STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of March 29,
1996, is made by and among IOMED, Inc., a Utah corporation ("IOMED"), Ciba-Geigy
Corporation, a New York corporation ("Purchaser"), acting through its
Pharmaceuticals Division, and Dermion, Inc., a Delaware corporation (the
"Company").
RECITALS:
The Company desires to issue and sell to Purchaser, and Purchaser
desires to purchase from the Company, shares of the Company's Common Stock, par
value $.001 per share (the "Common Stock"), on the terms and subject to the
conditions set forth herein.
The Company and Purchaser are entering into this Agreement in
connection with their execution of the Research and Development Agreement, dated
of even date herewith, by and between the Company, Purchaser and IOMED (the "R&D
Agreement"). Capitalized terms not otherwise defined herein shall have the
meanings given to them in the R&D Agreement.
Now, therefore, in consideration of the mutual promises and covenants
hereinafter contained, and intending to be legally bound, the parties agree as
follows:
ARTICLE I
PURCHASE AND SALE OF SHARES
1.01 Stock to Be Purchased. Subject to the terms and conditions
contained in this Agreement, the Company agrees to issue and sell to Purchaser
at the Closing (as defined in Section 1.03), and Purchaser agrees to purchase
from the Company, Two Hundred Thousand (200,000) newly issued shares of Common
Stock (the "Shares").
1.02 Purchase Price. The purchase price for the Shares (the "Purchase
Price") shall consist of cash in the amount of One Million Dollars ($1,000,000).
The Purchase Price shall be paid at the Closing, in the form of a check made
payable to the Company or in such other form agreed upon by the parties.
1.03 Closing. The closing of the purchase and sale of the Shares under
this Agreement (the "Closing") shall take place simultaneously with the
execution of this Agreement.
1.04 Delivery of Shares. At the Closing, the Company shall deliver to
Purchaser certificates representing the Shares, registered in the name of
Purchaser.
1.05 Legal Opinion. At the Closing, the Company will deliver to
Purchaser an opinion of Xxxxxxxx & Xxxxxxxx LLP, counsel to the Company, in the
form of Exhibit A attached hereto.
1.06 Further Assurances. In addition to the actions, documents and
instruments specifically required to be taken or delivered hereby, the Company
and Purchaser shall execute and deliver, or cause to be executed and delivered,
such other instruments and take such other actions as the other party may
reasonably request in order to complete and perfect the transactions
contemplated by this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.01. Representations and Warranties of the Company and IOMED. The
Company and IOMED hereby jointly and severally represent and warrant to
Purchaser on the date hereof as follows:
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. The
Company is duly licensed or qualified to do business, and is in good standing
under the laws of, each state in which the Company is required to be so licensed
or qualified. The Company has the corporate power and authority to own or lease
its properties, rights and assets and to conduct its business as now conducted
or presently proposed to be conducted. Since its date of incorporation, the
Company has not engaged in any activities or operations of any nature, except as
contemplated by this Agreement and the Transaction Documents. IOMED is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Utah.
(b) The Company and IOMED have full corporate power and
authority to enter into this Agreement, the Patent License Agreement in the form
attached as Exhibit B hereto (the "License Agreement"), the Support Services
Agreement in the form attached as Exhibit C hereto (the "Services Agreement"),
the Agreement of Sublease (the "Sublease Agreement") in the form attached as
Exhibit D hereto, the Stockholders' Agreement in the form attached as Exhibit E
hereto (the "Stockholders' Agreement"), the, Contribution Agreement in the form
attached as Exhibit F hereto (the "Contribution Agreement") and the R&D
Agreement (collectively, the "Transaction Documents"), and to carry out the
transactions contemplated hereby and thereby. All corporate action on the part
of the Company and of IOMED required to authorize the execution, delivery and
performance by the Company and IOMED of this Agreement and each of the
Transaction Documents, and the consummation of the transactions contemplated
hereby and thereby, has been taken. This Agreement and each of the Transaction
Documents has been duly and validly authorized, executed and delivered by the
Company and IOMED, and each constitutes a valid and binding obligation of the
Company and IOMED, enforceable against each of them in accordance with its
terms, subject to bankruptcy, insolvency, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights and to
general equitable principles.
(c) The execution, delivery and performance by the Company and
IOMED of this Agreement and each of the Transaction Documents do not and will
not (i) violate or breach the certificate of incorporation or bylaws of the
Company or the articles of incorporation or bylaws of IOMED, (ii) violate or
conflict with any applicable law, (iii) violate, breach, cause a default under
or otherwise give rise to a right of termination, cancellation or acceleration
with respect to (presently, with the giving of notice or the passage of time)
any material agreement, contract or instrument to which the Company or IOMED is
a party or by which any of their respective assets are bound, or (iv) result in
the creation or imposition of any lien, pledge, mortgage, claim, charge or
encumbrance upon any assets of the Company or IOMED.
(d) Assuming the accuracy of Purchaser's representations and
warranties in Section 2.02(e), no consent, authorization, license, permit,
registration or approval of, or exemption or other action by, any governmental
authority or other person is required in connection with the Company's or
IOMED's execution and delivery of this Agreement or any of the Transaction
Documents, or with the performance by the Company or IOMED of their respective
obligations hereunder or thereunder, except in each case for any consent,
authorization, license, permit, registration or approval as have been obtained
and remain in full force and effect.
(e) The authorized capital stock of the Company consists of
Four Million (4,000,000) shares, of Common Stock, of which Eight Hundred
Thousand (800,000) are issued and outstanding, all of which issued and
outstanding shares are owned beneficially and of record by IOMED, and One
Million (1,00.0,000) shares of Preferred Stock, $.001 par value per share, none
of which are issued and outstanding. Upon consummation of the transactions
contemplated by this Agreement and the Contribution Agreement, One Million
(1,000,000) shares of Common Stock will be issued and outstanding. The Shares
will, upon issuance pursuant to the terms of this Agreement, be duly and validly
authorized and issued, fully paid and nonassessable. Except as set forth in the
Stockholders' Agreement, the Company does not have outstanding any rights
(preemptive or other) or options to subscribe for or purchase, or any warrants
or other agreements providing for or requiring the issuance by the Company of,
any of its capital stock or securities convertible into or exchangeable for its
capital stock, nor is the Company under any obligation to repurchase or redeem
any shares of its capital stock or securities convertible into or exchangeable
for its capital stock.
(f) The Company has provided to Purchaser true and correct
copies of all agreements executed by the Company and IOMED pursuant to the
Contribution Agreement. (g) The Company is the owner or licensee of the Dermion
Technology, and has the right to license said Dermion Technology free of any
Lien (other than the obligations to pay royalties as provided in the University
of Utah License) in the manner set forth in the R&D Agreement. IOMED is the
licensee of the IOMED Technology and has the right to license said IOMED
Technology free of any Lien (other than the obligation to pay royalties as
provided in the Alza License) in the manner set forth in the R&D Agreement.
There are no existing defaults under the Alza License or University of Utah
License (or events which, with notice or lapse of time or both, would constitute
a default) either by IOMED or, to the best of IOMED's knowledge, by any other
party thereto, and true and correct copies of such licenses have been delivered
to Purchaser. Except as set forth on Schedule 7.01(e) to the R&D Agreement,
neither IOMED nor the Company has assigned or conveyed any interest in the
Dermion Technology or the IOMED Technology which may be inconsistent with the
rights granted under the R&D Agreement; to the best knowledge of the Company and
IOMED, the practice of the Dermion Technology and the IOMED Technology by the
Company and IOMED in connection with their respective business activities does
not infringe any rights of third parties; neither IOMED nor the Company is aware
that any third party is infringing any Dermion Technology or any IOMED
Technology; with respect to all Patent Rights constituting Dermion Technology or
IOMED Technology which were prosecuted by IOMED, such Patent Rights have been
prosecuted in good faith; and neither IOMED nor the Company has reason to
believe that any patent included within the Dermion Technology or the IOMED
Technology would be invalid or would be held to be unenforceable by a court of
competent jurisdiction. To the best of IOMED's and the Company's knowledge,
after reasonable inquiry, Schedules 1.1(b)(i) and 1.1(b)(ii) to the R&D
Agreement set forth all Patent Rights and identifiable Know-How owned or
licensed by IOMED or the Company or their respective Affiliates, applicable to
the development of the Systems.
(h) IOMED has contributed to the Company assets, properties
and rights that are sufficient, when taken together with the facilities to be
made available to the Company pursuant to the Sublease Agreement and the
services to be made available to the Company pursuant to the Services Agreement,
for the conduct of the Business as previously conducted by IOMED, other than the
IOMED Technology. The Company currently owns or has full-right to use all
assets, rights and properties (including all authorizations, approvals and
consents of Governmental Authorities) necessary to (i) to conduct, the Business
as previously conducted by IOMED and (ii) to perform the transactions
contemplated by this Agreement and the R&D Agreement except, in each case, for
the IOMED Technology.
(i) Attached as Schedule 2.01(i) is the unaudited pro forma
balance sheet of the Company as of March 29, 1996, (the "Balance Sheet"). The
Balance Sheet fairly presents the assets, liabilities and financial position of
the Company (assuming consummation of the transactions contemplated by the
Contribution Agreement as of such date) and was prepared in accordance with
generally accepted accounting principles.
2.02 Representations and Warranties of Purchaser. Purchaser represents
and warrants to the Company and to IOMED as follows:
(a) Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of New York.
(b) Purchaser has full corporate power and authority to enter
into this Agreement and each of the Transaction Documents to which it is a party
and to carry out the transactions contemplated hereby and thereby. All corporate
action on the part of Purchaser required to authorize the execution, delivery
and performance of this Agreement and each of the Transaction Documents to which
it is a party and the consummation of the transactions contemplated hereby and
thereby, has been taken. This Agreement and each of the Transaction Documents to
which it is a party has been duly and validly authorized, executed and delivered
by Purchaser, and each constitutes a valid and binding obligation of Purchaser
enforceable against it in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equitable principles.
(c) The execution, delivery and performance by Purchaser of
this Agreement and each of the Transaction Documents to which it is a party do
not and will not (i) violate or breach the articles of incorporation or bylaws
of Purchaser, (ii) violate or conflict with any applicable law, (iii) violate,
breach, cause a default under or otherwise give rise to a right of termination,
cancellation or acceleration with respect to (presently, with the giving of
notice or the passage of time) any material agreement, contract or instrument to
which Purchaser is a party or by which any of its assets is bound, or (iv)
result in the creation or imposition of any lien, pledge, mortgage, claim,
charge or encumbrance upon any assets of Purchaser.
(d) No consent, authorization, license, permit, registration
or approval of, or exemption or other action by, any governmental authority or
other person is required in connection. with Purchaser's execution and delivery
of this Agreement. or any Transaction Document to which it is a party or with
the performance by Purchaser of its obligations hereunder or thereunder, except
in each case for any consent, authorization, license, permit, registration or
approval as have been obtained and remain in full force and effect.
(e) Purchaser is acquiring the Shares for investment for its
own account and not with a view to, or for resale in connection with, any public
distribution, and understands that neither the Shares nor the shares of Common
Stock issuable upon conversion thereof have been registered under the Securities
Act of 1933, as amended (the "Securities Act"), by reason of a specific
exemption from the registration provisions of the Securities Act which depends
upon, among other things, the bona fide nature of the investment intent as
expressed herein.
ARTICLE III
DISCLAIMER OF IMPLIED WARRANTIES, REPRESENTATIONS
AND COVENANTS: SURVIVAL
3.01 Disclaimer. In entering into this Agreement, Purchaser, the
Company and IOMED have relied solely upon the representations and warranties set
forth in this Agreement and the Schedules hereto and the information referred to
herein as having been supplied by one to the other, and there are no
representations, warranties, covenants or agreements, express or implied, made
by any party to any other party in connection with the transactions contemplated
hereby other than as set forth in this Agreement and/or such Schedules.
3.02 Survival. The representations and warranties of the Company and
IOMED set forth in Sections 2.01(g), (h) and (i) shall survive the consummation
of the transaction contemplated herein and any examination or investigation of
the parties for a period of two years after the Closing Date. All other
representations and warranties of the parties set forth in this Agreement shall
survive the consummation of the transactions contemplated herein, and any
examination or investigation of the parties, indefinitely, without limitation as
to the duration thereof.
ARTICLE IV
INDEMNIFICATION
4.01 Indemnification by the Company and IOMED. Subject to the
provisions of this Article IV, the Company and IOMED shall jointly and severally
indemnify, defend and hold harmless Purchaser from and against any and all loss,
claim, liability, damage, cost and expense (including reasonable attorneys' fees
and expenses) (hereinafter referred to as a "Loss") asserted against, resulting
to, imposed upon or incurred or suffered by Purchaser or any assignee or
successor of Purchaser as a result of or arising out of any of the following:
(a) Any breach of any of the representations or warranties of
the Company or IOMED set forth in this Agreement or in any Schedule to this
Agreement; or
(b) Any breach or nonfulfillment by the Company or IOMED of
any of the covenants or agreements of the Company or IOMED contained in this
Agreement.
4.02 Indemnification by Purchaser. Subject to the provisions of this
Article IV, Purchaser shall indemnify, defend and hold harmless the Company and
IOMED from and against any and all Loss asserted against, resulting to, imposed
upon or incurred or suffered by the Company or any of its successors or assigns
as a result of or arising out of any of the following:
(a) Any breach of any of the representations or warranties of
Purchaser set forth in this Agreement or in any Schedule to this Agreement; or
(b) Any breach or nonfulfillment by Purchaser of any of the
covenants or agreements of Purchaser contained in this Agreement.
4.03 Procedure for Indemnification.
(a) Demands, Etc. Each indemnified party hereunder agrees that
upon its obtaining knowledge of facts indicating that there may be a basis for a
claim for indemnity under the provisions of this Agreement, including receipt by
it of notice of any demand, assertion, claim, action or proceeding, judicial or
otherwise, by any third party (such third party actions being collectively
referred to hereinafter as the "Claim"), with respect to any matter as to which
it may be entitled to indemnity under the provisions of this Agreement, it will
give notice thereof in writing to the indemnifying party within a reasonable
time after obtaining such knowledge, together with a statement of such
information respecting any of the foregoing as it shall then have. The
indemnifying party shall be obligated to indemnify the indemnified party
notwithstanding failure to give such notice in a timely manner, except if and to
the extent that the indemnifying party is materially prejudiced by any delay in
delivering, or non-delivery of, such notice.
(b) Right to Contest and Defend. The indemnifying party is
entitled at its cost and expense to contest and defend by all appropriate legal
proceedings any Claim with respect to which it is called upon to indemnify the
indemnified party under the provisions of this Agreement; provided, however,
that notice of the intention so to contest shall be delivered by the
indemnifying party to the indemnified party within thirty (30) days after the
indemnifying party becomes aware of such Claim (or within such shorter period of
time as may be necessary to avoid prejudice to the rights of the indemnified
party hereunder). Any such contest may be conducted in the name and on behalf of
the indemnifying party or the indemnified party, as may be appropriate. Such
contest shall be conducted by attorneys employed by the indemnifying party, but
the indemnified party shall have the right to participate in such proceedings
and to be represented by attorneys of its own choosing at its cost and expense.
If the indemnified party joins in any such contest, the indemnifying party shall
have full authority to determine all action to be taken with respect thereto. If
after such opportunity, the indemnifying party does not elect to contest any
such Claim, the indemnifying party shall be bound by the result obtained with
respect thereto by the indemnified party and the indemnified party shall be
entitled to abandon the contesting of the Claim or to settle or compromise the
Claim, and the indemnifying party shall be bound by all actions of the
indemnified party with respect to such Claim. At any time after the commencement
of defense of any Claim by the indemnifying party, the indemnifying party may
notify the indemnified party in writing of the abandonment of such contest or of
the payment or compromise by the indemnifying party of the asserted Claim,
whereupon such action shall be taken; provided, however, that the sole relief
provided is monetary damages that are paid in full by the indemnifying party;
provided, further, that the indemnified party may determine that the contest
should be continued, and shall so notify the indemnifying party in writing
within 15 days of such notice from the indemnifying party. In the event that the
indemnified party determines that the contest should be continued (and provided
the timing of notice condition has been met and the sole relief provided is
monetary damages that are paid in full by the indemnifying party), the
indemnifying party shall be liable hereunder only to the extent of the lesser of
(i) the amount which the other party to the contested Claim had agreed to accept
in payment or compromise as of the time the indemnifying party made its request
therefor to the indemnified party, or (ii) such amount for which the
indemnifying party may be liable with respect to such Claim by reason of the
provisions hereof. Notwithstanding the foregoing, if the indemnified party
determines in, good faith that there is a reasonable probability that an action
regarding a Claim either (i) may materially and adversely affect it or its
Affiliates other than as a result of monetary damages, or (ii) will
substantially impair its ability to continue to conduct its business or the
business of the Company as previously conducted, the indemnified party may, by
notice to the indemnifying party, assume the exclusive right to defend,
compromise or settle such action, but the indemnifying party shall not be bound
by any determination of an action so defended or any compromise or settlement
thereof effected without its consent (which shall not be unreasonably withheld
or delayed). All of the foregoing is subject to the rights of any indemnified
party's insurance carrier which is defending any such above proceedings.
(c) Cooperation. If requested by the indemnifying party, the
indemnified party agrees to cooperate with the indemnifying party and its
counsel in contesting any Claim which the indemnifying party elects to contest
or, if appropriate and not inconsistent with the reasonable commercial interests
of the indemnified party, in making any counterclaim against the person
asserting the Claim, or any cross-complaint against any person and further
agrees to take such other action as reasonably may be requested by an
indemnifying party to reduce or eliminate any loss or expense for which the
indemnifying party would have responsibility, but the indemnifying party will
reimburse the indemnified party for any expenses incurred by it in so
cooperating or acting at the request of the indemnifying party.
(d) Payment of Losses. The indemnifying party shall pay to the
indemnified party in cash the amount of any Losses to which the indemnified
party may become entitled by reason of the provisions of this Agreement, such
payment to be made within fifteen (15) days after any such amount of Losses is
finally determined either by mutual agreement of the parties hereto or pursuant
to the judgment of a court of competent jurisdiction. Any claim for which
indemnification occurs hereunder shall be, to the extent appropriate, assigned
to the indemnifying party.
ARTICLE V
MISCELLANEOUS
5.01 Publicity. Except after consultation with the other parties, no
party shall publicize, advertise, announce or describe to any Governmental
Authority or other Person, the terms of this Agreement, the parties hereto or
the transactions contemplated hereby, except as required by Applicable Law or as
required pursuant to this Agreement.
5.02 Assignment. This Agreement shall inure to the benefit of, and
shall be binding upon, the parties and their respective successors and permitted
assigns. No party may assign or delegate this Agreement or any of its rights or
duties under this Agreement (including, without limitation, by operation of law)
without the prior written consent of the other parties, except (i) to an
Affiliate of such party who expressly assumes the obligations of the assigning
party hereunder and (ii) in the case of Ciba, to a successor to Ciba's
Pharmaceuticals Division, whether by merger, consolidation, stock sale, asset
sale or otherwise.
5.03 Amendment. This Agreement may be amended, modified or supplemented
only by a written instrument specifically referring to this Agreement that is
signed and delivered by duly authorized officers of each party.
5.04 Waiver. The failure of any party to enforce at any time any
provision of this Agreement shall not be construed to be a waiver of any such
provision and will not effect the validity of this Agreement or any part hereof
or the right of such party to enforce any such provision. No waiver of any
breach hereof will be construed to be a waiver of any other breach.
5.05 Notices. All notices and communications required or authorized to be given
hereunder shall be in writing and shall be deemed to have been duly given (a)
when delivered by messenger, (b) upon actual receipt if sent by telecopy (with
receipt confirmed), provided that a copy is mailed by registered or certified
mail, postage prepaid, return receipt requested, or (c) when received by the
addressee, if sent by overnight courier, in each case to the appropriate address
or telecopier:
If to IOMED or the Company:
IOMED, Inc.
0000 Xxxx 0000 Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attn: Chief Executive Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx
Attn: C. Xxxxxxx Xxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
If to Purchaser:
Ciba-Geigy Corporation
Pharmaceuticals Division
000 Xxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attn: President
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Ciba-Geigy Corporation
Pharmaceuticals Division
000 Xxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attn: Division Counsel
Tel: (000) 000-0000
Fax: (000) 000-0000
or to such other person or address as any party may designate in writing from
time to time.
5.06 Disclaimer of Agency. This Agreement shall not be construed to
constitute the parties as partners, joint venturers, agents or otherwise as
participants in a joint or common undertaking. No party (or its agents and
employees) is the representative of the other party for any purpose and no party
has power or authority as agent, legal representative, employee or in any other
capacity to represent, act for, bind, or otherwise create or assume any
obligation on behalf of, any other party for any other purpose whatsoever.
5.07 Further Assurances. The parties shall each perform such acts,
execute and deliver such instruments and documents, and do all such other things
as may be reasonably necessary to accomplish the transaction's contemplated in
this Agreement.
5.08 Expenses. The parties shall each bear their own costs and expenses
(including attorneys' fees) incurred in connection with the negotiation and
preparation of this Agreement and, except as otherwise provided herein,
consummation of the transactions contemplated hereby.
5.09 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of New York, without giving effect to the conflicts
of laws provisions thereof.
5.10 Entire Agreement. This Agreement, including the exhibits and
schedules hereto, each of which is incorporated herein by this reference,
contains the entire agreement and understanding of the parties, and supersedes
any prior understandings and agreements, with respect to its subject matter,
including the Interim Agreement.
5.11 Severability. If any provision of this Agreement, or the
application thereof to any Person, place or circumstance shall be held by a
court of competent jurisdiction to be invalid, unenforceable or void, the
remainder of this Agreement and such provisions as applied to other Persons,
places and circumstances shall remain in full force and effect only if, after
excluding the portion deemed to be unenforceable, the remaining terms shall
provide for the consummation of the transactions contemplated hereby in
substantially the same manner as originally set forth herein. In such event, the
parties shall negotiate, in good faith, a substitute, valid and enforceable
provision or agreement which most nearly effects the parties' intent in entering
into this Agreement.
5.12 Broker's Fees. Each of the parties represents and warrants that it
has not dealt with any broker or finder in connection with any of the
transactions contemplated by this Agreement, and, to its knowledge, no broker or
other Person is entitled to any commission or finder's fee in connection with
any of these transactions. Each of the parties shall be responsible for, and
shall indemnify and hold the other parties harmless against, the fees of its
investment bankers and other advisors, if any.
5.13 Article and Section Headings. The article and section headings
included in this Agreement are for convenience of the parties only and shall not
affect the construction or interpretation of this Agreement.
5.14 Counterparts. This Agreement may be executed in any number of
counterparts each of which shall contribute an original instrument but all of
which, taken together, shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
IOMED, INC., a Utah corporation
By: /s/ Xxx X. Weinsheaker
Xxx X. Weinsheaker
President and Chief Executive Officer
CIBA-GEIGY CORPORATION,
a New York corporation, acting through
its Pharmaceuticals Division
By: /s/ Xxxxx X. Xxxxxxxx
Its:
DERMION, INC., a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx
Its: Secretary
