Exhibit 10.36
NOTE PURCHASE AGREEMENT
This NOTE PURCHASE AGREEMENT (this "Agreement"), dated as of April 26,
2007, is entered into by and among Somanta Pharmaceuticals, Inc., a Delaware
corporation (the "Company"), and Access Pharmaceuticals, Inc., a Delaware
corporation (the "Lender").
WHEREAS, the Lender has agreed to lend to the Company on the date
hereof the aggregate principal amount of $33,461.89 and may lend to the Company
from time to time after the date hereof an additional aggregate principal
amounts, all as hereinbelow provided.
NOW, THEREFORE, in consideration of the mutual promises and covenants
in this Agreement, the parties hereto agree as follows:
1. (a) Initial Loan Amount. On the date hereof (the
"Closing"), the Lender shall pay, on behalf of the Company, the initial loan
amount of $33,461.89 (the "Loan") by check or wire transfer pursuant to wire
transfer instructions furnished by the Company. At the Closing, the Company
shall issue to the Lender a promissory note in the form of Exhibit A hereto,
initially reflecting outstanding principal in the amount of the Loan (the
"Note"). In addition, at the Closing, the Company shall execute, deliver and/or
authorize, as the case may be, (i) the Patent Collateral Assignment and Security
Agreement in the form of Exhibit B hereto (the "Patent Agreement"), (ii) the
Trademark Collateral Assignment and Security Agreement in the form of Exhibit C
hereto (the "Trademark Agreement"), (iii) the Security Agreement in the form of
Exhibit D hereto (the "Security Agreement"), and (iv) all other instruments and
documents, including, without limitation, Uniform Commercial Code financing
statements, required to be delivered pursuant to the Patent Agreement, the
Trademark Agreement and the Security Agreement (such other instruments and
documents, with the Patent Agreement, the Trademark Agreement and the Security
Agreement, the "Security Documents," which Security Documents, together with
this Agreement, and the Note, are collectively referred to herein as the "Loan
Documents").
(b) Possible Additional Loan Amounts. Upon a request by
the Company in the form of Exhibit E hereto, Lender may, in its sole and
absolute discretion, advance additional Loan amounts requested by the Company,
whereupon Lender shall annotate the Table of Advances and Repayment of Principal
attached to the Note to record such Loan advance, thereby increasing the Loan
and the then outstanding principal balance owed under the Note by the amount of
such advance. The Company hereby authorizes Lender to make such annotations and
such annotations shall be deemed to be amendments to the Note duly authorized
and agreed by the Company.
2. Representations, Warranties and Certain Covenants of the
Lender. The Lender hereby represents, warrants and covenants to the Company as
to itself, as follows:
(a) The Lender understands that the offering and sale of
the Note are intended to be exempt from registration under the
Securities Act of 1933, as amended (the "Securities Act"), by virtue of
Section 4(2) thereof and the provisions of Regulation D promulgated
thereunder and, in accordance therewith and in furtherance thereof, the
Lender further represents and warrants to and agrees with the Company
as follows:
(i) the Lender is purchasing the Note for such
Lender's own account, for investment only, and not with a view
to, or for sale in connection with, any distribution of the
Note in violation of the Securities Act, any rule or
regulation thereunder, or any state securities laws;
(ii) the Lender understands that all documents,
records and books pertaining to this investment have been made
available for inspection by the Lender, the Lender's counsel
and/or the Lender's accountants, the Lender has carefully
reviewed all such documents, and understands and has relied
only on information provided to such Lender in writing by the
Company relating to this investment;
(iii) the Lender and/or the Lender's advisor(s)
have had a reasonable opportunity to ask questions of and
receive answers from a person or persons acting on behalf of
the Company concerning the offering of the Note, and all such
questions have been answered to the full satisfaction of such
Lender;
(iv) the Lender is not relying on the Company
with respect to the investment considerations of the Lender
relating to this investment;
(v) the Lender (A) will not sell, transfer,
pledge, assign or otherwise dispose of the Note without
registration thereof under the Securities Act or pursuant to
an exemption from registration and, if pursuant to an
exemption from registration and if requested by the Company,
receipt by the Company of an opinion of counsel in form and
substance satisfactory to the Company and its counsel to the
effect that such registration is not required, and (B) fully
understands and agrees that the Lender must bear the economic
risk of the Lender's investment for an indefinite period of
time because, among other reasons, the Note has not been
registered under the Securities Act or under the securities
laws of certain states and, therefore, cannot be resold,
transferred, pledged, assigned or otherwise disposed of unless
they are subsequently registered under the Securities Act and
under the applicable securities laws of such states or unless
an exemption from such registration is available; and
(vi) the Lender understands that sales or
transfers of the Note may be made only in compliance with
certain state securities laws, and the Note will bear a legend
reflecting the transfer restrictions imposed thereon and a
notation may be made in the records of the Company restricting
the transfer of the Note in a manner consistent with the
foregoing.
(b) The Lender is an "accredited investor" within the
meaning of Rule 501 of Regulation D, as promulgated by the Securities
and Exchange Commission, as presently in effect.
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3. Representations and Warranties of the Company. The Company
hereby represents and warrants to the Lender as follows as of the date set forth
above (and, in the event of any advance under the Note, as of the date of any
request for an advance under the Note, as applicable):
(a) Corporate Power; Binding Effect; Non-Contravention. The
Company has all requisite power and full legal right to execute and deliver this
Agreement and each of the other Loan Documents, and to perform all of its
obligations hereunder and thereunder in accordance with the respective terms
hereof and thereof. The Loan Documents and the transactions contemplated thereby
have been duly approved and authorized by all requisite corporate action on the
part of the Company, and the Loan Documents have been duly executed and
delivered by the Company and constitute the legal, valid and binding obligations
of the Company, enforceable against it in accordance with their respective
terms. The execution, delivery and performance by the Company of the Loan
Documents in accordance with their respective terms, and the consummation by the
Company of the transactions contemplated thereby, will not result (with or
without the giving of notice or the lapse of time or both) in any conflict,
violation, breach, or default, or the creation of any lien or encumbrance of any
nature ("Liens") upon any assets of the Company, (other than pursuant to the
Security Documents), or the termination, acceleration, vesting or modification
of any right or obligation, under or in respect of (i) the Certificate of
Incorporation or by-laws of the Company, each as amended to date, (ii) any
judgment, decree, order, statute, rule, or regulation binding on or applicable
to the Company, or (iii) any agreement or instrument to which the Company is a
party or by which it or any of its assets is or are bound.
(b) Properties, Leases, Etc. Except with respect to Liens in favor
of the Lender pursuant to the Security Documents, the Company has (A) good and
marketable title to all of the assets and properties owned by it, free and clear
of all Liens, (B) valid title to the lessee interest in all assets and
properties leased by the Company as lessee, free and clear of all Liens, and (C)
full right to hold and use all of its assets and properties used in or necessary
to its businesses and operations, in each case all free and clear of all Liens,
and in each case subject to applicable laws and the terms of any lease under
which the Company leases such assets or properties as lessee. All such assets
and properties are in good condition and repair, reasonable wear and tear
excepted, and are adequate and sufficient to carry on the businesses of the
Company as presently conducted. The Company does not own any real property or
any interest (other than a leasehold interest) in any real property. The
Company's leasehold interests are subject to no Lien, and the Company is in
quiet possession of the properties covered by such leases. The Company's
leasehold interests are subject to no Lien caused by the Company, and the
Company is in quiet possession of the properties covered by such leases.
(c) Tax Matters. The Company has timely filed all tax returns
required to be filed by it, each such tax return has been prepared in compliance
with all applicable laws and regulations, and all such tax returns are true and
accurate in all material respects. All taxes due and payable by the Company have
been paid in respect of any period ending on or before the date hereof, and the
Company will not be liable for any additional taxes in respect of any taxable
period ending on or before the date hereof in an amount that exceeds the
corresponding reserve therefor, if any, reflected in the accounting records of
the Company as of the date hereof. No claim has ever been made by a taxing
authority in a jurisdiction where the Company does not pay tax or file tax
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returns that the Company is or may be subject to taxes assessed by such
jurisdiction. There are no Liens for taxes (other than current taxes not yet due
and payable) on the assets of the Company. There is no action, suit, taxing
authority proceeding, or audit with respect to any tax now in progress, pending,
or, to the Company's knowledge, threatened, against or with respect to the
Company. No deficiency or proposed adjustment in respect of taxes that has not
been settled or otherwise resolved has been asserted or assessed by any taxing
authority against the Company. The Company has not consented to extend the time
in which any tax may be assessed or collected by any taxing authority. The
Company has not requested or been granted an extension of the time for filing
any tax return to a date on or after the Closing. The Company has withheld and
paid all taxes required to have been withheld and paid by it in connection with
amounts paid or owing to any employee, creditor, independent contractor or other
third party.
(d) Governmental and Other Third-Party Consents. Except for
filings or other notices required by applicable federal and state securities
laws (which will be completed by the Company within the applicable periods), no
consent, approval or authorization of, or registration, designation, declaration
or filing with, any governmental authority, federal or other, or any other
person or entity is required on the part of the Company in connection with its
execution, delivery or performance of this Agreement and the Note and its
consummation of the transactions contemplated hereby and thereby, or the
continued conduct of the present business of the Company after the Closing.
(e) Compliance with Securities Laws. Assuming the accuracy of the
representations of the Lender contained in Section 2 hereof, the offer, issuance
and delivery of the Note as contemplated by this Agreement are exempt from the
registration requirements of the Securities Act, and are exempt from
registration or qualification under applicable states' securities laws. Neither
the Company nor anyone authorized by the Company to act on its behalf will
hereafter offer to sell, solicit offers to buy, or sell, any securities of the
Company so as to subject the offer, issuance and sale of the Note to the
registration requirements of the Securities Act.
(f) Brokers. No finder, broker, agent or other intermediary has
acted for or on behalf of the Company in connection with the negotiation or
consummation of the transactions contemplated hereby, and no fee will be payable
by the Company to any such person in connection with such transactions.
(g) Disclosure. No representation or warranty by the Company in
this Agreement or any other Loan Document, in any schedule to this Agreement or
any other Loan Document, or in the Note, contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
required to be stated herein or therein or necessary to make the statements
contained herein or therein not false or misleading.
(h) Other Representations, Warranties and Covenants. All
representations, warranties and other statements of fact made by the Company in
the Agreement and Plan of Merger, by and among the Company, the Lender and the
other parties thereto, dated as of April 18, 2007 (the "Merger Agreement"), are
true and correct. The Company has fully performed all of its covenants and
duties set forth in the Merger Agreement and required to be performed by the
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Company as of the date hereof (and as of the date of any request for an advance
under the Note, as applicable).
4. Indemnification by the Company. The Company agrees to
indemnify and hold harmless the Lender and the officers, directors, and
affiliates and each other person, if any, who controls the Lender within the
meaning of Section 15 of the Securities Act, from and against any and all loss,
liability, claim, damage and expense whatsoever (including, but not limited to,
any and all expenses reasonably incurred in investigating, preparing or
defending against any litigation, commenced or threatened or any claim
whatsoever) arising out of or based upon any false representation or warranty or
breach or failure by the Company to comply with any covenant or agreement made
by the Company herein or in any other Loan Document furnished by the Company to
any of the foregoing in connection with this transaction.
5. Miscellaneous Provisions.
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(a) Amendments, Consents and Waivers.
--------------------------------
(i) This Agreement or any provision hereof may be amended
or terminated by the agreement of the Company and the Lender, and the observance
of any provision of this Agreement that is for the benefit of the Lender may be
waived (either generally or in a particular instance, and either retroactively
or prospectively), and any consent, approval, or other action to be given or
taken by the Lender pursuant to this Agreement, may be given or taken by the
waiver, consent, approval or other action of the Lender; provided, however, that
the Lender may, in writing, waive the benefits of any provision of this
Agreement.
(ii) No course of dealing between the Company and the
Lender will operate as a waiver of any of the Company's or the Lender's rights
under this Agreement. No waiver of any breach or default hereunder will be valid
unless in a writing signed by the waiving party. No failure or other delay by
any person in exercising any right, power, or privilege hereunder will be or
operate as a waiver thereof, nor will any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power, or privilege.
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(b) Notices. All notices, requests, payments, instructions or
other documents to be given hereunder will be in writing or by written
telecommunication, and will be deemed to have been duly given if (i) delivered
personally (effective upon delivery), (ii) mailed by certified mail, return
receipt requested, postage prepaid (effective five business days after
dispatch), (iii) sent by a reputable, established courier service that
guarantees overnight delivery (effective the next business day) or (iv)
dispatched by telecopier if the telecopy is received in complete, readable form
(effective upon dispatch), addressed as follows (or to such other address as the
recipient party may have furnished to the sending party):
(i) If to the Company:
Somanta Pharmaceuticals, Inc.
00000 Xxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxxxx
Telecopier No.: (000) 000-0000
with copies sent at the same time and by the same means to:
Xxxx Xxxxxx
Xxxxx & Xxxxxxx LLP
000 X. Xxxxxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000
Attention: Xxxx Xxxxxx, Esq.
Telecopier No.: (000) 000-0000
(ii) If to Lender, to
Access Pharmaceuticals, Inc.
0000 Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
Telecopier No.: (000) 000-0000
with a copy sent at the same time and by the same means to:
Xxxxxxx XxXxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx III, Esq.
Telecopier No. (000) 000-0000
(c) Counterparts. This Agreement may be executed by the parties in
separate counterparts, each of which when so executed and delivered will be an
original, but all of which together will constitute one and the same instrument.
In pleading or proving this Agreement, it will not be necessary to produce or
account for more than one such complete counterpart.
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(d) Captions. The captions of sections or subsections of this
Agreement are for reference only and will not affect the interpretation or
construction of this Agreement.
(e) Binding Effect and Benefits. This Agreement will bind and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. Except as otherwise provided in this Agreement, the
provisions of this Agreement that are for the Lender's benefit will inure to the
benefit of all permitted transferees of the Note, and the applicable provisions
of this Agreement that bind the Lender will bind all transferees of the Note.
Nothing in this Agreement is intended to or will confer any rights or remedies
on any person other than the parties hereto and their respective successors and
permitted assigns.
(f) Assignment. This Agreement and the rights and obligations
hereunder may not be assigned by the Company without the prior written consent
of the Lender in their sole and absolute discretion. This Agreement and the
rights and obligations hereunder and under the Note may be transferred by the
Lender in the Lender's sole discretion at any time, in whole or in part,
including, without limitation, to affiliates of the Lender, without the consent
of any other party hereto.
(g) Further Assurances. From time to time on and after the
Closing, the Company will promptly execute and deliver all such further
instruments and assurances, and will promptly take all such further actions, as
the Lender may reasonably request in order more effectively to effect or confirm
the transactions contemplated by this Agreement and/or any of the Loan Documents
and to carry out the purposes hereof and thereof.
(h) Severability. No invalidity or unenforceability of any section
of this Agreement or any portion thereof will affect the validity or
enforceability of any other section or the remainder of such section.
(i) Entire Agreement. This Agreement, together with the exhibits
and schedules hereto and the Loan Documents, contains the entire understanding
and agreement among the parties, or between or among any of them, and supersedes
any prior understandings or agreements between or among any of them, with
respect to the subject matter hereof.
(j) Governing Law; Consent to Jurisdiction. This Agreement will be
governed by and interpreted and construed in accordance with the internal laws
of the Commonwealth of Massachusetts, without regards to conflicts of laws
principles. The Company agrees that any action or claim arising out of any
dispute in connection with this Agreement, any rights or obligations hereunder
or the performance or enforcement of such rights or obligations may be brought
in the courts of the Commonwealth of Massachusetts or any federal court sitting
therein, and consents to the non-exclusive jurisdiction of such court and to
service of process in any such suit being made upon the Company by mail at the
address specified herein. The Company hereby waives any objection that it may
now or hereafter have to the venue of any such suit or any such court or that
such suit is brought in an inconvenient court.
(k) Waiver of Jury Trial. THE COMPANY WAIVES ITS RIGHT TO A JURY
TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE
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PERFORMANCE OR ENFORCEMENT OF ANY SUCH RIGHTS OR OBLIGATIONS. Except as
prohibited by law, the Company waives any right which it may have to claim or
recover in any litigation referred to in the preceding sentence any special,
exemplary, punitive or consequential damages or any damages other than, or in
addition to, actual damages. The Company (a) certifies that the Lender nor any
representative, agent or attorney of the Lender has represented, expressly or
otherwise, that the Lender would not, in the event of litigation, seek to
enforce the foregoing waivers or other waivers contained in this Agreement, and
(b) acknowledges that, in entering into this Agreement and the other Loan
Documents to which the Lender is a party, the Lender is relying upon, among
other things, the waivers and certifications contained in this paragraph.
(l) Expenses. The Company agrees to pay on demand all costs and
expenses, including reasonable fees and disbursements of a single counsel for
the Lender, incurred in connection with the negotiation, preparation, execution
and delivery of the Loan Documents and the consummation of the transactions
contemplated thereby, and all costs and expenses, including reasonable fees and
disbursements of a single counsel for the Lender, incurred in connection with
any amendments to or waivers under or in respect of the Loan Documents from time
to time.
[Signatures on Following Page.]
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IN WITNESS WHEREOF, the Company and the Lender have duly executed this
Agreement as an agreement under seal on and as of the date first above written.
COMPANY: SOMANTA PHARMACEUTICALS, INC.
By: /s/ XXXXXXXX X. XXXXXXXXX
------------------------------------
Name: Xxxxxxxx X. Xxxxxxxxx
Title: Executive Chairman
LENDER: ACCESS PHARMACEUTICALS, INC.
By: /s/ XXXXXXX XXXXXX
------------------------------------
Name: Xxxxxxx Xxxxxx
Title: President and CEO
Exhibit A
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Form of Note
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(See attached.)
Exhibit B
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Form of Patent Collateral Assignment and Security Agreement
-----------------------------------------------------------
(See attached.)
Exhibit C
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Form of Trademark Collateral Assignment and Security Agreement
--------------------------------------------------------------
(See attached.)
Exhibit D
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Form of Security Agreement
--------------------------
(See attached.)
Exhibit E
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Form of Request for Loan Advance
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Access Pharmaceuticals, Inc.
0000 Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
Dear Xx. Xxxxxx:
Somanta Pharmaceuticals, Inc. (the "Borrower") hereby requests that Access
Pharmaceuticals, Inc. (the "Lender") advance the principal amount set forth
below, under the promissory note, executed and delivered to by the Borrower as
of April 26, 2007 (the "Note").
Date Advance is
Amount of Advance Requested Wire Instructions Requested to Be Made
--------------------------------------------------------------------------------
In the event the Lender agrees to, and does, advance any amount requested
hereunder, Borrower hereby requests that the Lender amend the Note and annotate
the Table of Advances and Repayment of Principal attached to the Note to reflect
such amount as an additional principal amount payable thereunder.
Sincerely,
Somanta Pharmaceuticals, Inc.
By: __________________________
Name:
Title:
Date: ________________________
