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STOCK PURCHASE AGREEMENT
DATED
NOVEMBER 20, 2000
BETWEEN
IMPAX LABORATORIES, INC.
AND
PURCHASER
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TABLE OF CONTENTS
PAGE
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SECTION 1. Sale and Purchase of Common Stock........................1
SECTION 2. Closings. ...............................................1
SECTION 3. Definitions. ............................................2
SECTION 4. Representations and Warranties of the Company............8
SECTION 5. Representations and Warranties of the Purchaser.........17
SECTION 6. Restrictions On Transfer................................18
SECTION 7. Negative Covenants......................................19
SECTION 8. Conditions to Purchaser's Obligations...................20
SECTION 9. Breach of Representations, Warranties and Covenants.....21
SECTION 11. Termination22
SECTION 12. Specific Performance...................................22
SECTION 13. Expenses 23
SECTION 15. Amendments and Waivers.................................23
SECTION 17. Notices23
SECTION 18. Miscellaneous..........................................24
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This STOCK PURCHASE AGREEMENT is dated as of November 20, 2000
between Impax Laboratories, Inc., a Delaware corporation (the "COMPANY"), and
the Purchaser listed on the signature page of this Agreement (the "PURCHASER").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Company desires to issue and sell to the Purchaser, and
the Purchaser desires to purchase from the Company, shares of the Company's
common stock, par value $.01 per share (the "COMMON STOCK"), upon the terms and
provisions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
SECTION 1. Sale and Purchase of Common Stock
(a) The Company agrees to sell to the Purchaser and, subject to the
terms and conditions hereof and in reliance upon the representations and
warranties of the Company contained herein or made pursuant hereto, the
Purchaser agrees to purchase from the Company at the Closing provided for in
Section 2 hereof, the number of shares of Common Stock set forth opposite the
Purchaser's name on Schedule 1 hereto. The shares of Common Stock being acquired
under this Agreement and by the other Purchasers under the other Stock Purchase
Agreements (as hereinafter defined) are collectively referred to herein as the
"SHARES."
(b) The aggregate purchase price to be paid to the Company by the
Purchaser for the Shares to be purchased by the Purchaser pursuant to this
Agreement shall be the amount set forth opposite the Purchaser's name on
Schedule 1 hereto. No further payment shall be required from the Purchaser for
the Shares.
(c) The Shares are being sold to the purchasers listed on Schedule 1
hereto (the "PURCHASERS") pursuant to this Agreement and the other Common Stock
Purchase Agreements (such agreements collectively, as from time to time
assigned, supplemented or amended or as the terms thereof may be waived, the
"STOCK PURCHASE AGREEMENTS"). Each Stock Purchase Agreement shall be dated the
date hereof and shall be identical except as to the identities of the respective
Purchasers. The sale of Shares to each Purchaser under each Stock Purchase
Agreement is to be a separate sale, and no Purchaser shall have any liability
under any Stock Purchase Agreement other than the Stock Purchase Agreement to
which it is a party.
(d) The Company will use the net proceeds to be received from the
sale of the Shares primarily to fund product development work on the Company's
existing product pipeline as well as general working capital needs.
SECTION 2. Closings.
(a) Subject to the terms and conditions hereof, the closing of the
purchase and sale of the Shares to be purchased by the Purchaser and the other
Purchasers will take place at the offices of Cleary, Gottlieb, Xxxxx & Xxxxxxxx,
Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx at 10:00 A.M., New York City time on
November 28, 2000, or such other time and date as shall be mutually agreed to by
the Company and the Purchasers (the "CLOSING") (such time and date are herein
referred to as the "CLOSING DATE").
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(b) Subject to the terms and conditions hereof, at the Closing (i)
the Company will deliver to each Purchaser a certificate registered in the
Purchaser's name (or the name of its nominee, if any, as specified on Schedule 1
hereto) evidencing the number of Shares set forth opposite the Purchaser's name
on Schedule 1, together with the other documents, certificates and opinions to
be delivered pursuant to Section 8 hereof and (ii) upon the Purchaser's receipt
thereof, the Purchaser will deliver to the Company by wire transfer of federal
or other immediately available funds an amount equal to the aggregate purchase
price (as specified in Section 1(b) hereof) for the Shares to be purchased by
the Purchaser.
SECTION 3. Definitions.
(a) For purposes of this Agreement, the following definitions shall
apply (such definitions to be equally applicable to both the singular and plural
forms of the terms defined):
"ACCREDITED INVESTOR" has the meaning set forth in Regulation D
promulgated under the Securities Act.
"AFFILIATE," when used with respect to any Person, means (i) if such
Person is a corporation, any officer or director thereof and any Person
that is, directly or indirectly, the beneficial owner (by itself or as
part of any group) of more than five percent (5%) of any class of any
equity security (within the meaning of the Securities Exchange Act)
thereof, and, if such beneficial owner is a partnership, any general
partner thereof, or if such beneficial owner is a corporation, any Person
controlling, controlled by or under common control with such beneficial
owner, or any officer or director of such beneficial owner or of any
corporation occupying any such control relationship, (ii) if such Person
is a partnership, any general or limited partner thereof and (iii) any
other Person that, directly or indirectly, controls or is controlled by
or is under common control with such Person. For purposes of this
definition, "control" (including the correlative terms "controlling,"
"controlled by" and "under common control with"), with respect to any
Person, shall mean possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities or by contract
or otherwise. The holding of Shares and the rights under any Stock
Purchase Agreement or the Registration Rights Agreement (or the exercise
of any such rights, including, without limitation, nominating a director
to the Board (or a Board committee) of the Company and or sending an
observer to a Board (or Board committee) meetings of the Company), shall
not cause a Purchaser to be deemed to be an "Affiliate" of the Company.
"AGREEMENT" means this Stock Purchase Agreement (together with
exhibits and schedules) as from time to time assigned, supplemented or
amended or as the terms hereof may be waived.
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"BENEFIT PLAN" means any Plan, existing at the Closing, established
or to which contributions have at any time been made by the Company (or
any predecessor thereto or any ERISA Affiliate thereof), or under which
any employee, former employee or director of the Company or any
beneficiary thereof is covered, is eligible for coverage or has benefit
rights, or pursuant to which the Company (or any predecessor thereto or
any ERISA Affiliate thereof) has or may have any liability.
"BOARD" or "BOARD OF DIRECTORS" means with respect to any Person
that is a corporation, a business trust or other entity, the board of
directors or other group, however, designated, which is charged with
legal responsibility for the management of such Person, or any committee
of such board of directors or group, however designated, which is
authorized to exercise the power of such board or group in respect of the
matter in question.
"CLOSING" has the meaning set forth in Section 2(a) hereof.
"CLOSING DATE" has the meaning set forth in Section 2(a) hereof.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time, and the regulations and interpretations thereunder.
"COMMISSION" means the U.S. Securities and Exchange Commission and
any other similar or successor agency of the federal government
administering the Securities Act or the Securities Exchange Act.
"COMMON STOCK" means the Company's common stock, par value $.01 per
share, and shall also include any common stock of the Company hereafter
authorized and any capital stock of the Company of any other class
hereafter authorized that is not preferred as to dividends or assets over
any other class of capital stock of the Company or that has ordinary
voting power for the election of directors of the Company.
"COMPANY" means Impax Laboratories, Inc., a Delaware corporation,
its successors and assigns.
"DISCLOSURE MATERIAL" has the meaning specified in Section 4.5(a)
hereof.
"ENVIRONMENTAL LAWS" means any federal, state, local, foreign, civil
and criminal laws, statutes, ordinances, orders, codes, Environmental
Permits, rules, policies, and regulations and common law relating to the
protection of the environment and human health or relating to the
handling, use, generation, treatment, storage, transportation or disposal
of Hazardous Materials, including but not limited to the Resource
Conservation and Recovery Act of 1976, 42 X.X.X.xx. 6901 ET SEQ.; the
Toxic Substances Control Act, 15 X.X.X.xx. 2601 ET SEQ.; the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, 42 U.S.C. ss. 9601 ET SEQ .; the Federal Water Pollution Control
Act, 33 X.X.X.xx. 1251 ET SEQ.; the Clean Air Act, 42 X.X.X.xx. 7401 ET
SEQ.; the Hazardous Materials Transportation Act, 49 X.X.X.xx. 1801 ET
SEQ.; The Occupational Safety and Health Act, 29 X.X.X.xx. 651; the
Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. 136y ET
SEQ.; and the Oil Pollution Act of 1990, 33 X.X.X.xx. 2701 ET SEQ., all
as may be amended or superseded from time to time.
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"ENVIRONMENTAL LIEN" has the meaning set forth in Section 4.14
hereof.
"ENVIRONMENTAL PERMITS" means any permits, licenses, approvals,
authorizations or consents required by any Governmental Authority under
any applicable Environmental Law and includes any and all orders, consent
orders or binding agreements issued or entered into by a Governmental
Authority under any applicable Environmental Law.
"ERISA" means Employee Retirement Income Security Act of 1974, as
amended and all regulations promulgated thereunder, as in effect from
time to time.
"ERISA AFFILIATE" means each "person" (as defined in Section 3(9) of
ERISA) that is under "common control" with the Company (within the
meaning of Section 414(b), (c), (m) or (o) of the Code).
"GAAP" means U.S. generally accepted accounting principles, as in
effect for the relevant time or for the relevant period, consistently
applied.
"GOVERNMENTAL AUTHORITY" means any federal, state, or local
governmental agency or authority (including regulatory authority) having
jurisdiction over the Company or any of its respective assets or
businesses.
"HAZARDOUS MATERIALS" means any petroleum, petroleum hydrocarbons,
petroleum waste or petroleum products, underground storage tanks,
asbestos or asbestos-containing materials, pesticides, lead and
lead-containing materials, urea formaldehyde insulation and
polychlorinated biphenyls (PCBs), ionizing and non-ionizing radiation
including radon and electromagnetic frequency radiation; and any
chemicals, materials, substances or wastes in any amount or concentration
that are now or hereafter "hazardous substances," "hazardous wastes,"
"hazardous materials," "extremely hazardous wastes," "restricted
hazardous wastes," "toxic substances," "toxic pollutants" or words of
similar import, under any applicable Environmental Law.
"LIEN" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, or preference, priority or other
security interest of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same effect as any of the
foregoing, any assignment or other conveyance of any right to receive
income and any assignment of receivables with recourse against the
assignor), any filing of a financing statement as debtor under the
Uniform Commercial Code or any similar statute and any agreement to give
or make any of the foregoing; provided that the term "Lien" shall not
include Permitted Liens.
"OUTSTANDING" or "OUTSTANDING" means (a) when used with reference to
the Shares as of a particular time, all Shares theretofore duly issued
except (i) Shares theretofore reported as lost, stolen, mutilated or
destroyed or surrendered for transfer, exchange or replacement, in
respect of which new or replacement Shares have been issued by the
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Company, (ii) Shares theretofore canceled by the Company and (iii) Shares
registered in the name of, as well as Shares owned beneficially by, the
Company, or any of its Affiliates. For purposes of the preceding
sentence, in no event shall "Affiliates" include (x) the persons that are
identified as "Purchasers" on Schedule 1 hereto or (y) any Affiliates of
any such persons.
"PENSION PLAN" means any "employee pension benefit plan" as defined
in Section 3(2) of ERISA.
"PERMITTED LIEN " means (i) any Lien for Taxes, governmental charges
or levies not yet due or delinquent or being contested in good faith by
appropriate proceedings for which adequate reserves have been established
in accordance with GAAP, (ii) any imperfections of title, easements,
rights of way or similar Liens, zoning laws or land use restrictions as
normally exist with respect to property similar in character to the
property affected thereby and that individually or in the aggregate with
other such Liens, zoning laws or land use restrictions do not materially
impair the value or marketability of the property subject to such Liens,
zoning laws or land use restrictions or interfere with the use of such
property in the conduct of the business of the Company and that do not
secure obligations for money borrowed, (iii) Liens imposed by any law,
such as mechanic's, materialman's, landlord's, warehouseman's and
carrier's Liens, securing obligations incurred in the ordinary course of
business that are not yet overdue or that are being diligently contested
in good faith by appropriate proceedings and, with respect to such
obligations that are being contested, for which the Company has set aside
adequate reserves, if appropriate and (iv) any Lien resulting from
purchase by the Company of goods in the ordinary course of business as to
which Liens are not filed of record.
"PERSON" or "PERSON" means any individual, corporation, partnership,
limited liability company, firm, association, joint venture, trust,
unincorporated organization, government, governmental body, agency,
political subdivision or other entity.
"PLAN" means any bonus, compensation, incentive compensation,
deferred compensation, pension, profit sharing, retirement, savings,
stock purchase, stock option, stock ownership, stock appreciation rights,
phantom stock, leave of absence, layoff, vacation, day or dependent care,
legal services, cafeteria, life, health, accident, disability, workmen's
compensation or other insurance, severance, employment, consulting,
noncompetition, separation or other employee benefit plan, program,
agreement, practice, policy or arrangement of any kind, whether written
or oral, or whether for the benefit of a single individual or more than
one individual including, but not limited to, any "employee benefit plan"
within the meaning of Section 3(3) of ERISA.
"PREFERRED STOCK" means any class of the capital stock of a
corporation (whether or not convertible into any other class of such
capital stock) that has any right, whether absolute or contingent, to
receive dividends or other distributions of the assets of such
corporation (including, without limitation, amounts payable in the event
of the voluntary or involuntary liquidation, dissolution or winding-up of
such corporation), which right is superior to the rights of another class
of the capital stock of such corporation. "Preferred Stock" includes,
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without limitation, the Series 1 Preferred Stock and the Series 2
Preferred Stock of the Company.
"PURCHASER" means the person who accepts and agrees to the terms
hereof as indicated by such person's signature (as "the undersigned
Purchaser") on the execution page of this Agreement, together with its
successors and assigns.
"PURCHASER HOLDERS" means (i) each Purchaser, (ii) any Affiliate,
officer or employee of an Affiliate or investment fund managed by an
Affiliate of a Purchaser to which any Purchaser may transfer record
and/or beneficial ownership of any shares of the Shares and (iii) any
transferee of Shares from a Purchaser Holder other than a transferee of
Shares sold in either a public offering pursuant to a registration
statement under the Securities Act or pursuant to a Rule 144 Transaction.
The transferor and the transferee shall notify the Company in writing as
to the transferee's status as a Purchaser Holder in accordance with this
definition, and shall notify the Company if such transferee ceases to be
a Purchaser Holder.
"PURCHASERS" has the meaning set forth in Section 1(c) hereof,
together with their respective successors and assigns.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of the Closing Date, among the Company and each of
the Purchasers.
"RULE 144" means (i) Rule 144 under the Securities Act as such Rule
is in effect from time to time and (ii) any successor rule, regulation or
law, as in effect from time to time.
"RULE 144 TRANSACTION" means a transfer of Shares (A) complying with
Rule 144 as such Rule is in effect on the date of such transfer (but not
including a sale other than pursuant to "brokers" transactions" as
defined in clauses (1) and (2) of paragraph (g) of such Rule as in effect
on the date hereof) and (B) occurring at a time when Shares are
registered pursuant to Section 12 of the Securities Exchange Act.
"SEC REPORTS" has the meaning set forth in Section 4.17 hereof.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and
the rules, regulations and interpretations thereunder.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended, and the rules, regulations and interpretations thereunder.
"SERIES 1 CERTIFICATE OF DESIGNATIONS" means the Certificate of
Designations of the Series 1 Preferred Stock.
"SERIES 1 PREFERRED STOCK" means, collectively, the Series 1-A
Mandatorily Redeemable Convertible Preferred Stock, par value $.01 per
share and the Series 1-B Mandatorily Redeemable Convertible Preferred
Stock, par value $.01 per share.
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"SERIES 2 CERTIFICATE OF DESIGNATIONS" means the Certificate of
Designations of the Series 2 Preferred Stock.
"SERIES 2 PREFERRED STOCK" means the Company's Series 2 Mandatorily
Redeemable Convertible Preferred Stock, par value $.01 per share.
"SHARES" has the meaning set forth in Section 1(a) hereof. In the
event that any Shares are sold either in a public offering pursuant to a
registration statement under Section 5 of the Securities Act or pursuant
to a Rule 144 Transaction, then the transferees of such Shares shall not
be entitled to any benefits under this Agreement with respect to such
Shares and such Shares shall no longer be considered to be "Shares" for
purposes of any consent or waiver provision of this Agreement.
"STOCK PURCHASE AGREEMENTS" has the meaning set forth in Section
1(c) hereof.
"SUBSIDIARY", with respect to any Person, means any corporation,
association or other entity of which more than 50% of the total voting
power of shares of stock or other equity interests (without regard to the
occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is, at the time as of which any
determination is being made, owned or controlled, directly or indirectly,
by such Person or one or more of its Subsidiaries, or both.
"TAX" or "TAXES" means all federal, state, local or foreign net or
gross income, gross receipts, net proceeds, sales, use, AD VALOREM, value
added, franchise, bank shares, withholding, payroll, employment, excise,
property, alternative or add-on minimum, environmental or other taxes,
assessments, duties, fees, levies or other governmental charges of any
nature whatsoever, whether disputed or not, together with any interest,
penalties, additions to tax or additional amounts with respect thereto.
"TAX RETURNS" means any returns, reports or statements (including
any information returns) required to be filed for purposes of a
particular Tax.
"TAXING AUTHORITY" means any governmental agency, board, bureau,
body, department or authority of any United States federal, state or
local jurisdiction, or any foreign jurisdiction, having or purporting to
exercise jurisdiction with respect to any Tax.
"TRANSFEREES" shall mean any transferee (except for a Purchaser
Holder) of Shares from a Purchaser Holder. Transferees shall not include
a transferee of Shares sold in either a public offering pursuant to a
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), or pursuant to Rule 144 under the Securities Act.
(b) For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
(i) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any
particular Section or other subdivision;
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(ii) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP (except as otherwise
provided herein);
(iii) all computations provided for herein, if any, shall be made in
accordance with GAAP (except as otherwise provided herein);
(iv) any uses of the masculine, feminine or neuter gender shall also
be deemed to include any other gender, as appropriate;
(v) all references herein to actions by the Company, such as
"create," "sell," "transfer," "dispose of," etc., mean such action
whether voluntary or involuntary, by operation of law or otherwise;
(vi) the exhibits and schedules to this Agreement shall be deemed a
part of this Agreement;
(vii) each of the representations and warranties of the Company
contained in Section 4 hereof is separate and is not limited, qualified
or modified by the existence, wording or satisfaction of any other
representation or warranty of the Company in Section 4 or otherwise;
(viii) all references herein (in covenants or otherwise) to any
action(s) that are to be taken (or that are prohibited from being taken)
by any Person or the Company shall apply to such Person or the Company,
as the case may be, whether such action is taken directly or indirectly.
SECTION 4. Representations and Warranties of the Company.
4.1. CORPORATE EXISTENCE, POWER AND AUTHORITY.
The Company represents and warrants to the Purchaser as follows as
of the date hereof and as of the Closing Date, except as set forth in the
Disclosure Schedule attached hereto as Exhibit A:
(a) The Company is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation. The
Company is duly qualified, licensed or authorized as a foreign corporation to do
business and is in good standing under the laws of each jurisdiction in which it
owns or leases any property or in which the conduct of its business requires it
to so qualify or be so qualified, licensed or authorized except for such
jurisdictions where the failure to be so qualified, licensed or authorized would
not have a material adverse effect on the Company's assets, properties,
liabilities, business, affairs, results of operations, condition (financial or
otherwise) or prospects.
(b) The Company has all requisite power, authority (corporate and
other) and legal right to execute, deliver, enter into, consummate the
transactions contemplated by and perform its obligations under (i) the Stock
Purchase Agreements, including, without limitation, the issuance by the Company
of the Shares as contemplated herein and (ii) the Registration Rights Agreement.
The execution, delivery and performance of the Stock Purchase Agreements and the
Registration Rights Agreement by the Company (including, without limitation, the
8
issuance by the Company of the Shares) have been duly authorized by all required
corporate and other actions. The Company has duly executed and delivered the
Stock Purchase Agreements and the Registration Rights Agreement. The Stock
Purchase Agreements and the Registration Rights Agreement constitute the legal,
valid and binding obligations of the Company enforceable in accordance with
their respective terms, subject to bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to the rights of creditors generally
and to general principles of equity.
(c) No proceeding has been commenced looking toward the dissolution
or merger of the Company or the amendment of its certificate of incorporation.
The Company is not in violation in any respect of its certificate of
incorporation or bylaws.
(d) The Company has all requisite power, authority (corporate and
other) and legal right to own or to hold under lease and to operate the
properties it owns or holds and to conduct its business as now being and is
proposed to be conducted.
4.2. CAPITAL STOCK.
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(a) Schedule A1 hereto correctly and completely lists (i) the
authorized capital stock of the Company (Common Stock and Preferred Stock), (ii)
the number of designated shares of Preferred Stock in each series or class
thereof and (iii) on November o, 2000, after giving effect to the issuance of
Shares contemplated by the Stock Purchase Agreements, the number of shares
outstanding in each series or class thereof. All of such outstanding shares are,
or on the Closing Date will be, duly authorized, validly issued and outstanding,
fully paid and non-assessable and all such outstanding shares shares of Common
Stock are validly listed for trading on the NASDAQ National Market. Except as
provided in the Series 1 Certificate of Designations and the Series 2
Certificate of Designations, none of the shares of the Company's capital stock
that will be outstanding at the Closing (i) were or will be subject to
preemptive rights when issued or (ii) provide the holders thereof with any
preemptive rights with respect to any issuances of capital stock.
(b) Schedule A2 hereto correctly and completely lists the number and
purpose for which such shares of the Company's Common Stock are reserved for
issuance by the Company.
(c) Except as referred to in Section 4.2(b), there are no
outstanding options, warrants, subscriptions, rights, convertible securities or
other agreements or plans under which the Company may become obligated to issue,
sell or transfer shares of its capital stock or other securities.
(d) Except as set forth on Schedule A3 hereto and except for the
registration rights contained in the Registration Rights Agreement, there are
and will be no outstanding registration rights with respect to any capital stock
of the Company, which (in either case) will be outstanding on the Closing Date,
or any capital stock referred to in Section 4.2(b) or 4.2(c).
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(e) There are no voting agreements, voting trusts, proxies or other
agreements or understandings with respect to the voting of any capital stock of
the Company of which the Company is a party, except as provided in the Series 1
Certificate of Designations and the Series 2 Certificate of Designations and
Schedule A4 hereto.
(f) Except as set forth in Schedule A5 hereto, there are no
anti-dilution protections or other adjustment provisions in existence with
respect to any capital stock of the Company or any capital stock referred to in
Section 4.2(b) or 4.2(c).
4.3. SUBSIDIARIES.
------------
The Company has no Subsidiaries.
4.4. NO DEFAULTS OR CONFLICTS.
(a) The Company is not in violation or default in any material
respect (and is not in default in any respect regarding any indebtedness) under
any indenture, agreement or instrument to which it is a party or by which it or
its properties may be bound. The Company is not in default in any material
respect under any material order, writ, injunction, judgment or decree of any
court or other governmental authority or arbitrator(s).
(b) The execution, delivery and performance by the Company of the
Stock Purchase Agreements and the Registration Rights Agreement and any of the
transactions contemplated hereby or thereby (including, without limitation, the
issuance of the Shares as contemplated herein and therein) do not and will not
(i) violate or conflict with, with or without the giving of notice or the
passage of time or both, any provision of (A) the certificate of incorporation
or by-laws of the Company, (B) any law, rule, regulation or order of any
federal, state, county, municipal or other governmental authority, (C) any
judgment, writ, injunction, decree, award or other action of any court or
governmental authority or arbitrator(s), or (D) any agreement, indenture or
other instrument applicable to the Company or any of its respective properties,
(ii) result in the creation of any Lien upon any of the Company's properties,
assets or revenues, (iii) require the consent, waiver, approval, order or
authorization of, or declaration, registration, qualification or filing with,
any Person (whether or not a governmental authority and including, without
limitation, any shareholder approval) or (iv) cause anti-dilution clauses of any
outstanding securities to become operative or give rise to any preemptive
rights. No provision referred to in Sections (A) and (C) of the preceding clause
(i) materially adversely affects the assets, properties, liabilities, business,
affairs, results of operations, condition (financial or otherwise) or prospects
of the Company or the ability of the Company to perform its obligations under
the Stock Purchase Agreements and the Registration Rights Agreement or any of
the transactions contemplated hereby or thereby.
4.5. DISCLOSURE MATERIALS; OTHER INFORMATION.
(a) The Company has previously furnished to the Purchaser the
materials described on Schedule A6 hereto (the "DISCLOSURE MATERIAL"). The
audited and unaudited financial statements referred to or contained in the
materials referred to on Schedule A6 fairly present the financial condition of
the Company as of the respective dates thereof and the results of the operations
of the Company for such periods and have been prepared in accordance with GAAP,
except that any such unaudited statements may omit notes and may be subject to
year-end adjustment.
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(b) the Disclosure Material does not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein not misleading.
(c) Since September 30, 2000, (i) the business of the Company has
been conducted in the ordinary course and (ii) there has been no material
adverse change in the assets, properties, liabilities, business, affairs,
results of operations, condition (financial or otherwise) or prospects of the
Company. As of the Closing Date and as of the date hereof, there are no material
liabilities of the Company that would be required to be provided for in a
balance sheet of the Company as of either such date prepared in accordance with
GAAP, other than liabilities provided for in the financial statements referred
to in Section 4.5(a).
(d) Since October 27, 2000, there has been no change or amendment to
the certificate of incorporation or bylaws or other organizational documents of
the Company.
(e) There are no material liabilities, contingent or otherwise, of
the Company that have not been disclosed in the financial statements referred to
in Section 4.5(a) or otherwise disclosed in the Disclosure Material.
(f) There is no fact known to the Company that is not in the
Disclosure Material and that materially and adversely affects, or in the future
would be reasonably likely (as far as the Company currently can reasonably
foresee) to materially and adversely affect, the assets, properties,
liabilities, business, affairs, results of operations, condition (financial or
otherwise) or prospects of the Company.
4.6. LITIGATION.
----------
Other than as set forth in the Disclosure Material, there is no
action, suit, proceeding, investigation or claim pending or, to the knowledge of
the Company, threatened in law, equity or otherwise before any court,
administrative agency or arbitrator that (i) questions the validity of the Stock
Purchase Agreements, the Registration Rights Agreement or the Shares or (ii)
might result in a material adverse change in the assets, properties,
liabilities, business, affairs, results of operations, condition (financial or
otherwise) or prospects of the Company.
4.7. TAXES.
The Company has duly and timely filed all Tax Returns required to be
filed by it, and each such Tax Return correctly and completely reflects the Tax
liability and all other information required to be reported thereon. The Company
has paid or caused to be paid all Taxes (whether or not reflected on such Tax
Returns) that are due and payable. The provision for Taxes due by the Company in
the most recent financial statement included in the Disclosure Material is
sufficient for all unpaid Taxes, being current Taxes not yet due and payable, of
the Company, as of the end of the period covered by such financial statement,
and as of the Closing Date, such provision, as adjusted for the passage of time
through such date, will be sufficient for the then accrued and unpaid Taxes not
yet due and payable of the Company. No Tax Returns of the Company have ever been
audited by any Taxing Authority, there is no dispute concerning any Tax
liability of the Company either threatened, claimed or raised by any Taxing
11
Authority, and the Company does not expect any Taxing Authority to assess
additional Taxes against or in respect of it for any past period. The Company
has withheld and paid, or, if not yet due for payment, set aside in accounts for
such purposes, all Taxes required to have been withheld in connection with
amounts paid or owing to any employee, creditor, independent contractor or other
third party. Other than stamp taxes, the Company has no liability for Taxes of
any Person other than the Company (i) as a transferee or successor, (ii) by
contract, or (iii) otherwise. There are no applicable Taxes payable by the
Company in connection with the execution and delivery of the Stock Purchase
Agreements or the Registration Rights Agreement or the issuance by the Company
of the Shares.
4.8 ERISA.
-----
(a) Each Benefit Plan has at all times been maintained and
administered in all material respects in accordance with its terms and with the
requirements of all applicable law, including ERISA and the Code.
(b) Each Benefit Plan intended to qualify under section 401(a) of
the Code has at all times since its adoption been so qualified, and each trust
that forms a part of any such plan has at all times since its adoption been
tax-exempt under section 501(a) of the Code, and each such Benefit Plan has
received a favorable determination letter with respect to such qualified status
and nothing, to the best knowledge of the Company, has occurred that could
reasonably be expected to cause such qualified status to change.
(c) No Benefit Plan has incurred any "accumulated funding
deficiency" within the meaning of section 302 of ERISA or section 412 of the
Code, and the "amount of unfunded benefit liabilities" within the meaning of
section 4001(a)(18) of ERISA does not exceed zero with respect to any Benefit
Plan subject to Title IV of ERISA.
(d) No "reportable event" (within the meaning of section 4043 of
ERISA) has occurred with respect to any Benefit Plan or any Plan maintained by
an ERISA Affiliate since the effective date of said section 4043 for which
notice is not waived under the regulations issued pursuant to said Section 4043.
(e) No Benefit Plan is a multiemployer plan within the meaning of
section 3(37) of ERISA.
(f) No direct, contingent or secondary liability has been incurred
or is expected to be incurred by the Company or any ERISA Affiliate under Title
IV or section 302 of ERISA to any party with respect to any Benefit Plan, or
with respect to any other Plan presently or heretofore maintained or contributed
to by any ERISA Affiliate.
(g) Neither the Company nor any ERISA Affiliate has incurred any
liability for any tax imposed under section 4971 through 4980B of the Code or
civil liability under section 502(i) or (l) of ERISA.
12
(h) No benefit under any Benefit Plan, including, without
limitation, any severance or parachute payment plan or agreement, will be
established or become accelerated, vested or payable by reason of any
transaction contemplated under this Agreement or section 412 of the Code.
(i) No Benefit Plan provides health or death benefit coverage beyond
the termination of an employee's employment, except as required by Part 6 of
Subtitle B of Title I of ERISA or section 4980B of the Code or any State laws
requiring continuation of benefits coverage following termination of employment,
and the transactions contemplated by the Agreement will not result in the
payment by the Company to any person of an "excess parachute payment" within the
meaning of Section 280G of the Code, or any other payment which is not
deductible for federal income tax purposes under the Code.
(k) No suit, action or other litigation (excluding claims for
benefits incurred in the ordinary course of plan activities and any other claim
that could reasonably be expected to result in an immaterial liability or
expense to the Company) has been brought or, to the knowledge of the Company,
threatened against or with respect to any Benefit Plan and there are no facts or
circumstances known to the Company that could reasonably be expected to give
rise to any such suit, action or other litigation.
(l) All contributions to Benefit Plans that were required to be made
by the Company or an ERISA Affiliate under such Benefit Plans have been made,
and all benefits accrued under any unfunded Benefit Plan have been paid, accrued
or otherwise adequately reserved in accordance with generally accepted
accounting principles, and the Company or any ERISA Affiliate has performed all
material obligations required to be performed under all Benefit Plans.
(m) The execution, delivery and performance of the Stock Purchase
Agreements and the Registration Rights Agreement and the consummation of the
transactions contemplated hereby and thereby (including, without limitation, the
offer, issue and sale by the Company, and the purchase by the Purchaser of the
Shares) will not involve any "prohibited transaction" within the meaning of
ERISA or the Code with respect to any Benefit Plan.
(n) The Company has been in material compliance with all laws,
regulations and rulings regarding the terms and conditions of employment of
employees, former employees or prospective employees or other labor related
matters.
4.9 LEGAL COMPLIANCE.
-----------------
(a) The Company's manufacturing, distribution and marketing
practices are in compliance in all material respects with all applicable laws,
rules, regulations, orders, licenses, judgments, writs, injunctions, decrees or
demands, including, without limitation, laws and regulations administered by the
Food and Drug Administration ("FDA") and the Drug Enforcement Administration
("DEA").
(b) The Company possesses all material FDA new drug applications,
abbreviated new drug applications, and new animal drug applications as are
necessary for the conduct of its business as now being conducted.
13
(c) Other than the May 25, 1993 "Richlyn Order," there are no
adverse orders, judgments, writs, injunctions, decrees, or demands of any court
or administrative body, domestic or foreign, or of any governmental agency or
instrumentality, domestic or foreign, outstanding against the Company.
(d) The Company has not and will not use the services of any person
debarred under the provisions of the Generic Drug Enforcement Act of 1992, 21
U.S.C. ss. 335(a)(b). None of the Company's officers or employees has been
convicted of a felony under federal law for conduct relating to the development,
approval or regulation of any product subject to the Federal Food, Drug, and
Cosmetic Act or the Controlled Substances Act.
4.10. OUTSTANDING SECURITIES.
----------------------
All securities (as defined in the Securities Act) of the Company
have been offered, issued, sold and delivered in compliance with, or pursuant to
exemptions from, all applicable federal and state laws, and the rules and
regulations of federal and state regulatory bodies governing the offering,
issuance, sale and delivery of securities.
4.11. PERMITS, LICENSES AND APPROVALS; INTELLECTUAL PROPERTY
------------------------------------------------------
AND OTHER RIGHTS.
----------------
The Company owns or possesses and holds free from material conflicts
with the rights of others all franchises, licenses, permits, consents, approvals
and other authority (governmental or otherwise), patents, patent rights,
trademarks, trademark rights, trade names, trade name rights and copyrights, and
all rights and privileges with respect to any of the foregoing, as are necessary
for the conduct of its business as now being conducted and as currently proposed
to be conducted; PROVIDED that, no such representation is made with respect to
government franchises, licenses, permits, consents, approvals or other authority
which may be required with respect to the Company's business as proposed to be
conducted. The Company is not in default in any material respect under any of
such franchises, licenses, permits, consents, approvals or other authority. The
rights of (and use by) the Company with respect to such or any other patents,
patent rights, trademarks, trademark rights, trade names, trade name rights or
copyrights do not conflict with or infringe any rights of others in a manner
that might materially and adversely affect the assets, properties, liabilities,
business, affairs, results of operations, condition (financial or otherwise) or
prospects of the Company, and no such claim of conflict or infringement has been
asserted by any Person.
4.12. KEY EMPLOYEES.
-------------
The Company has good relationships with its employees and has not
had and does not expect any material labor problems. The Company has no
knowledge as to any intentions of any key employee or any group of employees to
leave the employ of the Company. The employees of the Company are not and have
never been represented by any labor union, and no collective bargaining
agreement is binding and in force against the Company or currently being
negotiated by the Company.
14
4.13. SUPPLIERS AND CUSTOMERS.
-----------------------
(a) The Company has adequate sources of supply for its business as
currently conducted and as proposed to be conducted. The Company has good
relationships with all of its material sources of supply of goods and services
and does not anticipate any material problem with any such material sources of
supply.
(b) The Company has no knowledge that the customer base of the
Company might materially decrease.
4.14. ENVIRONMENTAL COMPLIANCE.
------------------------
(a) There is no Hazardous Material on, about, under or in, any
property, real or personal, in which the Company has any interest in an amount
or concentration that could constitute a violation that would result in a
liability in excess of $100,000 or otherwise result in a liability in excess of
$100,000 to the Company under any applicable Environmental Law.
(b) There is no (and has not been any) off-site use, handling,
storage or disposal or on-site use, handling, storage or disposal of Hazardous
Material at or from any locations currently or formerly owned, leased, operated
or occupied by the Company as a result of which use, handling, storage or
disposal there would exist a risk that the Company could incur a material
liability or obligation under any applicable Environmental Law.
(c) The Company has not received any verbal or written notice,
citation, subpoena, summons, complaint or other correspondence or communication
from any person with respect to the presence of any non-indigenous Hazardous
Material upon, into, beneath, or emanating from or affecting any of the real
property (including improvements) currently or formerly owned or occupied by the
Company that could result in a liability to the Company in excess of $100,000.
(d) There has been no intentional or unintentional, gradual or
sudden, release, disposal or discharge by the Company or, to the Company's
knowledge, by others, upon, into or beneath the real property (including
improvements) currently or formerly owned or occupied by the Company that has
caused or is causing soil or groundwater contamination that, under applicable
Environmental Laws could require investigation or remediation or could otherwise
create a material liability or obligation on the part of the Company.
(e) The Company is in material compliance with all applicable
Environmental Laws and the terms and conditions of all Environmental Permits.
(f) To the best knowledge of the Company after reasonable inquiry,
there are no Liens arising under or pursuant to any Environmental Law
("ENVIRONMENTAL LIENS") relating to any real property (including improvements
thereon) currently owned by the Company.
15
(g) There are no (i) underground storage tanks, (ii) polychlorinated
biphenyl containing equipment or (iii) asbestos-containing materials at any site
currently owned, operated or leased by the Company, except in compliance with
all applicable Environmental Laws.
4.15. NO BURDENSOME AGREEMENTS.
------------------------
To the best of the knowledge of the Company, other than this
Agreement and the related documents, the Company is not a party to any contract
or agreement with any Affiliate of the Company, the terms of which are less
favorable to the Company than those that might have been obtained, at the time
such contract or agreement was entered into, from a person who was not such an
Affiliate.
4.16. OFFERING OF SHARES.
------------------
None of the Company, nor to the knowledge of the Company, any agent
or any other person acting on its behalf, directly or indirectly, (i) offered
any of the Shares or any similar security of the Company (A) by any form of
general solicitation or general advertising (within the meaning of Regulation D
under the Securities Act) or (B) for sale to or solicited offers to buy any
thereof from, or otherwise approached or negotiated with respect thereto with,
any person other than the Purchasers and not more than a limited number of other
institutional investors each of which the Company reasonably believed was an
"accredited investor" within the meaning of Regulation D under the Securities
Act or (ii) has done or caused to be done (or has omitted to do or to cause to
be done) any act, which act (or which omission) would result in bringing the
issuance or sale of the Shares within the provisions of Section 5 of the
Securities Act or the filing, notification or reporting provisions of any "blue
sky" or securities laws of any state or other jurisdiction.
4.17. SEC
---
(a) The Company has filed all proxy statements, reports and other
documents required to be filed by it under the Securities Exchange Act. The
Company has furnished the Purchaser with copies of (i) its Annual Report on Form
10-KSB for the fiscal year ended December 31, 1999, (ii) its Quarterly Reports
on Form 10-QSB for the fiscal quarters ended March 31, 2000, June 30, 2000 and
September 30, 2000 and (iii) its Current Reports on Form 8-K dated May 16, 2000
and August 24, 2000 filed by the Company (collectively, the "SEC REPORTS"). Each
SEC Report was in substantial compliance with the requirements of its respective
form and none of the SEC Reports, nor the financial statements (and the notes
thereto) included in the SEC Reports, as of their respective dates, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(b) The Company is eligible to register securities for offer and
sale on Form S-3 under the Securities Act.
16
4.18. USE OF PROCEEDS.
---------------
The Company will use the net proceeds to be received from the sale
of the Shares primarily to fund product development work on the Company's
existing product pipeline as well as general working capital needs. No portion
of such proceeds will be used for the purpose, whether immediate, incidental or
ultimate, of purchasing or carrying, within the meaning of Regulation U of the
Board of Governors of the Federal Reserve System, as amended from time to time,
any "margin stock" as defined in said Regulation U, or any "margin stock" as
defined in Regulation G of the Board of Governors of the Federal Reserve System,
as amended from time to time, or for the purpose of purchasing, carrying or
trading in securities within the meaning of Regulation T of the Board of
Governors of the Federal Reserve System, as amended from time to time, or for
the purpose of reducing or retiring any indebtedness that both (i) was
originally incurred to purchase any such margin stock or other securities and
(ii) was directly or indirectly secured by such margin stock or other
securities. None of the assets of the Company includes any such "margin stock."
The Company has no present intention of acquiring any such "margin stock."
4.19. OTHER NAMES.
-----------
Except for "Global Pharmaceutical Corporation" and "Impax
Pharmaceuticals, Inc.," the businesses previously or presently conducted by the
Company have not been conducted under any corporate, trade or fictitious name.
4.20. BROKERS.
-------
Except for First Union Securities, Inc., no broker, finder or
investment banker or other party is entitled to any brokerage, finder's or other
similar fee or commission in connection with any Stock Purchase Agreement or the
Registration Rights Agreement or any of the transactions contemplated hereby or
thereby, based upon arrangements made by or on behalf of the Company or any of
its Affiliates.
SECTION 5. Representations and Warranties of the Purchaser.
The Purchaser represents and warrants to the Company as follows:
5.1. CORPORATE POWER AND AUTHORITY.
-----------------------------
The Purchaser has all requisite power, authority and legal right to
execute, deliver, enter into, consummate the transactions contemplated by and
perform its obligations under this Agreement and the Registration Rights
Agreement. The execution, delivery and performance of this Agreement and the
Registration Rights Agreement by the Purchaser have been duly authorized by all
required corporate and other actions. The Purchaser has duly executed and
delivered this Agreement and the Registration Rights Agreement, and this
Agreement and the Registration Rights Agreement constitute the legal, valid and
binding obligations of the Purchaser enforceable against the Purchaser in
accordance with their respective terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to the rights of
creditors generally.
17
5.2. INVESTMENT INTENT.
-----------------
The Purchaser is capable of evaluating the risk of its investment in
the Shares being purchased by it and the Purchaser and any account for which the
Purchaser is acting is able to bear the economic risk of such investment. The
Purchaser has had the opportunity to request and receive all information deemed
necessary by it to evaluate an investment in the Company. The Purchaser is
purchasing the Shares for its own account or for one or more accounts as to each
of which it exercises sole investment discretion solely for the purpose of
investment and not with a view to, or for sale in connection with, any
distribution thereof in violation of applicable securities laws. The Purchaser
acknowledges that the Shares have not been registered under the Securities Act
and may be sold or disposed of in the absence of such registration only pursuant
to an exemption from the registration requirements of the Securities Act. It is
understood that the disposition of the Purchaser's property shall at all times
be within the Purchaser's control. If the Purchaser should in the future decide
to dispose of any of its Shares it is understood that it may do so only in
compliance with the Securities Act, applicable securities laws and this
Agreement. The Purchaser and each account for which it is acting is an
Accredited Investor. If domiciled in the United States, Purchaser's domicile is
in the state indicated on Schedule 1 hereto.
5.3 NO GENERAL SOLICITATION. The Purchaser acknowledges that it has
not received nor is it aware of any general solicitation or general advertising
of the Shares, including without limitation, (a) any communication published in
any newspaper or magazine or broadcast over television or radio or (b) any
seminar or meeting to which people were invited by means of a general
solicitation or general advertising.
5.4. BROKERS.
No broker, finder or investment banker or other party is entitled to
any brokerage, finder's or other similar fee or commission in connection with
any Stock Purchase Agreement or the Registration Rights Agreement or any of the
transactions contemplated hereby or thereby, based upon arrangements made by or
on behalf of the Purchaser or any of its Affiliates.
SECTION 6. Restrictions On Transfer
(a) The Purchaser agrees that it will not sell or otherwise dispose
of any Shares unless such Shares have been registered under the Securities Act
and, to the extent required, under any applicable state securities laws, or
pursuant to an applicable exemption from such registration requirements. The
Company may endorse on all Share certificates a legend stating or referring to
such transfer restrictions; PROVIDED, that no such legend shall be endorsed on
any Share certificates that, when issued, are no longer subject to the
restrictions of this Section 6.
(b) The Investor agrees to the placement on certificates
representing the Shares issued to the Purchaser pursuant to the terms hereof,
(i) any certificate issued at any time in exchange or substitution for any
certificate bearing such legend, a legend (the "PRIVATE PLACEMENT LEGEND")
substantially as set forth below:
18
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES
LAW, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT OR PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.
(c) The Private Placement Legend shall be removed from a certificate
representing the Shares if the securities represented thereby are sold pursuant
to an effective registration statement under the Securities Act or there is
delivered to the Company such satisfactory evidence, which may include an
opinion of independent counsel, as reasonably may be requested by the Company,
to confirm that neither such legend nor the restrictions on transfer set forth
therein are required to ensure that transfers of such securities will not
violate the registration and prospectus delivery requirements of the Securities
Act.
SECTION 7. Negative Covenants.
7.1. PRIVATE PLACEMENT STATUS.
------------------------
Neither the Company nor any agent nor other Person acting on the
Company's behalf will do or cause to be done (or will omit to do or to cause to
be done) any act, which act (or which omission) would result in bringing the
issuance or sale of the Shares within the provisions of Section 5 of the
Securities Act or the filing, notification or reporting requirements of any
state securities law (other than in accordance with a registration and
qualification of Conversion Shares pursuant to the Registration Rights
Agreement).
7.2. ACTIONS PRIOR TO THE CLOSING DATE.
---------------------------------
From the date hereof through the Closing Date, the Company will not,
(a) issue or agree to issue any capital stock or any securities exercisable for,
or convertible or exchangeable into, capital stock or (b) purchase, redeem or
otherwise acquire any of its capital stock; PROVIDED, HOWEVER, that this Section
7.2 shall not limit, or be applicable to, (i) the transactions contemplated by
the Stock Purchase Agreements, (ii) grants of options or issuances of Common
Stock to officers, directors or employees of the Company pursuant to the current
terms of the Company's 1995 Stock Incentive Plan and the Company's 1999 Equity
Incentive Plan and (iii) the conversion of the Series 1 Preferred Stock, the
Series 2 Preferred Stock or the exercise of existing warrants.
19
SECTION 8. Conditions to Purchaser's Obligations.
Purchaser's obligation to purchase Shares hereunder is subject to
satisfaction of the following conditions at the Closing (any of which may be
waived by Purchaser):
8.1 REGISTRATION RIGHTS AGREEMENT.
-----------------------------
The Company shall have entered into a Registration Rights Agreement
with the Purchasers substantially in the form of Exhibit B hereto and it shall
be in full force and effect.
8.2 CERTIFICATES FOR SHARES.
-----------------------
The Purchaser shall concurrently receive the certificates for Shares
contemplated by Section 2(b) hereof.
8.3. ACCURACY OF REPRESENTATIONS AND WARRANTIES.
------------------------------------------
The representations and warranties of the Company contained herein
or in any certificate or document delivered pursuant hereto shall be correct and
complete on and as of the Closing Date with the same effect as though made on
and as of such date.
8.4. COMPLIANCE WITH AGREEMENTS.
--------------------------
The Company shall have performed and complied in all material
respects with all agreements, covenants and conditions contained in the Stock
Purchase Agreements and any other document contemplated hereby or thereby that
are required to be performed or complied with by the Company on or before the
Closing Date.
8.5. OFFICERS' CERTIFICATES.
----------------------
The Purchaser shall have received a certificate dated the Closing
Date and signed by the President or Chief Executive Officer and by the Secretary
or the Treasurer of the Company, to the effect that the conditions of Sections
8.3, 8.4, 8.7 (second sentence only) and 8.9 have been satisfied.
8.6. PROCEEDINGS.
-----------
All corporate and other proceedings in connection with the
transactions contemplated by the Stock Purchase Agreements, and all documents
incident thereto, shall be in form and substance satisfactory to the Purchaser
and its counsel, and the Purchaser shall have received all such originals or
certified or other copies of such documents as the Purchaser or its counsel may
reasonably request.
8.7. LEGALITY; GOVERNMENTAL AND OTHER AUTHORIZATION.
----------------------------------------------
The purchase of and payment for the Shares shall not be prohibited
by any law or governmental order, rule, ruling, regulation, release,
interpretation or opinion applicable to the Purchaser and shall not subject the
Purchaser to any penalty, tax, liability or other onerous condition. Any
necessary consents, approvals, licenses, permits, orders and authorizations of,
and any filings, registrations or qualifications with, any governmental or
administrative agency or other Person, with respect to the transactions
contemplated by the Stock Purchase Agreements shall have been obtained or made
and shall be in full force and effect. The Company shall have delivered to the
Purchaser, upon its reasonable request setting forth what is required, factual
certificates or other evidence, in form and substance satisfactory to the
Purchaser and its counsel, to enable the Purchaser to establish compliance with
this condition.
8.8. NO MATERIAL ADVERSE CHANGE.
--------------------------
There shall have been no material adverse change in the assets,
properties, liabilities, business, affairs, results of operations, condition
(financial or otherwise) or prospects of the Company since September 30, 2000.
8.9. OPINION OF COUNSEL.
------------------
The Purchaser shall have received an opinion, dated the Closing Date
and addressed to the Purchasers, of Blank Rome Xxxxxxx & XxXxxxxx LLP, counsel
for the Company, which opinion shall be in form and substance satisfactory to
the Purchaser and its counsel and shall be to the effect set forth in Exhibit C
hereto.
8.10. OTHER DOCUMENTS AND OPINIONS.
----------------------------
The Purchaser shall have received such other documents and opinions,
in form and substance reasonably satisfactory to the Purchaser and its counsel,
relating to matters incident to the transactions contemplated hereby as the
Purchaser may reasonably request.
SECTION 9. Breach of Representations, Warranties and Covenants
(a) The representations, warranties, covenants and agreements of the
Company and the Purchaser contained in this Agreement and the Registration
Rights Agreement or in any document or certificate delivered pursuant hereto or
thereto or in connection herewith shall survive for a period of two (2) years
from the Closing Date, and shall continue in effect following, the execution and
delivery of the Stock Purchase Agreements and the Registration Rights Agreement,
the closings hereunder and thereunder, any investigation at any time made by the
Purchaser or on its behalf or by any other Person, the issuance, sale and
delivery of the Shares, any disposition thereof and any payment, conversion or
cancellation of the Shares. All statements contained in any certificate or other
document delivered by or on behalf of the Company pursuant hereto shall
constitute representations and warranties by the Company hereunder.
(b) The Company agrees to indemnify and hold the Purchaser harmless
from and against and will pay to the Purchaser the full amount of any loss,
21
damage, liability or expense (including amounts paid in settlement and
reasonable attorneys' fees and expenses) to the Purchaser resulting either
directly or indirectly from any breach of the representations, warranties,
covenants or agreements of the Company contained in any Stock Purchase Agreement
or in the Registration Rights Agreement or any other document or certificate
delivered pursuant hereto or thereto or in connection herewith or therewith.
SECTION 10. Termination
10.1 TERMINATION OF AGREEMENT. Subject to Section 10.2 hereof, this
Agreement may be terminated by notice in writing at any time prior to the
Closing by:
(a) the Purchasers or the Company, if the Closing shall not have
occurred on or before December 4, 2000; PROVIDED, HOWEVER, that the right to
terminate this Agreement under this Section 10.1(a) shall not be available to
any party whose failure to fulfill any obligation under this Agreement has been
the cause of, or resulted in, the failure of the Closing to occur on or before
such date;
(b) the Purchasers or the Company, if any Governmental Authority of
competent jurisdiction shall have issued any judgment, injunction, order, ruling
or decree or take any other action restraining, enjoining or otherwise
prohibiting the consummation of the transactions contemplated by this Agreement
or the Registration Rights Agreement and such judgment, injunction, order,
ruling, decree or other action becomes final and nonappealable; PROVIDED that
the party seeking to terminate this Agreement pursuant to this clause (b) shall
have used its best efforts to have such judgment, injunction, order, ruling or
decree lifted, vacated or denied;
(c) the Purchasers or the Company, if the Purchasers and the Company
so mutually agree in writing.
10.2 EFFECT OF TERMINATION. (a) If this Agreement is terminated in
accordance with Section 10.1 hereof and the transactions contemplated hereby are
not consummated, this Agreement shall become null and void and of no further
force and effect except that (i) the terms and provisions of this Section 10.2
and Sections 11, 12 and 14 hereof shall remain in full force and effect and (ii)
any termination of this Agreement shall not relieve any party hereto from any
liability for any breach of its obligations hereunder.
SECTION 11. Specific Performance
The parties agree that irreparable damage will result in the event
that this Agreement is not specifically enforced, and the parties agree that any
damages available at law for a breach of this Agreement would not be an adequate
remedy. Therefore, the provisions hereof and the obligations of the parties
hereunder shall be enforceable in a court of equity, or other tribunal with
jurisdiction, by a decree of specific performance, and appropriate injunctive
relief may be applied for and granted in connection therewith. Such remedies and
all other remedies provided for in this Agreement shall, however, be cumulative
and not exclusive and shall be in addition to any other remedies that a party
may have under this Agreement or otherwise.
SECTION 12. Expenses
(a) Each party to this Agreement shall pay its own fees and expenses
incidental to the negotiation, preparation and execution of this Agreement and
the Registration Rights Agreement (including legal and accounting fees and
expenses).
(b) The Company agrees to pay, or to cause to be paid, all
documentary, stamp and other similar Taxes, other than transfer taxes payable
upon the transfer by the Purchaser of Shares to a Transferee, levied under the
laws of the United States of America, any state or local Taxing Authority
thereof or therein or any other applicable jurisdiction in connection with the
issuance and sale of the Shares and the execution and delivery of the Stock
Purchase Agreements, the Registration Rights Agreement and any other documents
or instruments contemplated hereby or thereby and any modification of the
Registration Rights Agreement or the Stock Purchase Agreements or any such other
documents or instruments and will hold the Purchaser harmless without limitation
as to time against any and all liabilities with respect to all such Taxes.
(c) The obligations of the Company under this Section 12 shall
survive any Closing hereunder and any termination of the Stock Purchase
Agreements.
SECTION 13. Amendments and Waivers
(a) The terms and provisions of this Agreement may be amended,
waived, modified or terminated only with the written consent of the holders of
more than 70% of outstanding Shares; PROVIDED, HOWEVER, that no such amendment,
waiver, modification or termination shall change this Section 13(a) without the
written consent of the holders of all the Shares then outstanding.
(b) Promptly after obtaining the written consent of the holders as
herein provided, the Company shall transmit a copy of any amendment, waiver,
modification or termination that has been adopted to all holders of Shares then
outstanding, but failure to transmit copies shall not in any way affect the
validity of any such amendment, waiver, modification or termination.
23
SECTION 14. Notices
All notices, requests, demands, consents and other communications
hereunder shall be in writing and shall be delivered by hand or shall be sent by
telex or telecopy (confirmed by registered, certified or overnight mail or
courier, postage and delivery charges prepaid), (i) if to the Company, to Impax
Laboratories, Inc., 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, XX, 00000, Attention:
Xxxxx X. Xxxxxxx, Co-Chief Executive, with a copy to Blank Rome Xxxxxxx &
XxXxxxxx LLP, Xxx Xxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000-0000, Attention: Xxx X.
Xxxxxxx or (ii) if to the Purchaser, at the address indicated on Schedule 1
hereto, or at such other address as a party may from time to time designate as
its address in writing to the other party to this Agreement. Whenever any notice
is required to be given hereunder, such notice shall be deemed given and such
requirement satisfied only when such notice is delivered or, if sent by telex or
telecopier, when received.
SECTION 15. Miscellaneous
(a) The Stock Purchase Agreements, the Registration Rights Agreement
and, upon any closing hereunder together with any further agreements entered
into by the Purchaser and the Company at any closing hereunder, contain the
entire agreement between the Purchaser and the Company, and supersede any prior
oral or written agreements, commitments, terms or understandings, regarding the
subject matter hereof.
(b) Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. To the extent permitted by applicable law, the parties
hereby waive any provision of law that may render any provision hereof
prohibited or unenforceable in any respect.
(c) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns, whether so
expressed or not; PROVIDED, that (a) the Company may not assign any of its
rights, duties or obligations under this Agreement, except with the Purchaser's
written consent, and (b) the Purchaser may assign any of its rights, duties or
obligations under this Agreement to a purchaser of its Shares.
(d) In addition to any assignment by operation of law, the Purchaser
may assign, in whole or in part, any or all of its rights (and/or obligations)
under this Agreement to any permitted transferee of any or all of its Shares and
(unless such assignment expressly provides otherwise) any such assignment shall
not diminish the rights the Purchaser would otherwise have under this Agreement
or with respect to any remaining Shares held by the Purchaser.
(e) No course of dealing and no delay on the part of any party
hereto in exercising any right, power, or remedy conferred by this Agreement
shall operate as a waiver thereof or otherwise prejudice such party's rights,
powers and remedies. No single or partial exercise of any right, power or remedy
conferred by this Agreement shall preclude any other or further exercise thereof
or the exercise of any other right, power or remedy.
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(f) The headings and captions in this Agreement are for convenience
of reference only and shall not define, limit or otherwise affect any of the
terms or provisions hereof.
(g) This Agreement is for the sole benefit of the parties hereto and
their respective successors and permitted assigns and nothing herein, express or
implied, is intended or shall confer upon any other Person any legal or
equitable right, benefit or remedy of any nature whatsoever under or by reasons
of this Agreement.
(h) This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York (other than any conflict of laws rule
that might result in the application of the laws of any other jurisdiction).
(i) This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute one and the same instrument,
and all signatures need not appear on any one counterpart.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.
IMPAX LABORATORIES, INC.
By:
------------------------------------
Name:
Title:
Accepted and Agreed to as of the
date first above written by
the undersigned Purchaser:
XXXXXXX US DISCOVERY FUND III, L.P.
By: Xxxxxxx US Discovery Partners, L.P.,
Its general partner
By: Xxxxxxx US Discovery, LLC
Its general partner
By:
-------------------------------------------------
Name: Xxxxxx X. Xxxx
Title: Member
26
SCHEDULE 1
-------------------------------------------------------------- ----------------- ------------------------
PURCHASER NUMBER OF SHARES AGGREGATE PURCHASE PRICE
-------------------------------------------------------------- ----------------- -------------------------
Xxxxxxx Xxxxx 183,367 $1,100,202
-------------------------------------------------------------- ----------------- -------------------------
Xxxxxx Xxxxxxx Nominees Limited 833,300 $4,999,800
-------------------------------------------------------------- ----------------- -------------------------
Xxxxxxx US Discovery Fund III, L.P. 718,167 $4,309,002
-------------------------------------------------------------- ----------------- -------------------------
Xxxxxxx US Discovery Offshore Fund III, L.P. 115,167 $691,002
-------------------------------------------------------------- ----------------- -------------------------
Ashford Capital Management, Inc. 333,333 $1,999,998
-------------------------------------------------------------- ----------------- -------------------------
Narragansett Asset Management, LLC 166,666 $999,996
-------------------------------------------------------------- ----------------- -------------------------
SDS Capital Partners 50,000 $300,000
-------------------------------------------------------------- ----------------- -------------------------
S/G MedScience Fund, L.P. 100,000 $600,000
-------------------------------------------------------------- ----------------- -------------------------
TOTAL: 2,500,000 $15,000,000
-------------------------------------------------------------- ----------------- -------------------------
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EXHIBIT A Disclosure Schedule
EXHIBIT B Registration Rights Agreement
EXHIBIT C Opinion of Counsel for the Company
28
