EXHIBIT 10.37
COMMON STOCK PURCHASE AGREEMENT
DATED AS OF NOVEMBER 23, 1998
BY AND BETWEEN
SUPERGEN, INC.
AND
HSBC XXXXX XXXXX CANADA, INC.
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II PURCHASE AND SALE OF PREFERRED STOCK . . . . . . . . . . . . . . . . . 1
Section 2.1 PURCHASE AND SALE OF STOCK . . . . . . . . . . . . . . . . . . 2
Section 2.2 THE SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.3 PURCHASE PRICE AND CLOSING . . . . . . . . . . . . . . . . . . 2
ARTICLE III REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . 2
Section 3.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . 2
(a) ORGANIZATION, GOOD STANDING AND POWER . . . . . . . . . . . . . . . 2
(b) AUTHORIZATION; ENFORCEMENT . . . . . . . . . . . . . . . . . . . . 3
(c) CAPITALIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(d) ISSUANCE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . 4
(e) NO CONFLICTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(f) COMMISSION DOCUMENTS, FINANCIAL STATEMENTS . . . . . . . . . . . . 4
(g) SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(h) NO MATERIAL ADVERSE CHANGE . . . . . . . . . . . . . . . . . . . . 5
(i) NO UNDISCLOSED LIABILITIES . . . . . . . . . . . . . . . . . . . . 5
(j) NO UNDISCLOSED EVENTS OR CIRCUMSTANCES . . . . . . . . . . . . . . 6
(k) INDEBTEDNESS . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(l) TITLE TO ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(m) ACTION PENDING . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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PAGE
(n) COMPLIANCE WITH LAW . . . . . . . . . . . . . . . . . . . . . . . . 7
(o) CERTAIN FEES . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(p) DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(q) OPERATION OF BUSINESS . . . . . . . . . . . . . . . . . . . . . . . 7
(r) ENVIRONMENTAL COMPLIANCE . . . . . . . . . . . . . . . . . . . . . 7
(s) MATERIAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . 8
(t) TRANSACTION WITH AFFILIATES . . . . . . . . . . . . . . . . . . . . 8
(u) SECURITIES ACT OF 1933 . . . . . . . . . . . . . . . . . . . . . . 8
(v) EMPLOYEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(w) USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(x) PUBLIC UTILITY HOLDING COMPANY ACT AND INVESTMENT
COMPANY ACT STATUS . . . . . . . . . . . . . . . . . . . . . . . . 9
(y) ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(z) ACKNOWLEDGMENT REGARDING PURCHASER'S PURCHASE OF SHARES . . . . . . 9
Section 3.2 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER . . . . . . . 10
(a) ORGANIZATION AND STANDING OF THE PURCHASER . . . . . . . . . . . . 10
(b) AUTHORIZATION, AND POWER . . . . . . . . . . . . . . . . . . . . . 10
(c) NO CONFLICTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(d) ACQUISITION FOR INVESTMENT . . . . . . . . . . . . . . . . . . . . 10
(e) ACCREDITED PURCHASER . . . . . . . . . . . . . . . . . . . . . . . 11
(f) INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(g) GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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PAGE
ARTICLE IV COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 4.1 SECURITIES COMPLIANCE . . . . . . . . . . . . . . . . . . . . 11
Section 4.2 REGISTRATION AND LISTING . . . . . . . . . . . . . . . . . . . 12
Section 4.3 REGISTRATION STATEMENT . . . . . . . . . . . . . . . . . . . . 12
Section 4.4 DELIVERY OF THE SHARES . . . . . . . . . . . . . . . . . . . . 12
Section 4.5 COMPLIANCE WITH LAWS . . . . . . . . . . . . . . . . . . . . . 12
Section 4.6 KEEPING OF RECORDS AND BOOKS OF ACCOUNT . . . . . . . . . . . 12
Section 4.7 REPORTING REQUIREMENTS . . . . . . . . . . . . . . . . . . . . 13
Section 4.8 AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 4.9 OTHER AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE V CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 5.1 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY TO
SELL THE SHARES . . . . . . . . . . . . . . . . . . . . . . . 13
(a) ACCURACY OF THE PURCHASER'S REPRESENTATIONS AND WARRANTIES . . . . 14
(b) PERFORMANCE BY THE PURCHASER . . . . . . . . . . . . . . . . . . . 14
(c) NO INJUNCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 5.2 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE PURCHASER
TO CLOSE . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(a) ACCURACY OF THE COMPANY'S REPRESENTATIONS AND WARRANTIES . . . . . 14
(b) PERFORMANCE BY THE COMPANY . . . . . . . . . . . . . . . . . . . . 14
(c) NO SUSPENSION, ETC. . . . . . . . . . . . . . . . . . . . . . . . . 14
(d) NO INJUNCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(e) NO PROCEEDINGS OR LITIGATION . . . . . . . . . . . . . . . . . . . 15
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PAGE
(f) OPINION OF COUNSEL, ETC. . . . . . . . . . . . . . . . . . . . . . 15
(g) REGISTRATION RIGHTS AGREEMENT . . . . . . . . . . . . . . . . . . . 15
ARTICLE VI Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 6.1 TERMINATION BY MUTUAL CONSENT . . . . . . . . . . . . . . . . 15
Section 6.2 OTHER TERMINATION . . . . . . . . . . . . . . . . . . . . . . 15
Section 6.3 EFFECT OF TERMINATION . . . . . . . . . . . . . . . . . . . . 15
ARTICLE VII Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 7.1 GENERAL INDEMNITY . . . . . . . . . . . . . . . . . . . . . . 16
Section 7.2 INDEMNIFICATION PROCEDURE . . . . . . . . . . . . . . . . . . 16
ARTICLE VIII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 8.1 FEES AND EXPENSES . . . . . . . . . . . . . . . . . . . . . . 17
Section 8.2 SPECIFIC ENFORCEMENT, CONSENT TO JURISDICTION . . . . . . . . 17
Section 8.3 ENTIRE AGREEMENT; AMENDMENT . . . . . . . . . . . . . . . . . 18
Section 8.4 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 8.5 WAIVERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 8.6 HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 8.7 SUCCESSOR AND ASSIGNS . . . . . . . . . . . . . . . . . . . . 19
Section 8.8 NO THIRD PARTY BENEFICIARIES . . . . . . . . . . . . . . . . . 19
Section 8.9 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 8.10 SURVIVAL . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 8.11 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . 20
iv
PAGE
Section 8.12 PUBLICITY . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 8.13 SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 8.14 FURTHER ASSURANCES . . . . . . . . . . . . . . . . . . . . . . 20
v
COMMON STOCK PURCHASE AGREEMENT
This COMMON STOCK PURCHASE AGREEMENT (this "Agreement") is dated as of
November 23, 1998 by and among between SuperGen, Inc., a Delaware corporation
(the "Company") and HSBC Xxxxx Xxxxx Canada, Inc. (the "Purchaser").
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS.
(a) "MATERIAL ADVERSE EFFECT" shall mean any effect on the business,
operations, properties or financial condition of the Company that is material
and adverse to the Company and its subsidiaries, taken as a whole and/or any
condition, circumstance, or situation that would prohibit or otherwise interfere
with the ability of the Company to enter into and perform any of its obligations
under this Agreement or the Registration Rights Agreement in any material
respect.
(b) "MATERIAL CHANGE IN OWNERSHIP" shall mean that the officers and
directors of the Company shall own in the aggregate less than 50% of the
outstanding Common Stock of the Company that the officers and directors own as
of the date hereof.
(c) "REGISTRATION STATEMENT" shall mean the registration statement
under the Securities Act of 1933, as amended, to be filed with the Securities
and Exchange Commission for the registration of the Shares.
(d) "SHARES" shall have the meaning assigned to such term in Section
2.1 hereof.
ARTICLE II
PURCHASE AND SALE OF COMMON STOCK
Section 2.1 PURCHASE AND SALE OF STOCK. Subject to the terms and
conditions of this Agreement and the preemptive rights in favor of Tako
Ventures, LLC ("Tako") pursuant to the Tako Agreement described in Section
3.1(c) of the Schedule of Exceptions (the "Tako Preemptive Rights"), the Company
hereby issues and sells to the Purchaser and the Purchaser hereby purchases from
the Company 460,000 shares (the "Shares") of the Company's common stock, par
value $.001 per share (the "Common Stock"), for a purchase price of Three
Million Dollars ($3,000,000). In the
event Tako elects to exercise any Tako Preemptive Rights with respect to the
Shares, then the amount of Common Stock that may be acquired by Tako pursuant
to the Tako Preemptive Rights shall be based on the number of Shares;
PROVIDED, that the amount of Shares purchased by the Purchaser shall not be
reduced as a result of the exercise by Tako of such Tako Preemptive Rights.
Section 2.2 THE SHARES. The Company has authorized, free of preemptive
rights and other similar contractual rights of stockholders other than the Tako
Preemptive Rights, the Shares to be issued under this Agreement.
Section 2.3 PURCHASE PRICE AND CLOSING. The Company agrees to issue and
sell to the Purchaser and, in consideration of and in express reliance upon the
representations, warranties, covenants, terms and conditions of this Agreement,
the Purchaser, agrees to purchase that number of the Shares to be issued under
this Agreement. The closing under this Agreement shall take place at the
offices of Xxxxxx Xxxxxx Flattau & Klimpl, LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 (the "Closing") at 10:00 a.m. E.S.T. on (i) December 30,
1998, or (ii) such other time and place or on such date as the Purchaser and the
Company may agree upon (the "Closing Date"). Each party shall deliver all
documents, instruments and writings required to be delivered by such party
pursuant to this Agreement at or prior to the Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 REPRESENTATION AND WARRANTIES OF THE COMPANY. The Company
hereby makes the following representations and warranties to the Purchaser:
(a) ORGANIZATION, GOOD STANDING AND POWER. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has the requisite corporate power to own,
lease and operate its properties and assets and to conduct its business as it is
now being conducted. The Company does not have any subsidiaries (as defined in
Section 3.1(g)) except as set forth in the Company's most recent Form 10-K,
including the accompanying financial statements (the "Form 10-K"), or in the
Company's most recent Form 10-Q (the "Form 10-Q"), or in the Company's filings
on Form 8-K or public filings made by the Company with the Securities and
Exchange Commission (the "Commission"), pursuant to the Securities Act or the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), including the
Commission Documents referred to in Section 3.1(f) below (the "Commission
Filings", which term shall include such filings made prior to any Draw Down
Exercise Date), or on SCHEDULE 3.1(a) of the Schedule of Exceptions. The
Company and each such subsidiary is duly qualified as a foreign corporation to
do business and is in good standing in every jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary except for any jurisdiction in which the failure to be so qualified
will not have a material adverse effect on the Company's financial condition.
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(b) AUTHORIZATION; ENFORCEMENT. The Company has the requisite
corporate power and authority to enter into and perform this Agreement and the
Registration Rights Agreement attached hereto as Exhibit A (the "Registration
Rights Agreement") and to issue and sell the Shares in accordance with the terms
hereof. The execution, delivery and performance of this Agreement and the
Registration Rights Agreement by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action, and no further consent or
authorization of the Company or its Board of Directors or stockholders is
required. Each of this Agreement and the Registration Rights Agreement has been
duly executed and delivered by the Company. Each of this Agreement and the
Registration Rights Agreement constitutes, or shall constitute when executed and
delivered, a valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation, conservatorship, receivership or similar laws relating to, or
affecting generally the enforcement of, creditor's rights and remedies or by
other equitable principles of general application.
(c) CAPITALIZATION. The authorized capital stock of the Company and
the shares thereof issued and outstanding as of the date hereof are set forth in
the Form 10-K, Form 10-Q, on SCHEDULE 3.1(c) of the Schedule of Exceptions or in
the Commission Filings or as otherwise disclosed in writing to the Purchaser.
All of the outstanding shares of the Company's Common Stock have been duly and
validly authorized. Except as set forth in this Agreement and the Registration
Rights Agreement and as set forth in the Form 10-K, Form 10-Q, on SCHEDULE
3.1(c) of the Schedule of Exceptions or in the Commission Filings, no shares of
Common Stock are entitled to preemptive rights or registration rights and there
are no outstanding options, warrants, scrip, rights to subscribe to, call or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company. Furthermore,
except as set forth in this Agreement and the Registration Rights Agreement and
as set forth in the Form 10-K, Form 10-Q, on SCHEDULE 3.1(c) of the Schedule of
Exceptions or in the Commission Filings, there are no contracts, commitments,
understandings, or arrangements by which the Company is or may become bound to
issue additional shares of the capital stock of the Company or options,
securities or rights convertible into shares of capital stock of the Company.
Except for customary transfer restrictions contained in agreements entered into
by the Company in order to sell restricted securities or as provided in the Form
10-K, Form 10-Q, on SCHEDULE 3.1(c) of the Schedule of Exceptions or in the
Commission Filings, the Company is not a party to any agreement granting
registration rights to any person with respect to any of its equity or debt
securities. The Company is not a party to, and it has no knowledge of, any
agreement restricting the voting or transfer of any shares of the capital stock
of the Company. Except as set forth in the Form 10-K, Form 10-Q or on SCHEDULE
3.1(c) of the Schedule of Exceptions, the offer and sale of all capital stock,
convertible securities, rights, warrants, or options of the Company issued prior
to the Closing complied with all applicable Federal and state securities laws,
and no stockholder has a right of rescission or damages with respect thereto
which would have a Material Adverse Effect on the Company's financial condition
or operating results. The Company has furnished or made available to the
Purchaser true and correct copies of the
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Company's Certificate of Incorporation as in effect on the date hereof (the
"Articles"), and the Company's Bylaws as in effect on the date hereof (the
"Bylaws").
(d) ISSUANCE OF SHARES. The Shares to be issued under this Agreement
have been duly authorized by all necessary corporate action and, when paid for
or issued in accordance with the terms hereof, the Shares shall be validly
issued and outstanding, fully paid and nonassessable, and the Purchaser shall be
entitled to all rights accorded to a holder of Common Stock.
(e) NO CONFLICTS. Except as disclosed on SCHEDULE 3(e) of the
Schedule of Exceptions, the execution, delivery and performance of this
Agreement and the Registration Rights Agreement by the Company and the
consummation by the Company of the transactions contemplated therein do not (i)
violate any provision of the Company's Articles or Bylaws, (ii) conflict with,
or constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any material agreement, mortgage,
deed of trust, indenture, note, bond, license, lease agreement, instrument or
obligation to which the Company is a party, (iii) create or impose a lien,
charge or encumbrance on any property of the Company under any agreement or any
commitment to which the Company is a party or by which the Company is bound or
by which any of its respective properties or assets are bound, or (iv) result in
a violation of any federal, state, local or foreign statute, rule, regulation,
order, judgment or decree (including Federal and state securities laws and
regulations) applicable to the Company or any of its subsidiaries or by which
any property or asset of the Company or any of its subsidiaries are bound or
affected, except, in the case of clause (ii) above, any conflicts arising under
and in connection with the Tako Agreement, and except, in all cases, for such
conflicts, defaults, terminations, amendments, acceleration, cancellations and
violations as would not, individually or in the aggregate, have a Material
Adverse Effect. The Company is not required under Federal, state or local law,
rule or regulation to obtain any consent, authorization or order of, or make any
filing or registration with, any court or governmental agency in order for it to
execute, deliver or perform any of its obligations under this Agreement and the
Registration Rights Agreement, or issue and sell the Shares in accordance with
the terms hereof (other than any filings which may be required to be made by the
Company with the Commission, the National Association of Securities Dealers,
Inc. (the "NASD"), or state securities administrators subsequent to the Closing,
by the Company and the Purchaser with the Federal Trade Commission and the
Department of Justice under the Xxxx-Xxxxx Xxxxxx Antitrust Improvements Act of
1976, as amended, subsequent to the Closing, and, any registration statement
which may be filed pursuant hereto); provided that, for purpose of the
representation made in this sentence, the Company is assuming and relying upon
the accuracy of the relevant representations and agreements of the Purchaser
herein.
(f) COMMISSION DOCUMENTS, FINANCIAL STATEMENTS. The Common Stock of
the Company is registered pursuant to Section 12(b) or 12(g) of the Exchange
Act, and, except as disclosed in the Form 10-K, Form 10-Q or on SCHEDULE 3.1(f)
of the Schedule of Exceptions, the Company has timely filed all reports,
schedules, forms, statements and other documents required to be filed by it with
the Commission pursuant to the reporting requirements of the Exchange Act,
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including material filed pursuant to Section 13(a) or 15(d) of the Exchange Act
(all of the foregoing including filings incorporated by reference therein being
referred to herein as the "Commission Documents"). The Company has delivered or
made available to the Purchaser true and complete copies of the Commission
Documents filed with the Commission since December 31, 1997 and prior to the
Closing Date. The Company has not provided to the Purchaser any information
which, according to applicable law, rule or regulation, should have been
disclosed publicly by the Company but which has not been so disclosed, other
than with respect to the transactions contemplated by this Agreement. As of
their respective dates, the Form 10-K for the year ended December 31, 1997 and
the Forms 10-Q for the fiscal quarters ended March 31, 1998, June 30, 1998 and
September 30, 1998 complied in all material respects with the requirements of
the Exchange Act and the rules and regulations of the Commission promulgated
thereunder and other federal, state and local laws, rules and regulations
applicable to such documents, and, as of their respective dates, none of the
Form 10-K and the Form 10-Q referred to above contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of the Company included in the Commission Documents comply as to form
in all material respects with applicable accounting requirements and the
published rules and regulations of the Commission or other applicable rules and
regulations with respect thereto. Such financial statements have been prepared
in accordance with generally accepted accounting principles ("GAAP") applied on
a consistent basis during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto or (ii) in the case
of unaudited interim statements, to the extent they may not include footnotes or
may be condensed or summary statements), and fairly present in all material
respects the financial position of the Company and its subsidiaries as of the
dates thereof and the results of operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year-end audit
adjustments).
(g) SUBSIDIARIES. The Form 10-K, Form 10-Q, SCHEDULE 3.1(g) of the
Schedule of Exceptions or the Commission Filings sets forth each subsidiary of
the Company, showing the jurisdiction of its incorporation or organization and
showing the percentage of each person's ownership of the outstanding stock or
other interests of such subsidiary. For the purposes of this Agreement,
"subsidiary" shall mean any corporation or other entity of which at least a
majority of the securities or other ownership interest having ordinary voting
power (absolutely or contingently) for the election of directors or other
persons performing similar functions are at the time owned directly or
indirectly by the Company and/or any of its other subsidiaries. Except as set
forth in the Commission Filings, none of such subsidiaries is a "significant
subsidiary" as defined in Regulation S-X.
(h) NO MATERIAL ADVERSE CHANGE. Since September 30, 1998, the date
through which the most recent quarterly report of the Company on Form 10-Q has
been prepared and filed with the Commission, a copy of which is included in the
Commission Documents, the Company has not experienced or suffered any Material
Adverse Effect.
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(i) NO UNDISCLOSED LIABILITIES. Except as disclosed in the Form
10-K, Form 10-Q, on SCHEDULE 3.1(i) of the Schedule of Exceptions or the
Commission Filings, neither the Company nor any of its subsidiaries has any
liabilities, obligations, claims or losses (whether liquidated or unliquidated,
secured or unsecured, absolute, accrued, contingent or otherwise) that would be
required to be disclosed on a balance sheet of the Company or any subsidiary
(including the notes thereto) in conformity with GAAP not disclosed in the
Commission Documents, other than those incurred in the ordinary course of the
Company's or its subsidiaries respective businesses since June 30, 1998 and
which, individually or in the aggregate, do not or would not have a Material
Adverse Effect on the Company or its subsidiaries.
(j) NO UNDISCLOSED EVENTS OR CIRCUMSTANCES. No event or circumstance
has occurred or exists with respect to the Company or its subsidiaries or their
respective businesses, properties, prospects, operations or financial condition,
which, under applicable law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly announced or
disclosed.
(k) INDEBTEDNESS. The Form 10-K, Form 10-Q SCHEDULE 3.1(k) of the
Schedule of Exceptions or the Commission Filings sets forth as of the date
hereof all outstanding secured and unsecured Indebtedness of the Company or any
subsidiary, or for which the Company or any subsidiary has commitments. For the
purposes of this Agreement, "Indebtedness" shall mean (a) any liabilities for
borrowed money or amounts owed in excess of $25,000 (other than trade accounts
payable incurred in the ordinary course of business), (b) all guaranties,
endorsements and other contingent obligations in respect of Indebtedness of
others, whether or not the same are or should be reflected in the Company's
balance sheet (or the notes thereto), except guaranties by endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business; and (c) the present value of any lease payments in
excess of $25,000 due under leases required to be capitalized in accordance with
GAAP. Neither the Company nor any subsidiary is in default with respect to any
Indebtedness.
(l) TITLE TO ASSETS. Each of the Company and the subsidiaries has
good and marketable title to all of its real and personal property reflected in
the Commission Documents, free of any mortgages, pledges, charges, liens,
security interests or other encumbrances, except for those indicated in the Form
10-K, Form 10-Q or on SCHEDULE 3.1(l) of the Schedule of Exceptions or such that
could not reasonably be expected to cause a Material Adverse Effect on the
Company's financial condition or operating results. All said leases of the
Company and each of its subsidiaries are valid and subsisting and in full force
and effect in all material respects.
(m) ACTIONS PENDING. There is no action, suit, claim, investigation
or proceeding pending or, to the knowledge of the Company, threatened against
the Company or any subsidiary which questions the validity of this Agreement or
the transactions contemplated hereby or any action taken or to be taken pursuant
hereto or thereto. Except as set forth in the Form 10-K, Form 10-Q, on SCHEDULE
3.1(m) of the Schedule of Exceptions or the Commission Filings, there is no
action, suit, claim, investigation or proceeding pending or, to the knowledge of
the Company, threatened,
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against or involving the Company, any subsidiary or any of their respective
properties or assets and which, if adversely determined, is reasonably likely
to result in a Material Adverse Effect. Except in respect of rulings made by
the Food and Drug Administration, there are no outstanding orders, judgments,
injunctions, awards or decrees of any court, arbitrator or governmental or
regulatory body against the Company or any subsidiary.
(n) COMPLIANCE WITH LAW. The business of the Company and the
subsidiaries has been and is presently being conducted in accordance with all
applicable federal, state and local governmental laws, rules, regulations and
ordinances, except as set forth in the Form 10-K, Form 10-Q or on SCHEDULE
3.1(n) of the Schedule of Exceptions or such that do not cause a Material
Adverse Effect. The Company and each of its subsidiaries have all franchises,
permits, licenses, consents and other governmental or regulatory authorizations
and approvals necessary for the conduct of its business as now being conducted
by it unless the failure to possess such franchises, permits, licenses, consents
and other governmental or regulatory authorizations and approvals, individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
(o) CERTAIN FEES. Except as set forth on SCHEDULE 3.1(o) of the
Schedule of Exceptions, no brokers, finders or financial advisory fees or
commissions will be payable by the Company or any subsidiary with respect to the
transactions contemplated by this Agreement.
(p) DISCLOSURE. To the best of the Company's knowledge, neither this
Agreement or the Schedules hereto nor any other documents, certificates or
instruments furnished to the Purchaser by or on behalf of the Company or any
subsidiary in connection with the transactions contemplated by this Agreement
contain any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements made herein or therein, in the
light of the circumstances under which they were made herein or therein, not
misleading.
(q) OPERATION OF BUSINESS. The Company and each of the
subsidiaries owns or possesses all patents, trademarks, service marks, trade
names, copyrights, licenses and authorizations as set forth in the Form 10-K,
Form 10-Q, on SCHEDULE 3.1(q) of the Schedule of Exceptions and the
Commission Filings, and all rights with respect to the foregoing, which are
necessary for the conduct of its business as now conducted without any
conflict with the rights of others, except to the extent that a Material
Adverse Effect could not reasonably be expected to result from such conflict.
(r) ENVIRONMENTAL COMPLIANCE. Except as disclosed in the Form 10-K,
Form 10-Q or on SCHEDULE 3.1(r) of the Schedule of Exceptions, the Company and
each of its subsidiaries have obtained all material approvals, authorization,
certificates, consents, licenses, orders and permits or other similar
authorizations of all governmental authorities, or from any other person, that
are required under any Environmental Laws. "Environmental Laws" shall mean all
applicable laws relating to the protection of the environment including, without
limitation, all requirements pertaining to reporting, licensing, permitting,
controlling, investigating or remediating emissions, discharges, releases or
threatened releases of hazardous substances, chemical substances, pollutants,
contaminants or toxic substances, materials or wastes, whether solid, liquid or
gaseous in nature, into
-7-
the air, surface water, groundwater or land, or relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of hazardous substances, chemical substances, pollutants,
contaminants or toxic substances, material or wastes, whether solid, liquid
or gaseous in nature. Except for such instances as would not individually or
in the aggregate have a Material Adverse Effect, there are no past or present
events, conditions, circumstances, incidents, actions or omissions relating
to or in any way affecting the Company or its subsidiaries that violate or
could reasonably be expected to violate any Environmental Law after the
Closing or that could reasonably be expected to give rise to any
environmental liability, or otherwise form the basis of any claim, action,
demand, suit, proceeding, hearing, study or investigation (i) under any
Environmental Law, or (ii) based on or related to the manufacture,
processing, distribution, use, treatment, storage (including without
limitation underground storage tanks), disposal, transport or handling, or
the emission, discharge, release or threatened release of any hazardous
substance.
(s) MATERIAL AGREEMENTS. Except as set forth in the Form 10-K, Form
10-Q, Form 8-K, on SCHEDULE 3.1(s) of the Schedule of Exceptions or the
Commission Filings, neither the Company nor any subsidiary is a party to any
written or oral contract, instrument, agreement, commitment, obligation, plan or
arrangement, a copy of which would be required to be filed with the Commission
as an exhibit to a registration statement on Form S-3 or applicable form
(collectively, "Material Agreements") if the Company or any subsidiary were
registering securities under the Securities Act of 1933, as amended (the
"Securities Act"). The Company and each of its subsidiaries has in all material
respects performed all the obligations required to be performed by them to date
under the foregoing agreements, have received no notice of default and, to the
best of the Company's knowledge are not in default under any Material Agreement
now in effect, the result of which could reasonably be expected to cause a
Material Adverse Effect.
(t) TRANSACTIONS WITH AFFILIATES. Except as set forth in the Form
10-K, Form 10-Q or on SCHEDULE 3.1(t) of the Schedule of Exceptions or in
Commission Filings, there are no loans, leases, agreements, contracts, royalty
agreements, management contracts or arrangements or other continuing
transactions exceeding $100,000 between (a) the Company, any subsidiary or any
of their respective customers or suppliers on the one hand, and (b) on the other
hand, any officer, employee, consultant or director of the Company, or any of
its subsidiaries, or any person who would be covered by Item 404(a) of
Regulation S-K or any corporation or other entity controlled by such officer,
employee, consultant, director or person.
(u) SECURITIES ACT OF 1933. The Company has complied and will comply
with all applicable Federal and state securities laws in connection with the
offer, issuance and sale of the Shares hereunder. Neither the Company nor
anyone acting on its behalf, directly or indirectly, has or will sell, offer to
sell or solicit offers to buy the Shares or similar securities to, or solicit
offers with respect thereto from, or enter into any preliminary conversations or
negotiations relating thereto with, any person, so as to bring the issuance and
sale of the Shares under the registration provisions of the Securities Act and
applicable state securities laws. Neither the Company nor any of its
affiliates, nor any person acting on its or their behalf, has engaged in any
form of general solicitation
-8-
or general advertising (within the meaning of Regulation D under the
Securities Act) in connection with the offer or sale of the Shares.
(v) EMPLOYEES. Neither the Company nor any subsidiary has any
collective bargaining arrangements or agreements covering any of its employees,
except as set forth in the Form 10-K, Form 10-Q or on SCHEDULE 3.1(v) to the
Schedule of Exceptions or as otherwise disclosed to the Purchaser. Except as
set forth in the Form 10-K, Form 10-Q, on SCHEDULE 3.1(v) hereto or as otherwise
disclosed by the Company to the Purchaser, neither the Company nor any
subsidiary has any employment contract, agreement regarding proprietary
information, noncompetition agreement, nonsolicitation agreement,
confidentiality agreement, or any other similar contract or restrictive
covenant, relating to the right of any officer, employee or consultant to be
employed or engaged by the Company or such subsidiary. Since September 30,
1998, except as disclosed in Schedule 3.1(v) to the Schedule of Exceptions, no
officer, consultant or key employee of the Company or any subsidiary whose
termination, either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect, has terminated or, to the knowledge
of the Company, has any present intention of terminating his or her employment
or engagement with the Company or any subsidiary.
(w) USE OF PROCEEDS. The proceeds from the sale of the Shares will
be used by the Company and its subsidiaries for general corporate purposes.
(x) PUBLIC UTILITY HOLDING COMPANY ACT AND INVESTMENT COMPANY ACT
STATUS. The Company is not a "holding company" or a "public utility company" as
such terms are defined in the Public Utility Holding Company Act of 1935, as
amended. The Company is not, and as a result of and immediately upon Closing
will not be, an "investment company" or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as amended.
(y) ERISA. No liability to the Pension Benefit Guaranty Corporation
has been incurred with respect to any Plan by the Company or any of its
subsidiaries which is or would be materially adverse to the Company and its
subsidiaries. The execution and delivery of this Agreement and the issue and
sale of the Shares will not involve any transaction which is subject to the
prohibitions of Section 406 of ERISA or in connection with which a tax could be
imposed pursuant to Section 4975 of the Internal Revenue Code of 1986, as
amended, provided that, if any of the Purchaser, or any person or entity that
owns a beneficial interest in any of the Purchaser, is an "employee pension
benefit plan" (within the meaning of Section 3(2) of ERISA) with respect to
which the Company is a "party in interest" (within the meaning of Section 3(14)
of ERISA), the requirements of Sections 407(d)(5) and 408(e) of ERISA, if
applicable, are met. As used in this Section 2.1(ac), the term "Plan" shall
mean an "employee pension benefit plan" (as defined in Section 3 of ERISA) which
is or has been established or maintained, or to which contributions are or have
been made, by the Company or any subsidiary or by any trade or business, whether
or not incorporated, which, together with the Company or any subsidiary, is
under common control, as described in Section 414(b) or (c) of the Code.
-9-
(z) ACKNOWLEDGMENT REGARDING PURCHASER'S PURCHASE OF SHARES. The
Company acknowledges and agrees that each of the Purchaser is acting solely in
the capacity of arm's length purchaser with respect to this Agreement, the
Registration Rights Agreement and the transactions contemplated hereunder. The
Company further acknowledges that the Purchaser is not acting as a financial
advisor or fiduciary of the Company (or in any similar capacity) with respect to
this Agreement, the Registration Rights Agreement and the transactions
contemplated hereunder and any advice given by the Purchaser or any of its
representatives or agents in connection with this Agreement, the Registration
Rights Agreement and the transactions contemplated hereunder is merely
incidental to the Purchaser's purchase of the Shares.
Section 3.2 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser
hereby makes the following representations and warranties to the Company:
(a) ORGANIZATION AND STANDING OF THE PURCHASER. The Purchaser is a
corporation duly incorporated, validly existing and in good standing under the
laws of the jurisdiction of its incorporation.
(b) AUTHORIZATION AND POWER. The Purchaser has the requisite power
and authority to enter into and perform this Agreement and to purchase the
Shares being sold to it hereunder. The execution, delivery and performance of
this Agreement and the Registration Rights Agreement by Purchaser and the
consummation by it of the transactions contemplated hereby have been duly
authorized by all necessary corporate action. Each of this Agreement and the
Registration Rights Agreement constitutes, or shall constitute when executed and
delivered, a valid and binding obligation of the Purchaser enforceable against
the Purchaser in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation, conservatorship, receivership, or similar laws relating to, or
affecting generally the enforcement of, creditor's rights and remedies or by
other equitable principles of general application.
(c) NO CONFLICTS. The execution, delivery and performance of this
Agreement and the Registration Rights Agreement and the consummation by the
Purchaser of the transactions contemplated hereby and thereby or relating hereto
do not and will not (i) result in a violation of such Purchaser's charter
documents or bylaws or (ii) conflict with, or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration or
cancellation of any agreement, indenture or instrument to which the Purchaser is
a party, or result in a violation of any law, rule, or regulation, or any order,
judgment or decree of any court or governmental agency applicable to the
Purchaser or its properties, except for such conflicts, defaults and violations
as would not, individually or in the aggregate, prohibit or otherwise interfere
with the ability of the Purchaser to enter into and perform its obligations
under this Agreement in any material respect. The Purchaser is not required to
obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency in order for it to execute,
deliver or perform any of its obligations under this
-10-
Agreement or the Registration Rights Agreement or to purchase the Shares in
accordance with the terms hereof, provided that for purposes of the
representation made in this sentence, the Purchaser is assuming and relying
upon the accuracy of the relevant representations and agreements of the
Company herein.
(d) ACQUISITION FOR INVESTMENT. The Purchaser is purchasing the
Shares solely for its own account for the purpose of investment. The Purchaser
does not have a present arrangement or intention to effect any organized
distribution of the Shares to or through any person or entity; PROVIDED,
HOWEVER, that by making the representations herein, the Purchaser does not agree
to hold the Shares for any minimum or other specific term and reserves the right
to dispose of the Shares at any time in accordance with Federal and state
securities laws applicable to such disposition. The Purchaser acknowledges that
it is able to bear the financial risks associated with an investment in the
Shares and that it has been given full access to such records of the Company and
the subsidiaries and to the officers of the Company and the subsidiaries as it
has deemed necessary or appropriate to conduct its due diligence investigation.
The Purchaser is capable of evaluating the risks and merits of an investment in
the Shares by virtue of its experience as an investor and its knowledge,
experience, and sophistication in financial and business matters and the
Purchaser is capable of bearing the entire loss of its investment in the Shares.
(e) ACCREDITED PURCHASER. The Purchaser is an "accredited investor"
as defined in Regulation D promulgated under the Securities Act.
(f) INFORMATION. Investor and its advisors, if any, have been
furnished with all materials relating to the business, finances and operations
of the Company and materials relating to the offer and sale of the Shares which
have been requested by Investor. Investor and its advisors, if any, have been
afforded the opportunity to ask questions of the Company. Investor has sought
such accounting, legal and tax advice as it has considered necessary to make an
informed investment decision with respect to its acquisition of the Shares.
Investor understands that it (and not the Company) shall be responsible for its
own tax liabilities that may arise as a result of this investment or the
transactions contemplated by this Agreement.
(g) GENERAL. The Purchaser understands that the Shares are being
offered and sold in reliance on a transactional exemption from the registration
requirement of Federal and state securities laws and the Company is relying upon
the truth and accuracy of the representations, warranties, agreements,
acknowledgments and understandings of the Purchaser set forth herein in order to
determine the applicability of such exemptions and the suitability of the
Purchaser to acquire the Shares.
ARTICLE IV
COVENANTS
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The Company covenants with the Purchaser as follows, which covenants are
for the benefit of the Purchaser and its permitted assignees (as defined
herein).
Section 4.1 SECURITIES COMPLIANCE.
(a) The Company shall notify the Commission and NASD, if applicable,
in accordance with their rules and regulations, of the transactions contemplated
by this Agreement, and shall take all other necessary action and proceedings as
may be required and permitted by applicable law, rule and regulation, for the
legal and valid issuance of the Shares to the Purchaser or subsequent holders.
(b) The Company is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments and understandings of
the Purchaser set forth herein in order to determine the applicability of
Federal and state securities laws exemptions and the suitability of the
Purchaser to acquire the Shares.
Section 4.2 REGISTRATION AND LISTING. The Company will take all action
necessary to cause its Common Stock to continue to be registered under Sections
12(b) or 12(g) of the Exchange Act, will comply in all respects with its
reporting and filing obligations under the Exchange Act, will comply with all
requirements related to any registration statement filed pursuant to this
Agreement, and will not take any action or file any document (whether or not
permitted by the Securities Act or the rules promulgated thereunder) to
terminate or suspend such registration or to terminate or suspend its reporting
and filing obligations under the Exchange Act or Securities Act, except as
permitted herein. The Company will take all action necessary to continue the
listing or trading of its Common Stock on the NASDAQ system or any relevant
market or system, if applicable, and will comply in all respects with the
Company's reporting, filing and other obligations under the bylaws or rules of
the NASD and NASDAQ system or any relevant market or system.
Section 4.3 REGISTRATION STATEMENT. The Company shall cause to be filed
the Registration Statement, which Registration Statement shall provide for the
resale of the Shares purchased by and issued to the Purchaser in accordance of
this Agreement and the Registration Rights Agreement. The Company shall take
all action necessary to cause such Registration Statement to be declared
effective by the Commission in accordance with the Registration Rights
Agreement. Before the Purchaser shall be obligated to accept a Draw Down (other
than the initial Draw Down) request from the Company, the Company shall have
caused a sufficient number of shares of Common Stock to be registered to cover
the Shares to be issued in connection with this Agreement.
Section 4.4 DELIVERY OF THE SHARES. The Company shall cause 460,000
unregistered shares of Common Stock to be delivered to the Purchaser prior to
the funding of the Purchase Price. The Purchaser agrees to hold such Shares in
trust for the benefit of the Company until the Purchaser has paid the purchase
price.
-12-
Section 4.5 COMPLIANCE WITH LAWS. (a) The Company shall comply, and cause
each subsidiary to comply, with all applicable laws, rules, regulations and
orders, noncompliance with which could have a Material Adverse Effect.
Section 4.6 KEEPING OF RECORDS AND BOOKS OF ACCOUNT. The Company shall
keep and cause each subsidiary to keep adequate records and books of account, in
which complete entries will be made in accordance with GAAP consistently
applied, reflecting all financial transactions of the Company and its
subsidiaries, and in which, for each fiscal year, all proper reserves for
depreciation, depletion, obsolescence, amortization, taxes, bad debts and other
purposes in connection with its business shall be made.
Section 4.7 REPORTING REQUIREMENTS. Upon request, the Company shall
furnish the following to the Purchaser so long as such Purchaser is the
beneficial owner of the Shares:
(a) Quarterly Reports filed with the Commission on Form 10-Q as soon
as available, and in any event within 47 days after the end of each of the first
three fiscal quarters of the Company; and
(b) Annual Reports filed with the Commission on Form 10-K as soon as
available, and in any event within 92 days after the end of each fiscal year of
the Company.
Section 4.8 AMENDMENTS. The Company shall not amend or waive any provision
of the Articles of Incorporation or Bylaws of the Company in any way that would
adversely affect the dividend rights or voting rights of the holders of the
Shares.
Section 4.9 OTHER AGREEMENTS. The Company shall not enter into any
agreement in which the terms of such agreement would restrict or impair the
right to perform of the Company or any subsidiary under this Agreement or the
Articles of Incorporation of the Company. So long as the Purchaser is the
beneficial owner of the Shares, the Company is restricted from entering in any
other financing agreement without the prior consent of the Purchaser or without
terminating its agreement with the Purchaser, except that the Company may (i)
enter into a loan, credit or lease facility with a bank or financing
institution, establish an employee stock option plan or finance the acquisition
of other companies and/or (ii) issue shares of Common Stock in connection with
Tako Ventures exercise of its preemptive rights under the Tako Preemptive
Rights, stock splits, the Company's current director option plans or stock
purchase plans, currently outstanding warrants or options, acquisition of
products, licenses or other assets and strategic partnerships or joint ventures
(the primary purpose of which is not to raise equity); PROVIDED, that the
Company may not issue shares of Common Stock or securities convertible into
shares of Common Stock in excess of ten percent (10%) of the issued and
outstanding shares of Common Stock of the Company in connection with any
acquisition without the prior written consent of the Purchaser.
-13-
ARTICLE V
CONDITIONS TO CLOSING
Section 5.1 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY TO SELL
THE SHARES. The obligation hereunder of the Company to issue and sell the
Shares to the Purchaser is subject to the satisfaction or waiver, at or before
the Closing and with respect to each Draw Down and Call Option, of each of the
conditions set forth below. These conditions are for the Company's sole benefit
and may be waived by the Company at any time in its sole discretion.
(a) ACCURACY OF THE PURCHASER'S REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Purchaser shall be true and correct in all
material respects as of the date when made and as of the Closing as though made
at that time, except for representations and warranties that are expressly made
as of a particular date.
(b) PERFORMANCE BY THE PURCHASER. The Purchaser shall have
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Purchaser at or prior to the Closing.
(c) NO INJUNCTION. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by this
Agreement.
Section 5.2 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE PURCHASER TO
CLOSE. The obligation hereunder of the Purchaser to enter this Agreement is
subject to the satisfaction or waiver, at or before the Closing, of each of the
conditions set forth below. These conditions are for the Purchaser's sole
benefit and may be waived by the Purchaser at any time in its sole discretion.
(a) ACCURACY OF THE COMPANY'S REPRESENTATIONS AND WARRANTIES. Each
of the representations and warranties of the Company shall be true and correct
in all material respects as of the date when made and as of the Closing as
though made at that time (except for representations and warranties that speak
as of a particular date).
(b) PERFORMANCE BY THE COMPANY. The Company shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the Company at or prior to the Closing.
(c) NO SUSPENSION, ETC. From the date hereof to the Closing Date,
trading in the Company's Common Stock shall not have been suspended by the
Commission or the NASDAQ (except for any suspension of trading of limited
duration agreed to by the Company, which suspension shall be terminated prior to
Closing), and, at any time prior to the Closing, trading in securities generally
as reported by NASDAQ shall not have been suspended or limited, or minimum
-14-
prices shall not have been established on securities whose trades are reported
by NASDAQ, or on the New York Stock Exchange, nor shall a banking moratorium
have been declared either by the United States or New York State authorities,
nor shall there have occurred any material outbreak or escalation of hostilities
or other national or international calamity or crisis of such magnitude in its
effect on, or any material adverse change in any financial market which, in each
case, in the judgment of the Purchaser, makes it impracticable or inadvisable to
purchase the Shares.
(d) NO INJUNCTION. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by this
Agreement.
(e) NO PROCEEDINGS OR LITIGATION. No action, suit or proceeding
before any arbitrator or any governmental authority shall have been commenced,
and no investigation by any governmental authority shall have been threatened,
against the Company or any subsidiary, or any of the officers, directors or
affiliates of the Company or any subsidiary seeking to restrain, prevent or
change the transactions contemplated by this Agreement, or seeking damages in
connection with such transactions.
(f) OPINION OF COUNSEL, ETC. At the Closing, the Purchaser shall
have received an opinion of counsel to the Company, dated the date of Closing,
in the form of Exhibit A hereto, and such other certificates and documents as
the Purchaser or its counsel shall reasonably require incident to the Closing.
(g) REGISTRATION RIGHTS AGREEMENT. At the Closing the Company shall
have executed and delivered the Registration Rights Agreement to the Purchaser.
ARTICLE VI
TERMINATION
Section 6.1 TERMINATION BY MUTUAL CONSENT. This Agreement shall terminate
on December 31, 1998 if the Shares have not been issued and sold by the Company
and purchased by the Purchaser. This Agreement may be terminated by mutual
consent of the parties.
Section 6.2 OTHER TERMINATION. The Purchaser may terminate this Agreement
upon one (1) day's notice if (x) an event resulting in a Material Adverse Effect
or a Material Change in Ownership has occurred, or (y) the Company is insolvent
or has commenced or is the subject of a bankruptcy proceeding.
Section 6.3 EFFECT OF TERMINATION. In the event of termination by the
Company or the Purchaser, written notice thereof shall forthwith be given to the
other party and the transactions
-15-
contemplated by this Agreement shall be terminated without further action by
either party. If this Agreement is terminated as provided in Section 6.1 or
6.2 herein, this Agreement shall become void and of no further force and
effect, except for Sections 8.1 and 8.2, and Article VII herein. Nothing in
this Section 6.3 shall be deemed to release the Company or the Purchaser from
any liability for any breach under this Agreement, or to impair the rights of
the Company and the Purchaser to compel specific performance by the other
party of its obligations under this Agreement.
ARTICLE VII
INDEMNIFICATION
Section 7.1 GENERAL INDEMNITY. The Company agrees to indemnify and hold
harmless the Purchaser (and its directors, officers, affiliates, agents,
successors and assigns but excluding consequential damages) from and against any
and all actual losses, liabilities, deficiencies, costs, damages and reasonable
expenses (including, without limitation, reasonable attorney's fees, charges and
disbursements) incurred by the Purchaser as a result of any breach of the
covenants made by the Company herein. The Purchaser agrees to indemnify and
hold harmless the Company and its directors, officers, affiliates, agents,
successors and assigns from and against any and all actual losses, liabilities,
deficiencies, costs, damages and expenses (including, without limitation,
reasonable attorneys fees, charges and disbursements but excluding consequential
damages) incurred by the Company as result of any breach of the covenants made
by the Purchaser herein.
Section 7.2 INDEMNIFICATION PROCEDURE. Any party entitled to
indemnification under this Article VII (an "indemnified party") will give
written notice to the indemnifying party of any matters giving rise to a claim
for indemnification; provided, that the failure of any party entitled to
indemnification hereunder to give notice as provided herein shall not relieve
the indemnifying party of its obligations under this Article VII except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any action, proceeding or claim is brought against an
indemnified party in respect of which indemnification is sought hereunder, the
indemnifying party shall be entitled to participate in and, unless in the
reasonable judgment of the indemnified party a conflict of interest between it
and the indemnifying party may exist with respect of such action, proceeding or
claim, to assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. In the event that the indemnifying party advises an
indemnified party that it will contest such a claim for indemnification
hereunder, or fails, within thirty (30) days of receipt of any indemnification
notice to notify, in writing, such person of its election to defend, settle or
compromise, at its sole cost and expense, any action, proceeding or claim (or
discontinues its defense at any time after it commences such defense), then the
indemnified party may, at its option, defend, settle or otherwise compromise or
pay such action or claim. In any event, unless and until the indemnifying party
elects in writing to assume and does so assume the defense of any such claim,
proceeding or action, the indemnified party's costs and expenses arising out of
the defense, settlement or compromise of any such action, claim or proceeding
shall be losses subject to indemnification hereunder. The indemnified party
shall cooperate fully with the indemnifying party
-16-
in connection with any negotiation or defense of any such action or claim by
the indemnifying party and shall furnish to the indemnifying party all
information reasonably available to the indemnified party which relates to
such action or claim. The indemnifying party shall keep the indemnified
party fully apprised at all times as to the status of the defense or any
settlement negotiations with respect thereto. If the indemnifying party
elects to defend any such action or claim, then the indemnified party shall
be entitled to participate in such defense with counsel of its choice at its
sole cost and expense. The indemnifying party shall not be liable for any
settlement of any action, claim or proceeding effected without its prior
written consent. Notwithstanding anything in this Article VII to the
contrary, the indemnifying party shall not, without the indemnified party's
prior written consent (which consent shall not be unreasonable withheld),
settle or compromise any claim or consent to entry of any judgment in respect
thereof which imposes any future obligation on the indemnified party or which
does not include, as an unconditional term thereof, the giving by the
claimant or the plaintiff to the indemnified party of a release from all
liability in respect of such claim. The indemnification required by this
Article VII shall be made by periodic payments of the amount thereof during
the course of investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred, so long as the indemnified
party irrevocably agrees to refund such moneys if it is ultimately determined
by a court of competent jurisdiction that such party was not entitled to
indemnification. The indemnity agreements contained herein shall be in
addition to (a) any cause of action or similar rights of the indemnified
party against the indemnifying party or others, and (b) any liabilities the
indemnifying party may be subject to pursuant to the law.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 FEES AND EXPENSES. The Company shall pay all reasonable
fees and expenses related to the transactions contemplated by this Agreement;
PROVIDED, that the Company shall pay, at the Closing, all reasonable attorneys
fees and expenses (exclusive of disbursements and out-of-pocket expenses)
incurred by the Purchaser up to $35,000 in connection with the preparation,
negotiation, execution and delivery of this Agreement. In addition, the Company
shall pay all reasonable fees and expenses incurred by the Purchaser in
connection with any amendments, modifications or waivers of this Agreement or
the Registration Rights Agreement or incurred in connection with the enforcement
of this Agreement and the Registration Rights Agreement, including, without
limitation, all reasonable attorneys fees and expenses. The Company shall pay
all stamp or other similar taxes and duties levied in connection with issuance
of the Shares pursuant hereto.
Section 8.2 SPECIFIC ENFORCEMENT, CONSENT TO JURISDICTION.
(a) The Company and the Purchaser acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the
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parties shall be entitled to an injunction or injunctions to prevent or cure
breaches of the provisions of this Agreement and to enforce specifically the
terms and provisions hereof or thereof, this being in addition to any other
remedy to which any of them may be entitled by law or equity.
(b) Each of the Company and the Purchaser (i) hereby irrevocably
submits to the jurisdiction of the United States District Court and other courts
of the United States sitting in the State of Delaware for the purposes of any
suit, action or proceeding arising out of or relating to this Agreement and (ii)
hereby waives, and agrees not to assert in any such suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of such court,
that the suit, action or proceeding is brought in an inconvenient forum or that
the venue of the suit, action or proceeding is improper. Each of the Company
and the Purchaser consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address in effect for
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing in this
Section shall affect or limit any right to serve process in any other manner
permitted by law.
Section 8.3 ENTIRE AGREEMENT; AMENDMENT. This Agreement contains the
entire understanding of the parties with respect to the matters covered hereby,
supersedes all prior agreements with respect to subject matter hereof and,
except as specifically set forth herein, neither the Company nor the Purchaser
makes any representations, warranty, covenant or undertaking with respect to
such matters. No provision of this Agreement may be waived or amended other
than by a written instrument signed by the party against whom enforcement of any
such amendment or waiver is sought.
Section 8.4 NOTICES. Any notice, demand, request, waiver or other
communication required or permitted to be given hereunder shall be in writing
and shall be effective (a) upon hand delivery, by telex (with correct answer
back received), telecopy or facsimile at the address or number designated below
(if delivered on a business day during normal business hours where such notice
is to be received), or the first business day following such delivery (if
delivered other than on a business day during normal business hours where such
notice is to be received) or (b) on the second business day following the date
of mailing by express courier service, fully prepaid, addressed to such address,
or upon actual receipt of such mailing, whichever shall first occur. The
addresses for such communications shall be:
If to the Company: SuperGen, Inc.
0 Xxxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Telephone Number: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxx
Xxxxxxxxx
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With copies to: Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Telephone Number: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxxxx Xxxxx, Esq./Xxxx X. Xxxx, Esq.
If to any Purchaser: HSBC Xxxxx Xxxxx Canada, Inc.
000 Xxxxxxxx Xxxxxx Xxxx, Xxxxx 0000
Xxxxxxx XX XXX 0X0
Telephone Number: (000) 000-0000
Fax: (000) 000-0000
Attention: Xx. Xxxxx Elishis
With copies to: Xxxxxx Xxxxxx Flattau & Klimpl, LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone Number: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxx Xxxx Xxxxxxxx, Esq.
Any party hereto may from time to time change its address for notices by
giving at least ten (10) days written notice of such changed address to the
other party hereto.
Section 8.5 WAIVERS. No waiver by either party of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any other
provisions, condition or requirement hereof, nor shall any delay or omission
of any party to exercise any right hereunder in any manner impair the
exercise of any such right accruing to it thereafter.
Section 8.6 HEADINGS. The article, section and subsection headings in this
Agreement are for convenience only and shall not constitute a part of this
Agreement for any other purpose and shall not be deemed to limit or affect any
of the provisions hereof.
Section 8.7 SUCCESSORS AND ASSIGNS. The Purchaser may not assign this
Agreement to any person (other than to an affiliate of the Purchaser) without
the prior consent of the Company, which consent will not be unreasonably
withheld. This Agreement shall be binding upon and inure to the benefit of the
parties and their successors and assigns. The parties hereto may not amend this
Agreement or any rights or obligations hereunder without the prior written
consent of the Company and each Purchaser to be affected by the amendment.
After Closing, the assignment by a party to this Agreement of any rights
hereunder shall not affect the obligations of such party under this Agreement.
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Section 8.8 NO THIRD PARTY BENEFICIARIES. This Agreement is intended for
the benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
Section 8.9 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware, without
giving effect to the choice of law provisions.
Section 8.10 SURVIVAL. The representations and warranties of the Company
and the Purchaser contained in Article III shall survive the execution and
delivery hereof and the Closing until the date three years from the Closing
Date, and the agreements and covenants set forth in Articles IV, VI and VII of
this Agreement shall survive the execution and delivery hereof and the Closing
hereunder.
Section 8.11 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and shall become effective when counterparts have been signed by each
party and delivered to the other parties hereto, it being understood that all
parties need not sign the same counterpart. In the event any signature is
delivered by facsimile transmission, the party using such means of delivery
shall cause four additional executed signature pages to be physically delivered
to the other parties within five days of the execution and delivery hereof.
Section 8.12 PUBLICITY. Prior to the Closing, neither the Company nor the
Purchaser shall issue any press release or otherwise make any public statement
or announcement with respect to this Agreement or the transactions contemplated
hereby or the existence of this Agreement. In the event the Company is required
by law, based upon an opinion of the Company's counsel, that the Company must
issue a press release or otherwise make a public statement or announcement with
respect to this Agreement prior to the Closing, the Company will use its best
efforts to consult with the Purchaser on the form and substance of such press
release. After the Closing, the Company may issue a press release or otherwise
make a public statement or announcement with respect to this Agreement or the
transactions contemplated hereby or the existence of this Agreement; PROVIDED,
that prior to issuing any such press release, making any such public statement
or announcement, the Company obtains the prior consent of the Purchaser, which
consent shall not be unreasonably withheld or delayed.
Section 8.13 SEVERABILITY. The provisions of this Agreement are severable
and, in the event that any court of competent jurisdiction shall determine that
any one or more of the provisions or part of the provisions contained in this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provision or part of a provision of this Agreement, and this Agreement
shall be reformed and construed as if such invalid or illegal or unenforceable
provision, or part of such provision, had never been contained herein, so that
such provisions would be valid, legal and enforceable to the maximum extent
possible.
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Section 8.14 FURTHER ASSURANCES. From and after the date of this
Agreement, upon the request of the Purchaser or the Company, each of the Company
and the Purchaser shall execute and deliver such instrument, documents and other
writings as may be reasonably necessary or desirable to confirm and carry out
and to effectuate fully the intent and purposes of this Agreement and the
Shares.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorize officer as of the date first above
written.
SUPERGEN, INC.
By: /S/ XX. XXXXXX XXXXXXXXX
-----------------------------------------
Name: Xx. Xxxxxx Xxxxxxxxx
Title: President and Chief Executive Officer
HSBC XXXXX XXXXX CANADA, INC.
By: /S/ XXXXX XXXXXXX
-----------------------------------------
Name: Xxxxx Xxxxxxx
Title: Senior Vice President (SRA)
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