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EXHIBIT 4.1
SECURITIES PURCHASE AGREEMENT
DECEMBER 18, 2000
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TABLE OF CONTENTS
PAGE
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1. PURCHASE AND SALE OF PREFERRED STOCK AND WARRANTS ............................. 1
1.1 Sale and Issuance of Preferred Stock and Warrants .................... 1
1.2 Closing; Delivery .................................................... 2
2. REPRESENTATIONS AND WARRANTIES OF NEOGENE ..................................... 2
2.1 Organization, Good Standing and Qualification ........................ 2
2.2 Capitalization ....................................................... 3
2.3 Subsidiaries ......................................................... 3
2.4 Authorization and Compliance ......................................... 3
2.5 Valid Issuance of Securities ......................................... 4
2.6 Governmental Consents ................................................ 4
2.7 Litigation ........................................................... 5
2.8 Intellectual Property ................................................ 5
2.9 Compliance with Other Instruments and Laws; Permits .................. 5
2.10 Agreements; Actions .................................................. 5
2.11 Disclosure ........................................................... 6
2.12 Related Party Transactions ........................................... 6
2.13 Title to Assets ...................................................... 6
2.14 Employee Benefit Plans ............................................... 7
2.15 Tax Matters .......................................................... 7
2.16 Insurance ............................................................ 7
2.17 Private Offering ..................................................... 7
3. REPRESENTATIONS AND WARRANTIES OF NEOTHERAPEUTICS ............................. 7
3.1 Organization, Good Standing and Qualification ........................ 7
3.2 Capitalization ....................................................... 8
3.3 Subsidiaries ......................................................... 8
3.4 Authorization and Compliance ......................................... 8
3.5 Valid Issuance of Securities ......................................... 9
3.6 Governmental Consents ................................................ 9
3.7 Litigation ........................................................... 10
3.8 Intellectual Property ................................................ 10
3.9 Compliance with Other Instruments and Laws; Permits .................. 11
3.10 Private Offering ..................................................... 11
3.11 SEC Reports .......................................................... 11
3.12 Absence of Certain Developments ...................................... 12
3.13 Disclosure ........................................................... 12
3.14 Related Party Transactions ........................................... 12
3.15 Title to Assets ...................................................... 13
3.16 Form S-3 Eligibility ................................................. 13
3.17 Listing and Maintenance Requirements ................................. 13
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER ................................... 13
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4.1 Authorization ........................................................ 13
4.2 Experience; Qualified Institutional Buyer ............................ 13
4.3 Purchase Entirely for Own Account .................................... 14
4.4 Disclosure of Information ............................................ 14
4.5 Restricted Securities ................................................ 14
4.6 No Public Market ..................................................... 15
4.7 Residence ............................................................ 15
4.8 Further Restrictions on Disposition .................................. 15
4.9 Legends .............................................................. 16
5. RIGHT TO EXCHANGE PREFERRED SHARES FOR NEOTHERAPEUTICS PREFERRED STOCK ........ 17
5.1 Exchange Right ....................................................... 17
5.2 Exchange Notice; Filing of Designations .............................. 17
5.3 Certificates ......................................................... 17
5.4 Record Holder ........................................................ 17
5.5 Valid Issuance ....................................................... 17
5.6 Investment Representations ........................................... 18
6. OTHER AGREEMENTS .............................................................. 18
6.1 Furnishing of Information ............................................ 18
6.2 Voting ............................................................... 18
6.3 Acknowledgement of Dilution .......................................... 18
6.4 Integration .......................................................... 19
6.5 Increase in Authorized Preferred Shares .............................. 19
6.6 Certain Securities Laws Disclosures; Publicity ....................... 20
6.7 Use of Proceeds ...................................................... 20
6.8 Reimbursement ........................................................ 20
7. MISCELLANEOUS ................................................................. 21
7.1 Survival of Warranties ............................................... 21
7.2 Transfer; Successors and Assigns ..................................... 21
7.3 Governing Law ........................................................ 21
7.4 Counterparts ......................................................... 22
7.5 Titles and Subtitles ................................................. 22
7.6 Notices .............................................................. 22
7.7 Finder's Fee ......................................................... 22
7.8 Fees and Expenses .................................................... 22
7.9 Attorney's Fees ...................................................... 22
7.10 Amendments and Waivers ............................................... 23
7.11 Severability ......................................................... 23
7.12 Delays or Omissions; Remedies Cumulative ............................. 23
7.13 Entire Agreement ..................................................... 23
7.14 California Corporate Securities Law .................................. 23
7.15 Confidentiality ...................................................... 23
7.16 Reliance ............................................................. 24
7.17 Joint and Several Liability .......................................... 24
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EXHIBITS
Exhibit A Form of NeoGene Warrants
Exhibit B Form of NeoTherapeutics Warrants
Exhibit C NeoGene Certificate of Determination
Exhibit D Form of NeoGene Rights Agreement
Exhibit E Form of NeoTherapeutics Rights Agreement
Exhibit F Schedule of Exceptions to Representations and Warranties of NeoGene
Exhibit G Schedule of Exceptions to Representations and Warranties of
NeoTherapeutics
Exhibit H Form of Legal Opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
Exhibit I Form of Exchange Notice
Exhibit J Form of NeoTherapeutics Certificate of Designations
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SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this "Agreement") is made as of
December 18, 2000 by and among NeoGene Technologies, Inc., a California
corporation ("NeoGene"), NeoTherapeutics, Inc., a Delaware corporation
("NeoTherapeutics"), and Societe Generale, a bank organized under the laws of
France (the "Purchaser").
WHEREAS, NeoGene desires to issue and sell shares of its Series B
Convertible Preferred Stock, no par value per share (the "Series B Preferred"),
and warrants (the "NeoGene Warrants") to purchase shares of its common stock, no
par value per share (the "NeoGene Common Stock"), in the form attached hereto as
Exhibit A;
WHEREAS, NeoTherapeutics owns approximately 80% of the outstanding
NeoGene Common Stock, and as such will benefit from the Purchaser's investment
in NeoGene;
WHEREAS, In order to induce the Purchaser to purchase the Series B
Preferred and the NeoGene Warrants, NeoTherapeutics desires to issue, along with
the Series B Preferred, warrants (the "NeoTherapeutics Warrants") to purchase an
aggregate of 30,000 shares of its common stock, par value $.001 per share (the
"NeoTherapeutics Common Stock"), in the form attached hereto as Exhibit B, and
NeoTherapeutics desires to grant an exchange right to the holders of Series B
Preferred which will allow such holders to exchange their shares of Series B
Preferred for preferred stock of NeoTherapeutics;
WHEREAS, the Purchaser desires to acquire the Series B Preferred and the
NeoGene Warrants from NeoGene and the NeoTherapeutics Warrants from
NeoTherapeutics on the terms and subject to the conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the promises and mutual covenants
contained in this Agreement, the parties agree as follows:
1. PURCHASE AND SALE OF PREFERRED STOCK AND WARRANTS.
1.1 SALE AND ISSUANCE OF PREFERRED STOCK AND WARRANTS.
(a) NeoGene shall adopt and file with the Secretary of State of
the State of California on or before the Closing (as defined below) a
Certificate of Determination in the form attached hereto as Exhibit C (the
"NeoGene Determination").
(b) Subject to the terms and conditions of this Agreement, the
Purchaser agrees to purchase, and NeoGene agrees to sell and issue to the
Purchaser, at the Closing, (i) the 44,445 shares of Series B Preferred Stock
(collectively, the "Preferred Shares") and (ii) NeoGene Warrants to purchase up
to 9,387 shares of NeoGene Common Stock, and the Purchaser agrees to purchase,
and NeoTherapeutics agrees to issue to the Purchaser, at the Closing,
NeoTherapeutics Warrants to purchase up to 30,000 shares of NeoTherapeutics
Common Stock. The total purchase price for the Preferred Shares, the NeoGene
Warrants and the NeoTherapeutics Warrants issued to the Purchaser is $2,000,025
(the "Purchase Price"), which shall be paid to NeoGene by the Purchaser at the
Closing. The Preferred Shares will have the
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rights, preferences and privileges set forth in NeoGene's Amended and Restated
Articles of Incorporation (the "Restated Articles") and the NeoGene
Determination.
1.2 CLOSING; DELIVERY.
(a) The purchase and sale of the Preferred Shares, the NeoGene
Warrants and the NeoTherapeutics Warrants shall take place at the offices of
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, at
10:00 a.m., on December 18, 2000, or at such other time and place as the parties
shall mutually agree, in writing (which time and place are designated as the
"Closing", and the date of the Closing is hereinafter referred to as the
"Closing Date").
(b) At the Closing, the parties shall make the following
deliveries:
(i) NeoGene shall deliver to the Purchaser (A) a
certificate representing the Preferred Shares, (B) the NeoGene Warrants, (C) a
certified copy of the Restated Articles, (D) a certified copy of the NeoGene
Determination, (E) an executed copy of this Agreement, (F) an executed copy of
the Registration Rights Agreement in the form attached hereto as Exhibit D (the
"NeoGene Rights Agreement"), (G) the opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for
NeoGene and NeoTherapeutics, dated as of the Closing, in the form attached
hereto as Exhibit H and (H) a certificate of an officer of NeoGene.
(ii) NeoTherapeutics shall deliver to the Purchaser (A)
the NeoTherapeutics Warrants, (B) an executed copy of this Agreement, (C) an
executed copy of the Registration Rights Agreement in the form attached hereto
as Exhibit E (the "NeoTherapeutics Rights Agreement") and (D) a certificate of
an officer of NeoTherapeutics.
(iii) The Purchaser shall deliver (A) to NeoGene, (1)
the Purchase Price in immediately available funds by cashier's check payable to
NeoGene or by wire transfer to an account specified by NeoGene and (2) an
executed copy of the NeoGene Rights Agreement, (B) to NeoTherapeutics, an
executed copy of the NeoTherapeutics Rights Agreement and (C) to both NeoGene
and NeoTherapeutics, an executed copy of this Agreement.
2. REPRESENTATIONS AND WARRANTIES OF NEOGENE. NeoGene hereby represents and
warrants to the Purchaser that, except as set forth on the NeoGene Schedule of
Exceptions attached hereto as Exhibit F, specifically identifying the relevant
subsection hereof (provided, that, all information disclosed in the NeoGene
Schedule of Exceptions under a particular subsection shall be deemed disclosed
only for the purposes of such subsection, and not for the purposes of any other
subsection), as of the Closing:
2.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. NeoGene is a
corporation duly organized, validly existing and in good standing under the laws
of the State of California and has all requisite corporate power and authority
to carry on its business as currently conducted and as proposed to be conducted.
NeoGene is duly qualified to transact business and is in good standing in each
jurisdiction in which the failure so to qualify would (i) adversely affect the
legality, validity or enforceability of the NeoGene Securities (as defined
below), the NeoTherapeutics Securities (as defined below) or the Exchange
Securities (as defined below), or of this Agreement, the NeoGene Rights
Agreement, the NeoTherapeutics Rights Agreement, the
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NeoGene Warrants or the NeoTherapeutics Warrants (collectively, the "Transaction
Documents"), (ii) have or result in a material adverse effect on the results of
operations, assets, prospects, or condition (financial or otherwise) of NeoGene
and NeoTherapeutics taken as a whole, or (iii) adversely impair the ability of
either NeoGene or NeoTherapeutics to perform fully on a timely basis their
respective obligations under any of the Transaction Documents (any of (i), (ii)
or (iii), a "Material Adverse Effect").
2.2 CAPITALIZATION.
(a) The authorized capital of NeoGene consists of: (i) 5,000,000
shares of preferred stock, of which 150,000 shares have been designated Series A
Preferred, no par value (the "Series A Preferred"), 111,110 of which are issued
and outstanding, and of which 150,000 shares have been designated Series B
Preferred, none of which are issued and outstanding, and (ii) 10,000,000 shares
of Common Stock, 1,005,556 shares of which are issued and outstanding
immediately prior to the Closing. The Series A Preferred and the Series B
Preferred are pari passu as to dividend rights, rights upon liquidation and
otherwise.
(b) All of the outstanding shares of NeoGene's Common Stock and
Series A Preferred are duly authorized, fully paid and nonassessable and were
issued in compliance with all applicable federal and state securities laws.
(c) NeoGene has reserved a total of 250,000 shares of Common
Stock for issuance to officers, directors, employees and consultants of NeoGene
pursuant to its 2000 Stock Incentive Plan duly adopted by NeoGene's Board of
Directors and approved by NeoGene's Stockholders. Other than NeoGene's
commitment to issue 12,346 shares of NeoGene Common Stock to its 3 founders,
there are no outstanding options, warrants, rights (including conversion or
preemptive rights and rights of first refusal or similar rights) or agreements,
orally or in writing, for the purchase or acquisition from NeoGene of any of its
securities or any other agreements to participate in the profits of NeoGene.
2.3 SUBSIDIARIES. NeoGene does not currently own or control, directly or
indirectly, any interest in any other corporation, association, or other
business entity. NeoGene is not a participant in any joint venture, partnership
or similar arrangement.
2.4 AUTHORIZATION AND COMPLIANCE.
(a) NeoGene has the requisite corporate power and authority to
enter into and to consummate the transactions contemplated by each of this
Agreement, the NeoGene Determination, the NeoGene Warrants and the NeoGene
Rights Agreement (collectively, the "NeoGene Agreements") and otherwise to carry
out its obligations thereunder. All corporate action on the part of NeoGene, its
officers, directors and stockholders necessary for the authorization, execution
and delivery of the NeoGene Agreements, the performance of all obligations of
NeoGene hereunder and thereunder and the authorization, issuance and delivery of
the Preferred Shares, the NeoGene Common Stock issuable upon conversion of the
Preferred Shares, the NeoGene Warrants and the NeoGene Common Stock issuable
upon exercise of the NeoGene Warrants (collectively, the "NeoGene Securities")
has been taken, and the NeoGene Agreements, when executed and delivered by
NeoGene, shall constitute valid and legally binding
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obligations of NeoGene, enforceable against NeoGene in accordance with their
respective terms except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, and other laws of general
application affecting enforcement of creditors' rights generally, and as limited
by laws relating to the availability of specific performance, injunctive relief
or other equitable remedies or (ii) to the extent indemnification provisions in
the NeoGene Rights Agreement may be limited by applicable federal and state
securities laws.
(b) Subject to Section 2.6 of this Agreement, and assuming that
accuracy of the Purchaser's representations set forth in Section 4 hereof,
neither the execution and delivery of the NeoGene Agreements nor the performance
by NeoGene of its obligations under the NeoGene Agreements (including the
issuance of the NeoGene Securities) will: (i) conflict with or violate any
provisions of the Restated Articles or the By-laws of NeoGene; (ii) with or
without the giving of notice or the passage of time, or both, violate, or be in
conflict with, or constitute a default under, or cause or permit the termination
or the acceleration of the maturity of, any debt or obligation of NeoGene; (iii)
require notice to or the consent of any party to any agreement or commitment,
including, without limitation, any lease or license to which NeoGene is a party,
or by which it or its properties is bound or subject; (iv) result in the
creation or imposition of any security interest, lien or other encumbrance upon
any property or assets of NeoGene under any agreement or commitment to which it
is a party, or by which it or its properties is bound or subject; or (v) violate
any statute or law or any judgment, decree, order, regulation or rule of any
court, regulatory body or governmental authority to which NeoGene or its
properties is bound or subject.
2.5 VALID ISSUANCE OF SECURITIES. The Preferred Shares and the NeoGene
Warrants when issued, sold and delivered in accordance with the terms hereof
will be duly and validly issued, fully-paid and nonassessable, free and clear of
all liens, encumbrances and rights of first refusal (other than the right of
first refusal held by the holders of the Series A Preferred, which right has
been waived by such holders with respect to the transactions contemplated by
this Agreement) of any kind (collectively, "Liens") and, based in part upon the
representations of the Purchaser in this Agreement, will be issued in compliance
with all applicable federal and state securities laws regarding registration or
qualification. The shares of NeoGene Common Stock issuable upon conversion of
the Preferred Shares or exercise of the NeoGene Warrants have been duly and
validly authorized and reserved for issuance and, when issued and paid for in
accordance with the terms of the NeoGene Determination and the NeoGene Warrants,
shall be duly and validly issued, fully-paid and nonassessable and, based in
part upon the representations of the Purchaser in this Agreement, such shares of
Common Stock if issued at the Closing would be issued in compliance with all
applicable federal and state securities laws.
2.6 GOVERNMENTAL CONSENTS. No consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority on the part of NeoGene is
required in connection with the offer, sale or issuance of the NeoGene
Securities or the consummation of any other transactions contemplated by this
Agreement, except for (i) filing of any registration statements with the
Securities and Exchange Commission (the "Commission") in accordance with the
NeoGene Rights Agreement, (ii) filings pursuant to Section 25102(f) of the
California Corporate Securities Law of 1968, as amended, and the rules
thereunder, other applicable state securities laws and Regulation D of the
Securities Act of 1933, as amended (the "Securities Act"), which filings shall
be effected within
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the requisite time periods, (iii) the filing of the NeoGene Determination in the
office of the Secretary of State of the State of California which shall be filed
by NeoGene on or prior to the Closing and (iv) consents, approvals, orders,
authorizations, registrations, qualifications, designations, declarations or
filings where the failure to obtain or make such consents, approvals, orders,
authorizations, registrations, qualifications, designations, declarations or
filings would not have or result in, individually or in the aggregate, a
Material Adverse Effect.
2.7 LITIGATION. There is no action, suit, proceeding or investigation
pending or, to NeoGene's knowledge, currently threatened against NeoGene that
questions the validity of the NeoGene Agreements or the right of NeoGene to
enter into them, or to consummate the transactions contemplated hereby or
thereby, or that might result, either individually or in the aggregate, in a
Material Adverse Effect. NeoGene is not a party to or subject to the provisions
of any order, writ, injunction, judgment or decree of any court or government
agency or instrumentality specifically applicable to NeoGene. There is no
action, suit, proceeding or investigation by NeoGene currently pending or which
NeoGene intends to initiate.
2.8 INTELLECTUAL PROPERTY. NeoGene owns or possesses sufficient legal
rights to all patents, trademarks, service marks, tradenames, copyrights, trade
secrets, licenses, information and proprietary rights and processes necessary
for its business as now conducted (collectively, the "NeoGene Intellectual
Property Rights") without any conflict with, or infringement of, the rights of
others. NeoGene has not received any written communications alleging that
NeoGene has violated or, by conducting its business, would violate any of the
patents, trademarks, service marks, tradenames, copyrights, trade secrets or
other proprietary rights or processes of any other person or entity. To
NeoGene's knowledge, all NeoGene Intellectual Property Rights are enforceable
and there is no existing infringement by any person of such NeoGene Intellectual
Property Rights. All patent applications that have been filed by NeoGene with
the Patent and Trademark Office have been duly filed by NeoGene and NeoGene has
taken all actions reasonably necessary to maintain the prosecution of such
patent applications.
2.9 COMPLIANCE WITH OTHER INSTRUMENTS AND LAWS; PERMITS. NeoGene is not
in violation or default of any provision of its Restated Articles or By-Laws.
NeoGene is not in violation of, or in default under, any provision of any
instrument, mortgage, deed of trust, loan, contract, commitment, judgment,
decree, order or obligation to which it is a party or by which it or any of its
properties are bound, which violations or defaults, individually or in the
aggregate, would have a Material Adverse Effect. To NeoGene's knowledge, NeoGene
is not in violation of any provision of any federal, state or local statute,
rule or regulation which would have a Material Adverse Effect. NeoGene has all
franchises, permits, licenses and any similar authority necessary for the
conduct of its business, the lack of which could have a Material Adverse Effect.
NeoGene is not in default in any material respect under any of such franchises,
permits, licenses or other similar authority, and has not received any notice of
proceeding relating to the revocation or modification of any of its permits or
licenses.
2.10 AGREEMENTS; ACTIONS.
(a) Except for agreements explicitly contemplated by the NeoGene
Agreements, there are no agreements, understandings, instruments, contracts or
proposed transactions to which NeoGene is a party or by which it is bound that
involve (i) obligations
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(contingent or otherwise) of, or payments to, NeoGene in excess of, $50,000,
(ii) the license of any patent, copyright, trade secret or other proprietary
right to or from NeoGene (other than end-user, object code, internal use
software licenses and support/maintenance agreements), or (iii) the grant of
rights to any person or entity to manufacture, produce, assemble, license,
market or sell NeoGene's products or services or affect adversely NeoGene's
exclusive right to develop, manufacture, assemble, distribute, market or sell
its products or services.
(b) NeoGene has not (i) declared or paid any dividends, or
authorized or made any distribution upon or with respect to any class or series
of its capital stock (including any repurchases thereof), (ii) incurred any
indebtedness for money borrowed or incurred any other liabilities individually
in excess of $25,000 or in excess of $100,000 in the aggregate, (iii) made any
loans or advances to any person or entity, other than ordinary advances for
travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its
assets or rights, other than the sale of its inventory in the ordinary course of
business.
(c) NeoGene is not a guarantor or indemnitor of any indebtedness
of any other person or entity.
2.11 DISCLOSURE. All written materials provided by NeoGene to the
Purchaser regarding NeoGene, its business and the transactions contemplated
hereby, including the Exhibits to this Agreement, furnished by or on behalf of
NeoGene are true and correct and do not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
2.12 RELATED PARTY TRANSACTIONS. NeoGene is not indebted, directly or
indirectly, to any of its stockholders, officers or directors or to their
respective affiliates, spouses or children, in any amount whatsoever other than
in connection with payments for services rendered and for expenses or advances
of expenses incurred in the ordinary course of business or relocation expenses
of employees. None of NeoGene's stockholders, officers or directors, or any
affiliates thereof or members of their immediate families, are, directly or
indirectly, indebted to NeoGene (other than in connection with purchases of
NeoGene's stock) or have any direct or indirect ownership interest in any entity
with which NeoGene is affiliated or, to NeoGene's knowledge, with which NeoGene
has a business relationship or which competes with NeoGene, except that
officers, directors and/or stockholders of NeoGene may own stock in (but not
exceeding two percent of the outstanding capital stock of) any publicly traded
company that may compete with NeoGene. To NeoGene's knowledge, none of NeoGene's
stockholders, officers or directors or any members of their immediate families
are, directly or indirectly, interested in any material contract with NeoGene
(other than to the extent any such person or entity is a party to a NeoGene
Agreement).
2.13 TITLE TO ASSETS. NeoGene has good and marketable title in fee
simple to all of its real and personal assets that it purports to own, free and
clear of all mortgages, Liens, loans and encumbrances, except such encumbrances
and Liens which arise in the ordinary course of business and do not individually
or in the aggregate materially impair NeoGene's ownership or use of such assets.
With respect to the assets it leases, NeoGene is in material compliance with
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such leases and, to its knowledge, holds a valid leasehold interest free of any
Liens, claims or encumbrances.
2.14 EMPLOYEE BENEFIT PLANS. NeoGene does not have any Employee Benefit
Plans as defined in the Employee Retirement Income Security Act of 1974.
2.15 TAX MATTERS. NeoGene has not filed a tax return for 1999. NeoGene
has paid all taxes and other assessments due. NeoGene has not elected pursuant
to the Internal Revenue Code of 1986, as amended (the "Code"), to be treated as
a Subchapter S corporation or a collapsible corporation pursuant to Section
1362(a) or Section 341(f) of the Code, nor has it made any other elections
pursuant to the Code (other than elections that relate solely to methods of
accounting, depreciation or amortization) that would have a material effect on
the business, properties or condition (financial or otherwise) of NeoGene. None
of NeoGene's tax returns have ever been audited by any governmental authorities.
NeoGene has withheld or collected from each payment made to its employees the
amount of all taxes (including without limitation, federal income taxes, Federal
Insurance Contribution Act taxes and Federal Unemployment Tax Act taxes)
required to be withheld or collected therefrom, and has paid the same to the
proper tax receiving officers or authorized depositories.
2.16 INSURANCE. NeoGene has in full force and effect fire and casualty
insurance policies, with extended coverage, sufficient in amount (subject to
reasonable deductibles) to allow it to replace any of its properties that might
be damaged or destroyed.
2.17 PRIVATE OFFERING. Assuming the accuracy of the representations and
warranties of the Purchaser set forth in Section 4, the offer, issuance and sale
of the NeoGene Securities to the Purchaser as contemplated hereby are exempt
from the registration requirements of the Securities Act. Neither NeoGene nor
any person or entity acting on its behalf has taken or is, to the knowledge of
NeoGene, contemplating taking any action which could subject the offering,
issuance or sale of the NeoGene Securities to the registration requirements of
the Securities Act including soliciting any offer to buy or sell the NeoGene
Securities by means of any form of general solicitation or advertising.
3. REPRESENTATIONS AND WARRANTIES OF NEOTHERAPEUTICS. NeoTherapeutics hereby
represents and warrants to the Purchaser that, except as set forth on the
NeoTherapeutics Schedule of Exceptions attached hereto as Exhibit G,
specifically identifying the relevant subsection hereof (provided, that, all
information disclosed in the NeoTherapeutics Schedule of Exceptions under a
particular subsection shall be deemed disclosed only for the purposes of such
subsection, and not for the purposes of any other subsection), as of the
Closing:
3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. NeoTherapeutics is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
carry on its business as currently conducted and as proposed to be conducted.
Each NeoTherapeutics Subsidiary (as defined below) is an entity duly organized,
validly existing and in good standing under the laws of its jurisdiction of
formation and has all requisite power and authority to carry on its business as
currently conducted and as proposed to be conducted. NeoTherapeutics and each
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NeoTherapeutics Subsidiary is duly qualified to transact business and is in good
standing in each jurisdiction in which the failure so to qualify would have a
Material Adverse Effect.
3.2 CAPITALIZATION.
(a) The authorized capital of NeoTherapeutics consists, or will
consist, immediately prior to the Closing, of: (i) 5,000,000 shares of preferred
stock, of which 400 shares have been designated Series A Preferred, none of
which are outstanding, and (ii) 25,000,000 shares of NeoGene Common Stock,
13,307,227 shares of which are issued and outstanding immediately prior to the
Closing.
(b) All of the outstanding shares of NeoTherapeutics' Common
Stock and Series A Preferred Stock are duly authorized, fully paid and
nonassessable and were issued in compliance with all applicable federal and
state securities laws.
(c) NeoTherapeutics has reserved a total of 2,401,430 shares of
NeoTherapeutics Common Stock for issuance to officers, directors, employees and
consultants of NeoTherapeutics pursuant to its 1991 and 1997 Stock Option Plans
duly adopted by the Board of Directors and approved by NeoTherapeutics'
stockholders (the "Stock Plans"). Of such reserved shares of NeoTherapeutics
Common Stock, options to purchase 1,819,175 shares of NeoTherapeutics Common
Stock have been granted and are currently outstanding, and 446,730 shares of
NeoTherapeutics Common Stock remain available for future grants under the Stock
Plans. Additionally, NeoTherapeutics has granted options to acquire 746,000
shares of NeoTherapeutics Common Stock, which options were not granted pursuant
to any stock option plan.
(d) There are no other outstanding options, warrants, rights
(including conversion or preemptive rights and rights of first refusal or
similar rights) or agreements, orally or in writing, for the purchase or
acquisition from NeoTherapeutics of any of its securities or any other
agreements to participate in the profits of NeoTherapeutics.
3.3 SUBSIDIARIES. Other than NeoGene, Advanced ImmunesTherapeutics,
Inc., a California corporation, NeoOncoRx, Inc., a California corporation, and
NeoTherapeutics, GmbH, a Switzerland corporation (such entities, other than
NeoGene, the "NeoTherapeutics Subsidiaries"), NeoTherapeutics does not currently
own or control, directly or indirectly, any interest in any other corporation,
association or other business entity. NeoTherapeutics owns 100% of the equity
interests of each NeoTherapeutics Subsidiary. NeoTherapeutics is not a
participant in any joint venture, partnership or similar arrangement.
3.4 AUTHORIZATION AND COMPLIANCE.
(a) NeoTherapeutics has the requisite corporate power and
authority to enter into and to consummate the transaction contemplated by each
of this Agreement, the NeoTherapeutics Designation (as defined below), the
NeoTherapeutics Warrants and the NeoTherapeutics Rights Agreement (collectively,
the "NeoTherapeutics Agreements") and otherwise carryout its obligations
thereunder. All corporate action on the part of NeoTherapeutics, its officers,
directors and stockholders necessary for the authorization, execution and
delivery of the NeoTherapeutics Agreements, the performance of all obligations
of
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NeoTherapeutics hereunder and thereunder and the authorization, issuance and
delivery of the NeoTherapeutics Warrants and the NeoTherapeutics Common Stock
issuable upon exercise of the NeoTherapeutics Warrants (collectively, the
"NeoTherapeutics Securities") has been taken, and the NeoTherapeutics
Agreements, when executed and delivered by NeoTherapeutics, shall constitute
valid and legally binding obligations of NeoTherapeutics, enforceable against
NeoTherapeutics in accordance with their respective terms except (i) as limited
by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance and other laws of general application affecting enforcement of
creditors' rights generally, and as limited by laws relating to the availability
of specific performance, injunctive relief or other equitable remedies, or (ii)
to the extent the indemnification provisions contained in the NeoTherapeutics
Rights Agreement may be limited by applicable federal or state securities laws.
(b) Subject to Section 3.6 of this Agreement, and assuming that
accuracy of the Purchaser's representations set forth in Section 4 hereof and
assuming that such representations are true as of the date of any exchanges
under Section 5, neither the execution and delivery of the NeoTherapeutics
Agreements nor the performance by NeoTherapeutics of its obligations under the
NeoTherapeutics Agreements (including the issuance of the NeoTherapeutics
Securities and the NeoTherapeutics Preferred Stock and the shares of
NeoTherapeutics Common Stock upon conversion thereof (collectively, the
"Exchange Securities")) will: (i) conflict with or violate any provisions of the
Certificate of Incorporation of NeoTherapeutics (the "NeoTherapeutics
Certificate") or its By-laws; (ii) with or without the giving of notice or the
passage of time, or both, violate, or be in conflict with, or constitute a
default under, or cause or permit the termination or the acceleration of the
maturity of, any debt or other obligation of NeoTherapeutics; (iii) require
notice to or the consent of any party to any agreement or commitment, including,
without limitation, any lease or license to which NeoTherapeutics is a party, or
by which it or its properties is bound or subject; (iv) result in the creation
or imposition of any security interest, lien, or other encumbrance upon any
property or assets of NeoTherapeutics under any agreement or commitment to which
it is a party, or by which it or its properties is bound or subject; or (v)
violate any statute or law or any judgment, decree, order, regulation or rule of
any court, governmental authority or regulatory body to which NeoTherapeutics or
its properties is bound or subject.
3.5 VALID ISSUANCE OF SECURITIES. The NeoTherapeutics Warrants when
issued, sold and delivered in accordance with the terms hereof will be duly and
validly issued, free and clear of all Liens and, based in part upon the
representations of the Purchaser in this Agreement, will be issued in compliance
with all applicable federal and state securities laws regarding registration or
qualification. The shares of NeoTherapeutics Common Stock issuable upon exercise
of the NeoTherapeutics Warrants have been duly and validly authorized and
reserved for issuance and, when issued and paid for in accordance with the terms
of the NeoTherapeutics Warrants, shall be duly and validly issued, fully-paid
and nonassessable and, assuming that the representations of the Purchaser in
this Agreement remain true at the time of exercise of the NeoTherapeutics
Warrants, such shares of NeoTherapeutics Common Stock would be issued in
compliance with all applicable federal and state securities laws.
3.6 GOVERNMENTAL CONSENTS. No consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority on the part of NeoTherapeutics is
required in connection with the offer,
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sale or issuance of the NeoTherapeutics Securities or the Exchange Securities or
the consummation of any other transactions contemplated by this Agreement,
except for (i) filings pursuant to Section 25102(f) of the California Corporate
Securities Law of 1968, as amended, and the rules thereunder, other applicable
state securities laws and Regulation D of the Securities Act, which filings
shall be effected within the requisite time periods, (ii) the filing with the
Commission of one or more registration statements meeting the requirements set
forth in the NeoTherapeutics Rights Agreement, (iii) application(s) to the
Nasdaq National Market ("NASDAQ") for the listing of additional shares with the
NASDAQ (and with any other national securities exchange of market in which the
NeoTherapeutics Common Stock is then listed) required by the NeoTherapeutics
Rights Agreement, (iv) if applicable, the filing of a Certificate of Designation
in accordance with Section 5 below, and (v) consents, approvals, orders,
authorizations, registrations, qualifications, designations, declarations or
filings where the failure to obtain or make such consents, approvals, orders,
authorizations, registrations, qualifications, designations, declarations or
filings would not have or result in, individually or in the aggregate, a
Material Adverse Effect (the items described in clauses (i)-(v) of this Section
3.6 and in clauses (i)-(iv) of Section 2.6 above are collectively, the "Required
Approvals").
3.7 LITIGATION. There is no action, suit, proceeding or investigation
pending or, to NeoTherapeutics' and each NeoTherapeutics Subsidiary's knowledge,
currently threatened against NeoTherapeutics or any NeoTherapeutics Subsidiary
that questions the validity of the NeoTherapeutics Agreements or the right of
NeoTherapeutics to enter into them, or to consummate the transactions
contemplated hereby or thereby, or that might result, either individually or in
the aggregate, in a Material Adverse Effect. Neither NeoTherapeutics nor any
NeoTherapeutics Subsidiary is a party to or subject to the provisions of any
order, writ, injunction, judgment or decree of any court or government agency or
instrumentality specifically applicable to it. There is no action, suit,
proceeding or investigation by NeoTherapeutics or any NeoTherapeutics Subsidiary
currently pending or which NeoTherapeutics or any NeoTherapeutics Subsidiary
intends to initiate.
3.8 INTELLECTUAL PROPERTY. NeoTherapeutics and each NeoTherapeutics
Subsidiary owns or possesses sufficient legal rights to all patents, trademarks,
service marks, tradenames, copyrights, trade secrets, licenses, information and
proprietary rights and processes necessary for its business as now conducted
(collectively, the "NeoTherapeutics Intellectual Property Rights") without any
conflict with, or infringement of, the rights of others. Neither NeoTherapeutics
nor any NeoTherapeutics Subsidiary has received any written communications
alleging that NeoTherapeutics or any NeoTherapeutics Subsidiary has violated or,
by conducting its business, would violate any of the patents, trademarks,
service marks, tradenames, copyrights, trade secrets or other proprietary rights
or processes of any other person or entity. To NeoTherapeutics' and each
NeoTherapeutics Subsidiary's knowledge, all NeoTherapeutics Intellectual
Property Rights are enforceable and there is no existing infringement by any
person of such NeoTherapeutics Intellectual Property Rights. All patent
applications that have been filed by NeoTherapeutics or any NeoTherapeutics
Subsidiary with the Patent and Trademark Office have been duly filed by
NeoTherapeutics or such NeoTherapeutics Subsidiary, as applicable, and
NeoTherapeutics or such NeoTherapeutics Subsidiary, as applicable, has taken all
actions reasonably necessary to maintain the prosecution of such patent
applications.
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3.9 COMPLIANCE WITH OTHER INSTRUMENTS AND LAWS; PERMITS. Neither
NeoTherapeutics nor any NeoTherapeutics Subsidiary is in violation or default of
any provision of the NeoTherapeutics Certificate or by-laws. Neither
NeoTherapeutics nor any NeoTherapeutics Subsidiary is in violation of, or in
default under, any provision of any instrument, mortgage, deed of trust, loan,
contract, commitment, judgment, decree, order or obligation to which it is a
party or by which it or any of its properties are bound, which violations or
defaults, individually or in the aggregate, would have a Material Adverse
Effect. To NeoTherapeutics' and each NeoTherapeutics Subsidiary's knowledge,
neither NeoTherapeutics nor any NeoTherapeutics Subsidiary is in violation of
any provision of any federal, state or local statute, rule or regulation which
would have a Material Adverse Effect. NeoTherapeutics and each NeoTherapeutics
Subsidiary have all franchises, permits, licenses and any similar authority
necessary for the conduct of their respective businesses, the lack of which
could have a Material Adverse Effect. Neither NeoTherapeutics nor any
NeoTherapeutics Subsidiary is in default in any material respect under any of
such franchises, permits, licenses or other similar authority, and has not
received any notice of proceeding relating to the revocation or modification of
any of its permits or licenses.
3.10 PRIVATE OFFERING. Assuming the accuracy of the representations and
warranties of the Purchaser set forth in Section 4, the offer, issuance and sale
of the NeoTherapeutics Securities to the Purchaser as contemplated hereby are
exempt from the registration requirements of the Securities Act. Neither
NeoTherapeutics nor any person or entity acting on its behalf has taken or is,
to the knowledge of NeoTherapeutics, contemplating taking any action which could
subject the offering, issuance or sale of the NeoTherapeutics Securities to the
registration requirements of the Securities Act including soliciting any offer
to buy or sell the NeoTherapeutics Securities by means of any form of general
solicitation or advertising.
3.11 SEC REPORTS.
(a) NeoTherapeutics has filed all reports required to be filed
by it under the Securities Act and the Securities Exchange Act of 1934, as
amended (the "Exchange Act") for the two years preceding the date hereof
(collectively, the "SEC Reports") on a timely basis or has received a valid
extension of such time for filing and has filed any such SEC Reports prior to
the expiration of such extension. As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Securities Act or
the Exchange Act, as the case may be, and the rules and regulations of the
Commission thereunder applicable to such reports and registration statements. As
of their respective dates, the SEC Reports did not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were, or will be, made, not misleading. All
material agreements to which NeoTherapeutics is a party or to which its assets
are subject have been filed as exhibits to the SEC Reports.
(b) The audited consolidated financial statements and unaudited
interim financial statements of NeoTherapeutics included in the SEC Reports
comply as to form in all material respects with applicable accounting
requirements of the Securities Act or the Exchange Act, as applicable, and with
the published rules and regulations of the Commission with respect thereto. The
financial statements and the condensed financial statements, as applicable,
included in the SEC Reports (i) have been prepared in accordance with GAAP
(except as may be
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indicated therein or in the notes thereto), (ii) present fairly, in all material
respects, the financial position of NeoTherapeutics and its subsidiaries as of
the dates thereof and the results of their operations and cash flows for the
periods then ended subject, in the case of the unaudited interim financial
statements, to normal year-end audit adjustments and the fact that certain
information and notes have been condensed or omitted in accordance with the
Exchange Act and the rules and regulations promulgated thereunder, and (iii) are
in all material respects in agreement with the books and records of
NeoTherapeutics and its subsidiaries.
3.12 ABSENCE OF CERTAIN DEVELOPMENTS. Except as disclosed in the SEC
Reports filed with the Commission prior to the date hereof or in
NeoTherapeutics' press releases prior to the date hereof and except for the
transactions contemplated by this Agreement, since September 30, 2000, (a) there
has been no event, occurrence or development that has or that is reasonably
likely to result in a material adverse effect to the business, operations or
properties of NeoTherapeutics or any NeoTherapeutics Subsidiary, (b) neither
NeoTherapeutics nor any NeoTherapeutics Subsidiary has incurred any liabilities
(contingent or otherwise) other than (i) liabilities incurred in the ordinary
course of business consistent with past practice and (ii) liabilities not
required to be reflected in NeoTherapeutics' financial statements pursuant to
GAAP or required to be disclosed in filings made with the Commission, (c)
NeoTherapeutics has not altered its method of accounting or the identity of its
auditors and (d) NeoTherapeutics has not declared or made any payment or
distribution of cash or other property to its stockholders or officers or
directors (other than in compliance with existing NeoTherapeutics' stock or
stock option plans and existing agreements and terms of employment) with respect
to its capital stock, or purchased, redeemed (or made any agreements to purchase
or redeem) any shares of its capital stock.
3.13 DISCLOSURE. NeoTherapeutics confirms that it has not provided the
Purchaser or its agents or counsel with any information that constitutes or
might constitute material non-public information. NeoTherapeutics understands
and confirms that the Purchaser shall be relying on the foregoing
representations in effecting transactions in securities of NeoTherapeutics. All
written materials provided by NeoTherapeutics to the Purchaser regarding
NeoTherapeutics, its business and the transactions contemplated hereby,
including the Exhibits to this Agreement, furnished by or on behalf of
NeoTherapeutics are true and correct and do not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
3.14 RELATED PARTY TRANSACTIONS. NeoTherapeutics is not indebted,
directly or indirectly, to any of its stockholders, officers or directors or to
their respective affiliates, spouses or children, in any amount whatsoever other
than in connection with payments for services rendered and for expenses or
advances of expenses incurred in the ordinary course of business or relocation
expenses of employees. None of NeoTherapeutics' stockholders, officers or
directors, or any affiliates thereof or members of their immediate families,
are, directly or indirectly, indebted to NeoTherapeutics (other than in
connection with purchases of NeoTherapeutics' stock) or have any direct or
indirect ownership interest in any entity with which NeoTherapeutics is
affiliated or, to NeoTherapeutics' knowledge, with which NeoTherapeutics has a
business relationship or which competes with NeoTherapeutics, except that
officers, directors and/or stockholders of NeoTherapeutics may own stock in (but
not exceeding two percent of the
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outstanding capital stock of) any publicly traded company that may compete with
NeoTherapeutics. To NeoTherapeutics' knowledge, none of NeoTherapeutics'
stockholders, officers or directors or any members of their immediate families
are, directly or indirectly, interested in any material contract with
NeoTherapeutics (other than to the extent any such person or entity is a party
to an Agreement).
3.15 TITLE TO ASSETS. NeoTherapeutics and each NeoTherapeutics
Subsidiary has good and marketable title in fee simple to all of its real and
personal assets that it purports to own, free and clear of all mortgages, Liens,
loans and encumbrances, except such encumbrances and Liens which arise in the
ordinary course of business and do not individually or in the aggregate
materially impair its ownership or use of such assets. With respect to the
assets it leases, NeoTherapeutics and each NeoTherapeutics Subsidiary is in
material compliance with such leases and, to its knowledge, holds a valid
leasehold interest free of any Liens, claims or encumbrances.
3.16 FORM S-3 ELIGIBILITY. NeoTherapeutics is eligible to register its
Common Stock for resale under Form S-3 promulgated under the Securities Act.
3.17 LISTING AND MAINTENANCE REQUIREMENTS. NeoTherapeutics has not, in
the two years preceding the date hereof received notice (written or oral) from
the NASDAQ or any other stock exchange, market or trading facility on which the
NeoTherapeutics Common Stock is or has been listed (or on which it has been
quoted) to the effect that NeoTherapeutics is not in compliance with the listing
or maintenance requirements of such exchange, market or trading facility.
NeoTherapeutics is, and has no reason to believe that it will not in the
foreseeable future continue to be, in compliance with all such listing and
maintenance requirements.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER. The Purchaser hereby represents
and warrants to NeoGene and NeoTherapeutics that as of the Closing:
4.1 AUTHORIZATION. The Purchaser has full power and authority to enter
into this Agreement, the NeoGene Rights Agreement and the NeoTherapeutics Rights
Agreement. This Agreement, the NeoGene Rights Agreement and the NeoTherapeutics
Rights Agreement, when executed and delivered by the Purchaser, will constitute
valid and legally binding obligations of the Purchaser, enforceable in
accordance with their respective terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and
any other laws of general application affecting enforcement of creditors' rights
generally, and as limited by laws relating to the availability of a specific
performance, injunctive relief, or other equitable remedies, or (b) to the
extent the indemnification provisions contained in the NeoGene Rights Agreement
and the NeoTherapeutics Rights Agreement may be limited by applicable federal or
state securities laws. The Purchaser's subscription for and purchase of the
NeoGene Securities and the NeoTherapeutics Securities will not violate any
provision of law of the Purchaser's jurisdiction of organization, and no
governmental approvals, consents or filing are required in connection with such
subscription and purchase.
4.2 EXPERIENCE; QUALIFIED INSTITUTIONAL BUYER. The Purchaser has
experience as an investor in securities of companies in the developmental stage
and acknowledges that it can bear the economic risk of its investment in the
NeoGene Securities and NeoTherapeutics Securities.
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The Purchaser has, by reason of its business or financial experience or the
business or financial experience of its professional advisors who are
unaffiliated with and who are not compensated by either NeoGene or
NeoTherapeutics or any affiliate or selling agent of either NeoGene or
NeoTherapeutics, directly or indirectly, the capacity to protect its own
interests in connection with its purchase of the NeoGene Securities and
NeoTherapeutics Securities. The Purchaser has the financial capacity to bear the
risk of this investment. The Purchaser is a qualified institutional buyer as
defined in Rule 144A promulgated under the Securities Act.
4.3 PURCHASE ENTIRELY FOR OWN ACCOUNT. The NeoGene Securities and the
NeoTherapeutics Securities to be acquired by the Purchaser will be acquired for
investment for the Purchaser's own account (or a trust account if the Purchaser
is a nominee), not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and the Purchaser has no present intention of
selling, granting any participation in or otherwise distributing the same. The
Purchaser does not presently have any contract, undertaking, agreement or
arrangement with any person or entity to sell, transfer or grant participations
to such person or to any third person, with respect to any of the NeoGene
Securities or the NeoTherapeutics Securities. The Purchaser has not been formed
for the specific purpose of acquiring the NeoGene Securities and the
NeoTherapeutics Securities.
4.4 DISCLOSURE OF INFORMATION. The Purchaser has received and reviewed
information about NeoGene and NeoTherapeutics and has had an opportunity to
discuss each of NeoGene's and NeoTherapeutics' business, management and
financial affairs with their management and to review each of NeoGene's and
NeoTherapeutics' facilities. The Purchaser understands and acknowledges that
such discussions, as well as any written information issued by either NeoGene or
NeoTherapeutics, (i) were intended to describe the aspects of such company's
business and prospects which such company believes to be material, but were not
necessarily an exhaustive description, and (ii) may have contained
forward-looking statements involving known and unknown risks and uncertainties
which may cause the company's actual results in future periods or plans for
future periods to differ materially from what was anticipated and that no
representations or warranties were or are being made with respect to any such
forward-looking statements or the probability of achieving any of the results
projected in any of such forward-looking statements. Nothing contained in this
Section 4.4 shall limit in any respect representations and warranties of NeoGene
and NeoTherapeutics contained in this Agreement.
4.5 RESTRICTED SECURITIES. The Purchaser understands that the NeoGene
Securities and the NeoTherapeutics Securities have not been, and will not be,
prior to issuance, registered under the Securities Act, and will be issued
pursuant to a specific exemption from the registration provisions of the
Securities Act which depends upon, among other things, the bona fide nature of
the investment intent and the accuracy of the Purchaser's representations as
expressed herein. The Purchaser understands that the NeoGene Securities and the
NeoTherapeutics Securities are "restricted securities" under applicable U.S.
federal and state securities laws and that, pursuant to these laws, the
Purchaser must hold such securities indefinitely unless they are registered with
the Commission and qualified by state authorities, or an exemption from such
registration and qualification requirements is available. The Purchaser
acknowledges that NeoGene has no obligation to register or qualify the NeoGene
Securities for resale except as set forth in the NeoGene Rights Agreement and
NeoTherapeutics has no obligation to register or qualify the NeoTherapeutics
Securities for resale except as set forth in
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the NeoTherapeutics Rights Agreement. The Purchaser further acknowledges that if
an exemption from registration or qualification is available, it may be
conditioned on various requirements including, but not limited to, the time and
manner of sale, the holding period for the NeoGene Securities or the
NeoTherapeutics Securities, and on requirements relating to NeoGene or
NeoTherapeutics which are outside of the Purchaser's control, and which, except
as otherwise set forth herein, NeoGene or NeoTherapeutics is under no obligation
and may not be able to satisfy. The Purchaser acknowledges that each of NeoGene
and NeoTherapeutics will make a notation on its stock books regarding the
restrictions on transfers set forth in this Section 4 and will transfer
securities on their books only to the extent not inconsistent therewith.
4.6 NO PUBLIC MARKET. The Purchaser understands that no public market
now exists for any of the securities issued by NeoGene, and that NeoGene has
made no assurances that a public market will ever exist for the NeoGene
Securities.
4.7 RESIDENCE. The office or offices of the Purchaser in which its
investment decision was made is located at the address or addresses of the
Purchaser set forth on the signature pages.
4.8 FURTHER RESTRICTIONS ON DISPOSITION. NeoGene Securities,
NeoTherapeutics Securities and Exchange Securities may be disposed of only
pursuant to an effective registration statement under the Securities Act, to
either NeoGene or NeoTherapeutics, respectively, or pursuant to an available
exemption from, or in a transaction not subject to the registration requirements
of, the Securities Act, and in compliance with any applicable federal and state
securities laws. In connection with any transfer of NeoGene Securities,
NeoTherapeutics Securities or Exchange Securities other than pursuant to an
effective registration statement or to NeoGene or NeoTherapeutics, respectively,
except as otherwise set forth herein, NeoGene or NeoTherapeutics, as applicable,
may require the transferor thereof to provide to such company an opinion of
counsel reasonably acceptable to such company, the form and substance of which
opinion shall be reasonably satisfactory to such company, to the effect that
such transfer does not require registration under the Securities Act.
Notwithstanding the foregoing, NeoGene and NeoTherapeutics hereby consent and
agree to register on the books of the applicable company and with any transfer
agent for the securities of the applicable company, without requiring a legal
opinion, any transfer of NeoGene Securities, NeoTherapeutics Securities or
Exchange Securities by the Purchaser to an affiliate of the Purchaser or to one
or more funds or managed accounts under common management with such Purchaser,
and any transfer among any such affiliates or one or more funds or managed
accounts, provided (i) that the transferee certifies to such company that it is
an "accredited investor" within the meaning of Rule 501(a) under the Securities
Act or a "qualified institutional buyer" as defined in Rule 144A promulgated
under the Securities Act, as may be necessary to ensure compliance with the
Securities Act, (ii) that it is acquiring the NeoGene Securities,
NeoTherapeutics Securities or Exchange Securities solely for investment
purposes, and (iii) that any such transferee shall agree in writing to be bound
by the terms of this Agreement and shall have the rights of the Purchaser under
this Agreement, the NeoGene Rights Agreement and the NeoTherapeutics Rights
Agreement.
4.9 LEGENDS. The Purchaser understands that the NeoGene Securities, the
NeoTherapeutics Securities and the Exchange Securities and any securities issued
in respect of
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or exchange for such securities, may bear the following legend until it is no
longer required by law or the provisions of this Section:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE
SECURITIES ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH
ACT AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES OR BLUE SKY LAWS.
The NeoGene Securities, the NeoTherapeutics Securities and Exchange Securities
shall not contain the legend set forth above nor any other legend at any time
while a registration statement covering such securities is effective under the
Securities Act or, in the event there is not an effective registration
statement, covering such securities at such time if such legend is not required
under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the Commission). Each
of NeoGene and NeoTherapeutics agree that with respect to any NeoGene
Securities, NeoTherapeutics Securities or Exchange Securities, respectively,
that are issued with a legend in accordance with this Section 4.9, it will,
within three (3) Trading Days (as defined below) after request therefor by the
Purchaser and the surrender by the Purchaser of the certificate representing the
applicable NeoGene Securities, NeoTherapeutics Securities or Exchange Securities
provide the Purchaser with a certificate or certificates representing such
NeoGene Securities, NeoTherapeutics Securities or Exchange Securities, free from
such legend at such time as such legend would not have been required under this
Section 4.9 had such issuance occurred on the date of such request. NeoGene and
NeoTherapeutics may not make any notation on their records or give instructions
to any transfer agent which enlarge the restrictions of transfer set forth in
this Section. The Purchaser will comply with the prospectus delivery
requirements of the Securities Act as applicable to it in connection with sales
of Registrable Securities (as defined in the NeoGene Rights Agreement or the
NeoTherapeutics Rights Agreement, as applicable) pursuant to a registration
statement. For the purposes of this Agreement, "Trading Day" means (a) a day on
which the shares of NeoTherapeutics Common Stock are traded on the NASDAQ or on
such of the New York Stock Exchange, American Stock Exchange or the Nasdaq
SmallCap Market (each, a "Subsequent Market") on which the shares of
NeoTherapeutics Common Stock are then listed or quoted, or (b) if the shares of
NeoTherapeutics Common Stock are not listed on the NASDAQ or a Subsequent
Market, a day on which the shares of NeoTherapeutics Common Stock are traded in
the over-the-counter market, as reported by the OTC Bulletin Board, or (c) if
the shares of NeoTherapeutics Common Stock are not quoted on the OTC Bulletin
Board, a day on which the shares of NeoTherapeutics Common Stock are quoted in
the over-the-counter market as reported by the National Quotation Bureau
Incorporated (or any similar organization or agency succeeding its functions of
reporting prices); provided, however, that in the event that the shares of
NeoTherapeutics Common Stock are not listed or quoted as set forth in (a), (b)
and (c) hereof, then Trading Day shall mean any day except Saturday, Sunday and
any day which
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shall be a legal holiday or a day on which banking institutions in the State of
New York are authorized or required by law or other government action to close
5. RIGHT TO EXCHANGE PREFERRED SHARES FOR NEOTHERAPEUTICS PREFERRED Stock. In
addition to the other rights granted to the Purchaser hereunder, NeoTherapeutics
hereby grants the following exchange right (an "Exchange Right") to the
Purchaser:
5.1 EXCHANGE RIGHT. The Purchaser shall have the right, at its option,
at any time and from time to time after the sixth monthly anniversary of the
Closing, to exchange all or a portion of the Preferred Shares then held by the
Purchaser for a number of shares of Series C Convertible Preferred Stock, $.001
par value per share, of NeoTherapeutics (the "NeoTherapeutics Preferred Stock")
equal to (i) the aggregate liquidation preference of the Preferred Shares
surrendered for exchange plus any accrued but unpaid dividends thereon, divided
by (ii) the stated value per share of the NeoTherapeutics Preferred Stock.
5.2 EXCHANGE NOTICE; FILING OF DESIGNATIONS. In order to exercise the
Exchange Right for shares of NeoTherapeutics Preferred Stock, the Purchaser
shall deliver to NeoTherapeutics, no less than four (4) Trading Days prior to
the desired date of exchange, written notice of its intent to exercise the
Exchange Right in the form of the Exchange Notice attached hereto as Exhibit I
(each such notice, an "Exchange Notice"). Upon receipt of the first Exchange
Notice for an exchange of Preferred Shares for shares of NeoTherapeutics
Preferred Stock, NeoTherapeutics shall have three (3) Trading Days to file the
Certificate of Designations in the form attached hereto as Exhibit J (the
"NeoTherapeutics Designation") setting forth the terms of the NeoTherapeutics
Preferred Stock with the Secretary of State of the State of Delaware. The
NeoTherapeutics Designation shall not be filed with the Secretary of State of
the State of Delaware prior to NeoTherapeutics' receipt of the first Exchange
Notice for an exchange of Preferred Shares for shares of NeoTherapeutics
Preferred Stock.
5.3 CERTIFICATES. As promptly as practicable after the filing of the
NeoTherapeutics Designation, if applicable, but in no event later than four (4)
Trading Days from its receipt of the Exchange Notice, NeoTherapeutics shall
issue and deliver to the Purchaser exercising an Exchange Right at its principal
office a certificate for the full number of shares of NeoTherapeutics Preferred
Stock issuable upon exchange of the Preferred Shares, and the Purchaser shall
surrender its certificate or certificates representing the Preferred Shares.
5.4 RECORD HOLDER. The Purchaser exercising an Exchange Right will
become the holder of record of the NeoTherapeutics Preferred Stock issued in the
exchange as of the close of business on the day the Preferred Shares are
surrendered for exchange.
5.5 VALID ISSUANCE. NeoTherapeutics represents and warrants to the
Purchaser that, upon issuance, any NeoTherapeutics Preferred Stock issued in
exchange for Preferred Shares and any shares of NeoTherapeutics' Common Stock
issued upon conversion of such NeoTherapeutics Preferred Stock in accordance
with the terms of the NeoTherapeutics Designation shall be validly issued, fully
paid, non-assessable and free and clear of all Liens, and assuming that the
Purchaser makes the representations required by Section 5.6 below, such shares
of NeoTherapeutics Preferred Stock or shares of NeoTherapeutics Common Stock
would be offered and issued in compliance with all applicable federal and state
securities laws and be
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exempt from the registration requirements of the Securities Act. Upon issuance
of NeoTherapeutics Preferred Stock, NeoTherapeutics will have reserved a number
of duly authorized shares of NeoTherapeutics Common Stock for issuance upon
conversion of the NeoTherapeutics Preferred Stock that is not less than the sum
of 200% of the number of shares of NeoTherapeutics Common Stock which would be
issuable upon conversion in full of the NeoTherapeutics Preferred Stock,
assuming such conversion occurred at the respective conversion price on December
18, 2000 and all dividends and interest (as applicable) thereon is paid in
shares of NeoTherapeutics Common Stock until the fifth yearly anniversary of the
Closing Date, and (ii) the maximum number of shares of NeoTherapeutics Common
Stock issuable upon exercise in full of the NeoTherapeutics Warrants.
5.6 INVESTMENT REPRESENTATIONS. Notwithstanding the foregoing, the
Purchaser shall not have the right to deliver an Exchange Notice hereunder
unless the Purchaser makes the representations and warranties set forth in
Sections 4.2-4.9 hereof as of the date of exchange as set forth in the
applicable Exchange Notice.
6. OTHER AGREEMENTS.
6.1 FURNISHING OF INFORMATION. As long as a Purchaser owns
NeoTherapeutics Securities or Exchange Securities, NeoTherapeutics covenants to
file timely (or obtain extensions in respect thereof and file within the
applicable grace period) all reports required to be filed by NeoTherapeutics
after the date hereof pursuant to the Exchange Act. So long as the Purchaser
owns NeoTherapeutics Securities or Exchange Securities, if NeoTherapeutics is
not required to file reports pursuant to such laws, it will prepare and furnish
to the Purchaser owning NeoTherapeutics Securities or Exchange Securities, and
make publicly available in accordance with Rule 144(c) promulgated under the
Securities Act, such information as is required for the Purchaser to sell the
NeoTherapeutics Securities or Exchange Securities under Rule 144 promulgated
under the Securities Act. NeoTherapeutics further covenants that it will take
such further action as any holder of NeoTherapeutics Securities or Exchange
Securities may reasonably request, all to the extent required from time to time
to enable such person or entity to sell NeoTherapeutics Securities or Exchange
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144 promulgated under the Securities Act.
6.2 VOTING. During the period in which it owns NeoGene Securities,
NeoTherapeutics Securities or Exchange Securities, the Purchaser agrees to vote
each voting security of each such company held by the Purchaser as directed by
such company's management in all matters on which the holder of such security is
entitled to vote.
6.3 ACKNOWLEDGEMENT OF DILUTION.
(a) NeoGene acknowledges that the issuance of the NeoGene Common
Stock upon conversion of the Preferred Shares will result in dilution of the
outstanding shares of NeoGene Common Stock, which dilution may be substantial
under certain conditions. NeoGene further acknowledges that its obligation to
issue NeoGene Common Stock upon conversion of the Preferred Shares is
unconditional and absolute, subject to the limitations set forth herein and in
the NeoGene Determination, regardless of the effect of any such dilution.
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(b) NeoTherapeutics acknowledges that in the event
NeoTherapeutics Preferred Stock is issued to the Purchaser pursuant to Section
5, the issuance of NeoTherapeutics Common Stock upon the conversion of
NeoTherapeutics Preferred Stock will result in dilution of the outstanding
shares of NeoTherapeutics Common Stock, which dilution may be substantial under
certain market conditions. NeoTherapeutics further acknowledges that its
obligation to issue NeoTherapeutics Common Stock upon the conversion of
NeoTherapeutics Preferred Stock is unconditional and absolute, subject to the
limitations set forth herein or in the NeoTherapeutics Designation, regardless
of the effect of any such dilution.
6.4 INTEGRATION. NeoGene and NeoTherapeutics shall not, and shall use
their best efforts to ensure that, no affiliate shall, sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the Securities Act) that would be integrated with the
offer or sale of the securities contemplated in this Agreement in a manner that
would require the registration under the Securities Act of the sale of the
securities sold pursuant to this Agreement to the Purchaser or that would be
integrated with the offer or sale of the securities sold pursuant to this
Agreement for purposes of the rules and regulations of the Nasdaq Stock Market.
6.5 INCREASE IN AUTHORIZED PREFERRED SHARES. If on any date
NeoTherapeutics would be, if a notice of conversion or exercise (as the case may
be) were to be delivered on such date, precluded from issuing (a) 200% of the
number of shares of NeoTherapeutics Common Stock as would then be issuable upon
a conversion in full of the NeoTherapeutics Preferred Stock and (b) the number
of shares of NeoTherapeutics Common Stock issuable upon exercise in full of the
NeoTherapeutics Warrants (the "Current Required Minimum"), in either case, due
to the unavailability of a sufficient number of authorized but unissued or
reserved shares of NeoTherapeutics Common Stock, then the Board of Directors of
NeoTherapeutics shall promptly (and in any case, within 60 Trading Days from
such date) prepare and mail to the stockholders of NeoTherapeutics proxy
materials requesting authorization to amend the NeoTherapeutics Certificate to
increase the number of shares of NeoTherapeutics Common Stock which
NeoTherapeutics is authorized to issue to at least such number of shares as is
reasonably adequate to enable NeoTherapeutics to comply with its issuance,
conversion, exercise and reservation of shares obligations as set forth in this
Agreement, the NeoTherapeutics Designation and the NeoTherapeutics Warrants (the
sum of (x) the number of shares of NeoTherapeutics Common Stock then outstanding
plus all shares of NeoTherapeutics Common Stock issuable upon exercise of all
outstanding options, warrants and convertible instruments, and (y) the Current
Required Minimum, shall be a reasonable number). In connection therewith, the
Board of Directors shall (a) adopt proper resolutions authorizing such increase,
(b) recommend to and otherwise use its best efforts to promptly and duly obtain
stockholder approval to carry out such resolutions (and hold a special meeting
of the stockholders no later than the earlier to occur of the 60th day after
delivery of the proxy materials relating to such meeting and the 90th day after
request by a holder of securities to issue the number of shares of
NeoTherapeutics Common Stock in accordance with the terms hereof) and (c) within
five Trading Days of obtaining such stockholder authorization, file an
appropriate amendment to NeoTherapeutics' certificate of incorporation to
evidence such increase. Notwithstanding NeoTherapeutics' obligation to call a
special meeting of stockholders pursuant to this Section 6.5, if at any time
prior to the next annual meeting of stockholders of NeoTherapeutics, which is
scheduled for June 2001, the number of authorized but unissued or reserved
shares of NeoTherapeutics Common Stock does
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not satisfy the Current Required Minimum, NeoTherapeutics need not call a
special stockholders meeting but may instead satisfy the requirements of this
Section 6.5 at such annual stockholders meeting, provided that such meeting
takes place on or before June 30, 2001.
6.6 CERTAIN SECURITIES LAWS DISCLOSURES; PUBLICITY. NeoTherapeutics
shall: (i) on the Closing Date, issue a press release acceptable to the
Purchaser disclosing the transactions contemplated hereby, (ii) file with the
Commission a Report on Form 8-K or Form 10-Q (as applicable) disclosing the
transactions contemplated hereby within ten (10) Trading Days after the Closing
Date, and (iii) timely file with the Commission a Form D promulgated under the
Securities Act as required under Regulation D promulgated under the Securities
Act and provide a copy thereof to the Purchaser promptly after the filing
thereof. NeoTherapeutics shall, no less than two (2) Trading Days prior to the
filing of any disclosure required by clauses (ii) and (iii) above, provide a
copy thereof to the Purchaser. NeoTherapeutics and the Purchaser shall consult
with each other in issuing any press releases or otherwise making public
statements or filings and other communications with the Commission or any
regulatory agency or stock market or trading facility with respect to the
transactions contemplated hereby and neither party shall issue any such press
release or otherwise make any such public statement, filings or other
communications pertaining to the transactions contemplated hereby without the
prior written consent of the other, which consent shall not be unreasonably
withheld or delayed, except that no prior consent shall be required if such
disclosure is required by law or such consent can not reasonably be expected to
be received prior to the time required to complete such filing or make such
statement in accordance with such applicable law, in which such case the
disclosing party shall provide the other party with prior notice of such public
statement, filing or other communication. Notwithstanding the foregoing,
NeoTherapeutics shall not publicly disclose the name of the Purchaser, or
include the name of the Purchaser in any filing with the Commission, or any
regulatory agency, trading facility or stock market without the prior written
consent of the Purchaser, except to the extent such disclosure is required by
law, in which case NeoTherapeutics shall provide the Purchaser with prior notice
of such disclosure.
6.7 USE OF PROCEEDS. NeoGene shall use the net proceeds obtained
hereunder for working capital purposes and not to redeem any NeoGene equity or
equity-equivalent securities, except as may be expressly permitted by the
Transaction Documents. Pending application of the proceeds of this placement in
the manner permitted hereby, NeoGene will invest such proceeds in interest
bearing accounts and/or short-term, investment grade interest bearing
securities.
6.8 REIMBURSEMENT. If the Purchaser, other than by reason of its gross
negligence or willful misconduct, becomes involved in any capacity in any
action, proceeding or investigation brought by or against any person or entity,
including stockholders of either NeoTherapeutics or NeoGene, in connection with
or as a result of the consummation of the transactions contemplated by the
Transaction Documents, NeoGene will reimburse the Purchaser for its reasonable
legal and other expenses (including the cost of any investigation and
preparation and travel in connection therewith) incurred in connection
therewith, as such expenses are incurred. In addition, other than with respect
to any matter in which the Purchaser is a named party, NeoGene will pay the
Purchaser the charges, as reasonably determined by the Purchaser, for the time
of any officers or employees of the Purchaser devoted to appearing and preparing
to appear as witnesses, assisting in preparation for hearings, trials or
pretrial matters, or otherwise with respect to inquiries, hearings, trials, and
other proceedings relating to the subject matter of this
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Agreement. The reimbursement obligations of NeoGene under this paragraph shall
be in addition to any liability which NeoGene may otherwise have, shall extend
upon the same terms and conditions to any affiliates of the Purchaser who are
actually named in such action, proceeding or investigation, and partners,
directors, agents, employees and controlling persons (if any), as the case may
be, of the Purchaser and any such affiliate, and shall be binding upon and inure
to the benefit of any successors, assigns, heirs and personal representatives of
NeoGene, the Purchaser and any such affiliate and any such person or entity.
NeoGene also agrees that neither the Purchaser nor any such affiliates,
partners, directors, agents, employees or controlling persons shall have any
liability to assert claims on behalf of or in right of NeoGene in connection
with or as a result of the consummation of the Transaction Documents except to
the extent that any losses, claims, damages, liabilities or expenses incurred by
NeoGene result from the gross negligence or willful misconduct of the Purchaser
or entity in connection with the transactions contemplated by this Agreement.
7. MISCELLANEOUS.
7.1 SURVIVAL OF WARRANTIES. Unless otherwise set forth in this
Agreement, the warranties, representations and covenants of NeoGene,
NeoTherapeutics and the Purchaser contained in or made pursuant to this
Agreement shall survive the execution and delivery of this Agreement and the
Closing; provided, however, that such representations and warranties are only
made as of the date of such execution and delivery and as of such Closing.
7.2 TRANSFER; SUCCESSORS AND ASSIGNS. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties as are permitted by this Agreement.
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and permitted
assigns any rights, remedies, obligations, or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement.
7.3 GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York, without
regard to the principles of conflicts of law thereof. NeoGene, NeoTherapeutics
and the Purchaser hereby irrevocably submit to the exclusive jurisdiction of the
state and federal courts sitting in the City of New York, Borough of Manhattan,
for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, or that
such suit, action or proceeding is improper. Each of NeoGene, NeoTherapeutics
and the Purchaser hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
receiving a copy thereof sent to NeoGene and NeoTherapeutics at the addresses in
effect for notices to it under this instrument and agrees that such service
shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law.
7.4 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and signatures may be delivered by facsimile, each of which shall
be enforceable against the
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parties actually executing such counterparts, and all of which together shall
constitute one instrument.
7.5 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
7.6 NOTICES. Any notice required or permitted by this Agreement shall be
in writing and shall be deemed sufficient upon delivery, when delivered
personally or by overnight courier or sent by telegram or fax, or forty-eight
(48) hours after being deposited in the U.S. mail, as certified or registered
mail, with postage prepaid, addressed (a) if to NeoTherapeutics or NeoGene, to
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief Financial
Officer or via facsimile to (▇▇▇) ▇▇▇-▇▇▇▇, with a copy to ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention:
▇▇▇▇ ▇. ▇▇▇▇▇▇, or via facsimile to (▇▇▇) ▇▇▇-▇▇▇▇, or (b) if to a Purchaser, to
the address listed below the Purchaser's signature on the signature page hereto,
with a copy to ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, attention J. ▇▇▇▇ ▇▇▇▇, Esq.
7.7 FINDER'S FEE. Other than those fees owed by NeoGene to Brighton
Capital, Ltd., each party represents that it neither is nor will be obligated
for any finder's fee or commission in connection with this transaction. The
Purchaser agrees to indemnify and to hold harmless NeoGene from any liability
for any commission or compensation in the nature of a finder's fee (and the
costs and expenses of defending against such liability or asserted liability)
for which a Purchaser or any of its officers, employees, or representatives is
responsible. NeoGene and NeoTherapeutics agree to indemnify and hold harmless
the Purchaser from any liability for any commission or compensation in the
nature of a finder's fee (and the costs and expenses of defending against such
liability or asserted liability) for which NeoGene or any of its officers,
employees or representatives is responsible.
7.8 FEES AND EXPENSES. NeoGene, NeoTherapeutics and the Purchaser shall
each bear their own expenses and legal fees incurred on their behalf with
respect to this Agreement and the transactions contemplated hereby; provided,
however, that NeoGene shall reimburse the Purchaser, in the aggregate, $25,000
for the fees and expenses the Purchaser incurred on their behalf with respect to
this Agreement and the transactions contemplated hereby, which amount, less any
previously paid, non-refundable retainer, may be deducted by the Purchaser from
the Purchase Price payable to NeoGene and paid directly by the Purchaser to
▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇.
7.9 ATTORNEY'S FEES. If any action at law or in equity (including
arbitration) is necessary to enforce or interpret the terms of any of the
Agreements or the NeoTherapeutics Rights Agreement, the prevailing party shall
be entitled to reasonable attorney's fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
7.10 AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended
or waived (either generally or in a particular instance and either retroactively
or prospectively) only with the written consent of NeoGene, NeoTherapeutics and
the Purchaser. Any amendment or waiver effected in accordance with this Section
7.10 shall be binding upon the Purchaser,
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NeoGene, NeoTherapeutics and each transferee of the NeoGene Securities, the
NeoTherapeutics Securities and the Exchange Securities.
7.11 SEVERABILITY. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, the parties agree to renegotiate such
provision in good faith. Until such time as the parties have agreed upon an
enforceable replacement for such provision, (a) such provision shall be excluded
from this Agreement, (b) the balance of the Agreement shall be interpreted as if
such provision were so excluded and (c) the balance of the Agreement shall be
enforceable in accordance with its terms.
7.12 DELAYS OR OMISSIONS; REMEDIES CUMULATIVE. No delay or omission to
exercise any right, power or remedy accruing to any party under this Agreement,
upon any breach or default of any other party under this Agreement, shall impair
any such right, power or remedy of such non-breaching or non-defaulting party
nor shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurring. Any
waiver, permit, consent or approval of any kind or character on the part of any
party of any breach or default under this Agreement, or any waiver on the part
of any party of any provisions or conditions of this Agreement, must be in
writing and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement or by law or otherwise
afforded to any party, shall be cumulative and not alternative.
7.13 ENTIRE AGREEMENT. This Agreement and the Exhibits hereto constitute
the entire agreement among the parties hereto pertaining to the subject matter
hereof, and any and all other written or oral agreements relating to the subject
matter hereof existing among any of the parties hereto are expressly canceled.
7.14 CALIFORNIA CORPORATE SECURITIES LAW. THE SALE OF THE SECURITIES
WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE
COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF THE
SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR
PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT
FROM THE QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA
CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
CONDITIONED UPON THE QUALIFICATION BEING OBTAINED UNLESS THE SALE IS SO EXEMPT.
7.15 CONFIDENTIALITY. Subject to the terms hereof, NeoGene,
NeoTherapeutics and the Purchaser each agree that, except with the prior written
permission of the applicable party, it shall at all times keep confidential and
not divulge, furnish or make accessible to anyone any confidential information,
knowledge or data concerning or relating to the business or financial affairs of
the other parties to which such party has been or shall become privy by reason
of this Agreement, discussions or negotiations relating to this Agreement, the
performance of its obligations hereunder or the ownership of securities
purchased hereunder. The provisions of this Section 7.15 shall be in addition
to, and not in substitution for, the provisions of any separate nondisclosure
agreement executed by the parties hereto with respect to the transactions
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contemplated hereby. Each of NeoGene and NeoTherapeutics agrees that it will not
provide the Purchaser or its agents or counsel with any information that
constitutes or might constitute material non-public information.
7.16 RELIANCE. The Purchaser acknowledges that it is not relying upon
any person or entity, other than NeoGene and its representatives or
NeoTherapeutics and its representatives, in making its investment or decision to
invest in NeoGene and NeoTherapeutics, respectively.
7.17 JOINT AND SEVERAL LIABILITY. NeoGene and NeoTherapeutics will be
jointly and severally liable for the representations, warranties, covenants or
other obligations of NeoGene and NeoTherapeutics set forth in this Agreement.
(Remainder of page intentionally left blank)
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The parties have executed this Securities Purchase Agreement as of the
date first written above.
NEOGENE TECHNOLOGIES, INC. SOCIETE GENERALE
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------ -------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Chief Financial Officer Title: Managing Director
Address:
c/o ▇▇ ▇▇▇▇▇ Securities Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
NEOTHERAPEUTICS, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
Chief Financial Officer