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EXHIBIT 10.28
EXCHANGE AGREEMENT
THIS AGREEMENT is made and shall be effective as of the 1st day of
November, 1997, by and among Iomed, Inc., a Utah corporation ("Iomed"), Novartis
Pharmaceuticals Corporation, a Delaware corporation and the successor to the
ethical pharmaceuticals business of Ciba-Geigy Corporation ("Novartis"), and
Dermion, Inc., a Delaware corporation ("Dermion"). Each of Iomed, Novartis and
Dermion are referred to herein individually as a "Party", and are referred to
collectively herein as the "Parties".
RECITALS:
A. Iomed and Novartis are the sole shareholders, and collectively own
100%, of the issued and outstanding equity securities of Dermion.
B. Iomed, Novartis and Dermion are Parties to that certain Research and
Development Agreement, dated as of March 29, 1996 (the "R&D Agreement").
C. In connection with the R&D Agreement, and the acquisition by Novartis
of its interest in Dermion, the Parties entered into a Stock Purchase Agreement,
dated March 29, 1996 (the "Stock Purchase Agreement"), and a Stockholders'
Agreement, dated March 29, 1996 (the "Stockholders Agreement").
D. In part to facilitate a possible initial public offering by Iomed,
the Parties have agreed to restructure their business relationship in the manner
set forth in this Agreement.
AGREEMENT:
NOW THEREFORE, in consideration of the foregoing Recitals and the
covenants and agreements set forth herein, together with other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Parties agree as follows:
1. Exchange of Securities. By the execution of this Agreement,
Novartis herewith sells, assigns, transfers and sets over unto Iomed all of
Novartis' right, title and interest in and to 200,000 shares of the issued and
outstanding common stock of Dermion (the "Dermion Shares") solely in exchange
for 1,145,000 duly and validly authorized and issued, fully paid,
non-assessable, voting common shares of Iomed (the "Exchange Shares"). By the
execution of this Agreement, Iomed accepts the transfer of the Dermion Shares
solely in exchange, and as payment in full for the Exchange Shares.
2. Amendment of the Stock Purchase Agreement. Upon the effective
date of this Agreement, the provisions of paragraph 3.02 and of paragraph
4.01(a) of the Stock Purchase
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Agreement shall terminate and cease to be effective, such that Iomed shall have
no liability to Novartis for any "Loss" (as such term is defined in the Stock
Purchase Agreement) asserted against, resulting to, imposed upon or incurred or
suffered by Novartis or any assignee or successor of Novartis as a result of or
rising out of any breach of any representation or warranty made or given by
Iomed or Dermion in the Stock Purchase Agreement. As of the effective date of
this Agreement, all of the duties and obligations of the Parties under the Stock
Purchase Agreement have been fulfilled, and no Party has any further duty or
obligation to any other Party thereunder.
3. Termination of the Stockholders' Agreement. Upon the effective
date of this Agreement, the Stockholders' Agreement shall completely terminate,
by the mutual agreement of the Parties, and shall be of no further force or
effect. No Party shall have any liability or obligation to any of the other
Parties under the Stockholders' Agreement as the result of or in connection with
the Stockholders' Agreement, any breach thereof, or the termination thereof.
4. Amendment of the Research and Development Agreement. Upon the
execution of this Agreement, the Parties shall execute and deliver a First
Amendment of Research and Development Agreement, substantially in the form
attached hereto as Exhibit "A" (the "Amendment"), in order to completely amend
and restate certain of the terms, conditions and provisions of the R&D
Agreement.
5. Deliveries.
(a) Upon the execution and delivery of this Agreement, Iomed
shall deliver to Novartis a certificate representing the Exchange Shares.
(b) Upon the execution and delivery of this Agreement,
Novartis shall deliver to Iomed the certificate or certificates representing the
Dermion Shares duly endorsed in blank, or accompanied by duly executed stock
powers.
(c) Upon the execution and delivery of this Agreement, the
Parties shall execute and deliver counterpart originals of the Amendment, in
substantially the form attached hereto as Exhibit "A".
(d) Upon the execution and delivery of this Agreement, Iomed
shall deliver to Novartis the "Warrant" called for by paragraph 12 hereof.
6. Representations and Warranties of Iomed. Iomed represents and
warrants to Novartis that the statements contained in this paragraph 6 are
correct and complete as of the date of this Agreement, except as set forth in
the Disclosure Schedule delivered by Iomed to Novartis prior to the execution
and delivery of this Agreement (the "Disclosure Schedule").
(a) Iomed is a corporation duly organized, validly existing
and in good standing under the laws of the State of Utah. Iomed is duly licensed
or qualified to do business,
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and is in good standing under the laws of each state in which Iomed is required
to be so licensed or qualified, except where the lack of such qualification
would not have a material adverse effect on the financial condition of Iomed.
Iomed has the corporate power and authority to own or lease its properties,
rights and assets and to conduct its business as now conducted and as presently
proposed to be conducted.
(b) Iomed has full corporate power and authority to enter into
this Agreement and the Amendment, and to carry out the transactions contemplated
hereby and thereby. All corporate action on the part of Iomed necessary to
authorize the execution, delivery and performance by Iomed of this Agreement and
the Amendment, and the consummation of the transactions contemplated hereby and
thereby, has been taken. This Agreement has, and the Amendment, when executed
and delivered in accordance with this Agreement will have been, duly and validly
authorized, executed and delivered by Iomed, and each constitutes a valid and
binding obligation of Iomed, enforceable against Iomed in accordance with its
respective terms, subject to bankruptcy, insolvency, reorganization, moratorium
and similar laws of general applicability relating to or effecting creditors
rights and to general equitable principals.
(c) The execution, delivery and performance by Iomed of this
Agreement, the R&D Agreement and of the Amendment do not and will not (i)
violate or breach 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 Iomed
is a party or by which its assets are bound, or (iv) result in the creation or
imposition of any lien, pledge, mortgage, claim, charge or encumbrance upon any
of the assets of Iomed.
(d) Assuming the accuracy of Novartis' representations and
warranties in paragraph 8 hereof, no consent, authorization, license, permit,
registration or approval of, or exemption or other action by any governmental
authority or other person as required in connection with Iomed's execution and
delivery of this Agreement or of the Amendment, or with the performance by Iomed
of its obligations hereunder or thereunder, except, in each case, where any such
consent, authorization, license, permit, registration or approval has been
obtained and remains in full force and effect.
(e) The authorized capital stock of Iomed consists of
40,000,000 shares of common stock, of which 15,040,455 shares are issued and
outstanding, and 4,215,618 shares of preferred stock of which 138,240 shares are
issued and outstanding. 50,000 common shares and 4,077,378 preferred shares of
Iomed are held in treasury. The issued and outstanding shares of common stock
and preferred stock of Iomed are held of record by the persons and entities set
forth in paragraph 6(e) of the Disclosure Schedule. Upon the consummation of the
transactions contemplated by this Agreement, 16,185,455 common shares and
138,240 preferred shares will be issued and outstanding. The Exchange Shares
will, upon issuance pursuant to the terms of this Agreement, be duly and validly
authorized and issued, fully paid and non-assessable. Except as set forth in
paragraph 6(e) of the Disclosure Schedule, there are no outstanding or
authorized options, warrants, purchase rights, subscription rights, conversion
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rights, exchange rights or other contracts or commitments that could require
Iomed to issue, sell or otherwise cause to become outstanding any of its capital
stock. There are no outstanding or authorized stock appreciation, phantom stock,
profit participation or similar rights with respect to Iomed.
(f) Dermion is the only subsidiary of Iomed (the
"Subsidiary").
(g) Iomed and the Subsidiary have good title to, or a valid
leasehold interest in, the real property and material tangible assets which they
use regularly in the conduct of their businesses.
(h) Attached hereto as Exhibit "B" are the audited,
consolidated balance sheets and statements of income, changes in stockholders'
equity and cash flow as of and for the fiscal years ended June 30, 1997, June
30, 1996, and June 30, 1995 for Iomed (collectively, the "Financial
Statements"). The Financial Statements (including the Notes thereto) have been
prepared in accordance with GAAP applied on a consistent basis throughout the
periods covered thereby and present fairly the financial condition of Iomed as
of such dates and the results of operations of Iomed for such periods.
(i) Since the date of the audited, consolidated balance sheets
and statements of income, changes in stockholders' equity and cash flow as of
and for the fiscal year of Iomed ended June 30, 1997, as included in the
Financial Statements, there has not been any material adverse change in the
financial condition of Iomed.
(j) Iomed and the Subsidiary have complied with all applicable
laws, including rules, regulations, codes, plans, injunctions, judgments,
orders, decrees, ruling and charges thereunder (of federal, state, local and
foreign and all agencies thereof), except where the failure to comply would not
have a material adverse effect upon the financial condition of Iomed and the
Subsidiary taken as a whole.
(k) Each of Iomed and the Subsidiary has filed all income tax
returns that it was required to file, and has paid all income taxes shown
thereon as owing, except where the failure to file income tax returns or to pay
income taxes would not have a material adverse effect on the financial condition
of Iomed and the Subsidiary taken as a whole, or except where such income taxes
are being contested in good faith.
(l) There is no action, suit, proceeding or known
investigation pending or currently threatened against Iomed or the Subsidiary
that questions the validity of this Agreement, the R&D Agreement (or any
agreement entered into in connection therewith), or the Amendment, or the right
of Iomed to issue the Exchange Shares or to consummate the transactions
contemplated hereby or thereby. Additionally, there is no action, suit,
proceeding or known investigation pending or currently threatened against Iomed
or the Subsidiary that might result, either individually or in the aggregate, in
any material adverse change in the assets, business, properties, prospects of
financial condition of the Iomed and the Subsidiary.
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(m) There is no strike or labor dispute or, to the best of
Iomed's knowledge, union organization activities pending or threatened between
Iomed and its employees. None of Iomed's employees belong to any union or
collective bargaining unit. To the best of its knowledge, Iomed has complied, in
all material respects, with all federal and state equal employment opportunity
and other laws related to employment. Iomed is not a party to or bound by any
currently effective employment contract, deferred compensation agreement, profit
sharing plan, pension plan, retirement plan or agreement, or other employee
compensation agreement, other than Iomed's 1988 Incentive Stock Option Plan (a
complete and correct copy of which has heretofore been delivered to Novartis)
and options granted thereunder. Iomed is not aware that any officer or key
employee, or that any group of key employees, intends to terminate their
employment with Iomed or with Dermion.
(n) Neither Iomed nor Dermion is in violation of any
applicable statute, law or regulation relating to the environment or to
occupational health and safety, except for such non-compliance as would not have
a material adverse effect on the financial condition of Iomed and the Subsidiary
taken as a whole. Additionally, neither Iomed nor the Subsidiary has received
any written notice, report or other information regarding any actual or alleged
violation of applicable statutes, laws or regulations relating to the
environment or to occupational health and safety, or any liabilities or
potential liabilities (whether accrued, absolute, contingent, unliquidated or
otherwise), including any investigatory, remedial or corrective obligations
relating to Iomed or the Subsidiary or their facilities arising under statutes,
laws or regulations relating to the environment or occupational health and
safety, the subject of which would have a material adverse effect on the
financial condition of Iomed and the Subsidiary taken as a whole.
(o) Iomed and Dermion are the owners or licensees of the
"Iomed Technology" and the "Dermion Technology", respectively (as such terms are
defined in the R&D Agreement), and Iomed is the licensee of the "Elan
Technology" (as such term is defined in the Amendment). Iomed and Dermion have
the right to utilize such technologies in the manner set forth in the R&D
Agreement and the Amendment. There are no existing defaults under the Alza
License, the University of Utah License, or the Elan License (as such terms are
defined in the R&D Agreement and the Amendment), or events which, with notice or
lapse of time or both, would constitute a default by Iomed or Dermion, or to the
best of Iomed's knowledge, by any other party to such licenses. Except as set
forth in paragraph 6(o) of the Disclosure Schedule, neither Iomed nor Dermion
has assigned or conveyed any interest in the Dermion Technology, the Iomed
Technology or the Elan Technology which is inconsistent with the rights granted
under the R&D Agreement and the Amendment and, to the best knowledge of Iomed,
the practice of the Dermion Technology, the Iomed Technology and the Elan
Technology by Dermion and Iomed in connection with their respective business
activities does not infringe any rights of third parties. Iomed is not aware
that any third party is infringing any Dermion Technology, any Iomed Technology
or any Elan Technology. With respect to all "Patent Rights" (as such term is
defined in the R&D Agreement) constituting the Dermion Technology, the Iomed
Technology or the Elan Technology which were prosecuted by Iomed, such Patent
Rights have been prosecuted in good faith, and Iomed has no reason to believe
that any patent included within the Dermion Technology, the Iomed Technology or
the Elan Technology would be invalid or would be held to be unenforceable by a
court of competent jurisdiction.
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(p) Iomed understands that its representations and warranties
set forth herein shall be deemed material and to have been relied upon by
Novartis. No representation or warranty by Iomed or Dermion in this Agreement,
and no written statement contained in any document, certificate or other writing
delivered by Iomed to Novartis in connection with this Agreement contains any
untrue statement of material fact, or omits a material fact necessary to make
the statements herein or therein, in light of the circumstances under which they
were made, not misleading.
7. Representations and Warranties of Dermion. Dermion represents
and warrants to Novartis that the statements contained in this paragraph 7 are
correct and complete as of the date of this Agreement.
(a) Dermion is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. Dermion is duly
licensed or qualified to do business and is in good standing under the laws of
each state in which Dermion is required to be so licensed or qualified, except
where the lack of such qualification would not have a material adverse effect on
the financial condition of Dermion. Dermion 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.
(b) Dermion has full corporate power and authority to enter
into this Agreement and the Amendment, and to carry out the transactions
contemplated hereby and thereby. All corporate action on the part of Dermion
necessary to authorized the execution, delivery and performance by Dermion of
this Agreement and the Amendment, and the consummation of the transactions
contemplated hereby and thereby, has been taken. This Agreement has, and the
Amendment when executed and delivered in accordance with this Agreement will
have been, duly and validly authorized, executed and delivered by Dermion, and
each constitutes a valid and binding obligation of Dermion, enforceable against
Dermion in accordance with its respective terms, subject to bankruptcy,
insolvency, reorganization, moratorium and similar laws of general applicability
relating to or effecting creditors rights and to general equitable principals.
(c) The authorized capital stock of Dermion consists of 4
million shares of common stock, of which 1 million are issued and outstanding,
800,000 of which are owned of record by Iomed and 200,000 of which are owned or
record by Novartis, and 1 million shares of preferred stock, none of which are
issued and outstanding. Upon the consummation of the transactions contemplated
by this Agreement, 1 million shares of common stock will be issued and
outstanding, all of which will be owned of record by Iomed. All such issued and
outstanding common shares have been duly and validly authorized and issued, are
fully paid and non-assessable.
(d) Assuming the execution and delivery of this Agreement by
all of the Parties, and its enforceability against Iomed and Novartis, the
execution, delivery and performance by Dermion of this Agreement, the R&D
Agreement and the Amendment do not
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and will not (i) violate or breach the Certificate of Incorporation or Bylaws of
Dermion, (ii) violate on 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 Dermion is a party or by which its assets are bound, or (iv) result in the
creation or imposition of any lien, pledge, mortgage, claim, charge or
encumbrance upon any of the assets of Dermion.
8. Representations and Warranties of Novartis. Novartis
represents and warrants to Iomed and to Dermion that the statements contained in
this paragraph 8 are correct and complete as of the date of this Agreement.
(a) Novartis is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware.
(b) Novartis has full corporate power and authority to enter
into this Agreement and the Amendment and to carry out the transactions
contemplated hereby and thereby. All corporate action on the part of Novartis
required to authorize the execution, delivery and performance of this Agreement
and of the Amendment, and the consummation of the transactions contemplated
hereby and thereby, has been taken. This Agreement and the Amendment have been
duly and validly authorized, executed and delivered by Novartis and each
constitutes a valid and binding obligation of Novartis enforceable against it in
accordance with its respective terms, subject to bankruptcy, insolvency,
reorganization, moratorium and similar laws of general applicability relating to
or effecting creditors rights and to general equitable principals.
(c) The execution, delivery and performance by Novartis of
this Agreement, the R&D Agreement and the Amendment do not and will not (i)
violate or breach the Certificate of Incorporation or Bylaws of Novartis, (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
Novartis 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 Novartis.
(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 Novartis' execution and delivery of
this Agreement or of the Amendment, or with the performance by Novartis of its
obligations hereunder or thereunder, except in each case where any such consent,
authorization, license, permit, registration or approval has been obtained and
remains in full force and effect.
(e) Subject to and assuming the correctness and accuracy of
the representations and warranties made by Dermion and Iomed in Sections
2.01(a)-(g) of the Stock Purchase Agreement, Novartis is the sole owner of the
Dermion Shares and has not pledged,
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hypothecated or otherwise encumbered the Dermion Shares. Upon the effective date
of this Agreement and the delivery of the Dermion Shares to Iomed as required by
paragraph 5(b) hereof, the Dermion Shares shall be free of liens and
encumbrances of every type, nature or description.
(f) Novartis is acquiring the Exchange Shares for investment
for its own account and not with a view to, or for re-sale in connection with,
any public distribution, and understands that the Exchange Shares have not 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 representations of
Novartis set forth herein.
(g) Novartis is an accredited investor, as defined in Rule
501(a) of Regulation D of the Securities and Exchange Commission under the
Securities Act. As such, Novartis represents that it is experienced in
evaluating and investing in securities of companies in the development stage and
acknowledges that Novartis is able to fend for itself, can bear the economic
risk of an investment in the Exchange Shares and has such knowledge and
experience in financial and business matters, that Novartis is capable of
evaluating the merits and risks of the investment in and ownership of the
Exchange Shares.
(h) Novartis understands and agrees that the Exchange Shares
may not be sold, transferred or otherwise disposed of without registration under
the Securities Act or an exemption therefrom, and that in the absence of an
effective Registration Statement covering the Exchange Shares, or an available
exemption from registration under the Securities Act, the Exchange Shares must
be held indefinitely. In particular, Novartis is aware that the Exchange Shares
constitute "Restricted Securities" as defined in Rule 144 promulgated under the
Securities Act and may not be sold pursuant to such Rule unless all of the
conditions of that Rule are met. Novartis agrees that the certificate or
certificates representing the Exchange Shares may bear such restrictive legends
as may be deemed necessary or appropriate by the Board of Directors of Iomed, in
order to denote and clarify their status as Restricted Securities.
(i) Novartis understands that its representations and
warranties set forth herein shall be deemed material and to have been relied
upon by Iomed and Novartis. No representation or warranty by Novartis in this
Agreement, and no written statement contained in any document, certificate or
other writing delivered by Novartis to Iomed or Dermion in connection with this
Agreement contains any untrue statement of material fact, or omits a material
fact necessary to make the statements herein or therein, in light of the
circumstances under which they were made, not misleading.
9. Disclaimer of Implied Warranties and Representations;
Survival.
(a) Except as otherwise expressly set forth herein, each
Party, in entering into this Agreement, has relied solely upon the
representations and warranties set forth in this Agreement and the Schedules and
Exhibits hereto and the information referred to herein as having been supplied
by one to the others, and there are no representations, warranties,
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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 and Exhibits.
(b) The representations and warranties of Iomed set forth in
paragraphs 6(h) and 6(o) hereof shall survive the execution of this Agreement
and the consummation of the transactions contemplated hereby and any examination
or investigation of the Parties for a period of two (2) years following the
effective date of this Agreement. All other representations and warranties of
the Parties, as set forth in paragraphs 6, 7 and 8 hereof, shall indefinitely
survive the consummation of the transactions contemplated herein and any
examination or investigation of the Parties.
10. Indemnification.
(a) Subject to the provisions of this paragraph 10, Iomed and
Dermion shall jointly and severally indemnify, defend and hold harmless Novartis
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 Novartis or any permitted assignee or successor of Novartis as a result of or
arising out of any of the following:
(i) The material breach of any of representation or
warranty of Iomed or Dermion set forth in this Agreement or in any Schedule or
Exhibit to this Agreement; or
(ii) The material breach or nonfulfillment by Iomed or
Dermion of any of the covenants or agreements of Iomed or Dermion contained in
this Agreement.
(b) Subject to the provisions of this paragraph 10, Novartis
shall indemnify, defend and hold harmless Iomed and Dermion from and against any
and all Loss asserted against, resulting to, imposed upon or incurred or
suffered by Iomed or Dermion or any of their successors or assigns as a result
of or arising out of any of the following:
(i) The material breach of any of the representations or
warranties of Novartis set forth in this Agreement or in any Schedule or Exhibit
to this Agreement; or
(ii) The material breach or nonfulfillment by Novartis of
any of the covenants or agreements of Novartis contained in this Agreement.
(c) 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
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collectively referred to hereinafter as a "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 or
Parties 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 or Parties shall be obligated to indemnify the
indemnified Party or Parties notwithstanding failure to give such notice in a
timely manner, except if and to the extent that the indemnifying Party or
Parties are materially prejudiced by any delay in delivering, or non-delivery
of, such notice.
(d) The indemnifying Party or Parties are entitled at its or
their cost and expense to contest and defend by all appropriate legal
proceedings any Claim with respect to which it or they are called upon to
indemnify the indemnified Party or Parties under the provisions of this
Agreement; provided, however, that notice of the intention to so contest shall
be delivered by the indemnifying Party or Parties to the Indemnified Party or
Parties within thirty (30) days after the indemnifying Party or Parties become
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 or Parties hereunder).
Any such contest may be conducted in the name and on behalf of the indemnifying
Party or Parties or the indemnified Party or Parties, as may be appropriate.
Such contest shall be conducted by attorneys employed by the indemnifying Party
or Parties, but the indemnified Party or Parties shall have the right to
participate in such proceedings and to be represented by attorneys of its or
their own choosing at its or their cost and expense. If the indemnified Party or
Parties join in any such contest, the indemnifying Party or Parties shall have
full authority to determine all action to be taken with respect thereto. If
after such opportunity, the indemnifying Party or Parties do not elect to
contest any such Claim, the indemnifying Party or Parties shall be bound by the
result obtained with respect thereto by the indemnified Party or Parties and the
indemnified Party or Parties shall be entitled to abandon the contesting of the
Claim or to settle or compromise the Claim, and the indemnifying Party or
Parties shall be bound by all actions of the indemnified Party or Parties with
respect to such Claim. At any time after the commencement of defense of any
Claim by the indemnifying Party or Parties, the indemnifying Party or Parties
may notify the indemnified Party or Parties in writing of the abandonment of
such contest or of the payment or compromise by the indemnifying Party or
Parties 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 or Parties; provided, further, that the indemnified
Party or Parties may determine that the contest should be continued, and shall
so notify the indemnifying Party or Parties in writing within fifteen (15) days
of such notice from the indemnifying Party or Parties. In the event that the
indemnified Party or Parties determine that the contest should be continued (and
provided the timing of the notice condition has been met and the sole relief
provided is monetary damages that are paid in full by the indemnifying Party or
Parties), the indemnifying Party or Parties shall be liable hereunder only to
the extent of the lesser of (i) the amount which the other Party or Parties to
the contested Claim had agreed to accept in payment or compromise as of the time
the indemnifying Party or Parties made its or their request therefor to the
indemnified Party or Parties, or (ii) such amount for which the indemnifying
Party or Parties may be liable with respect to such Claim by reason of the
provisions hereof. Notwithstanding the foregoing, if the indemnified Party or
Parties determine in good faith that there is a reasonable probability that an
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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 as
previously conducted, the indemnified Party or Parties may, by notice to the
indemnifying Party or Parties, assume the exclusive right to defend, compromise
or settle such action, but the indemnifying Party or Parties 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 are subject to the rights of any indemnified
Party's or Parties' insurance carrier which is defending any such above
proceedings.
(e) If requested by the indemnifying Party or Parties, the
indemnified Party or Parties agree to cooperate with the indemnifying Party or
Parties and its or their counsel in contesting any Claim which the indemnifying
Party or Parties elect to contest or, if appropriate and not inconsistent with
the reasonable commercial interests of the indemnified Party or Parties, 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 or Parties to reduce or
eliminate any Loss or expense for which the indemnifying Party or Parties would
have responsibility, but the indemnifying Party or Parties will reimburse the
indemnified Party or Parties for any expenses incurred by it or them in so
cooperating or acting at the request of the indemnifying Party or Parties.
(f) The indemnifying Party or Parties shall pay to the
indemnified Party or Parties in cash the amount of any Losses to which the
indemnified Party or Parties 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 if 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 or Parties.
11. Registration Rights and Procedure.
(a) Definitions. For purposes of this paragraph 11 the
following terms shall have the meanings set forth below.
Act. The term "Act" means the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
Common Stock. The term "Common Stock" means the common stock,
$.001 par value per share of Iomed.
Exchange Act. The term "Exchange Act" means the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder.
Form S-3. The term "Form S-3" means such form under the Act
as in effect on the date hereof or any registration form under the Act
subsequently adopted by the SEC
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which permits inclusion or incorporation of substantial information by reference
to other documents filed by Iomed with the SEC.
Holder. The term "Holder" means Novartis and any other person
or entity that acquires any Registrable Securities in compliance with paragraphs
11(j) hereof.
Initial Public Offering. The term "Initial Public Offering"
means the first registered underwritten public offering of Iomed's Common Stock
that generates aggregate proceeds to Iomed (net of underwriting discounts and
commissions but prior to other offering expenses payable by Iomed) of at least
$10,000,000 at a price per share of at least $1.00 (adjusted to reflect
subsequent stock dividends, stock splits and the like).
Initiating Holders. The term "Initiating Holders" means any
Holder or Holders of not less than the lesser of (i) Two Hundred Fifty Thousand
(250,000) shares of Registrable Securities (as adjusted for stock splits,
combinations and the like) and (ii) seventy-five percent (75%) of all shares of
Registrable Securities then held by the Holders.
Registrable Securities. The term "Registrable Securities"
means (i) the Exchange Shares (ii) any Common Stock issued as (or issuable upon
the conversion or exercise of any warrant, right or other security which is
issues as) a dividend or other distribution with respect to, or in exchange for
or in replacement of, the Exchange Shares, and (iii) any Common Stock, and any
Common Stock issuable upon the conversion, exercise or exchange of the Warrant
issued to Novartis pursuant to paragraph 12 hereof; excluding in all cases,
however, any Registrable Securities sold by a person in a transaction in which
its rights under this paragraph 11 are not assigned in the manner permitted by
this Agreement; provided, however, that such shares of Common Stock shall only
be treated as Registrable Securities if and so long as they have not been sold
to or through a broker or dealer or underwriter in a public distribution or a
public securities transaction or pursuant to Rule 144 under the Act.
Registration Participants. The term "Registration
Participants" means those persons and entities, other than Novartis, to which
Iomed has (pursuant to valid and binding agreements entered into prior to the
effective date hereof) granted rights to require Iomed to register under the
Act, certain shares of Common Stock, or to participate in registrations by Iomed
of common shares of Common Stock for its own account.
(b) Demand Registrations.
(i) In case Iomed shall receive from Initiating Holders,
at any time after one hundred eighty (180) days following the first registered
public offering of Iomed's Common Stock, regardless of whether such offering is
the Initial Public Offering, a written request that Iomed effect any
registration under the Act, qualification or compliance with respect to all of
the Registrable Securities then held by such Initiating Holders, or any portion
thereof the sale of which is reasonably expected to yield gross proceeds to the
Initiating Holders of at least $2,000,000, Iomed will:
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(A) give written notice of the proposed registration,
qualification or compliance to all other Holders, and to all Registration
Participants who hold similar demand registration rights, within ten (10) days
after receipt thereof; and
(B) use its diligent best efforts to effect, as soon
as practicable, all such registrations, qualifications and compliances as may be
so requested and as would permit or facilitate the sale and distribution of all
of the Registrable Securities held by such Initiating Holders, together with all
of the Registrable Securities of any Holder and all eligible Common Stock held
by any Registration Participant who joins in such request in a written request
received by Iomed within thirty (30) days after such written notice is given;
provided, that Iomed shall not be obligated to take any action to effect any
such registration, qualification, or compliance pursuant to this paragraph
11(b):
(w) In any particular jurisdiction in which Iomed
would be required to execute a general consent to service of process, to
register as a dealer, or to cause any officer or employee of Iomed to register
as a salesman in effecting such registration, qualification or compliance;
(x) Within one hundred eighty days (180)
immediately following the effective date of any registration statement
pertaining to an underwritten public offering of securities of Iomed;
(y) After Iomed has effected two (2) "demand"
registrations pursuant to this paragraph 11(b).
(z) If Iomed shall furnish to the Initiating
Holders a certificate signed by the Chief Executive Officer of Iomed stating
that in the good faith judgment of the Board of Directors it would be seriously
detrimental to a material transaction then being pursued by Iomed or its
stockholders for a registration statement to be filed in the near future, then
Iomed's obligation to use its best efforts to register, qualify or comply under
this paragraph 11(b) shall be deferred for a period not to exceed ninety (90)
days from the date of receipt of written request from the Initiating Holders;
provided, however, that Iomed shall only be entitled to such deferral one (1)
time with respect to each registration pursuant to this paragraph 11(b).
(ii) Subject to the foregoing, Iomed will use its best
efforts to file a registration statement covering the Registrable Securities as
soon as practicable after receipt of the request or requests of the Initiating
Holders.
(iii) The Initiating Holders shall include in their
request made pursuant to this paragraph 11(b) the name, if any, of the
underwriter or underwriters that such Initiating Holders would propose, with the
consent of Iomed (which consent shall not be unreasonably withheld), to employ
in connection with the public offering proposed to be made pursuant to the
registration requested, and Iomed shall include such information in the written
notice referred to in paragraph 11(b)(i)(A). The right of any Holder or
Registration Participant to
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registration pursuant to this paragraph 11(b) shall be conditioned on such
person's participation in such underwriting and the inclusion of such person's
Registrable Securities, or eligible Common Stock, in the underwriting. Iomed
shall (together will all Holders and Registration Participants proposing to
distribute their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting in the manner set forth above. Notwithstanding
any other provision of this paragraph 11(b), if the underwriter advises the
Initiating Holders, in writing, that marketing factors require a limitation of
the number of shares to be underwritten, then the Initiating Holders shall so
advise all Holders of Registrable Securities and all Registration Participants,
and the total number of shares of Common Stock that may be included in the
registration and underwriting, as determined by the underwriters, shall be
allocated among all Holders and Registration Participants in proportion, as
nearly as practicable, to the respective amounts of Registrable Securities and
eligible Common Stock requested to be registered by such Holders and
Registration Participants (or in such other manner as the Holders and
Registration Participants requesting registration may elect in a written notice
to Iomed signed by all such Holders and Registration Participants). No
Registrable Securities or other shares of Common Stock excluded from the
underwriting by reason of the underwriter's marketing limitation shall be
included in such registration.
(c) Company Registration.
(i) If at any time, or from time to time, Iomed shall
determine to register any of its securities, either for its own account or for
the account of a security holder or holders, other than (A) a registration on
Form S-8 relating solely to employee benefit plans, or a registration on Form
S-4 relating solely to an SEC Rule 145 transaction, or a registration on any
other form which does not include substantially the same information as would be
required to be included in a registration statement covering the sale of
Registrable Securities, (B) a registration pursuant to paragraph 11(b) hereof,
or (C) the Initial Public Offering (provided that at least ninety percent (90%)
of the securities sold therein are sold for the account of Iomed and that any
selling shareholders acquired their shares in their capacity as employees of
Iomed or its Affiliates), Iomed will:
(x) promptly give to each Holder written notice
thereof; and
(y) include in such registration, and in any
underwriting involved therein, all the Registrable Securities specified in any
written request or requests by any Holder or Holders received by Iomed within
thirty (30) days after such written notice is given on the same terms and
conditions as the Common Stock, if any, otherwise being sold through the
underwriter in such registration.
(ii) If the registration of which Iomed gives notice is
for a registered public offering involving an underwriting, Iomed shall so
advise the Holders as a part of the written notice given pursuant to paragraph
11(c)(i). In such event the right of any Holder to registration pursuant to this
paragraph 11(c) shall be conditioned upon such Holder's
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participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. Iomed
and all Holders proposing to distribute their Registrable Securities through
such underwriting shall enter into an underwriting agreement in customary form
with the underwriter or underwriters selected for such underwriting by Iomed.
(iii) Notwithstanding any other provisions of this
paragraph 11(d), if the underwriter determines in good faith that marketing
factors require a limitation of the number of shares to be underwritten, and
gives written notice thereof to Iomed or the Holders, the underwriter may limit
the total number of shares of Common Stock to be included in the registration
and underwriting. Iomed shall so advise all Holders of Registrable Securities
which would otherwise be registered and underwritten pursuant hereto, and the
number of shares of Common Stock that may be included in registration and
underwriting (in addition to those specified in the notice given pursuant to
paragraph 11(c)(i)(x) above) shall be allocated among all of the Holders and the
Registration Participants who have elected to have Common Stock included in the
registration pro rata among such Holders and such Registration Participants on
the basis of the number of shares of Common Stock held by such persons. No
Registrable Securities or other shares of Common Stock excluded from the
underwriting by reason of the underwriter's marketing limitation shall be
included in such registration.
(d) Expenses of Registration. All expenses incurred in
connection with any registration, qualification or compliance pursuant to this
paragraph 11, including without limitation, all registration, filing and
qualification fees, printing expenses, escrow fees, fees and disbursements of
counsel for Iomed and the reasonable fees and disbursements of one counsel to
the selling stockholders, accounting fees and expenses, and expenses of any
special audits incidental to or required by such registration, shall be borne by
Iomed; provided, however, that Iomed shall not be required to pay underwriters'
discounts or commissions relating to Registrable Securities.
(e) Registration Procedures. If and whenever Iomed is
required by the provisions of this paragraph 11 to use its best efforts to
effect the registration of any of the Registrable Securities under the Act,
Iomed will, as expeditiously as possible:
(i) Prepare and file with the SEC a registration
statement with respect to such securities and use its best efforts to cause such
registration statement to become and remain effective for such period as may be
reasonably and customarily necessary to permit the successful marketing of such
securities, or until the Holder or Holders have completed the distribution
described in the registration statement relating thereto, whichever first
occurs.
(ii) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to comply with the provisions of the Act; and to
keep such registration statement effective for that period of time specified in
paragraph 11(e)(i) hereof.
(iii) Furnish to each Holder participating in the
registration such number of prospectuses and preliminary prospectuses in
conformity with the requirements of the
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Act, and such other documents as such Holder may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Securities
being sold by such Holder.
(iv) In the event of any underwritten public offering,
enter into and perform its obligations under an underwriting agreement, in usual
and customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(v) Notify each Holder of Registrable Securities covered
by such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing.
(vi) Furnish, at the request of any Holder requesting
registration of Registrable Securities pursuant to this paragraph 11, on the
date that such Registrable Securities are delivered to the underwriters for sale
in connection with a registration pursuant to this paragraph 11, if such
securities are being sold through underwriters, or, if such securities are not
being sold through underwriters, on the date that the registration statement
with respect to such securities becomes effective, (x) an opinion, dated on such
date, of the counsel representing Iomed for the purposes of such registration,
in form and substance as is customarily given to the underwriters in an
underwritten public offering, addressed to the underwriters, if any, and to the
Holders requesting registration of Registrable Securities and (y) a letter dated
such date, from the independent certified public accountants of Iomed, in form
and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering, addressed to the
underwriters, if any, and to the Holders requesting registration of Registrable
Securities.
(vii) Use its best efforts to register or qualify the
Registrable Securities covered by such registration statements under such other
securities or blue sky laws of such jurisdictions as each such selling Holder of
Registrable Securities shall reasonably request and do any and all other acts
and things which may be necessary or desirable to enable such Holder to
consummate the public sale or other disposition in such jurisdictions, provided
that Iomed shall not be required in connection therewith or as a condition
thereto to qualify to do business or file a general consent to service of
process in any such jurisdictions.
(viii) Give the Holders requesting registration of
Registrable Securities pursuant to this paragraph 11, their underwriters, if
any, and their respective counsel and accountants, the opportunity to review,
and to reasonably participate in the preparation of, any registration statement,
each prospectus included therein or filed with the SEC, and each amendment
thereof or supplement thereto, and (subject to reasonable and customary
obligations of confidentiality) will give each of them such access to its books
and records and such opportunities to discuss the business, finances and
accounts of the Company and its subsidiaries with its officers, directors and
the independent public accountants who have certified its
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Financial Statements as shall be necessary, in the reasonable judgment of such
Holders' and such underwriters' respective counsel, to conduct a reasonable
investigation within the meaning of the Act.
(ix) Provide a transfer agent and registrar for all
Registrable Securities covered by such registration not later than the effective
date of the registration statement with respect to such Registrable Securities.
(x) Use its best efforts to list all Registrable
Securities covered by the registration statement on any securities exchange on
which any of the Registrable Securities are then listed.
(f) Indemnification.
(i) Iomed agrees to indemnify and hold harmless each
Holder of Registrable Securities with respect to which a registration statement
has been filed under the Act pursuant to this paragraph 11, each of such
Holder's partners, officers, directors, employees, agents and advisors, each
underwriter of any of the Registrable Securities included in such registration
statement, and each person, if any, who controls any such Holder or underwriter
within the meaning of the Act of the Exchange Act (hereinafter referred to as
the "Holder-Underwriters"), as follows:
(A) against any and all loss, liability, claim (joint
or several), damage and expense whatsoever arising out of any untrue statement
or alleged untrue statement of a material fact contained in such registration
statement (or any amendment thereto), or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to make
the statements therein not misleading, or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any final prospectus
(or any amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading, unless
such untrue statement or omission or such alleged untrue statement or omission
was made in reliance upon and in conformity with written information furnished
to Iomed by any Holder-Underwriter expressly for use in such registration
statement (or any amendment thereto) or such final prospectus (or any amendment
or supplement thereto);
(B) against any and all loss, liability, claim,
damage and expense whatsoever to the extent of the aggregate amount paid in
settlement of any litigation, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission or any such alleged
untrue statement or omission, if such settlement is effected with the written
consent of Iomed; and
(C) against any and all legal or other expense
whatsoever reasonably incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense
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is not paid under clause (A) or (B) above, which expenses under this clause (C)
shall be paid by Iomed as incurred.
(ii) Iomed shall be notified in writing of any matter
potentially giving rise to a claim under this paragraph 11(f) within a
reasonable time after the assertion thereof, but failure to so notify Iomed
shall not relieve Iomed from any liability which it may have pursuant to this
indemnity agreement or otherwise, except if and to the extent that Iomed is
materially prejudiced by such delay. In case of any such notice, Iomed shall be
entitled to participate at its expense in the defense, or if it so elects within
a reasonable time after receipt of such notice, to assume the defense of any
suit brought to enforce any such claim (unless in the Holder-Underwriter's
reasonable judgment a conflict of interest between such Holder-Underwriter and
Iomed may exist in respect of such claim); but if it so elects to assume the
defense, such defense shall be conducted by counsel chosen by it and reasonably
acceptable to the Holder-Underwriter or Holder-Underwriters. In the event that
Iomed elects to assume the defense of any such suit and retain such counsel, the
Holder-Underwriter or Holder-Underwriters shall have the right to retain
separate counsel to participate in such proceedings, but at the sole cost and
expense of the Holder-Underwriters. No indemnifying party shall consent to entry
of any judgment or enter into any settlement of any pending or threatened
proceeding in respect of which an indemnified Party is or could have been a
Party and indemnity could have been sought under this paragraph11(f) which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified Party of a release from all liability in respect
to such claim or litigation without the consent of the indemnified Party.
(iii) Each Holder severally agrees that it will indemnify
and hold harmless Iomed, each officer, director, employee agent and advisor of
Iomed, each person, if any, who controls Iomed within the meaning of the Act,
each underwriter of Registrable Securities included in any registration
statement which has been filed under the Act pursuant to this paragraph 11, and
each person, if any, who controls such underwriter within the meaning of the
Act, against any and all Loss, liability, claim, damages and expense described
in paragraph 11(f)(i) above, up to the amount of the gross proceeds actually
received from the offering by such Holder, but only with respect to statements
or omissions, or alleged statements or omissions made in such registration
statement (or any amendment thereto) or final prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to Iomed by such Holder expressly for use in such registration
statement (or any amendment thereto) or such final prospectus (or any amendment
or supplement thereto). In case any action shall be brought against Iomed or any
person so indemnified pursuant to the provisions of this paragraph 11(f)(iii)
and in respect of which indemnity may be sought against any Holder, the Holders
from whom indemnity is sought shall have the rights and duties given to Iomed,
and Iomed and the other persons so indemnified shall have the rights and duties
given to the persons entitled to indemnification by the provisions of paragraph
11(f)(ii) above.
(g) Information by Holder. The Holder or Holders of
Registrable Securities included in any registration shall furnish to Iomed such
information regarding such Holder or Holders, and the distribution proposed by
such Holder or Holders, as Iomed may
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reasonably request in writing and as shall be required in connection with any
registration qualification or compliance referred to in this paragraph 11.
(h) Sale Without Registration. If at the time of any transfer
(other than a transfer not involving a change in beneficial ownership) of any
Registrable Securities, such Registrable Securities shall not be registered
under the Act, Iomed may require, as a condition of allowing such transfer, that
the Holder or transferee furnish to Iomed (A) such information as is necessary
in order to establish that such transfer may be made without registration under
the Act, and (B) (if the transfer is not made in compliance with Rule 144) at
the expense of the Holder or transferee, an opinion of counsel reasonably
satisfactory to Iomed in form and substance to the effect that such transfer may
be made without registration under the Act.
(i) Rule 144 Reporting. With a view to making available to
the Holders the benefits of certain rules and regulations of the SEC which may
permit the sale of the Registrable Securities to the public without
registration, Iomed agrees to use its best efforts to:
(i) Make and keep public information available, as those
terms are understood and defined in SEC Rule 144, at all times after ninety (90)
days after the effective date of the first registration statement filed by Iomed
for an offering of its Common Stock to the general public; and
(ii) File with the SEC in a timely manner all reports and
other documents required of Iomed under the Act and the Exchange Act.
(j) Transfer of Registration Rights. The rights to cause
Iomed to register securities granted by Iomed under paragraphs 11(b), 11(c) and
11(d) hereof may be assigned in writing by any Holder of Registrable Securities
to a transferee or assignee of not less than five hundred thousand (500,000)
shares of the Registrable Securities (as appropriately adjusted from time to
time for stock splits and the like); provided, that such transfer may otherwise
be effected in accordance with the terms of this Agreement and applicable
securities laws; and provided further, that Iomed is given written notice by
such Holder of Registrable Securities at the time of or within a reasonable time
after said transfer, stating the name and address of said transferee or assignee
and identifying the securities with respect to which such registration rights
are being assigned.
(k) "Market Stand-Off" Agreement.
(i) If requested by the underwriters of the Initial
Public Offering and in connection with the following registration pursuant to
paragraph 11(c), the Holders shall not sell or otherwise transfer or dispose of
any Registrable Securities held by them during the one hundred eighty (180) day
period following the effective date of such registration statement of Iomed
filed under the Act; provided, that (A) such agreement shall not apply to any
shares of Registrable Securities that are included in such public offering in
accordance with the terms hereof and (B) all executive officers and directors of
Iomed, and all persons who own more than ten percent (10%) of the issued and
outstanding shares of capital stock of Iomed, enter into
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similar agreements. Iomed may impose stop-transfer instructions with respect to
the Registrable Securities subject to the foregoing restriction until the end of
said one hundred eighty (180) day period.
(ii) If requested by an underwriter in any registration
pursuant to paragraph 11(b), Iomed shall not sell or otherwise transfer or
dispose of any shares of its capital stock during the one hundred eighty (180)
day period following the effective date of a registration statement of Iomed
filed under the Act, except for sales by Iomed (A) pursuant to registrations on
Form S-4 or S-8 (or any successor or similar forms thereto), or (B) in
connection with a bona fide acquisition or strategic alliance transaction.
(l) No Impairment. Iomed herewith covenants and agrees that
it will not utilize or employ any of its rights under this paragraph 11, or take
any other voluntary action, which is intended to interfere with, impair or
unreasonably restrict the rights granted to Novartis by this paragraph 11 to
cause the registration of its Registerable Securities in the manner contemplated
hereby, but will, at all times and in good faith, assist Novartis in its efforts
to cause the registration of its Registerable Securities in the manner and under
the circumstances contemplated by this paragraph 11.
12. Stock Purchase Warrant. In connection with the agreement by
Novartis to enter into the Amendment in the manner contemplated by paragraph 4
hereof, Iomed shall issue to Novartis, upon the effective date of this
Agreement, a Warrant to Purchase Shares of Common Stock, in substantially the
form attached hereto as Exhibit "C" (the "Warrant"), which shall entitle
Novartis to purchase a total of ninety thousand (90,000) authorized but
previously unissued common shares of Iomed. All common shares of Iomed, if any,
which are acquired by Novartis through the exercise of its rights under the
Warrant shall be deemed to constitute "Registrable Securities" as such term is
defined in paragraph 11 hereof.
13. Notices. Any notice which is required or permitted to be
given to a Party shall be deemed to have been given only if such notice is
reduced to writing and delivered personally, or by United States mail with
postage pre-paid and return receipt requested, or by telecopier (Fax)
transmission, or by overnight courier to the Party in question as set forth
below:
If to Iomed
or to Dermion: Iomed, Inc.
0000 Xxxx 0000 Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attn: President
Fax: (000) 000-0000
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If to Novartis: Novartis Pharmaceuticals Corporation
00 Xxxxx 00
Xxxx Xxxxxxx, Xxx Xxxxxx 00000-0000
Attn: Vice President, Business Development
and Licensing
Fax: (000) 000-0000
With a copy to: Novartis Pharmaceuticals Corporation
00 Xxxxx 00
Xxxx Xxxxxxx, Xxx Xxxxxx 00000-0000
Attn: General Counsel
Fax: (000) 000-0000
Any Party may change its address by giving notice of such change in the manner
set forth herein. Any notice given to a Party by mail or by overnight courier
shall be deemed delivered two days following the date upon which it is deposited
in the U.S. mail, with postage pre-paid and return receipt requested, or
delivered to the courier, as the case may be, addressed to the Party in question
as set forth herein. Any notice given to a Party by Fax shall be deemed
effective on the date it is actually transmitted to the Party in question at the
Fax number specified herein, by confirmed transmission; provided, that if such
transmission is not confirmed prior to 5:00 p.m., local time of the Party to
which such notice is transmitted, on a business day, such transmission shall be
deemed delivered on the next business day.
14. 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 this Agreement, or delegate its duties or
obligations hereunder, without the prior written consent of the other Parties,
which consent may not be unreasonably withheld or delayed.
15. Entire Agreement. This Agreement, including the Exhibits
hereto (which are incorporated herein by reference) supersedes any prior
understandings or agreements, whether written or oral, among the Parties in
regard to the subject matter hereof, and contains the entire agreement among the
Parties in regard to subject matter hereof. Neither this Agreement nor the
Amendment may be changed or modified orally, but only by an agreement, in
writing, signed by all of the Parties.
16. Savings Clause. Should any part or provision of this
Agreement be rendered or declared invalid by reason of any state or federal law,
or by decree of a court of competent jurisdiction, the invalidation of such part
or provision shall not invalidate the remaining part or provisions of this
Agreement, and such remaining parts and provisions shall remain in full force
and effect.
17. Waiver. Neither the failure nor delay on the part of any
Party to exercise any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right or
privilege preclude any other further exercise thereof or of any other right or
privilege.
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18. Remedies. Should default occur in the performance of any of
the obligations set forth herein, the non-defaulting Party or Parties shall be
entitled to obtain an injunction compelling the specific performance of this
Agreement, in addition to any damages which may result from such default. The
defaulting Party or Parties shall pay to the non-defaulting Party or Parties, in
addition to any damages which may arise as the result of such default, all costs
and expenses (including reasonable attorneys fees) incurred by the
non-defaulting Party or Parties in seeking or obtaining the cure of such
default.
19. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Utah, without giving
effect to the choice of law rules thereof.
20. Counterparts. This Agreement may be executed in three or more
counterparts, each of which shall be a binding agreement, but all of which
together shall constitute but one document.
21. Publicity. No Party shall publicize, advertise, announce or
publicly describe the terms of this Agreement or the transactions contemplated
hereby to any third party, except with the prior consent of the other Parties,
which consent shall not be unreasonably withheld or delayed. Notwithstanding the
foregoing, (i) Iomed shall have the right to describe this Agreement in any
filings which it is required to make with the Securities & Exchange Commission
in connection with any registered public offering of its securities (including
without limitation Iomed's Initial Public Offering and any offering permitted or
required pursuant to paragraph 11 hereof); provided, however, that Iomed shall
provide the other Parties with the opportunity to review and comment upon such
materials (as they relate to the description of this Agreement and the
transactions contemplated hereby) prior to such filing, and (ii) each Party
shall have the right to disclose the terms of this Agreement and the
transactions contemplated hereby to its affiliates, consultants, attorneys,
accountants and other representatives subject to a non-disclosure commitment by
such persons or entities.
IN WITNESS WHEREOF, the Parties have caused this Exchange Agreement to
be executed by their duly authorized representatives as of the date first herein
written.
Iomed:
Iomed, Inc.
By: /s/ XXX X. XXXXXXXXXXX
----------------------------------------
Xxx X. Xxxxxxxxxxx,
President and Chief Executive Officer
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Dermion:
Dermion, Inc.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------
Xxxxxx X. Xxxxxxx, Secretary
Novartis:
Novartis Pharmaceuticals Corporation.
By: [SIG]
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Its:
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23
