AMENDMENT NO. 6 TO ASSET PURCHASE AGREEMENT dated as of
September 19, 1997, between XXXXXXX PHARMACEUTICALS, INC., a New
Jersey corporation ("Purchaser"), and BERLEX LABORATORIES, INC.,
a Delaware corporation ("Seller", and, together with Purchaser,
the "Parties").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Purchaser and Seller previously entered into an
Asset Purchase Agreement dated as of November 10, 1993 as amended
by Amendment Nos. 1 and 2 thereto, by letter agreement dated
December 11, 1995, by Amendment No. 4 thereto dated as of January
5, 1996, by Amendment No. 5 thereto ("Amendment No. 5") dated as
of December 23, 1996 and by letter agreement (the "Letter
Agreement") dated May 12, 1997 (collectively, the "Original Asset
Purchase Agreement"), and desire to further amend the Original
Asset Purchase Agreement as provided herein (the Original Asset
Purchase Agreement as amended hereby and as may be further
amended, restated, supplemented or otherwise modified from time
to time is hereinafter referred to as the "Agreement").
AGREEMENT:
---------
NOW, THEREFORE, in consideration of the premises and the
respective agreements hereinafter set forth, the Parties agree as
follows:
I. Defined Terms.
-------------
1. Capitalized terms used and not defined herein and
defined in the Original Asset Purchase Agreement shall have the
meanings ascribed to such terms in the Original Asset Purchase
Agreement. When used in the Agreement, the term "Agreement"
means the Agreement as defined above.
2. The following definitions shall be added to Section
1.01 of the Agreement:
"Amendment No. 6" shall mean Amendment No. 6
to the Agreement.
"Class A Stock" shall mean the class A common
capital stock of Purchaser.
"Class B Stock" shall mean the class B common
capital stock of Purchaser.
"1997 Shares" shall mean four hundred fifty
thousand (450,000) shares of Class A Stock to be issued
by Purchaser to Seller pursuant to the Letter Agreement
and this Amendment No. 6.
"Rule 144" shall mean Rule 144 promulgated under
the Securities Act of 1933, as amended.
"Warrant" shall mean the Warrant in the form
attached hereto as Exhibit A, with such modifications
---------
as the parties shall have agreed to in writing on or before
the issuance thereof pursuant to Section 6.16 of the
Agreement.
"Warrant Shares" shall mean the shares of
Class A Stock to be issued by Purchaser upon the
exercise of any of the Warrants.
3. The term "Effective Date" shall mean the date on which
this Amendment No. 6 is effective and all of the conditions
precedent to the effectiveness hereof as described at Section 11
of this Amendment No. 6 shall have occurred.
II. Payment. 1. Section 2.03(g) of the Agreement is hereby
-------
amended and restated in its entirety as follows:
"(g) Purchaser shall pay and deliver to Seller:
a. the sum of $1.15 million, plus accrued
interest thereon in accordance with the terms of
the Agreement in the amount of $73,954.45, which
shall be paid via wire transfer of immediately
available funds to an account designated by Seller
on the Effective Date (the "Effective Date
Payment"); and
b. certificates representing the 1997
Shares which shall be delivered to Seller on the
Effective Date (evidencing forty-five thousand
(45,000) shares each, i.e. ten (10) certificates).
Upon the payment in full and the delivery of the 1997
Shares by Purchaser in accordance with this Subsection
2.03(g), Seller's security interest in the Collateral
described in the Trademark Security Agreement shall
terminate. Seller shall take all steps reasonably
necessary or desirable to effect a release of such
security interests. Purchaser hereby acknowledges that
the 1997 Shares have value as of the date hereof and
are a material part of the consideration to be received
by Seller.
2. The provisions of Section 2.03(l) of the Agreement is
hereby amended and restated in its entirety as follows:
"For all purposes of the Agreement (including, without
limitation, Sections 11.01(i) and 11.02 of the Agree-
ment), (a) Purchase Price payment or Purchase Price
payments or Purchase Price Payments shall mean the
payment required pursuant to clause (g)(i), and (b) the
payment referred to in the immediately preceding clause
(a) constitutes part of the Purchase Price. Unless
otherwise stated in writing by Seller, the account
designated by Seller to which the Effective Date
Payment and any other payments due hereunder shall be
made is an account in the name of Berlex Laboratories,
Inc., Mellon Bank, Pittsburgh, PA, Account No.
#0009902, ABA #000000000."
III. Restriction on Transfer of Class B Stock. Purchaser
----------------------------------------
hereby acknowledges that Xxxxxx Xxxxxxxx has agreed not to
encumber, pledge, sell or otherwise transfer any interest in any
Class B Stock directly owned by him (other than a transfer of his
Class B Stock upon death to his family member or affiliate who is
then a holder of Class B Stock, which transferred Class B Stock
shall continue to be subject to the restrictions contained in
this Section 3) until such time as (a) a Registration Statement
relating to the Shares and the 1997 Shares has been declared
effective by the Commission, and (b) the Warrant has been issued,
in each case in accordance with the terms hereof. Purchaser
hereby agrees to use its best efforts not to permit the transfer
of any such Class B Stock until the events described in clauses
(a) and (b) above have occurred and represents that as of the
date hereof, Xxx Xxxxxxxx directly owns 254,311 shares of Class B
Stock. Purchaser hereby agrees to place a legend with respect to
the foregoing (which shall be reasonably acceptable to Seller) on
all Class B Stock directly owned by Xxxxxx Xxxxxxxx.
IV. Restrictions on Transfer of 1997 Shares. Seller
---------------------------------------
acknowledges that the 1997 Shares cannot be sold or transferred
except pursuant to an effective registration statement under the
Act as defined in Section 5 of this Amendment No. 6 or a valid
exemption from such registration. Seller agrees that prior to
Seller offering for sale, transfer or assignment some or all of
the 1997 Shares in a private sale (which shall be deemed to
exclude sales pursuant to Rule 144) either through a sale on
NASDAQ or on a national securities exchange (an "Open Market
Sale") or a sale at which the price per share is determined or to
be determined by an agreement, written or otherwise, between
Seller and the prospective buyer of such shares, not on NASDAQ or
on a national securities exchange (an "Agreed Upon Sale"), (1997
Shares to be offered for sale by Seller are herein referred to as
the "Offered Shares"), Seller shall provide Purchaser with the
opportunity to purchase the Offered Shares at the Sales Price
(herein defined). Purchaser shall exercise such opportunity by
making payment of cash to Seller within five (5) Business Days
from Purchaser's receipt of the Sales Notice (herein defined)
provided that Purchaser shall, at Seller's request, provide prior
to such payment evidence reasonably satisfactory to Seller that
(A) the purchase of such Offered Shares by Purchaser will not
constitute a purchase in violation of applicable corporate or
other applicable law and (B) there will not occur within ninety-
one (91) days after the date of such payment any of the events
described in Section 11.01(iv) or (v) hereof. In the event
Seller makes such a request, such five (5) Business Day period
shall be extended by such time as is reasonably required for
Purchaser to comply with (A) and (B) above (but in no event more
than two (2) additional Business Days). If Purchaser fails to
pay for the Offered Shares within five (5) Business Days (as the
same may be extended) of Purchaser's receipt of the Sales Notice,
Seller may sell such Offered Shares during the next thirty (30)
days, in the case of an Agreed Upon Sale, or ninety (90) days in
the case of an Open Market Sale, free of any right whatsoever of
Purchaser to purchase the Offered Shares; provided however, that
the sale of the Offered Shares shall, on an Open Market Sale, be
made on NASDAQ or on a national securities exchange and in the
event of an Agreed Upon Sale be made at a price not less than the
Offer Price (as defined below). In the event Seller does not
sell the Offered Shares within such thirty (30) (or ninety (90))
day period, the rights contained in this Section 4 shall continue
to apply to any proposed private sale by Seller of the Shares as
if no Sales Notice had been given. "Sales Price" means (i) in
the case of an Open Market Sale, the price per share which is
equal to the average of the bid and asked price published in the
Wall Street Journal on the Business Day before the Sales Notice
is sent by Seller to Purchaser (or if there is no bid and asked
price on such last Business Day, on the most recent day on which
a bid and asked price had been published in the Wall Street
Journal) or (ii) in the case of an Agreed Upon Sale, the price
per share at which Seller proposes to sell the Offered Shares
(the "Offered Price"). The Sales Notice shall be a written
notice entitling Purchaser to purchase the Offered Shares within
such five Business Day period and may be sent to Purchaser by
fax, overnight mail (by federal express, DHL or some other
similar service), personal delivery and/or certified mail, return
receipt requested and, in the case of an Agreed Upon Sale,
contain the price per share at which Seller proposes to sell the
Offered Shares. Purchaser's right to buy the Offered Shares
shall not apply if the Purchaser's common stock is not listed on
NASDAQ or any national securities exchange. The only restrictive
legend to be included on the 1997 Shares shall be the following
legend: "The shares of Class A Common Stock represented by the
Certificate have not been registered under the Securities Act of
1933, and cannot be sold or transferred unless and until they are
so registered, or unless an exemption is then available." Upon
the request of Seller, after (a) the effectiveness of a
Registration Statement relating to the Shares and the 1997
Shares, or, (b) with respect to a sale made in compliance with
Rule 144, after Seller has delivered to Purchaser an opinion of
counsel reasonably satisfactory to Purchaser to the effect that
such sale or transfer is exempt from registration under the Act
as defined in Section 5 of this Amendment No. 6, such restrictive
legend shall be removed from the Certificates then owned by
Seller. No buyer of any of the 1997 Shares shall have any
obligation to determine whether Seller has complied with the
provisions of Section 4 hereof and no claim can be asserted
against any such buyer in connection therewith, provided that the
preceding part of this sentence shall not in any manner excuse
any breach by Seller of its obligations to comply with Section 4
hereof. Once the 1997 Shares are sold to a third party,
Purchaser shall have no rights under this Section 4 hereof with
respect to such transferred Shares.
V. Registration Rights.
-------------------
A. Defined Terms. As used in this Section 5 the
-------------
following terms shall have the following respective meanings:
1. "Act" shall mean the Securities Act of 1933,
as amended, or any similar federal statute and the rules and
regulations thereunder, all as the same shall be in effect from
time to time;
2. "Commission" shall mean the Securities and
Exchange Commission, or any other federal agency at the time
administering the securities laws;
3. "Prospectus" shall mean any preliminary
Prospectus and final Prospectus (as such may be amended or
supplemented) which constitutes Part I of a Registration
Statement filed with the Commission;
4. "Registration Expenses" shall mean all
expenses arising out of or related to the preparation, filing,
amendment(s) and supplementing(s) of a Registration Statement,
provided, however, that Registration Expenses shall not include
underwriting commission, fees and discounts, if any, attributable
solely to the inclusion of Seller's shares in such Registration
Statement, and any legal fees and disbursements for counsel to
Seller;
5. "Registration Statement" shall mean a regis-
tration statement filed by the Purchaser with the Commission for
a public offering and sale of securities of the Purchaser.
6. "Shares" shall have the meaning given it in
Amendment No. 5.
B. Purchaser's Registration. 1. Purchaser agrees
------------------------
that at Purchaser's sole expense, Purchaser shall, (i) use its
best efforts to file, on or prior to September 30, 1997, on its
behalf and on behalf of Seller with respect to the Shares and the
1997 Shares a Registration Statement in accordance with the Act;
and (ii) use its best efforts to cause such Registration
Statement to be declared effective by the Commission as soon
thereafter as reasonably practicable, but in all events use its
best efforts to cause such Registration Statement to be declared
effective not later than September 19, 1998.
2. Purchaser agrees that at Purchaser's sole
expense, Purchaser shall, (i) no later than one hundred twenty
(120) days following a written demand from Seller for
registration, which demand may only be made during the three (3)
year period commencing on the first day that the Warrant is
exercised, file on its behalf and on behalf of Seller with
respect to the Warrant Shares specified in such demand a
Registration Statement in accordance with the Act; and (ii) use
its best efforts to cause such Registration Statement to be
declared effective by the Commission as soon thereafter as
reasonably practicable, but in all events use its best efforts to
cause such Registration Statement to be declared effective not
later than two hundred ten (210) days thereafter. Purchaser
shall be obligated to prepare, file and cause to become effective
only two (2) Registration Statements pursuant to this Subsection
5.2(b). A registration required to be effected by Purchaser
pursuant to Subsection (a) of Amendment No. 6 or this Subsection
(b) shall not be deemed to have been effected even though a
Registration Statement with respect thereto has become effective
(1) if, after it has become effective, such registration is
interfered with by any stop order, injunction, or other order or
requirement of the Commission or other governmental agency or
court, for any reason not attributable to Seller with respect to
such Registration Statement, and has not thereafter become
effective or (2) if the conditions to closing specified in the
underwriting agreement, if any, entered into in connection with
such registration are not satisfied or waived, other than by
reason of a failure on the part of Seller with respect to such
Registration Statement.
3. If and whenever Purchaser proposes to
register any of Class A Stock (or securities convertible into or
exercisable for Class A Stock) under the Act for its own account
or the account of any stockholder of Purchaser (a "Piggyback
Registration"), Purchaser shall give prompt notice to Seller of
its intention to effect such a registration and, subject to the
remainder of this Subsection 5.2(c), shall include in such
registration all Shares, 1997 Shares and Warrant Shares with
respect to which Purchaser has received a written request from
Seller (which request shall specify the number of Shares, 1997
Shares and Warrant Shares for inclusion therein) within thirty
(30) days after receipt by Seller of Purchaser's notice. If a
Piggyback Registration involves an underwritten offering and if
the managing underwriter in good faith advises Purchaser (in
writing) that in its opinion the number of securities requested
to be included in such Piggyback Registration exceeds the number
that can be sold in such offering without materially adversely
affecting the marketability of such offering or the price at
which such securities can be sold, then Purchaser shall be
required to include in such Piggyback Registration the maximum
number of shares that such underwriter advises can be included,
allocated pro rata on the basis on the number of shares each
stockholder (including Seller) and Purchaser requests be included
in such registration.
C. Registration Procedures. With respect to
-----------------------
Purchaser's obligations under this Section 5, if Purchaser is
required to use its best efforts to effect and/or continue the
registration of the Shares, the 1997 Shares or the Warrant Shares
under the Act (whether in connection with a Piggyback
Registration or otherwise), the Purchaser shall:
1. File with the Commission a Registration
Statement with respect to such Shares, 1997 Shares and Warrant
Shares under and subject to Subsection 5.4(b) of this Amendment
No. 6, use its best efforts to cause that Registration Statement
to become and remain effective.
2. As expeditiously as possible prepare and file
with the Commi(c)^X^A are to undertake the sale and distribution
of the Shares, the 1997 Shares and the Warrant Shares to be
included in a Registration Statement filed in connection with any
registration other than a Piggyback Registration under the
provisions of this Section 5.
3. Purchaser, in connection with a Piggyback
Registration or a demand registration under Subsection 5.2(b) of
this Amendment No. 6, shall have the right to require, if the
offering is to be underwritten and includes securities being
offered for the account of Purchaser, that Seller delay any
offering of the Shares, the 1997 Shares and the Warrant Shares to
be included on its behalf for a reasonable period of time not to
exceed ninety (90) days (the "Delay Period") after the effective
date of such Registration Statement (upon Purchaser first having
delivered to Seller the written opinion of its managing or
principal underwriter to the effect that the inclusion of such
securities in the Registration Statement will have a material
adverse effect on the marketing of such offering); provided,
however, that all officers, directors and five percent (5%) or
greater stockholders of Purchaser also delay offering securities
to be sold on their behalf for such reasonable period of time.
Any additional expenses incurred by reason of the delayed
registration of such securities (such as the necessity to file a
post-effective amendment) shall be borne solely by Purchaser.
4. Purchaser shall be required to keep the
Registration Statement effective (for which purpose the Purchaser
shall be required to prepare and file such amendments and supple-
ments to the Registration Statement and Prospectus used in
connection therewith as may be necessary to keep the Registration
Statement effective) for the period set forth in Subsection
5.3(b) of this Amendment No. 6, pursuant to which Seller is
entitled to sell Shares, 1997 Shares and Warrant Shares.
5. In connection with any request for registra-
tion and the filing of a Registration Statement, Seller shall be
required to furnish Purchaser with all relevant information
concerning the proposed method of sale or other disposition of
the Shares, the 1997 Shares and the Warrant Shares, the identity
and compensation to be paid to any proposed underwriters, if any,
to be employed at the election of Seller in connection therewith,
and such other information as may be reasonably required by
Purchaser to properly prepare and file such Registration
Statement in accordance with applicable provisions of the Act
(which includes the rules and regulations thereunder). Upon the
request of Purchaser, such information shall be furnished by
Seller in writing.
D. Expenses. In connection with or otherwise
--------
relating to registrations on behalf of Seller of any Shares, 1997
Shares or Warrant Shares under the Act pursuant to this Section
5, Purchaser shall pay all Registration Expenses; provided,
however, that Seller shall be required to bear that portion of
the underwriting commissions, fees and discounts, if any,
attributable solely to the inclusion of Shares, 1997 Shares or
Warrant Shares in any Registration Statement relating thereto and
the inclusion of Shares, 1997 Shares or Warrant Shares in the
related filings under state securities or Blue Sky laws; and
further provided that Seller shall pay the legal fees and
disbursements of counsel to Seller in connection therewith.
E. Indemnification.
---------------
1. In connection with or otherwise relating to
the registration of any Shares, 1997 Shares or Warrant Shares
under the Act pursuant to the provisions of this Amendment No. 6,
Purchaser agrees to indemnify and hold harmless and defend
Seller, each underwriter, if any, of such Shares, 1997 Shares or
Warrant Shares, each other person who controls Seller or any such
underwriter within the meaning of the Act, and Seller's officers,
directors and counsel from and against any and all losses,
claims, damages, liabilities, joint or several, to which Seller,
such underwriter, such controlling person or such officers,
directors and counsel of Seller may become subject under the Act
or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any Registration
Statement under which such Shares, 1997 Shares or Warrant Shares
were registered under the Act or any Prospectus contained therein
or related thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and will reimburse Seller, such
underwriter, such controlling person or such officers, directors
and counsel of Seller for any legal or any other fees or expenses
reasonably incurred by such Seller, underwriter, controlling
person or Seller's officers, directors and counsel in connection
with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that Purchaser will not
be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or
alleged omission made in such Registration Statement or such
Prospectus in reliance upon and in conformity with written
information furnished to Purchaser by the party seeking
indemnification.
2. In connection with or otherwise relating to
the registration of any Shares, 1997 Shares or Warrant Shares
under the Act pursuant to the provisions hereof, Seller agrees to
indemnify and hold harmless Purchaser, each person who controls
Purchaser within the meaning of the Act, and each officer and
director of Purchaser from and against any losses, claims,
damages or liabilities, joint or several, to which the Purchaser,
such controlling person or such officer or director or counsel of
Purchaser may become subject under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact
contained in any Registration Statement under which such Shares,
1997 Shares or Warrant Shares were registered under the Act or
any Prospectus contained therein, or arise out of or are based
upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading, which untrue statement or
alleged untrue statement or omission or alleged omission was made
therein in reliance upon and in conformity with written
information furnished to Purchaser by Seller, any person who
controls Seller or any officer, director or counsel of Seller
specifically for use in connection with the preparation thereof;
and will reimburse Purchaser, each such controlling person and
each such officer or director for any legal or any other fees and
expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage,
liability or action.
3. Each person entitled to indemnification
hereunder (the "Indemnitee") agrees, as soon as is reasonably
practicable after the receipt of notice of any claim or action
against it, to notify the party from whom indemnity may be sought
hereunder (the "Indemnitor") in writing; provided that any
failure to promptly provide such notice shall not excuse the
Indemnitor from its obligations hereunder except to the extent
the Indemnitor is actually prejudiced thereby. The Indemnitor
shall assume the defense of any such claim or action (and the
cost thereof) by counsel of the Indemnitor's own choosing, who
shall be reasonably satisfactory to the Indemnitee. Each
Indemnitee shall have the right to employ separate counsel in
connection with any such claim or action and to participate in
the handling or defense thereof, but the fees and expenses of
such counsel shall be at the expense of such Indemnitee unless
the employment of such counsel has been specifically authorized
by the Indemnitor or the Indemnitor shall not have employed
counsel to have charge of the defense of such action or claim or
such Indemnitee shall have reasonably concluded that there may be
defenses available to the Indemnitee (in which case the Indemni-
tor shall not have the right to direct the defense of such action
on behalf of such Indemnitee), in any of which events such fees
and expenses shall be borne by the Indemnitor. The Indemnitor
shall be free to settle any claims or action in respect to which
indemnity may be sought against it pursuant to this Subsection
5.6(c); provided, however, that the Indemnitor shall not settle
any such claim or action if such settlement would result in the
imposition against Indemnitee of a judgement, decree or order in
the nature of equitable relief or otherwise require an
acknowledgement of wrongdoing unless the Indemnitor has obtained
the prior written consent of such Indemnitee (which consent shall
not be unreasonably withheld).
F. Compliance with Rule 144. The Purchaser shall
------------------------
take such actions pursuant to or otherwise in connection with
Rule 144 as is necessary to enable the Seller to sell Shares,
1997 Shares and Warrant Shares pursuant to that Rule.
G. Assignment. Seller's rights under this Section 5
----------
may be assigned by Seller to a transferee or assignee of any of
the Shares, the 1997 Shares and/or the Warrant Shares; provided
that Purchaser is given written notice of such assignment at the
time of or within a reasonable time after the assignment, stating
the name and address of the transferee or assignee and
identifying the number of Shares, 1997 Shares and/or Warrant
Shares with respect to which such rights of Seller are being
assigned.
VI. Representations and Warranties of Seller. Seller represents
----------------------------------------
and warrants to Purchaser as follows:
1. Organization and Good Standing; Subsidiary. Seller is
------------------------------------------
a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization
and is duly qualified as a foreign corporation in good standing
and is authorized to do business under the laws of the State of
New Jersey.
2. Authority. Seller has full corporate power and
---------
authority to execute and deliver this Amendment No. 6 and the
other agreements, documents and instructions executed and
delivered and/or to be executed and delivered by it in connection
herewith and to consummate the transactions contemplated hereby
and thereby. All corporate acts and other proceedings required
to be taken by or on the part of the Seller to authorize the
execution, delivery and performance by Seller of this Amendment
No. 6 and of such other agreements, documents and instruments and
to consummate the transactions contemplated hereby and thereby
have been duly and properly taken and obtained. This Amendment
No. 6 has been duly executed and delivered by Seller and
constitutes, and such other agreements, documents and instruments
when duly executed and delivered by Seller will constitute,
legal, valid and binding obligations of Seller enforceable
against Seller in accordance with their respective terms. The
execution and delivery by Seller of this Amendment No. 6 and such
other agreements, documents and instruments and the consummation
by Seller of the transactions contemplated hereby and thereby
will not violate any law, or conflict with, result in any breach
of, constitute a default (or an event which with notice or lapse
of time or both would become a default) or cause a Lien under,
the corporate charter or by-laws of Seller or any indenture,
mortgage, lease, agreement or other instrument to which Seller is
a party or by which Seller or its properties or assets is bound,
except for any violations, conflicts, breaches or Liens which
individually or in the aggregate would not have a material
adverse effect on the business currently conducted by Seller. No
approval, authorization, consent or other order of, action of or
filing with any court, administrative agency or other
governmental authority is required for the execution and delivery
by Seller of this Amendment No. 6 or such other agreements,
documents and instruments or the consummation by Seller of the
transactions contemplated hereby or thereby.
3. Security. Seller has no security interest in any asset
--------
of Purchaser or its Subsidiary except for its security interest
in the Collateral, as that term is defined in and pursuant to the
Trademark Security Agreement as amended.
4. Disclosure. No representation or warranty by Seller in
----------
this Amendment No. 6 contains or will contain any untrue state-
ment of material fact or omits or will omit to state any material
fact required to make the statements herein or therein contained
not misleading.
VII. Representations and Warranties of Purchaser. Purchaser
-------------------------------------------
represents and warrants to Seller as follows:
1. Organization. Purchaser is a corporation duly
------------
organized, validly existing and in good standing under the laws
of the jurisdiction of its organization.
2. Authority. Purchaser has full corporate power and
---------
authority to execute and deliver this Amendment No. 6 and the
other agreements, documents and instruments executed and
delivered and/or to be executed and delivered by it in connection
herewith and to consummate the transactions contemplated hereby
and thereby. All corporate acts and other proceedings required
to be taken to authorize such execution, delivery and
consummation have been duly and properly taken and obtained.
This Amendment No. 6 has been duly executed and delivered by
Purchaser and constitutes, and such other agreements, documents
and instruments when duly executed and delivered by Purchaser
will constitute, legal, valid and binding obligations of
Purchaser enforceable against it in accordance with their
respective terms. The execution and delivery by Purchaser of
this Amendment No. 6 and such other agreements, documents and
instruments and the consummation by Purchaser of the transactions
contemplated hereby and thereby will not violate any law, or
conflict with, result in any breach of, constitute a default (or
an event which with notice or lapse of time or both would become
a default) or cause a Lien under, the corporate charter or by-
laws of Purchaser, or any indenture, mortgage, lease, agreement
or other instrument to which Purchaser is a party or by which
Purchaser or its properties or assets is bound, except for any
violations, conflicts, breaches or Liens which individually or in
the aggregate would not have a material adverse effect on the
business currently conducted by Purchaser or its assets. No
approval, authorization, consent or other order of, action of or
filing with any court, administrative agency or other
governmental authority is required for the execution and delivery
by Purchaser of this Amendment No. 6 and/or the execution and
delivery by Purchaser of such other agreements, documents and
instruments or the consummation by Purchaser of the transactions
contemplated hereby or thereby, except for filings and notices
required by the Commission or pursuant to any securities law
affecting Purchaser in connection with this Amendment No. 6.
3. SEC Documents. Purchaser has furnished Seller with a
-------------
true and complete copy of each report, schedule, registration
statement and a definitive proxy statement filed by Purchaser
with the SEC since January 1, 1995 (the "Recent Purchaser SEC
--------------------
Documents") which are all the documents (other than preliminary
---------
material) that Purchaser was required to file with the SEC since
January 1, 1995. Except as set forth in Purchaser's Form 10-QSB
filed with respect to the period ending on June 30, 1997, as of
their respective dates, and subject to any qualifications
contained herein, none of the Recent Purchaser SEC Documents
contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary
in order to make the statements therein not misleading. Except
to the extent information contained in any Recent Purchaser SEC
Document has been revised or superseded by a later-filed Recent
Purchaser SEC Document, and subject to any qualifications
contained therein, none of the Recent Purchaser SEC Documents
currently contains any untrue statement of a material fact or
omits to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading.
Except as set forth in Purchaser's Form 10-QSB filed with respect
to the period ending on June 30, 1997, the financial statements
of Purchaser included in the Recent Purchaser SEC Documents
comply as to form in all material respects with the published
rules and regulations of the SEC with respect thereto, have been
prepared in accordance with US GAAP applied on a consistent basis
during the periods involved (except as may be indicated in the
notes thereto or, in the case of unaudited statements, as
permitted by the rules applicable to the preparation of reports
on Form 10-QSB promulgated by the SEC) and fairly present
(subject, in the case of unaudited statements, to normal audit
adjustments) the consolidated financial position of Purchaser and
its consolidated Subsidiary as at the respective dates thereof
and the consolidated results of their operations and changes in
cash flow for the respective periods then ended.
4. Absence of Certain Changes or Events. Since June 30,
------------------------------------
1997, there has not been or otherwise occurred any event which
has had or, to the best of Purchaser's knowledge, could have a
material adverse effect on the business, financial condition or
results of operations of Purchaser and its Subsidiary taken as a
whole.
5. Capitalization. As of the date prior to the date
--------------
hereof, (i) the authorized capital stock of Purchaser consists of
26,400,000 shares of Class A Stock and 900,000 shares of Class B
Stock, 2,000,000 shares of Preferred Stock and none other; (ii)
(A) 7,628,320 shares of Class A Stock, (B) 431,552 shares of
Class B Stock and (C) no shares of Preferred Stock are issued and
outstanding; and (iii) 2,600,000 shares of Class A Stock were
reserved for issuance upon exercise of options granted pursuant
to Purchaser's 1990 Stock Option Plan, as amended, 960,000 shares
of Class A Stock are reserved for issuance under the unit
purchase option plan for X.X. Xxxxx & Co. arising out of a
December, 1993 private placement; warrants to acquire 60,000
shares of Class A Stock at $4.50 per share held by Xxxxxx-Xxxxx
Laboratories, Inc. expiring December 15, 1997 and warrants to
acquire 150,000 shares of Class A Stock at $4.50 per share are
held by Tsumura International, Inc. expiring March 30, 1998.
There are no other authorized or issued shares of capital stock
(preferred or otherwise) of any kind or nature whatsoever of
Purchaser. Except as provided in clause (iii) of the next
preceding sentence, there are no options, warrants,
subscriptions, or other rights, agreements or commitments of any
kind or nature whatsoever which may, do or could directly or
indirectly require the issuance, sale or transfer by Purchaser of
any shares of capital stock of Purchaser, including, without
limitation, any securities convertible into or exchangeable or
exercisable for, or otherwise evidencing the right to acquire,
any shares of capital stock of Purchaser. All of the 1997 Shares
have been duly authorized and validly issued, fully paid and non-
assessable and are not subject to, nor were they issued in
violation of, any preemptive rights, and are free and clear of
all Liens excluding liens or encumbrances caused or created by
Seller. Upon the issuance of the Warrant Shares, if ever, all of
such Warrant Shares will be duly authorized and validly issued,
fully paid and non-assessable and will not be subject to, nor
will they be issued in violation of, any preemptive rights, and
will be free and clear of all Liens excluding liens or
encumbrances caused or created by Seller. Purchaser has not
amended, restated or otherwise modified either its certificate of
incorporation or its by-laws from that provided by Purchaser to
Seller in connection with Amendment No. 4. The last amendment,
restatement or modification of its certificate of incorporation
is dated October 21, 1991 and the last amendment, restatement or
modification of its by-laws is dated October 21, 1991.
6. Agreements with Affiliates. There are no agreements or
--------------------------
other arrangements between or among Purchaser or any Subsidiary,
on the one hand, and any Affiliated Person, on the other hand,
except as described in the Recent Purchaser SEC Documents.
7. Disclosure. No representation or warranty by Purchaser
----------
or Xxxx in this Amendment No. 6 or any other agreement, document
or instrument executed and delivered or to be executed and
delivered by Purchaser or Xxxx pursuant hereto or in connection
herewith, contains or will contain any untrue statement of
material fact, or omits or will omit to state any material fact
required to make the statements herein or therein contained not
misleading.
VIII. Amendment of Section 6.14(e). Section 6.14(e) of the
----------------------------
Agreement is hereby amended to add the words "and/or Amendment
No. 6" after the words "Amendment No. 5" in the two places in
which the words "Amendment No. 5" appear.
IX. New Sections 6.16. New Sections 6.16, 6.17, 6.18 and 6.19
-----------------
are hereby added to the Agreement to read in their entireties as
follows:
"SECTION 6.16. Warrant. 1. In consideration of Seller
-------
executing and delivering this Amendment No. 6 and for other
good and valuable consideration, promptly after Purchaser is
permitted to do so under applicable law, Purchaser shall
issue to Seller, for no additional consideration, the
Warrant to purchase seven hundred fifty thousand (750,000)
shares of Class A Stock at an exercise price of $1.25 per
share, exercisable (in full at any time or in part from time
to time) (i) during the period commencing on May 1, 1999 and
ending on April 30, 2001, in the event that the Warrant is
issued to Seller on or before December 31, 1998, or (ii)
during the period commencing on the six (6) month
anniversary of the date that the Warrant is issued to Seller
and ending on the thirty (30) month anniversary of the date
that the Warrant is issued to Seller, in the event that the
warrant is issued to Seller after December 31, 1998;
provided that the applicable period during which the Warrant
may be exercised pursuant to clause (i) or (ii) above, shall
be extended for up to three consecutive twelve (12) month
periods (the "Extended Exercise Period") if the exercise by
Seller of the Warrant in full would cause Seller to own in
excess of 19.98% of the issued and outstanding Class A Stock
as of the last day of the applicable period during which the
Warrant may be exercised pursuant to clause (i) or (ii)
above or the prior Extended Exercise Period, as applicable.
2. Purchaser shall reserve and keep available out of
its authorized but unissued Class A Stock the number of
shares of such stock required for issuance upon the exercise
of the Warrant (including any additional shares of such
stock which may become so issuable by reason of the
operation of anti-dilution provisions of the Warrant).
SECTION 6.17. Reincorporation. In consideration of
---------------
Seller executing and delivering this Amendment No. 6 and for
other good and valuable consideration, Purchaser agrees to submit
to its stockholders for approval at Purchaser's 1998 Annual
Meeting of stockholders, and shall use its best efforts to cause
its stockholders to approve, a proposal to reincorporate
Purchaser in Delaware. Seller agrees to vote its shares of Class
A Stock in favor of such proposal.
SECTION 6.18. Voting. (a) Subject to Subsection
------
6.18(b) below, Seller shall vote all shares of Class A Stock
owned by it on a pro rata basis in accordance with the
--- ----
manner that (i) all other shares of Class A Stock are voted,
with respect to all matters which are voted upon by holders
of Class A Stock as a class (for example, if 70% of all
shares of Class A Stock entitled to vote with respect to a
matter are voted in favor of such matter and 30% are voted
against it, 70% of the shares of Class A Stock owned by
Seller shall be voted in favor of such matter and 30% shall
be voted against it), or (ii) all other shares of Class A
Stock and Class B Stock are voted, with respect to all
matters which are voted upon by all holders of Class A Stock
and Class B Stock (for example, if 70% of all shares of
Class A Stock and Class B Stock entitled to vote with
respect to a matter are voted in favor of such matter and
30% are voted against it, 70% of the shares of Class A Stock
owned by Seller shall be voted in favor of such matter and
30% shall be voted against it).
(b) Notwithstanding the provisions of Subsection
6.18(a) above to the contrary, Seller shall have the right
to vote all such shares of Class A Stock as it may determine
in its sole discretion on all of the following matters:
a. any matter in connection with which Seller
has dissenter or appraisal rights and Seller has
exercised such dissenter or appraisal rights;
b. any matter voted upon after a bankruptcy
proceeding is pending with respect to Purchaser
(whether initiated voluntarily or involuntarily) under
the U.S. Bankruptcy Code, as amended;
c. any matter which, if approved, would
discriminate against any holder of five percent (5%) or
more of the outstanding capital stock of Purchaser
(including Seller); or
d. the stockholder vote referred to in 6.17 with
respect to which Seller has agreed to vote its shares
in the manner set forth in Section 6.17.
SECTION 6.19. Redemption. In the event that Purchaser
----------
redeems any of its common capital stock from any holder(s)
thereof (other than Seller), other than a pro rata
--- ----
redemption from all holders of such stock, or any such stock
is forfeited by any such holder(s), Purchaser shall notify
Seller, in writing (the "Redemption Notice"), not less that
twenty (20) days prior to any such action. Seller shall
have the right to require Purchaser to redeem from Seller a
pro rata number of Seller's shares of Class A Stock, by
--- ----
notifying Purchaser, in writing (the "Exercise Notice"),
within ten (10) Business Days of Seller's receipt of the
Redemption Notice from Purchaser. Seller's stock shall be
redeemed at a price per share which is equal to the average
of the bid and asked price published in the Wall Street
Journal on the Business Day before the Exercise Notice is
sent by Seller to Purchaser (or if there is no bid and asked
price on such last Business Day, on the most recent day on
which a bid and asked price had been published in the Wall
Street Journal).
SECTION 6.20. Restriction on Issuance of Additional
-------------------------------------
Class B Stock. Purchaser agrees that until such time as (a)
-------------
a Registration Statement relating to the Shares and the 1997
Shares has been declared effective by the Commission, and
(b) the Warrant has been issued, in each case in accordance
with the terms hereof, Purchaser shall not issue any Class B
Stock unless after such issuance the percentage of all
issued and outstanding shares of Class B Stock directly
owned by Xxxxxx Xxxxxxxx is no lower than the percentage of
all issued and outstanding shares of Class B Stock directly
owned by Xxxxxx Xxxxxxxx on the date hereof."
X. Amendment of Section 11.01. Clause (vii) of Section 11.01
--------------------------
of the Agreement is hereby amended and restated in its entirety
as follows:
"(vii) A registration statement respecting the
Shares and the 1997 Shares either (A) has not been
filed by the date set forth in Section 5.2 or (B) shall
cease to be effective for an aggregate of sixty (60)
days unless the reason for any such event is the fault
of Seller or circumstances outside the control of
Purchaser."
XI. Condition Precedent to Effective Date. This Amendment No. 6
-------------------------------------
shall not become effective until the date the following have
occurred:
1. Purchaser shall have paid the Effective Date
Payment in accordance with Section 2.03(g)(i); and
2. The parties shall have executed and delivered the
other documents and agreements listed on Schedule A,
contemplated by this Amendment No. 6, all in form and
substance reasonably satisfactory to Seller.
XII. Release. Purchaser, on behalf of itself and its
-------
Subsidiary, hereby completely and forever waives, releases and
discharges any claims, demands, liabilities, agreements or other
obligations of any kind and nature whatsoever that either
Purchaser or its Subsidiary or both has had, now has or hereafter
may, could or shall have against Seller and/or its officers,
directors and controlling persons with respect to any of the
matters relating to or otherwise in connection with the Agreement
(including, without limitation, the sale of the business by
Seller to Purchaser on or about December 10, 1993), except, and
only except, the obligations of Seller (a) pursuant to Sections
4, 5 and 6 of this Amendment No. 6; and (b) to indemnify
Purchaser in respect of claims which are in the nature of product
liability claims asserted by individuals for personal injury, and
then only to such extent (and none others) pursuant to Section
9.05(b) of the Agreement.
XIII. Confidentiality. Except in connection with an Event of
---------------
Default, Seller agrees to treat as confidential and not to
disclose or use for purposes of investment or trading for its own
account or the account of others, any information of a
confidential or proprietary nature ("Confidential Information")
------------------------
concerning Purchaser or its Subsidiary (i) unless such
information is or becomes a matter of public record through no
fault of Seller or Seller can demonstrate such information was
known by Seller prior to such disclosure, (ii) except for any
information given to Seller by any third party unless Seller knew
or had a reasonable reason to believe that such third party did
not have a right to give such information to Seller and (iii)
except as Seller reasonably believes may be required by any
applicable law. In no event shall Seller use any Confidential
Information in violation of federal or state securities laws.
XIV. Miscellaneous.
-------------
1. Survival. The representations, warranties, covenants
--------
and agreements contained in this Amendment No. 6, and in any
agreements, documents or instruments delivered pursuant to this
Amendment No. 6, shall survive the closing of the transactions
contemplated by this Amendment No. 6 and shall remain in full
force and effect.
2. Expenses. Purchaser and Seller confirm that, in con
--------
nection with and in satisfaction of Purchaser's obligation to
reimburse Seller for Seller's attorneys and other fees incurred
in connection with or otherwise relating to this Amendment No. 6
(including in connection with the other agreements, instruments
and documents delivered pursuant to or in connection with this
Amendment No. 6), Seller has agreed to accept and Purchaser has
agreed to pay Seller (a) $15,000, in the event that the closing
of the transactions contemplated hereby occurs on or prior to
September 19, 1997, or (b) $25,000, in the event that the closing
of the transactions contemplated hereby occurs after September
19, 1997, and Purchaser has made such payment on the date hereof.
3. Further Assurances. From and after the date hereof,
------------------
upon request and at the cost and expense of Seller (except as
otherwise provided in this Amendment No. 6), Purchaser shall
take, execute, acknowledge and deliver all such further acts,
assurances, deeds, assignments, transfers, conveyances and other
instruments and papers as may be required to carry out the
transactions contemplated in this Amendment No. 6 and/or the
other agreements, documents or instruments delivered pursuant to
or in connection with this Amendment No. 6. From and after the
date hereof, upon request and at the cost and expense of
Purchaser (except as otherwise provided in this Amendment No. 6),
Seller shall take, execute, acknowledge and deliver all such
further acts, assurances, deeds, assignments, transfers,
conveyances and other instruments and papers (including, without
limitation, UCC-3 Termination Statements terminating any UCC-1
Financing Statements filed by Seller, as secured party, in
connection with the Original Asset Purchase Agreement) as may be
required to carry out the transactions contemplated in this
Amendment No. 6 and/or the other agreements, documents or
instruments delivered pursuant to or in connection with this
Amendment No. 6.
4. Governing Law. This Amendment No. 6 shall be governed
-------------
by and construed and interpreted in accordance with the laws of
the State of New York, without giving effect to principles of
conflicts of law.
5. Publicity. Each party shall be solely responsible for
---------
any press release or any other public announcement it issues with
respect to this Amendment No. 6 or the transactions contemplated
hereby; provided that, without limiting the generality of the
preceding clause, Purchaser shall provide Seller with at least
two (2) Business Days opportunity to comment on the press release
Seller intends to issue upon the execution of this Amendment No.
6. Except where required by law, each party shall provide the
other with reasonable advance notice of any such press release or
public announcement relating to this Amendment No. 6 and the
transactions contemplated hereby and by the Original Asset
Purchase Agreement.
6. Severability. If any provision of the Agreement
------------
(including this Amendment No. 6) or the application thereof to
any Person(s) or circumstance(s) shall be invalid or
unenforceable to any extent, (i) the remainder of the Agreement
and the application of such provision to other Person(s) or
circumstance(s) shall not be affected thereby and (ii) each such
provision shall be enforced to the greatest extent permitted by
law.
7. Counterparts. This Amendment No. 6 may be executed in
------------
two or more counterparts (and via fax), each of which shall
constitute an original, but all of which, when taken together,
shall constitute but one instrument.
8. Limited Amendment. The provisions of the Original
-----------------
Asset Purchase Agreement, as amended by this Amendment No. 6,
shall remain in full force and effect, and except as expressly
provided herein, shall remain unamended. Except as expressly
provided herein, the provisions of all of the other agreements,
documents and instruments executed and delivered in connection
with the Original Asset Purchase Agreement shall remain in full
force and effect and shall remain unamended.
In the event of a conflict between the terms of this Amendment
No. 6, and the terms of the Original Asset Purchase Agreement,
the terms of this Amendment No. 6 shall be controlling.
9. References to the Agreement. From and after the date
---------------------------
hereof, all references to the Original Asset Purchase Agreement
in the other agreements, documents and instruments executed and
delivered in connection with the Original Asset Purchase
Agreement shall mean the Agreement.
10. Third Party Beneficiaries. Notwithstanding Section
-------------------------
12.16 of the Agreement, the individuals and/or entities other
than Seller and Purchaser which are referred to in Section 5 of
this Amendment No. 6 are intended third party beneficiaries of
such Section 5 and shall have the right to fully enforce such
provisions as fully as if they were a party hereto.
11. Specific Performance. The parties agree that
--------------------
irreparable damage would occur in the event that any of the
provisions of this Amendment No. 6 were not performed in
accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent any breach of this Amendment
No. 6 and to enforce specifically the terms and provisions hereof
in any court of the United States or any state having
jurisdiction, this being in addition to any other remedy to which
they are entitled at law or in equity.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 6 to be duly executed as of the day and year first
above written.
XXXXXXX PHARMACEUTICALS, INC.
By:
Name: XXXXXX XXXXXXXX
Title: Chief Executive
Officer
BERLEX LABORATORIES, INC.
By:
Name: XXXXXXXX XXXXX
Title: Vice President
SCHEDULE A
Seller shall have received fully executed copies of the
following, in form and substance reasonably satisfactory to
Seller:
1. Letter Agreement with Xxxxxx Xxxxxxxx
2. Officer's Certificate (together with Board resolutions) from
Purchaser
