-----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, R1n281shT9l3HRHJkPLPuLBG5DGKeTANdWnmIIh+Cy+GCdpfNo3laBxgLDOfykWZ u5pZ+nhGD7eTsab9Z9TWag== 0000891836-99-000132.txt : 19990302 0000891836-99-000132.hdr.sgml : 19990302 ACCESSION NUMBER: 0000891836-99-000132 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19990301 GROUP MEMBERS: PHARMACIA & UPJOHN AB GROUP MEMBERS: PHARMACIA & UPJOHN COMPANY GROUP MEMBERS: PHARMACIA & UPJOHN HOLDINGS B.V. GROUP MEMBERS: PHARMACIA & UPJOHN INC GROUP MEMBERS: PHARMACIA & UPJOHN S.P.A. GROUP MEMBERS: PHARMACIA & UPJOHN, INC. SUBJECT COMPANY: 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: SC 13D SEC ACT: SEC FILE NUMBER: 005-49175 FILM NUMBER: 99552976 BUSINESS ADDRESS: STREET 1: 7408 HOLLISTER AVE CITY: SANTA BARBARA STATE: CA ZIP: 93117 BUSINESS PHONE: 8056859880 MAIL ADDRESS: STREET 1: 7408 HOLLISTER AVENUE CITY: SANTA BARBARA STATE: CA ZIP: 93117 FORMER COMPANY: FORMER CONFORMED NAME: PDT INC /DE/ DATE OF NAME CHANGE: 19941214 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: PHARMACIA & UPJOHN INC CENTRAL INDEX KEY: 0000949573 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 980155411 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 95 CORPORATE DR CITY: BRIDGEWATER STATE: NJ ZIP: 08807-0995 BUSINESS PHONE: 9083064400 MAIL ADDRESS: STREET 1: 7000 PORTGAGE ROAD CITY: KALAMAZOO STATE: MI ZIP: 49001 SC 13D 1 SCHEDULE 13D :--------------------------: : OMB APPROVAL : :--------------------------: :OMB Number: 3235-0145: :Expires: August 31, 1999: SECURITIES AND EXCHANGE COMMISSION :Estimated average burden : WASHINGTON, D.C. 20549 :hours per response.. 14.90: :--------------------------: SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. ______________)* MIRAVANT MEDICAL TECHNOLOGIES - ------------------------------------------------------------------------------- (Name of Issuer) Common Stock, Par Value $0.01 Per Share - ------------------------------------------------------------------------------- (Title of Class of Securities) 6932P103 ---------------------------------------------------- (CUSIP Number) Richard T. Collier Senior Vice President and General counsel Pharmacia & Upjohn, Inc. 95 Corporate Drive Bridgewater, NJ 08807 - ------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) February 18, 1999 ---------------------------------------------------- (Date of Event which Requires Filing of this Statement) OMB APPROVAL If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box |_|. NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See ss. 240.13d-7 for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SEC 1746(12-91) SCHEDULE 13D - --------------------- ------------------ CUSIP NO. 69329P103 PAGE 2 OF 31 PAGES - --------------------- ------------------ - ------------------------------------------------------------------------------- 1. NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY). Pharmacia & Upjohn Company - ------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (A) |_| (B) |_| - ------------------------------------------------------------------------------- 3. SEC USE ONLY - ------------------------------------------------------------------------------- 4. SOURCE OF FUNDS (SEE INSTRUCTIONS) WC - ------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| - ------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------- NUMBER OF 7. SOLE VOTING POWER SHARES 125,001 BENEFICIALLY -------------------------------------------------------------- OWNED BY 8. SHARED VOTING POWER EACH -0- REPORTING -------------------------------------------------------------- PERSON 9. SOLE DISPOSITIVE POWER WITH 125,001 -------------------------------------------------------------- 10. SHARED DISPOSITIVE POWER -0- -------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 125,001 - ------------------------------------------------------------------------------- 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) |_| - ------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.7% - ------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) CO - ------------------------------------------------------------------------------- SCHEDULE 13D - --------------------- ------------------ CUSIP NO. 69329P103 PAGE 3 OF 31 PAGES - --------------------- ------------------ - ------------------------------------------------------------------------------- 1. NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY). Pharmacia & Upjohn S.p.A. - ------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP(SEE INSTRUCTIONS) (A) |_| (B) |_| - ------------------------------------------------------------------------------- 3. SEC USE ONLY - ------------------------------------------------------------------------------- 4. SOURCE OF FUNDS(SEE INSTRUCTIONS) WC - ------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| - ------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION Italy - ------------------------------------------------------------------------------- NUMBER OF 7. SOLE VOTING POWER SHARES 1,736,533 BENEFICIALLY -------------------------------------------------------------- OWNED BY 8. SHARED VOTING POWER EACH -0- REPORTING -------------------------------------------------------------- PERSON 9. SOLE DISPOSITIVE POWER WITH 1,736,533 -------------------------------------------------------------- 10. SHARED DISPOSITIVE POWER -0- -------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,736,533 - ------------------------------------------------------------------------------- 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) |_| - ------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 10.1% - ------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) CO - ------------------------------------------------------------------------------- SCHEDULE 13D - --------------------- ------------------ CUSIP NO. 69329P103 PAGE 4 OF 31 PAGES - --------------------- ------------------ - ------------------------------------------------------------------------------- 1. NAME OF REPORTING PERSONS DENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY). Pharmacia & Upjohn AB - ------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (A) |_| (B) |_| - ------------------------------------------------------------------------------- 3. SEC USE ONLY - ------------------------------------------------------------------------------- 4. SOURCE OF FUNDS (SEE INSTRUCTIONS) AF - ------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| - ------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION Sweden - ------------------------------------------------------------------------------- NUMBER OF 7. SOLE VOTING POWER SHARES 1,736,533 BENEFICIALLY -------------------------------------------------------------- OWNED BY 8. SHARED VOTING POWER EACH -0- REPORTING -------------------------------------------------------------- PERSON 9. SOLE DISPOSITIVE POWER WITH 1,736,533 -------------------------------------------------------------- 10. SHARED DISPOSITIVE POWER -0- -------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,736,533 - ------------------------------------------------------------------------------- 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) |_| - ------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 10.1% - ------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) CO - ------------------------------------------------------------------------------- SCHEDULE 13D - --------------------- ------------------ CUSIP NO. 69329P103 PAGE 5 OF 31 PAGES - --------------------- ------------------ - ------------------------------------------------------------------------------- 1. NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY). Pharmacia & Upjohn Holdings B.V. - ------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) |_| (B) |_| - ------------------------------------------------------------------------------- 3. SEC USE ONLY - ------------------------------------------------------------------------------- 4. SOURCE OF FUNDS (SEE INSTRUCTIONS) AF - ------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| - ------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION Netherlands - ------------------------------------------------------------------------------- NUMBER OF 7. SOLE VOTING POWER SHARES 1,736,533 BENEFICIALLY -------------------------------------------------------------- OWNED BY 8. SHARED VOTING POWER EACH -0- REPORTING -------------------------------------------------------------- PERSON 9. SOLE DISPOSITIVE POWER WITH 1,736,533 -------------------------------------------------------------- 10. SHARED DISPOSITIVE POWER -0- -------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,736,533 - ------------------------------------------------------------------------------- 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) |_| - ------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 10.1% - ------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) OO - ------------------------------------------------------------------------------- SCHEDULE 13D - --------------------- ------------------ CUSIP NO. 69329P103 PAGE 6 OF 31 PAGES - --------------------- ------------------ - ------------------------------------------------------------------------------- 1. NAME OF REPORTING PERSONS (ENTITIES ONLY). I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS Pharmacia & Upjohn, Inc. - ------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (A) |_| (B) |_| - ------------------------------------------------------------------------------- 3. SEC USE ONLY - ------------------------------------------------------------------------------- 4. SOURCE OF FUNDS AF - ------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| - ------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------- NUMBER OF 7. SOLE VOTING POWER SHARES 1,861,534 BENEFICIALLY -------------------------------------------------------------- OWNED BY 8. SHARED VOTING POWER EACH -0- REPORTING -------------------------------------------------------------- PERSON 9. SOLE DISPOSITIVE POWER WITH 1,861,534 -------------------------------------------------------------- 10. SHARED DISPOSITIVE POWER -0- -------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,861,534 - ------------------------------------------------------------------------------- 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) |_| - ------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 10.8% - ------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) CO, HC - ------------------------------------------------------------------------------- SCHEDULE 13D CUSIP NO: 69329P103 PAGE 7 OF 31 ITEM 1. SECURITY AND ISSUER The class of equity securities to which this statement relates is the shares of Common Stock, par value $.01 per share (the "Shares"), of Miravant Medical Technologies (formerly PDT, Inc.), a Delaware corporation ("Miravant"). The principal executive office of Miravant is located at 7408 Hollister Avenue, Santa Barbara, California 93117. ITEM 2. IDENTITY AND BACKGROUND This statement is being filed by Pharmacia & Upjohn AB (formerly Pharmacia AB), a Swedish corporation ("P&U AB"), Pharmacia & Upjohn S.p.A. (formerly Pharmacia S.p.A.), an Italian corporation ("P&U S.p.A."), Pharmacia & Upjohn Company, a Delaware corporation ("P&U Co."), Pharmacia & Upjohn Holdings B.V., a "check the box" entity incorporated in the Netherlands ("P&U BV") and Pharmacia & Upjohn, Inc. ("P&U Inc.", and together with P&U AB, P&U Co., P&U BV and P&U S.p.A., the "Reporting Persons"). The principal business address of P&U S.p.A. is Pharmacia & Upjohn S.p.A., via Robert Koch 1.2, 75017 Milan, Italy. The principal business address of P&U AB is Pharmacia & Upjohn AB, S-171 97 Stockholm, Sweden. The principal business address of P&U BV is Pharmacia & Upjohn Holdings B.V., Houttuinlaan 4, NL - 3447 GM Woerden, The Netherlands. The principal business address of both P&U Inc. and P&U Co. is Pharmacia & Upjohn, Inc., 95 Corporate Drive, Bridgewater, New Jersey 08807. P&U S.p.A. is an Italian corporation and a subsidiary of P&U AB, a Swedish corporation, which, in turn, is a wholly owned subsidiary of P&U BV, a "check the box" entity incorporated in the Netherlands. P&U BV and P&U Co. are wholly owned subsidiaries of P&U Inc., a Delaware corporation. P&U Co., a Delaware corporation, is the successor to Pharmacia, Inc., a CUSIP Number: 69329P103 Page 8 of 31 Minnesota corporation and a former wholly owned subsidiary of P&U AB. The principal business of each of the Reporting Persons is the development, production, marketing and sale of pharmaceutical products. The name, residence or business address, present principal occupation or employment, and the citizenship of each of each director and executive officer of (i) P&U S.p.A. is set forth in Schedule I hereto and incorporated herein by reference, (ii) P&U Co. is set forth in Schedule II hereto and incorporated herein by reference, (iii) P&U Inc. is set forth in Schedule III hereto and incorporated herein by reference. None of the Reporting Persons, or to the best knowledge and belief of the Reporting Persons, any of the individuals listed in Schedule I, II or III has, during the past five years, been convicted in any criminal proceeding (excluding traffic violations or similar misdemeanors) or has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. This Item 2 is qualified in its entirety by reference to Schedules I, II and III which are incorporated herein by reference. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION In 1994, Pharmacia, Inc., a former wholly owned subsidiary of P&U AB as to which P&U Co. is the successor by merger, purchased 83,334 Shares of Miravant and was granted a warrant, dated as of August 31, 1994 and incorporated by reference as Exhibit C hereto (the "PDT Warrant") to purchase an additional 41,667 Shares of Miravant for $1,000,008, the source CUSIP Number: 69329P103 Page 9 of 31 of which funds was working capital. The PDT Warrant issued to Pharmacia, Inc. was not exercised and has expired. In 1995, P&U S.p.A. purchased 400,000 Shares of Miravant for $12,000,000, the source of which funds was working capital. In 1995, pursuant to a 3 for 2 stock split, the holdings of Pharmacia, Inc. were adjusted to 125,001 Shares and the holdings of P&U S.p.A. were adjusted to 600,000 Shares. On February 18, 1999, P&U S.p.A. purchased 1,136,533 Shares of Miravant for $19,000,000, the source of which funds was working capital. Pursuant to the terms of a Credit Agreement, dated February 18, 1999 between Pharmacia & Upjohn Treasury Services AB ("P&U Treasury Services") and Miravant and filed as Exhibit H hereto (the "Credit Agreement"), P&U Treasury Services may be granted up to 360,000 Warrants (as defined in the Credit Agreement) to purchase additional Shares if Miravant borrows up to $22,500,000 available to it under the Credit Agreement, and, subject to certain conditions, Miravant may, at its option, repay at maturity any amounts borrowed under the Credit Agreement with a number of Shares of Miravant that will vary depending on the market price of the Shares at the time of repayment and the principal amount of borrowings repaid. The Reporting Persons have not sold any Shares of Miravant. None of the persons listed on Schedule I, II or III hereto has contributed any funds or other consideration towards the purchase of the Shares of Miravant reported in this statement. ITEM 4. PURPOSE OF TRANSACTION The Shares of Miravant described by this statement were acquired for investment purposes. Other than as set forth herein, CUSIP Number: 69329P103 Page 10 of 31 the Reporting Persons do not have plans or proposals which relate to or would result in any of the events described by Items 4(a) through 4(j) of Schedule 13D other than the following: (i) The Credit Agreement provides that 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 fifth anniversary of the borrowing date for the first Loan made pursuant to the Credit Agreement (the "Maturity Date"). On the Maturity Date and subject to certain conditions, Miravant 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, in its Shares. The number of Shares of Miravant issued to P&U Treasury Services or one of its affiliates will vary depending on the market price of the Shares at the time of repayment and the principal amount of borrowings repaid. (ii) The Credit Agreement provides that Miravant will issue to P&U Treasury Services or one of its affiliates, in respect of each $62.50 in principal amount of loans extended under the Credit Agreement, one warrant to purchase Common Stock of Miravant having the terms set forth in the Warrant Agreement, dated February 18, 1999, between Miravant and P&U Treasury Services and filed as Exhibit F hereto (the "Warrant Agreement"). If Miravant borrows the full $22,500,000 available under the Credit Agreement, P&U Treasury Services or one of its affiliates will acquire 360,000 Warrants. The exercise price of each warrant will be equal to 140% of the average of the closing prices of the Common Stock for the ten trading days immediately preceding the borrowing request for the related loan. The Warrants will expire on the fifth anniversary of the first borrowing made pursuant to the Credit Agreement. CUSIP Number: 69329P103 Page 11 of 31 (iii) The Equity Investment Agreement, dated January 15, 1999, P&U Inc., P&U S.p.A. and Miravant and filed as Exhibit D hereto (the "Original Equity Investment Agreement"), as amended by the Agreement and Amendment to the Equity Investment Agreement, dated as of February 17, 1999, by and between Miravant, P&U Inc. and P&U S.p.A. and filed as Exhibit E hereto (together with the Original Equity Investment Agreement, the "Equity Investment Agreement"), provides that, subject to certain limitations, unless specifically requested in advance by the Miravant's Board of Directors, neither P&U Inc. nor any of its affiliates will, and P&U Inc. and its affiliates will not assist or encourage others to, directly or indirectly, acquire or agree, offer, seek or propose to acquire ownership of any securities issued by Miravant or enter into any discussions, negotiations, arrangements or understandings with any person with respect to any of the foregoing until the sooner to occur of July 1, 2000 or the occurrence of certain other events. See Item 6. (iv) The Registration Rights Agreement, dated as of February 18, 1999, between Miravant and P&U Inc. and filed as Exhibit G hereto (the "Registration Rights Agreement"), provides that (i) the holders of Shares received by the Reporting Persons pursuant to the Equity Investment Agreement or the Warrant Agreement have the right to demand that Miravant file registration statements with respect to such Shares of Miravant held by such holders and (ii) P&U Inc. and its subsidiaries have certain rights to participate in other registered offerings of Shares of Miravant. See Item 6. (v) The Warrant Agreement provides that (i) Miravant is entitled to purchase any Warrant issued pursuant to the Credit Agreement and Warrant Agreement should the average closing price for the Shares of Miravant over any consecutive 30 trading days exceed the exercise CUSIP Number: 69329P103 Page 12 of 31 price for such Warrant, and (ii) at such time as a Reporting Person seeks to exercise a Warrant, Miravant has the right, in its sole discretion, to pay a certain cash amount in lieu of delivering the Shares issuable in respect thereof. See Item 6. (vi) See Item 6 for a discussion of the anti-dilution provisions of Shares issuable upon exercise of the Warrants that may result in the acquisition of additional Shares by the Reporting Persons. The foregoing discussion is qualified in its entirety by reference to the Stock Purchase Agreement, dated as of July 1, 1995, by and between PDT, Inc. and Pharmacia S.p.A. and incorporated by reference as Exhibit A hereto (the "Stock Purchase Agreement"), the PDT, Inc. $10,000,000 Common Stock and Warrants Offering Investment Agreement, dated as of August 31, 1994, by and between PDT, Inc. and Pharmacia, Inc. and incorporated by reference as Exhibit B hereto (the "1994 Stock Purchase Agreement"), the PDT Warrant, the Equity Investment Agreement, the Warrant Agreement, the Registration Rights Agreement and the Credit Agreement, which are either filed as exhibits or incorporated by reference as exhibits hereto, each of which is incorporated by reference in their entirety into this Item 4. Each Reporting Person expects to evaluate on an ongoing basis Miravant's financial condition, business operations and prospects, market price of the Shares of Miravant, conditions in securities markets generally, general economic and industry conditions and other factors. Accordingly, each Reporting Person reserves the right to change its plans and intentions at any time, as it deems appropriate. In particular, each Reporting Person may at any time and from time to time acquire additional Shares of Miravant or securities convertible or exchangeable for Shares of Miravant; may dispose of Shares of Miravant; and/or may enter into privately negotiated derivative transactions with institutional counterparties to hedge the market risk of some or CUSIP Number: 69329P103 Page 13 of 31 all of its positions in such Shares. Any such transactions may be effected at any time and from time to time subject to any applicable limitations of the Securities Act and the contractual restrictions described in Item 6. To the knowledge of each Reporting Person, each of the persons listed on Schedule I, Schedule II and Schedule III hereto may make the same evaluation and reserves the same rights. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a) The percentage interest held by each Reporting Person presented below is based on the number of Shares of Miravant reported to be outstanding as of October 31, 1998 in Miravant's Quarterly Report on Form 10-Q for the quarter ended September 30, 1998, as adjusted to give effect to the issuance of the Shares of Miravant issued pursuant to the Equity Investment Agreement (the "Outstanding Shares"). P&U Co., as successor to Pharmacia, Inc., beneficially owns 125,001 Shares of Miravant, representing approximately 0.7% of the Outstanding Shares. P&U S.p.A. beneficially owns 1,736,533 Shares of Miravant, representing approximately 10.1% of the Outstanding Shares. P&U AB may be deemed to beneficially own 1,736,533 Shares of Miravant, representing approximately 10.1% of the Outstanding Shares. P&U BV may be deemed to beneficially own 1,736,533 Shares of Miravant, representing approximately 10.1% of the Outstanding Shares. P&U Inc. may be deemed to beneficially own 1,861,534 Shares of Miravant, representing approximately 10.8% of the Outstanding Shares. CUSIP Number: 69329P103 Page 14 of 31 None of the Reporting Persons, and to the knowledge of the Reporting Persons, none of the persons listed in Schedules I, II and III hereto beneficially owns any Shares of Miravant other than as set forth herein. (b) Each Reporting Person has the power to vote or direct the vote and dispose or direct the disposition of the Shares beneficially owned by such Reporting Persons as indicated in pages 2 through 6 above. (c) None of the Reporting Persons and, to the knowledge of the Reporting Persons, none of the persons listed on Schedule I, II or III hereto, has been party to any transaction in Shares of Miravant during the past sixty days. (d) No other person has the right to receive or the power to direct the receipt of dividends from or proceeds from the sale of Shares of Miravant. (e) Not Applicable. The foregoing discussion is qualified in its entirety by reference to the Stock Purchase Agreement, the 1994 Stock Purchase Agreement, the PDT Warrant, the Equity Investment Agreement, the Registration Rights Agreement, the Warrant Agreement and the Credit Agreement, each of which is incorporated herein by reference. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER There are no contracts, arrangements, understandings or relationships between the Reporting Persons (or their wholly owned subsidiaries) and other persons with respect to the Shares of Miravant aside from the following: (a) The Stock Purchase Agreement, under which P&U S.p.A. (i) received rights to initiate registration of the CUSIP Number: 69329P103 Page 15 of 31 non-registered Shares of Miravant which are held by P&U S.p.A.; (ii) received rights to participate in certain registrations initiated by Miravant or othe shareholders of Miravant; and (iii) agreed not to transfer the 400,000 Shares which P&U S.p.A. received on July 1, 1994 for one year unless certain conditions are met. Pursuant to the Equity Investment Agreement, Section 5.5 of the Stock Purchase Agreement, which prevented Pharmacia S.p.A. from directly or indirectly acquiring additional Miravant securities without first receiving approval from Miravant's board of Directors until July 1, 2000, is void ab initio. (b) The 1994 Stock Purchase Agreement, under which Pharmacia, Inc. received the right to cause PDT, Inc. to register Shares held by Pharmacia, Inc. and to participate in certain registrations initiated by PDT, Inc. and/or other shareholders of PDT, Inc. (the "1994 Stock Purchase Agreement"). (c) The PDT Warrant, under which Pharmacia, Inc. was granted a warrant to purchase up to 41,667 Shares (pre-split) of Miravant for the price of $12.00 per share (pre-split). The PDT Warrant was not exercised and has expired. (d) The Equity Investment Agreement, under which P&U S.p.A. purchased from Miravant 1,136,533 Shares of Miravant for an aggregate purchase price of $19,000,000. Pursuant to the Equity Investment Agreement, prior to the 180th calendar day following closing, P&U Inc. and its subsidiaries will not sell, assign, transfer or otherwise dispose of any of the Shares received pursuant to the Equity Investment Agreement, except that P&U Inc. may transfer any of such Shares to any of its wholly owned subsidiaries. Moreover, the Equity Investment Agreement provides that prior to the earliest of (i) the occurrence of an Event of Default CUSIP Number: 69329P103 Page 16 of 31 (as defined in the Credit Agreement), (ii) the commencement of a tender offer by any person or entity, other than P&U Inc. or any of its wholly owned subsidiaries, for Shares of Miravant, and (iii) July 1, 2000, unless specifically requested in advance by the Miravant's Board of Directors, neither P&U Inc. nor any of its affiliates will, and P&U Inc. and its affiliates will not assist or encourage others (including by providing financing) to, directly or indirectly, acquire or agree, offer, seek or propose to acquire ownership of any securities issued by Miravant (including but not limited to beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934)) or enter into any discussions, negotiations, arrangements or understandings with any person with respect to any of the foregoing; provided that such provision shall not prohibit (i) the acquisition by P&U Inc. and its affiliates of a number of Shares which, taken together with the number of Shares held by P&U Inc. and its affiliates as of the date of such acquisition, does not exceed 25% of the aggregate number of outstanding Shares as of the date of this acquisition, (ii) the acquisition by P&U Inc. or its affiliates of Shares pursuant to the Credit Agreement or upon exercise of any Warrants, or (iii) the acquisition by P&U Inc. or its affiliates of promissory notes pursuant to the Credit Agreement or any other securities pursuant to the Credit Documents (as defined in the Credit Agreement). (e) The Credit Agreement, under which, subject to the terms and conditions of such Credit Agreement, P&U Treasury Services agreed to lend to Miravant, for general corporate purposes, an aggregate amount not to exceed $22,500,000, in the form of up to six term loans, with not more than one such term loan to be made in each of the six calendar quarters between January 1, 1999 and June 30, 2000. Miravant will issue to P&U Treasury CUSIP Number: 69329P103 Page 17 of 31 Services or one of its affiliates, in respect of each $62.50 in principal amount of loans extended under the Credit Agreement, one warrant to purchase Common Stock of Miravant having the terms set forth in the Warrant Agreement attached as Exhibit F hereto. If Miravant borrows the full $22,500,000 available under the Credit Agreement, P&U Treasury Services or one of its affiliates will acquire 360,000 Warrants. The exercise price of each warrant will be equal to 140% of the average of the closing prices of the Common Stock for the ten trading days immediately preceding the borrowing request for the related loan. The Warrants will expire on the fifth anniversary of the first borrowing made pursuant to the Credit Agreement. Moreover, pursuant to the Credit Agreement and subject to certain conditions, on the Maturity Date, Miravant may, at its option, repay any amounts borrowed under the Credit Agreement with a number of Shares of Miravant that will vary depending on the market price of the Shares at the time of repayment and the principal amount of borrowings repaid. (f) The Registration Rights Agreement, under which Miravant granted certain registration rights for Shares of Miravant issued pursuant to the transactions contemplated by the Equity Investment Agreement and the Warrant Agreement. Upon written demand, a majority of holders of the Shares received by P&U Inc. or any of its affiliates under either the Equity Investment Agreement or the Warrant Agreement may, subject to certain limitations, require Miravant to file a registration statement with respect to the Shares held by such holder and any other holder that desires to have its Shares included in such registration statement; provided that each of the holders shall have the right to make only three such elections to require Miravant to file such a registration statement. P&U Inc., together with its affiliates, also has rights, CUSIP Number: 69329P103 Page 18 of 31 subject to certain limitations, to require Miravant to include Shares in certain other registrations of equity securities by Miravant. The Registration Rights Agreement provides that Miravant will indemnify the selling holders for certain liabilities, including liabilities arising under the Securities Act of 1933. The Registration Rights Agreement also provides that all costs and expenses (other than underwriters' discounts and commissions and the fees and expenses of counsel to the selling holders as state securities officials may require that the holders of Securities pay) incurred in connection with the registration of the Shares pursuant to the Registration Rights Agreement shall be paid by Miravant (including, without limitation, all registration and filing fees, printing expenses, costs of special audits incident to or required by any such registration, fees and disbursements of counsel for Miravant and up to $20,000 of fees and disbursements of one special counsel acting for the holders of Shares being included in any registration). (g) The Warrant Agreement, under which each holder of Warrants is entitled to purchase a number of Shares of Miravant equal to one share, subject to certain anti-dilution adjustments, provided, however, that Miravant may, at its sole election, in lieu of delivering any Shares, pay the holder of any Warrants so exercised a certain cash amount representing 95% of the closing price of the Shares as of the date of exercise of such Warrant multiplied by the number of Shares into which such Warrant is convertible. Miravant is entitled to purchase any Warrant issued pursuant to the Credit Agreement and Warrant Agreement should the average closing price of the Shares of Miravant over any 30 consecutive trading days exceed the exercise price for such Warrant. The number of Shares issuable upon exercise of the Warrants is subject to adjustment upon, CUSIP Number: 69329P103 Page 19 of 31 among other things, (i) the payment of a dividend on the outstanding Shares that is payable in additional Shares or securities convertible into additional Shares, (ii) the subdivision of the outstanding Shares into a greater number of shares (whether by stock split or otherwise), and (iii) the combination of the outstanding Shares into a smaller number of shares (whether by reverse stock split or otherwise). The foregoing discussion is qualified in its entirety by reference to the Stock Purchase Agreement, the 1994 Stock Purchase Agreement, the PDT Warrant, the Equity Investment Agreement, the Registration Rights Agreement, the Warrant Agreement and the Credit Agreement, each of which is incorporated herein by reference. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS Exhibit No. Exhibit Description - ---------- ------------------- A Stock Purchase Agreement, dated as of July 1, 1995, by and between PDT, Inc. and Pharmacia S.p.A. (incorporated by reference from Exhibit B to the report on Schedule 13D, dated July 7, 1995, filed by P&U AB in respect to the Shares) B PDT, Inc. $10,000,000 Common Stock and Warrants Offering Investment Agreement, dated as of August 31, 1994, by and between PDT, Inc. and Pharmacia, Inc.(incorporated by reference from Exhibit B to the report on Schedule 13D, dated July 7, 1995, filed by P&U S.p.A. in respect to the Shares) CUSIP Number: 69329P103 Page 20 of 31 C PDT Warrant, dated as of August 31, 1994, granting Pharmacia, Inc. a right to purchase up to 41,667 Shares (pre-split) of PDT, Inc. for the price of $12.00 per share (pre-split) (incorporated by reference from Exhibit C to the report on Schedule 13D, dated July 7, 1995, filed by P&U S.p.A. in respect to the Shares) D Equity Investment Agreement, dated January 15, 1999, between Miravant, P&U Inc. and P&U S.p.A. E Agreement and Amendment to the Equity Investment Agreement, dated as of February 17, 1999, by and between Miravant, P&U Inc. and P&U S.p.A. F F Warrant Agreement, dated February 18, 1999, between Miravant and P&U Treasury Services G Registration Rights Agreement, dated February 18, 1999, between Miravant and P&U Treasury Services H Credit Agreement, dated February 18, 1999, between Miravant and P&U Treasury Services I Joint Filing Agreement CUSIP Number: 69329P103 Page 21 of 31 SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, we certify that the information set forth in this statement is true, complete and correct. Dated: February 26, 1999 PHARMACIA & UPJOHN COMPANY By: /s/ Don W. Schmitz ------------------------ Title: Secretary PHARMACIA & UPJOHN S.p.A. By: /s/ Mats Pettersson ------------------------ Title: Attorney-In-Fact PHARMACIA & UPJOHN AB By: /s/ Mats Pettersson ------------------------ Title: Attorney-In-Fact PHARMACIA & UPJOHN HOLDINGS B.V. By: /s/ Wim Kuiper ------------------------ Title: Director CUSIP Number: 69329P103 Page 22 of 31 PHARMACIA & UPJOHN, INC. By: /s/ Don W. Schmitz ------------------------ Title: Secretary CUSIP Number: 69329P103 Page 23 of 31 SCHEDULE I Name, Business Address, Principal Occupation or Employment and Citizenship of all Directors and Executive Officers of Pharmacia & Upjohn S.p.A.: Board of Directors - ------------------ Maurizio Premoli Pharmacia & Upjohn S.p.A. via Robert Koch 1.2 20152 Milan Italy Citizenship: Italy Francesco Radaelli Pharmacia & Upjohn S.p.A. via Robert Koch 1.2 20152 Milan Italy Citizenship: Italy Emanuele Barie Pharmacia & Upjohn S.p.A. via Robert Koch 1.2 20152 Milan Italy Citizenship: Italy Toni Weitzberg Chairman Pharmacia & Upjohn S.p.A. Lindhagensatan 133 S-112 87 Stockholm Sweden Citizenship: Sweden Francesco Granata Managing Director Pharmacia & Upjohn S.p.A. via Robert Koch 1.2 20152 Milan Italy Citizenship: Italy CUSIP Number: 69329P103 Page 24 of 31 Executive Officers - ------------------ Francesco Granata Managing Director Pharmacia & Upjohn S.p.A. via Robert Koch 1.2 20152 Milan Italy Citizenship: Italy CUSIP Number: 69329P103 Page 25 of 31 SCHEDULE II Name, Business Address, Principal Occupation or Employment and Citizenship of all Directors and Executive Officers of Pharmacia & Upjohn Company: Board of Directors - ------------------ Fred Hassan President and CEO 95 Corporate Drive Bridgewater, NJ 08807 Citizenship: United States Richard T. Collier Senior Vice President and General Counsel 95 Corporate Drive Bridgewater, NJ 08807 Citizenship: United States Christopher J. Coughlin Executive Vice President and Chief Financial Officer 95 Corporate Drive Bridgewater, NJ 08807 Citizenship: United States Executive Officers - ------------------ Fred Hassan President and CEO 95 Corporate Drive Bridgewater, NJ 08807 Citizenship: United States CUSIP Number: 69329P103 Page 25 of 31 Goran A. Ando, M.D. Executive Vice President 95 Corporate Drive Bridgewater, NJ 08807 Citizenship: Sweden Richard T. Collier Senior Vice President and Assistant Secretary 95 Corporate Drive Bridgewater, NJ 08807 Citizenship: United States Timothy G. Rothwell Executive Vice President 95 Corporate Drive Bridgewater, NJ 08807 Citizenship: United States Christopher J. Coughlin Executive Vice President 95 Corporate Drive Bridgewater, NJ 08807 Citizenship: United States Robert G. Thompson Senior Vice President and Controller 95 Corporate Drive Bridgewater, NJ 08807 Citizenship: United States CUSIP Number: 69329P103 Page 27 of 31 SCHEDULE III Name, Business Address, Principal Occupation or Employment and Citizenship of all Directors and Executive Officers of Pharmacia & Upjohn, Inc.: Board of Directors: - ------------------- Gustaf Douglas Chairman, Investment AB Latour Biblioteksgatan 12 S-103 88 Stockholm, Sweden Citizenship: Sweden Fred Hassan President and CEO, Pharmacia & Upjohn, Inc. 95 Corporate Drive Bridgewater, NJ 08807 Citizenship: United States Olof Lund Chairman, Enator AB Lojtnantsgatan 21 S-115 93 Stockholm Sweden Citizenship: Sweden C. Steven McMillan President and COO, Sara Lee Corporation Suite 4600 Three First National Plaza 70 W. Madison Chicago, IL 60602 Citizenship: United States CUSIP Number: 69329P103 Page 28 of 31 Richard H. Brown CEO and Chairman, Electronic Data Systems 5400 Legacy Drive Suite H2-7W-40 Plano, TX 75024-3199 Citizenship: United States M. Kathryn Eickhoff President, Eickhoff Economics Suite 400 510 LaGuardia Place New York, NY 10012 Citizenship: United States R.L. Berthold Lindqvist President & CEO, Gambro AB Magistratsvagen 16 S-220 10 Lund Sweden Citizenship: Sweden Bengt I. Samuelsson Professor, Karolinska Institutet Scheele Laboratory Department of Medicine Biochemistry & Biophysics Doktorsringen 9, A3 S-171 77 Stockholm, Sweden Citizenship: Sweden Frank C. Carlucci Chairman, The Carlyle Group Suite 220S 1001 Pennsylvania Avenue, N.W. Washington, DC 20004-2505 Citizenship: United States CUSIP Number: 69329P103 Page 29 of 31 J. Soren Gyll - Chairman Chairman of the Board of Directors, Pharmacia & Upjohn, Inc. AB Volvo Kungstradgarden S-103 95 Stockholm Sweden Citizenship: Sweden William U. Parfet Co-Chairman, MPI Research 54943 N. Main Street Mattawan, MI 49071 Citizenship: United States Ulla B. Reinius President, Finansfakta R. AB Sibyllegatam 5 S-I14 51 Stockholm Sweden Citizenship: Sweden Executive Officers: - ------------------ Fred Hassan President and CEO 95 Corporate Drive Bridgewater, NJ 08807 Citizenship: United States Goran A. Ando, M.D. Executive Vice President and President, Research and Development 95 Corporate Drive Bridgewater, NJ 08807 Citizenship: Sweden Richard T. Collier Senior Vice President and General Counsel 95 Corporate Drive Bridgewater, NJ 08807 Citizenship: United States CUSIP Number: 69329P103 Page 30 of 31 Timothy G. Rothwell Executive Vice President and President, Pharmaceutical Operations 95 Corporate Drive Bridgewater, NJ 08807 Citizenship: United States Christopher J. Coughlin Executive Vice President and Chief Financial Officer 95 Corporate Drive Bridgewater, NJ 08807 Citizenship: United States Robert G. Thompson Senior Vice President and Chief Accounting Officer 95 Corporate Drive Bridgewater, NJ 08807 Citizenship: United States Hakan Astrom Senior Vice President, Corporate Strategy and Investor Relations 95 Corporate Drive Bridgewater, NJ 08807 Citizenship: Sweden Carrie Cox Senior Vice President and Head, Global Business Management 95 Corporate Drive Bridgewater, NJ 08807 Citizenship: United States Paul Matson Senior Vice President, Human Resources 95 Corporate Drive Bridgewater, NJ 08807 Citizenship: United States CUSIP Number: 69329P103 Page 31 of 31 Mats Pettersson Senior Vice President, Mergers & Acquisitions 95 Corporate Drive Bridgewater, NJ 08807 Citizenship: Sweden List of Exhibits ---------------- Exhibit No. Exhibit Description - ----------- ------------------- 10.1 Stock Purchase Agreement, dated as of July 1, 1995, by and between PDT, Inc. and Pharmacia S.p.A. (incorporated by reference from Exhibit B to the report on Schedule 13D, dated July 7, 1995, filed by P&U AB in respect to the Shares) 10.2 PDT, Inc. $10,000,000 Common Stock and Warrants Offering Investment Agreement, dated as of August 31, 1994, by and between PDT, Inc. and Pharmacia, Inc.(incorporated by reference from Exhibit B to the report on Schedule 13D, dated July 7, 1995, filed by P&U S.p.A. in respect to the Shares) 10.3 PDT Warrant, dated as of August 31, 1994, granting Pharmacia, Inc. a right to purchase up to 41,667 Shares (pre-split) of PDT, Inc. for the price of $12.00 per share (pre-split)(incorporated by reference from Exhibit C to the report on Schedule 13D, dated July 7, 1995, filed by P&U S.p.A. in respect to the Shares) 10.4 Equity Investment Agreement, dated January 15, 1999, between Miravant, P&U Inc. and P&U S.p.A. 10.5 Agreement and Amendment to the Equity Investment Agreement, dated as of February 17, 1999, by and between Miravant, P&U Inc. and P&U S.p.A. 10.6 Warrant Agreement, dated February 18, 1999, between Miravant and P&U Treasury Services 10.7 Registration Rights Agreement, dated February 18, 1999, between Miravant and P&U Treasury Services 10.8 Credit Agreement, dated February 18, 1999, between Miravant and P&U Treasury Services (Confidential treatment has been requested for certain information in this document. Pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, a complete copy of this document has been filed with the Securities and Exchange Commission.) 99.1 Joint Filing Agreement EX-10.4 2 EQUITY INVESTMENT AGREEMENT EXHIBIT D EQUITY INVESTMENT AGREEMENT EQUITY INVESTMENT AGREEMENT (this "Agreement"), dated as of January 15, 1999, between Miravant Medical Technologies, a Delaware corporation (the "Company"), Pharmacia & Upjohn, Inc., a Delaware corporation (the "Purchaser"), and Pharmacia & Upjohn, S.p.A., an Italian corporation. W I T N E S S E T H : WHEREAS, the Company and Affiliates of the Purchaser are parties to the Restated and Amended Development and License Agreement, dated June 8, 1998, between Pharmacia & Upjohn S.p.A. and the Company (the "Oncology License Agreement"), and the Amended and Restated Ophthalmology Development and License Agreement, dated June 8, 1998, between Pharmacia & Upjohn AB and the Company (the "Ophthalmology License Agreement" and, together with the Oncology License Agreement, the "License Agreements"), and the parties desire to amend such License Agreements in certain respects, as contemplated herein; and WHEREAS, certain subsidiaries of the Purchaser are the record owners of shares of Common Stock (as hereinafter defined), and the Purchaser wishes to acquire additional shares of Common Stock, all on the terms and subject to the conditions set forth in this Agreement. NOW, THEREFORE, the parties agree as follows: ARTICLE I Definitions =========== Section 1.01. 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". All references herein to the Preamble, Recitals, Articles, Sections and Schedules shall be deemed references to the -1- Preamble and Recitals, Articles and Sections of, and Schedules to, this Agreement unless the context shall otherwise require. The 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. Section 1.02. Definitions. The following terms have the meanings ascribed to them below: "Act" has the meaning assigned to such term in Section 6.03. "Affiliate" means any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. "Agreement" has the meaning assigned to such term in the preamble hereto. "Amending Agreement" has the meaning assigned to such term specified in Section 7.01. "Associate" has the meaning ascribed to such term in Rule 12b-2 under the 1934 Act. "Audited Financial Statements" has the meaning assigned to such term in Section 4.10. "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. "Certificate of Incorporation" means the Restated Certificate of Incorporation of the Company as in effect on the Closing Date. "Closing" has the meaning assigned to such term in Section 3.02. "Closing Date" has the meaning assigned to such term in Section 3.02. "Commission" means the Securities and Exchange Commission. -2- "Common Stock" means the common stock, $.01 par value, of the Company. "Company" has the meaning assigned to such term in the Preamble. "Control," "controlled by" or "under common control with" means direct or indirect possession of the power to direct or cause the direction of management or policies (whether through ownership of voting securities, by contract or otherwise); provided that control shall be conclusively presumed when any Person directly or indirectly owns a majority of the securities having ordinary voting power for the election of a majority of the directors of a corporation. "Credit Agreement" has the meaning assigned to such term in Section 7.01. "Disclosure Package" has the meaning assigned to such term in Section 4.09(a). "Employee Benefit Plan" has the meaning assigned to such term in Section 4.18. "Environmental Law" has the meaning assigned to such term in Section 4.22. "Environmental Property" has the meaning assigned to such term in Section 4.22. "FDA" has the meaning assigned to such term in Section 4.24. "Hazardous Materials" has the meaning assigned to such term in Section 4.22. "Intellectual Property Rights" has the meaning assigned to such term in Section 4.14. "License Agreements" has the meaning assigned to such term in the first Recital. "Licenses and Permits" means all governmental and private permits, licenses, certificates of occupancy, franchises and authorizations required to conduct the business of the Company and its Subsidiaries with operations and products substantially the same as those of the Company -3- immediately prior to the consummation of the transaction contemplated hereby or as now contemplated. "Loss" means any loss, claim, damages, or liability. "Oncology License Agreement" has the meaning assigned to such term in the first Recital. "Ophthalmology License Agreement" has the meaning assigned to such term in the first Recital. "Person" means and includes natural persons, corporations, limited liability companies, limited partnerships, general partnerships, joint stock companies, joint ventures, associations, companies, trusts or other organizations, whether or not legal entities, and governments and agencies and political subdivisions thereof. "Product Intellectual Property" has the meaning assigned to such term in Section 4.13. "Purchase Price" has the meaning assigned to such term in Section 3.01. "Purchaser" has the meaning assigned to such term in the Preamble. "Registration Rights Agreement" has the meaning assigned to such term in Section 7.01. "Securities" has the meaning assigned to such term in Section 3.01. "Security Agreement" has the meaning specified in Section 7.01. "Subsidiary" means any corporation, association or other business entity of which more than 50% of the total voting power or shares of stock entitled to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by the Company or one or more of the other Subsidiaries of the Company or a combination thereof. "Warrant Agreement" has the meaning assigned to such term in Section 7.01. -4- "1933 Act" means the Securities Act of 1933, as amended and as it may be amended from time to time, including the rules and regulations thereunder. "1934 Act" means the Securities Exchange Act of 1934, as amended and as it may be amended from time to time, including the rules and regulations thereunder. ARTICLE II Amendments to the License Agreements Section 2.01. Amendment to the Oncology License Agreement. The Oncology License Agreement is hereby amended ab initio, effective as of the Closing Date, to delete therefrom Section 3.04 thereof in its entirety. Section 2.02. Amendment to Ophthalmology License Agreement. When executed and delivered as contemplated hereby, the Amending Agreement will amend the Ophthalmology License Agreement in certain respects, all as set forth in the Amending Agreement. ARTICLE III Equity Investment Section 3.01. Issuance, Sale and Delivery of the Securities. The Company hereby agrees, subject to the prior satisfaction or waiver in writing by the Company of the conditions specified in Section 7.02, to issue and sell to the Purchaser, and the Purchaser hereby agrees, subject to the prior satisfaction or waiver in writing by the Purchaser of the conditions specified in Section 7.01, to purchase from the Company, 1,136,533 shares of Common Stock (the "Securities") for an aggregate purchase price equal to $19,000,000 (the "Purchase Price"). Section 3.02. Closing. The consummation of the stock purchase transaction contemplated by Section 3.01 shall take place at Sullivan & Cromwell, 125 Broad Street, New York, New York 10004, at 10:00 a.m., New York time, on the fifth day following the satisfaction or waiver by the Purchaser in writing of the last to be satisfied or so waived of the conditions set forth in Article VII, or at such other -5- location, date and time as may be agreed upon between the Purchaser and the Company (such consummation being called the "Closing" and such date and time being called the "Closing Date"). At the Closing, (a) the Company shall deliver, issue and sell to the Purchaser a stock certificate or certificates in the name of the Purchaser or any Affiliate of the Purchaser designated to the Company by the Purchaser, representing the Securities, and (b) the Purchaser shall pay the Purchase Price by wire transfer or certified or bank cashier's check in same day funds. ARTICLE IV Representations and Warranties of the Company The Company hereby makes the following representations and warranties which shall survive the execution and delivery of this Agreement and the issuance, delivery and sale of the Securities pursuant hereto: Section 4.01. Organization and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and is duly qualified to do business in California. Neither the Company nor any of its stockholders has adopted or taken any action in contemplation of any plan of liquidation or dissolution of the Company. The Company has provided the Purchaser with true, complete and correct copies of the Certificate of Incorporation and Bylaws of the Company as in effect on the date hereof. Section 4.02. Corporate Power of the Company. The Company has the requisite corporate power and authority to execute, deliver and carry out this Agreement and all other instruments, documents and agreements contemplated or required by the provisions of this Agreement to be executed, delivered or carried out by the Company. The Company has all requisite corporate power and authority under the laws of the jurisdiction of its incorporation to own and operate its properties and to carry on its business as now conducted and as presently proposed to be conducted. The Board of Directors and stockholders of the Company have taken all necessary corporate action to approve this Agreement and to authorize the execution, delivery and performance of this Agreement by the Company, the issuance by the Company of the Securities and the consummation of the transactions contemplated hereby. -6- This Agreement has been duly properly executed and delivered by the Company and constitutes the legally valid and binding obligation of the Company enforceable against it in accordance with its terms. Section 4.03. No Conflict. Except as set forth in Schedule 4.03, none of (a) the approval by the Board of Directors and stockholders of the Company of this Agreement, (b) the execution or the delivery by the Company of this Agreement or the performance by the Company of its obligations hereunder or the consummation of the transactions contemplated hereby or (c) the issuance by the Company of the Securities will (A) conflict with or result in any violation or constitute a default under the Certificate of Incorporation or Bylaws of the Company or any agreement, mortgage, indenture, franchise, license, permit, authorization, lease or other instrument, or any judgment, decree, order, law or regulation by which the Company or any of its properties or assets is bound, or (B) result in the creation or imposition of any lien, security interest, charge, encumbrance, restriction or claim of any nature upon, or give to others any interest or right, including any right of termination or cancellation, in or with respect to, or otherwise adversely affect, any property, asset or business of the Company, or (C) require the Company to obtain or make any consent, authorization, approval, registration, declaration or filing under any statute, law, ordinance, regulation, rule, judgment, decree or order of any court or any governmental agency, board, bureau, body, department or authority of any United States or foreign jurisdiction, except those which have been completed at the date of this Agreement, or (D) conflict with any other restriction of any kind or character to which the Company is subject or to which any of its properties is bound. Section 4.04. Subsidiaries. The Company has three Subsidiaries, Miravant Cardiovascular, Inc., a Delaware corporation, Miravant Pharmaceuticals, Inc., a Delaware corporation, and Miravant Systems, Inc., a California corporation. Each Subsidiary is duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation, and has all corporate power and authority to carry on its business as now conducted and as presently proposed to be conducted. All of the outstanding capital stock of the Company's Subsidiaries is validly issued, fully paid and nonassessable and owned by the Company free and clear of any lien, pledge or other encumbrance. Other than the three Subsidiaries, the Company does not own any -7- securities or other ownership interests in any other Person which would entitle the Company to control such Person. Section 4.05. Capitalization. (a) Authorized Shares. The authorized capital of the Company consists of 50,000,000 shares of Common Stock and 20,000,000 shares of preferred stock, of which 500,000 shares have been designated Series A Preferred Stock. The Company holds no shares of its capital stock in its treasury. Except as set forth in Schedule 4.05(a) and except as disclosed in the Disclosure Package, no Person has any agreement, subscription, option or warrant or any other right or commitment entitling such Person to acquire from the Company any shares of the Company's capital stock or any other securities or other instruments convertible into or exchangeable for any such shares. (b) Outstanding Shares. At the Closing, no more than 17,200,000 shares of capital stock of the Company will be issued and outstanding. All of the Securities when issued, sold and delivered in accordance with the terms hereof and for the consideration expressed herein, will have been duly authorized and validly issued, fully paid and non-assessable and free of any liens or encumbrances. The issuance of the Securities will not violate any preemptive or other rights and will be in compliance with applicable federal and state securities laws and regulations. The Company has no obligations or agreements concerning the repurchase of any of the shares of its outstanding capital stock. Section 4.06. Corporate Record Keeping. The corporate record and stock transfer books of the Company and each of its Subsidiaries are complete, accurate and up-to-date with all necessary signatures and set forth all meetings and actions taken by the respective incorporators, stockholders and directors of each such party. Section 4.07. Compliance With Laws. The Company and each of its Subsidiaries is in compliance in all material respects with all federal, state, local and foreign statutes, laws, ordinances, regulations, rules, judgments, orders and decrees applicable to it or its respective assets, properties, business or operations. Section 4.08. Licenses and Permits. The Company is not aware of any fact which has not been disclosed to the -8- Purchaser which could adversely affect the ability of the Company to obtain or maintain the Licenses and Permits (or any consent required to be obtained with respect thereto as a result of the transactions contemplated hereby) after consummation of the transactions contemplated hereby on the same terms as such Licenses and Permits were held by the Company immediately prior to the consummation of the transactions contemplated hereby. Section 4.09. Disclosure. (a) The Company has delivered to the Purchaser copies of the filings made by the Company with the Commission since December 31, 1995 and prior to the date hereof and the press releases issued by the Company since September 30, 1998 and prior to the date hereof (such filings and press releases collectively, the "Disclosure Package"). (b) To the Company's knowledge, none of such statements, forms or reports (including, without limitation, any financial statements, exhibits and schedules included therein and documents incorporated therein by reference), as amended or supplemented, if applicable, at the time filed, declared effective or mailed, as the case may be, contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein not misleading. (c) This Agreement and all of the Schedules delivered to the Purchaser in connection herewith, when read together with the Disclosure Package, do not contain any statement that is false or misleading with respect to any material fact and do not omit to state a material fact necessary in order to make the statements therein not false or misleading. There is no additional fact of which the Company is aware that has not disclosed in writing to the Purchaser that in the opinion or belief of the Company materially and adversely affects, or so far as the Company can now reasonably foresee will materially and adversely affect, the properties, business or condition (financial or otherwise) of the Company or any Subsidiary. Section 4.10. Financial Statements. The Company has furnished to the Purchaser a true and complete copy of its audited consolidated balance sheet as of December 31, 1997 and an audited consolidated statement of income and retained earnings for the year then ended (the "Audited Financial -9- Statements"). Except as disclosed in the Disclosure Package, the Audited Financial Statements have been prepared in accordance with generally accepted accounting principles on a basis consistent with prior periods and fairly present the financial condition and results of operations and changes in the financial condition of the Company and the Subsidiaries as of the dates thereof, and for the periods indicated, subject to all normal adjustments. For purposes of this Agreement, all references to "Audited Financial Statements" include any notes to such statements. Section 4.11. Litigation. There is no material suit, action, arbitration or legal, administrative or other proceeding or pending investigation to which the Company or any Subsidiary is a party or, to the Company's knowledge, is threatened against the Company, or any of its Subsidiaries or their businesses, assets or financial condition. Except as set forth in Schedule 4.11, the Company has no knowledge of any governmental investigation against the Company or its Subsidiaries, other than routine government contract audits. To the best of the Company's knowledge, neither the Company nor any of its Subsidiaries is in violation or infringement of any intellectual property right, or registrations or applications therefor, of any other person. Section 4.12. Conflict of Interest. Except as disclosed in the Disclosure Package, all purchasing transactions relating to the Company and its Subsidiaries have been at market prices since inception. No officer or director of the Company or any Affiliate of any such person has or within the last year has had, either directly or indirectly: (a) an equity or debt interest in any corporation, partnership, joint venture, association, organization or other Person which furnishes or sells or during such period furnished or sold services or products to the Company or the Subsidiaries, or purchases or during such period purchased from the Company or the Subsidiaries any goods or services, or otherwise does or during such period did business with the Company or the Subsidiaries; or (b) a beneficial interest in any contract, commitment or agreement to which the Company or the Subsidiaries is or was a party or under which it was obligated or bound or to which its properties may be or may have been subject, other than stock options and other contracts, commitments or agreements between the Company or the -10- Subsidiaries and such persons in their capacities as employees, independent contractors, officers or directors of the Company or the Subsidiaries. Section 4.13. License Agreements and Product Intellectual Property. The representations and warranties made by the Company in the License Agreements are true and correct. The Company has no actual knowledge of any suit, claims or proceedings pending or threatened with respect to the rights in the intellectual property owned by or licensed to the Company (the "Product Intellectual Property"). To the Company's knowledge, there are no commitments or contractual obligations of which the Company is a party which would prohibit the Company from entering into this Agreement or performing its obligations hereunder or which would affect the Company's ability to amend with the Purchaser the licenses for the Product Intellectual Property provided for in the License Agreements. Section 4.14. Intellectual Property Rights. (a) To the Company's knowledge and except as disclosed in the Disclosure Package: the Company and its Subsidiaries have good and marketable title to and own their inventions, licenses, patents, trade secrets or other proprietary know-how (the "Intellectual Property Rights") free and clear of all mortgages, liens, loans and encumbrances, except such encumbrances and liens which arise in the ordinary course of business and do not materially impair the Company's or its Subsidiaries' ownership or use of the Intellectual Property Rights or materially detract from the value thereof; no proceedings have been instituted or are pending which challenge the Company's or its Subsidiaries' rights to the Intellectual Property Rights or the validity thereof; all material rights or inventions conceived by any employee or consultant of the Company or its Subsidiaries during the scope of their services for the Company or its Subsidiaries have been disclosed and effectively assigned to the Company or its Subsidiaries; and with respect to the Intellectual Property Rights licensed by the Company and its Subsidiaries, such licenses are in full force and effect, the Company and its Subsidiaries are in compliance with the terms and provisions thereof, and no event has occurred which, with notice or lapse of time or both, would constitute a breach or violation thereof which could have a material adverse effect on the financial condition, business or properties of the Company and its Subsidiaries taken as a whole, and the Company and its -11- Subsidiaries hold a valid license free of any liens, claims or encumbrances which do not and will not, individually or in the aggregate, have a material adverse effect on the financial condition, business or properties of the Company and its Subsidiaries taken as a whole. (b) To the Company's knowledge, the Company and its Subsidiaries have the right and authority to use the Intellectual Property Rights in connection with the conduct of the business of the Company and its Subsidiaries in the manner and to the extent such business is presently conducted and as it is proposed to be conducted, and the Company and its Subsidiaries have not been notified of any claim that such use conflicts with, infringes upon or violates any rights of any other Person, except to the extent that such conflict, infringement or violation does not and will not, individually or in the aggregate, have a material adverse effect. Section 4.15. Material Contracts. Except as set forth on Schedule 4.15 and except as disclosed in the Disclosure Package, there are no material agreements, undertakings, instruments, contracts or proposed transactions to which the Company or any of the Subsidiaries is a party or by which it is bound which involve an option, license or agreement of any kind with respect to the Intellectual Property Rights of the Company or its Subsidiaries, or the prohibition or limitation of the Company's or any of its Subsidiaries' ability to engage in their respective businesses or any other business or to compete with any Person. Section 4.16. No Undisclosed Liabilities. Except as disclosed in the Disclosure Package, there are no liabilities or obligations of any nature, whether absolute, accrued, contingent or otherwise, and whether due or to become due (including, without limitation, any liability for taxes and interest, penalties and other charges payable with respect to any such liability or obligations) which individually or in the aggregate are material to the condition (financial or otherwise) of the Company, or prospects of the Company, which are not disclosed in the Audited Financial Statements, or incurred in the ordinary course of business subsequent to the latest of the Audited Financial Statements. Section 4.17. Changes. Except as disclosed in the Disclosure Package and except as set forth in Schedule 4.17 or disclosed elsewhere in this Agreement since December 31, 1997, except as filed with the Commission, there has not been: -12- (a) any material change in the assets, liabilities (contingent or otherwise), obligations, condition (financial or otherwise) or operating results of the Company or any of the Subsidiaries, except operating losses and changes in the ordinary course of business from that reflected in the Audited Financial Statements or subsequent financial statements filed with the Commission; (b) any material waiver by the Company and its Subsidiaries of a valuable right which is material to the Company's and its Subsidiaries' business or of a material debt owed to it; (c) any satisfaction or discharge of any lien, claim or encumbrance or payment of any obligation by the Company and its Subsidiaries, except in the ordinary course of business and which is not material to the assets, properties, financial condition, operating results, prospects or business of the Company and its Subsidiaries (as such business is presently conducted and as it is planned to be conducted); (d) any material change or amendment to a material contract or arrangement by which the Company and its Subsidiaries or any of its assets or properties is bound or subject; or (e) any other material adverse change in the business or prospects of the Company and its Subsidiaries (as such business is presently conducted or planned to be conducted). Section 4.18. Employee Benefit Plans. No prohibited transaction (as defined under Section 4975 of the Internal Revenue Code of 1986, as amended) has occurred. The Company has received a favorable determination of qualification from the Internal Revenue Service for each employee benefit plan (as defined in Section 3(3) of ERISA)("Employee Benefit Plan") in which employees of the Company or the Subsidiaries participate. The financial statements of the Company accurately reflect all liabilities owed by the Company to past and present employees or their beneficiaries arising out of such employees' employment with the Company pursuant to such Employee Benefit Plans. All amounts required under the terms of any Employee Benefit Plan to have been paid or accrued as contributions to such Employee Benefit Plan by the Company as of the last day of the most -13- recent fiscal year of such Plan ended on or before the date of this Agreement have been paid or accrued. Section 4.19. Employee Relations. The Company is not bound by or subject to (and none of its assets or properties is bound by or subject to) any written or oral, express or implied, contract, commitment or arrangement with any labor union, and no labor union has requested or, to the knowledge of the Company, sought to represent any of the employees, representatives or agents of the Company or any of its Subsidiaries. There is no strike or other labor dispute involving the Company or any of its Subsidiaries pending, or to the knowledge of the Company threatened, which could have a material adverse effect on the assets, properties, financial condition, prospects or business (as now conducted or as proposed to be conducted) of the Company, nor is the Company aware of any labor organization activity involving its or its Subsidiaries' employees. The Company is not aware that any officer or key employee intends to terminate his or her employment with the Company or any of its Subsidiaries, nor does the Company intend to terminate the employment of any such person. The Company believes its relations with its employees are satisfactory. Section 4.20. Taxes. All required foreign, federal, state and local tax returns, notices and reports of the Company and its Subsidiaries have been accurately prepared and duly and timely filed, and all foreign, federal, state, local and other taxes required to be paid with respect to the periods covered by such returns have been paid, except such returns and taxes with respect to which the failure to pay or file would not have a material adverse effect. The Company has never had any tax deficiency proposed or assessed against it which would have a material adverse effect, has not executed any waiver or extension of any statute of limitations on the assessment or collection of any taxes which would have a material adverse effect and none of the Company's federal or state tax returns has ever been audited by governmental authorities. No tax audit, action, suit, proceeding, investigation, examination or claim is now pending or, to the Company's knowledge, threatened against the Company, and no issue or question has been communicated to the Company (and is currently pending) by any taxing authority in connection with any of the Company's tax returns or reports. Section 4.21. Use of Proceeds. The proceeds of the sale of the Securities to the Purchaser hereunder shall be -14- used by the Company for working capital and other general corporate purposes. Section 4.22. Environmental Matters. To the Company's best knowledge after reasonable inquiry: (a) all assets and property currently or previously owned, leased, operated or used by the Company or any of the Subsidiaries in connection with their businesses ("Environmental Property"), all current and previous conditions on and uses of the Environmental Property and all current and previous ownership and operations of the Environmental Property and the Company and the Subsidiaries (including, without limitation, transportation and disposal of Hazardous Materials by or for the Company or the Subsidiaries) comply, have at all times complied, and will comply with, and do not cause, and have not caused, liability to be incurred by the Company or the Subsidiaries under any current or past federal or state law relating to the protection of health or the environment, including, without limitation, the common law, including the law of nuisance and strict liability ("Environmental Law") except where non-compliance has had and will have no material adverse effect; and neither the Company nor any of the Subsidiaries is in violation of and has not violated any Environmental Law which violation has had or will have a material adverse effect; (b) the Company has properly obtained and is in compliance with all necessary permits, registrations, approvals and licenses, and has properly made all filings with and submissions to any government or other authority, required by any Environmental Law the failure of which to obtain, comply with or make would have a material adverse effect. No deficiencies have been asserted by any such government or authority with respect to such items which deficiencies have had or will have a material adverse effect; and (c) there has been no spill, discharge, leak, leaching, emission, migration, injection, disposal, escape, dumping or release of any kind on, beneath, above or into the Environmental Property or into the environment surrounding the Environmental Property of any (i) pollutants or contaminants, other than automobile emissions, (ii) hazardous, toxic, infectious or radioactive substances, chemicals, materials or wastes (including, without limitation, those defined as hazardous under any Environmental Law), (iii) petroleum including crude oil or any derivative or fraction thereof, -15- (iv) asbestos fibers, other than contained in automobile brake linings or (v) solid wastes ((i)-(v) collectively, "Hazardous Materials") which have had or will have a material adverse effect. Section 4.23. Registration Rights; Voting Trust Agreements. Except as described in the Disclosure Package, the Company is not a party to any contract or commitment which requires the Company to register (now or in the future, whether contingent or not) under the 1933 Act any of its capital stock. The Company is not a party to, nor aware of, any stockholder agreements, voting trusts, proxies or other agreements or understandings with respect to the voting of any of the capital stock of the Company. Section 4.24. FDA Matters. Except as disclosed to the Purchaser in writing, there are no applications or other proceedings presently pending before the United States Food and Drug Administration (the "FDA"). The FDA has not delivered a letter of non-approval or threatened to deliver such a letter with respect to any product manufactured, marketed, licensed or developed by the Company or any Subsidiary, or any product which the Company or its Subsidiaries intend to manufacture, market, license or develop. Section 4.25. Warranties and Representations. All of the foregoing representations and warranties will survive for a period of one year from the Closing Date. ARTICLE V Covenants The Company covenants and agrees that so long as the Purchaser and its Affiliates own more than 5% of the outstanding shares of Common Stock of the Company, unless the Purchaser shall otherwise consent in writing, it will: Section 5.01. Financial Information. Furnish or cause to be furnished to the Purchaser the following financial statements and information, which shall be prepared on a substantially consistent basis: (a) As soon as available but in any event within 100 days after the close of each fiscal year of the Company, -16- audited consolidated balance sheets of the Company and of each of its Subsidiaries as of the close of such fiscal year, and audited consolidated statements of income, stockholders' equity and cash flow of the Company and each of its Subsidiaries for such fiscal year, prepared in accordance with generally accepted accounting principles, setting forth, in the case of each consolidated balance sheet and consolidated statement, in comparative form, corresponding figures for the preceding fiscal year, together with copies of the reports and certificates relating thereto, including an opinion of Ernst & Young LLP or other independent certified public accountants of recognized national standing selected by the Company. The Company and the Purchaser agree that so long as the Company is subject to the reporting obligations of Section 13 of the 1934 Act pursuant to Section 12(b) or 12(g) of the 1934 Act, the Company's Annual Report on Form 10-K shall satisfy the requirements of this Section 5.01(a). (b) As soon as available but in any event within 60 days after the end of each fiscal quarter of the Company (i) a consolidated balance sheet of the Company and its Subsidiaries as of the last day of such fiscal quarter and consolidated statements of income and cash flow of the Company and each of its Subsidiaries for such quarter and for the period from the beginning of the then current fiscal year to the end of such quarter, setting forth in comparative form corresponding figures for the same quarter and period in the preceding fiscal year and for the same quarter and period in the current year and (ii) a consolidating balance sheet for the Company and each of its Subsidiaries as of the close of such quarter and consolidating statements of earnings and cash flow for the Company and each of its Subsidiaries for such quarter and for the period from the beginning of the then current fiscal year to the end of such quarter, each balance sheet and statement of earnings and cash flow referred to in this Section to be certified by the principal financial officer of the Company, provided that any such certificate may state that the accompanying balance sheet and statements are subject to normal year-end adjustments based on year-end audit. The Company and the Purchaser agree that so long as the Company is subject to the reporting obligations of Section 13 of the 1934 Act pursuant to Section 12(b) or 12(g) of the 1934 Act, the Company's Quarterly Report on Form 10-Q shall satisfy the requirements of this Section 5.01(b). (c) From time to time, with reasonable promptness, such additional financial statements and information with -17- respect to the financial condition of the Company and of its Subsidiaries as the Purchaser may reasonably request, including, without limitation and without further request, any financial statements or reports (including comment letters to management) furnished to the Company or any Subsidiary by its independent certified public accountants, any and all registration statements, proxy statements and periodic reports filed by the Company or any Subsidiary with the Commission pursuant to the 1933 Act or the 1934 Act, and all material press releases issued by or on behalf of the Company or any Subsidiary. Section 5.02. Access to Information. Provide such information concerning the operations of the Company and its Subsidiaries as the Purchaser may from time to time reasonably request in writing, and upon reasonable advance notice permit representatives of the Purchaser full and free access during normal business hours to the properties, books and records of the Company and its Subsidiaries; provided that the Company shall not be required to disclose any confidential information or information held as a trade secret, and to discuss the affairs, accounts and finances of the Company or any of its Subsidiaries with the financial and management personnel of the Company and its Subsidiaries and with their independent certified public accountants. Section 5.03. Board of Directors' Meetings. The Purchaser shall receive notices of any and all Board of Directors' meetings in accordance with the Bylaws of the Company and shall be entitled to attend, as an observer, all such Board of Directors' meetings. In addition, the Company will provide the Purchaser with copies of any written consents of the Board of Directors at the time they are signed by the Board of Directors. Section 5.04. Rule 144. The Company agrees to make and keep public information regarding the Company available as those terms are understood and defined in Rule 144 promulgated under the 1933 Act, at all times following the date of the Company's initial public offering, and to file with the Commission in a timely manner all reports and other documents required of the Company under the 1933 Act and the 1934 Act, at any time that it is subject to such reporting requirements. -18- ARTICLE VI Representations, Warranties and Covenants of the Purchaser; Transfer of Securities Section 6.01. Representations of the Purchaser. The Purchaser hereby represents and warrants to the Company as follows: (a) The Purchaser is a corporation organized under the laws of Delaware having its principal place of business in Bridgewater, New Jersey. (b) The Purchaser has the requisite corporate power and authority to execute, deliver and carry out this Agreement and all other instruments, documents and agreements contemplated or required by the provisions of this Agreement to be executed, delivered or carried out by the Purchaser. This Agreement constitutes the legally valid and binding obligation of the Purchaser enforceable against the Purchaser in accordance with its terms. (c) The Purchaser is an "accredited investor" within the meaning of Regulation D under the 1933 Act, and is acquiring the Securities for investment for its own account, and not with a view to distribution subject, nevertheless, to any requirement of law that the disposition of its property shall at all times be within its control. The Purchaser has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of purchasing the Securities. The Purchaser is aware that it may be required to bear the economic risk of an investment in the Securities for an indefinite period, and it is able to bear such risk for an indefinite period. The Purchaser acknowledges (a) that the Securities being acquired by it are not being registered under the 1933 Act on the grounds that the issuance of such securities is exempt from registration under Section 4(2) of the 1933 Act as not involving any public offering, and (b) that the Company's reliance on such exemption is predicated in part on the representations made to the Company by the Purchaser in this Section 6.01. Section 6.02. Transfer of Securities. The Purchaser will not sell, assign or transfer all or any part of the Securities acquired by it except as follows: -19- (a) The Securities or any part thereof or interest therein may be assigned or transferred to an Affiliate of the Purchaser for its own account or in connection with a sale of the Purchaser or its portfolio assets; provided that such assignment or transfer is made in compliance with applicable securities laws. (b) The Securities or any part thereof or interest therein may be assigned or transferred if such transfer is determined by the Purchaser and its counsel, which may be in-house counsel to the Purchaser, to be necessary in order to comply with applicable laws, rules or regulations; provided that such assignment or transfer is made in compliance with applicable securities laws. (c) The Securities or any part thereof or interest therein may be assigned or transferred to any other Person or Persons; provided that the Purchaser shall have furnished to the Company, if reasonably requested to do so, either (i) an opinion, reasonably satisfactory to counsel for the Company, of counsel skilled in securities matters (selected by the Purchaser and reasonably satisfactory to the Company, it being understood and agreed that Sullivan & Cromwell is and will be reasonably satisfactory to the Company) to the effect that the proposed sale or transfer may be made without registration under the 1933 Act, or (ii) an interpretive letter from the Commission to the effect that no enforcement action will be recommended if the proposed sale or transfer is made without registration under the 1933 Act, in either case accompanied by evidence reasonably satisfactory to the Company that such transfer will be in compliance with applicable state securities ("blue sky") laws; provided, however, that the foregoing proviso shall not apply with respect to any transfer pursuant to an effective registration statement under the 1933 Act. Upon the assignment or transfer by the Purchaser of all or any part of the Securities or its interest therein pursuant to paragraphs (a), (b) or (c) above, the term "the Purchaser", as used herein, shall thereafter include, to the extent of the interest so assigned or transferred, the assignee or transferee of such interest provided, however, that the foregoing shall not apply with respect to any transfer pursuant to an effective registration statement under the 1933 Act. -20- Section 6.03. Private Placement; Legends. The Purchaser acknowledges and agrees that the Securities have not been registered under the 1933 Act and may not be offered or sold in the United States or to U.S. persons (as defined in Regulation S) unless the Securities are registered under the 1933 Act, or an exemption from the registration requirements of the 1933 Act is available. Each certificate evidencing any Securities shall bear a legend in substantially the following form: The securities represented by this certificate are subject to an Equity Investment Agreement, dated January 15, 1999, a copy of which is on file at the principal office of the Company and will be furnished to the holder on request to the Secretary of the Company. Such Equity Investment Agreement provides, among other things, for certain restrictions on sale, transfer, pledge, hypothecation or other disposition of the securities evidenced by this certificate. In addition, unless counsel to the Company shall have advised the Company that such legend is no longer needed, each certificate evidencing the Securities shall bear a legend in substantially the following form: The securities represented by this certificate have not been registered pursuant to the Securities Act of 1933, as amended (the "Act"), or any state securities law, and such securities may not be sold, transferred or otherwise disposed of unless the same are registered and qualified in accordance with the Act and any applicable state securities laws, or in the opinion of counsel reasonably satisfactory to the Company such registration and qualification are not required. The Purchaser shall have the right to request that the Company remove such legends if the conditions of Rule 144 of the 1933 Act have been satisfied with respect to the Securities evidenced by such certificate, or if such Securities are otherwise registered in accordance with the 1933 Act or another exemption from such registration is available, and the Company shall fully cooperate with the Purchaser if any of the foregoing conditions are satisfied; provided in each case other than registration under the 1933 Act that the Purchaser shall have furnished to the Company, if -21- reasonably requested to do so, an opinion or interpretive letter and such other evidence as is referenced in Section 6.02(c) for a transfer of such Securities. ARTICLE VII Conditions to Closing Section 7.01. Conditions to the Purchaser's Obligations. The obligation of the Purchaser to purchase the Securities is subject to the prior satisfaction or waiver in writing by the Purchaser of all of the following conditions: (a) The representations and warranties of the Company contained in Article IV shall be true in all material respects as of the Closing Date as though made at and as of the Closing Date. (b) The Company shall have performed, in all material respects, all covenants, agreements and obligations required to be performed by it on or prior to the Closing Date pursuant to this Agreement. (c) A Credit Agreement in the form attached hereto as Exhibit A (the "Credit Agreement"), a Warrant Agreement in the form attached hereto as Exhibit B (the "Warrant Agreement"), a Security Agreement in the form attached hereto as Exhibit C (the "Security Agreement"), a Registration Rights Agreement in the form attached hereto as Exhibit D (the "Registration Rights Agreement") and an Amended and Restated Ophthalmology Development & License Agreement in the form attached hereto as Exhibit E (the "Amending Agreement") shall have been duly executed and delivered by the parties thereto. (d) The Purchaser shall have received the opinion of Nida & Maloney PC in the form attached hereto as Exhibit F. (e) On or prior to the Closing Date, the Company shall tender to the Purchaser certificate(s) representing the Securities. (f) The Company and the Purchaser shall have obtained all necessary authorizations, consents or approvals or other orders or actions necessary or appropriate for the consummation of the transactions contemplated by this Agreement, and the Company and the Purchaser shall have made all necessary filings with any court, administrative agency, or other governmental or regulatory -22- body or authority required for the execution and delivery by the Company and the Purchaser of this Agreement or the Company's and the Purchaser's consummation of the transactions contemplated hereby. (g) No action, suit, proceeding or investigation by or before any court, administrative agency or other governmental authority shall have been instituted or threatened which may restrain, prohibit or invalidate any of the transactions contemplated by this Agreement. (h) The waiting period (including any extension thereof) applicable to the Purchaser's acquisition of the Securities pursuant to this Agreement under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, shall have expired or been terminated, and the Purchaser shall have received evidence thereof satisfactory to the Purchaser. Section 7.02. Conditions to the Company's Obligations. The obligation of the Company to issue, deliver and sell the Securities is subject to the prior satisfaction or waiver in writing by the Company of all of the following conditions: (a) The representations and warranties of the Purchaser contained in Section 6.01 shall be true in all material respects as of the Closing Date as though made at and as of the Closing Date. (b) The Purchaser shall have performed, in all material respects, all covenants, agreements and obligations required to be performed by it on or prior to the Closing Date pursuant to this Agreement. (c) The Credit Agreement, Warrant Agreement, Security Agreement, Registration Rights Agreement and Amending Agreement shall have been duly executed and delivered by the parties thereto. (d) On the Closing Date, the Purchaser shall tender to the Company the Purchase Price. (e) The Company and the Purchaser shall have obtained all necessary authorizations, consents or approvals or other orders or actions necessary or appropriate for the consummation of the transactions contemplated by this Agreement, and the Company and the Purchaser shall have made all necessary filings with any court, administrative agency, or other governmental or regulatory -23- body or authority required for the execution and delivery by the Company and the Purchaser of this Agreement or the Company's and the Purchaser's consummation of the transactions contemplated hereby. (f) No action, suit, proceeding or investigation by or before any court, administrative agency or other governmental authority shall have been instituted or threatened which may restrain, prohibit or invalidate any of the transactions contemplated by this Agreement. (g) The waiting period (including any extension thereof) applicable to the Purchaser's acquisition of the Securities pursuant to this Agreement under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, shall have expired or been terminated, and the Company shall have received evidence thereof satisfactory to the Company. ARTICLE VIII Indemnity Section 8.01. General. The Company shall indemnify, defend and save harmless the Purchaser from, against, for and in respect of any Loss which arises out of or relates to (i) a state of facts as a result of which any representation made by the Company in Article IV hereof or in any document delivered pursuant to this Agreement is untrue, inaccurate or misleading in any respect as of the date hereof, or (ii) the breach of any warranty made by the Company in Article IV hereof, or (iii) the failure of the Company to comply with, perform or observe any other term, provision or condition contained in this Agreement or in any document delivered pursuant to this Agreement; and any reasonable expenses incurred in connection with investigating, defending or asserting any claim, action, suit or proceeding incident to any matter indemnified against hereunder, including, without limitation, court filing fees, court costs, arbitration fees or costs, witness fees, and fees and disbursements of legal counsel, investigators, expert witnesses, accountants and other professionals in connection therewith. Section 8.02. Cooperation. Each of the parties hereto agrees to render to the other parties such assistance as they may reasonably require and to cooperate in good faith with the other parties in order to ensure the proper and -24- adequate defense of any claim, action, suit or proceeding brought by any third party. Section 8.03. Remedies Cumulative. The remedies of the parties provided for in this Article VIII shall be cumulative, shall not preclude the assertion by any party of any other rights such party may have under this Agreement, applicable law or otherwise (including rescission) and shall survive redemption or repurchase of the Securities. ARTICLE IX Effectiveness of Agreement Section 9.01. General. Except as otherwise provided herein, the provisions of this Agreement shall continue in full force and effect for the benefit of the holders of the Securities so long as any shares of the Securities are held by the Purchaser or its Affiliates. The representations and warranties made herein or in connection herewith shall survive the issuance, delivery and sale of the Securities. ARTICLE X Lockup and Standstill Agreements Section 10.01. Lockup. Prior to the 180th calendar day following the Closing Date, the Purchaser shall not, and shall cause its Affiliates not to, sell, assign, transfer or otherwise dispose of any of the Securities, except that the Purchaser may transfer any of the Securities to any of its wholly owned subsidiaries. Section 10.02. Standstill. (a) The Stock Purchase Agreement, dated as of July 1, 1995, between the Company and Pharmacia & Upjohn S.p.A. is hereby amended ab initio, effective as of the date thereof, to delete therefrom Section 5.5 thereof in its entirety. (b) Prior to the earliest of (i) the occurrence of an Event of Default (as defined in the Credit Agreement), (ii) the commencement of a tender offer by any Person, other than Pharmacia & Upjohn, Inc. or any of its wholly owned subsidiaries, -25- for shares of Common Stock, and (iii) July 1, 2000, unless specifically requested in advance by the Company's Board of Directors, neither the Purchaser nor any of the Purchasers' Affiliates will, and the Purchaser and its Affiliates will not assist or encourage others (including by providing financing) to, directly or indirectly, acquire or agree, offer, seek or propose to acquire ownership of any securities issued by the Company (including but not limited to beneficial ownership (as defined in Rule 13d-3 under the 1934 Act)) or enter into any discussions, negotiations, arrangements or understandings with any Person with respect to any of the foregoing; provided that this Section 10.02(b) shall not prohibit (i) the acquisition by the Purchaser and its Affiliates of a number of shares of Common Stock which, taken together with the number of shares of Common Stock held by the Purchaser and its Affiliates as of the date of such acquisition, does not exceed 25% of the aggregate number of outstanding shares of Common Stock as of the date of this acquisition, (ii) the acquisition by the Purchaser or its Affiliates of shares of Common Stock pursuant to Section 2.03 of the Credit Agreement or upon exercise of any Warrants (as defined in the Credit Agreement), or (iii) the acquisition by the Purchaser or its Affiliates of promissory notes pursuant to the Credit Agreement or any other securities pursuant to the Credit Documents (as defined in the Credit Agreement). ARTICLE XI Miscellaneous SECTION 11.01. APPLICABLE LAW. THIS AGREEMENT AND ALL RIGHTS ARISING HEREUNDER 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 11.02. WAIVER OF JURY. THE COMPANY AND THE PURCHASER 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 AND ANY RIGHT ARISING HEREUNDER. Section 11.03. Jurisdiction and Venue; Service of Process. (a) The Company and the Purchaser each hereby -26- 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 this Agreement and any right arising hereunder, and to the laying of venue in the Borough of Manhattan, The City of New York. The Company and the Purchaser 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 Company 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 Company at its address set forth in Section 11.06 or at such other address of which the Purchaser shall have been notified pursuant thereto. The Company 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 in any other jurisdiction. (c) Each of the Company and the Purchaser 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 11.03 any special, exemplary, punitive or consequential damages. Section 11.04. 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 Company and the Purchaser. (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 11.05. Cumulative Rights; No Waiver. Each and every right granted to the Purchaser or allowed the Purchaser 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 Purchaser to exercise, and no delay in -27- exercising, any right will operate as a waiver thereof, nor will any single or partial exercise by the Purchaser of any right preclude any other or future exercise thereof or the exercise of any other right. Section 11.06. 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 Section 11.06 shall be addressed: If to the Company, to Miravant Medical Technologies 7408 Hollister Avenue Santa Barbara, California 93117 Telecopy: (805) 685-6038 Attention: Gary S. Kledzik with a copy (which, in and of itself, shall not constitute notice) to Nida & Maloney PC 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 Purchaser, to Pharmacia & Upjohn, Inc. -28- 95 Corporate Drive Bridgewater, New Jersey 08807 Telecopy: (908) 470-8047 Attention: Treasurer and Pharmacia & Upjohn, Inc. 95 Corporate Drive Bridgewater, New Jersey 08807 Telecopy: (908) 306-4485 Attention: Senior Vice President of Business Development and Pharmacia & Upjohn, Inc. 95 Corporate Drive Bridgewater, New Jersey 08807 Telecopy: (908) 306-4489 Attention: General Counsel with a copy (which, in and of itself, shall not constitute notice) to Sullivan & Cromwell 125 Broad Street New York, New York 10004 Telecopy: (212) 558-3588 Attention: Neil T. Anderson, Matthew G. Hurd and Martin J. Travers (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. -29- Section 11.07. Separability. In case any one or more of the provisions contained in this Agreement shall be invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions contained in this Agreement shall not in any way be affected or impaired thereby. Section 11.08. Persons Benefitting. This Agreement shall be binding upon and inure to the benefit of the Purchaser and the Company, and their respective successors, assigns, beneficiaries, executors and administrators. Nothing in this Agreement is intended or shall be construed to confer upon any Person, other than the Company and the Purchaser (and such successors, assigns, beneficiaries, executors and administrators), any right, remedy or claim under or by reason of this Agreement or any part hereof. This Agreement may not be assigned without the written consent of the parties hereto, and any purported assignment made in violation of this provision shall be null and void. The provisions of the previous sentence notwithstanding, the Purchaser may assign its rights and obligations under this Agreement to any of its wholly owned Subsidiaries without the consent of any other party to this Agreement. Section 11.09. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together constitute one and the same instrument. Section 11.10. Headings. The descriptive headings of the several Sections of this Agreement are inserted for convenience and shall not control or affect the meaning or construction of any of the provisions hereof. -30- 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: /s/ Gary S. Kledzik -------------------------------- Title: Chief Executive Officer PHARMACIA & UPJOHN, INC. By: /s/ Mats Pettersson -------------------------------- Title: Senior Vice President PHARMACIA & UPJOHN, S.p.A. By: /s/ Mats Pettersson -------------------------------- Title: Attorney-In-Fact -31- EX-10.5 3 AGREEMENT & AMENDMENT TO EQUITY INVESTMENT EXHIBIT E AGREEMENT AND AMENDMENT TO THE EQUITY INVESTMENT AGREEMENT AGREEMENT AND AMENDMENT, dated as of February 17, 1999 (the "Agreement"), to the Equity Investment Agreement, dated as of January 15, 1999, by and between Miravant Medical Technologies, a Delaware Corporation (the "Company"), Pharmacia & Upjohn, Inc., a Delaware corporation ("P&U Inc.") and Pharmacia & Upjohn S.p.A., an Italian corporation ("P&U S.p.A." and together with P&U Inc., "P&U") (the "Equity Investment Agreement"). WHEREAS, P&U wishes to make P&U S.p.A. the Purchaser of any securities to be received by P&U pursuant to the Equity Investment Agreement; and WHEREAS, each party to the Equity Investment Agreement desires to amend the Equity Investment Agreement in the manner set forth herein. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: Section 1. Capitalized terms used but not defined herein shall have the meanings given to such terms in the Equity Investment Agreement. Section 2. The Equity Investment Agreement is hereby amended, effective as of the date hereof, as follows: (i) The definition of the term "Purchaser" is hereby amended to read in its entirety as follows: "Purchaser" shall mean Pharmacia & Upjohn S.p.A. (ii) The last sentence of Section 4.13 is hereby amended to read in its entirety as follows: To the Company's knowledge, there are no commitments or contractual obligations of which the Company is a party which would prohibit the Company from entering into this Agreement or performing its obligations hereunder or which would affect the Company's ability to amend with the Purchaser or its Affiliates the licenses for the Product Intellectual Property provided for in the License Agreements. (iii) Section 6.01(a) is hereby amended to read in its entirety as follows: (a) The Purchaser is a corporation organized under the laws of Italy having its principal place of business in Milan, Italy. (iv) Section 10.01 is amended to read in its entirety as follows: Section 10.01 Lockup. Prior to the 180th calendar day following the Closing Date, the Purchaser shall not, and Pharmacia & Upjohn, Inc. shall not and shall not cause its Affiliates to, sell, assign, transfer or otherwise dispose of any of the Securities, except that the Purchaser may transfer any of the Securities to any wholly owned subsidiary of Pharmacia & Upjohn, Inc. (v) Section 11.06 is hereby amended to add the following to addresses to which notices to the Purchaser must be directed: Pharmacia & Upjohn S.p.A., via Robert Koch 1.2, 75017 Milan, Italy Telecopy: 39 2 48381 2988 Attention: Legal Counsel (vi) The last sentence of Section 11.08 is amended to read in its entirety as follows: The provisions of the previous sentence notwithstanding, the Purchaser may assign its rights and obligations under this Agreement to any wholly owned Subsidiary of Pharmacia & Upjohn, Inc. without the consent of any other party to this Agreement. Section 5. This Agreement may be executed in two or more counterparts, each of which shall constitute an original and all of which, when taken together, shall constitute one Agreement. -2- Section 6. This Agreement shall be effective as of the date hereof and, except as set forth herein, the Equity Investment Agreement shall remain in full force and effect and be otherwise unaffected hereby. Section 7. Each party to this Agreement agrees to execute, acknowledge, deliver, file and record such further certificates, amendments, instruments and documents, and to do all such other acts and things, as may be required by law or as may be necessary or advisable to carry out the intent and purpose of this Agreement. Section 8. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF. Section 9. THE COMPANY AND THE PURCHASER 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 AND ANY RIGHT ARISING HEREUNDER. Section 10. Every provision of this Agreement is intended to be severable. The invalidity and unenforceability of any particular provision of this Agreement in any jurisdiction shall not affect the other provisions hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provision were omitted. Section 11. This Agreement shall be binding upon the parties hereto and their respective successors, executors, administrators, legal representatives, heirs and legal assigns and shall inure to the benefit of the parties hereto and, except as otherwise provided herein, their respective successors, executors, administrators, legal representatives, heirs and legal assigns. No person other than the parties hereto and their respective successors, executors, administrators, legal representatives, heirs and legal assigns, shall have any rights or claims under this Agreement. -3- In witness whereof, the undersigned have signed this Agreement as of the date first above written. MIRAVANT MEDICAL TECHNOLOGIES By: /s/ Gary S. Kledzik ---------------------------------- Title: Chief Executive Officer PHARMACIA & UPJOHN, INC. By: /s/ Mats Pettersson ---------------------------------- Title: Senior Vice President PHARMACIA & UPJOHN S.p.A. By: /s/ Mats Pettersson ---------------------------------- Title: Attorney-In-Fact -4- EX-10.6 4 WARRANT AGREEMENT EXHIBIT F WARRANT AGREEMENT WARRANT AGREEMENT (this "Agreement"), dated as of February 18, 1999, between MIRAVANT MEDICAL TECHNOLOGIES, a Delaware corporation (the "Company"), and PHARMACIA & UPJOHN TREASURY SERVICES AB, a Swedish corporation (the "Initial Holder"). W I T N E S S E T H : WHEREAS, Sections 2.02 and 6.02(c) of the Credit Agreement, of even date herewith, between the Company and Pharmacia & Upjohn Treasury Services AB (the "Credit Agreement") provide that in connection with the making of each Borrowing Request contemplated thereby, the Company shall deliver to the Initial Holder a Warrant Certificate representing a number of Warrants equal to the Warrant Number and having the terms herein set forth; NOW, THEREFORE, the parties agree as follows: ARTICLE I Definitions Section 1.01. 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". All references herein to the Preamble, Recitals, Articles, Sections and Exhibits shall be deemed references to the Preamble and Recitals, Articles and Sections of, and Exhibits to, this Agreement unless the context shall otherwise require. The 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. Section 1.02. Definitions. The following terms have the meanings ascribed to them below: "Affiliate" of any Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such Person. For purposes of this definition, "control" when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Average Price" means, with respect to the Exercise Price for any Warrant, the average of the Closing Prices of the Common Stock for the 10 Trading Days immediately preceding the date of the dispatch to the Initial Holder of the Borrowing Request that accompanies the Warrant Certificate evidencing such Warrant. "Board of Directors" means the board of directors of the Company. "Borrowing Request" has the meaning assigned to such term in the Credit Agreement. "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. "Cash Amount" means, with respect to any Warrant, an amount of cash equal to the product of (i) 95% of the Closing Price of the Common Stock as of the date of exercise of such Warrant multiplied by (ii) the Shares Amount in effect on such date. "Close of Business" means, for any day, 5:00 p.m., New York City time, on such date. "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, or if not listed or admitted to trading on any national securities exchange and not quoted on the Nasdaq National -2- Market, the closing bid price of the Common Stock in the over-the-counter market on the day in question as reported by the National Quotation Bureau Incorporated, or a similarly generally accepted reporting service, or, if not so available in such manner, as furnished by any New York Stock Exchange, Inc. member firm selected from time to time by the Board of Directors for such purpose. In the case of a closing price of Common Stock on the Nasdaq National Market System, 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. "Commission" means the Securities and Exchange Commission (or any successor Governmental Authority). "Common Stock" means the common stock, par value $.01 per share, of the Company and any other stock of the Company into which such common stock may be converted or reclassified (other than stock of the Company 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. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Exercise Price" means, with respect to any Warrant, the price equal to 140% of the Average Price. "Expiration Date" means, with respect to each Warrant, the fifth anniversary of the date on which a Warrant Certificate evidencing such Warrant is first received by the Initial Holder, provided that if such anniversary is not a Business Day, the next Business Day thereafter. "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. "Holder" means any holder from time to time of Warrant Certificates. "Person" means any individual, sole proprietorship, partnership, joint venture, trust, unincorporated -3- 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). "Quarterly Loan" has the meaning assigned to such term in the Credit Agreement. "SEC Reports" means the annual and quarterly reports and the information, documents, and other reports that the Company is required to file with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act. "Securities Act" means the Securities Act of 1933, as amended. "Shares Amount" means, with respect to any Warrant, one share of Common Stock, subject to all adjustments made pursuant to Article V hereof on or prior to the date of exercise of such Warrant. "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. "Warrant" means a warrant to purchase Common Stock at a price per share of Common Stock equal to the Exercise Price for such Warrant. "Warrant Number" has the meaning assigned to such term in the Credit Agreement. -4- Section 1.03. Tie Sheet. The following terms are defined in the Sections set forth below: Term Section ---- ------- Agreement Preamble Applicable Price 5.06 Call Notice 3.07(b) Called Warrants 3.07(a) Common Stock Fundamental Change 5.06 Company Preamble Credit Agreement Recitals Current Event 5.01(g) Expiration Time 5.01(f) Indemnitee 9.02 Initial Holder Preamble Non-Stock Fundamental Change 5.06 Other Event 5.01(g) Purchased Shares 5.01(f) Purchaser Stock Price 5.06 Reference Date 5.01(d) Registrar 2.04(a) Transfer Agent 7.01 Trigger Date 3.07(a) Warrant Certificates 2.02 Warrant Register 2.04(a) ARTICLE II Issuance and Grant of Warrants; Form, Execution, Delivery and Registration of Warrant Certificates Section 2.01. Issuance and Grant of Warrants. In connection with the delivery by the Company of each Borrowing Request pursuant to Section 2.02 of the Credit Agreement, the Company will issue and grant to the Initial Holder a number of Warrants equal to the Warrant Number. In the event that the Company has complied with its obligations pursuant to the Credit Agreement and the Initial Holder fails to make the Quarterly Loan contemplated by Section 2.02 of the Credit Agreement, the Warrants evidenced by the Warrant Certificate that accompanies the related Borrowing Request shall be null and void; provided, however, that if the Initial Holder fails to make such Quarterly Loan as a result of the Company's cancellation or revocation of such Borrowing Request or as a result of the Company's failure to comply with its obligations under the Credit Agreement, such Warrants and such Warrant Certificate shall not be rendered null, void or otherwise invalid. -5- Section 2.02. Form of Warrant Certificates. The certificates evidencing the Warrants (the "Warrant Certificates") shall be in registered form only, in the form set forth in Exhibit A hereto and may represent any whole number of Warrants. Each Warrant Certificate shall be dated the date of the Borrowing Request accompanying such Warrant Certificate and may have imprinted or otherwise reproduced thereon such letters, numbers or other marks of identification as may, consistent with the provisions of this Agreement, be determined by the officers executing any such Warrant Certificate. Section 2.03. Execution and Delivery of Warrant Certificates. Each Warrant Certificate shall be executed on behalf of the Company by (a) its chairman, chief executive officer, president, or chief operating officer, and (b) its chief financial officer, in any case either manually or by facsimile signature printed thereon. Section 2.04. Registration; Registration of Transfers and Exchanges. (a) The Company will keep a register or registers in which the Company shall maintain a master list of names and addresses of the Holders (the "Warrant Register") and shall provide for the registration of, and registration of transfer and exchange of, Warrant Certificates as provided in this Article. Each person designated by the Company from time to time as a person having custody of the Warrant Register and register the transfer and exchange of the Warrant Certificates is hereinafter called, individually and collectively, the "Registrar". The Company hereby appoints the Chief Financial Officer of the Company as Registrar. Upon written notice to the Initial Holder and any acting Registrar, the Company may appoint a successor Registrar for such purposes. (b) Upon due presentation for registration of transfer of any Warrant Certificate to the Registrar, the Company shall execute and deliver in the name of the transferee or transferees a new Warrant Certificate or Warrant Certificates in authorized denominations for a like aggregate number of Warrants bearing numbers or other distinguishing symbols not contemporaneously outstanding. (c) Any Warrant Certificate or Warrant Certificates may be exchanged for a Warrant Certificate or Warrant Certificates in other authorized denominations, representing in the aggregate a like number of Warrants. A Warrant -6- Certificate or Warrant Certificates to be so exchanged shall be surrendered to the Registrar, and the Company shall execute and deliver in exchange therefor the Warrant Certificate or Warrant Certificates bearing numbers or other distinguishing symbols not contemporaneously outstanding. (d) The Company and the Registrar may deem and treat the person in whose name any Warrant Certificate shall be registered in the Warrant Register as the absolute owner of such Warrant Certificate for the purpose of any exercise thereof or any distribution to the Holder thereof and for all other purposes. (e) All Warrants presented for registration of transfer or exchange shall (if so required by the Company or the Registrar) be duly endorsed by the registered Holder or Holders thereof or by the duly appointed legal representative thereof or by a duly authorized attorney and shall be accompanied by a written instrument or instruments of transfer or exchange. (f) No service charge shall be made for any transfer or exchange of Warrant Certificates, but the Company may require payment from the Holder(s) of such Warrant Certificates of a sum sufficient to cover any stamp or other governmental charge or tax that may be imposed in connection with any such transfer or exchange. Section 2.05. Lost, Stolen, Destroyed, Defaced or Mutilated Warrant Certificates. Upon receipt by the Registrar of evidence reasonably satisfactory to the Company of the loss, theft, destruction, defacement, or mutilation of any Warrant Certificate and, in the case of mutilation or defacement, upon surrender thereof to the Registrar for cancellation, then the Company shall execute and deliver, in exchange for or in lieu of the lost, stolen, destroyed, defaced or mutilated Warrant Certificate, a new Warrant Certificate having the same tenor and for a like number of Warrants, bearing a number or other distinguishing symbol not contemporaneously outstanding. Upon the issuance of any new Warrant Certificate pursuant to this Section 2.05, the Company may require the payment from the Holder of such Warrant Certificate of a sum sufficient to cover any tax, stamp tax or other governmental charge that may be imposed in relation thereto and may require (if the Holder of such Warrant Certificate is the Initial Holder or any of its Affiliates) a written instrument executed and delivered by the Initial -7- Holder or The Pharmacia & Upjohn Company, a Delaware corporation, undertaking to indemnify and defend the Company against all claims in respect of the lost, stolen, destroyed, defaced or mutilated Warrant Certificate or (if the Holder is not the Initial Holder or any of its Affiliates) a lost instrument bond providing customary coverage. Every substitute Warrant Certificate executed and delivered pursuant to this Section in lieu of any lost, stolen or destroyed Warrant Certificate shall constitute an additional contractual obligation of the Company, whether or not the lost, stolen or destroyed Warrant Certificate shall be at any time enforceable by anyone, and shall be entitled to the benefits of (but shall be subject to all the limitations of rights set forth in) this Agreement equally and proportionately with any and all other Warrant Certificates duly executed and delivered hereunder. ARTICLE III Exercise of Warrants Section 3.01. Duration of Exercise Rights. Each Warrant shall be exercisable as provided in this Article III from time to time on any Business Day prior to the Close of Business on the Expiration Date for such Warrant. Section 3.02. Right to Purchase. When exercised in accordance with Section 3.03 or 3.07, each Warrant shall entitle the Holder to purchase, and the Company shall be required to issue and deliver, a number of shares of Common Stock equal to the Shares Amount in effect on the day such Warrant is exercised in accordance with Section 3.03 or on the Trigger Date, in the case of an exercise pursuant to Section 3.07, at the Exercise Price for such Warrant; provided, however, that in the case of an exercise pursuant to Section 3.03, the Company may, at its sole election, pay to the Holder of each Warrant so exercised in respect of any one or more of such Warrants cash in an amount equal to the Cash Amount in lieu of delivering the shares of Common Stock. Section 3.03. Exercise Procedures. In order to exercise a Warrant, the Holder must surrender the Warrant Certificate evidencing such Warrant to the Registrar, with the form of election on the reverse of or attached to the Warrant Certificate duly executed, together with payment of the Exercise Price. Any such payment of the Exercise Price shall -8- be by certified or official bank check or wire transfer to the Company of same day funds. Section 3.04. Delivery of Shares. In the event the Company elects to deliver the Shares Amount as provided in Section 3.02, then upon surrender of the Warrant Certificate in accordance with Section 3.03 the Company shall promptly issue or cause to be issued to or upon the written order of the Holder of such Warrant Certificate, a certificate or certificates evidencing the share or shares of Common Stock to which such Holder is entitled, in fully registered form, registered in such name or names as may be directed by such Holder pursuant to the form of election on the reverse of or attached to the Warrant Certificate. Such certificate or certificates evidencing such share or shares shall be deemed to have been issued and any persons who are designated to be named therein shall be deemed to have become the holder of record of such share or shares as of the Close of Business on the date on which the Exercise Price for the related Warrant or Warrants shall have been paid. Section 3.05. Payment of Cash. If the Company elects to deliver the Cash Amount as provided in Section 3.02, then upon surrender of the Warrant Certificate in accordance with Section 3.03, the Company shall make prompt payment of the Cash Amount in same day funds to the account specified on the form of election on the reverse of or attached to the Warrant Certificate. Section 3.06. Certificate for Unexercised Warrants. If fewer than all the Warrants represented by a Warrant Certificate are exercised, such Warrant Certificate shall be surrendered to the Registrar with instructions for the issuance of a new Warrant Certificate and the Company shall promptly execute and deliver a new Warrant Certificate for the Warrants that were not exercised bearing numbers or other distinguishing symbols not contemporaneously outstanding. Section 3.07. Mandatory Exercise. (a) If and only if the average of the Closing Prices of the Common Stock for the 30 Trading Days immediately preceding a particular date (the "Trigger Date") exceeds the Exercise Price set forth in the Warrant Certificate representing one or more Warrants, the Company shall be entitled, at its option exercised within 30 days following the Trigger Date, to cause the Holder of such Warrant Certificate to exercise all, but not fewer than all, -9- of the related Warrants (the "Called Warrants") as provided herein. (b) If the Company elects to cause the Holder to exercise the Called Warrants, it shall furnish to the Holder, within 30 calendar days following the Trigger Date, a written notice thereof, (the "Call Notice"), specifying the identifying number of the Warrant Certificate evidencing the Called Warrants and the Trigger Date. (c) Not later than three Business Days following the later of (i) the date of the Call Notice, and (ii) the expiration or termination of any waiting period (and any extension thereof) applicable to the acquisition by the Holder thereof of the shares of Common Stock issuable upon exercise of the Called Warrants under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended and the receipt of all governmental and contractual permits, consents and approvals necessary in connection with such acquisition, the Company shall deliver to the Holder of the Called Warrants a certificate evidencing a number of shares of Common Stock equal to the product of (x) Shares Amount in effect on the Trigger Date, multiplied by (y) the number of Called Warrants. (d) Not later than three Business Days following the receipt of the certificate referred to in Section 3.07(c), the Holder of the Called Warrants shall deliver to the Company the certificate representing the Called Warrants and a check for the product of (i) the Exercise Price, multiplied by (ii) the number of Called Warrants. ARTICLE IV Compliance With the Securities Act and Restrictions on Transfer of Shares Section 4.01. Acknowledgment. The Initial Holder hereby acknowledges that the Warrants and the shares of Common Stock that may be received by the Initial Holder upon exercise of any Warrant are and will be subject to certain restrictions on transfers under the Securities Act and the regulations promulgated thereunder. Section 4.02. Representation. The Initial Holder hereby represents to the Company that it is acquiring the Warrants for its own account for investment and not with a view to the resale or distribution of any interest therein. -10- Section 4.03. Restrictions on Transfer of Shares. Prior to the thirtieth calendar day following the issuance of shares of Common Stock upon the exercise of Warrants, the Initial Holder shall not, and shall cause its Affiliates not to, sell, assign, transfer or otherwise dispose of such shares, except that the Initial Holder may transfer any such shares to any wholly owned subsidiary of Pharmacia & Upjohn, Inc. The provisions of this Section 4.03 shall not prohibit or restrict the sale, assignment, transfer or disposition at any time of any shares of Common Stock acquired pursuant to Section 3.07. ARTICLE V Adjustments Section 5.01. Adjustment upon Certain Transactions. The Shares Amount (and, by virtue thereof, the Cash Amount) shall be subject to adjustment from time to time on and subsequent to the date of this Agreement as follows: (a) In case the Company shall pay or make a dividend or other distribution on its Common Stock exclusively in Common Stock or shall pay or make a dividend or other distribution on any other class or series of stock of the Company which dividend or distribution includes Common Stock, the Shares Amount in effect at the opening of business on the date following the date fixed for the determination of stockholders entitled to receive such dividend or other distribution shall be increased by multiplying such Shares Amount by a fraction of which the denominator shall be the number of shares of Common Stock outstanding at the Close of Business on the date fixed for such determination and the numerator shall be the sum of such number of shares plus the total number of shares constituting such dividend or other distribution, such increase to become effective immediately after the opening of business on the day following the date fixed for such determination. For the purposes of this Section 5.01(a), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company. The Company shall not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Company. (b) In case the Company shall pay or make a dividend or other distribution on its Common Stock consisting -11- exclusively of, or shall otherwise issue to all holders of its Common Stock, rights or warrants entitling the holders thereof to subscribe for or purchase shares of Common Stock at a price per share less than the current market price per share (determined as provided in Section 5.01(g)) of the Common Stock on the date fixed for the determination of stockholders entitled to receive such rights or warrants, the Shares Amount in effect at the opening of business on the day following the date fixed for such determination shall be increased by multiplying the Shares Amount by a fraction of which the denominator shall be the number of shares of Common Stock outstanding at the Close of Business on the date fixed for such determination plus the number of shares of Common Stock which the aggregate of the offering price of the total number of shares of Common Stock so offered for subscription or purchase would purchase at such current market price and the numerator shall be the number of shares of Common Stock outstanding at the Close of Business on the date fixed for such determination plus the number of shares of Common Stock so offered for subscription or purchase, such increase to become effective immediately after the opening of business on the day following the date fixed for such determination. For the purposes of this Section 5.01(b), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company. The Company shall not issue any rights or warrants in respect of shares of Common Stock held in the treasury of the Company. In case any rights or warrants referred to in this Section 5.01(b) in respect of which an adjustment shall have been made shall expire unexercised within 60 days after the same shall have been distributed or issued by the Company, the Shares Amount shall be readjusted at the time of such expiration to the Shares Amount that would have been in effect if no adjustment had been made on account of the distribution or issuance of such expired rights or warrants. (c) In case outstanding shares of Common Stock shall be subdivided into a greater number of shares of Common Stock, the Shares Amount in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be proportionately increased, and conversely, in case outstanding shares of Common Stock shall each be combined into a smaller number of shares of Common Stock, the Shares Amount in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately decreased, such reduction or increase, as the case may be, to become effective -12- immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective. No reduction in the Shares Amount may occur except pursuant to this Section 5.01(c) or the last sentence of Section 5.01(b). (d) Subject to the last two sentences of this Section 5.01(d), in case the Company shall, by dividend or otherwise, distribute to all holders of its Common Stock evidences of its indebtedness, shares of any class or series of stock, cash or assets (including securities, but excluding any rights or warrants referred to in Section 5.01(b), any dividend or distribution paid exclusively in cash and any dividend or distribution referred to in Section 5.01(a)), the Shares Amount shall be increased so that the same shall equal the number determined by multiplying the Shares Amount in effect immediately prior to the effectiveness of the Shares Amount increase contemplated by this Section 5.01(d) by a fraction of which the numerator shall be the current market price per share (determined as provided in Section 5.01(g)) of the Common Stock on the date fixed for the payment of such distribution (the "Reference Date") plus the fair market value (as determined in good faith by the Board of Directors and described in a resolution of the Board of Directors), on the Reference Date of the portion of the evidences of indebtedness, shares of stock, cash and assets so distributed applicable to one share of Common Stock and the denominator shall be such current market price per share of the Common Stock, such increase to become effective immediately prior to the opening of business on the day following the Reference Date. If the Board of Directors determines the fair market value of any distribution for purposes of this Section 5.01(d) by reference to the actual or when issued trading market for any securities comprising such distribution, it must in doing so consider the prices in such market over the same period used in computing the current market price per share of Common Stock pursuant to Section 5.01(g). For purposes of this Section 5.01(d), any dividend or distribution that includes shares of Common Stock or rights or warrants to subscribe for or purchase shares of Common Stock shall be deemed instead to be (1) a dividend or distribution of the evidences of indebtedness, cash, assets or shares of stock other than such shares of Common Stock or such rights or warrants (making any Shares Amount increase required by this Section 5.01(d)) immediately followed by (2) a dividend or distribution of such shares of Common Stock or such rights or warrants (making any further Shares Amount increase required by Section 5.01(a) or -13- (b) except (A) the Reference Date of such dividend or distribution as defined in this Section 5.01(d) shall be substituted as "the date fixed for the determination of stockholders entitled to receive such dividend or other distribution", "the date fixed for the determination of stockholders entitled to receive such rights or warrants" and "the date fixed for such determination" within the meaning of Section 5.01(a) or (b) and (B) any shares of Common Stock included in such dividend or distribution shall not be deemed "outstanding at the Close of Business on the date fixed for such determination" within the meaning of Section 5.01(a) or (b)). (e) In case the Company shall pay or make a dividend or other distribution on the Common Stock exclusively in cash the Shares Amount shall be increased so that the same shall equal the number determined by multiplying the Shares Amount in effect immediately prior to the effectiveness of the Shares Amount increase contemplated by this Section 5.01(e) by a fraction of which the numerator shall be the current market price per share (determined as provided in Section 5.01(g)) of the Common Stock on the date fixed for the payment of such distribution plus the amount of cash so distributed applicable to one share of Common Stock and the denominator shall be such current market price per share of Common Stock, such increase to become effective immediately prior to the opening of business on the day following the date fixed for the payment of such distribution. (f) In case a tender or exchange offer made by the Company or by any subsidiary of the Company for all or any portion of the Common Stock shall expire and such tender or exchange offer shall involve the payment by the Company or such subsidiary of consideration per share of Common Stock having a fair market value (as determined in good faith by the Board of Directors and described in a resolution of the Board of Directors) at the last time (the "Expiration Time") shares of Common Stock may be tendered into to such tender or exchange offer (as it shall have been amended) that exceeds the current market price per share (determined as provided in Section 5.01(g)) of the Common Stock on the Trading Day next succeeding the Expiration Time, the Shares Amount shall be increased so that the same shall equal the number determined by multiplying the Shares Amount in effect immediately prior to the effectiveness of the Shares Amount increase contemplated by this Section 5.01(f) by a fraction of which the denominator shall be the number of shares of Common Stock -14- outstanding (including any tendered or exchanged shares) at the Expiration Time multiplied by the current market price per share (determined as provided in Section 5.01(g)) of the Common Stock on the Trading Day next succeeding the Expiration Time and the numerator shall be the sum of (x) the fair market value (determined as aforesaid) of the aggregate consideration payable to stockholders based on the acceptance (up to any maximum specified in the terms of the tender or exchange offer) of all shares validly tendered or exchanged and not withdrawn as of the Expiration Time (the shares deemed so accepted, up to any such maximum, being referred to as the "Purchased Shares") and (y) the product of the number of shares of Common Stock outstanding (less any Purchased Shares) at the Expiration Time and the current market price per share (determined as provided in Section 5.01(g)) of the Common Stock on the Trading Day next succeeding the Expiration Time, such increase to become effective immediately prior to the opening of business on the day following the Expiration Time. (g) For the purpose of any computation under Section 5.01(b), (d), (e) and (f), the "current market price" per share of Common Stock on any date in question shall be deemed to be the average of the daily Closing Prices for the five consecutive Trading Days prior to and including the date in question; provided, however, that (1) if the "ex" date (as hereinafter defined) for any event (other than the issuance or distribution requiring such computation) that requires an adjustment to the Shares Amount pursuant to Section 5.01(a), (b), (c), (d), (e), (f) or (h) ("Other Event") occurs after the fifth Trading Day prior to the day in question and prior to the "ex" date for the issuance or distribution requiring such computation (the "Current Event"), the Closing Price for each Trading Day prior to the "ex" date for such Other Event shall be adjusted by multiplying such Closing Price by the reciprocal of the fraction by which the Shares Amount is so required to be adjusted as a result of such Other Event, (2) if the "ex" date for any Other Event occurs after the "ex" date for the Current Event and on or prior to the date in question, the Closing Price for each Trading Day on and after the "ex" date for such Other Event shall be adjusted by multiplying such Closing Price by the fraction by which the Shares Amount is so required to be adjusted as a result of such Other Event, (3) if the "ex" date of any Other Event occurs on the "ex" date for the Current Event, one of those events shall be deemed for purposes of clauses (1) and (2) of this proviso to have an "ex" date occurring prior to the "ex" date for the other event, and (4) if the "ex" date for the -15- Current Event is on or prior to the date in question, after taking into account any adjustment required pursuant to clause (2) of this proviso, the Closing Price for each Trading Day on or after such "ex" date shall be adjusted by adding thereto the amount of any cash and the fair market value on the date in question (as determined in good faith by the Board of Directors in a manner consistent with any determination of such value for purposes of Section 5.01(d) or (e), and described in a resolution of the Board of Directors) of the portion of the rights, warrants, evidences of indebtedness, shares of stock or assets being distributed applicable to one share of Common Stock. For the purpose of any computation under Section 5.01(f), the current market price per share of Common Stock on any date in question shall be deemed to be the average of the daily Closing Prices for such date in question and the next two succeeding Trading Days; provided, however, that if the "ex" date for any event (other than the tender or exchange offer requiring such computation) that requires an adjustment to the Shares Amount pursuant to Section 5.01(a), (b), (c), (d), (e), (f) or (h) occurs after the Expiration Time for the tender or exchange offer requiring such computation and on or prior to the second Trading Day following the date in question, the Closing Price for each Trading Day on and after the "ex" date for such other event shall be adjusted by multiplying such Closing Price by the fraction by which the Shares Amount is so required to be adjusted as a result of such other event. For purposes of this paragraph, the term "ex" date, (1) when used with respect to any issuance or distribution, means the first date on which the Common Stock trades regular way on the relevant exchange or in the relevant market from which the Closing Price was obtained without the right to receive such issuance or distribution, (2) when used with respect to any subdivision or combination of shares of Common Stock, means the first date on which the Common Stock trades regular way on such exchange or in such market after the time at which such subdivision or combination becomes effective, and (3) when used with respect to any tender or exchange offer, means the first date on which the Common Stock trades regular way on such exchange or in such market after the Expiration Time of such offer. (h) The Company may make such increase in the Shares Amount, in addition to those required by Section 5.01(a), (b), (c), (d), (e) and (f) as it considers to be advisable to avoid or diminish an income tax to holders of Common Stock or rights to purchase Common Stock resulting from any dividend or distribution of stock (or rights to acquire -16- stock) or from any event treated as such for income tax purposes. The Company from time to time may increase the Shares Amount by any amount for any period of time if the period is at least twenty days, the increase is irrevocable during the period, and the Board of Directors shall have made a determination that such increase would be in the best interest of the Company. Whenever the Shares Amount is increased pursuant to the preceding sentence, the Company shall mail to Holders a notice of the increase at least fifteen days prior to the date the increased Shares Amount takes effect, and such notice shall state the increased Shares Amount and the period it will be in effect. (i) No adjustment in the Shares Amount shall be required unless such adjustment would require an increase or decrease of at least 1% in the Shares Amount; provided, however, that any adjustments which by reason of this Section 5.01(i) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. (j) Whenever the Shares Amount is adjusted as herein provided, the Company shall compute the adjusted Shares Amount and shall prepare a certificate signed by the Chief Financial Officer of the Company setting forth the adjusted Shares Amount and showing in reasonable detail the facts upon which such adjustment is based, and a copy of such certificate shall forthwith be delivered to each Holder. Section 5.02. No Fractional Shares. No fractional shares of Common Stock shall be issued upon exercise of the Warrants. If more than one Warrant is exercised by the same Holder at one time, the number of full shares issuable upon such exercise shall be computed on the basis of the aggregate number of Warrants so exercised. Instead of any fractional share of Common Stock that would otherwise be issuable to a holder upon exercise of the Warrants, the Company shall pay a cash adjustment in respect of such fractional share in an amount equal to the same fraction of the Closing Price per share of Common Stock as of the date of such exercise. Section 5.03. Reclassification, Consolidation, Merger or Sale of Assets. In the event that the Company shall be a party to any transaction (including without limitation any recapitalization or reclassification of the Common Stock (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination of the Common Stock and other than -17- the reclassification of unissued Common Stock into other stock of the Company), any consolidation of the Company with, or merger of the Company into, any other Person, any merger of another person into the Company (other than a merger which does not result in a reclassification, conversion, exchange or cancellation of outstanding shares of Common Stock of the Company), any sale or transfer of all or substantially all of the assets of the Company or any compulsory share exchange) pursuant to which the Common Stock is converted into the right to receive other securities, cash or other property, then lawful provisions shall be made as part of the terms of such transaction whereby the holder of each Warrant then outstanding shall have the right thereafter to exercise such Warrant only for (i) in the case of any such transaction other than a Common Stock Fundamental Change (as defined in Section 5.06(b)) and subject to funds being legally available for such purpose under applicable law at the time of such exercise, the kind and amount of securities, cash and other property receivable upon such transaction by a holder of the number of shares of Common Stock of the Company for which such Warrant could have been exercised immediately prior to such transaction, and (ii) in the case of a Common Stock Fundamental Change, common stock of the kind received by holders of Common Stock as a result of such Common Stock Fundamental Change in an amount determined pursuant to the provisions of Section 5.05. The Company or the Person formed by such consolidation or resulting from such merger or which acquires such assets or which acquires the Company's shares, as the case may be, shall execute an agreement in form and substance reasonably acceptable to the Holders evidencing such right. Such agreement shall provide for adjustments which, for events subsequent to the effective date of such agreement, shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article VI. The above provisions shall similarly apply to each and every successive transaction of the foregoing type. Section 5.04. Prior Notice of Certain Events. In case: (a) the Company shall (i) declare any dividend (or any other distribution) on its Common Stock, other than (A) a dividend payable in shares of Common Stock or (B) a dividend payable in cash in an amount not greater than its retained earnings other than any special or nonrecurring or other extraordinary dividend or (ii) declare or authorize a redemption or repurchase of -18- in excess of 10% of the then-outstanding shares of Common Stock; or (b) the Company shall authorize the granting to all holders of Common Stock of rights or warrants to subscribe for or purchase any share of stock of any class or series or of any other rights or warrants; or (c) of any reclassification of Common Stock (other than a subdivision or combination of the outstanding Common Stock, or a change in par value, or from par value to no par value, or from no par value to par value and other than the reclassification of unissued Common Stock into other stock of the Company), or of any consolidation or merger to which the Company is a party and for which approval of any shareholders of the Company shall be required, or of the sale or transfer of all or substantially all of the assets of the Company or of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or other property; or (d) of the voluntary or involuntary dissolution, liquidation or winding up of the Company; then the Company shall cause to be delivered to the Holders, at least 10 days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record (if any) is to be taken for the purpose of such dividend, distribution, redemption, repurchase, rights or warrants or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer, share exchange, dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer, share exchange, dissolution, liquidation or winding up (but no failure to mail such notice or any defect therein or in the mailing thereof shall affect the validity of the corporate action required to be specified in such notice). -19- Section 5.05. Adjustments in Case of Fundamental Changes. (a) Notwithstanding any other provision in this Article 6 to the contrary, if any Fundamental Change (as defined in Section 5.06(c)) occurs, then the Shares Amount in effect will be adjusted immediately after such Fundamental Change as described in Section 5.05(c). In addition, in the event of a Common Stock Fundamental Change (as defined in Section 5.06(b)), each Warrant shall be exercisable solely in exchange for common stock of the kind and amount received by holders of Common Stock as a result of such Common Stock Fundamental Change as more specifically provided in Section 5.05(b). (b) For purposes of calculating any adjustment to be made pursuant to this Section 5.05 in the event of a Fundamental Change, immediately after such Fundamental Change in the case of a Common Stock Fundamental Change, the Shares Amount in effect immediately prior to such Common Stock Fundamental Change, but after giving effect to any other prior adjustments effected pursuant to this Article V, shall thereupon be adjusted by multiplying such Shares Amount by a fraction of which the denominator shall be the Purchaser Stock Price (as defined in Section 5.06(e)) and the numerator shall be the Applicable Price (as defined in Section 5.06(a)); provided, however, that in the event of a Common Stock Fundamental Change in which (A) 100% by value of the consideration received by a holder of Common Stock is common stock of the successor, acquiror or other third party (and cash, if any, is paid with respect to any fractional interests in such common stock resulting from such Common Stock Fundamental Change) and (B) all of the Common Stock shall have been exchanged for, converted into or acquired for common stock (and cash with respect to fractional interests) of the successor, acquiror or other third party, the Shares Amount in effect immediately prior to such Common Stock Fundamental Change shall thereupon be adjusted by multiplying such Shares Amount by the number of shares of common stock of the successor, acquiror, or other third party received by a shareholder for one share of Common Stock as a result of such Common Stock Fundamental Change. -20- Section 5.06. Definitions. The following definitions shall apply to terms used in this Article V: (a) "Applicable Price" means (1) in the event of a Non-Stock Fundamental Change in which the holders of the Common Stock receive only cash, the amount of cash received by a shareholder for one share of Common Stock and (2) in the event of any other Non-Stock Fundamental Change or any Common Stock Fundamental Change, the average of the daily Closing Prices of the Common Stock for the ten consecutive Trading Days prior to and including the record date for the determination of the holders of Common Stock entitled to receive securities, cash or other property in connection with such Non-Stock Fundamental Change or Common Stock Fundamental Change, or, if there is no such record date, the date upon which the holders of the Common Stock shall have the right to receive such securities, cash or other property, in each case, as adjusted in good faith by the Board of Directors of the Company to appropriately reflect any of the events referred to in Section 5.01(a), (b), (c), (d), (e), (f) and (h). (b) "Common Stock Fundamental Change" means any Fundamental Change in which more than 50% by value (as determined in good faith by the Board of Directors) of the consideration received by holders of Common Stock consists of common stock that for each of the ten consecutive Trading Days referred to with respect to such Fundamental Change in Section 5.05(i) above has been admitted for listing or admitted for listing subject to notice of issuance on a national securities exchange or quoted on the NASDAQ National Market System; provided, however, that a Fundamental Change shall not be a Common Stock Fundamental Change unless either (1) the Company continues to exist after the occurrence of such Fundamental Change and the outstanding Warrants continue to exist as outstanding Warrants, or (2) not later than the occurrence of such Fundamental Change, the outstanding Warrants are converted into or exchanged for warrants of a corporation succeeding to the business of the Company, which warrants have terms identical to those of the Warrants. (c) "Fundamental Change" means the occurrence of any transaction or event in connection with a plan pursuant to which all or substantially all of the Common Stock shall be exchanged for, converted into, acquired for or constitute solely the right to receive securities, cash or other property (whether by means of an exchange offer, liquidation, tender offer, consolidation, merger, combination, reclassification, -21- recapitalization or otherwise); provided, however, in the case of a plan involving more than one such transaction or event, for purposes of adjustment of the Shares Amount, such Fundamental Change shall be deemed to have occurred when substantially all of the Common Stock of the Company shall be exchanged for, converted into, or acquired for or constitute solely the right to receive cash, securities, property or other assets, but the adjustment shall be based upon the highest weighted average of consideration per share which a holder of Common Stock could have received in such transactions or events as a result of which more than 50% of the Common Stock shall have been exchanged for, converted into, or acquired for or constitute solely the rights to receive cash, securities, property or other assets. (d) "Non-Stock Fundamental Change" means any Fundamental Change other than a Common Stock Fundamental Change. (e) "Purchaser Stock Price" means, with respect to any Common Stock Fundamental Change, the average of the daily Closing Prices of the common stock received in such Common Stock Fundamental Change for the ten consecutive Trading Days prior to and including the record date for the determination of the holders of Common Stock entitled to receive such common stock, or, if there is no such record date, the date upon which the holders of the Common Stock shall have the right to receive such common stock, in each case, as adjusted in good faith by the Board of Directors to appropriately reflect any of the events referred to in Section 5.01(a), (b), (c), (d), (e), (f) and (h); provided, however, if no such Closing Prices of the common stock for such Trading Days exist, then the Purchaser Stock price shall be set at a price determined in good faith by the Board of Directors. Section 5.07. Certain Additional Rights. In case the Company shall, by dividend or otherwise, declare or make a distribution on the Common Stock referred to in Section 5.01(d) or 5.01(e) (including, without limitation, dividends or distributions referred to in the last two sentences of Section 5.01(d)), the holder of each Warrant, upon the exercise thereof subsequent to the Close of Business on the date fixed for the determination of shareholders entitled to receive such distribution and prior to the effectiveness of the Shares Amount adjustment in respect of such distribution, shall also be entitled to receive for each share of Common Stock for which such Warrant is exercised, the -22- portion of the shares of Common Stock, rights, warrants, evidences of indebtedness, shares of stock, cash and assets so distributed applicable to one share of Common Stock; provided, however, that, at the election of the Company (whose election shall be evidenced by a resolution of the Board of Directors) with respect to all holders so exercising, the Company may, in lieu of distributing to such holder any portion of such distribution not consisting of cash or securities of the Company, pay such holder an amount in cash equal to the fair market value thereof (as determined in good faith by the Board of Directors and described in a resolution of the Board of Directors). If any exercise of a Warrant described in the immediately preceding sentence occurs prior to the payment date for a distribution to holders of Common Stock which the holder of the Warrant so exercised is entitled to receive in accordance with the immediately preceding sentence, the Company may elect (such election to be evidenced by a resolution of the Board of Directors) to distribute to such holder a due bill for the shares of Common Stock, rights, warrants, evidences of indebtedness, shares of stock, cash or assets to which such holder is so entitled, provided that such due bill (i) meets any applicable requirements of the principal national securities exchange or other market on which the Common Stock is then traded and (ii) requires payment or delivery of such shares of Common Stock, rights, warrants, evidences of indebtedness, shares of stock, cash or assets no later than the date of payment or delivery thereof to holders of shares of Common Stock receiving such distribution. Section 5.08. Reservation of Shares, etc. (a) The Company shall at all times reserve and keep available, free from preemptive rights out of its authorized and unissued stock, solely for the purpose of allowing the exercise of the Warrants, such number of shares of its Common Stock as shall from time to time be sufficient to permit the Company to deliver the Shares Amount in the event all of the Warrants from time to time outstanding were exercised. The Company shall from time to time, in accordance with the laws of the State of Delaware, increase the authorized number of shares of Common Stock if at any time the number of shares of authorized and unissued Common Stock shall not be sufficient to permit the Company to deliver the Shares Amount upon the exercise of all of the then-outstanding Warrants (taking into account the adjustments to the Shares Amount that are provided for herein). -23- (b) If any shares of Common Stock required to be reserved for purposes of the exercise of the Warrants hereunder require registration with or approval of any governmental authority under any Federal or State law before such shares may be issued upon exercise, and an exemption under Section 3(a)(9) of the Securities Act or similar exemption is not available, the Company will in good faith and as expeditiously as possible endeavor to cause such shares to be duly registered or approved as the case may be. If the Common Stock is quoted on the NASDAQ National Market System or listed on any U.S. national securities exchange, the Company will, if permitted by the rules of such exchange, list and keep listed on such exchange, upon official notice of issuance, all shares of Common Stock issuable upon exercise of the Warrants. The second sentence of this paragraph shall apply only when the Warrants shall have become freely transferable pursuant to Rule 144(k) under the Securities Act or if the shares of Common Stock issuable upon exercise of the Warrants are exempt from the registration requirements of the Securities Act by operation of an exemption referred to in the first sentence of this paragraph. Section 5.09. Dividend or Interest Reinvestment Plans or Other Plans. Notwithstanding the foregoing provisions, the issuance of any shares of Common Stock pursuant to any plan providing for the reinvestment of dividends or interest payable on securities of the Company and the investment of additional optional amounts in shares of Common Stock under any such plan (i.e., a "DRIP"), and the issuance of any shares of Common Stock or options or rights to purchase such shares pursuant to any employee or director benefit plan or program of the Company or pursuant to any option, warrant, right or exercisable, exchangeable or convertible security outstanding as of the date hereof shall not be deemed to constitute an issuance of Common Stock or exercisable, exchangeable or convertible securities by the Company to which any of the adjustment provisions described above applies. In addition, no adjustment to the Shares Amount or Cash Amount pursuant to this Article V shall be made in respect of any transaction expressly permitted by Section 7.02(h)(iii) of the Credit Agreement. If any action would require adjustment of the Shares Amount pursuant to more than one of the provisions described in this Article V only one adjustment shall be made and such adjustment shall be the amount of adjustment which has the highest absolute value to holders of the Warrants. -24- ARTICLE VI Representations and Warranties The Company hereby represents and warrants, as of the date of this Agreement, as follows: Section 6.01. Good Standing and Power. The Company is a corporation, duly incorporated and validly existing in good standing under the laws of the jurisdiction of its incorporation. Section 6.02. Corporate Authority. The Company has full corporate power and authority to execute and deliver, and to incur and perform its obligations under, this Agreement and each Warrant Certificate, all of which have been duly authorized and will have been duly authorized by all proper and necessary corporate action. No consent or approval of stockholders is required or will be required as a condition to the validity or performance of, or the exercise by any Holder of any of its rights or remedies under, this Agreement or any Warrant Certificate. Section 6.03. 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 Company of, and the incurrence and performance of each of its obligations under, this Agreement and each Warrant Certificate, and the exercise by any Holder of its remedies under this Agreement or any Warrant Certificate have been effected or obtained and are and will be in full force and effect. Section 6.04. Binding Obligation. This Agreement constitutes and, when issued in accordance with the terms hereof, each Warrant Certificate will constitute, a valid and legally binding obligation of the Company 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. Section 6.05. No Conflicts. There is no statute, regulation, rule, order or judgment, and no provision of any agreement or instrument binding upon the Company or any of its subsidiaries, or affecting their properties, and no provision -25- of the certificate of incorporation or bylaws of the Company 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 Company under, this Agreement or any Warrant Certificate, or result in or require the creation or imposition of any lien, charge or encumbrance of any type on property of the Company or any of its subsidiaries as a consequence of the execution, delivery and performance of this Agreement or any Warrant Certificate. Section 6.06. Reservation. The Board of Directors has unanimously adopted the resolutions set forth in Exhibit B. ARTICLE VII Covenants Section 7.01. Reservation of Common Stock for Issuance on Exercise of Warrants. The Company covenants that it will at all times reserve and keep available, free from preemptive rights, out of its authorized but unissued shares of Common Stock, solely for the purpose of issue upon exercise of Warrants, as herein provided, such number of shares of Common Stock as shall then be issuable upon the exercise of all Warrants issued hereunder. The transfer agent for the Common Stock (the "Transfer Agent") will be irrevocably authorized and directed at all times to reserve such number of authorized shares as shall be required for such purpose. The Company will keep a copy of this Agreement on file with the Transfer Agent. The Warrant Agent is hereby irrevocably authorized to requisition from time to time from such Transfer Agent the stock certificates required to honor outstanding Warrants upon exercise thereof in accordance with the terms of this Agreement. The Company represents, warrants and covenants that, upon payment therefor, all shares of Common Stock issued upon the exercise of warrants shall be duly authorized, validly issued, fully paid and nonassessable, free of preemptive rights and free from all taxes, liens, charges and security interests with respect to the issuance thereof. Section 7.02. Notice of Dividends. At any time when and if the Company declares any dividend on Common Stock, it shall give notice to the Holders of all the then outstanding Warrants of any such declaration not fewer than -26- 10 days prior to the related record date for payment of the dividend so declared. Section 7.03. Reports. For so long as any Warrants remain outstanding and not expired by their terms, the Company shall furnish to the Holders the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. In addition, the Company shall furnish to the Initial Holder within ten days after it files them with the Commission copies of its SEC Reports. In the event the Company shall cease to be required to file SEC Reports pursuant to the Exchange Act, the Company shall nevertheless mail such SEC Reports to Holders upon their request. ARTICLE VIII Holders Section 8.01. Holder Not Deemed a Shareholder. No Holder, as such, shall be entitled to vote, receive dividends or be deemed for any purpose the holder of Common Stock or any other securities of the Company which may at any time be issuable on the exercise or conversion of the Warrants represented thereby, nor shall anything contained herein or in any Warrant Certificate be construed to confer upon a Holder, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as specifically provided herein), or to receive dividends or subscriptions rights, or otherwise, until the Warrant or Warrants evidenced by such Warrant Certificate shall have been exercised and the Company shall have elected to deliver Common Stock (and not cash) upon such exercise. Section 8.02. Right of Action. All rights of action in respect of this Agreement are vested in the Holders, and any Holder of any Warrant, without consent of any other Holder, may on such Holder's own behalf and for such Holder's own benefit, enforce, and may institute and maintain any suit, action or proceeding against the Company suitable to enforce, or otherwise in respect of, such Holder's right to exercise or exchange such Holder's Warrants in the manner provided in this Agreement. -27- ARTICLE IX Miscellaneous Section 9.01. Payment of Taxes. The Company shall pay all transfer, stamp and other similar taxes that may be imposed in respect of the issuance or delivery of Warrants, or in respect of the issuance or delivery of any securities upon exercise of Warrants, and any and all filing fees incurred by a Holder in connection with the matters described in Section 3.07(c)(ii). The Company shall not be required, however, to pay any tax or other charge imposed in connection with any transfer involved in the issue of any certificate for shares of Common Stock or other securities underlying the Warrants or payment of cash to any Person other than the Holder of a Warrant Certificate surrendered upon the exercise or purchase of a Warrant, and in case of such transfer or payment, the Company shall not be required to issue any stock certificate or pay any cash until such tax or charge has been paid or it has been established to the Company's reasonable satisfaction that no such tax or other charge is due. Section 9.02. Expenses; Indemnity. (a) The Company agrees to pay or reimburse the Initial Holder for all reasonable costs and expenses incurred in connection with the enforcement or preservation of any rights under this Agreement, any Warrant, any Warrant Certificate, and any such other documents, including, without limitation, the reasonable fees and disbursements of counsel to the Initial Holder (but excluding fees and disbursements incurred on or prior to the date hereof in negotiating and preparing this Agreement and the related documents); provided, however, that in the event of any litigation between the Company and any Holder initiated prior to any Event of Default specified in Section 8.01(g) or (h) of the Credit Agreement and arising out of the matters set forth in Section 9.04(b)(i), the fees and disbursements of counsel to the Initial Holder shall be borne by the Company if and only if the Initial Holder is the prevailing party. (b) The Company agrees to indemnify the Initial Holder and its directors, officers, employees, agents and Affiliates (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 this Agreement or -28- any agreement or instrument contemplated by this Agreement, the performance by the parties hereto of their respective obligations under this Agreement, any Warrant or any Warrant Certificate or the consummation of the transactions and the other transactions contemplated hereby or thereby, (ii) the use of the proceeds of the exercise of Warrants 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 9.04(b) shall not operate or be construed to indemnify the Initial Holder 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 Initial Holder 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 Company and the Initial Holder in which the Initial Holder is not the prevailing party. (c) All amounts due under this Section 9.02 shall be payable in immediately available funds upon written demand therefor. SECTION 9.03. APPLICABLE LAW. THIS AGREEMENT, EACH WARRANT CERTIFICATE, EACH WARRANT ISSUED HEREUNDER AND ALL RIGHTS ARISING HEREUNDER 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 9.04. WAIVER OF JURY. THE COMPANY AND THE INITIAL HOLDER 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, ANY WARRANT CERTIFICATE, ANY WARRANT ISSUED HEREUNDER AND ANY RIGHT ARISING HEREUNDER. Section 9.05. Jurisdiction and Venue; Service of Process. (a) The Company and the Initial Holder 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 this Agreement, any Warrant Certificate, any Warrant issued hereunder and any right arising hereunder, and to the laying of venue in the -29- Borough of Manhattan, The City of New York. The Company and the Initial Holder 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 Company 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 Company at its address set forth in Section 9.08 or at such other address of which the Initial Holder shall have been notified pursuant thereto. The Company 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 Initial Holder and the Company 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 9.05 any special, exemplary, punitive or consequential damages. Section 9.06. 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 Company and the Initial Holder. (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 9.07. Cumulative Rights; No Waiver. Each and every right granted to any Holder hereunder or under any Warrant Certificate, or allowed such Holder by law or equity, shall be cumulative and not exclusive and may be exercised from time to time. No failure on the part of any Holder to exercise, and no delay in exercising, any right will operate as a waiver thereof, nor will any single or partial exercise by any Holder of any right preclude any other or future exercise thereof or the exercise of any other right. -30- Section 9.08. 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 9.08 shall be addressed: If to the Company, to Miravant Medical Technologies 7408 Hollister Avenue Santa Barbara, California 93117 Telecopy: (805) 685-6038 Attention: Gary S. Kledzik with a copy (which, in and of itself, shall not constitute notice) to Nida & Maloney PC 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 Initial Holder, to Pharmacia & Upjohn Treasury Services AB Lindhagensgatan 133 S-112 87 Stockholm, Sweden Telecopy: +46 8 695 47 08 -31- Attention: Associate General Counsel and Pharmacia & Upjohn, Inc. 95 Corporate Drive Bridgewater, New Jersey 08807 Telecopy: (908) 306-470-8047 Attention: Treasurer and Pharmacia & Upjohn, Inc. 95 Corporate Drive Bridgewater, New Jersey 08807 Telecopy: (908) 306-4485 Attention: Senior Vice President of Business Development and Pharmacia & Upjohn, Inc. 95 Corporate Drive Bridgewater, New Jersey 08807 Telecopy: (908) 306-4489 Attention: General Counsel with a copy (which, in and of itself, shall not constitute notice) to Sullivan & Cromwell 125 Broad Street New York, New York 10004 Telecopy: (212) 558-3588 Attention: Neil T. Anderson, Matthew G. Hurd and Martin J. Travers -32- (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 9.09. Separability. In case any one or more of the provisions contained in this Agreement or any Warrant Certificate shall be invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions contained in this Agreement or any Warrant Certificate shall not in any way be affected or impaired thereby. Section 9.10. Persons Benefitting. This Agreement shall be binding upon and inure to the benefit of any Holders (each of whom is an intended third party beneficiary) and the Company, and their respective successors, assigns, beneficiaries, executors and administrators. Nothing in this Agreement is intended or shall be construed to confer upon any Person, other than the Company and the Holders (and such successors, assigns, beneficiaries, executors and administrators), any right, remedy or claim under or by reason of this Agreement or any part hereof. Section 9.11. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together constitute one and the same instrument. Section 9.12. Headings. The descriptive headings of the several Sections of this Agreement are inserted for convenience and shall not control or affect the meaning or construction of any of the provisions hereof. Section 9.13. Remedies. In the event of a breach by the Company or by a Holder of any of their obligations under this Agreement or any Warrant Certificate, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement and such Warrant Certificate. The Company and the Initial Holder agree that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of any of the provisions of this Agreement or any Warrant Certificate and hereby further agrees that, in the event of any action for -33- specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate. -34- 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: /s/ Gary S. Kledzik ------------------------------------ Title: Chief Executive Officer PHARMACIA & UPJOHN TREASURY SERVICES AB By: /s/ Mats Pettersson ------------------------------------ Title: Attorney-In-Fact -35- EXHIBIT A [FORM OF WARRANT CERTIFICATE] THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR OFFERED FOR SALE UNLESS REGISTERED PURSUANT TO THERETO OR UNLESS AN EXEMPTION THEREFROM IS AVAILABLE. WARRANTS TO PURCHASE COMMON STOCK OF MIRAVANT MEDICAL TECHNOLOGIES No._______ Certificate for ______ Warrants This certifies that , or registered assigns, is the registered holder of the number of Warrants set forth above. Each Warrant entitles the holder thereof (a "Holder"), subject to the provisions contained herein and in the Warrant Agreement referred to below, to purchase, from Miravant Medical Technologies, a Delaware corporation (the "Company"), the number of shares of the Company's common stock, par value $.01 per share (the "Common Stock"), provided in the Warrant Agreement, at an exercise price of $__________ per Warrant and subject to all of the terms and conditions set forth in the Warrant Agreement. At the sole election of the Company, upon the exercise of any Warrant, the Company may pay to the Holder a certain amount of cash, as provided in the Warrant Agreement, in lieu of delivering the shares of Common Stock. This Warrant Certificate is issued under and in accordance with the Warrant Agreement, dated as of February 18, 1999 (the "Warrant Agreement"), between the Company and Pharmacia & Upjohn Treasury Services AB (the "Initial Holder"), and is subject to the terms and provisions contained in the Warrant Agreement, to all of which terms and provisions the Holder of this Warrant Certificate consents by acceptance hereof. The Warrant Agreement is hereby incorporated herein by reference and made a part hereof. Reference is hereby made to the Warrant Agreement for a full statement of the respective rights, limitations of rights, duties, obligations and immunities thereunder of the Company and the Holders of the Warrants. This Warrant Certificate shall terminate and be void as of the Close of Business on _________, 200__. A-1 As provided in the Warrant Agreement and subject to the terms and conditions therein set forth, the Warrants shall be exercisable from time to time on any Business Day ending on the Expiration Date. The number of shares of Common Stock issuable, and the amount of cash payable, upon the exercise of each Warrant are subject to adjustment as provided in the Warrant Agreement. Upon payment therefor, all shares of Common Stock issued upon the exercise of Warrants shall be duly authorized, validly issued, fully paid and nonassessable free of preemptive rights and free from all taxes, liens, charges and security interests with respect to the issuance thereof. In order to exercise a Warrant, the registered holder hereof must surrender this Warrant Certificate to the Registrar for the Warrants (the "Registrar") with the form of election on the reverse hereof or attached hereto duly executed, together with payment of the Exercise Price then in effect for the share(s) of Common Stock as to which the Warrant(s) represented by this Warrant Certificate are submitted for exercise, all subject to the terms and conditions hereof and of the Warrant Agreement. Any such payment of the cash Exercise Price shall be by certified or official bank check or wire transfer to the Company of same day funds. The Company shall pay all transfer, stamp and other similar taxes that may be imposed in respect of the issuance or delivery of Warrants, or in respect of the issuance or delivery of any securities upon exercise of Warrants. The Company shall not be required, however, to pay any tax or other charge imposed in connection with any transfer involved in the issuance of any certificate for shares of Common Stock or other securities underlying the Warrants or payment of cash to any Person other than the Holder of a Warrant Certificate surrendered upon the exercise or purchase of a Warrant, and in case of such transfer or payment, the Company shall not be required to issue any stock certificate or pay any cash until such tax or other charge has been paid or it has been established to the Company's reasonable satisfaction that no such tax or other charge is due. Subject to the Warrant Agreement, this Warrant Certificate and all rights hereunder are transferable by the A-2 registered holder hereof, in whole or in part, on the Warrant Register of the Company, upon surrender of this Warrant Certificate to the Registrar, duly endorsed by, or accompanied by a written instrument of transfer in form reasonably satisfactory to the Company duly executed by the Holder hereof or his attorney duly authorized in writing. Upon any partial transfer, the Company will issue and deliver to such holder a new Warrant Certificate or Certificates with respect to any portion not so transferred. No service charge shall be made for any transfer or exchange of this Warrant Certificate, but the Company may require payment from the Holder of this Warrant Certificate of a sum sufficient to cover any stamp or other governmental charge or tax that may be imposed in connection with any such transfer or exchange. Each taker and holder of this Warrant Certificate, by taking or holding the same, consents and agrees that this Warrant Certificate, when duly endorsed in blank, shall be deemed negotiable and that when this Warrant Certificate shall have been so endorsed, the holder hereof may be treated by the Company, the Registrar and all other persons dealing with this Warrant Certificate as the absolute owner hereof for any purpose and as the person entitled to exercise the rights represented hereby, or to the transfer hereof on the register of the Company maintained by the Registrar, any notice to the contrary notwithstanding, but until such transfer on such register, the Company and the Registrar may treat the registered Holder hereof as the owner for all purposes. This Warrant Certificate and the Warrant Agreement are subject to amendment as provided in the Warrant Agreement. All terms used in this Warrant Certificate that are defined in the Warrant Agreement shall have the meanings assigned to them in the Warrant Agreement. A-3 Copies of the Warrant Agreement are on file at the office of the Company and may be obtained by writing to the Company at the following address: 7408 Hollister Avenue, Santa Barbara, California 93117, Attention: Chief Financial Officer. Dated: __________. MIRAVANT MEDICAL TECHNOLOGIES By:______________________________ Name: Title: By:______________________________ Name: Title: A-4 ELECTION TO EXERCISE (To be executed only upon exercise of Warrant) TO MIRAVANT MEDICAL TECHNOLOGIES: The undersigned irrevocably exercises __________ of the Warrants for, at your election, either (i) the Shares Amount or (ii) the Cash Amount, and herewith makes payment of $__________ (such payment being by certified or official bank check payable to the order of Miravant Medical Technologies), all at the Exercise Price and on the terms and subject to the conditions specified in the within Warrant Certificate and the Warrant Agreement therein referred to, surrenders this Warrant Certificate and all right, title and interest therein to Miravant Medical Technologies, Inc. and directs that any shares of Common Stock deliverable upon the exercise of such Warrants be registered in the name and delivered at the address specified on the following page, or any Cash Amount be wired to the account specified on the following page. Date:______________ ____________________________________ (Signature of Holder) ____________________________________ (Street Address) ____________________________________ (City) (State) (Zip Code) A-5 Securities and/or check to be issued to: Taxpayer identification number: Name: Street Address: City, State and Zip Code: Any unexercised Warrants evidenced by the within Warrant Certificate to be issued to: Taxpayer identification number: Wire transfer instructions: A-6 FORM OF ASSIGNMENT FOR VALUE RECEIVED, the undersigned registered holder of the within Warrant Certificate hereby sells, assigns, and transfers unto the Assignee(s) named below (including the undersigned with respect to any Warrants constituting a part of the Warrants evidenced by the within Warrant Certificate not being assigned hereby) all of the rights of the undersigned under the within Warrant Certificate, with respect to the number of Warrants set forth below: Social Security or Taxpayer Identification Names of Number of Number of Assignees Address Assignee(s) Warrants - --------- ------- --------------- --------- and does hereby irrevocably constitute and appoint ___________ the undersigned's attorney to make such transfer on the books of _____________ maintained for that purpose, with full power of substitution in the premises. Dated: __________. ____________________________________ (Signature of Holder) ____________________________________ (Street Address) ____________________________________ (City) (State) (Zip Code) A-7 EXHIBIT B [BOARD RESOLUTIONS] [To come] B-1 EX-10.7 5 REGISTRATION RIGHTS AGREEMENT EXHIBIT G REGISTRATION RIGHTS AGREEMENT REGISTRATION RIGHTS AGREEMENT, dated as of February 18, 1999 (this "Agreement") by and between Miravant Medical Technologies, a Delaware corporation (the "Company"), and Pharmacia & Upjohn, Inc., a Delaware corporation (collectively with its Affiliates, the "Purchaser"). W I T N E S S E T H: WHEREAS, in connection with the Equity Investment Agreement, of even date herewith, between the Company and the Purchaser (the "Equity Investment Agreement") and the Warrant Agreement, of even date herewith, between the Company and the Purchaser (the "Warrant Agreement" and, together with the Equity Investment Agreement, the "Purchase Agreements"), the Company has agreed, upon the terms and subject to the conditions of said Purchase Agreements, to issue and sell to the Purchaser shares of common stock of the Company, par value $.01 per share (the "Common Stock") and warrants to purchase Common Stock, the shares of Common Stock and the shares of Common Stock issuable upon exercise of the Warrants being collectively referred to herein as the "Securities"; and WHEREAS, to induce the Purchaser to execute and deliver the Purchase Agreements, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the "Securities Act"), and applicable state securities laws with respect to the Securities. NOW THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Purchaser hereby agree as follows: ARTICLE I Definitions Section 1.01. Definitions. Capitalized terms used herein shall have the respective meanings set forth in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings: "Affiliate" means any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. "Commission" means the Securities and Exchange Commission. "Person" means and includes natural persons, corporations, limited liability companies, limited partnerships, general partnerships, joint stock companies, joint ventures, associations, companies, trusts or other organizations, whether or not legal entities, and governments and agencies and political subdivisions thereof. "Qualified Public Offering" means an underwritten registered public offering of equity securities of the Company, which offering yields minimum gross proceeds of US$20,000,000. "1933 Act" means the Securities Act of 1933, as amended and as it may be amended from time to time, including the rules and regulations thereunder. "1934 Act" means the Securities Exchange Act of 1934, as amended and as it may be amended from time to time, including the rules and regulations thereunder. ARTICLE II Registration Rights Section 2.01. Demand Rights. (a) Upon written demand of holders of a majority of the Securities, the Company shall prepare and file a registration statement under the 1933 Act covering an offering of such number of Securities as shall have been requested by such holder(s) in such demand, and shall use its diligent efforts to cause such registration statement to become effective, all in -2- accordance with the provisions of this Agreement; provided, that if the Company's Board of Directors determines in good faith that it would be seriously detrimental to the Company to file such a registration statement at the time of such demand, the Company shall have the right to defer filing such registration statement for 120 days. The Company shall only be required to cause up to three (3) registration statements to become effective under this Section 2.01. (b) Whenever the Company shall have received a demand pursuant to this Section 2.01 to effect the registration of any Securities, the Company shall promptly give written notice of such proposed registration to all other holders of Securities. Any such holder may, within 30 days after receipt of such notice, request in writing that all of such holder's Securities, or any portion thereof designated by such holder, be included in the offering. (c) The Company shall proceed as expeditiously as possible after receipt of a demand pursuant to this Section 2.01 to file a registration statement and use its best efforts to effect, within 120 days after the giving of such written demand (or, in the case of a demand made within 60 days prior to the end of the Company's then fiscal year, within 210 days after the giving of such written demand) the registration of an offering under the 1933 Act. Such offering shall include: (i) the Securities specified in the demand given pursuant to Section 2.01(a); and (ii) all other Securities that the holders thereof have requested be included in the offering pursuant to Section 2.01(b); all to the extent required to permit the holders of the Securities to dispose of such Securities in compliance with applicable law. Unless otherwise recommended by the managing underwriter to facilitate such offering, the Company shall have the right to include in such offering authorized but unissued shares of its Common Stock and shares of its Common Stock held in its treasury that together constitute no more than 20% of the aggregate number of Securities to be offered. No other outstanding securities of the Company shall be included in such registration statement unless, and then only to the extent that, in the opinion of the representative of the -3- underwriters participating in the sale and distribution of the shares of Common Stock covered by such registration statement, such other outstanding securities may be included in such registration statement and sold without adversely affecting the sale of Securities otherwise included therein. The Purchaser shall select the representative, if any, of the underwriters to be engaged in connection with any such registration, subject to the consent of the Company, which shall not unreasonably be withheld or delayed. Section 2.02. Piggyback Rights. (a) If at any time the Company shall propose to register any of its shares for sale or disposition, for its own account for cash under the 1933 Act in a Qualified Public Offering (including, for this purpose, a registration effected by the Company for stockholders other than Purchaser) and if all of the Securities have not been registered under Section 2.01 above, the Company shall: (i) Promptly give to the Purchaser at least thirty (30) days' written notice prior to the filing thereof (which shall include, if then determined, the proposed date on which the registration statement is to be filed, the proposed price and registration price per share, the number of shares proposed to be included in such registration, the identity of any proposed selling stockholders and a list of the jurisdictions in which the Company intends to attempt to qualify such securities under the applicable blue sky or other state securities laws); and (ii) Include in such registration (and any related qualification under blue sky laws or other compliance), and in any underwriting involved therein, a portion of the Securities which are specified in a written request, or requests, made by the Purchaser within ten (10) days after receipt of such written notice from the Company by the Purchaser. (b) The rights of the Purchaser to registration pursuant to this section shall be conditioned upon the Purchaser's participation in any underwriting relating to the Company's registered public offering. The Purchaser shall (together with the Company) enter into an underwriting agreement in customary form with the underwriter or underwriters selected by the Company. The Company will use its best efforts to include the Purchaser's Securities in -4- the Qualified Public Offering. Notwithstanding any provision of this section, if the underwriter, in its sole discretion, determines that marketing factors require a limitation of the number of securities to be underwritten, or that the Qualified Public Offering be limited to shares offered by the Company only, the underwriter may exclude some or all of the Purchaser's shares for which the Purchaser seeks registration from inclusion in the registration and underwriting, which reduction shall be pro rata among the Purchaser and any other stockholder whose shares are sought to be included in the public offering. Section 2.03. Termination of Registration Rights. The Company shall have no obligation under Section 2.01 or 2.02 to register any Securities if the Company shall deliver to the holders requesting such registration an opinion of counsel reasonably satisfactory to such holders and their counsel to the effect that the proposed sale or disposition for which registration was requested does not require registration under the 1933 Act. The Company hereby agrees to indemnify the holders of Securities, and each of them, against, and to hold them harmless from, all damages, losses, liabilities (including liability for rescission), costs and expenses that they may incur under the 1933 Act or otherwise by reason of their proceeding in accordance with such opinion of counsel. Section 2.04. Actions to be Taken by the Company. If and whenever the Company is obligated by the provisions of this Agreement to effect the registration of any offering of Securities under the 1933 Act, as expeditiously as possible the Company will, or will use its best efforts to, as the case may be: (a) Prepare and file with the Commission a registration statement with respect to such Securities and cause such registration statement to become effective; provided, however, that before filing a registration statement or prospectus or any amendments or supplements thereto, the Company shall furnish to the holders of the Securities covered by such registration statement, their counsel and the representative of the underwriters, if any, copies of all such documents proposed to be filed, which documents will be subject to the review of such holders, their counsel and the representative of the underwriters, if any, and the Company shall not file any registration statement or prospectus or any amendments or supplements -5- thereto to which the holders of a majority of the Securities covered by such registration statement, their counsel, or the representative of the underwriters, if any, shall reasonably object on a timely basis. (b) Prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective until the earlier of the sale of all Securities covered thereby or the expiration of a period of 270 days after its effective date, and comply with the provisions of the 1933 Act with respect to the disposition of all Securities covered by such registration statement; provided, however, that if maintaining the effectiveness of the registration statement would require the filing of a post-effective amendment including new financial statements (other than financial statements which the Company would be required to include in a current report on Form 10-Q under Section 13 or 15(d) of the 1934 Act) the Company shall be obligated hereunder to use its best efforts to maintain the effectiveness of the registration statement for 90 days. In the event that any Securities included in a registration statement subject to, or required by, this Agreement remain unsold at the end of the period during which the Company is obligated to use its best efforts to maintain the effectiveness of such registration statement, the Company, if and when a further amendment or supplement would be required to comply with Section 10 of the 1933 Act, may file a post-effective amendment to the registration statement for the purpose of removing such shares from registered status. (c) Furnish to holders for whom Securities are registered or are to be registered so many copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the 1933 Act, and such other documents, as such holders may reasonably request. (d) Register or qualify the Securities covered by such registration statement under such other securities or blue sky laws of such jurisdictions as the holders for whom Securities are registered shall request, and do any and all other acts and things that may be reasonably necessary or advisable to enable such holders to consummate the disposition in such jurisdictions of such Securities; provided, however, that the Company shall not be obligated, by reason thereof, to qualify as a foreign corporation or -6- file any general consent to service of process under the laws of any such jurisdiction or subject itself to taxation as doing business in any such jurisdiction. (e) Notify the holders for whom Securities are registered or are to be registered and their counsel promptly after the Company shall receive notice that any registration statement, supplement or amendment has become effective, any registration statement is required to be amended or supplemented, or any stop order with respect thereto has been issued. (f) Enter into such agreements (including an underwriting agreement in form, scope and substance as is customary in underwritten offerings) and take all such other actions in connection therewith (including those reasonably requested by the representative of the underwriters or the holders of a majority of the Securities subject to the registration statement) in order to expedite or facilitate the disposition of the Securities and in such connection, (i) make such representations and warranties to the underwriters with respect to the business of the Company and its subsidiaries, the registration statement, the prospectus and the documents, if any, incorporated or deemed to be incorporated by reference in the registration statement, in each case in form, substance and scope as are customarily made by issuers to underwriters in underwritten secondary offerings and confirm the same if and when requested; (ii) obtain opinions of counsel to the Company and updates thereof, which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the representative of the underwriters, addressed to each of the underwriters, covering the matters customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by such underwriters, including without limitation, the matters referred to in clause (i) above; (iii) obtain "cold comfort" letters and updates thereof from the independent certified public accountants of the Company (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired by the Company for which financial statements and financial data is or is required to be included in the registration statement) addressed to each of the underwriters, such letters to be in customary form and covering matters of the type customarily covered in "cold comfort" letters to underwriters in connection with underwritten offerings; and (iv) deliver -7- such documents and certificates as may be requested by the representative of the underwriters to evidence the continued validity of the representations and warranties made pursuant to clause (i) above and to evidence compliance with any customary conditions contained in the underwriting agreement or other agreement entered into by the Company. The above shall be done at each closing under such underwriting or similar agreement, or as and to the extent required thereunder. (g) Make available for inspection by any underwriter and any attorney or accountant retained by such underwriter, all financial and other records, pertinent corporate documents and properties of the Company and its Subsidiaries, and cause the officers, directors and employees of the Company and its Subsidiaries to supply all information reasonably requested by any such underwriter, attorney or accountant in connection with such registration statement; provided, however, that any records, information or documents that are designated by the Company in writing as confidential shall be kept confidential by such Persons unless (i) disclosure of such records, information or documents is required by court or administrative order, or (ii) disclosure of such records, information or documents, in the opinion of counsel to such Person, is required by law (including, without limitation, pursuant to the requirements of the 1933 Act) or (iii) such records, information or documents are in the public domain or otherwise publicly available. Section 2.05. Costs and Expenses. The costs and expenses (other than underwriting discounts or commissions and such fees for counsel, printing, registration and other fees as state securities officials may require that the holders of Securities pay) of all registrations and qualifications under the 1933 Act, and of all other actions that the Company is required to take or effect pursuant to this Agreement, shall be paid by the Company (including, without limitation, all registration and filing fees, printing expenses, costs of special audits incident to or required by any such registration, fees and disbursements of counsel for the Company and up to $20,000 of fees and disbursements of one special counsel acting for the holders of Securities being included in any registration) except that all such expenses in connection with any amendment or supplement to the registration statement or the prospectus used in connection therewith required to be filed more than -8- 270 days after the date on which such registration statement becomes effective under the 1933 Act because any holder has not effected the disposition of Securities covered by such registration statement shall be borne pro rata by such holder or holders and provided that all such costs and expenses shall be borne pro rata by the Company and all holders if required by any state securities commissioner as a condition to qualification of securities in such jurisdiction. Section 2.06. Indemnification. In the event of any registration under the 1933 Act of any offering of Securities, the Company hereby agrees to indemnify and hold harmless each holder of Securities and each other Person, if any, who controls such holder (within the meaning of the 1933 Act) and each other Person (including each underwriter, and each other Person, if any, who controls such underwriter) who participates in the offering of such Securities against any losses, claims, damages or liabilities ("Losses"), joint or several, to which such holder or controlling Person or participating Person may become subject under the 1933 Act or otherwise, insofar as such Losses (or proceedings in respect thereof) arise out of or are based upon (a) any untrue statement or alleged untrue statement of any material fact contained, on the effective date thereof, in any registration statement under which Securities were registered under the 1933 Act, in any preliminary prospectus or final prospectus contained therein, or in any amendment or supplement thereto, (b) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading or (c) any violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any state securities law or any rule or regulation promulgated under the 1933 Act, the 1934 Act or any state securities law, and will reimburse such holder and each such controlling Person or participating Person for any legal or other expenses reasonably incurred by such holder or such controlling Person or participating Person in connection with investigating or defending any such Loss; provided that the Company will not be liable in any such case to the extent that any such Loss arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, such preliminary or final prospectus or such amendment or supplement in reliance upon and in conformity with written information furnished by an instrument duly executed by such -9- holder or such controlling or participating Person, as the case may be, specifically for use in the preparation thereof. The Company shall also indemnify underwriters participating in the distribution, their officers, directors, agents and employees and each Person who controls such Persons (within the meaning of Section 15 of the 1933 Act or Section 20 of the Exchange Act) to the same extent as provided above with respect to the indemnification of the holders of Securities. Section 2.07. Additional Indemnification. In the event of any registration under the 1933 Act of any offering of Securities, each holder of such Securities hereby severally agrees to indemnify and hold harmless the Company, each other holder and each other Person, if any, who controls the Company within the meaning of the 1933 Act and each other Person (including each underwriter, and each other Person, if any, who controls such underwriter) who participates in the offering of such Securities against any Losses, joint or several, to which the Company, such holder or controlling Person or participating Person may become subject under the 1933 Act or otherwise, insofar as such Losses (or proceedings in respect thereof) arise out of or are based upon (a) any untrue statement or alleged untrue statement of any material fact contained, on the effective date thereof, in any registration statement under which an offering of such Securities was registered under the 1933 Act, in any preliminary prospectus or final prospectus contained therein, or in any amendment or supplement thereto, (b) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement therein not misleading or (c) any violation or alleged violation by the Purchaser of the 1933 Act, the 1934 Act, any state securities law or any rule or regulation promulgated under the 1933 Act, the 1934 Act or any state securities law, and will reimburse the Company, such holder and each such controlling Person or participating Person for any legal or other expenses reasonably incurred by the Company, such holder or such controlling or participating Person in connection with investigating or defending any such Loss or proceeding; provided that such holder will be liable in any such case to the extent, and only to the extent, that any such Loss arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, such preliminary or final prospectus or such amendment or supplement in reliance -10- upon and in conformity with written information furnished in an instrument duly executed by such holder specifically for use in the preparation thereof. The Company shall be entitled to receive indemnities from underwriters participating in the distribution to the same extent as provided above with respect to information so furnished in writing by such Persons specifically for inclusion in any registration statement or prospectus. Section 2.08. Indemnification Procedures. If any action or proceeding (including any governmental investigation or inquiry) shall be brought or any claim shall be asserted against any Person entitled to indemnity hereunder (an "indemnified party"), such indemnified party shall promptly notify the party from which such indemnity is sought (the "indemnifying party") in writing, and the indemnifying party shall assume and control the defense thereof, including the employment of counsel reasonably satisfactory to the indemnified party and the payment of all fees and expenses incurred in connection with the defense thereof. Any such fees and expenses borne by the indemnified party (including any fees and expenses incurred in connection with investigating or preparing to defend such action or proceeding) shall be paid to the indemnified party, as incurred, within 15 days of written notice thereof to the indemnifying party (regardless of whether it is ultimately determined that an indemnified party is not entitled to indemnification hereunder; provided the indemnified party shall reimburse such fees and expenses if it is finally determined that such indemnified party is not entitled to indemnity hereunder). Any such indemnified party shall have the right to employ separate counsel in any such action, claim or proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be the expenses of such indemnified party unless (a) the indemnifying party has agreed to pay such fees and expenses, or (b) the indemnifying party shall have failed to assume promptly the defense of such action, claim or proceeding, or (c) the named parties to any such action, claim or proceeding (including any impleaded parties) include both such indemnified party and the indemnifying party, and such indemnified party shall have been advised by counsel that there may be one or more legal defenses available to it which are different from or in addition to those available to the indemnifying party and that the assertion of such defenses would create a conflict of interest such that counsel employed by the indemnified party -11- could not faithfully represent the indemnified party (in which case, if such indemnified party notifies the indemnifying party in writing that it elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such action, claim or proceeding on behalf of such indemnified party; it being understood, however, that the indemnifying party shall not, in connection with any one such action, claim or proceeding or separate but substantially similar or related actions, claims or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (together with appropriate local counsel) at any time for all such indemnified parties, unless in the reasonable judgment of such indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such action, claim or proceeding, in which event the indemnifying party shall be obligated to pay the fees and expenses of such additional counsel or counsels). The indemnifying party shall not be liable for any settlement of any such action or proceeding effected without its written consent. Section 2.09. Contribution. If the indemnification provided for in this Agreement is unavailable to an indemnified party under Section 2.06 or 2.07 (other than by reason of exceptions provided in those Sections) in respect of any Losses, then each applicable indemnifying party in lieu of indemnifying such indemnified party shall contribute to the amount paid or payable by such indemnified party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the indemnifying party and indemnified parties in connection with the actions, statements or omissions which resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such indemnifying party and the indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue statement or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information suppled by, such indemnifying party or indemnified party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses -12- shall be deemed to include, subject to the limitations set forth in this Section 2.09, any legal or other fees or expenses reasonably incurred by such party in connection with any action, suit, claim, investigation or proceeding. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. Section 2.10. Form S-3. The Company represents and warrants that it meets the requirements for the use of Form S-3 for registration of the sale by the Purchaser of the Securities, and the Company shall file all reports required to be filed by the Company with the SEC in a timely manner so as to maintain such eligibility for the use of Form S-3. ARTICLE III Miscellaneous SECTION 3.01. APPLICABLE LAW. THIS AGREEMENT AND ALL RIGHTS ARISING HEREUNDER 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 3.02. WAIVER OF JURY. THE COMPANY AND THE PURCHASER 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 AND ANY RIGHT ARISING HEREUNDER. Section 3.03. Jurisdiction and Venue; Service of Process. (a) The Company and the Purchaser 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 this Agreement and any right arising hereunder, and to the laying of venue in the Borough of Manhattan, The City of New York. The Company and the Purchaser 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 -13- 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 Company 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 Company at its address set forth in Section 3.06 or at such other address of which the Purchaser shall have been notified pursuant thereto. The Company 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 Purchaser and the Company 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 3.03 any special, exemplary, punitive or consequential damages. The waiver set forth in this Section 3.03(c) shall terminate automatically upon the occurrence of a "Separation Event", as defined in that certain stockholder rights protection plan of Pharmacia & Upjohn, Inc. in effect on the date of this Agreement, as it may from time to time be amended. Section 3.04. 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 Company and the Purchaser. (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 3.05. Cumulative Rights; No Waiver. Each and every right granted to the Purchaser or allowed the Purchaser 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 Purchaser to exercise, and no delay in exercising, any right will operate as a waiver thereof, nor will any single or partial exercise by the -14- Purchaser of any right preclude any other or future exercise thereof or the exercise of any other right. Section 3.06. 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 3.06 shall be addressed: If to the Company, to Miravant Medical Technologies 7408 Hollister Avenue Santa Barbara, California 93117 Telecopy: (805) 685-6038 Attention: Gary S. Kledzik with a copy (which, in and of itself, shall not constitute notice) to Nida & Maloney PC 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 -15- If to the Purchaser, to Pharmacia & Upjohn, Inc. 95 Corporate Drive Bridgewater, New Jersey 08807 Telecopy: (908) 470-8047 Attention: Treasurer and Pharmacia & Upjohn, Inc. 95 Corporate Drive Bridgewater, New Jersey 08807 Telecopy: (908) 306-4485 Attention: Senior Vice President of Business Development and Pharmacia & Upjohn, Inc. 95 Corporate Drive Bridgewater, New Jersey 08807 Telecopy: (908) 306-4489 Attention: General Counsel with a copy (which, in and of itself, shall not constitute notice) to Sullivan & Cromwell 125 Broad Street New York, New York 10004 Telecopy: (212) 558-3588 Attention: Neil T. Anderson, Matthew G. Hurd and Martin J. Travers (b) Unless otherwise provided to the contrary herein, any notice which is required to be given in writing -16- pursuant to the terms of this Agreement may be given by telecopy. Section 3.07. Separability. In case any one or more of the provisions contained in this Agreement shall be invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions contained in this Agreement shall not in any way be affected or impaired thereby. Section 3.08. Persons Benefitting. This Agreement shall be binding upon and inure to the benefit of the Purchaser and the Company, and their respective successors, assigns, beneficiaries, executors and administrators. Nothing in this Agreement is intended or shall be construed to confer upon any Person, other than the Company and the Purchaser (and such successors, assigns, beneficiaries, executors and administrators), any right, remedy or claim under or by reason of this Agreement or any part hereof. This Agreement may not be assigned without the written consent of the parties hereto, and any purported assignment made in violation of this provision shall be null and void. The provisions of the previous sentence notwithstanding, the Purchaser may assign its rights and obligations under this letter agreement to any of its wholly owned subsidiaries without the consent of the Company. Section 3.09. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together constitute one and the same instrument. Section 3.10. Headings. The descriptive headings of the several Sections of this Agreement are inserted for convenience and shall not control or affect the meaning or construction of any of the provisions hereof. Section 3.11. Remedies. In the event of a breach by the Company or by the Purchaser of any of their obligations under this Agreement, the Purchaser or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company and the Purchaser agree that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific -17- performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate. -18- 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: /s/ Gary S. Kledzik -------------------------------- Title: Chief Financial Officer PHARMACIA & UPJOHN, INC. By: /s/ Mats Pettersson -------------------------------- Title: Senior Vice President -19- EX-10.8 6 CREDIT AGREEMENT EXHIBIT H ================================================================================ CREDIT AGREEMENT dated as of February 18, 1999 between MIRAVANT MEDICAL TECHNOLOGIES and PHARMACIA & UPJOHN 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.........................................................15 Section 2.02. Borrowing Procedure...........................................16 Section 2.03. Repayment.....................................................16 Section 2.04. Prepayment....................................................17 ARTICLE III Interest Section 3.01. Interest on Loans.............................................18 Section 3.02. Interest on Overdue Amounts...................................19 Section 3.03. Day Counts....................................................19 Section 3.04. Maximum Interest Rate.........................................19 ARTICLE IV Disbursement and Payment Section 4.01. Method and Time of Payments...................................20 Section 4.02. Compensation for Losses.......................................20 Section 4.03. Withholding...................................................21 Section 4.04. Expenses; Indemnity...........................................21 Section 4.05. Survival......................................................22 -i- Page ARTICLE V Representations and Warranties Section 5.01. Representations and Warranties................................23 (a) Subsidiaries..................................................23 (b) Good Standing and Power.......................................23 (c) Corporate Authority...........................................23 (d) Authorizations................................................23 (e) Binding Obligation............................................23 (f) Litigation....................................................24 (g) No Conflicts..................................................24 (h) Financial Condition...........................................24 (i) Taxes.........................................................25 (j) Use of Proceeds...............................................25 (k) Margin Regulations............................................25 (l) Compliance with ERISA.........................................25 (m) Not an Investment Company.....................................26 (n) Properties....................................................26 (o) Compliance with Laws and Charter Documents....................26 (p) Environmental Protection......................................27 (q) Insurance.....................................................28 (r) Adverse Contracts.............................................28 (s) Solvency......................................................28 (t) Disclosure....................................................28 Section 5.02. Survival......................................................29 ARTICLE VI Conditions Precedent Section 6.01. Conditions to the Availability of the Commitment..............29 (a) This Agreement................................................29 (b) Evidence of Corporate Action..................................29 (c) Opinions of Counsel...........................................30 (d) Representations and Warranties................................30 (e) Other Documents...............................................30 Section 6.02. Conditions to All Quarterly Loans.............................30 (a) Borrowing Request.............................................30 (b) Note..........................................................30 -ii- Page (c) Warrant Certificate...........................................30 (d) No Default....................................................31 (e) Representations and Warranties; Covenants.....................31 Section 6.03. Satisfaction of Conditions Precedent..........................31 ARTICLE VII Covenants Section 7.01. Affirmative Covenants.........................................31 (a) Financial Statements; Compliance Certificates.................31 (b) Corporate Existence...........................................33 (c) Conduct of Business...........................................33 (d) Authorizations................................................33 (e) Taxes.........................................................34 (f) Insurance.....................................................34 (g) Inspection....................................................34 (h) Maintenance of Records........................................34 (i) Maintenance of Property.......................................35 (j) ERISA.........................................................35 (k) Notice of Defaults and Adverse Developments...................36 (l) Environmental Matters.........................................37 Section 7.02. Negative Covenants............................................37 (a) Mergers, Consolidations and Sales of Assets...................37 (b) Liens.........................................................38 (c) Indebtedness..................................................38 (d) Contingent Liabilities........................................38 (e) Loans and Investments.........................................39 (f) Capital Expenditures..........................................40 (g) Redemptions, etc..............................................41 (h) Dividends and Purchase of Stock...............................41 (i) Stock of Subsidiaries.........................................42 (j) Distributions by Subsidiaries.................................42 (k) Related Agreements............................................42 (l) Sale and Leaseback Transactions...............................43 (m) Transactions with Affiliates and Related Persons..............43 (n) Asset Dispositions............................................43 (o) Securities Offerings..........................................43 (p) Surplus Cashflows.............................................44 Section 7.03. Financial Covenants...........................................44 (a) Shareholders' Equity..........................................44 (b) Current Ratio.................................................44 -iii- Page (c) Minimum Operating Income......................................44 (d) Ophthalmology Expense.........................................44 ARTICLE VIII Events of Default Section 8.01. Events of Default.............................................45 (a) ..............................................................45 (b) ..............................................................45 (c) ..............................................................45 (d) ..............................................................45 (e) ..............................................................45 (f) ..............................................................45 (g) ..............................................................45 (h) ..............................................................46 (i) ..............................................................46 (j) ..............................................................46 (k) ..............................................................47 (l) ..............................................................47 Section 8.02. Assignments...................................................47 (b) ..............................................................48 Section 8.03. Certain Pledges...............................................48 ARTICLE IX Miscellaneous SECTION 9.01. APPLICABLE LAW................................................48 SECTION 9.02. WAIVER OF JURY................................................49 Section 9.03. Jurisdiction and Venue; Service of Process....................49 Section 9.04. Set-off.......................................................49 Section 9.05. Amendments and Waivers........................................50 Section 9.06. Cumulative Rights; No Waiver..................................50 Section 9.07. Notices.......................................................50 Section 9.08. Certain Acknowledgments.......................................52 Section 9.09. Separability..................................................52 Section 9.10. Parties in Interest...........................................53 Section 9.11. Execution in Counterparts.....................................53 -iv- 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 -v- CREDIT AGREEMENT, dated as of February 18, 1999, between Miravant Medical Technologies, a Delaware corporation (the "Borrower") and Pharmacia & Upjohn Treasury Services AB, a Swedish corporation (the "Lender"). W I T N E S S E T H : WHEREAS, the Borrower has requested the Lender to commit to lend to the Borrower, for general corporate purposes, an aggregate amount not to exceed $22,500,000, in the form of up to six term loans, with not more than one such term loan to be made in each of the six calendar quarters between January 1, 1999 and June 30, 2000; and WHEREAS, the Lender is willing to make such loans, and the additional loans described in Section 3.01(b) hereof, on the terms and conditions provided herein; NOW, THEREFORE, the parties agree as follows: ARTICLE I Definitions Section 1.01. Definitions. (a) Terms Generally. The definitions ascribed to terms in this Agreement apply equally to both the singular and plural forms of such terms. Whenever the context may require, any pronoun shall be deemed to include the corresponding masculine, feminine and neuter forms. The words "include", "includes" and "including" shall be interpreted as if followed by the phrase "without limitation". The phrase "individually or in the aggregate" shall be deemed general in scope and not to refer to any specific Section or clause of this Agreement. All references herein to the Preamble, Recitals, Articles, Sections, Exhibits and Schedules shall be deemed references to the Preamble and Recitals, Articles and Sections of, and Exhibits and Schedules to, this Agreement unless the context shall otherwise require. The table of contents, headings and captions herein shall not be given effect in interpreting or construing the provisions of this Agreement. Except as otherwise expressly provided herein, all references to "dollars" or "$" 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: "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 credit agreement, as it may be amended, modified or supplemented from time to time. "Approved Subsidiary" has the meaning assigned to such term in Section 8.02(a). "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. -2- "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 Quarterly Loan, the Business Day set forth in the relevant Borrowing Request as the date upon which the Borrower desires to borrow such Quarterly 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; and provided, further, that the Borrowing Date with respect to any Loan for the Quarter consisting of January, February and March, 1999 may be any Business Day not fewer than five Business Days and not more than ten Business Days following Lender's receipt of the Borrowing Request relating to such Loan. "Borrowing Request" means a request by the Borrower for a Quarterly Loan, which shall specify (i) the requested Borrowing Date, (ii) the Borrowing Amount for such Quarterly 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. -3- "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. "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. "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. "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, of even date herewith, between the Borrower, as debtor, and the Lender, as secured party; 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 -4- 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, consolidated current assets 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). "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. "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. -5- "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. "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 between the Borrower and an affiliate of the Lender) 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 -6- 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 -7- 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, (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. -8- "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 Quarterly Loans and the Additional Loans. "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 the fifth anniversary of the Borrowing Date for the first Loan made pursuant to this Agreement. "Maximum Quarterly Amount" means, (i) for the Quarter comprising January, February and March, 1999, $3,750,000, and (ii) for any other Quarter (the "Reference Quarter"), the sum of $3,750,000 plus either (A) if and only if no Quarterly Loan was made in the Quarter immediately preceding the Reference Quarter or the principal amount of the Quarterly Loan made in the Quarter immediately preceding the Reference Quarter was less than $3,750,000, then the amount equal to the amount by which $3,750,000 exceeds the principal amount of the Quarterly Loan, if any, made in the Quarter immediately preceding the Reference Quarter, or (B) if and only if the principal amount of the -9- Quarterly Loan made in the Quarter immediately preceding the Reference Quarter was equal to or greater than $3,750,000, then zero. "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" has the meaning assigned to such term in Section 7.02(e)(ix). "Note" means a promissory note of the Borrower in the form set forth in Exhibit B, executed and delivered in accordance -10- 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. "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 -11- 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 -12- of business; (xiv) Liens on insurance proceeds in favor of insurance companies granted solely as security for financed premiums; and (xv) 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). "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. "Quarter" means each of the six calendar quarters consisting of January, February and March, 1999; April, May and June, 1999; July, August and September, 1999; October, November and December, 1999; January, February and March, 2000; and April, May and June, 2000. "Quarterly Loan" has the meaning assigned to such term in Section 2.01. "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 -13- 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). -14- "Taxes" has the meaning assigned to such term in Section 4.03. "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. "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, of even date herewith, between the Borrower and the Lender. "Warrant Certificate" has the meaning assigned to such term in the Warrant Agreement. "Warrant Number" means, with respect to any Quarterly Loan, a number of Warrants equal to the product of (i) the Borrowing Amount for such 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 2.01. Loans. Subject to the terms and conditions of this Agreement, the Lender agrees to make a single term loan (each, a "Quarterly Loan") in dollars to the Borrower not more than once in each Quarter in a principal amount not to exceed the Maximum Quarterly Amount per Quarter. Each Quarterly Loan shall be made on the applicable Borrowing Date only in a -15- principal amount of $1,000,000 or an integral multiple of $250,000 in excess thereof, but in no event greater than the Maximum Quarterly Amount for such Quarter. Section 2.02. Borrowing Procedure. In order to borrow a Quarterly Loan, the Borrower shall deliver a Borrowing Request to the treasurer of Lender, no later than 12:00 Noon, New York time, on the thirtieth Business Day of the Quarter to which the Loan relates; provided, however, that any Borrowing Request with respect to a Quarterly Loan for the Quarter consisting of January, February and March, 1999 may be furnished to the Lender at any time no later than 12:00 Noon, New York time, on the fifteenth Business Day following the Effective Time. Each Borrowing Request shall be accompanied by 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 but shall not exceed the Maximum Quarterly Amount for such Quarter), and 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 2.03. 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 -16- 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 2.04. 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 $[Confidential treatment requested] or integral multiples of $[Confidential treatment requested] in excess thereof (or if the aggregate amount of outstanding Loans is less than $[Confidential treatment requested], 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 [Confidential treatment requested]% of the Net Available Asset Disposition Proceeds, [Confidential treatment requested]% of the Net Available Securities Offering Proceeds or [Confidential treatment requested]% 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. -17- ARTICLE III Interest Section 3.01. 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 Effective Date, 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. (i) On or prior to the fifth Business Day following each Quarterly Payment Date prior to January 1, 2001, 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) All interest on Loans (including Additional Loans) payable on any Quarterly Payment Date subsequent to December 31, 2000 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)(iii), 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 -18- 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). (iii) The Borrower shall not be entitled to pay interest on Loans in the manner set forth in Section 3.01(b)(ii) in respect of interest payable on any of 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 $5,000,000. (c) No Warrants shall be issuable in connection with any Additional Loan. Section 3.02. 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 3.03. 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 3.04. 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 -19- 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 4.01. 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 later of the date when due or the fifth Business Day following the Borrower's receipt of an oral or written confirmation made in response to the request contemplated by Section 4.01(c). (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 & Upjohn, Inc.) the Lender shall confirm the Lender's calculation of the amount of any payment due on a particular date. Section 4.02. 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 -20- the Borrower reasonable documentation concerning such fees and costs. Section 4.03. 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 4.04. 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 -21- 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 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. Section 4.05. 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 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. -22- ARTICLE V Representations and Warranties Section 5.01. 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 -23- 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. Except as disclosed in filings made by the Borrower with the SEC prior to the date hereof or in the press releases issued by the Company since September 30, 1998 and prior to the date hereof and attached to 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"), (i) The consolidated balance sheet of the Borrower as of December 31, 1997, together with consolidated statements of income, shareholders' equity and cash flows for the fiscal year then ended, reported upon by Ernst & Young LLP, and the unaudited consolidated balance sheet of the Borrower as of September 30, 1998, together with consolidated statements of income and cash flows for the nine months then ended, 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. -24- (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 the date of the balance sheet dated December 31, 1997 referred to in Section 5.01(h)(i). Except as disclosed in the Disclosure Package, since December 31, 1997, 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 -25- 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 September 30, 1998 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 Encumbrances. (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. -26- (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. -27- (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. The Borrower and each of its Subsidiaries is and, 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 each of its Subsidiaries will be Solvent. Neither the Borrower nor any of its Subsidiaries is and, 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 each of its Subsidiaries will not be insolvent (as defined in any of Uniform Laws Annotated, Uniform Fraudulent Transfer Act ss. 2 (West 1985); Cal. Civ. Code ss. 3439.02 (West 1997); and Del. Code Ann. tit. 6, ss. 1302 (1997)). (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. -28- Section 5.02 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 6.01. Conditions to the Availability of the Commitment. The obligations of the Lender hereunder are subject to, and no Quarterly Loans shall be made until the earliest time (the "Effective Time") (which shall be no later than the close of business in The City of New York on the fifth Business Day following the Closing contemplated by that certain Equity Investment Agreement, dated as of January 15, 1999, among the Borrower and certain Affiliates of the Lender) on which each of the following conditions precedent shall have been either satisfied or waived in writing by the Lender: (a) This Agreement. The 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 Date, 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 Date; and (ii) a certificate of the Secretary or an Assistant Secretary of the Borrower, dated the Effective Date, 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 -29- 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 Date, of Nida & Maloney PC, 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 Date, and the Lender shall have received a certificate, signed by a Responsible Officer of the Borrower, to that effect. (e) Other Documents. The Lender shall have received such other certificates, opinions and other documents as the Lender reasonably may require. Section 6.02. Conditions to All Quarterly Loans. The obligations of each Lender to make each Quarterly Loan are subject to the conditions precedent that, on the date of each Quarterly 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 Quarterly 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 Quarterly Loan and shall have duly -30- 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 Quarterly 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) 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. Section 6.03. 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 Quarterly 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) and (e) has been satisfied with respect to any Loans then being made. ARTICLE VII Covenants Section 7.01. 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; -31- (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; -32- (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; and (viii) 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. -33- (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 -34- 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; -35- (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 -36- 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 7.02. 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) and (iii) 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 this Agreement, does not exceed $[Confidential treatment requested], 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 -37- connection with the acquisition of assets on or following the date of this Agreement, does not exceed $[Confidential treatment requested]; 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 [Confidential treatment requested]% 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. (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 the 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), -38- (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 than 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. Make any Investment or permit any of its Subsidiaries to do so, except: (i) Investments existing on the date hereof, (ii) Investments consisting of the endorsement of negotiable instrument for deposit or collection or similar transaction in the 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 this Agreement and not exceeding an aggregate principal balance of $[Confidential treatment requested], 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, (vii) Investments consisting of loans to employees, officers or directors of the Borrower and its Subsidiaries made on or subsequent to the date of this Agreement and not exceeding an aggregate principal balance of $[Confidential treatment requested] at any time outstanding, (viii) Investments in the form of debt securities or other evidence of Indebtedness of Ramus Medical Technologies -39- acquired or received on or subsequent to the date of this Agreement pursuant to agreements or instruments in effect on the date of this Agreement and having an aggregate principal amount not exceeding $[Confidential treatment requested], (ix) [Confidential treatment requested] (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 this Agreement. (f) Capital Expenditures. Make any Capital Expenditures, or permit any of its Subsidiaries to do so, exceeding $[Confidential treatment requested] in the aggregate for the Borrower and the Subsidiaries in any one calendar year; provided that following the earliest to occur of [Confidential treatment requested]. -40- (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, (iii) [Confidential treatment requested], and -41- (iv) [Confidential treatment requested]. (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 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. -42- (l) Sale and Leaseback Transactions. Enter into, or permit any of its Subsidiaries to enter into, any Sale and Leaseback Transaction. (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) [Confidential treatment requested]% 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 48 hours 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 -43- (ii) [Confidential treatment requested]% 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 48 hours 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 [Confidential treatment requested]% of the amount (the "Surplus") by which EBITDA in any calendar quarter exceeds $[Confidential treatment requested]. Section 7.03 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 [Confidential Treatment requested] June 30, 1999 [Confidential Treatment requested] September 30, 1999 [Confidential Treatment requested] December 31, 1999 [Confidential Treatment requested] March 31, 2000 [Confidential Treatment requested] June 30, 2000 [Confidential Treatment requested] Each calendar quarter ending after June 30, 2000 [Confidential Treatment requested] (b) Current Ratio. Permit the ratio of Current Assets to Current Liabilities to be less that [Confidential treatment requested] at any time. (c) Minimum Operating Income. [Confidential Treatment requested] (d) Ophthalmology Expense. [Confidential Treatment requested] -44- ARTICLE VIII Events of Default Section 8.01. 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; 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 $[Confidential treatment requested] or more when due; or any such Indebtedness having an aggregate principal amount outstanding of $[Confidential treatment requested] 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 -45- 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 (i) one or more judgments against the Borrower or any of its Subsidiaries or attachments against its property, which in the aggregate exceed $[Confidential treatment requested], 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) -46- 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 (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 8.02. Assignments. (a) Upon reasonable prior notice having been given to the Borrower, the Lender may at any time assign to one or more of The Pharmacia & Upjohn -47- Company, Pharmacia & Upjohn B.V., Pharmacia & Upjohn AB 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 8.03. 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 9.01. 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. -48- SECTION 9.02. 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 9.03. 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 "Separation Event" as defined in that certain stockholder rights protection plan of Pharmacia & Upjohn, Inc. in effect on the date of this Agreement, as it may from time to time be amended. Section 9.04. 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 -49- 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 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 9.05. 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 9.06. 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 9.07. 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 7408 Hollister Avenue Santa Barbara, California 93117 Telecopy: (805) 685-6038 Attention: Gary S. Kledzik -50- with copies (which, in and of themselves, shall not constitute notice) to Nida & Maloney PC 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 & Upjohn Treasury Services AB Lindhagensgatan 133 S-112 87 Stockholm, Sweden Telecopy: +46 8 695 47 08 Attention: Associate General Counse and Pharmacia & Upjohn, Inc. 95 Corporate Drive Bridgewater, New Jersey 08807 Telecopy: (908) 470-8047 Attention: Treasurer and Pharmacia & Upjohn, Inc. 95 Corporate Drive Bridgewater, New Jersey 08807 -51- Telecopy: (908) 306-4485 Attention: Senior Vice President of Business Development and Pharmacia & Upjohn, Inc. 95 Corporate Drive Bridgewater, New Jersey 08807 Telecopy: (908) 306-4489 Attention: General Counsel with a copy (which, in and of itself, shall not constitute notice) to Sullivan & Cromwell 125 Broad Street New York, New York 10004 Telecopy: (212) 558-3588 Attention: Neil T. Anderson, Matthew G. Hurd and Martin J. Travers 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 9.08. 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 9.09. 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, -52- 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 9.10. 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 9.11. 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. -53- 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: /S/ Gary S. Kledzik --------------------------------- Title: Chief Executive Officer PHARMACIA & UPJOHN TREASURY SERVICES AB By: /S/ Mats Pettersson --------------------------------- Title: Attorney-In-Fact -54- Schedule 5.01(a) Subsidiaries of the Borrower Miravant Pharmaceuticals, Inc. Miravant Cardiovascular, Inc. Miravant Systems, Inc. Exhibit A Form of Borrowing Request [Date]* Pharmacia & Upjohn, Inc. 95 Corporate Drive Bridgewater, New Jersey 08807 Attention: Treasurer Borrowing Request Ladies and Gentlemen: reena Reference is made to the Credit Agreement, dated as of February 18, 1999 (as amended, modified or supplemented from time to time, the "Credit Agreement"), between Miravant Medical Technologies and Pharmacia & Upjohn 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(a) of the Credit Agreement, that it requests a Quarterly 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:** _________, ____ Borrowing Amount:*** $___________ - ------------ * 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. Warrant Number:**** ___________ 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 Quarterly 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 _________________ divided by 10 _________________ [A] x 0.40 _________________ [B] [A]+[B] _________________ Very truly yours, MIRAVANT MEDICAL TECHNOLOGIES By: --------------------------- Name: Title: - ---------- **** See the definition of "Warrant Number" in Section 1.01(c) of the Credit Agreement. A-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 & Upjohn Treasury Services AB (the "Lender"), on [MATURITY DATE], the principal sum of $[PRINCIPAL AMOUNT] pursuant to and in the manner contemplated by that certain Credit Agreement, dated as of February 18, 1999 (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 2.01(b) of the Credit Agreement, in the manner set forth in such Section 2.01(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. B-1 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: B-2 Exhibit C Form of Opinion of Counsel for the Borrower to be Delivered Upon Payment of Shares [TO COME] C-1 Exhibit D Form of Opinion of Counsel for the Borrower to be Delivered at the Effective Time [Effective Date] Pharmacia & Upjohn, Inc. 95 Corporate Drive Bridgewater, New Jersey 08807 Ladies and Gentlemen: In connection with the execution and delivery today of the Credit Agreement, dated as of February 18, 1999 (the "Credit Agreement"), between Miravant Medical Technologies, Inc., a Delaware corporation (the "Borrower"), and Pharmacia & Upjohn 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, 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. D-1 (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. D-2 This letter is delivered by us as counsel for the Borrower to you, and is solely for your benefit. Very truly yours, NIDA & MALONEY PC D-3 Exhibit E Form of Compliance Certificate COMPLIANCE CERTIFICATE [For the Fiscal Quarter ending ________] [For the Fiscal Year ending ________] Reference is made to the Credit Agreement, dated as of February 18, 1999 (as amended, modified or supplemented from time to time, the "Credit Agreement"), between Miravant Medical Technologies (the "Borrower") and Pharmacia & Upjohn 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] - ---------- * Insert only in Compliance Certificates accompanying quarterly financial statements delivered pursuant to Section 7.01(a) 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 E-2 EX-99.1 7 JOINT FILING AGREEMENT EXHIBIT I JOINT FILING AGREEMENT ---------------------- In accordance with Rule 13d-1(k)(1) promulgated under the Securities Exchange Act of 1934, the undersigned agree to the joint filing of a Statement on Schedule 13D (including any and all amendments thereto) with respect to the Common Stock, $0.01 par value, of Miravant Medical Technologies, and further agree to the filing of this agreement as an Exhibit thereto. In addition, each party to this Agreement expressly authorizes each other party to this Agreement to file on its behalf any and all amendments to such Statement on Schedule 13D. Dated: February 26, 1999 PHARMACIA & UPJOHN COMPANY By: /s/ Don W. Schmitz ------------------------ Title: Secretary PHARMACIA & UPJOHN S.p.A. By: /s/ Mats Pettersson ------------------------ Title: Attorney-In-Fact PHARMACIA & UPJOHN AB By: /s/ Mats Pettersson ------------------------ Title: Attorney-In-Fact PHARMACIA & UPJOHN HOLDINGS B.V. By: /s/ Wim Kuiper ------------------------ Title: Director PHARMACIA & UPJOHN, INC. By: /s/ Don W. Schmitz ------------------------ Title: Secretary -----END PRIVACY-ENHANCED MESSAGE-----