Exhibit 10.23
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STOCK PURCHASE AGREEMENT
BY AND BETWEEN
SCRIPTGEN PHARMACEUTICALS, INC.
AND
BIOCHEM PHARMA INC.
DECEMBER 12, 1997
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS; INTERPRETATION. . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 CERTAIN DEFINED TERMS. . . . . . . . . . . . . . . . . . 1
Section 1.2 INTERPRETATION . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE II
PURCHASE AND SALE OF STOCK: CLOSING. . . . . . . . . . . . . . . . . . . . . 5
Section 2.1 TRANSFER OF STOCK. . . . . . . . . . . . . . . . . . . . 5
Section 2.2 CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.3 CONSIDERATION FOR STOCK. . . . . . . . . . . . . . . . . 5
Section 2.4 CLOSING DELIVERIES OF THE COMPANY. . . . . . . . . . . . 6
Section 2.5 CLOSING DELIVERIES BY BUYER. . . . . . . . . . . . . . . 6
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY. . . . . . . . . . . . . . . . 7
Section 3.1 REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY. . 7
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER. . . . . . . . . . . . . . . . . . . 17
Section 4.1 ORGANIZATION OF BUYER. . . . . . . . . . . . . . . . . . 17
Section 4.2 AUTHORIZATION; VALIDITY. . . . . . . . . . . . . . . . . 17
Section 4.3 NO CONFLICT OR VIOLATION . . . . . . . . . . . . . . . . 17
Section 4.4 NO BROKERS . . . . . . . . . . . . . . . . . . . . . . . 18
Section 4.5 INVESTMENT . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE V
CONDITIONS TO THE COMPANY'S OBLIGATIONS. . . . . . . . . . . . . . . . . . . 18
Section 5.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. . . . . . . . 18
Section 5.2 NO INJUNCTION. . . . . . . . . . . . . . . . . . . . . . 18
Section 5.3 OPINION OF COUNSEL . . . . . . . . . . . . . . . . . . . 19
Section 5.4 PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 5.5 CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . 19
Section 5.6 CONSENTS . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 5.7 AMENDMENT OF RESTATED CERTIFICATE; AMENDED AND
RESTATED STOCKHOLDERS AGREEMENT; REGISTRATION RIGHTS
AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . 19
Section 5.8 ABSENCE OF LITIGATION. . . . . . . . . . . . . . . . . . 19
Section 5.9 SECURITIES LAW COMPLIANCE. . . . . . . . . . . . . . . . 19
Section 5.10 ALL PROCEEDINGS TO BE SATISFACTORY . . . . . . . . . . . 20
Section 5.11 CLOSING DATE.. . . . . . . . . . . . . . . . . . . . . . 20
Section 5.12 RESEARCH AGREEMENT.. . . . . . . . . . . . . . . . . . . 20
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ARTICLE VI
CONDITIONS TO BUYER'S OBLIGATIONS. . . . . . . . . . . . . . . . . . . . . . 20
Section 6.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. . . . . . . . 20
Section 6.2 CONSENTS . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 6.3 NO INJUNCTION. . . . . . . . . . . . . . . . . . . . . . 20
Section 6.4 DOCUMENTS TO BE DELIVERED BY COMPANY . . . . . . . . . . 21
Section 6.5 AMENDMENT OF RESTATED CERTIFICATE; AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT; REGISTRATION RIGHTS AGREEMENT. . 21
Section 6.6 ABSENCE OF LITIGATION. . . . . . . . . . . . . . . . . . 22
Section 6.7 SECURITIES LAW COMPLIANCE. . . . . . . . . . . . . . . . 22
Section 6.8 ALL PROCEEDINGS TO BE SATISFACTORY . . . . . . . . . . . 22
Section 6.9 CLOSING DATE.. . . . . . . . . . . . . . . . . . . . . . 22
Section 6.10 RESEARCH AGREEMENT.. . . . . . . . . . . . . . . . . . . 22
ARTICLE VII
POST-CLOSING COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 7.1 FURTHER ASSURANCES . . . . . . . . . . . . . . . . . . . 22
Section 7.2 PUBLIC ANNOUNCEMENTS . . . . . . . . . . . . . . . . . . 22
Section 7.3 AVAILABILITY OF COMMON STOCK FOR CONVERSION AND
EXERCISE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE VIII
INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 8.1 SURVIVAL, REPRESENTATIONS AND WARRANTIES . . . . . . . . 23
Section 8.2 INDEMNIFICATION OBLIGATION OF THE COMPANY. . . . . . . . 23
Section 8.3 INDEMNIFICATION OBLIGATION OF BUYER. . . . . . . . . . . 24
Section 8.4 INDEMNIFICATION PROCEDURES . . . . . . . . . . . . . . . 24
Section 8.5 PAYMENT. . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE IX
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 9.1 ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . 26
Section 9.2 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 9.3 CHOICE OF LAW. . . . . . . . . . . . . . . . . . . . . . 27
Section 9.4 ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS . . . . . . . . 27
Section 9.5 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . 28
Section 9.6 INVALIDITY . . . . . . . . . . . . . . . . . . . . . . . 28
Section 9.7 HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 9.8 EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 9.9 SPECIFIC PERFORMANCE . . . . . . . . . . . . . . . . . . 28
Section 9.10 TIME IS OF THE ESSENCE; COMPUTATION OF TIME. . . . . . . 28
Section 9.11 WAIVER OF JURY TRIAL.. . . . . . . . . . . . . . . . . . 28
Section 9.12 VOTING AGREEMENTS. . . . . . . . . . . . . . . . . . . . 29
Section 9.13 AMALGAMATION. . . . . . . . . . . . . . . . . . . . . . 29
Section 9.14 STANDSTILL AGREEMENT. . . . . . . . . . . . . . . . . . 29
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EXHIBITS
Exhibit A - Financial Statements
Exhibit B - Intentionally Omitted
Exhibit C - Form of Restated Articles of Incorporation
Exhibit D - Form of Stockholders Agreement
Exhibit E - Form of Registration Rights Agreement
Exhibit F - Form of Warrant Agreement
Exhibit G - Form of Research and License Agreement
DISCLOSURE SCHEDULE
Section 3.1(a) - Directors and Officers
Section 3.1(b) - Capitalization
Section 3.1(d) - Consents
Section 3.1(f) - Title to Assets
Section 3.1(i) - Subsequent Events
Section 3.1(l) - Tax Matters
Section 3.1(m) - Intellectual Property
Section 3.1(n) - Contracts
Section 3.1(p) - Litigation
Section 3.1(r) - Transactions with Affiliates
Section 3.1(s) - Funded Debt
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of December 12, 1997, by and
between SCRIPTGEN PHARMACEUTICALS, INC., a Delaware corporation (the "COMPANY"),
and BIOCHEM PHARMA INC., a Canadian corporation (the "BUYER"). The Company and
the Buyer are referred to collectively herein as the "PARTIES".
WHEREAS, Buyer desires to purchase from the Company, and the Company
desires to sell, transfer and convey to Buyer, 5,713,034 shares of Series D
Convertible Preferred Stock, par value $.01 per share, of the Company,
convertible, immediately following the Closing, into 20% of the shares of the
Company's Common Stock outstanding on a fully-diluted basis for a total
consideration of US$20 million (the "STOCK"), all subject to the terms and
conditions of this Agreement. The Stock shall have the rights, restrictions,
privileges and preferences as set forth in the form of the Amended and Restated
Articles of Incorporation, set forth as EXHIBIT C attached hereto.
NOW THEREFORE, in consideration of the mutual covenants and promises
contained herein and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
Section 1.1 CERTAIN DEFINED TERMS. As used herein, the terms below
shall have the following meanings:
"1934 ACT" means the Securities Exchange Act of 1934, as amended.
"AFFILIATE" means, with respect to any Person, any other Person who
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person. The term "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise, and the terms
"controlled" and "controlling" have meanings correlative thereto.
"AFFILIATED GROUP" shall mean any affiliated group within the meaning
of Section 1504(a) of the Code or any similar group defined under a similar
provision of state, local or foreign law.
"ARTICLES" shall mean the Restated Articles of Incorporation attached
as EXHIBIT C hereto.
"BALANCE SHEET" shall mean the audited consolidated balance sheet of
the Company as at December 31, 1996, together with the notes thereon, previously
delivered to Buyer and attached hereto as part of EXHIBIT A.
"BUYER GROUP" means any corporation or other entity controlling,
controlled by or under common control with the Buyer.
"CHANGE OF CONTROL" shall be deemed to have taken place if (i) any
"person" (as such term is used in Sections 13(d) and 14(d)(2) of the 0000 Xxx)
is or becomes the beneficial owner, directly or indirectly, of a majority of the
Common Stock or (ii) as the result of a contested election (a "Proxy Contest"),
the persons who were directors of the Company immediately before the Proxy
Contest or whose election was recommended by the Board of Directors of the
Company in the Proxy Contest do not constitute a majority of the Board of
Directors of the Company immediately after the Proxy Contest.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"COMMON STOCK" means the Company's Common Stock, par value $.01 per
share.
"COMMON STOCK DEEMED OUTSTANDING" means, at any given time, the number
of shares of Common Stock actually outstanding at such time, plus the number of
shares of Common Stock to be issued upon exercise of the Options or the
conversion or exchange of Convertible Securities (whether or not such securities
are actually exercisable at such time) but excluding the Warrant Shares (as that
term is defined in the Warrant Agreement (attached as Exhibit F hereto)).
"COMPANY PROPRIETARY RIGHTS" shall mean all Proprietary Rights owned
or used by the Company, along with all income, royalties, damages and payments
due or payable at the Closing or thereafter (including, without limitation,
damages and payments for past and future infringements or misappropriation
thereof), the right to xxx and recover for past infringement or misappropriation
thereof, and all corresponding rights that, now or hereafter, may be secured
throughout the world and all copies and tangible embodiments of any such
Proprietary Rights.
"CONTROLLED GROUP" has the meaning set forth in Section 1563 of the
Code.
"CONVERTIBLE SECURITIES" means any stock or securities directly or
indirectly convertible into or exchangeable for Common Stock.
"FINANCIAL STATEMENTS" has the meaning specified in SECTION 3.2(G).
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"FUNDED DEBT" of the Company shall mean, without duplication, all
obligations under indebtedness for borrowed money (including, without
limitation, principal, interest, overdrafts, penalties, premiums, fees,
expenses, indemnities and breakage costs), all obligations under capital leases,
notes payable, guaranties and drafts accepted representing extensions of credit.
"GAAP" means generally accepted accounting principles as in effect in
the United States on the date of this Agreement, applied on a consistent basis.
"INCOME TAXES" shall mean taxes measured by or with reference to net
income imposed by any federal, state, local or foreign governmental taxing
authority, including additions to tax and penalties related to such taxes, and
interest on such taxes and on such additions to tax and penalties.
"LIEN" shall mean any claim, lien, pledge, option, charge, security
interest, mortgage, right-of-way, encumbrance or other right of any third party.
"LOSSES" means any claims, liabilities, losses, damages (including
consequential damages and damages for lost profits), deficiencies, assessments,
judgments, remediations and costs or expenses (including reasonable attorneys',
consultants' and experts' fees and expenses).
"MOST RECENT BALANCE SHEET" has the meaning specified in
SECTION 3.1(H).
"MOST RECENT FINANCIAL STATEMENTS" has the meaning specified in
SECTION 3.1(H).
"OPTIONS" means any rights, warrants or options to subscribe for or
purchase Common Stock or Convertible Securities.
"ORDINARY COURSE OF BUSINESS" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"PERSON" means an individual, partnership, corporation, limited
liability company, joint stock company, unincorporated organization or
association, trust, joint venture, association or
other organization, whether or not a legal entity, or a governmental authority.
"PRE-CLOSING PERIOD" shall mean any taxable period ending on or before
the Closing Date.
"PROPRIETARY RIGHTS" shall mean all (i) patents, patent applications,
patent disclosure and inventions (whether patentable or unpatentable and whether
or not reduced to practice), (ii) trademarks, service marks, trade dress, trade
names, logos, slogans, corporate names and Internet domain names, and
registrations and applications for registration thereof, together with all of
the goodwill associated
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therewith, (iii) copyrights and copyrightable works, and registrations and
applications for registration thereof, (iv) computer software, data bases and
documentation, and (v) trade secrets and other confidential information
(including ideas, formulae and compositions), know-how, processes, techniques,
research and development information, drawings, specifications, designs, plans,
proposals, data, financial, business and marketing plans and customer and
supplier lists and information.
"PROSPECTUS" means the prospectus included in the Company's
registration statement on Form S-1 filed with the Securities and Exchange
Commission on November 20, 1997.
"RELATED AGREEMENTS" means the Stockholders Agreement, Registration
Rights Agreement, Warrant Agreement and Research and License Agreement attached
as exhibits to this Agreement.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITY INTEREST" shall mean any mortgage, pledge, lien,
encumbrance, charge, or other security interest, other than (a) mechanic's,
materialmen's, and similar liens, (b) liens for Taxes not yet due and payable or
for Taxes that the taxpayer is contesting in good faith through appropriate
proceedings and for which adequate reserves have been established on the Most
Recent Financial Statements, (c) purchase money liens and liens securing rental
payments under capital lease arrangements, and (d) other liens arising in the
Ordinary Course of Business and not incurred in connection with the borrowing of
money.
"SUBSIDIARY" means any Person whose (a) securities having ordinary
voting power to elect a majority of its board of directors or managing or
general partners (or other persons having similar functions) or (b) other
ownership interests (including partnership and membership interests) ordinarily
constituting a majority interest in the capital, profits or cash flow of such
Person, are at the time, directly or indirectly, owned or controlled by such
other Person, or by one or more other Subsidiaries of such other Person, or by
such other Person and one or more of its other Subsidiaries.
"TAX" shall mean any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Section 59A of
the Code), customs duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated, or other tax of any kind whatsoever, including any interest,
penalty, or addition thereto, whether disputed or not, and any amounts payable
pursuant to the determination or settlement of an audit.
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"TAX RETURN" shall mean any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
Section 1.2 INTERPRETATION. Unless otherwise indicated to the
contrary herein by the context or use thereof: (i) the words, "herein,"
"hereto," "hereof" and words of similar import refer to this Agreement as a
whole and not to any particular Section or paragraph hereof; (ii) the word
"including" means "including, but not limited to"; (iii) masculine gender shall
also include the feminine and neutral genders, and vice versa; and (iv) words
importing the singular shall also include the plural, and vice versa.
ARTICLE II
PURCHASE AND SALE OF STOCK: CLOSING
Section 2.1 TRANSFER OF STOCK. Upon the terms and subject to the
conditions contained herein, the Company shall sell, convey, transfer, assign
and deliver to Buyer, and Buyer shall acquire and in reliance upon the
representations, warranties and covenants contained herein, at the Closing, the
Stock free and clear of all Liens or Security Interests, other than those which
may have been created by the Buyer.
Section 2.2 CLOSING. The closing of the transactions contemplated
herein shall be held at 10:00 a.m., local time, on the later of (i) December 19,
1997, and (ii) one (1) business day after the satisfaction or waiver of all
conditions to closing contained in Articles V and VI, (the "CLOSING" or the
"CLOSING DATE"), at the offices of Xxxxxxxx & Xxxxx, 000 Xxxx 00xx Xxxxxx, Xxx
Xxxx, XX, or such other time and/or place as the parties hereto otherwise agree.
Section 2.3 CONSIDERATION FOR STOCK. Upon the terms and subject to
the conditions contained herein, as consideration for the purchase of the Stock,
Buyer shall pay to the Company by wire transfer of immediately available funds,
the amount of twenty million dollars (US $20,000,000) (the "PURCHASE PRICE").
In the case of the sale of Common Stock in the First Listing (as that term is
defined in the Registration Rights Agreement attached hereto as EXHIBIT E), if
the Common Stock sold in the First Listing is sold for a consideration per share
which is less than the Current Conversion Price (as that term is defined in
Section 4.1(c) of the Articles) in effect immediately prior to the consummation
of such First Listing, then, upon consummation of the First Listing, the Company
shall issue an additional number of shares of Common Stock (rounding a
fractional share to the nearest whole share) to the Buyer for no consideration
in an amount equal to: (i)(A) the Current Conversion Price MULTIPLIED by the
number of shares of Common Stock issuable upon conversion of all of the Stock
held by Buyer immediately prior to the consummation of the First Listing (in
each case, after giving effect to any stock split, reverse stock split, share
combination or similar recapitalization affecting the Common Stock made or to be
made in connection with the First Listing), DIVIDED BY
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(B) the price per share at which the Common Stock is sold by the Company in the
First Listing LESS (ii) the number of shares of Common Stock issuable upon
exercise of all of the Stock held by the Buyer immediately prior to the
consummation of the First Listing (after giving effect to any stock split,
reverse stock split, share combination or similar recapitalization affecting the
Common Stock made or to be made in connection with the First Listing). The
Stock shall be convertible into the Common Stock pursuant to the terms and
conditions of the Articles. The Company hereby represents that nothing
contained in this Section 2.3 conflicts with the Articles.
Section 2.4 CLOSING DELIVERIES OF THE COMPANY. To effect the
transfer referred to in SECTION 2.1 hereof and the delivery of the consideration
described in SECTION 2.3 hereof, the Company shall, on the Closing Date, deliver
the following to Buyer:
(a) certificates evidencing the Stock, free and clear of any and all
Liens;
(b) all consents, approvals, releases, and waivers from governmental
authorities and other third parties required or necessary as a result of the
transactions contemplated hereby, reasonably satisfactory in form and substance
to Buyer and its counsel; and
(c) all other documents required to be delivered pursuant to Article
VI hereof not specifically mentioned in this Section.
All instruments and documents executed and delivered to Buyer pursuant hereto
shall be in form and substance, and shall be executed in a manner, reasonably
satisfactory to Buyer and its counsel.
Section 2.5 CLOSING DELIVERIES BY BUYER. To effect the transfer
referred to in SECTION 2.1 hereof and the delivery of the consideration
described in SECTION 2.3 hereof, Buyer shall, on the Closing Date, deliver the
following to the Company:
(a) Buyer shall have tendered to the Company the Purchase Price, by
wire transfer of immediately available funds to such account of which the
Company shall have given prior written notice to Buyer hereunder; and
(b) Buyer shall have tendered all other documents required to be
delivered pursuant to Article V hereof and not specifically mentioned in this
Section.
All instruments and documents executed and delivered to the Company pursuant
hereto shall be in form and substance, and shall be executed in a manner,
reasonably satisfactory to the Company and its counsel.
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ARTICLE III
REPRESENTATIONS AND
WARRANTIES OF THE COMPANY
Section 3.1 REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY.
The Company represents and warrants to the Buyer that the statements contained
in this SECTION 3.1 are correct and complete as of the date of this Agreement,
except as set forth in the disclosure schedule delivered by the Company to the
Buyer on the date hereof (the "DISCLOSURE SCHEDULE"). The Disclosure Schedule
will be arranged in paragraphs corresponding to the lettered and numbered
paragraphs contained in this SECTION 3.1.
(a) ORGANIZATION, QUALIFICATION, AND CORPORATE POWER. The Company is
a corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation. The Company is duly authorized to
conduct business and is in good standing under the laws of each jurisdiction
where such qualification is required, except where the lack of such
qualification would not have a material adverse effect on the business,
condition (financial or otherwise), operations, results of operations, or future
prospects of the Company. The Company has full corporate power and authority to
carry on the businesses in which it is engaged and to own and use the properties
owned and used by it. SECTION 3.1(A) of the Disclosure Schedule lists the
directors and officers of the Company.
(b) CAPITALIZATION. The entire authorized, issued and outstanding
capital stock of the Company is set forth on SECTION 3.1(B) of the Disclosure
Schedule. All of the issued and outstanding shares of the Company's capital
stock have been duly authorized, are validly issued, fully paid, and
nonassessable, and are held of record free and clear of all Liens, claims,
encumbrances and restrictions whatsoever, except as set forth on SECTION 3.1(B)
of the Disclosure Schedule. Except as set forth on SECTION 3.1(B) of the
Disclosure Schedule, no shares of the Company's capital stock are reserved for
issuance or are held as treasury shares. Except as set forth on SECTION 3.1(B)
of the Disclosure Schedule, there are no outstanding or authorized options,
warrants, purchase rights, subscription rights, conversion rights, exchange
rights, or other commitments that could require the Company to issue, sell, or
otherwise cause to become outstanding any of its capital stock, nor any stock
appreciation rights, phantom stock, or similar rights or instruments. The
shares of Common Stock issuable upon conversion of the Stock have been duly and
validly reserved, are currently subject to preemptive rights or rights of first
refusal (the waiver of which must be obtained as of the Closing Date in
connection with the transactions contemplated by this Agreement), and, upon
issuance, will be duly authorized, validly issued, fully paid, and
nonassessable. The Stock will represent twenty percent (20%) on a fully diluted
basis of the Common Stock Deemed Outstanding immediately after the Closing Date.
(c) AUTHORIZATION; VALIDITY. The Company has all necessary power and
authority to enter into this Agreement and the Related Agreements, and, subject
to obtaining requisite Stockholder approvals, waivers, and consents has taken
all action
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necessary to consummate the transactions contemplated hereby and to perform its
obligations hereunder and under the Related Agreements. This Agreement has been
duly executed and delivered by the Company, and this Agreement and each of the
Related Agreements when executed will be a legal, valid, and binding obligation
of the Company, enforceable against the Company in accordance with its terms.
As of the Closing Date, the Company shall have authorized the issuance of the
Stock, with the rights and privileges described in the Articles.
(d) NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby
(including the issuance of Common Stock upon conversion of the Stock and
execution and delivery of the Related Agreements), will (i) violate any
constitution, statute, regulation, rule, injunction, judgment, or other
restriction of any government, governmental agency, or court to which the
Company is subject or any provision of the charter or bylaws of the Company or
(ii) conflict with, result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract, lease,
license, instrument, or other arrangement to which the Company is a party or by
which it is bound or to which any of its assets is subject (or result in the
imposition of any Security Interest upon any of its assets), except where the
violation, conflict, breach, default, acceleration, termination, modification,
cancellation, failure to give notice, or Security Interest would not have a
material adverse effect on the business, condition (financial or otherwise),
operations, results of operations, or future prospects of the Company or on the
ability of the Parties to consummate the transactions contemplated by this
Agreement (a "MATERIAL ADVERSE EFFECT"). Except as set forth on SECTION 3.1(D)
of the Disclosure Schedule, the Company does not need to obtain any
authorization, consent, or approval of, or make any declaration, filing or
registration with, any government or governmental agency or regulatory authority
in connection with the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby, except where the
failure to obtain such authorizations, consents, approvals, declarations,
filings or registrations would not have a Material Adverse Effect.
(e) BROKERS' FEES. The Company does not have any liability or
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement.
(f) TITLE TO ASSETS; SUFFICIENCY. Except as set forth on SECTION
3.1(F) of the Disclosure Schedule, the Company has good and marketable title to,
or a valid leasehold interest in, the material properties and assets used by it
or otherwise necessary to conduct its business, located on its premises, or
shown on the Most Recent Balance Sheet or acquired after the date thereof, free
and clear of all Security Interests, except for properties and assets disposed
of in the Ordinary Course of Business since the date of the Most Recent Balance
Sheet. The assets currently owned by the Company or leased by the Company
pursuant to any lease agreement entered into in the Ordinary Course of Business
or otherwise disclosed to Buyer constitute all of the
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assets necessary to conduct the business of the Company in accordance with past
practices as of the Most Recent Fiscal Month End and as of the date hereof.
(g) SUBSIDIARIES. The Company has no Subsidiaries.
(h) FINANCIAL STATEMENTS. Attached hereto as EXHIBIT A are the
following financial statements (collectively the "FINANCIAL STATEMENTS"): (i)
audited balance sheet and statements of operations, redeemable preferred stock
and stockholders' equity (deficit), and cash flow as of and for the fiscal year
ended December 31, 1996 (the "MOST RECENT FISCAL YEAR END") for the Company; and
(ii) unaudited consolidated and consolidating balance sheets (the "MOST RECENT
BALANCE SHEET") and statements of operations, redeemable preferred stock and
stockholders' equity (deficit), and cash flow (the "MOST RECENT FINANCIAL
STATEMENTS") as of and for the nine months ended September 30, 1997 (the "MOST
RECENT FISCAL MONTH END") for the Company. The Financial Statements (including
the notes thereto) have been prepared from the books and records of the Company,
are correct and complete, have been prepared in accordance with GAAP applied on
a consistent basis throughout the periods covered thereby and present fairly the
financial condition of the Company as of such dates and the results of
operations of the Company for such periods; PROVIDED, HOWEVER, that the Most
Recent Financial Statements are subject to normal year-end adjustments (which
adjustments will not be material, either individually or in the aggregate) and
lack footnotes and other presentation items.
(i) EVENTS SUBSEQUENT TO MOST RECENT FISCAL YEAR END. Since the Most
Recent Fiscal Year End, there has not been any material adverse change in the
business, condition (financial or otherwise), operations, results of operations,
or future prospects of the Company. Without limiting the generality of the
foregoing, since that date and except as set forth on SCHEDULE 3.1(I) of the
Disclosure Schedule:
(i) the Company has not sold, leased, transferred, or assigned
any material assets, tangible or intangible, outside the Ordinary Course of
Business;
(ii) the Company has not entered into any material agreement,
contract, lease, or license outside the Ordinary Course of Business;
(iii) no party (including the Company) has accelerated,
terminated, made material modifications to, or canceled any material agreement,
contract, lease, or license to which the Company is a party or by which the
Company is bound;
(iv) no Security Interest upon any of the assets, tangible or
intangible of the Company have been created or incurred;
(v) the Company has not made any capital expenditures in an
amount in excess of $50,000, either individually or in the aggregate;
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(vi) the Company has not made any capital investment in, or any
loan to, any other Person;
(vii) the Company has not created, incurred, assumed, or
guaranteed more than $50,000 in aggregate indebtedness for borrowed money and
capitalized lease obligations;
(viii) the Company has not granted any license or sublicense of any
material rights under or with respect to any Company Proprietary Rights;
(ix) there has been no change made or authorized in the charter
or bylaws of the Company;
(x) the Company has not issued, sold, or otherwise disposed of
any of its capital stock, or granted any options, warrants, or other rights to
purchase or obtain (including upon conversion, exchange, or exercise) any of its
capital stock;
(xi) the Company has not declared, set aside, or paid any
dividend or made any distribution with respect to its capital stock (whether in
cash or in kind) or redeemed, purchased, or otherwise acquired any of its
capital stock;
(xii) the Company has not experienced any material damage,
destruction, or loss (whether or not covered by insurance) to its property;
(xiii) the Company has not made any loan to, or entered into any
other transaction with, any of its directors, officers, and employees, other
than employment arrangements entered into in the Ordinary Course of Business and
disclosed in writing to Buyer;
(xiv) the Company has not granted any increase in the base
compensation of or made any other material change in the employment terms of any
of its directors, officers and employees;
(xv) the Company has not entered into any employment contract or
collective bargaining agreement, written or oral, or modified the terms of any
existing such contract or agreement;
(xvi) the Company has not adopted, amended, modified, or
terminated any bonus, profit-sharing, incentive, severance, or other plan,
contract, or commitment for the benefit of any of its directors, officers, and
employees;
(xvii) the Company has not conducted its cash management customs
and practices other than in the usual and ordinary course of business in
accordance with past practice; and
(xviii) the Company has not committed to do any of the foregoing.
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(j) UNDISCLOSED LIABILITIES. The Company does not have any material
liability (whether known or unknown, whether asserted or unasserted, whether
absolute or contingent, whether accrued or unaccrued, whether liquidated or
unliquidated, and whether due or to become due, including any liability for
taxes), except for (i) liabilities set forth on the face of the Most Recent
Balance Sheet (rather than in any notes thereto) and (ii) liabilities which have
arisen after the Most Recent Fiscal Month End in the Ordinary Course of
Business, none of which is a liability resulting from, arising out of, relating
to, in the nature of or caused by any breach of contract, breach of warranty,
tort, infringement, claim or lawsuit.
(k) LEGAL COMPLIANCE. The Company has complied with all applicable
laws (including rules, regulations, codes, plans, injunctions, judgments,
orders, decrees, rulings, and charges thereunder) of federal, state, local, and
foreign governments (and all agencies thereof), and no action, suit, proceeding,
hearing, investigation, charge, complaint, claim, demand, or notice has been
filed or commenced against any of them alleging any failure so to comply, except
where the failure to so comply would not have a Material Adverse Effect.
(l) TAX MATTERS.
(i) The Company has duly and timely filed all Tax Returns it was
required to file. All such Tax Returns were correct and complete in all
material respects. All Taxes owed by the Company (whether or not shown on any
Tax Return) have been timely paid. The Company is not currently the beneficiary
of any extension of time within which to file any Tax Return. The Company has
maintained adequate provision for, and adequate funds to pay, Taxes payable by
the Company as of September 30, 1997, and such provision and funds (as adjusted
for the passage of time through the Closing Date in accordance with the past
custom and practices of the Company in filing its Tax Returns) will be adequate
for Taxes payable by the Company as of the Closing Date.
(ii) There is no material dispute or claim concerning any Tax
liability of the Company either (A) claimed or raised by any authority in
writing or (B) as to which the Company has knowledge based upon contact with any
agent of such authority.
(iii) SECTION 3.1(L) of the Disclosure Schedule lists all Tax
Returns that have been audited, and indicates those Tax Returns that currently
are the subject of audit. The Company has not waived any statute of
limitations in respect of Taxes or agreed to any extension of time with respect
to any Tax assessment or deficiency.
(iv) The Company has not received, or expects to receive, from
any taxing authority any written notice of proposed adjustment, deficiency,
underpayment of Taxes or any other such notice which has not been satisfied by
payment or been withdrawn, and no claims have been asserted relating to such
Taxes against the Company;
-11-
(v) The Company has withheld and paid all required Taxes in
connection with amounts paid or owing to any employee, independent contractor,
creditor, stockholder, or other similar third party;
(vi) The Company has not filed a consent to the application of
Section 341(f) of the Code;
(vii) The Company will not be required, as a result of (A) a
change in accounting method for a Tax period beginning on or before the Closing
Date, to include any adjustment under Section 481(c) of the Code (or any
corresponding provision of state, local or foreign Tax law) in taxable income
for any Tax period beginning on or after the Closing Date, or (B) any "closing
agreement," as described in Section 7121 of the Code (or any corresponding
provision of state, local or foreign Tax law), to include any item or income in
or exclude any item of deduction from any Tax period beginning on or after the
Closing Date;
(viii) The Company has disclosed on its income Tax Returns all
positions taken therein that could give rise to an accuracy-related penalty
under Section 6662 of the Code (or any corresponding provision of Tax law);
(ix) The Company has not made any payments, is obligated to make
any payments, or is a party to any agreement that under certain circumstances
could obligate it to make any payments that will not be deductible under Section
280G or Section 162(m) of the Code;
(x) No claim has ever been made by a taxing authority in a
jurisdiction where the Company does not pay Taxes or file Tax Returns that such
entity is or may be subject to Taxes assessed by such jurisdiction;
(xi) The Company has not been a United States real property
holding corporation within the meaning of Code Section 897(c)(2) during the
applicable period specified in Code Section 897(c)(1)(A)(ii);
(xii) The Company is not a party to any Tax allocation or sharing
agreement;
(xiii) All Taxes imposed by law (if any) in connection with the
issuance, sale, and delivery of the Stock shall have been fully paid, and all
laws imposing such Taxes shall have been fully complied with in all material
respects, prior to the Closing Date; and
(xiv) The Company (A) has not been a member of an Affiliated Group
filing a consolidated federal income Tax Return and (B) has no liability for
the Taxes of any Person (other than the Company) under Treas. Reg. Section
1.1502-6 (or any similar provision of state, local, or foreign law), as a
transferee or successor, by contract, or otherwise.
-12-
(m) INTELLECTUAL PROPERTY.
(i) The Company has not interfered with, infringed upon,
misappropriated, or violated any material Proprietary Rights of any third party,
in any material respect, and the Company has never received any charge,
complaint, claim, demand, or notice alleging any such interference,
infringement, misappropriation, or violation (including any claim that the
Company must license or refrain from using any Proprietary Rights of any third
party). To the knowledge of the Company, no third party has interfered with,
infringed upon, misappropriated, or violated any material Proprietary Rights of
the Company in any material respect.
(ii) SECTION 3.1(M)(II) of the Disclosure Schedule identifies
each patent or registration which has been issued to the Company with respect to
any of the Company Proprietary Rights, identifies each pending patent
application or application for registration which the Company has made with
respect to the Company Proprietary Rights, and identifies each material license,
agreement, or other permission which the Company has granted to any third party
with respect to the Company Proprietary Rights (together with any exceptions).
SECTION 3.1(M)(II) of the Disclosure Schedule also identifies each material
trade name or unregistered trademark used by the Company.
(iii) SECTION 3.1(M)(III) of the Disclosure Schedule identifies
each material item of the Company Proprietary Rights that any third party owns
and that the Company uses pursuant to license, sublicense, agreement, or
permission. With respect to each item of the Company Proprietary Rights
required to be identified in SECTION 3.2(M)(III) of the Disclosure Schedule:
(iv) the license, sublicense, agreement, or permission covering
the item is legal, valid, binding, enforceable, and in full force and effect in
all material respects;
(v) no party to the license, sublicense, agreement, or
permission is in material breach or default, and no event has
occurred which with notice or lapse of time would constitute a material breach
or default or permit termination, modification, or acceleration thereunder;
(vi) no party to the license, sublicense, agreement, or
permission has repudiated any material provision thereof; and
(vii) the Company has not granted any sublicense or similar right
with respect to the license, sublicense, agreement, or permission.
(viii) the Company owns or has a license to use all Proprietary
Rights necessary for the operation of its business as conducted as of the Most
Recent Fiscal Year End and as currently conducted.
(n) CONTRACTS. SECTION 3.1(N) of the Disclosure Schedule lists the
following contracts and other agreements to which the Company is a party:
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(i) any agreement (or group of related agreements) for the
consignment or lease of machinery, equipment or other personal property to or
from any Person providing for lease payments in excess of $50,000 per annum;
(ii) any agreement (or group of related agreements) for the
purchase or sale of raw materials, products, machinery, equipment or other
personal property, or for the furnishing or receipt of services, the performance
of which will extend over a period of more than one year or involve
consideration in excess of $50,000;
(iii) any capitalized lease, pledge, conditional sale or title
retention agreement involving the payment of more than $50,000 in the aggregate;
(iv) any agreement concerning a partnership or joint venture;
(v) any agreement (or group of related agreements) under which
it has created, incurred, assumed, or guaranteed any indebtedness for borrowed
money, or any capitalized lease obligation, or under which it has imposed a
Security Interest on any of its assets, tangible or intangible;
(vi) any agreement concerning confidentiality or noncompetition
or otherwise prohibiting the Company from freely engaging in any business;
(vii) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other material plan or
arrangement for the benefit of its current or former directors, officers, or
employees;
(viii) any license, royalty or other agreement relating to the
Company Proprietary Rights;
(ix) any agreement containing commitments of suretyship,
guarantee or indemnification (except for guarantees, warranties and indemnities
provided by the Company in the Ordinary Course of Business and those having a
contract value, individually or in the aggregate of $25,000 or less);
(x) any mortgage, indenture, note, bond or other agreement
relating to indebtedness incurred or provided by the Company;
(xi) any agreement involving a governmental body;
(xii) any collective bargaining agreement;
(xiii) any agreement for the employment of any individual on a
full-time, part-time, consulting, or other basis providing annual compensation
in excess of $50,000 or providing material severance benefits;
(xiv) any agreement under which the consequences of a default or
termination could have a Material Adverse Effect; and
-14-
(xv) any commitment to do any of the foregoing described in
clauses (i) through (xiv).
The Company has made available to the Buyer a correct and complete redacted copy
of each written agreement listed in SECTION 3.1(N) of the Disclosure Schedule
and a written summary setting forth the material terms and conditions of each
oral agreement referred to in SECTION 3.1(N) of the Disclosure Schedule. With
respect to each such agreement: (A) the agreement is legal, valid, binding,
enforceable, and in full force and effect in all material respects and will
continue to be so following the Closing; (B) no party is in material breach or
default, and no event has occurred which with notice or lapse of time would
constitute a material breach or default, or permit termination, modification, or
acceleration, under the agreement; and (C) no party has repudiated any material
provision of the agreement. Except as specifically identified in SECTION 3.1(N)
of the Disclosure Schedule, the Company is not a party to any contract,
agreement or understanding which contains a "change in control", "potential
change in control" or similar provision which could be triggered by the
transactions contemplated by this Agreement
(o) NOTES AND ACCOUNTS RECEIVABLE. All notes and accounts receivable
of the Company are reflected properly on its books and records, are valid
receivables subject to no setoffs or counterclaims, are current and collectible,
and will be collected in accordance with their terms at their recorded amounts,
subject only to the reserve for bad debts set forth on the face of the Most
Recent Balance Sheet (rather than in any notes thereto) as adjusted for
operations and transactions through the Closing Date in accordance with the past
custom and practice of the Company.
(p) LITIGATION.
(i) SECTION 3.1(P) of the Disclosure Schedule sets forth each
instance in which the Company (i) is subject to any outstanding injunction,
judgment, order, decree, ruling, or charge or (ii) is a party or, to the
knowledge of the Company, is threatened to be made a party to any action, suit,
proceeding, hearing, or investigation of, in, or before any court or
quasi-judicial or administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator.
(ii) The Company has not admitted in writing its inability to pay
its debts generally as they become due, filed, or consented to the filing
against it of a petition in bankruptcy or a petition to take advantage of any
insolvency act, made an assignment for the benefit of creditors, consented to
the appointment of a receiver for itself or for the whole or any substantial
part of its property, or had a petition in bankruptcy filed against it, been
adjudicated a bankrupt, or filed a petition or answer seeking reorganization or
arrangement under the Federal bankruptcy laws or any similar law or statute of
the United States of America or any other jurisdiction.
(q) BOOKS AND RECORDS. The stock records of the Company fairly and
accurately reflect in all material respects the record ownership of all of the
outstanding shares of the Company's capital stock. The other books and records
of the Company, including financial records, minute books and books of account,
are complete and
-15-
accurate in all material respects and have been maintained in accordance with
sound business practices.
(r) TRANSACTION WITH AFFILIATES. Except as set forth on in SECTION
3.1(R) of the Disclosure Schedule, none of the Company's shareholders,
directors, officers or employees nor any of their respective relatives or
Affiliates is involved in any business arrangement or relationship with the
Company (whether written or oral), and none of the Company's shareholders,
directors, officers or employees nor any of their respective relatives or
Affiliates owns any property or right, tangible or intangible, which is used by
the Company.
(s) FUNDED DEBT. Except as set forth in SECTION 3.1(S) of the
Disclosure Schedule the Company does not have outstanding any Funded Debt nor is
a guarantor or is otherwise responsible for any liability or obligation
(including indebtedness) of any other Person.
(t) OFFERING. Subject in part to the truth and accuracy of the
Buyer's representations and warranties set forth in this Agreement, the offer,
sale, and issuance of the Stock and the issuance of the Common Stock upon the
conversion of the Stock as contemplated by this Agreement are exempt from the
registration requirements of the Securities Act and from the registration or
qualification requirements of the laws of any applicable jurisdiction of the
United States, and neither the Company nor anyone acting on its behalf will take
any action hereafter that would cause the loss of such exemption.
(u) CONSENTS. No consent, approval, qualification, order or
authorization of, or filing with, any governmental authority of the United
States, including the Secretary of State of the State of Delaware, is required
in connection with the Company's valid execution, delivery, or performance of
this Agreement or any of the Exhibits hereto, or the offer, sale, or issuance of
the Stock by the Company or the consummation of any other transaction
contemplated on the part of the Company hereby or pursuant to any such Exhibit,
except for such filings as have been made prior to the Closing.
(v) BUSINESS OF THE COMPANY. There is no pending or, to the best of
the Company's knowledge and belief, threatened claim or litigation against or
affecting the Company contesting its right to perform any of the services
presently conducted by or proposed to be conducted by the Company or to produce,
manufacture, sell, or use any product, process, method, substance, part, or
other material presently produced, manufactured, sold, or used or planned to be
produced, manufactured, sold, or used by the Company in connection with the
business and operations of the Company. The Company has no knowledge or belief
that (i) there exists, or there is pending or planned, any patent, invention,
device, application or principle, or any statute, rule, law, regulation,
standard, or code that would materially affect the condition, financial or
otherwise, operations or prospects of the Company; or (ii) there is any other
factor (other than fire, flood, accident, act of war, or civil commotion, or any
other cause or event beyond the control of the Company) that materially
adversely affects the condition, financial or otherwise, business, or the
operations of the Company.
-16-
(w) PROPRIETARY INFORMATION OF THIRD PARTIES. No third party has
claimed, has reason to claim, or has requested information to suggest that any
person employed by or affiliated with the Company has (a) violated or may be
violating any of the terms or conditions of its employment, consulting,
non-competition, or non-disclosure agreement with such third party, (b)
disclosed or may be disclosing or utilized or may be utilizing any trade secret
or proprietary information or documentation of such third party, or (c)
interfered or may be interfering in the employment relationship between such
third party and any of its present employees. To the best knowledge of the
Company, after due inquiry, no person employed by or affiliated with the Company
has employed or proposes to employ any trade secret or any information or
documentation proprietary to any other person in connection with the conduct of
the Company's business (as now conducted and as proposed to be conducted).
(x) DISCLOSURE. The representations and warranties contained in this
SECTION 3.1 do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained in this SECTION 3.1 not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Company as follows:
Section 4.1 ORGANIZATION OF BUYER. Buyer is a company duly
organized, validly existing, and in good standing under the laws of Quebec. The
Buyer is duly authorized to conduct business and is in good standing under the
laws of each jurisdiction where such qualification is required, except where the
lack of such qualification would not have a material adverse effect on the
business, condition (financial or otherwise), operations, results of operations,
or future prospects of the Buyer. The Buyer has full corporate power and
authority to carry on the businesses in which it is engaged and to own and use
the properties owned and used by it.
Section 4.2 AUTHORIZATION; VALIDITY. The Buyer has all necessary
power and authority to enter into this Agreement and the Related Agreements, and
has taken all action necessary to consummate the transactions contemplated
hereby and to perform its obligations hereunder and under the Related
Agreements. This Agreement has been duly executed and delivered by the Buyer
and this Agreement and each of the Related Agreements when executed will be a
legal, valid, and binding obligation of the Buyer, enforceable against the Buyer
in accordance with its terms.
Section 4.3 NO CONFLICT OR VIOLATION. Neither the execution and the
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby (including the execution and delivery of the Related
Agreements), will (i) violate any constitution, statute, regulation, rule,
injunction, judgment, or other restriction of any government, governmental
agency, or court to which the Buyer is subject or any provision of the charter
or bylaws of the Buyer or (ii) conflict with, result in a breach
-17-
of, constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which the Buyer is a party or by which it is bound or to which
any of its assets is subject (or result in the imposition of any Security
Interest upon any of its assets), except where the violation, conflict, breach,
default, acceleration, termination, modification, cancellation, failure to give
notice, or Security Interest would not have a material adverse effect on the
business, condition (financial or otherwise), operations, results of operations,
or future prospects of the Buyer or on the ability of the Parties to consummate
the transactions contemplated by this Agreement (a "BUYER MATERIAL ADVERSE
EFFECT"). The Buyer does not need to obtain any authorization, consent, or
approval of, or make any declaration, filing or registration with, any
government or governmental agency or regulatory authority in connection with the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby, except where the failure to obtain such
authorizations, consents, approvals, declarations, filings or registrations
would not have a Buyer Material Adverse Effect.
Section 4.4 NO BROKERS. Neither Buyer nor any affiliate of Buyer
has entered into or will enter into any agreement, arrangement or understanding
with any person or entity which will result in the obligation of the Company to
pay any finder's fee, brokerage commission or similar payment in connection with
the transactions contemplated hereby.
Section 4.5 INVESTMENT. Buyer is acquiring the Stock, and will be
acquiring the shares of Common Stock issuable upon conversion of the Stock, for
investment for its own account and not with a view to, or for resale in
connection with, any distribution thereof. Buyer understands that the Stock and
the shares of Common Stock issuable upon conversion of the Stock have not been
registered under the Securities Act by reason of a specified exemption from the
registration provisions of the Securities Act which depends upon, among other
things, the bona fide nature of its investment intent as expressed herein.
ARTICLE V
CONDITIONS TO THE COMPANY'S OBLIGATIONS
The obligation of the Company to transfer the Stock to Buyer on the
Closing Date is subject to the satisfaction or waiver by the Company, on or
prior to the Closing Date, of each of the following conditions:
Section 5.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. All
representations and warranties of Buyer contained in this Agreement shall be
true and correct at and as of the Closing Date as if such representations and
warranties were made at and as of the Closing Date, and Buyer shall have
performed all agreements and covenants required hereby to be performed by it
prior to or at the Closing Date.
Section 5.2 NO INJUNCTION. No injunction, stay or restraining
order shall be in effect prohibiting the consummation of the transactions
contemplated by this Agreement.
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Section 5.3 OPINION OF COUNSEL. Buyer shall have delivered to the
Company an opinion of the general counsel of Buyer, in form and substance
reasonably satisfactory to the Company and its counsel.
Section 5.4 PAYMENTS. Buyer shall have tendered the Purchase Price
to the Company in accordance with SECTION 2.3.
Section 5.5 CERTIFICATES. Buyer will furnish the Company with the
following certificates of its officers, directors and others to evidence
compliance with the conditions set forth in this Article V:
(a) COMPLIANCE CERTIFICATE. A certificate signed by the chief
executive officer of the Buyer that each of the representations and warranties
made by the Buyer in this Agreement is true and correct in all material respects
on and as of the Closing Date with the same effect as though such
representations and warranties had been made or given on and as of the Closing
Date, and that the Company has performed and complied in all material respects
with all of its obligations under this Agreement which are to be performed or
complies with on or prior to the Closing Date.
(b) CERTIFIED RESOLUTIONS. Certified copies of the resolutions of
the Board of Directors of the Buyer, authorizing and approving this Agreement
and the consummation of the transactions contemplated hereby.
(c) INCUMBENCY CERTIFICATE. Incumbency certificates relating to each
Person executing (as corporate officer or
otherwise on behalf of another Person) any document executed and delivered to
the Company pursuant to the terms hereof.
Section 5.6 CONSENTS. All consents, approvals, and waivers from
governmental authorities and other parties required or necessary as a result of
the transactions contemplated hereby, including, without limitation, those set
forth on SECTION 5.6 of the Disclosure Schedule, shall have been obtained.
Section 5.7 AMENDMENT OF RESTATED CERTIFICATE; AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT; REGISTRATION RIGHTS AGREEMENT; WARRANT AGREEMENT. The
Company shall have amended its Certificate of Incorporation in the form set
forth as EXHIBIT C attached hereto, and the Stockholders Agreement in the form
attached hereto as EXHIBIT D, the Registration Rights Agreement, in the form
attached hereto as EXHIBIT E, and the Warrant Agreement, in the form attached as
EXHIBIT F, shall have been executed by the parties thereto.
Section 5.8 ABSENCE OF LITIGATION. No action, suit, investigation
or proceeding shall have been commenced or threatened by a governmental agency
or third party against Buyer, the Company, or any of the Affiliates, officers or
directors of any of them, with respect to the transactions contemplated hereby.
Section 5.9 SECURITIES LAW COMPLIANCE. All such actions and steps
necessary to assure compliance with applicable Federal securities laws and the
-19-
securities laws of any other jurisdiction of the United States, including all
authorizations, approvals, and permits, if any, of any governmental authority or
regulatory body in any jurisdiction where the Stock is being sold, that are
required in connection with the lawful issuance and sale of the Stock pursuant
to this Agreement, the conversion of the Stock into Common Stock, and the
issuance of such Common Stock upon such conversion shall have been duly obtained
and shall be effective at and as of the Closing.
Section 5.10 ALL PROCEEDINGS TO BE SATISFACTORY. All corporate and
other proceedings to be taken by the Buyer in connection with the transactions
contemplated hereby, and all documents incident thereto shall be reasonably
satisfactory in form and substance to the Company and its counsel, and the
Company and said counsel shall have received all such counterpart originals or
certified or other copies of such documents as it or they may reasonably
request.
Section 5.11 CLOSING DATE. The Closing Date shall occur no later
than January 6, 1998, unless extended by the Company in its sole discretion.
Section 5.12 RESEARCH AGREEMENT. The Research and License Agreement
between the Company and Buyer, substantially in the form attached hereto as
EXHIBIT G shall have been executed.
ARTICLE VI
CONDITIONS TO BUYER'S OBLIGATIONS
The obligations of Buyer to purchase the Stock as provided hereby are
subject, in the discretion of Buyer, to the satisfaction, on or prior to the
Closing Date, of each of the following conditions:
Section 6.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. All
representations and warranties of the Company contained in this Agreement shall
be true and correct when made and, except as contemplated by this Agreement, at
and as of the Closing Date as if such representations and warranties were made
at and as of the Closing Date, and the Company shall have performed all
agreements and covenants required hereby to be performed by either of them prior
to or at the Closing Date.
Section 6.2 CONSENTS. All consents, approvals and waivers from
governmental authorities and other parties required or necessary as a result of
the transactions contemplated hereby, including, without limitation, those set
forth in SECTION 6.2 of the Disclosure Schedule, shall have been obtained.
Section 6.3 NO INJUNCTION. No injunction, stay or restraining
order shall be in effect prohibiting the consummation of the transactions
contemplated by this Agreement.
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Section 6.4 DOCUMENTS TO BE DELIVERED BY COMPANY. At the Closing,
Company shall have delivered to Buyer the following documents, in each case duly
executed or otherwise in proper form:
(a) STOCK CERTIFICATE(S). Stock certificates representing all of the
Stock.
(b) COMPLIANCE CERTIFICATE. A certificate signed by the chief
executive officer of the Company that each of the representations and warranties
made by the Company in this Agreement is true and correct in all material
respects on and as of the Closing Date with the same effect as though such
representations and warranties had been made or given on and as of the Closing
Date, and that the Company has performed and complied in all material respects
with all of its obligations under this Agreement which are to be performed or
complies with on or prior to the Closing Date.
(c) OPINION OF COUNSEL. A written opinion of Xxxxxx, XxXxxxxxx &
Fish, LLP, counsel to the Company, dated as of the Closing Date, addressed to
Buyer, in form and substance reasonably satisfactory to Buyer and its counsel.
(d) CERTIFIED RESOLUTIONS. Certified copies of the resolutions of
the Board of Directors, authorizing and approving this Agreement and the
consummation of the transactions contemplated hereby.
(e) CERTIFICATE; BYLAWS; GOOD STANDINGS. (i) A copy of the
certificate of incorporation of the Company certified as of a recent date by the
Secretary of State of the state of incorporation of the Company, (ii) a copy of
the bylaws of the Company certified by the secretary of the Company, and (iii)
certificates of good standing for the Company from the Secretary of State of the
state of incorporation of the Company and from each other jurisdiction in which
the Company is required to qualify to do business, in each case dated not more
than five (5) days prior to the Closing Date.
(f) INCUMBENCY CERTIFICATE. Incumbency certificates relating to each
person executing (as corporate officer or otherwise on behalf of another person)
any document executed and delivered to Buyer pursuant to the terms hereof.
(g) OTHER DOCUMENTS. All other documents, instruments or writings
required to be delivered to Buyer at or prior to the Closing pursuant to this
Agreement and such other certificates of authority and documents as Buyer may
reasonably request.
Section 6.5 AMENDMENT OF RESTATED CERTIFICATE; AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT; REGISTRATION RIGHTS AGREEMENT; WARRANT AGREEMENT. The
Company shall have amended its Certificate of Incorporation in the form set
forth as EXHIBIT C attached hereto, and the Stockholders Agreement, in the form
attached hereto as EXHIBIT D, the Registration Rights Agreement, in the form
attached hereto as EXHIBIT E, and the Warrant Agreement, in the form attached as
EXHIBIT F, shall have been executed by the parties thereto.
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Section 6.6 ABSENCE OF LITIGATION. No action, suit, investigation
or proceeding shall have been commenced or threatened by a governmental agency
or third party against Buyer, the Company, or any of the Affiliates, officers or
directors of any of them, with respect to the transactions contemplated hereby.
Section 6.7 SECURITIES LAW COMPLIANCE. All such actions and steps
necessary to assure compliance with applicable Federal securities laws and the
securities laws of any other jurisdiction of the United States, including all
authorizations, approvals, and permits, if any, of any governmental authority or
regulatory body in any jurisdiction where the Stock is being sold, that are
required in connection with the lawful issuance and sale of the Stock pursuant
to this Agreement, the conversion of the Stock into Common Stock, and the
issuance of such Common Stock upon such conversion shall have been duly obtained
and shall be effective at and as of the Closing.
Section 6.8 ALL PROCEEDINGS TO BE SATISFACTORY. All corporate and
other proceedings to be taken by the Company in connection with the transactions
contemplated hereby, and all documents incident thereto shall be reasonably
satisfactory in form and substance to the Buyer and its counsel, and the Buyer
and said counsel shall have received all such counterpart originals or certified
or other copies of such documents as it or they may reasonably request.
Section 6.9 CLOSING DATE. The Closing Date shall occur no later
than January 6, 1998, unless extended by Buyer in its sole discretion.
Section 6.10 RESEARCH AGREEMENT. The Research and License
Agreement, between the Company and Buyer, substantially in the form attached
hereto as EXHIBIT G, shall have been executed.
ARTICLE VII
POST-CLOSING COVENANTS
Section 7.1 FURTHER ASSURANCES. On and after the Closing Date, the
Company and Buyer will take all appropriate action and execute (or cause to be
executed) all documents, instruments or conveyances of any kind which may be
reasonably necessary or advisable to carry out any of the provisions hereof.
Section 7.2 PUBLIC ANNOUNCEMENTS. The timing and content of all
announcements regarding any aspect of this Agreement or the transactions
contemplated hereto to the financial community, government agencies, employees
or the general public shall be mutually agreed upon in advance by the Parties
hereto; PROVIDED, that each party hereto may make any such announcement which it
in good faith believes, based on advice of counsel, is necessary or advisable in
connection with any requirement of law or regulation, it being understood and
agreed that each party shall promptly provide the other parties hereto with
copies of any such announcement; and PROVIDED FURTHER that Buyer, the Company,
or their respective Affiliates may make any announcement or disclosure to
current or future financing sources or subsequent purchasers or assignees of
substantially all of the capital stock or assets of Buyer, the
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Company or Affiliate thereof without consent of or disclosure to the Company or
the Buyer, as the case may be.
Section 7.3 AVAILABILITY OF COMMON STOCK FOR CONVERSION AND
EXERCISE. The Company will keep such number of shares of Common Stock unissued
and available for issuance in order to permit conversion of all the then
outstanding shares of Stock.
ARTICLE VIII
INDEMNIFICATION
Section 8.1 SURVIVAL, REPRESENTATIONS AND WARRANTIES. The
respective representations and warranties of the Company and Buyer contained
herein or in any certificates or other documents delivered at the Closing shall
not be deemed waived or otherwise affected by any investigation made by any
party hereto. The representations and warranties provided for in this Agreement
shall survive for 24 months beyond the Closing Date, except that the
representations and warranties set forth in SECTIONS 3.1(B) and 4.2 shall
survive indefinitely. The provisions of this SECTION 8.1 shall not limit any
covenant or agreement of the parties hereto which, by its terms, contemplates
performance after the Closing Date. The indemnification provisions contained in
this Article VIII are in addition to, and not in derogation of, any statutory,
equitable, or common law remedy any party hereto may have for any breach of any
representation, warranty, or covenant. The covenants and agreements in this
Article VIII shall survive until such time as any claim for indemnification is
finally settled in accordance with the terms hereof.
Section 8.2 INDEMNIFICATION OBLIGATION OF THE COMPANY.
(a) The Company agrees to indemnify Buyer and its Affiliates,
stockholders, officers, directors, employees, agents, representatives and
successors and assigns (collectively, the "BUYER INDEMNITEES") in respect of,
and save and hold each Buyer Indemnitee harmless against and pay on behalf of or
reimburse each Buyer Indemnitee as and when incurred, any Losses which any Buyer
Indemnitee suffers, sustains or becomes subject to as a result of or by virtue
of, without duplication:
(i) any facts or circumstances which constitute a
misrepresentation or breach by the Company set forth in this Agreement
(including any Schedule hereto), or any certificate delivered by the Company
pursuant to this Agreement (provided that the Company is given written notice
of such Loss during the survival period specified in SECTION 8.1 above);
(ii) any nonfulfillment or breach of any covenant of the Company
set forth in this Agreement; and
(iii) expenses of the Company incident to this Agreement and the
transactions contemplated hereby (including, without limitation, the fees and
expenses and Taxes described in SECTION 9.8).
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(b) Notwithstanding the foregoing, the Company shall not be required
to indemnify the Buyer Indemnitees in respect of any Losses Buyer suffers,
sustains or becomes subject to as a result of or by virtue of any of the
occurrences referred to in SECTION 8.2(A)(I) above (other than losses arising
out of any misrepresentation or breach under any of Sections 3.1(b) and (d)
unless the aggregate of all such Losses exceeds $200,000; PROVIDED, that in such
event, the Company shall be responsible for the amount of all such Losses. In
no event shall the Company be obligated to indemnify the Buyer Indemnities under
this Article VIII in respect of any Losses Buyer suffers, sustains, or becomes
subject to, as a result of or by virtue of any of the occurrences referred to in
SECTION 8.2(A)(I) above in excess of $20,000,000 in the aggregate.
Section 8.3 INDEMNIFICATION OBLIGATION OF BUYER. Buyer will indemnify
the Company and its Affiliates, stockholders, officers, managers, directors,
employees, agents, representatives and successors and assigns (collectively, the
"COMPANY INDEMNITEES") in respect of, and save and hold each Company Indemnitee
harmless against any Losses which such Company Indemnitee suffers, sustains or
becomes subject to as a result of or by virtue of, without duplication:
(a) any facts or circumstances which constitute a misrepresentation
or breach of by Buyer set forth in this Agreement or any certificate delivered
by Buyer pursuant to this Agreement (provided that Buyer is given written notice
of such Loss during the applicable survival period specified in SECTION 8.1
above); or
(b) any nonfulfillment or breach of any covenant or agreement of the
Buyer set forth in this Agreement.
Section 8.4 INDEMNIFICATION PROCEDURES.
(a) Any Person making a claim for indemnification pursuant to
SECTION 8.2 OR 8.3 above (each, an "INDEMNIFIED PARTY") must give the party from
whom indemnification is sought (an "INDEMNIFYING PARTY") written notice of such
claim promptly after the Indemnified Party receives any written notice of any
action, lawsuit, proceeding, investigation or other claim (a "PROCEEDING")
against or involving the Indemnified Party by any Person or otherwise discovers
the liability, obligation or facts giving rise to such claim for
indemnification; PROVIDED, that the failure to notify or delay in notifying an
Indemnifying Party will not relieve the Indemnifying Party of its obligations
pursuant to SECTION 8.2 or 8.3 above, as applicable, except to the extent that
such failure actually xxxxx the Indemnifying Party.
(b) With respect to the defense of any Proceeding against or
involving an Indemnified Party in which any Person in question seeks only the
recovery of a sum of money (and not for injunctive or equitable relief) for
which indemnification is provided in SECTION 8.2 OR 8.3 above, at its option an
Indemnifying Party may appoint as lead counsel of such defense any legal counsel
selected by the Indemnified Party; PROVIDED, that before the Indemnifying Party
assumes control of such defense it must first:
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(i) enter into an agreement with the Indemnified Party (in form
and substance satisfactory to the Indemnified Party) pursuant to which the
Indemnifying Party agrees to be fully responsible (with no reservation of any
rights other than the right to be subrogated to the rights of the Indemnified
Party) for all Losses relating to such Proceeding and unconditionally guarantees
the payment and performance of any liability or obligation which may arise with
respect to such Proceeding or the facts giving rise to such claim for
indemnification; and
(ii) furnish the Indemnified Party with evidence that the
Indemnifying Party, in the Indemnified Party's sole judgment, is and will be
able to satisfy any such liability.
(c) Notwithstanding SECTION 8.4(B) above: (i) the Indemnified Party
will be entitled to participate in the defense of such claim and to employ
counsel of its choice for such purpose at its own expense (provided that the
Indemnifying Party will bear the reasonable fees and expenses of such separate
counsel incurred prior to the date upon which the Indemnifying Party effectively
assumes control of such defense), and (ii) the Indemnifying Party will not be
entitled to assume control of the defense of such claim, and will pay the
reasonable fees and expenses of legal counsel retained by the Indemnified Party,
if:
(i) the Indemnified Party reasonably believes that an adverse
determination of such Proceeding could be materially detrimental to or
materially injure the Indemnified Party's reputation or future business
prospects;
(ii) the Indemnified Party reasonably believes that there exists
or could arise a conflict of interest which, under applicable principles of
legal ethics, could prohibit a single legal counsel from representing both the
Indemnified Party and the Indemnifying Party in such Proceeding; or
(iii) a court of competent jurisdiction rules that the
Indemnifying Party has failed or is failing to prosecute or defend vigorously
such claim.
(d) The Indemnifying Party must obtain the prior written consent of
the Indemnified Party (which the Indemnified Party will not unreasonably
withhold) prior to entering into any settlement of such claim or Proceeding or
ceasing to defend such claim or Proceeding, provided that any such settlement
shall provide for the full release of all claims against each Indemnified Party.
The Indemnified Party shall not settle any claim or proceeding without the
consent of the Indemnifying Party (which consent shall not be unreasonably
withheld).
Section 8.5 PAYMENT. Upon the determination of the liability under
Article VIII or otherwise between the parties or by judicial proceeding, the
appropriate party shall pay to the other, as the case may be, within ten (10)
days after such determination, the amount of any claim for indemnification made
hereunder. In the event that the Indemnified Party is not paid in full for any
such claim pursuant to the foregoing provisions promptly after the other party's
obligation to indemnify has been determined in accordance herewith, it shall
have the right, notwithstanding any other rights that it may have against any
other Person, to setoff the unpaid amount of any
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such claim against any amounts owed by it under any instrument or agreement
entered into pursuant to this Agreement or otherwise. Upon the payment in full
of any claim, either by setoff or otherwise, the entity making payment shall be
subrogated to the rights of the Indemnified Party against any Person with
respect to the subject matter of such claim.
ARTICLE IX
MISCELLANEOUS
Section 9.1 ASSIGNMENT. Neither this Agreement nor any of the
rights or obligations hereunder may be assigned by the Company without the prior
written consent of Buyer, or by Buyer without the prior written consent of the
Company, except that Buyer may, without such consent, assign, directly or
indirectly, all of its rights and obligations under this Agreement to any of its
Affiliates, any Person which provides financing to the Buyer or any of its
Subsidiaries or any subsequent purchaser of the Buyer or its Affiliates (whether
by merger, consolidation, sale of stock, sale of assets or otherwise). Subject
to the foregoing, this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, legal representatives,
successors and permitted assigns, including a successor by amalgamation, merger,
or otherwise. This Agreement shall be for the sole benefit of the parties
hereto and their respective heirs, successors (including successors created by
amalgamation, merger, or otherwise), permitted assigns and legal representatives
and is not intended, nor shall be construed, to give any Person, other than the
parties hereto and their respective heirs, successors, (including successors
created by amalgamation, merger, or otherwise assigns and legal representatives,
any legal or equitable right, remedy or claim hereunder.
Section 9.2 NOTICES. Any notice, request, demand, waiver, consent,
approval or other communication which is required or permitted hereunder shall
be in writing. All such notices shall be delivered personally, by telecopier,
by certified mail, return receipt requested, or by reputable overnight courier
(costs prepaid), and shall be deemed given or made upon receipt thereof. All
such notices are to be given or made to the parties at the following addresses
(or to such other address as any party may designate by a notice given in
accordance with the provisions of this Section):
IF TO BUYER:
BioChem Pharma Inc.
000 Xxxxxx-Xxxxxxxx Xxxxxxxxx
Xxxxx, Xxxxxx X0X0X0
Xxxxxx
Attention: Vice President, Legal Affairs
Telecopy No.: (000) 000-0000
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WITH COPIES (WHICH SHALL NOT CONSTITUTE NOTICE TO BUYER) TO:
Xxxxxxxx & Xxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxx X. Xxxxxxx, Esq.
Telecopy No.: (000) 000-0000
IF TO THE COMPANY:
SCRIPTGEN Pharmaceuticals, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
WITH COPIES (WHICH SHALL NOT CONSTITUTE NOTICE TO THE COMPANY) TO:
Xxxxxx, XxXxxxxxx & Fish, LLP
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxxxxxx Xxxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
SECTION 9.3 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT REFERENCE TO THE CHOICE OF LAW OR CONFLICTS OF LAW PRINCIPLES THEREOF.
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR THE
UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY HERETO HEREBY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS. THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVE ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY FORUM NON CONVENIENS,
WHICH ANY OF THEM MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF SUCH ACTION OR
PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
Section 9.4 ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS. This
Agreement, together with all Exhibits and Schedules hereto, constitutes the
entire agreement among the Parties pertaining to the subject matter hereof and
supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the Parties. No supplement, modification or waiver
of this Agreement shall be binding unless executed in writing by the Party to be
bound thereby. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provision hereof (whether or
not similar), nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided.
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Section 9.5 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 9.6 INVALIDITY. In the event that any one or more of the
provisions contained in this Agreement or in any other instrument referred to
herein, shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement or any other such instrument.
Section 9.7 HEADINGS. The headings of the Articles and Sections
herein are inserted for convenience of reference only and are not intended to be
a part of or to affect the meaning or interpretation of this Agreement.
Section 9.8 EXPENSES. Except as otherwise provided herein, the
Company and Buyer will each be liable for their respective costs and expenses
incurred in connection with the negotiation, preparation, execution and
performance of this Agreement and the consummation of the transactions
contemplated hereby; PROVIDED, that the Company shall pay any and all transfer,
gains, stamp and other similar Taxes, if any, assessed in connection with the
transactions contemplated by this Agreement and shall have delivered evidence
satisfactory to Buyer of the payment of such Taxes.
Section 9.9 SPECIFIC PERFORMANCE. Each of the Buyer and the
Company acknowledges and agrees that the other Party would be damaged
irreparably in the event any of the provisions of this Agreement are not
performed in accordance with their specific terms or otherwise are breached.
Accordingly, each Party agrees that the other Party shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically this Agreement and the terms and
provisions hereof in any action instituted in any court of the United States or
any state thereof having jurisdiction over the parties and the matter (subject
to the terms and conditions of SECTION 9.3), in addition to any other remedy to
which they may be entitled, at law or in equity.
Section 9.10 TIME IS OF THE ESSENCE; COMPUTATION OF TIME. Buyer and
the Company agrees that time is of the essence with respect to every covenant,
condition to be satisfied, and action to be taken hereunder, and shall proceed
accordingly with respect to every action necessary, proper or advisable to make
effective the transactions contemplated by this Agreement. Whenever the last
day for the exercise of any privilege or the discharge of any duty hereunder
shall fall upon any day which is not a business day, the party having such
privilege or duty may exercise such privilege or discharge such duty on the next
succeeding business day.
Section 9.11 WAIVER OF JURY TRIAL. Each of the parties hereto
waives to the fullest extent permitted by law any right it may have to trial by
jury in respect of any claim, demand, action or cause of action based on, or
arising out of, under or in connection with this Agreement, or any course of
conduct, course of dealing, verbal or written statement or action of any party
hereto, in each case whether now existing or hereafter arising, and whether in
contract, tort, equity or otherwise. The parties to this
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Agreement each hereby agrees that any such claim, demand, action or cause of
action shall be decided by court trial without a jury and that the parties to
this Agreement may file an original counterpart of a copy of this Agreement with
any court as evidence of the consent of the parties hereto to the waiver of
their right to trial by jury.
Section 9.12 VOTING AGREEMENTS. With respect to the Company First
Listing (as that term is defined in the Registration Rights Agreement (attached
as EXHIBIT E hereto)), the Buyer agrees to (a) vote the Stock in favor of
adoption of the following proposals:
(i) approval of a blank check stock;
(ii) a reverse stock split;
(iii) elimination of stockholder action by unanimous written
consent; and
(iv) approval of the equity incentive plan described in the
Prospectus and indemnification agreements for officers and
directors of the Company,
and (b) to grant all waivers necessary under Section 3(b) and 4 of the
Stockholders Agreement (attached hereto as EXHIBIT D) reasonably necessary to
facilitate such Company First Listing. The Buyer further agrees not to
unreasonably withhold its vote in favor of all other proposals which require a
vote of the stockholders of the Company in connection with such Company First
Listing and as to which a majority of the votes cast by all of the holders of
capital stock of the Company have been cast in favor of. The foregoing
notwithstanding, the Buyer shall not be required to vote in favor of any such
other proposal if such other proposal will not affect all stockholders of the
Company (including Buyer) alike. Any approval granted under Subsection (a) of
this section shall automatically be deemed rescinded and of no force and effect
if the Company First Listing is not consummated on or before March 31, 1998.
This Section shall not apply to a Company First Listing consummated after March
31, 1998.
Section 9.13 AMALGAMATION. The Company acknowledges that Buyer has
advised it that it proposes to carry out a reorganization, including an
amalgamation, pursuant to which, among other things, a corporation named BioChem
Holdings Inc. (the "Successor") will own all of the assets and be liable for all
liabilities of Buyer (the "Amalgamation"). The Company hereby agrees that, upon
consummation of the Amalgamation, the Successor shall have all of the rights and
obligations of Buyer as if Successor had executed this Agreement on the date
hereof in lieu of Buyer, and that neither Buyer nor Successor shall be required
to send any notice of any kind regarding the Amalgamation nor seek the consent
of the Company to such Amalgamation.
Section 9.14 STANDSTILL AGREEMENT. For a period of five (5) years
from the Closing Date, neither Buyer nor any member of the Buyer Group will,
without prior approval of the Board of Directors of the Company, directly or
indirectly:
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(a) acquire, offer to acquire, or agree to acquire, by purchase, gift
or otherwise, any Common Stock or any securities which by the terms thereof are
convertible into or exchangeable or exercisable for Common Stock if the effect
of such acquisition will be to give the Buyer or any member of the Buyer Group,
individually or collectively assuming conversion, exchange or exercise of any
security convertible into or exchangeable or exercisable for Common Stock, the
right to cast more than twenty-five percent (25%) of the votes entitled to be
cast generally in the election of Directors of the Company on the date of
acquisition;
(b) make, or in any way participate in any "solicitation" of
"proxies" to vote (as such terms are defined in Rule 14a-1 under the 1934 Act),
solicit any consent or seek to advise or influence any person or entity with
respect to the voting of any Common Stock or become a "participant" in any
"election contest" (as such terms are defined or used in Rule 14a-11 under the
0000 Xxx) with respect to a Change of Control;
(c) form, join or encourage the formation of, any "person" within the
meaning of Section 13(d)(3) of the 1934 Act with respect to any Common Stock to
effectuate a Change of Control;
(d) deposit any Common Stock into a voting trust or subject any such
Common Stock to any arrangement or agreement with respect to the voting thereof
with respect to a Change of Control;
(e) initiate, propose or otherwise solicit stockholders for the
approval of one or more stockholder proposals regarding a Change of Control with
respect to the Company as described in Rule 14a-8 under the 1934 Act, or induce
or attempt to induce any other person to initiate any such stockholder proposal;
(f) except as to the Investor Director (as that term is defined in
Section 1 of the Stockholder's Agreement, attached as EXHIBIT D hereof) seek
election to or seek to place a representative on the Board of Directors of the
Company;
(g) call or seek to have called any meeting of the stockholders of
the Company regarding a Change of Control;
(h) except through the Investor Director, act to seek to control of
the Company;
(i) solicit, seek to effect, negotiate with any other party with
respect to, or make any proposal, wither written or oral, to the Board of
Directors of the Company or any director or officer of the Company or otherwise
make any public proposal whatsoever with respect to, any form of business
combination transaction involving the Company and Buyer, including, without
limitation, a merger, exchange offer or liquidation of the Company's assets, or
any restructuring, recapitalization or similar transaction with respect to the
Company; or
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(j) instigate or assist any third party to do any of the foregoing
with respect to a Change of Control, PROVIDED, HOWEVER, that nothing herein
shall be deemed to prohibit or limit the sale by Buyer of the Stock to any other
party under any circumstances not otherwise prohibited under other sections of
this Agreement, the Related Agreements, or applicable securities' laws.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
SCRIPTGEN PHARMACEUTICALS, INC.
By /s/ Xxxx X. Xxxxxx
------------------------------
Name: Xxxx X. Xxxxxx
Title: President and Chief
Executive Officer
BIOCHEM PHARMA, INC.
By /s/ Xxxxxxxx Xxxxxxx
------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Executive Vice President
By /s/ Xxxxxx Xxxx
------------------------------
Name: Xxxxxx Xxxx
Title: Vice President
