Exhibit 10.1
Form of Stock Purchase Agreement
This STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered
into this 26th day of October, 2001 by and among HealthSpan Sciences, Inc., soon
to be known as Arogen, Inc., a California corporation with its principal
executive offices located at 0000 Xxxxx Xxxxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx 00000
(the "Company"), and Disease Sciences, Inc., a Delaware corporation with its
principal executive offices located at 00000 Xxxxx Xxxx 0, Xxxxx 000, Xxxx
Xxxxx, Xxxxxxx 00000 (the "Buyer").
RECITALS
WHEREAS, the Buyer wishes to purchase and the Company wishes to sell,
upon the terms and conditions stated in this Agreement, such number of shares of
the Company's common stock, with no par value (the "Common Shares"), as shall
represent 51% of the Company's issued and outstanding capital stock and 51% of
the voting rights of the Company's issued and outstanding capital stock (the
"Buyer's Guaranteed Ownership Interest") (i) after giving effect to the
currently issued and outstanding Common Shares, (ii) and assuming the conversion
of all currently outstanding shares of Series A Preferred stock (as hereinafter
described) into Common Shares pursuant to such preferred shares current
designations, rights and preferences, and (iii) but giving no effect to the
exercise of currently outstanding common stock purchase warrants to acquire an
aggregate of Common Shares.
NOW THEREFORE, the Company and the Buyer hereby agree as follows:
1. PURCHASE AND SALE OF COMMON SHARES.
a. Purchase of Common Shares. Subject to the satisfaction (or waiver)
of the conditions set forth in Sections 5 and 6 below, the Company shall issue
and sell to the Buyer and the Buyer agrees to purchase from the Company at
Closing (as hereinafter defined) 9,050,883 Common Shares. The number of Common
Shares is subject to future adjustment as hereinafter set forth in sub-section
(b) below in order to maintain the Buyer's Guaranteed Ownership Interest. As
full and complete payment of the purchase price (the "Purchase Price") of the
Common Shares, at the Closing the Buyer shall issue to the Company four million
(3,800,000) shares of Buyer's restricted common stock, par value $.001 per share
(the "Buyer's Shares").
b. Maintaining Buyer's Guaranteed Ownership Interest. For the period
beginning on the Closing date and ending on the earlier of (i) two years from
the Closing date, or (ii) the effective date of a registration statement filed
by the Company with the Securities and Exchange Commission for an underwritten
initial public offering of the Company's Common Shares (the "Guarantee Period"),
the Buyer has the right to maintain the Buyer's Guaranteed Ownership Interest at
51% by purchasing new Company shares
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at the same price that the extra shares were made available to others. During
the Guarantee Period, the Company will not issue or sell any Common Shares or
other securities or rights convertible into Common Shares or any securities
having any voting rights (collectively, the "Common Share Equivalents") without
the Buyer's prior written consent except (i) upon the exercise of currently
outstanding options and warrants (collectively, the "Option Exercise") to
purchase Common Shares, or (ii) upon the conversion (the "Preferred Stock
Conversion") of currently outstanding shares of Series A Preferred Stock (as
hereinafter defined). If the Company should desire to issue and sell any Common
Shares or Common Share Equivalents for cash, debt or a combination thereof
during the Guaranteed Period (the "Fund Raising Transaction"), and the Buyer
shall have consented to such Fund Raising Transaction, which such consent shall
not be unreasonably withheld, the Buyer shall have the right to purchase such
number of Common Shares from the Company, upon the same terms and conditions as
are sold or issued in the Fund Raising Transaction. If Common Share Equivalents
are sold in the Fund Raising Transaction, the number of Common Shares the Buyer
is entitled to purchase, and the purchase price thereof, shall be adjusted to
give effect to the conversion of the Common Share Equivalents to Common Shares.
The Buyer shall exercise its right within sixty (60) days following the closing
of the Fund Raising Transaction or forfeit such right.
c. Issuance of Additional Common Shares on exercise of options. During
the Guaranteed Period, the Company will prohibit any exercise of warrants or
options to buy Common Shares by management or shareholders with more than 5% of
the outstanding Common Shares of Company. Those holders of warrant or options
with less than a 5% position in the Company will be permitted to exercise their
warrants or options, and the Buyer will have the right to maintain Buyer's
Guaranteed Ownership interest. Within five (5) business days of an Option
Exercise, the Company shall deliver to the Buyer share certificates representing
the additional common shares representing such additional Common Shares as the
Company is obligated to issue so as to maintain the Buyer's Guaranteed Ownership
Interest and deliver those certificates to the Buyer at the address set forth
herein. Such Common Shares shall be deemed owned beneficially and of record,
however, on the date of the exercise of the option, regardless of the date of
issuance of said certificate or certificates, and the Buyer shall have all
rights and privileges as a shareholder of the Company with respect to such
Common Shares as of the date of the exercised option; provided however, the
Buyer has thirty (30) days to pay for said Common Shares at the same price as
the option exercise price or forfeits said Common Shares.
d. Reservation of Common Shares. During the Guarantee Period, the
Company covenants that it will reserve from its authorized and unissued Common
Shares a sufficient number of Common Shares to provide for the issuance of
additional Common Shares to maintain the Buyer's Guaranteed Ownership Interest
at 51%. The Company further covenants that its execution and delivery of this
Agreement shall constitute full authority to its officers who are charged with
the duty of executing stock certificates to execute and issue the necessary
certificates for the additional Common Shares upon the occurrence of any of the
Triggering Events. The Company will take all such reasonable action as may
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be necessary to assure that such Common Shares may be issued as provided herein
without violation of any applicable law or regulation, or of any requirements of
the or any domestic securities exchange upon which the Common Shares may be
listed or quoted.
e. Buyer's Right to Purchase Common Shares. In the event the Company
should undertake an underwritten public offering of its securities, immediately
prior to the effective date of such offering, the Buyer shall be permitted to
purchase such number of Common Shares which, when added to the number of Common
Shares then owned by Buyer, shall equal 35% of the Company's issued and
outstanding Common Shares after giving effect to such offering. The price per
share to be paid by the Buyer shall be equal to the public offering price of the
Company's securities and equal to the other terms and conditions of the
offering. These shares shall be subject to the lock-up agreement as hereinafter
set forth in Section 5 of this Agreement.
f. Closing. The closing of the transactions herein contemplated (the
"Closing") shall occur on the second business day following the satisfaction of
the conditions precedent to such Closing as hereinafter set forth in Sections 5
and 6 of this Agreement at the offices of Atlas Xxxxxxxx, P.A., 000 Xxxx Xxx
Xxxx Xxxxxxxxx, Xxxxx 0000, Xxxx Xxxxxxxxxx, Xxxxxxx 00000, or such other
location as the parties hereto shall mutually agree.
2. BUYER'S REPRESENTATIONS AND WARRANTIES.
The Buyer represents and warrants:
a. Investment Purpose. The Buyer is acquiring the Common Shares for its
own account for investment only and not with a view towards, or for resale in
connection with, the public sale or distribution thereof, except pursuant to
sales registered or exempted under the Securities Act of 1933, as amended (the
"1933 Act"); provided, however, that by making the representations herein, the
Buyer does not agree to hold any of the Common Shares for any minimum or other
specific term and reserves the right to dispose of the Common Shares at any time
in accordance with or pursuant to an effective registration statement or an
exemption under the 1933 Act.
b. Reliance on Exemptions. The Buyer understands that the Common Shares
are being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and the
Buyer's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of the Buyer
to acquire the Common Shares.
c. No Governmental Review. The Buyer understands that no United States
federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Common Shares or the
fairness or
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suitability of the investment in the Common Shares nor have such authorities
passed upon or endorsed the merits of the offering of the Common Shares.
d. Transfer or Resale. The Buyer understands that all offers and sales
of the Common Shares shall only be made pursuant to an effective registration
statement in accordance with the 1933 Act covering the Common Shares for resale
or pursuant to an exemption from registration under the 1933 Act.
e. Legends. The Buyer understands that the certificates representing
the Common Shares, until such time as the resale of the Common Shares may have
been registered under the 1933 Act, shall bear a restrictive legend in
substantially the following form (and a stop-transfer order may be placed
against transfer of such stock certificates):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR
APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE
UNITED STATES OF AMERICA OR TO OR FOR THE ACCOUNT OR BENEFIT OF A U.S.
PERSON, AS DEFINED IN REGULATION S ("REGULATION S") AS PROMULGATED
UNDER THE 1933 ACT (OTHER THAN DISTRIBUTORS AS DEFINED IN REGULATION S)
DURING THE RESTRICTED PERIOD (AS DEFINED IN REGULATION S) UNLESS (1)
THE SECURITIES ARE REGISTERED PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE 1933 ACT OR (2) THE SECURITIES
ARE OFFERED AND SOLD PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE 1933 ACT.
Subject to the provisions of Section 6 hereof, the legend set forth
above shall be removed and the Company shall issue a certificate without such
legend to the holder of the Common Shares upon which it is stamped, if, unless
otherwise required by state securities laws, (i) such Common Shares are
registered for resale under the 1933 Act and the Common Shares are being sold
pursuant to a registration statement, (ii) in connection with a sale
transaction, such holder provides the Company (and its counsel) with an opinion
of counsel, in a generally acceptable form, to the effect that a public sale,
assignment or transfer of the Common Shares may be made without registration
under the 1933 Act, or (iii) such holder provides the Company (and its counsel)
with reasonable assurances that the Common Shares can be sold pursuant to Rule
144 without any restriction as to the number of securities acquired as of a
particular date that can then be immediately sold.
f. Validity; Enforcement. This Agreement has been duly and validly
authorized, executed and delivered on behalf of the Buyer and is a valid and
binding agreement of the Buyer enforceable against the Buyer in accordance with
its terms, subject as to enforceability to general principles of equity and to
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and
other similar laws relating to, or affecting generally, the enforcement of
applicable creditors' rights and remedies.
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3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the Buyer:
a. Organization and Authorizations. The Company has been duly organized
and is validly existing as a corporation in good standing under the laws of the
State of California, and has all requisite power and authority to own or lease
and operate its properties and to conduct its businesses as presently and
proposed to be conducted. The Company has no Subsidiaries as of the date of this
Agreement. For the purpose of this Agreement, "Subsidiaries" means any entity in
which the Company, directly or indirectly, owns a controlling position of
capital stock or holds a controlling position of an equity or similar interest.
The Company is duly qualified to transact business as a foreign corporation and
is in good standing under the laws of each jurisdiction wherein the location of
its properties or the character of its operations make such qualification
necessary, except where the failure to be so qualified would not have a Material
Adverse Effect on the Company. As used in this Agreement, "Material Adverse
Effect" means any material adverse effect on the business, properties, assets,
operations, results or operations or financial condition of the Company, if any,
taken as a whole, or on the transactions contemplated hereby or by the
agreements and instruments to be entered into in connection herewith, or on the
authority or ability of the Company to perform its obligations under the
Transactional Documents (as hereinafter defined). The Company has all necessary
authorizations, approvals, licenses, permits, franchises and orders (the
"Authorizations") of and from all governmental officials and bodies to own or
lease and operate its properties and to conduct its businesses as presently and
proposed to be conducted, except for those Authorizations the failure of which
to obtain would not have a Material Adverse Effect on the Company. The conduct
of business by the Company as presently and proposed to be conducted is not
subject to continuing oversight or supervision by any governmental official or
body of the United States or any other jurisdiction wherein the Company conducts
or proposes to conduct such business, except as described on Schedule 3a hereto.
There are no outstanding orders, judgments or decrees of any court, governmental
agency or other tribunal naming the Company and enjoining the Company from
taking, or requiring the Company to take, any action, or to which the Company,
its properties or businesses are bound or subject.
b. Corporate Power and Authority; Binding Agreement. Attached as
Exhibit A are copies of the Company's articles of incorporation, as amended
("Articles of Incorporation"), by-laws, as amended ("Bylaws"), and minutes of
all meetings of the Company's board of directors and shareholders, or written
consents in lieu thereof, from the date of the Company's incorporation through
the date of this Agreement (collectively, the "Company Minutes"). The Company
has the requisite corporate power and authority to enter into and perform this
Agreement and each of the other agreements as may be entered into by the parties
hereto in connection with the transactions contemplated by this Agreement
(collectively, the "Transactional Documents") and to sell the Common Shares as
herein contemplated. This Transactional Documents have been duly authorized,
executed and delivered on behalf of the Company and is the valid and binding
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obligation of the Company, enforceable in accordance with their respective
terms, subject only to the effect, if any, of bankruptcy laws or similar laws
relating to the insolvency of debtors and to principles of equity. The Company
is not in violation of its Articles of Incorporation or Bylaws or any applicable
statute, rule, regulation or ordinance, except as may be set forth on Schedule
3b hereto, nor is the Company in default under any order, writ, judgment,
injunction or decree of any court, government agency or arbitration tribunal
applicable to the Company. Xxxxxx Xxxxxxxxxxxx, Ph.D. is an officer and director
of both the Company and the Buyer. The Company has satisfied all applicable
provisions of the California Corporations Code with respect to any approvals
necessary to execute this Agreement and the Transactional Documents and to
consummate the transactions herein and therein contemplated with respect to
transactions with affiliates.
c. No Conflict. The execution and delivery of, and the compliance with,
this Agreement by the Company and the consummation by the Company of the
transactions herein contemplated will not, with or without the giving of notice
or the lapse of time, or both: (i) result in a material conflict with or breach
of any of the material terms or provisions of, or constitute a default under, or
result in the modification or termination of, or require consent under, or
result in the creation or imposition of any lien, security interest, charge or
encumbrance upon any of the material properties or assets of the Company
pursuant to the terms of, any agreement or instrument to which the Company is a
party or by which the Company may be bound or to which any of the property or
assets of the Company is subject, or (ii) violate the Company's Articles of
Incorporation or Bylaws or (iii) have any material effect on any material
license, permit, judgment, decree, order, statute, rule or regulation applicable
to the Company or any of its properties or businesses.
d. Issuance of Common Shares. The Common Shares are duly authorized
and, upon issuance in accordance with the terms hereof, shall be (i) validly
issued, fully paid and non-assessable and (ii) free from all taxes, liens and
charges with respect to the issue thereof. The Buyer will not be subject to
personal liability by reason of being a holder of the Common Shares, and none of
the Common Shares are subject to the preemptive rights of any shareholder of the
Company.
e. Company Agreements. Attached as Exhibit C are copies of all
agreements, contracts or other documents binding the Company or its assets or to
which the Company is a party (collectively, the "Company Agreements.). No
material default exists in the due performance or observance of any term,
covenant or condition of the Company Agreements, other than as set forth in
Schedule 3e hereto; the Company Agreements are in full force and effect in
accordance with their respective terms; and no other party to any thereof has
instituted or, to the best of the Company's knowledge after due inquiry,
threatened any action or proceeding wherein the Company would or might be
alleged to be in default thereunder. The Company is not a party to any contract
or instrument materially affecting its financial condition, business,
management, properties or prospects, other than those set forth on Schedule 3e
hereto.
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f. Capitalization; Shareholders. The authorized capital stock of the
Company consists of 100,000,000 Common Shares and 10,000,000 shares of preferred
stock, with no par value per share issuable in such series and with such
designations, rights and preferences as the Company's Board of Directors may
authorize from time to time (the "Preferred Stock"). As of the date hereto, the
Board of Directors has authorized a series of 2,000,000 shares of Preferred
Stock which has been designated Series A Preferred Stock ("Series A Preferred),
the designations, rights and preferences of which are set forth in Schedule 3b
hereof. Attached hereto as Exhibit D are copies of all options, warrants or
other rights calling for issuances by the Company of shares of its capital stock
and stock option, stock purchase or similar plans of the Company (collectively,
the "Options"). As of the date of this Agreement, there are Common Shares and
Series A Preferred shares issued and outstanding, all of which have been duly
authorized and are validly issued and fully paid and non-assessable. None of the
outstanding Common Shares, Series A Preferred shares or Options have been issued
in violation of the preemptive rights of any shareholder of the Company. Except
as set forth on Schedule 3f, there are no commitments, plans or arrangements of
the Company to issue any shares of capital stock of the Company or any
securities convertible into or exchangeable for such capital. Except as set
forth on Schedule 3h hereof, no holder of any of the Company's securities has
any (a) rights, "demand," "piggy-back" or otherwise, to have such securities
registered under the 1933 Act; (b) pre-emptive rights; (c) anti-dilution rights;
or (d) rights of first refusal. Notwithstanding anything contained to the
contrary in any Company Minutes, the voting rights of the Company's shareholders
are as set forth in the Articles of Incorporation and pursuant to applicable
California law. There are no voting trust or similar agreements to which the
Company is a party or to the knowledge of the Company, after due inquiry, to
which any of its shareholders is a party.
g. Litigation. There is no action, suit, proceeding, inquiry or
investigation before or by any court, public board, government agency,
self-regulatory organization or body pending litigation or governmental
proceeding pending, or to the best of the Company's knowledge, after due
inquiry, threatened against the Company or involving its properties or business
or the Common Shares or any of the Company's officers or directors in their
capacities. To the best knowledge of the Company, after due inquiry, there is no
basis for any such action, suit, proceeding, arbitration, claim or inquiry.
h. Intellectual Property. Schedule 3h sets forth the trademarks,
tradenames, service marks, service xxxx registrations, patents, patent rights,
patent applications, copyrights, inventions and licenses (collectively, the
"Intellectual Property"). The Company owns or possess adequate rights or
licenses to use all Intellectual Property, and all governmental authorizations,
trade secrets and rights necessary to conduct its businesses as now conducted.
None of the Company's Intellectual Property, government authorizations, trade
secrets or other intellectual property rights have expired or terminated, or are
expected to expire or terminate within two years from the date of this
Agreement. The Company does not have any knowledge after due inquiry of any
infringement by the Company of trademark, trade name rights, patents, patent
rights, copyrights, inventions, licenses, service names, service marks, service
xxxx registrations, trade secret or other similar rights of others. The Company
has not and is not infringing on the rights of others with respect to the
Intellectual Property and neither the Company, nor any officer or director of
the Company has received any notice of conflict with the asserted rights of
others with respect to the Intellectual Property in any respect and knows no
basis therefore after due inquiry.
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i. Properties. Schedule 3i sets forth all real and personal property
owned or leased by the Company. The Company has either good and marketable title
to, or valid and enforceable leasehold interests in, all items of real property
and personal property which are set forth in Schedule 3i to be owned or leased
by it, in each case free and clear of all liens, encumbrances, claims, security
interests, subleases and defects, other than those referred to in Schedule 3i.
The Company has the right to operate all of its facilities in its present
locations and the operation of such facilities does not violate the material
provisions of any lease with respect thereto which the Company is a party. The
Company is not in violation of any applicable law, ordinance, regulation, order
or requirement relating to its owned or leased properties and it has not
received any notice of an alleged violation.
j. Taxes. Except as set forth on Schedule 3j hereto, the Company has
filed with the appropriate federal, state and local governmental agencies, and
all foreign countries and political subdivisions thereof, all tax returns,
including franchise tax returns, which are required to be filed or has duly
obtained extensions of time for the filing thereof and has paid all taxes shown
on such return and all assessments received by it to the extent that the same
have become due; and the provisions for income taxes payable, if any, shown on
the Financial Statements (as hereinafter defined) are sufficient for all accrued
and unpaid foreign and domestic taxes, whether or not disputed, and for all
periods to and including the dates of such Financial Statements (as hereinafter
defined). Except as set forth on Schedule 3j hereto, the Company has not
executed or filed with any taxing authority, foreign or domestic, any agreement
extending the period for assessment or collection of any income taxes and is not
a party to any pending action or proceeding by any foreign or domestic
governmental agency for assessment or collection of taxes; and no claims for
assessment or collection of taxes have been asserted by the Company.
k. Foreign Corrupt Practices Act. The Company has not, directly or
indirectly, at any time (i) made any contributions to any candidate for
political office in violation of law or failed to disclose fully any such
contribution, or (ii) made any payment to any state, federal or foreign
governmental office or official, or other person charged with similar public or
quasi-public duties, other than payments or contributions required or allowed by
applicable law. The Company's internal accounting controls and procedures are
sufficient to cause the Company to comply in all material respects with the
Foreign Corrupt Practices Act of 1977, as amended.
l. Officers and Directors. Schedule 3l sets forth the Company's
officers and directors as of the date of this Agreement, and a schedule of all
compensation (including cash, stock appreciation rights, stock options or any
other instrument of value) paid or payable to such individual by reason of his
or her appointment or election to such positions. All such officers and
directors have been duly and properly elected pursuant to the
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provisions of applicable state law, the Company's Articles of Incorporation and
Bylaws. There are no agreements or understandings with any third parties by
which such parties will be appointed or elected directors or officers of the
Company. Each such officer and director listed on Schedule 3l hereto has full
power and authority to fulfill his office as contemplated by applicable state
law, the Articles of Incorporation and the Bylaws. The Company represents that
no director, executive officer, or key employee of the Company has been
convicted or any felony, experienced a personal bankruptcy, or been an officer,
director, or key employee of any company that during their tenure with such
company experienced any bankruptcy, or had any trustee, receiver, or conservator
appointed with respect to its business or assets.
m. Employee Relations. Xx. Xxxxxx Villeponteau and Xx. Xxxxxx Xxxx are
the Company's sole employees as of the date of this Agreement. Xx. Xxxxxxxxxxxx
is also an employee, an officer and a member of the Board of Directors of the
Buyer. In the time split between the duties owed the Company and the Buyer, Xx.
Xxxxxxxxxxxx devotes approximately half of his time to the business and affairs
of the Company and approximately half of his time to the business and affairs of
the Buyer. Xx. Xxxxxxxxxxxx also provides multiple services to NanoLife, a start
up business that does not compete with either the Company or the Buyer. The
Company is not involved in any union labor dispute nor, to the knowledge of the
Company after due inquiry, is any such dispute threatened. Except as may be
reflected as due by the Company on the Financial Statements (as hereinafter
defined), all compensation payable by the Company to its employees has been -
paid in full through the date of this Agreement.
n. Employment Agreements. Exhibit E contains copies of all employment
agreements to which the Company is party (the "Employment Agreements"). All such
Employment Agreements remain in full force and effect and neither the Company
nor the employee is in default under any of the terms thereof, other than a
default which may be caused by the Company's failure to pay the compensation due
under the Employment Agreements as contemplated therein. The amounts of such
accrued but unpaid compensation through September 30, 2001 are contingent on
future large scale financing in excess of $2,000,000 and will be footnoted in
the Financial Statements (as hereinafter defined) when delivered to the Buyer
pursuant to Section 6 hereof. The execution and delivery of the Transactional
Documents and the sale of the Common Shares as herein contemplated will not
result if an event of default under any Employment Agreement, nor will it give
rise to any change of control provisions as may be contained therein or
otherwise have any effect whatsoever on any Employment Agreement. However, it is
understood that Dr. Villeponteau's and Xx. Xxxx'x appointments are both
half-time, commensurate with the lower pay.
o. Environmental Laws. The Company (i) is in compliance with any and
all applicable foreign, federal, state and local laws and regulations relating
to the protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental Laws"),
(ii) has received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct its businesses, and (iii) is in
compliance with all terms and conditions of any such permit, license or
approval.
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p. Regulatory Permits. Except as set forth on Schedule 3p hereto, the
Company possess all certificates, authorizations and permits issued by the
appropriate federal, state or foreign regulatory authorities necessary to
conduct its businesses, and the Company has not received any notice of
proceedings relating to the revocation or modification of any such certificate,
authorization or permit.
q. Transactions With Affiliates. Except as set forth on Schedule 3q
hereto, none of the officers, directors, or controlling shareholders of the
Company is presently a party to any transaction with the Company (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Company after due inquiry, any corporation, partnership, trust
or other entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner.
r. Poison Pill Provisions. The Company does not have a stockholder
rights plan. None of the transactions contemplated herein or the acquisition of
Common Shares pursuant hereto, will in any event under any circumstance trigger
the poison pill provisions of any other or subsequently adopted plan or
agreement, or a substantially similar occurrence under any successor or similar
plan.
s. No Brokers. Except as otherwise set forth herein, the Company has
taken no action which would give rise to any claim by any person for brokerage
commissions, finder's fees or similar payments by the Company or the Buyer
relating to this Agreement or the transactions contemplated hereby.
t. Internal Accounting Controls. The Company maintains a system of
internal accounting controls sufficient, in the judgment of the Company's
management, to provide reasonable assurance that (i) transactions are executed
in accordance with management's general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability, (iii) access to assets is permitted only in
accordance with management's general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
u. No Reliance on Buyer. The Company acknowledges and agrees that the
Buyer is acting solely in the capacity of an arm's length purchaser with respect
to this Agreement and the performance under the Transactional Documents and the
transactions contemplated hereby and thereby. The Company further acknowledges
that the Buyer is not acting as a financial advisor or fiduciary of the Company
(or in any similar capacity) with respect to this Agreement and the
Transactional Documents and the transactions contemplated hereby and thereby.
The Company further represents to the Buyer that the Company's decision to enter
into this Agreement and the performance hereunder and under the Transactional
Documents has been based solely on the independent evaluation by the Company and
its representatives.
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v. Acknowledgment of Dilution. The number of Common Shares issuable
pursuant to this Agreement may increase substantially in certain circumstances
as set forth herein. The Company acknowledges that its obligation to issue
Common Shares in accordance with this Agreement and the Transactional Documents
is absolute and unconditional, regardless of the dilution that such issuance may
have on other shareholders of the Company.
w. Buyer's Shares. The Company acknowledges that (i) the Buyer is a
publicly- traded company whose shares of common stock are quoted on the OTC
Bulletin Board and are registered under Section 12g of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). The Company further acknowledges
that there is a limited public market for Buyer's common stock and that an
active or liquid trading market for the Buyer's securities may never develop.
The Company understands that it may be difficult for it to sell the Buyer's
Shares in the future, and, as a result, an investment in the Buyer's Shares may
be illiquid and the Company may not be able to liquidate the Buyer's Shares
readily or at all when it desires to sell. The Buyer has made available to the
Company the opportunity to examine such additional documents from the Buyer and
to ask questions of, and receive full answers from, the Buyer concerning, among
other things, the Buyer, its financial condition, its management, its prior
activities and any other information which the Company considers relevant or
appropriate in connection with entering into this Agreement. The Company
acknowledges that the Buyer's Shares have not been registered under the 1933 Act
and the Buyer has no obligation to so register such shares.
The Company represents that it is familiar with the provisions of Rule 144
promulgated under the 1933 Act, and understands that in the event all of the
applicable requirements of Rule 144 are not satisfied, registration under the
1933 Act or some other exemption from the registration requirements of the 1933
Act will be required in order to eventually dispose of the Buyer's Shares, and
that the Company may be required to hold the Buyer's Shares received under this
Agreement for a significant period of time prior to reselling them. The Company
is capable of assessing the risks of an investment in the Buyer's Shares and is
fully aware of the economic risks thereof. The Company is acquiring the Buyer's
Shares for its own account and not with a view to distribution in violation of
any securities laws. The Buyer acknowledges the Company's obligation to transfer
200,000 of the Buyer's Shares to Granite Financial Group, Inc. as described in
this Agreement. The Company has no present intention to sell the Buyer's Shares
in violation of federal or state securities laws and the Company has no present
arrangement (whether or not legally binding) to sell the Buyer's Shares to or
through any person or entity.
x. Prior Offerings. The Company has never undertaken or consummated any
public offerings of its securities. Schedule 3x sets forth all sales by the
Company of shares of its capital stock or Options made pursuant to exemption
11
from registration under the 1933 Act, and contains copies of all subscription
agreements, purchaser questionnaires, and offering memoranda related thereto
(collectively, the "Prior Offerings"). The offering memoranda for each such
Prior Offering has been accurately prepared by the Company in conformity with
the requirements of Regulation D, the 1933 Act and the requirements of all other
rules and regulations of the Securities Exchange Commission relating to the
private offerings (as defined in Regulation D). Except as set forth in on
Schedule 3x hereto, all Prior Offerings were made and sold in reliance upon the
registration exemption provided by Regulation D in a transaction not involving
any public offering. The offering memoranda used in the Prior Offerings (i)
described the material aspects of an investment in the Company; and (ii) did not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they are made, not misleading. No
general solicitation was used by the Company in the Prior Offerings. To the
Company's knowledge, after due inquiry, there are no events or circumstances
related to the Prior Offerings which would give rise to any right of rescission
of such sales, and no request or demand has been made by any purchaser in the
Prior Offerings for a rescission of his or her purchase therein. Except as set
forth on Schedule 3x, none of the Company's shareholders have been granted any
registration rights, or have any understanding or agreement with the Company
whereby the Company will file a registration statement with the Securities and
Exchange Commission.
y. Investment Banking Agreements. The Company is not a party to any
investment banking, financing, finder's fee or similar agreements, other than a
financial advisory agreement with Granite Financial Group, Inc., pursuant to
which upon the closing of this agreement, Buyer will issue 200,000 of the
Buyer's Common Shares to Granite Financial Group, Inc. as full and complete
compensation for services rendered by it to the Company in connection with the
transactions contemplated by this Agreement.
z. Section 12 Status. The Company is not required to register its
securities pursuant to any provision of the Exchange Act.
4. COVENANTS.
a. Best Efforts. Each party shall use its reasonable best efforts
timely to satisfy each of the conditions to be satisfied by it as provided in
Sections 5 and 6 of this Agreement.
b. Activities. Except as contemplated by this Agreement or as
expressly agreed to in writing by the Company, during the period from the date
of this Agreement to the Closing, the Company will conduct its operations
substantially as presently operated and only in the ordinary course of business,
in a normal manner consistent with past practices and will use commercially
reasonable efforts to preserve intact its business organization, to keep
available the services of its officers and employees and to maintain
satisfactory relationships with suppliers, distributors, customers and others
having business
12
relationships with it and will take no action which would adversely affect its
ability to consummate the transactions contemplated by this Agreement. Without
limiting the generality of the foregoing, except as otherwise expressly provided
in this Agreement, prior to the Closing, the Company will not, without the prior
written consent of the Buyer:
(i) amend its Articles of Incorporation or Bylaws;
(ii) authorize for issuance, issue, sell, deliver, grant any
options for, or otherwise agree or commit to issue, sell or deliver any shares
of its capital stock or any securities convertible into shares of its capital
stock;
(iii) recapitalize, split, combine or reclassify any shares of
its capital stock; declare, set aside or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in respect of
its capital stock; or purchase, redeem or otherwise acquire any shares of its
own capital stock;
(iv) create, incur, assume, maintain or permit to exist any
long-term debt or any short-term debt for borrowed money other than under
existing lines of credit, relating to purchase money security interests or
obligations as a lessee under leases recorded as capital leases, each as
incurred in the ordinary course of business; (ii) assume, guarantee, endorse or
otherwise become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other person, except in the ordinary
course of business and consistent with past practices; or (iii) make any loans,
advances or capital contributions to, or investments in, any other person;
(v) increase in any manner the rate of compensation of any of
its directors, officers or other employees, except in the ordinary course of
business and in accordance with its customary past practices or as otherwise may
be contractually required; or (ii) pay or agree to pay any bonus, pension,
retirement allowance, severance or other employee benefit except as required
under currently existing employee benefit plans;
(vi) sell or otherwise dispose of, or encumber, or agree to
sell or otherwise dispose of or encumber, any assets other than inventory in the
ordinary course of business;
(vii) enter into any other agreement, commitment or contract,
except agreements, commitments or contracts for the purchase, sale or lease of
goods or services in the ordinary course of business consistent with past
practice;
(viii) authorize, recommend, propose or announce an intention
to authorize, recommend or propose, or enter into any agreement in principle or
an agreement with respect to, any (A) plan of liquidation or dissolution, (B)
acquisition of a material amount of assets or securities, (C) disposition of a
material amount of assets or securities, or (D) material change in its
capitalization, or enter into a material contract or any amendment or
modification of any material contract or release or relinquish any material
contract right;
13
(ix) engage in any unusual or novel method of transacting
business or change any accounting procedure or practice or its financial
structure; or
(x) authorize or enter into any formal or informal agreement
or otherwise make any commitment to do any of the foregoing or to take any
action which would make any of the representations or warranties of the Company
contained in this Agreement untrue or incorrect or prevent the Company from
performing or cause the Company not to perform its covenants hereunder in any
material respect or result in any of the conditions to the Closing set forth
herein not being satisfied.
c. Issuance of Capital Stock by the Company. Until such time as the
Company shall have undertaken an underwritten public offering of its securities,
or consummated a transaction for the sale of all or substantially all of its
assets or capital stock (the "Separation Event"), the Buyer will not vote its
Common Shares at any meeting of the Company's shareholders to issue any Common
Shares, warrants or securities convertible into Common Shares, unless either (i)
Xxxxxx Xxxxxxxxxxxx, Ph.D. and Xx. Xxxxxx Xxxx, members of the Company's board
of directors, or (ii) a majority of the holders of all other issued and
outstanding shares entitled to vote at such meeting, excluding the Buyer's
Shares and the Common Shares owned by Xx. Xxxxxxxxxxxx and Xx. Xxxx, shall have
voted "FOR" such issuance.
d. Reservation of Shares. The Company shall take all action necessary
to at all times have authorized, and reserved for the purpose of issuance, a
sufficient number of authorized but unissued Common Shares to provide for
additional issuances to the Buyer during the Guarantee Period so as to retain
the Buyer's Guaranteed Ownership Interest at 51%. The issuance of such
additional Common Shares shall be duly authorized, and when issued in accordance
with this Agreement will be validly issued, fully paid and non-assessable and
free of all taxes, liens, charges and preemptive rights with respect to the
issue thereof
e. Management of the Company. Until a Separation Event shall have
occurred, the Buyer agrees to vote its Common Shares "FOR" the election of Xx.
Xxxxxx Villeponteau and Xx. Xxxxxx Xxxx as members of the Company's Board of
Directors as long as such individuals are nominated for such positions, unless
(i) all disinterested directors shall have determined that such individual shall
have engaged in conduct which is reasonably determined to have been
substantially detrimental to the best interests of the Company, or (ii) the
holders of at least 60% of the ^issued and outstanding Common Shares of the
Company, excluding the Buyer's Shares.
f. Ownership of Intellectual Property. Subject to the terms and
conditions of that certain Research and Development Agreement dated October 14
2001, by and between the parties, the parties hereto agree that the Company's
current and future Intellectual Property, including patent filings related to
N-propyl Gallate and any other age
14
related disease drugs that are developed prior to the occurrence of the
Separation Event, are the sole property of the Company, with all rights thereof
inuring to the benefit of the Company. The one exception is that the Buyer will
retain the intellectual property rights for the sole indication of prion-caused
diseases. The Company will not sell, assign, transfer, license or otherwise
dispose of such Intellectual Property prior to the occurrence of a Separation
Event other than in the ordinary course of business without the consent of the
holders of at least 60% of the issued and outstanding Common Shares of the
Company, excluding the Buyer's Shares.
g. Use of Company Funds. he parties hereto agree that cash derived
from the Company's business and operations is to be used solely for the payment
of direct costs and expenses incurred in the Company's research and development
activities.
h. Separation Event. The parties hereto acknowledge that upon the
expiration of the Guarantee Period the Company will result in the occurrence of
a Separation Event. The Buyer agrees not to take any actions that could be
detrimental to the Company's successful conclusion of a Separation Event.
i Payment of Compensation. Schedule 4(i) sets forth all compensation
due former employees of the Company through the date of this Agreement, all such
compensation being due in payment of bona fide services previously rendered to
the Company. The Company will use its best efforts to secure the written
agreement prior to Closing of each of these individuals to defer the payment of
such compensation until the earlier of such time as the Company shall have
received a lump sum investment of at least $2 million from a corporate
partnership or upon the occurrence of a Separation Event.
5. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL. The obligation of the
Company hereunder to issue and sell the Common Shares to the Buyer at the
Closing is subject to the satisfaction, at or before the Closing Date, of each
of the following conditions, provided that these conditions are for the
Company's sole benefit and may be waived by the Company at any time in its sole
discretion by providing the Buyer with prior written notice thereof:
a. The Buyer shall have executed each of the Transactional Documents to
which it is a party and delivered the same to the Company for the transactions
contemplated by this Agreement;
b. The Buyer shall have delivered to the Company a lock-up agreement,
in the form attached hereto as Exhibit F, agreeing in the event that the Company
undertakes an underwritten public offering not to sell, transfer or otherwise
dispose of the Common Shares following such offering for a period no longer than
that which is agreed upon by the Company's officers, directors and principal
shareholders in conjunction with such offering.
c. The representations and warranties of the Buyer shall be true and
correct in all material respects as of the date when made and as of the Closing
Date as though made
15
at that time (except for representations and warranties that speak as of a
specific date), and the Buyer shall have performed, satisfied and complied in
all material respects with the covenants, agreements and conditions required by
this Agreement to be performed, satisfied or complied with by the Buyer at or
prior to the Closing Date; and
d. The Buyer shall have delivered to the Company such other documents
relating to the transactions contemplated by this Agreement as the Company or
its counsel may reasonably request; and
e. The Buyer shall have executed and delivered to the Company the
certificates representing the Buyer's Shares being tendered as the Purchase
Price by the Buyer at the Closing.
6. CONDITIONS TO BUYER'S OBLIGATION TO PURCHASE. The obligation of the
Buyer hereunder to purchase the Common Shares at the Closing is subject to the
satisfaction, at or before the Closing Date, of each of the following
conditions, provided that these conditions are for the Buyer's sole benefit and
may be waived by the Buyer at any time in its sole discretion by providing the
Company with prior written notice thereof:
a. The Company shall have executed each of the Transactional Documents
and delivered the same to the Buyer;
b. At least five (5) business days prior to Closing, the Company shall
have delivered all schedules and exhibits referenced in this Agreement and
required to be attached to this Agreement pursuant to its terms, and the Buyer
shall be satisfied with the content and scope of such schedules and exhibits in
its sole discretion;
c. At least five (5) business days prior to Closing, the Company shall
have delivered audited financial statements for the year ended December 31, 2000
and for the interim period from January 1, 2001 through September 30, 2001
(collectively, the "Financial Statements"). The Financial Statements shall have
been prepared in accordance with generally accepted accounting principles,
consistently applied, during the periods involved except as may be otherwise
indicated in such Financial Statements or the notes thereto and fairly present
in all material respects the financial position of the Company as of the dates
thereof and the results of its operations and cash flows for the periods then
ended. The Financial Statements shall be accompanied by an Officer's Certificate
attesting to the foregoing and that after due inquiry, no event, liability,
development or circumstance has occurred or exists, with respect to the Company
or its business, properties, operations or financial condition, that would be
required to be disclosed by the Company in the Financial Statements.
d. The Company shall have delivered an Officer's Certificate stating
that there has been no material adverse change since September 30, 2001 in the
financial position or results of operations of the Company or in its business,
affairs, and the capitalization,
16
properties, business and management of the Company conform in all material
respects to the descriptions thereof contained herein.
e. The Company shall have delivered an investment letter signed by
Granite Financial Group, Inc. in the form attached hereto as Exhibit H.
f. The Company shall have delivered a waiver letter in the form
attached hereto as Exhibit I executed by each of Xx. Xxxxxxxxxxxx and Mr. Ridz
(i) waiving all compensation due them under their respective Employment
Agreements through the Closing until the earlier of such time as the Company
shall have received a lump sum investment of at least $2 million from a
corporate partnership or upon the occurrence of a Separation Event, (ii) stating
that the Employment Agreement is not in default and the consummation of the
transactions contemplated by this Agreement will not result in an event of
default or require the Company to take any of the actions set forth in Section
3.2 of the Employment Agreement, and (iii) agreeing that the possible failure of
the Company to compensation such employee pursuant to the terms of the
Employment Agreement from the Closing until the occurrence of a Separation Event
shall not be deemed to be a default under the Employment Agreement.
g. The representations and warranties of the Company shall be true and
correct, in all material respects, as of the date when made and as of the
Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date) and the Company shall have
performed, satisfied and complied, in all material respects, with the covenants,
agreements and conditions required by the Transactional Documents to be
performed, satisfied or complied with by the Company at or prior to the Closing
Date;
h. The Company shall have executed and delivered to the Buyer the
certificates representing Common Shares (in such denominations as the Buyer
shall request) for the Common Shares being purchased by the Buyer at the
Closing;
i. There shall have been no material adverse change in the business,
operations, assets, prospects, financial condition or results of operations of
the Company;
j. No preliminary or permanent injunction, or other order decreed by
any federal or state court which prevents the consummation of this Agreement
shall have been issued and remain in effect (each party agrees to use its
reasonable efforts to have any such injunction, order or decree lifted). No
governmental authority shall have enacted any statute, rule or regulation that
would prevent consummation of this Agreement or make the transactions
contemplated hereby illegal; and
k. The Company shall have delivered to the Buyer such other documents
relating to the transactions contemplated by this Agreement as the Buyer or its
counsel may reasonably request.
17
l. The Company shall have delivered to the Buyer a lock-up agreement,
in the form attached hereto as Exhibit G, agreeing in the event that the Buyer
undertakes an underwritten public offering not to sell, transfer or otherwise
dispose of the Buyer's Shares following such offering for a period no longer
than that which is agreed upon by the Buyer's officers, directors and principal
shareholders in conjunction with such offering.
7. INDEMNIFICATION.
a. Indemnification by Company. In consideration of the Buyer's
execution and delivery of the Transactional Documents and acquiring the Common
Shares thereunder and in addition to all of the Company's other obligations
under the Transactional Documents, the Company shall defend, protect, indemnify
and hold harmless the Buyer and all of its shareholders, partners, officers,
directors, employees and any of the foregoing person's agents or other
representatives (including, without limitation, those retained in connection
with the transactions contemplated by this Agreement) (collectively, the "Buyer
Indemnitees") from and against any and all actions, causes of action, suits,
claims, losses, costs, penalties, fees, liabilities and damages, and expenses in
connection therewith and including reasonable attorneys' fees and disbursements
(the "Buyer Indemnified Liabilities"), incurred by the Buyer Indemnitee as a
result of, or arising out of, or relating to (a) any material misrepresentation
or breach of any representation or warranty made by the Company in the
Transactional Documents or any other certificate, instrument or document
contemplated hereby or thereby, (b) any material breach of any covenant,
agreement or obligation of the Company contained in the Transactional Documents
or any other certificate, instrument or document contemplated hereby or thereby,
(c) any cause of action, suit or claim brought or made against the Buyer
Indemnitee and arising out of or resulting from the execution, delivery,
performance or enforcement of the Transactional Documents or any other
certificate, instrument or document contemplated hereby or thereby, or (d) any
transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of the issuance of the Common Shares. To the
extent that the foregoing undertaking by the Company may be unenforceable for
any reason, the Company shall make the maximum contribution to the payment and
satisfaction of each of the Buyer Indemnified Liabilities which is permissible
under applicable law; provided, however, that the Company shall subject to an
indemnification obligation under this Section 7(a) for only that amount of Buyer
Indemnified Liabilities as does not exceed the net proceeds to the Company as a
result of the sale of Common Shares held by the Buyer.
b. Indemnification by Buyer. In consideration of the Company's
execution and delivery of the Transactional Documents and the Company's
performance of the transactions contemplated thereunder, the Buyer shall defend,
protect, indemnify and hold harmless the Company, its officers and directors
(collectively, the "Company Indemnitees") from and against any and all actions,
causes of action, suits, claims, losses, costs, penalties, fees, liabilities and
damages, and expenses in connection therewith and including reasonable
attorneys' fees and disbursements (the "Company Indemnified Liabilities"),
incurred by any Company Indemnitee as a result of, or arising out of, or
relating to (a) any material representation or breach of any representation or
warranty
18
made by the Buyer in the Transactional Documents or any other certificate,
instrument or document contemplated hereby or thereby, or (b) any material
breach of any covenant, agreement or obligation of the Buyer contained in the
Transactional Documents or any other certificate, instrument or document
contemplated hereby or thereby; provided, however, that the Buyer shall not be
jointly liable for the indemnification obligations of any other Buyer or
investor and the Buyer subject to an indemnification obligation shall be liable
under this Section 7(b) for only that amount of Company Indemnified Liabilities
as does not exceed the net proceeds to the Buyer as a result of the sale of
Common Shares held by the Buyer. To the extent that the foregoing undertaking by
a Buyer may be unenforceable for any reason, the Buyer shall make the maximum
contribution to the payment and satisfaction of each of the Company Indemnified
Liabilities which is permissible under applicable law; provided, however, that
the Buyer shall not be jointly liable for the indemnification obligations of any
other Buyer or investor and the Buyer subject to an indemnification obligation
shall be liable under this Section 7(b) for only that amount of Company
Indemnified Liabilities as does not exceed the net proceeds to the Buyer as a
result of the sale of Common Shares held by the Buyer.
8. TERMINATION AND ABANDONMENT.
a. Termination. This Agreement may be terminated at any time prior to
the Closing (i) by mutual consent of the Company and the Buyer; or (ii) by
either the Company or the Buyer if any court of competent jurisdiction in the
United States or other governmental body in the United States shall have issued
an order (other than a temporary restraining order), decree or ruling or taken
any other action restraining, enjoining or otherwise prohibiting the
transactions herein contemplated, and such order, decree, ruling or other action
shall have become final and nonappealable; or (iii) by either the Company or the
Buyer if the Closing shall not have been consummated by November 30, 2001,
provided that a party in material breach of this Agreement may not terminate
this Agreement.
b. Termination by the Parties. This Agreement may be terminated at any
time prior to Closing by either party if (i) the other party shall have failed
to comply in any material respect with any of the covenants or agreements
contained in this Agreement to be complied with by such party at or prior to
such date of termination; or (ii) there exists a breach of any representation or
warranty of such party contained in this Agreement such that the closing
conditions set forth in Sections 5 or 6, as the case may be, would not be
satisfied.
c. Procedure for Termination. In the event of termination of this
Agreement prior to Closing by the Company or the Buyer pursuant to this Section
8, written notice thereof shall forthwith be given to the other.
d. Effect of Termination. In the event of termination of this Agreement
pursuant to this Section 8, no party hereto (or any of its directors or
officers) shall have any liability -- or further obligation to any other party
to this Agreement, except as provided in Section hereof.
19
9. GOVERNING LAW; MISCELLANEOUS.
a. Construction and Enforcement. This Agreement shall be construed in
accordance with the laws of the State of Delaware, without and application of
the principles of conflicts of laws. If it becomes necessary for any party to
institute legal action to enforce the terms and conditions of this Agreement,
and such legal action results in a final judgment in favor of such party
("Prevailing Party"), then the party or parties against whom said final judgment
is obtained shall reimburse the Prevailing Party for all direct, indirect or
incidental expenses incurred including, but not limited to, all attorneys' fees,
court costs and other expenses incurred throughout all negotiations, trials or
appeals undertaken in order to enforce the Prevailing Party's rights hereunder.
Any suit, action or proceeding with respect to this Agreement shall be brought
in the state or federal courts located in Palm Beach County in the State of
Florida, if brought by the Buyer, or in the state or federal courts located in
San Diego County in the State of California, if brought by the Company. The
parties hereto hereby accept the exclusive jurisdiction and venue of those
courts for the purpose of any such suit, action or proceeding.
b. Counterparts. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile signature.
c. Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
d. Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.
e. Entire Agreement; Amendments. This Agreement supersedes all other
prior oral or written agreements between the Buyer, the Company, their
affiliates and persons acting on their behalf with respect to the matters
discussed herein, and this Agreement and the instruments referenced herein
contain the entire understanding of the parties with respect to the matters
covered herein and therein and, except as specifically set forth herein or
therein, neither the Company nor the Buyer makes any representation, warranty,
covenant or undertaking with respect to such matters. No provision of this
Agreement may be amended other than by an instrument in writing signed by the
Company and the Buyer, and no provision hereof may be waived other than by an
instrument in writing signed by the party against whom enforcement is sought.
20
f. Notices. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one business day after deposit with
a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:
If to the Company: 0000 Xxxxx Xxxxxx Xxxx
Xxx Xxxxx, XX 00000
With a copy to: Xxxxxx Krinztman
000 Xxxxx Xxxxxxx
Xxxxx 000
Xxx Xxxxxxx, XX 00000
If to the Buyer: 00000 Xxxxx Xxxx 0
Xxxxx 000
Xxxx Xxxxx, XX 00000
With a copy to: Atlas Xxxxxxxx P.A.
000 X. Xxx Xxxx Xxxx., Xxxxx 0000
Xx. Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
or at such other address of such other person as the recipient party has
specified by written notice given to each other party five (5) days prior to the
effectiveness of such change.
g. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns,
including any purchasers of the Common Shares. The Company shall not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the Buyer. The Buyer may assign some or all of its rights hereunder
without the consent of the Company, provided, however, that any such assignment
shall not release the Buyer from its obligations hereunder unless such
obligations are assumed by such assignee and the Company has consented to such
assignment and assumption.
h. No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
i. Survival. Unless this Agreement is terminated under Section 8(k),
the agreements and covenants set forth in Sections 4, 5 and 8 and the
indemnification provisions set forth in Section 7 shall survive the Closing.
21
j. Further Assurances. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
k. Termination. In the event that the Closing shall not have occurred
with respect to the Buyer on or before November 30, 2001, as a result of the
Company's or the - Buyer's failure to satisfy the conditions set forth in
Sections 5 and 6 above (and the non- breaching party's failure to waive such
unsatisfied condition(s)), the non-breaching party shall have the option to
terminate this Agreement with respect to such breaching party at the close of
business on such date without liability of any party to any other party.
l. No Strict Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.
m. Remedies. The Buyer shall have all rights and remedies set forth in
the Transactional Documents and all rights and remedies which such holder has
been granted at any time under any other agreement or contract and all of the
rights which such holder has under any law. Any party having any rights under
any provision of this Agreement shall be entitled to enforce such rights
specifically (without posting a bond or other security), to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights granted by law.
THE COMPANY ACKNOWLEDGES THAT IT HAS READ THIS AGREEMENT, THAT THE
COMPANY HAS BEEN GIVEN AMPLE OPPORTUNITY TO REVIEW IT AND TO CONSULT WITH A
REPRESENTATIVE OR ATTORNEY OF THE COMPANY'S CHOOSING CONCERNING ITS TERMS. THE
COMPANY FURTHER ACKNOWLEDGES THAT IT UNDERSTANDS THE TERMS AND CONDITIONS OF
THIS AGREEMENT AND IS VOLUNTARILY ENTERING INTO IT WITH THE INTENTION OF
RELINQUISHING ALL CLAIMS AND RIGHTS THAT IT MAY HAVE OTHER THAN THOSE RESERVED
IN THIS AGREEMENT.
IN WITNESS WHEREOF, the Buyer and the Company have caused this Stock
Purchase Agreement to be duly executed as of the date first written above.
HEALTHSPAN SCIENCES, INC (AROGEN, Inc)
By:
----------------------------------------
Xxxxxx Xxxxxxxxxxxx, Ph.D.,
President
DISEASE SCIENCES, INC.
By:
----------------------------------------
Xxxxx Xxxxxxxxx, M.D.,
President
22
