section 7.02(n), (iv) Investments of the Borrower in or to Subsidiaries of the Borrower or of Subsidiaries of the Borrower in or to other Subsidiaries of the Borrower or in or to the Borrower, (v) Investments consisting of travel advances, employee relocation loans and other employee loans and advances in the ordinary course of business, (vi) Investments consisting of loans to employees, officers or directors of the Borrower or its Subsidiaries outstanding on the date of the Original Agreement and not exceeding an aggregate principal balance of *****, relating to the purchase or equity securities of the Borrower or its Subsidiaries pursuant to employee stock purchase plans approved by the Borrower's Board of Directors, *****Confidential Treatment Requested (vii)Investments consisting of loans to employees, officers or directors of the Borrower or its Subsidiaries made on or subsequent to the date of the Original Agreement and not exceeding an aggregate principal balance of *****, at any time outstanding, (viii) Investments in the form of debt securities or other evidence of Indebtedness of Ramus Medical Technologies acquired or received on or subsequent to the date of the Original Agreement and prior to the date of this Agreement pursuant to agreements or instruments in effect on the date of the Original Agreement and having an aggregate principal amount not exceeding *****, (ix) ***** (x) Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of business, (xi) Investments pursuant to or arising under currency agreements or interest rate agreements entered into in the ordinary course of business, (xii)Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers made or received in the ordinary course of business, and (xiii) Investments in the form of deposit accounts and marketable securities made pursuant to the cash management policy adopted by the Borrower's Board of Directors and furnished to the Lender prior to the date of the Original Agreement. (f) Capital Expenditures. Make any Capital Expenditures, or permit any of its Subsidiaries to do so, exceeding ***** in the aggregate for the Borrower and the Subsidiaries in any one calendar year ending on or prior to December 31, 2000 or ***** in the aggregate for the Borrower and the Subsidiaries for any one calendar year ending after December 31, 2000. *****Confidential Treatment Requested (g) Redemptions, etc. Redeem, defease (including but not limited to legal or covenant defeasance), repurchase, retire or otherwise acquire or retire for value prior to any scheduled maturity, repayment or sinking fund payment, Indebtedness, other than Indebtedness to the Lender under the Credit Documents, or permit any of its Subsidiaries to do so. (h) Dividends and Purchase of Stock. Declare any dividends (other than dividends payable in capital stock of the Borrower) on any shares of any class of capital stock, or purchase, acquire, redeem or retire, or apply any property or assets to the purchase, acquisition, redemption or retirement of, or set apart any sum for the payment of any dividends on, or for the purchase, acquisition, redemption or retirement of, or make any other distribution by reduction of capital or otherwise in respect of, any shares of any class of capital stock of the Borrower or any of its Subsidiaries or any options, warrants or rights to purchase or acquire shares of any class of capital stock of the Borrower or any such Subsidiary, or permit any of its Subsidiaries which is not a Wholly Owned Subsidiary to do so, except that (i) the Borrower may purchase, redeem or otherwise acquire shares of Common Stock pursuant to any agreement existing on the date hereof between it, or any Subsidiary of the Borrower, and any officer, director, employee or consultant to the Borrower or any of its Subsidiaries, in which the Borrower is obligated or has the option to repurchase from such officer, director, employee or consultant shares of Common Stock upon such Person's termination of employment or the services with the Borrower or any such Subsidiary, (ii) the Borrower may convert, exchange or redeem any Indebtedness outstanding on the date hereof which by its terms is convertible or exchangeable or constitutes the right to purchase any shares of any class of capital stock of the Borrower, ***** (i) Stock of Subsidiaries. Sell, pledge or otherwise dispose of any shares of capital stock of any of its Subsidiaries (except in connection with a merger or consolidation of a Wholly Owned Subsidiary of the Borrower permitted by Section 7.02(a) or with the dissolution of any Subsidiary of the Borrower) or permit any of its Subsidiaries to issue any additional shares of capital stock except pro rata to its stockholders. (j) Distributions by Subsidiaries. Suffer to exist, or permit any of its Subsidiaries to suffer to exist, any consensual encumbrance or restriction on the ability of any such Subsidiary (i) to pay, directly or indirectly, dividends or make any other distributions in respect of its capital stock or pay any Indebtedness or other obligation owed to the Borrower or any other Subsidiary of the Borrower; (ii) to make loans or advances to the Borrower or any Subsidiary of the Borrower; or (iii) to transfer any of its property or assets to the Borrower. (k) Related Agreements. Amend, modify or waive, or permit to be amended, modified or waived, any provision of the Key Agreements or the Rights Plan unless, within not less than 30 days prior to such amendment, modification or waiver, the Borrower shall have given the Lender notice thereof, including all relevant terms and conditions thereof, and the Lender shall have consented in writing thereto. (l) Sale and Leaseback Transactions. Enter into, or permit any of its Subsidiaries to enter into any Sale and Leaseback Transaction. *****Confidential Treatment Requested (m) Transactions with Affiliates and Related Persons. Directly or indirectly enter into, or permit any of its Subsidiaries to directly or indirectly enter into, on or following the date hereof, any transaction (including, without limitation, the purchase, sale, lease or exchange of property, the rendering of any service or the making of any loan or advance, but excluding transactions between the Borrower and Wholly Owned Subsidiaries of the Borrower) with any Affiliate or Related Person of the Borrower or any of its Subsidiaries. (n) Asset Dispositions. Make any Asset Disposition, or permit any of its Subsidiaries to make any Asset Disposition, in one or more related transactions, unless (i) the Borrower (or such Subsidiary, as the case may be) receives consideration at the time of such disposition at least equal to the fair market value of the shares or assets disposed of (which shall be as determined in good faith by the Board of Directors and evidenced by a resolution adopted thereby), (ii) the consideration for such disposition consists of cash or readily marketable cash equivalents or the assumption of Indebtedness of the Borrower or other obligations relating to such assets and release from all liability on the Indebtedness or other obligations assumed, and (iii) ***** of the Net Available Asset Disposition Proceeds from such disposition (including from the sale of any marketable cash equivalents received therein) are applied by the Borrower (or such Subsidiary, as the case may be), within two Business Days of the receipt thereof, to prepayment of Loans pursuant to Section 2.04. (o) Securities Offerings. Sell or offer to sell any securities, or permit any of its Subsidiaries to offer or sell any securities, in one or more related transactions, unless (i) the consideration for such disposition consists of cash, and *****Confidential Treatment Requested (ii) ***** of the Net Available Securities Offering Proceeds from such offering or sale are applied by the Borrower (or such Subsidiary, as the case may be), within two Business Days of the receipt thereof, to prepayment of Loans pursuant to Section 2.04. (p) Surplus Cashflows. Fail to apply to the prepayment of Loans pursuant to Section 2.04 at least ***** of the amount (the "Surplus") by which EBITDA in any Calendar Quarter exceeds *****. Section VII.3 Financial Covenants. Until satisfaction in full of all the obligations of the Borrower under the Credit Documents, the Borrower will not: (a) Shareholders' Equity. Permit Shareholders' Equity as of the last day of any Calendar Quarter designated below to be less than the amount set forth opposite such quarter below. Calendar quarter ending Shareholders' Equity March 31, 1999 ***** June 30, 1999 ***** September 30, 1999 ***** December 31, 1999 ***** March 31, 2000 ***** June 30, 2000 ***** Each Calendar Quarter ending after June 30, 2000 and before the ***** Effective Time (b) Current Ratio. At any time on or following the date of the Original Agreement and before the Effective Time permit the ratio of Original Current Assets to Current Liabilities to be less than *****. On or following the date hereof, permit the ratio of Current Assets to Current Liabilities to be less than: *****Confidential Treatment Requested (i) *****as of March 31, 2001; (ii) *****as of June 30, 2001; (iii) *****as of September 30, 2001; and (iv) *****as of December 31, 2001 and as of each Calendar Quarter thereafter. (c) ***** (d) ***** (e) ***** (f) Cash Balance. Permit the Cash Balance as of the last day of any Calendar Quarter designated below to be less than the amount set forth opposite such quarter below. Calendar quarter ending Cash Balance March 31, 2001 ***** June 30, 2001 ***** September 30, 2001 ***** December 31, 2001 ***** Each Calendar Quarter ending after ***** December 31, 2001 *****Confidential Treatment Requested ARTICLE VIII Events of Default Section VIII.1. Events of Default. If one or more of the following events (each, an "Event of Default") shall occur: (a) the Borrower shall fail duly to pay any principal of any Loan when due, whether at maturity, by notice of intention to prepay or otherwise; or (b) the Borrower shall fail duly to pay any interest, fee or any other amount payable under the Credit Documents within five Business Days after the same shall be due, in the manner set forth in this Agreement; or (c) the Borrower shall fail duly to observe or perform any term, covenant, or agreement contained in Section 7.02 or 7.03 and such failure shall have continued unremedied for a period of 30 days following written notice to the Borrower thereof; or (d) the Borrower shall fail duly to observe or perform any other term, covenant or agreement contained in this Agreement, and such failure shall have continued unremedied for a period of 30 days following written notice to the Borrower thereof; or (e) any representation or warranty made or deemed made by the Borrower in a Credit Document, or any statement or representation made in any certificate, report or opinion delivered by or on behalf of the Borrower in connection with a Credit Document, shall prove to have been false or misleading in any material respect when so made or deemed made; or (f) the Borrower or any of its Subsidiary shall fail to pay any Indebtedness (other than obligations hereunder) in an amount of *****or more when due; or any such Indebtedness having an aggregate principal amount outstanding of *****or more shall become or be declared to be due prior to the expressed maturity thereof; or (g) an involuntary case or other proceeding shall be commenced against the Borrower or any of its Subsidiaries seeking liquidation, reorganization or other relief with respect to it or its debts under any applicable bankruptcy, insolvency, reorganization or similar law or seeking the appointment of a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of it or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of more than 60 days; or an order or decree approving or ordering any of the foregoing shall be entered and continued unstayed and in effect; or (h) the Borrower or any of its Subsidiaries shall commence a voluntary case or proceeding under any applicable bankruptcy, insolvency, reorganization or similar law or any other case or proceeding to be adjudicated a bankrupt or insolvent, or any of them shall consent to the entry of a decree or order for relief in respect of the Borrower or any such Subsidiary in an involuntary case or proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against any of them, or any of them shall file a petition or answer or consent seeking reorganization or relief under any applicable law, or any of them shall consent to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of the Borrower or any such Subsidiary or any substantial part of their respective property, or any of them shall make an assignment for the benefit of creditors, or any of them shall admit in writing its inability to pay its debts generally as they become due, or the Borrower or any Subsidiary shall take corporate action in furtherance of any such action; or *****Confidential Treatment Requested (i) one or more judgments against the Borrower or any of its Subsidiaries or attachments against its property, which in the aggregate exceed *****, or the operation or result of which could be to interfere materially and adversely with the conduct of the business of the Borrower or any such Subsidiary remain unpaid, unstayed on appeal, undischarged, unbonded, or undismissed for a period of more than 30 days; or (j) notice of intent to terminate a Pension Plan shall have been filed with any affected party (as defined in Section 4001 of ERISA), or notice of an application by the PBGC to institute proceedings to terminate a Pension Plan pursuant to Section 4042 of ERISA shall have been received by any member of the ERISA Group, in each case only if the amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of ERISA) as of the date such notice is filed or received exceeds $500,000; any member of the ERISA Group incurs liability under Sections 4062(e), 4063 or 4064 of ERISA in respect of a Pension Plan in an amount in excess of $1,000,000; an amendment is adopted to a Pension Plan which would require security to be given to such Pension Plan pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA in an amount in excess of $1,000,000; any member of the ERISA Group fails to make a payment to a Pension Plan which would give rise to a Lien in favor of such Plan under Section 302(f) of ERISA in an amount in excess of $500,000; or (k) any court or governmental or regulatory authority shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, judgment, decree, injunction or other order (whether temporary, preliminary or permanent) which is in effect and which prohibits, enjoins or otherwise restricts, in a manner that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, any of the transactions contemplated under the Credit Documents; or *****Confidential Treatment Requested (l) any person or group of persons (within the meaning of Section 13 or 14 of the Securities Exchange Act of 1934, as amended), other than the Lender and its Affiliates and other than any person or group of persons which has beneficial ownership of 5% or more of the outstanding shares of Common Stock as of the date of this Agreement, shall have acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission under said Act) of 19.9% or more of the outstanding shares of Common Stock; or, during any period of 24 consecutive calendar months, individuals who were directors of the Borrower on the first day of such period shall cease to constitute a majority of the board of directors of the Borrower; then, and at any time during the continuance of such Event of Default, the Lender may, by written notice to the Borrower declare any Loans then outstanding to be due, whereupon the principal of the Loans so declared to be due, together with accrued interest thereon and any unpaid amounts accrued under the Credit Documents, shall become forthwith due, without presentment, demand, protest or any other notice of any kind (all of which are hereby expressly waived by the Borrower). Section VIII.2. Assignments. (a) Upon reasonable prior notice having been given to the Borrower, the Lender may at any time assign to one or more of Pharmacia Corporation, Pharmacia Cork Ltd., Pharmacia & Upjohn Company, Pharmacia & Upjohn B.V., Pharmacia & Upjohn AB, Pharmacia Enterprises S.A., Pharmacia Coordination Center N.V. or Pharmacia & Upjohn S.p.A. (any such entity, an "Approved Subsidiary") all, or a proportionate part of all, of its rights and obligations under this Agreement, and such Approved Subsidiary shall assume such rights and obligations, pursuant to a written instrument executed by such Approved Subsidiary and the Lender. If there shall have occurred an Event of Default that is continuing, the Lender may assign to any Person, other than a Person which engages in, as its principal business or one of its principal businesses, the development of photoselective drugs or light producing and light delivery medical devices (any such assignee, or any Approved Subsidiary referred to in the previous sentence being referred to as an "Assignee"), all, or a proportionate part of all, of its rights and obligations under this Agreement, and such Assignee shall assume such rights and obligations, pursuant to a written instrument executed by such Assignee and the Lender. Any such Assignee shall have all the rights and obligations of the Lender, and the Lender shall be released from its obligations hereunder to a corresponding extent, and no further consent or action by any party shall be required. (b) No Assignee of the Lender's rights shall be entitled to receive any greater payment under Section 4.03 or 4.04 than the Lender would have been entitled to receive with respect to the rights transferred, and amounts payable under this Agreement shall not be increased in respect of any Taxes required to be withheld or deducted solely as a consequence of the Lender's status as a nonresident alien, as such term is defined in the Code. Section VIII.3. Certain Pledges. Notwithstanding any other provision in this Agreement, any Lender may at any time create a security interest in, or pledge, all or any portion of its rights under this Agreement and any Note held by it in favor of any Person. ARTICLE IX Miscellaneous SECTION IX.1. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE. SECTION IX.2. WAIVER OF JURY. THE BORROWER AND THE LENDER EACH HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, THE NOTES OR THE RELATIONSHIPS ESTABLISHED HEREUNDER. Section IX.3. Jurisdiction and Venue; Service of Process. (a) The Borrower and the Lender each hereby irrevocably submits to the non-exclusive jurisdiction of any state or federal court in the Borough of Manhattan, The City of New York for the purpose of any suit, action, proceeding or judgment relating to or arising out of any Credit Document and to the laying of venue in the Borough of Manhattan, The City of New York. The Borrower and the Lender each hereby irrevocably waives, to the fullest extent permitted by applicable law, any objection to the laying of the venue of any such suit, action or proceeding brought in the aforesaid courts and hereby irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. (b) The Borrower agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to the Borrower at its address set forth in Section 9.07 or at such other address of which the Lender shall have been notified pursuant thereto. The Borrower further agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue any other jurisdiction. (c) Each of the Borrower and the Lender waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section 9.03 any special, exemplary, punitive or consequential damages. The waiver set forth in this Section 9.03(c) shall terminate automatically upon the occurrence of a "Shares Acquisition Date" as defined in that certain stockholder rights protection plan of Pharmacia Corporation in effect on the date of this Agreement, as it may from time to time be amended. Section IX.4. Set-off. The Borrower hereby authorizes the Lender and each of its Affiliates, upon the occurrence of an Event of Default and at any time and from time to time during the continuance thereof, to the fullest extent permitted by law, to set-off and apply any and all sums payable by such Lender or any such Affiliate to or for the credit or the account of the Borrower or any of its Affiliates against any of the obligations of the Borrower or any of its Affiliates, now or hereafter existing under any Credit Document, irrespective of whether the Lender shall have made any demand under the Original Agreement or this Agreement and although such obligations may be unmatured. The rights of the Lender and its Affiliates under this Section 9.04 are in addition to other rights and remedies (including other rights of set-off) which the Lender and its Affiliates may have. Section IX.5. Amendments and Waivers. (a) Any provision of this Agreement may be amended, modified, supplemented or waived, but only by a written amendment or supplement, or written waiver, signed by the Borrower and the Lender. (b) Except to the extent expressly set forth therein, any waiver shall be effective only in the specific instance and for the specific purpose for which such waiver is given. Section IX.6. Cumulative Rights; No Waiver. Each and every right granted to the Lender hereunder or under any other document delivered in connection herewith, or allowed the Lender by law or equity, shall be cumulative and not exclusive and may be exercised from time to time. No failure on the part of the Lender to exercise, and no delay in exercising, any right will operate as a waiver thereof, nor will any single or partial exercise by the Lender of any right preclude any other or future exercise thereof or the exercise of any other right. Section IX.7. Notices. (a) Any communication, demand or notice to be given hereunder will be duly given when delivered in writing or by telecopy to a party at its address as indicated below or such other address as such party may specify in a notice to each other party hereto. A communication, demand or notice given pursuant to this Section 9.07 shall be addressed: If to the Borrower, to Miravant Medical Technologies 336 Bollay Drive Santa Barbara, California 93117 Telecopy: (805) 685-6038 Attention: Gary S. Kledzik with copies (which, in and of themselves, shall not constitute notice) to Nida & Maloney, LLP 800 Anacapa Street Santa Barbara, California 93101 Telecopy: (805) 568-1955 Attention: Joseph E. Nida and Wilson Sonsini Goodrich & Rosati 650 Page Mill Road Palo Alto, California 94304 Telecopy: (650) 493-6811 Attention: John T. Sheridan If to the Lender, to Pharmacia Treasury Services AB Lindhagensgatan 133 S-112 87 Stockholm, Sweden Telecopy: +46 8 695 47 08 Attention: Associate General Counsel and Pharmacia Corporation 100 Route 206 North Peapack, New Jersey 07977 Telecopy: (908) 901-1830 Attention: Treasurer and Pharmacia Corporation 100 Route 206 North Peapack, New Jersey 07977 Telecopy: (908) Attention: Vice President of Research and Development Finance and Pharmacia Corporation 100 Route 206 North Peapack, New Jersey 07977 Telecopy: (908) 901-1810 Attention: General Counsel with a copy (which, in and of itself, shall not constitute notice) to Sullivan & Cromwell 1870 Embarcadero Road Palo Alto, California 94303 Telecopy: (650) 461-5700 Attention: Matthew G. Hurd This Section 9.07 shall not apply to notices referred to in Article II of this Agreement, except to the extent set forth therein. (b) Unless otherwise provided to the contrary herein, any notice which is required to be given in writing pursuant to the terms of this Agreement may be given by telecopy. Section IX.8. Certain Acknowledgments. The Borrower hereby confirms and acknowledges that the Lender does not have any fiduciary or similar relationship to the Borrower and that the relationship established by the Credit Documents between the Lender and the Borrower is solely that of creditor and debtor and (b) that no joint venture exists between the Borrower and the Lender. Section IX.9. Separability. In case any one or more of the provisions contained in any Credit Document shall be invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions contained herein or in any other Credit Document shall not in any way be affected or impaired thereby. Section IX.10. Parties in Interest. This Agreement shall be binding upon and inure to the benefit of the Borrower and the Lender and their respective successors and assigns, except that the Borrower may not assign any of its rights hereunder without the prior written consent of the Lender, and any purported assignment by the Borrower without such consent shall be void. Section IX.11. Execution in Counterparts. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all the counterparts shall together constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written. MIRAVANT MEDICAL TECHNOLOGIES By: ------------------------------ Name: Title: PHARMACIA TREASURY SERVICES AB By: ------------------------------ Name: Title: By: ------------------------------ Name: Title: Schedule 5.01(a) Subsidiaries of the Borrower Miravant Pharmaceuticals, Inc. Miravant Cardiovascular, Inc. Miravant Systems, Inc. A-2 Exhibit A Form of Borrowing Request [Date]* Pharmacia Corporation 100 Route 206 North Peapack, New Jersey 07977 Attention: Treasurer Borrowing Request Ladies and Gentlemen: Reference is made to the Amended and Restated Credit Agreement, dated as of May 24, 2001 (as amended, modified or supplemented from time to time, the "Credit Agreement"), between Miravant Medical Technologies and Pharmacia Treasury Services AB. Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to such terms in the Credit Agreement. The Borrower hereby gives you notice, pursuant to Section 2.02 of the Credit Agreement, that it requests a [Pre-Event/Post-Event] Loan in a principal amount equal to the Borrowing Amount set forth below, to be made on the Borrowing Date set forth below. Borrowing Date:** _________, ____ A-3 NY12528: 141927.13 Borrowing Amount:*** $___________ Warrant Number:**** __________ The Borrower hereby represents and warrants that the Borrowing Amount of such [Pre-Event/Post-Event] Loan (i) individually and in the aggregate with all other [Pre-Event/Post-Event] Loans outstanding shall not exceed the Maximum [Pre-Event/Post-Event] Amount and (ii) in the aggregate with all other Term Loans made by the Lender to the Borrower during this Calendar Quarter, shall not exceed the Maximum Quarterly Amount. A duly executed Note in the form of Exhibit B to the Credit Agreement, dated as of the Borrowing Date set forth above and evidencing a Term Loan in a principal amount equal to the Borrowing Amount set forth above, is enclosed. A duly executed Warrant Certificate evidencing a number of Warrants equal to the Warrant Number is enclosed. The Exercise Price for each such Warrant is $______, and the closing bid prices for the 10 Trading Days preceding this bid request and a calculation of the Exercise Price are set out below. The Exercise Price is the sum of [A] plus [B]. Trading Day Closing Bid Price 1. $ 2. 3. 4. 5. 6. 7. 8. 9. 10. ==================== Total ____________________ / 10 ____________________ [A] x 0.40 ____________________ [B] [A]+[B] ____________________ Very truly yours, MIRAVANT MEDICAL TECHNOLOGIES By: -------------------------------- Name: Title: B-2 Exhibit B Form of Note PROMISSORY NOTE $[Principal Amount] [Date] MIRAVANT MEDICAL TECHNOLOGIES, a Delaware corporation (the "Borrower"), for value received, promises to pay to the order of Pharmacia Treasury Services AB (the "Lender"), on [MATURITY DATE], the principal sum of $[PRINCIPAL AMOUNT] pursuant to and in the manner contemplated by that certain Amended and Restated Credit Agreement, dated as of May 24, 2001 (as amended, modified or supplemented from time to time, the "Credit Agreement"), between the Borrower and the Lender. The Borrower also promises to pay interest on the unpaid principal amount hereof from time to time outstanding, from the date hereof until the date of repayment, at the rate or rates per annum and on the date or dates determined pursuant to the Credit Agreement. Payments of both principal and interest are to be made in lawful money of the United States of America in funds immediately available to the Lender at its office or offices designated in accordance with the Credit Agreement, or, if and only if specifically permitted by Section 2.03(b) of the Credit Agreement, in the manner set forth in such Section 2.03(b). All parties hereto, whether as makers, endorsers, or otherwise, severally waive diligence, presentment, demand, protest and notice of any kind whatsoever. The failure or forbearance by the holder to exercise any of its rights hereunder in any particular instance shall in no event constitute a waiver thereof. The Credit Agreement, among other things, contains provisions for the acceleration of the maturity hereof upon the happening of certain events and for the amendment or waiver of certain provisions of the Credit Agreement and/or this Note, all upon the terms and conditions therein specified. Capitalized terms used and not otherwise defined herein have the meanings ascribed thereto in the Credit Agreement. THIS NOTE HAS BEEN DELIVERED IN NEW YORK, NEW YORK AND SHALL BE DEEMED TO BE A CONTRACT MADE UNDER, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. This Note is not negotiable and may be assigned only upon the terms and conditions specified in the Credit Agreement. MIRAVANT MEDICAL TECHNOLOGIES By: -------------------------------- Name: Title: C-1 Exhibit C Form of Opinion of Counsel for the Borrower to be Delivered Upon Payment of Shares [TO COME] D-4 Exhibit D Form of Opinion of Counsel for the Borrower to be Delivered at the Effective Time [Effective Time] Pharmacia Corporation 100 Route 206 North Peapack, New Jersey 07977 Ladies and Gentlemen: In connection with the execution and delivery today of the Amended and Restated Credit Agreement, dated as of May 24, 2001 (the "Credit Agreement"), between Miravant Medical Technologies, a Delaware corporation (the "Borrower"), and Pharmacia Treasury Services AB, a Swedish corporation (the "Lender"), the Security Agreement, dated as of February 18, 1999 (the "Security Agreement"), among the Borrower, as debtor, and the Lender, as Secured Party as it may have been amended, modified or supplemented, and [add references to other Credit Documents] (collectively with the Credit Agreement and the Security Agreement, the "Credit Documents"), we, as counsel for the Borrower, have examined such corporate records, certificates and other documents, and such questions of law, as we have considered necessary or appropriate for the purposes of this opinion. Upon the basis of such examination, it is our opinion that: (1) The Borrower has been duly incorporated and is an existing corporation in good standing under the laws of the State of Delaware. (2) Each of the Credit Documents has been duly authorized, executed and delivered, and, if and when duly executed and delivered in accordance with the terms of the Credit Agreement, any Notes will be duly authorized, executed and delivered by the Borrower; and each of the Credit Documents (other than any Notes) constitutes, and each Note (if and when duly executed and delivered in accordance with the terms of the Credit Agreement) will constitute, the valid and legally binding obligation of the Borrower enforceable in accordance with its respective terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. (3) [Opinion on the Warrants and Exercise Shares] (4) All regulatory consents, authorizations, approvals and filings required to be obtained or made by the Borrower under the Federal laws of the United States and the laws of the State of New York for the borrowing by the Borrower from the Lender under the Credit Agreement, the execution and delivery of each of the Credit Documents to the Lender and the performance by the Company of its obligations thereunder have been obtained or made; provided, however, that, insofar as performance by the Borrower of its obligations under each of the Credit Documents is concerned, we express no opinion as to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights or as to general equity principles. (5) The Borrower is not an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940. For purposes of this letter, terms defined in the Credit Agreement have the meanings set forth therein. The foregoing opinion is limited to the Federal laws of the United States and the laws of the State of New York, and we are expressing no opinion as to the effect of the laws of any other jurisdiction. With your approval, we have relied as to certain matters on information obtained from public officials, officers of the Borrower and other sources believed by us to be responsible, and we have assumed that each of the Credit Documents has been duly authorized, executed and delivered by the parties thereto other than the Borrower and its Affiliates, and that the signatures on all documents examined by us are genuine, assumptions which we have not independently verified. This letter is delivered by us as counsel for the Borrower to you, and is solely for your benefit. Very truly yours, E-3 Exhibit E Form of Compliance Certificate COMPLIANCE CERTIFICATE [For the Fiscal Quarter ending ________] [For the Fiscal Year ending ________] Reference is made to the Amended and Restated Credit Agreement, dated as of May 24, 2001 (as amended, modified or supplemented from time to time, the "Credit Agreement"), between Miravant Medical Technologies (the "Borrower") and Pharmacia Treasury Services AB. Pursuant to Section 7.01(a)(iii) of the Credit Agreement, the undersigned Responsible Officer of the Borrower hereby certifies on behalf of the Borrower that: (a) ______ During the period of four consecutive fiscal quarters ended on ____________, __, such Responsible Officer has obtained no knowledge of any Default or Event of Default except as follows: [Specify with particularity]. The financial statements referred to in Section 7.01(a) of the Credit Agreement which are delivered concurrently with the delivery of this Compliance Certificate fairly present the financial position, results of operations, cash flows and changes in shareholders' equity of the Borrower and its Subsidiaries, subject to normal year-end audit adjustments which are not expected to be material in amount.* (b) ______ The covenant calculations set forth below are based on the Borrower's [audited] balance sheet and statements of earnings, cash flows and shareholders' equity for the fiscal [quarter] [year] ended ___________, ____ (the "Period-End Date"). [Insert calculations demonstrating compliance with Section 7.03 of the Credit Agreement] IN WITNESS WHEREOF, on behalf of the Borrower, the undersigned has hereto set his or her hand. Dated:_________, ___ MIRAVANT MEDICAL TECHNOLOGIES By: _______________________________ A Responsible Officer - -------- * See Section 2.02 the Credit Agreement. ** _______ See the definition of "Borrowing Date" in Section 1.01(c) of the Credit Agreement. *** ______ See Section 2.01 and the definition of "Maximum Quarterly Amount" in Section 1.01(c) of the Credit Agreement. **** See the definition of "Warrant Number" in Section 1.01(c) of the Credit Agreement. * Insert only in Compliance Certificates accompanying quarterly financial statements delivered pursuant to Section 7.01(a) of the Credit Agreement. EX-10 7 f8kmay242001exb10_5.txt EXHIBIT 10.5 API ESCROW AGREEMENT ESCROW AGREEMENT, dated as of May 24, 2001 (this "Agreement"), among Pharmacia & Upjohn Company, a Delaware corporation ("Buyer"), Miravant Medical Technologies, a Delaware corporation ("Seller") and Sanwa Bank California, as the Escrow Agent (the "Escrow Agent"). WHEREAS, Buyer and Seller have entered into an Asset Purchase Agreement, dated as of May 24, 2001 (the "Asset Purchase Agreement") pursuant to which, among other things, Buyer shall purchase certain assets of Seller (the "Purchase"); WHEREAS, contemporaneously with the execution and delivery of the Asset Purchase Agreement, Buyer has tendered and Seller has accepted one or more purchase orders providing for the purchase of Seller's current inventory of API (as defined below), which consists of approximately 1.6 kilograms of API, for $2,245,509, which is Seller's cost of manufacturing, and the purchase of at least 3.5 kilograms of API at a cost of $800 per gram; and WHEREAS, pursuant to the terms of the Asset Purchase Agreement, Buyer Indemnified Parties (as defined below) are to be indemnified by Seller for certain events or occurrences specified in the Asset Purchase Agreement, including breaches of representations, warranties, covenants and agreements made, entered into or to be performed pursuant to the terms of the Asset Purchase Agreement. NOW THEREFORE, in consideration of mutual promises and good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows: 1. Definitions. The following terms, as used herein, have the following meaning: "API" means the active ingredient utilized in the formulation of tin ethyl-etiopurpurin. "business day" means any day that is not a Saturday, Sunday or other day on which commercial banks in Los Angeles, California, are authorized by law to close. "Buyer Indemnified Party" means Buyer and any of its affiliates entitled to indemnification pursuant to Section 13 of the Asset Purchase Agreement. "Closing" means the meaning specified in Section 5.2 of the Asset Purchase Agreement. "Closing Date" means the meaning specified in Section 5.2 of the Asset Purchase Agreement. "Escrow Account" means a separate account established by the Escrow Agent for the purpose of holding the funds constituting the Escrow Amounts. "Escrow Amounts" means the Initial Escrow Amount together with any Subsequent Escrow Amounts. "Initial Escrow Amount" means $2,245,509, the purchase price paid by Buyer for Seller's current inventory of API. "Officer's Certificate" means a certificate signed by any Vice President of Buyer substantially in the form attached hereto as Exhibit A stating that a Buyer Indemnified Party has incurred or suffered any damages, losses, liabilities and expenses (including reasonable attorney fees and expenses) as a result of certain events or occurrences specified in Article X of the Asset Purchase Agreement, including a breach of any representation, warranty, covenant or agreement set forth in the Asset Purchase Agreement, for which indemnification is available pursuant to the Asset Purchase Agreement in the aggregate amount set forth in such Officer's Certificate (the "Indemnity Amount") that is delivered by Buyer to the Escrow Agent and Seller. "Person" means any individual, sole proprietorship, partnership, joint venture, trust, unincorporated organization, association, corporation, institution, public benefit corporation, entity or government (whether Federal, state, county, city, municipal or otherwise, including any instrumentality, division, agency, body or department thereof). "Subsequent Escrow Amount" means the purchase price paid by Buyer upon receipt of API delivered to Buyer from Seller pursuant to one or more purchase orders tendered by Buyer and accepted by Seller providing for the purchase of at least 3.2 kilos of API of $800 per gram made prior to December 31, 2001. "Subsidiary" means, at any time and with respect to any Person, any other Person the shares of stock or other ownership interests of which having ordinary voting power to elect a majority of the board of directors or other matters of such Person are at the time owned, or the management or policies of which is otherwise at the time controlled, directly or indirectly through one or more intermediaries (including other Subsidiaries) or both, by such first Person. 2. Appointment of the Escrow Agent. Buyer and Seller hereby appoint the Escrow Agent on the terms and conditions set forth herein and the Escrow Agent hereby accepts such appointment on such terms and conditions. 3. Deposit of Proceeds. Buyer shall deposit the Initial Escrow Amount with the Escrow Agent upon execution and delivery of this Agreement and shall deposit the appropriate Subsequent Escrow Amount upon a purchase of API by Buyer from Seller made by Buyer in one or more purchases prior to December 31, 2001. 4. Escrow Account. The Escrow Agent shall deposit the Escrow Amounts, upon receipt, into the Escrow Account and shall hold, safeguard and distribute such Escrow Amounts in accordance with and subject to the terms of this Agreement. 5. Purpose. It is understood and agreed that (i) the Escrow Account and the Escrow Amounts are for the purpose of satisfying the indemnification obligations owed to Buyer by Seller and no assets shall be used for any other purpose except as explicitly set forth in this Agreement and (ii) interest or other earnings on the assets, if any shall be added to the Escrow Account. 6. Rights to the Escrow Account. In accordance with and subject to the terms of this Agreement, Buyer Indemnified Parties shall be entitled to recover from the Escrow Account the Indemnity Amount or the Final Indemnity Amount (as defined below), as the case may be. 7. Indemnity Payments by the Escrow Agent. (a) Subject to Section 7(b), on the tenth business day after receipt by the Escrow Agent of an Officer's Certificate, the Escrow Agent shall deliver to Buyer from the Escrow Account in a manner specified in writing by Buyer the Indemnity Amount or (ii) to the extent that the Indemnity Amount exceeds the amount held in the Escrow Account (the amount of such excess being the "Shortfall Amount"), an amount in cash equal to the lesser of the cash in the Escrow Account or the Shortfall Amount. (b) If Seller shall, within ten business days after the Escrow Agent's and Seller's receipt of the Officer's Certificate, notify the Escrow Agent and Buyer in writing that Seller objects to the Indemnity Amount, (i) the Indemnity Amount shall not be delivered to Buyer, (ii) Buyer and Seller shall (A) endeavor in good faith to agree on the amount the Buyer Indemnified Party shall be entitled to recover from the Escrow Account or have such amount determined by a court of competent jurisdiction pursuant to the Asset Purchase Agreement (such amount being the "Final Indemnity Amount") and (B) either deliver to the Escrow Agent a certificate signed by any Vice President of Buyer and Seller setting forth the Final Indemnity Amount (the "Joint Certificate") or deliver to the Escrow Agent the court order or judgment by a court of competent jurisdiction, certified by either Seller or Buyer as an original (or as a true and complete copy thereof) (a "Final Judgment") and (iii) the Escrow Agent shall deliver to Buyer the Final Indemnity Amount from the Escrow Account in the manner set forth in Section 7(a). If Seller fails so to notify Buyer and the Escrow Agent of Seller's objection to the Indemnity Amount within such ten business day period, the Indemnity Amount shall be deemed conclusive and binding on all the parties hereto, whereupon the Escrow Agent shall make distributions from the Escrow Account in the manner set forth in Section 7(a). 8. Termination of the Escrow Account. Within five days after January 2, 2002 (the "Termination Date"), Seller shall notify the Escrow Agent in writing to deliver all assets then remaining, together with all interest accruing thereon (except a sufficient amount of assets to satisfy any unsatisfied claim specified in any Officer's Certificate, Joint Certificate or Final Judgment theretofore delivered to the Escrow Agent) to Seller; provided, however, that if the Escrow Agent shall receive a certificate signed by any Vice President of Buyer instructing the Escrow Agent not to distribute such assets until any unsatisfied indemnification claim hereunder has been resolved, the Escrow Agent shall hold such assets until such time as it receives a certificate signed by any Vice President of Buyer and Seller and dispose of such assets in accordance with the instructions set forth therein. 9. Notices. Any communication, demand or notice to be given hereunder will be duly given when delivered in writing or by telecopy to a party at its address as indicated below or such other address as such party may specify in a notice to each other party hereto. A communication, demand or notice given pursuant to this Agreement shall be addressed: If to Buyer: Pharmacia Corporation 100 Route 206 North Peapack, New Jersey 07977 Attn: General Counsel Fax: (908) 901-1830 with a copy (which, in and of itself, shall not constitute notice) to: Matthew G. Hurd Sullivan & Cromwell 1870 Embarcadero Road Palo Alto, California 94303 Fax: (650) 461-5700 If to Seller: Miravant Medical Technologies 336 Bollay Drive Santa Barbara, California 93117 Attention: Gary S. Kledzik Fax: (805) 685-6038 with a copy (which, in and of itself, shall not constitute notice) to: Joseph E. Nida Nida & Maloney, LLP 800 Anacapa Street Santa Barbara, California 93101 Fax: (805) 568-1955 If to the Escrow Agent: Robert W. Rainey Vice President and Manager Sanwa Bank California Wealth Management Division Santa Barbara Trust Office Post Office Box 1539 1036 State Street, No. 240 Santa Barbara, CA 93102 Fax: (805) 966-3006 or, as to any party, to such other address as shall be designated by such party in a prior written notice to each other party similarly given. 10. The Escrow Agent. (a) This Agreement sets forth the exclusive duties of the Escrow Agent with respect to any and all matters pertinent hereto, and no implied duties whatsoever on the part of the Escrow Agent shall be read into this Agreement. Upon the complete disbursement of the Escrow Account in accordance with the terms and conditions of this Agreement, the Escrow Agent shall be fully released from all further duties and obligations hereunder. The Escrow Agent shall have no duty or obligation hereunder other than to take such specific actions as are required of it from time to time under the provisions hereof, and it shall incur no liability hereunder or in connection herewith for anything whatsoever other than as a result of its own gross negligence or willful misconduct. The party primarily responsible for causing any and all losses, claims, liabilities and expenses, including the reasonable fees of counsel, to the Escrow Agent shall indemnify, hold harmless and defend the Escrow Agent from and against any and all losses, claims, liabilities and expenses, including the reasonable fees of counsel, which it may suffer or incur hereunder, or in connection herewith, except such as shall result solely and directly from the Escrow Agent's own gross negligence or willful misconduct; provided, however, that if no party is primarily responsible for causing such losses, claims, liabilities and expenses, including the reasonable fees of counsel, Buyer and Seller shall jointly and severally indemnify the Escrow Agent in accordance with this Section 10. The Escrow Agent shall not be bound in any way by any agreement or contract among Buyer and Seller (whether or not the Escrow Agent has knowledge thereof) and the only duties and responsibilities of the Escrow Agent shall be to hold the assets in accordance with the terms of this Escrow Agreement. All reasonable fees and expenses of the Escrow Agent shall be paid by Seller. (b) Notwithstanding any provision contained herein to the contrary, the Escrow Agent, including its officers, directors, employees and agents, shall: (i) have no responsibility to inquire into or determine the genuineness, authenticity, or sufficiency of any securities, checks, or other documents or instruments submitted to it in connection with its duties hereunder; (ii) be entitled to deem the signatories of any documents or instruments submitted to it hereunder as being those purported to be authorized to sign such documents or instruments on behalf of the parties hereto, and shall be entitled to rely upon the genuineness of the signature of such signatories without inquiry and without requiring substantiating evidence of any kind; (iii) have no responsibility or liability for any diminution in value of any assets held hereunder which may result from any investments or reinvestments made in accordance with any provision which may be contained herein; (iv) be entitled to compensation for its services hereunder and for reimbursement of its out-of-pocket expenses including, but not by way of limitation, the fees and costs of attorneys or agents which it may find necessary to engage in performance of its duties hereunder, and the Escrow Agent shall have, and is hereby granted, a prior lien upon the Escrow Account with respect to its unpaid fees and non reimbursed expenses, superior to the interests of any other persons or entities; and (v) invest the deposited funds or the income generated thereby in [money market mutual funds] unless Seller and Buyer shall have jointly instructed the Escrow Agent in writing to invest such funds in some other specified investment or investments. If Seller and Buyer jointly instruct the Escrow Agent in writing to invest such funds in some other specified investment or investments, then the Escrow Agent shall invest such funds as instructed. Earnings on the Escrow Account shall be for the account of Seller (Federal Tax I.D. No. 770-222 872). The Escrow Agent shall report such earnings to the appropriate tax authorities on Form 1099 or such other substitute form as applicable. The Escrow Agent shall have no liability or responsibility whatsoever for any loss resulting from any investment made in compliance with the terms and provisions of this Agreement. 11. Further Assurances. Subject to the terms and conditions of this Agreement, the parties hereto shall use their reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary or desirable to perform their obligations hereunder including, without limitation, determining the amount a Buyer Indemnified Party shall be entitled to recover from the Escrow Account and delivering to the Escrow Agent a Joint Certificate or a Final Judgment upon such determination. 12. Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, that no party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the written consent of each other party hereto. Notwithstanding the foregoing sentence, Buyer may, at its option, upon notice to Seller at least two days prior to the Closing Date, designate one or more direct or indirect subsidiaries or Affiliates of the Buyer (the "Substituted Subsidiaries") to be substituted as Buyer hereunder in such Buyer's place. Upon such designation, and the execution and delivery by the Substituted Subsidiaries to Seller of an instrument pursuant to which the Substituted Subsidiaries shall assume all of such Buyer's obligations hereunder, the Substituted Subsidiaries shall succeed to all of Buyer's rights hereunder, and, for the purposes of this Agreement, all references to the "Buyer" shall, as applied on or after the date of such designation, apply to the Substituted Subsidiaries; provided, however, that the original "Buyer" shall be liable for the Substituted Subsidiaries' performance of the Buyer's obligations hereunder. Except as set forth above, this Agreement may not be assigned by the parties hereto prior to Closing. Any such purported assignment, delegation or transfer made in contravention of the foregoing shall be null and void. 13. Governing Law. The validity, performance and enforcement of this Agreement shall be governed by the laws of the State of California (regardless of the laws that might otherwise govern under California principles of conflicts of laws). 14. Arbitration. (a) Any dispute among any of the parties hereto arising out of or in connection with this Agreement, including any question regarding the existence, validity or termination thereof, or any claim of fraud or intentional misrepresentation, shall be exclusively referred to and finally resolved by arbitration in accordance with the Commercial Arbitration Rules (the "Rules") of the American Arbitration Association (the "AAA"), which Rules are deemed to be incorporated by reference into this Section. Any such arbitration shall be (i) brought in the City and County of San Francisco, California, (ii) conducted in English, and (iii) to the maximum extent permitted by applicable law, final, binding and conclusive upon the parties thereto. If the arbitrators deem it necessary or appropriate, the parties to any dispute may be permitted limited discovery based on the United States Federal Rules of Civil Procedure then in effect, subject to such limitations as the arbitrators may impose consistent with the objective of expediting the resolution of the dispute; provided, however, that in any dispute submitted to arbitration hereunder that relates to whether any person or entity is required to furnish indemnity under this Agreement discovery rights in accordance with the United States Federal Rules of Civil Procedure then in effect shall be applicable and available in all events. The parties agree that service of any notice in the course of any such arbitration at their respective addresses for notice and in the manner provided herein shall be valid and sufficient notice for purposes of such arbitration. Each of the parties agrees to be bound by such arbitration. (b) In any arbitration pursuant hereto, the award shall be rendered by a majority of the members of an arbitral tribunal consisting of three arbitrators. One arbitrator shall be appointed by Buyer and one arbitrator shall be appointed by Seller each within 30 days after the commencement of the arbitration. The third arbitrator shall be appointed by mutual agreement of the two arbitrators selected by Buyer, on the one hand, and Seller, on the other hand, and shall be experienced in corporate contractual matters relating to transactions of the nature contemplated by this Agreement. The third arbitrator shall act as Chair of the arbitral tribunal. In the event of the failure of said two arbitrators to agree as to the third arbitrator within 20 days after the appointment of the last of the two arbitrators, the third arbitrator shall be appointed by the AAA as administrator under the Rules within 15 days thereafter in accordance with its then existing Rules upon application by any of the parties to the arbitration. Notwithstanding the foregoing, if either Buyer or Seller fail to appoint the arbitrators they are respectively required to appoint within the specified time period, such arbitrator and the third arbitrator shall be appointed by the AAA in accordance with the Rules. The AAA shall not appoint all three arbitrators unless both Buyer, on the one hand, and Seller, on the other hand, fail to appoint an arbitrator within the specified time. (c) Awards, decisions and rulings of the arbitral tribunal shall be in writing, and shall set forth the reasons therefor and, to the extent applicable, the manner in which the amount of any damages or other monetary recovery was calculated. Any monetary award shall be in U.S. dollars. Judgment upon any award, decision or ruling may be entered in any court having jurisdiction thereof. 15. Counterparts. This Agreement may be executed in any number of counterparts, each of which, when executed, shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument. 16. Resignation or Removal of the Escrow Agent. (a) The Escrow Agent may resign as such upon 30 days' prior written notice to the other parties hereto. The Escrow Agent may be removed and replaced upon 30 days' prior written notice to the Escrow Agent from Buyer and Seller. If the Escrow Agent resigns or is removed, the duties of the Escrow Agent shall terminate 30 days after receipt of such notice (or as of such earlier date as may be agreed by the parties hereto) and the Escrow Agent shall then deliver the balance of the Escrow Account then in its possession to a successor escrow agent as shall be appointed by the other parties hereto as evidenced by a written notice filed with the Escrow Agent. (b) If the other parties hereto are unable to agree upon a successor to the Escrow Agent or shall have failed to appoint such successor prior to the expiration of 30 days following receipt of the notice of resignation or removal, the Escrow Agent may petition any court of competent jurisdiction for the appointment of a successor escrow agent or for other appropriate relief, and any such resulting appointment shall be binding upon all of the parties hereto. Costs incurred by the Escrow Agent in petitioning any court to appoint a successor pursuant to the foregoing sentence shall be borne by the Escrow Account. Upon acknowledgment by any successor escrow agent of the receipt of the balance of the assets in escrow, the Escrow Agent shall be fully released and relieved of all duties, responsibilities, and obligations under this Agreement. 17. Entire Agreement; Amendments. This Agreement contains the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, oral or written, with respect to such transactions. This Agreement may not be modified or amended except by a written instrument signed by all parties hereto. 18. Headings. The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. 19. Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application thereof to any person or entity or any circumstance, is invalid or unenforceable, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other persons, entities or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction. 20. Specific Performance. Each party acknowledges that one party will have no adequate remedy at law if the other party fails to perform any of its obligations under this Agreement. In such event, each party agrees that the other party shall have the right, in addition to any other rights it may have, to specific performance of this Agreement and agrees to take no action to oppose the other party's seeking such remedy. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. PHARMACIA & UPJOHN COMPANY By: ______________________________ Name: Title: MIRAVANT MEDICAL TECHNOLOGIES By: ______________________________ Name: Title: SANWA BANK CALIFORNIA By: ______________________________ Name: Title: By: ______________________________ Name: Title: Form of Officer's Certificate Miravant Medical Technologies 336 Bollay Drive Santa Barbara, California 93117 Attn: Gary S. Kledzik Sanwa Bank California Wealth Management Division Santa Barbara Trust Office Post Office Box 1539 1036 State Street, No. 240 Santa Barbara, CA 93102 Attn: Robert W. Rainey Dear Ladies and Gentlemen: Please be advised that there [has occurred an event] / [exists a condition or circumstance] entitling [insert name], a Buyer Indemnified Party (as defined in the Escrow Agreement, dated as of May 24, 2001 among [BUYER], a Delaware corporation (the "Buyer"), Miravant Medical Technologies, a Delaware corporation ("Seller") and Sanwa Bank California, as the Escrow Agent (the "Escrow Agent")) to indemnification pursuant to the Asset Purchase Agreement, dated as of May 24, 2001, among Buyer and Seller. [Describe the event, condition or circumstance giving rise to the indemnity claim]. The aggregate amount of damages, losses, liabilities and expenses (including reasonable attorney fees and expenses) incurred or suffered by the Buyer Indemnified Party as a result of such [event]/[condition or circumstance] is $_________. Sincerely, ----------------------------- Name: Title: -----END PRIVACY-ENHANCED MESSAGE-----