NOTE PURCHASE AGREEMENT
EXHIBIT
10.42
This
NOTE
PURCHASE AGREEMENT
(this
“Agreement”),
dated
as of April 26, 2007, is entered into by and among Somanta Pharmaceuticals,
Inc., a Delaware corporation (the “Company”),
and
Access Pharmaceuticals, Inc., a Delaware corporation (the “Lender”).
WHEREAS,
the Lender has agreed to lend to the Company on the date hereof the aggregate
principal amount of $33,461.89 and may lend to the Company from time to time
after the date hereof an additional aggregate principal amounts, all as
hereinbelow provided.
NOW,
THEREFORE, in consideration of the mutual promises and covenants in this
Agreement, the parties hereto agree as follows:
1. (a) Initial Loan Amount. On
the date hereof (the “Closing“),
the
Lender shall pay, on behalf of the Company, the initial loan amount of
$33,461.89 (the “Loan”)
by
check or wire transfer pursuant to wire transfer instructions furnished by
the
Company. At the Closing, the Company shall issue to the Lender a promissory
note
in the form of Exhibit A
hereto,
initially reflecting outstanding principal in the amount of the Loan (the
“Note”).
In
addition, at the Closing, the Company shall execute, deliver and/or authorize,
as the case may be, (i) the Patent Collateral Assignment and Security
Agreement in the form of Exhibit
B
hereto
(the “Patent
Agreement”),
(ii) the Trademark Collateral Assignment and Security Agreement in the form
of Exhibit C
hereto
(the “Trademark
Agreement”),
(iii) the Security Agreement in the form of Exhibit D
hereto
(the “Security
Agreement”),
and
(iv) all other instruments and documents, including, without limitation,
Uniform Commercial Code financing statements, required to be delivered pursuant
to the Patent Agreement, the Trademark Agreement and the Security Agreement
(such other instruments and documents, with the Patent Agreement, the Trademark
Agreement and the Security Agreement, the “Security
Documents,”
which
Security Documents, together with this Agreement, and the Note, are collectively
referred to herein as the “Loan
Documents”).
(b) Possible Additional Loan Amounts. Upon
a
request by the Company in the form of Exhibit E
hereto,
Lender may, in its sole and absolute discretion, advance additional Loan amounts
requested by the Company, whereupon Lender shall annotate the Table of Advances
and Repayment of Principal attached to the Note to record such Loan advance,
thereby increasing the Loan and the then outstanding principal balance owed
under the Note by the amount of such advance. The Company hereby authorizes
Lender to make such annotations and such annotations shall be deemed to be
amendments to the Note duly authorized and agreed by the Company.
2. Representations,
Warranties and Certain Covenants of the Lender.
The
Lender hereby represents, warrants and covenants to the Company as to itself,
as
follows:
(a) The
Lender understands that the offering and sale of the Note are intended to be
exempt from registration under the Securities Act of 1933, as amended (the
“Securities Act”),
by
virtue of Section 4(2) thereof and the provisions of Regulation D
promulgated thereunder and, in accordance therewith and in furtherance thereof,
the Lender further represents and warrants to and agrees with the Company as
follows:
(i) the
Lender is purchasing the Note for such Lender’s own account, for investment
only, and not with a view to, or for sale in connection with, any distribution
of the Note in violation of the Securities Act, any rule or regulation
thereunder, or any state securities laws;
(ii) the
Lender understands that all documents, records and books pertaining to this
investment have been made available for inspection by the Lender, the Lender’s
counsel and/or the Lender’s accountants, the Lender has carefully reviewed all
such documents, and understands and has relied only on information provided
to
such Lender in writing by the Company relating to this investment;
(iii) the
Lender and/or the Lender’s advisor(s) have had a reasonable opportunity to ask
questions of and receive answers from a person or persons acting on behalf
of
the Company concerning the offering of the Note, and all such questions have
been answered to the full satisfaction of such Lender;
(iv) the
Lender is not relying on the Company with respect to the investment
considerations of the Lender relating to this investment;
(v) the
Lender (A) will not sell, transfer, pledge, assign or otherwise dispose of
the
Note without registration thereof under the Securities Act or pursuant to an
exemption from registration and, if pursuant to an exemption from registration
and if requested by the Company, receipt by the Company of an opinion of counsel
in form and substance satisfactory to the Company and its counsel to the effect
that such registration is not required, and (B) fully understands and
agrees that the Lender must bear the economic risk of the Lender’s investment
for an indefinite period of time because, among other reasons, the Note has
not
been registered under the Securities Act or under the securities laws of certain
states and, therefore, cannot be resold, transferred, pledged, assigned or
otherwise disposed of unless they are subsequently registered under the
Securities Act and under the applicable securities laws of such states or unless
an exemption from such registration is available; and
(vi) the
Lender understands that sales or transfers of the Note may be made only in
compliance with certain state securities laws, and the Note will bear a legend
reflecting the transfer restrictions imposed thereon and a notation may be
made
in the records of the Company restricting the transfer of the Note in a manner
consistent with the foregoing.
(b) The
Lender is an "accredited investor" within the meaning of Rule 501 of
Regulation D, as promulgated by the Securities and Exchange Commission, as
presently in effect.
-2-
3. Representations
and Warranties of the Company.
The
Company hereby represents and warrants to the Lender as follows as of the date
set forth above (and,
in
the event of any advance under the Note, as of the date of any request for
an
advance under the Note, as applicable):
(a) Corporate
Power; Binding Effect; Non-Contravention. The
Company has all requisite power and full legal right to execute and deliver
this
Agreement and each of the other Loan Documents, and to perform all of its
obligations hereunder and thereunder in accordance with the respective terms
hereof and thereof. The Loan Documents and the transactions contemplated thereby
have been duly approved and authorized by all requisite corporate action on
the
part of the Company, and the Loan Documents have been duly executed and
delivered by the Company and constitute the legal, valid and binding obligations
of the Company, enforceable against it in accordance with their respective
terms. The execution, delivery and performance by the Company of the Loan
Documents in accordance with their respective terms, and the consummation by
the
Company of the transactions contemplated thereby, will not result (with or
without the giving of notice or the lapse of time or both) in any conflict,
violation, breach, or default, or the creation of any lien or encumbrance of
any
nature (“Liens”)
upon
any assets of the Company, (other than pursuant to the Security Documents),
or
the termination, acceleration, vesting or modification of any right or
obligation, under or in respect of (i) the Certificate of Incorporation or
by-laws of the Company, each as amended to date, (ii) any judgment, decree,
order, statute, rule, or regulation binding on or applicable to the Company,
or
(iii) any agreement or instrument to which the Company is a party or by
which it or any of its assets is or are bound.
(b) Properties,
Leases, Etc. Except
with respect to Liens in favor of the Lender pursuant to the Security Documents,
the Company has (A) good and marketable title to all of the assets and
properties owned by it, free and clear of all Liens, (B) valid title to the
lessee interest in all assets and properties leased by the Company as lessee,
free and clear of all Liens, and (C) full right to hold and use all of its
assets and properties used in or necessary to its businesses and operations,
in
each case all free and clear of all Liens, and in each case subject to
applicable laws and the terms of any lease under which the Company leases such
assets or properties as lessee. All such assets and properties are in good
condition and repair, reasonable wear and tear excepted, and are adequate and
sufficient to carry on the businesses of the Company as presently conducted.
The
Company does not own any real property or any interest (other than a leasehold
interest) in any real property. The Company's leasehold interests are subject
to
no Lien, and the Company is in quiet possession of the properties covered by
such leases. The Company’s leasehold interests are subject to no Lien caused by
the Company, and the Company is in quiet possession of the properties covered
by
such leases.
(c) Tax
Matters.
The
Company has timely filed all tax returns required to be filed by it, each such
tax return has been prepared in compliance with all applicable laws and
regulations, and all such tax returns are true and accurate in all material
respects. All taxes due and payable by the Company have been paid in respect
of
any period ending on or before the date hereof, and the Company will not be
liable for any additional taxes in respect of any taxable period ending on
or
before the date hereof in an amount that exceeds the corresponding reserve
therefor, if any, reflected in the accounting records of the Company as of
the
date hereof. No claim has ever been made by a taxing authority in a jurisdiction
where the Company does not pay tax or file tax returns that the Company is
or
may be subject to taxes assessed by such jurisdiction. There are no Liens for
taxes (other than current taxes not yet due and payable) on the assets of the
Company. There is no action, suit, taxing authority proceeding, or audit with
respect to any tax now in progress, pending, or, to the Company's knowledge,
threatened, against or with respect to the Company. No deficiency or proposed
adjustment in respect of taxes that has not been settled or otherwise resolved
has been asserted or assessed by any taxing authority against the Company.
The
Company has not consented to extend the time in which any tax may be assessed
or
collected by any taxing authority. The Company has not requested or been granted
an extension of the time for filing any tax return to a date on or after the
Closing. The Company has withheld and paid all taxes required to have been
withheld and paid by it in connection with amounts paid or owing to any
employee, creditor, independent contractor or other third party.
-3-
(d) Governmental
and Other Third-Party Consents. Except
for filings or other notices required by applicable federal and state securities
laws (which will be completed by the Company within the applicable periods),
no
consent, approval or authorization of, or registration, designation, declaration
or filing with, any governmental authority, federal or other, or any other
person or entity is required on the part of the Company in connection with
its
execution, delivery or performance of this Agreement and the Note and its
consummation of the transactions contemplated hereby and thereby, or the
continued conduct of the present business of the Company after the
Closing.
(e) Compliance
with Securities Laws.
Assuming the accuracy of the representations of the Lender contained in
Section 2 hereof, the offer, issuance and delivery of the Note as
contemplated by this Agreement are exempt from the registration requirements
of
the Securities Act, and are exempt from registration or qualification under
applicable states' securities laws. Neither the Company nor anyone authorized
by
the Company to act on its behalf will hereafter offer to sell, solicit offers
to
buy, or sell, any securities of the Company so as to subject the offer, issuance
and sale of the Note to the registration requirements of the Securities Act.
(f) Brokers. No
finder, broker, agent or other intermediary has acted for or on behalf of the
Company in connection with the negotiation or consummation of the transactions
contemplated hereby, and no fee will be payable by the Company to any such
person in connection with such transactions.
(g) Disclosure. No
representation or warranty by the Company in this Agreement or any other Loan
Document, in any schedule to this Agreement or any other Loan Document, or
in
the Note, contains or will contain any untrue statement of a material fact
or
omits or will omit to state a material fact required to be stated herein or
therein or necessary to make the statements contained herein or therein not
false or misleading.
(h) Other
Representations, Warranties and Covenants. All
representations, warranties and other statements of fact made by the Company
in
the Agreement
and Plan of Merger, by and among the Company, the Lender and the other parties
thereto, dated as of April 18, 2007 (the “Merger Agreement”),
are
true and correct. The Company has fully performed all of its covenants and
duties set forth in the Merger Agreement and required to be performed by the
Company as of the date hereof (and as of the date of any request for an advance
under the Note, as applicable).
-4-
4. Indemnification
by the Company.
The
Company agrees to indemnify and hold harmless the Lender and the officers,
directors, and affiliates and each other person, if any, who controls the Lender
within the meaning of Section 15 of the Securities Act, from and against any
and
all loss, liability, claim, damage and expense whatsoever (including, but not
limited to, any and all expenses reasonably incurred in investigating, preparing
or defending against any litigation, commenced or threatened or any claim
whatsoever) arising out of or based upon any false representation or warranty
or
breach or failure by the Company to comply with any covenant or agreement made
by the Company herein or in any other Loan Document furnished by the Company
to
any of the foregoing in connection with this transaction.
5. Miscellaneous
Provisions.
(a) Amendments,
Consents and Waivers.
(i) This
Agreement or any provision hereof may be amended or terminated by the agreement
of the Company and the Lender, and the observance of any provision of this
Agreement that is for the benefit of the Lender may be waived (either generally
or in a particular instance, and either retroactively or prospectively), and
any
consent, approval, or other action to be given or taken by the Lender pursuant
to this Agreement, may be given or taken by the waiver, consent, approval or
other action of the Lender; provided,
however,
that
the Lender may, in writing, waive the benefits of any provision of this
Agreement.
(ii) No
course
of dealing between the Company and the Lender will operate as a waiver of any
of
the Company's or the Lender's rights under this Agreement. No waiver of any
breach or default hereunder will be valid unless in a writing signed by the
waiving party. No failure or other delay by any person in exercising any right,
power, or privilege hereunder will be or operate as a waiver thereof, nor will
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power, or privilege.
-5-
(b) Notices.
All
notices, requests, payments, instructions or other documents to be given
hereunder will be in writing or by written telecommunication, and will be deemed
to have been duly given if (i) delivered personally (effective upon
delivery), (ii) mailed by certified mail, return receipt requested, postage
prepaid (effective five business days after dispatch), (iii) sent by a
reputable, established courier service that guarantees overnight delivery
(effective the next business day) or (iv) dispatched by telecopier if the
telecopy is received in complete, readable form (effective upon dispatch),
addressed as follows (or to such other address as the recipient party may have
furnished to the sending party):
(i) If
to the
Company:
Somanta
Pharmaceuticals, Inc.
00000
Xxx
Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx,
XX 00000
Attention:
Xxxxxxxx Xxxxxxxxx
Telecopier
No.: (000) 000-0000
with
copies sent at the same time and by the same means to:
Xxxx
Xxxxxx
Xxxxx
& Xxxxxxx LLP
000
X.
Xxxxxxxx, Xxxxx 0000
Xxx
Xxxxx, XX 00000
Attention: Xxxx
Xxxxxx, Esq.
Telecopier
No.: (000) 000-0000
(ii) If
to
Lender, to
Access
Pharmaceuticals, Inc.
0000
Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx,
XX 00000
Attention:
Xxxxxxx Xxxxxx
Telecopier
No.: (000) 000-0000
with
a
copy sent at the same time and by the same means to:
Xxxxxxx
XxXxxxxxx LLP
000
Xxxxxxx Xxxxxx
Xxxxxx,
Xxxxxxxxxxxxx 00000
Attention:
Xxxx X. Xxxxxxxxx III, Esq.
Telecopier
No. (000) 000-0000
(c) Counterparts.
This
Agreement may be executed by the parties in separate counterparts, each of
which
when so executed and delivered will be an original, but all of which together
will constitute one and the same instrument. In pleading or proving this
Agreement, it will not be necessary to produce or account for more than one
such
complete counterpart.
-6-
(d) Captions.
The
captions of sections or subsections of this Agreement are for reference only
and
will not affect the interpretation or construction of this
Agreement.
(e) Binding
Effect and Benefits. This
Agreement will bind and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Except as otherwise provided in
this Agreement, the provisions of this Agreement that are for the Lender's
benefit will inure to the benefit of all permitted transferees of the Note,
and
the applicable provisions of this Agreement that bind the Lender will bind
all
transferees of the Note. Nothing in this Agreement is intended to or will confer
any rights or remedies on any person other than the parties hereto and their
respective successors and permitted assigns.
(f) Assignment.
This
Agreement and the rights and obligations hereunder may not be assigned by the
Company without the prior written consent of the Lender in their sole and
absolute discretion. This Agreement and the rights and obligations hereunder
and
under the Note may be transferred by the Lender in the Lender’s sole discretion
at any time, in whole or in part, including, without limitation, to affiliates
of the Lender, without the consent of any other party hereto.
(g) Further
Assurances. From
time to time on and after the Closing, the Company will promptly execute and
deliver all such further instruments and assurances, and will promptly take
all
such further actions, as the Lender may reasonably request in order more
effectively to effect or confirm the transactions contemplated by this Agreement
and/or any of the Loan Documents and to carry out the purposes hereof and
thereof.
(h) Severability.
No
invalidity or unenforceability of any section of this Agreement or any portion
thereof will affect the validity or enforceability of any other section or
the
remainder of such section.
(i) Entire
Agreement. This
Agreement, together with the exhibits and schedules hereto and the Loan
Documents, contains the entire understanding and agreement among the parties,
or
between or among any of them, and supersedes any prior understandings or
agreements between or among any of them, with respect to the subject matter
hereof.
(j) Governing
Law; Consent to Jurisdiction.
This
Agreement will be governed by and interpreted and construed in accordance with
the internal laws of the Commonwealth of Massachusetts, without regards to
conflicts of laws principles. The
Company agrees that any action or claim arising out of any dispute in connection
with this Agreement, any rights or obligations hereunder or the performance
or
enforcement of such rights or obligations may be brought in the courts of the
Commonwealth of Massachusetts or any federal court sitting therein, and consents
to the non-exclusive jurisdiction of such court and to service of process in
any
such suit being made upon the Company by mail at the address specified herein.
The Company hereby waives any objection that it may now or hereafter have to
the
venue of any such suit or any such court or that such suit is brought in an
inconvenient court.
-7-
(k) Waiver
of Jury Trial. THE
COMPANY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM
ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY RIGHTS OR
OBLIGATIONS HEREUNDER OR THE PERFORMANCE OR ENFORCEMENT OF ANY SUCH RIGHTS
OR
OBLIGATIONS. Except as prohibited by law, the Company waives any right which
it
may have to claim or recover in any litigation referred to in the preceding
sentence any special, exemplary, punitive or consequential damages or any
damages other than, or in addition to, actual damages. The Company
(a) certifies that the Lender nor any representative, agent or attorney of
the Lender has represented, expressly or otherwise, that the Lender would not,
in the event of litigation, seek to enforce the foregoing waivers or other
waivers contained in this Agreement, and (b) acknowledges that, in entering
into
this Agreement and the other Loan Documents to which the Lender is a party,
the
Lender is relying upon, among other things, the waivers and certifications
contained in this paragraph.
(l) Expenses.
The
Company agrees to pay on demand all costs and expenses, including reasonable
fees and disbursements of a single counsel for the Lender, incurred in
connection with the negotiation, preparation, execution and delivery of the
Loan
Documents and the consummation of the transactions contemplated thereby, and
all
costs and expenses, including reasonable fees and disbursements of a single
counsel for the Lender, incurred in connection with any amendments to or waivers
under or in respect of the Loan Documents from time to time.
[Signatures
on Following Page.]
-8-
IN
WITNESS WHEREOF, the Company and the Lender have duly executed this Agreement
as
an agreement under seal on and as of the date first above written.
| COMPANY: | SOMANTA PHARMACEUTICALS, INC. | |||
| By: | /s/ Xxxxxxxx X. Xxxxxxxxx | |||
| Name: Xxxxxxxx X. Xxxxxxxxx | ||||
| Title: Executive Chairman | ||||
| LENDER: | ACCESS PHARMACEUTICALS, INC. | |||
| By: | /s/ Xxxxxxx X. Xxxxxx | |||
| Name: Xxxxxxx X. Xxxxxx | ||||
| Title: President and Chief Executive Officer | ||||
Exhibit
A
Form
of Note
(See
attached.)
Exhibit
B
Form
of Patent Collateral Assignment and Security Agreement
(See
attached.)
Exhibit
C
Form
of Trademark Collateral Assignment and Security Agreement
(See
attached.)
Exhibit
D
Form
of Security Agreement
(See
attached.)
Exhibit
E
Form
of Request for Loan Advance
Access
Pharmaceuticals, Inc.
0000
Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx,
XX 00000
Attention:
Xxxxxxx Xxxxxx
Dear
Xx.
Xxxxxx:
Somanta
Pharmaceuticals, Inc. (the “Borrower”)
hereby
requests that Access Pharmaceuticals, Inc. (the “Lender”)
advance
the principal amount set forth below, under the promissory note, executed and
delivered to by the Borrower as of April 26, 2007 (the “Note”).
|
Amount
of Advance Requested
|
Wire
Instructions
|
Date
Advance is Requested to Be Made
|
In
the
event the Lender agrees to, and does, advance any amount requested hereunder,
Borrower hereby requests that the Lender amend the Note and annotate the
Table
of
Advances and Repayment of Principal attached to the Note to reflect such amount
as an additional principal amount payable thereunder.
Sincerely,
Somanta
Pharmaceuticals, Inc.
By:
__________________________
Name:
Title:
Date:
________________________
