EXHIBIT 4.1
SETTLEMENT AGREEMENT AND RELEASE
BY AND BETWEEN
NEOTHERAPEUTICS, INC.
AND
[Vendor]
[date]
TABLE OF CONTENTS
1. Definitions .................................................... 1
2. Payment of Shares of Common Stock .............................. 2
(a) Settlement Payment .................................... 2
(b) The Closing ........................................... 2
(c) Deliveries at the Closing ............................. 2
3. Representations and Warranties ................................. 2
(a) Representations and Warranties of the Company ......... 2
(b) Representations and Warranties of [Vendor] ............ 3
4. Release ........................................................ 5
(a) [Vendor] Release ...................................... 5
(b) General Release ....................................... 5
(c) Representations and Warranties ........................ 6
5. Enforcement of Release ......................................... 6
6. Compromise ..................................................... 6
7. Advice of Counsel .............................................. 6
8. Registration Rights ............................................ 6
(a) Obligations of the Company ............................ 6
(b) Furnish Information ................................... 7
(c) Expenses of Registration .............................. 7
(d) Delay of Registration ................................. 8
(e) Indemnification ....................................... 8
(f) Reports Under Exchange Act ............................ 10
(g) Assignment of Registration Rights ..................... 11
(h) Termination of Registration Rights .................... 11
(i) Piggyback on Registration ............................. 11
9. Survival of Representations and Warranties ..................... 11
10. Miscellaneous .................................................. 11
(a) Further Assurances .................................... 11
(b) Recapitalizations, Etc ................................ 11
(c) Delays or Omissions; Remedies Cumulative .............. 11
(d) No Third-Party Beneficiaries .......................... 12
(e) Successors and Assigns ................................ 12
(f) Entire Agreement ...................................... 12
(g) Counterparts .......................................... 12
(h) Headings .............................................. 12
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EXHIBIT 4.1
(i) Notices ................................................ 12
(j) Governing Law .......................................... 13
(k) Amendments ............................................. 13
(l) Severability ........................................... 14
(m) Expenses ............................................... 14
(n) Construction ........................................... 14
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SETTLEMENT AGREEMENT AND RELEASE
This Settlement Agreement and Release (the "Agreement") is made and entered
into as of [month] [day], [year], by and between NeoTherapeutics, Inc., a
Delaware corporation (the "Company"), and [Vendor], a [corporation, partnership,
individual, etc.] ("[Vendor]"). The Company and [Vendor] are referred to
collectively herein as the "Parties."
WHEREAS, the Company and [Vendor] are parties to that certain [the original
agreement] ("[Original Agreement]") dated as of [month] [day], [year], pursuant
to which the Company owes payment of $_________ to [Vendor] for services
performed by [Vendor] under the [Original Agreement];
WHEREAS, the Company desires to give and [Vendor] desires to receive shares
of common stock of the Company in lieu of cash as satisfaction of the payment
owed by the Company to [Vendor].
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows.
1. Definitions.
"Agreement" means this agreement.
"Closing" has the meaning set forth in (S)2(b) below.
"Closing Date" has the meaning set forth in (S)2(b) below.
"Common Stock" means the Company's common stock, $.001 par value per share.
"Company" has the meaning set forth in the preface above.
"Effectiveness Date" means the 120/th/ day following the Closing Date.
"Exchange Act" has the meaning set forth in (S)8(e)(i) below.
"Filing Date" means the 60/th/ day following the Closing Date.
"[Original Agreement]" has the meaning set forth in the preface above.
"Outstanding Debt" has the meaning set forth in (S)2(a) below.
"Parties" has the meaning set forth in the preface above.
"person(s)" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"Register," "registered," and "registration" refer to a registration
effected by preparing and filing a registration statement or similar document in
compliance with the Securities Act and the declaration or ordering of
effectiveness of such registration statement or document.
"SEC" means the Securities and Exchange Commission or any other federal
agency at the time administering the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended.
"[Vendor]" has the meaning set forth in the preface above.
2. Payment of Shares of Common Stock..
(a) Settlement Payment. The Company agrees to issue to [Vendor] at
the Closing ________ shares of Common Stock (the "Shares"), in full and complete
settlement and satisfaction of the outstanding amount of $________ owed by the
Company to [Vendor], under the [Original Agreement] (the "Outstanding Debt").
(b) The Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place upon the date of the signing of
this Agreement by all Parties (the "Closing Date").
(c) Deliveries at the Closing. At the Closing, (i) the Parties will
exchange signed copies of this Agreement and (ii) the Company will deliver to
[Vendor] a stock certificate representing the Shares, registered in the name of
[Vendor].
3. Representations and Warranties.
(a) Representations and Warranties of the Company. The Company
represents and warrants to [Vendor] that the statements contained in this
ss.3(a) are correct and complete as of the date of this Agreement.
(i) Authorization of Transaction. The Company has full
power and authority (including full corporate power and authority)
to execute and deliver this Agreement and to perform his or its
obligations hereunder. All action of the Company necessary to
authorize the execution and delivery of this Agreement and
performance by the Company of all of its obligations hereunder has
been taken, and this Agreement constitutes the valid and legally
binding obligation of the Company, enforceable in accordance with
its terms and conditions. Except as set forth in Section 8 below,
the Company need not give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any government or
governmental agency in order to consummate the transactions
contemplated by this Agreement.
(ii) Noncontravention. Neither the execution and the
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will violate any constitution, statute,
regulation, rule, injunction, judgment, order,
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decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Company is subject, or any
provision of its charter.
(iii) Brokers' Fees. The Company has no liability or obligation
to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement for which
[Vendor] could become liable or obligated.
(b) Representations and Warranties of [Vendor]. [Vendor] represents
and warrants to the Company that the statements contained in this ss.3(b) are
correct and complete as of the date of this Agreement.
(i) [Organization of [Vendor]. [Vendor] is a corporation
duly organized, validly existing, and in good standing under the laws
of the jurisdiction of its incorporation.]
(ii) Authorization of Transaction. [Vendor] has full power and
authority [(including full [corporate] [partnership] [limited
liability company] power and authority)] to execute and deliver this
Agreement and to perform its obligations hereunder. All [corporate]
action of [Vendor] necessary to authorize the execution and delivery
of this Agreement and performance by [Vendor] of all of its
obligations hereunder has been taken, and this Agreement constitutes
the valid and legally binding obligation of [Vendor], enforceable in
accordance with its terms and conditions. [Vendor] need not give any
notice to, make any filing with, or obtain any authorization, consent,
or approval of any government or governmental agency in order to
consummate the transactions contemplated by this Agreement.
(iii) Noncontravention. Neither the execution and the delivery
of this Agreement, nor the consummation of the transactions
contemplated hereby, will violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge,
or other restriction of any government, governmental agency, or court
to which [Vendor] is subject or any provision of its charter or
bylaws.
(iv) Brokers' Fees. [Vendor] has no liability or obligation to
pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement for which
the Company could become liable or obligated.
(v) Business or Financial Expertise. [Vendor] has either (i)
a pre-existing personal or business relationship with the Company or
any of its officers, directors or controlling persons that is of a
nature and duration which enables [Vendor] to be aware of the
character, business acumen and general business and financial
circumstances of the Company or (ii) by reason of [Vendor]'s business
or financial expertise or the business or financial experience of its
professional advisors who are unaffiliated with and who are not
compensated by the Company
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or any affiliate or selling agent of the Company, directly or
indirectly, the capacity to protect its own interests in connection
with its acquisition of the Shares. [Vendor] _____ is or _____ is not
(check the appropriate) an "accredited investor" as defined in Rule
501 of Regulation D of the Shares Act of 1933, as amended (the "Shares
Act").
(vi) Awareness; No Distribution. [Vendor] has had the
opportunity to ask questions about the Company's business affairs and
financial condition, and has acquired sufficient information about the
Company to reach an informed and knowledgeable decision to acquire the
Shares. [Vendor] is acquiring these Shares for its own account for
investment purposes only and not with a view to, or for the resale in
connection with, any "distribution" thereof for purposes of the Shares
Act. [Vendor] recognizes that the Shares are a speculative investment
involving a high degree of risk of loss and that [Vendor] could lose
the entire amount of its investment. [Vendor] is able to bear the
economic risk of this investment and at the present time could afford
a complete loss of this investment.
(vii) No Registration. [Vendor] understands that the Shares
will be issued without registration under the Shares Act and without
qualification and/or registration under applicable state securities
laws ("Blue Sky Laws") in reliance upon specific exemptions therefrom,
which exemptions depend upon, among other things, the bona fide nature
of its investment intent as expressed herein. In this connection,
[Vendor] understands that, in the view of the SEC, the statutory basis
for such exemption may be unavailable if its representations were
predicated solely upon a present intention to hold the Shares for the
minimum capital gains period specified under tax statutes, for a
deferred sale, for or until an increase or decrease in the market
price of the Shares, or for a period of one year or any other fixed
period in the future.
(viii) Legend. [Vendor] further understands that the Shares
must be held indefinitely unless subsequently registered and/or
qualified under the Securities Act and under the Blue Sky Laws or
unless an exemption from registration and/or qualification is
otherwise available. In addition, [Vendor] understands that the
certificate evidencing the Shares will be imprinted with a legend in
substantially the form as follows which prohibits the transfer of the
Shares unless they are registered and/or qualified or such
registration and/or qualification is not required in the opinion of
counsel for [Vendor].
THESE SECURITIES 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 SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM
THE
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REGISTRATION REQUIREMENTS THEREUNDER AND IN COMPLIANCE WITH APPLICABLE
STATE SECURITIES OR BLUE SKY LAWS.
(ix) Rule 144. [Vendor] is aware of the provisions of Rule 144,
promulgated under the Securities Act, which, in substance, permits
limited public resale of "restricted securities" acquired, directly or
indirectly, from the issuer thereof (or from an affiliate of such
issuer), in a non-public offering subject to the satisfaction of
certain conditions. [Vendor] understands that the Shares constitute
"restricted securities" for the purposes of Rule 144.
(x) No Public Market. [Vendor] further understands that at the
time it wishes to sell the Shares there may be no public market upon
which to make such a sale.
(xi) Risk. [Vendor] further understands that in the event all of
the requirements of Rule 144 are not satisfied, registration under the
Securities Act, compliance with Regulation A, or some other
registration exemption will be required; and that, notwithstanding the
fact that Rule 144 is not exclusive, the Staff of the SEC has
expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering and otherwise than
pursuant to Rule 144 will have a substantial burden of proof in
establishing that an exemption from registration is available for such
offers or sales, and that such persons and their respective brokers
who participate in such transactions do so at their own risk.
4. Release.
(a) [Vendor] Release. For good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, [Vendor] and its heirs,
successors and assigns do hereby release and forever discharge the Company,
together with its affiliates, employees, agents, representatives, partners,
shareholders, officers and directors, successors and assigns (collectively, the
"Company Parties") of and from all common law and statutory claims, demands,
damages, debts, losses, actions and causes of action, suits, rights,
liabilities, contracts, duties and obligations, of any kind and nature
whatsoever, whether known or unknown, accrued or to accrue, contingent or
liquidated (collectively "Claims"), that [Vendor] had, now has or may have
against any Company Parties, arising from or in connection with the Outstanding
Debt.
(b) General Release. It is the intention of [Vendor] in providing this
release that the same shall be effective as a bar to each and every claim,
demand and cause of action hereinabove specified; and in furtherance of this
intention, [Vendor] hereby expressly waives any and all rights and benefits
conferred upon it by the provisions of Section 1542 of the California Civil Code
and expressly agrees that the above release is intended to and does extend to
and cover claims of the type referred to in said Section 1542, which reads as
follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR EXPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
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RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
[Vendor] expressly consents that the above release shall be given full
force and effect according to each and all of its express terms and provisions,
including as well those relating to the unknown and unsuspected claims, demands
and causes of action hereinabove specified.
(c) Representations and Warranties. [Vendor] hereby represents and
warrants to the Company that it is the current legal and beneficial owner of all
Claims released hereby and has not assigned, pledged or contracted to assign or
pledge any such Claim to any other person. [Vendor] agrees to indemnify, defend
and hold harmless the Company from and against and in respect of any claims,
demands, losses, costs, expenses, obligations, liabilities or damages asserted
against the Company by [Vendor] in respect of any Claim.
5. Enforcement of Release. The release set forth in Section 4 above may be
pleaded as the full and complete defense to, and as a basis for an injunction
against, any action, suit or other proceeding which may be instituted,
prosecuted or attempted with respect to any Claim. If [Vendor] brings an action
in respect of any Claim released hereby, the Company shall be entitled to
recover its costs and expenses, including court costs and attorneys' fees, if
any, incurred in connection with such suit, including appeals therefrom, whether
or not such action is prosecuted to final judgment.
6. Compromise. The Parties hereto acknowledge and agree that this Agreement
is entered into as a compromise settlement which is not in any respect or for
any purpose to be deemed or construed as an admission or concession of any
liability whatsoever on the part of any party hereto.
7. Advice of Counsel. The Parties have carefully and completely read this
Agreement, have not relied upon any representations or warranties of the other
party (except as set forth in this Agreement) in signing it, have had an
opportunity to review it with their attorneys, and are satisfied they understand
its terms.
8. Registration Rights.
(a) Obligations of the Company. On or prior to the Filing Date, the
Company shall, as expeditiously as reasonably possible:
(i) Prepare and file with the SEC a registration statement with
respect to the resale of the Shares and use commercially reasonable
efforts to cause such registration statement to become effective as
promptly as possible after the filing thereof, but in any event prior
to the Effectiveness Date.
(ii) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection with such
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registration statement as may be necessary to comply with the
provisions of the Securities Act.
(iii) Furnish to [Vendor] such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they
may reasonably request in order to facilitate the disposition of the
Shares.
(iv) Use commercially reasonable efforts to register and
qualify the securities covered by such registration statement under
such other securities or Blue Sky laws of such jurisdictions as shall
be reasonably requested by [Vendor], provided that the Company shall
not be required in connection therewith or as a condition thereto to
qualify to do business or to file a general consent to service of
process in any such states or jurisdictions.
(v) Promptly notify [Vendor] at any time when the Company
becomes aware of the happening of any event as a result of which the
registration statement or the prospectus included in such registration
statement or any supplement to the prospectus (as then in effect)
contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements there in (in the case
of the prospectus, in light of the circumstances under which they were
made) not misleading or, if for any other reason it shall be necessary
during such time period to amend or supplement the registration
statement or the prospectus in order to comply with the Securities
Act, whereupon, in either case, [Vendor] shall immediately cease to
use such registration statement or prospectus for any purpose and, as
promptly as practicable thereafter, the Company shall prepare and file
with the SEC, and furnish without charge to [Vendor] a supplement or
amendment to such registration statement or prospectus which will
correct such statement or omission or effect such compliance and such
copies thereof as [Vendor] may reasonably request.
(vi) Use commercially reasonable efforts to cause all the
Shares registered pursuant hereunder to be listed on each securities
exchange or market on which similar securities issued by the Company
are then listed or traded, if applicable.
(b) Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section 8 with
respect to the Shares that [Vendor] shall furnish to the Company such
information regarding itself, the Shares held by it, and the intended method of
disposition of such securities as shall be required to effect the registration
of the Shares.
(c) Expenses of Registration. All expenses including without
limitation all registration, filing and qualification fees, printers' and
accounting fees, fees and disbursements of counsel for the Company and the
reasonable fees and disbursements of one counsel for [Vendor], shall be borne by
the Company.
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(d) Delay of Registration. [Vendor] shall not have any right to
obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Section 8.
(e) Indemnification. In the event the Shares are included in a
registration statement under this Section 8:
(i) Indemnification by the Company. To the extent
permitted by law, the Company will indemnify and hold harmless
[Vendor], any underwriter (as defined in the Securities Act) for
[Vendor] and each person, if any, who controls [Vendor] or
underwriter within the meaning of the Securities Act or the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
against any losses, claims, damages, or liabilities (joint or
several) to which they may become subject under the Securities
Act, the Exchange Act or other federal or state law, insofar as
such losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based upon any of the
following statements, omissions or violations (collectively a
"Violation"): (i) any untrue statement or alleged untrue statement
of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, (ii) the
omission or alleged omission to state therein a material fact
required to be stated therein, or necessary to make the statements
therein not misleading, or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act,
any state securities law or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities
law; and the Company will pay to [Vendor], underwriter or
controlling person, as incurred, any legal or other expenses
reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action;
provided, however, that the indemnity agreement contained in this
Section 8(e)(i) shall not apply to amounts paid in settlement of
any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of the Company (which
consent shall not be unreasonably withheld), nor shall the Company
be liable to [Vendor], underwriter or controlling person for any
such loss, claim, damage, liability, or action to the extent that
it arises out of or is based upon a Violation (x) which occurs in
reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by
[Vendor], underwriter or controlling person or (y) which occurs in
any preliminary prospectus if a final, amended or supplemental
prospectus which corrects such Violation is delivered by the
Company to such person at or prior to the written confirmation of
the sale giving rise to such loss, claim, damage, liability, or
action.
(ii) Indemnification by [Vendor]. To the extent permitted
by law, [Vendor] will indemnify and hold harmless the Company,
each of its directors, each of its officers who has signed the
registration statement, each person, if any, who controls the
Company within the meaning of the Securities Act, any underwriter
and any controlling person of any such underwriter or [Vendor],
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against any losses, claims, damages, or liabilities (joint or
several) to which any of the foregoing persons may become subject,
under the Securities Act, the Exchange Act or other federal or
state law, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereto) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent)
that such Violation occurs in reliance upon and in conformity with
written information furnished by [Vendor] expressly for use in
connection with such registration statement; and [Vendor] will
pay, as incurred, any legal or other expenses reasonably incurred
by any person intended to be indemnified pursuant to this Section
8(e)(ii), in connection with investigating or defending any such
loss, claim, damage, liability, or action; provided, however, that
the indemnity agreement contained in this Section 8(e)(ii) shall
not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without
the consent of [Vendor], which consent shall not be unreasonably
withheld; provided, that in no event shall any indemnification by
[Vendor] under this Section 8(e)(ii) exceed the net proceeds from
the offering received by [Vendor], except in the case of willful
fraud by [Vendor].
(iii) Procedures. Promptly after receipt by an indemnified
party under this Section 8(e) of notice of the commencement of any
action (including any governmental action), such indemnified party
will, if a claim in respect thereof is to be made against any
indemnifying party under this Section 8(e), deliver to the
indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate in,
and, to the extent the indemnifying party so desires, jointly with
any other indemnifying party similarly noticed, to assume the
defense thereof with counsel mutually satisfactory to the parties;
provided, however, that an indemnified party (together with all
other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one
separate counsel, with the reasonable fees and expenses to be paid
by the indemnifying party, if representation of such indemnified
party by the counsel retained by the indemnifying party would be
inappropriate due to actual or potential differing interests
between such indemnified party and any other party represented by
such counsel in such proceeding. The failure to deliver written
notice to the indemnifying party within a reasonable time of the
commencement of any such action, if materially prejudicial to its
ability to defend such action, shall relieve such indemnifying
party of any liability to the indemnified party under this Section
8(e), but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this
Section 8(e). No indemnifying party, in the defense of any such
claim or litigation, shall, except with the consent of each
indemnified party, consent to entry of any judgment or enter into
any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to
such claim or litigation. The indemnity agreements contained in
this Section 8(e) shall not apply to amounts paid in settlement of
any loss, claim, damage, liability or action
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if such settlement is effected without the consent of the
indemnifying party, such consent not to be unreasonably withheld.
(iv) Contribution. If the indemnification provided for in
this Section 8(e) is held by a court of competent jurisdiction to
be unavailable to an indemnified party with respect to any loss,
liability, claim, damage or expense referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified party
hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim,
damage, or expense in such proportion as is appropriate to reflect
the relative fault of the indemnifying party on the one hand and
of the indemnified party on the other in connection with the
statements or omissions that resulted in such loss, liability,
claim, damage or expense as well as any other relevant equitable
considerations; provided, that in no event shall any contribution
by [Vendor] under this Section 8(e)(iv) exceed the net proceeds
from the offering received by such [Vendor], except in the case of
willful fraud by [Vendor]. The relative fault of the indemnifying
party and of the indemnified party shall be determined by
reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the indemnifying
party or by the indemnified party and the parties' relative
intent, knowledge, access to information, and opportunity to
correct or prevent such statement or omission.
(v) Survival. The obligations of the Company and
[Vendor] under this Section 8(e) shall survive the completion of
any offering of the Shares in a registration statement under this
Section 8, and otherwise.
(f) Reports Under Exchange Act. With a view to making available to
[Vendor] the benefits of Rule 144 promulgated under the Securities Act and any
other rule or regulation of the SEC that may at any time permit [Vendor] to sell
securities of the Company to the public without registration, the Company agrees
to:
(i) make and keep public information available, in
accordance with SEC Rule 144, at all times after the effective
date of the first registration statement filed by the Company for
the offering of its securities to the general public so long as
the Company remains subject to the periodic reporting requirements
under Sections 13 or 15(d) of the Exchange Act;
(ii) file with the SEC in a timely manner all reports and
other documents as may be required of the Company under the
Securities Act and the Exchange Act; and
(iii) furnish to [Vendor], so long as [Vendor] owns the
Shares, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of
SEC Rule 144, the Securities Act and the Exchange Act (at any time
after it has become subject to such reporting requirements), (ii)
a copy of the most recent annual or quarterly report of the
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Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably
requested in availing [Vendor] of any rule or regulation of the
SEC which permits the selling of any such securities without
registration or pursuant to such form.
(g) Assignment of Registration Rights. The rights granted
[Vendor] under Section 8 may not be assigned to a transferee or assignee of
Shares without the prior written consent of the Company, except that such rights
may be freely transferred to any party controlling, controlled by or under
common control with [Vendor] without such consent; provided, that the Company is
provided with prompt notice of the name and address of such transferee and such
transferee agrees in writing to be bound by the provisions of this Agreement.
(h) Termination of Registration Rights. [Vendor] shall not be
entitled to exercise any registration right provided for in this Section 8 after
such time as Rule 144(k) or another similar exemption under the Securities Act
is available for the sale of all of the Shares without limitation as to volume
or manner of sale.
(i) Piggyback on Registration. The Company may include shares
of Common Stock held by other stockholders of the Company in the registration
statement filed pursuant to this Section 8.
9. Survival of Representations and Warranties. All of the
representations and warranties of the Parties contained in this Agreement shall
survive the Closing hereunder (even if the damaged party knew or had reason to
know of any misrepresentation or breach of warranty or covenant at the time of
Closing) and continue in full force and effect forever thereafter (subject to
any applicable statutes of limitations).
10. Miscellaneous.
(a) Further Assurances. The Company and [Vendor] shall deliver
or cause to be delivered to the other party on the Closing Date and at such
other times and places as shall be reasonably agreed to, such additional
instruments as any of the other party may reasonably request for the purposes of
carrying out this Agreement.
(b) Recapitalizations, Etc. The provisions of this Agreement
shall apply, to the full extent set forth herein with respect to the Shares and
to the Common Stock, to any and all shares of capital stock of the Company or
any capital stock, partnership or member units or any other security evidencing
ownership interests in any successor or assign of the Company (whether by
merger, consolidation, sale of assets or otherwise) that may be issued in
respect of, in exchange for, or in substitution of the Shares by reason of any
stock dividend, split, combination, recapitalization, liquidation,
reclassification, merger, consolidation or otherwise.
(c) 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
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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.
(d) No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person other than the Parties and their respective
successors and permitted assigns.
(e) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the Parties and their respective
successors and assigns. Notwithstanding the foregoing, neither this Agreement
nor any rights hereunder may be assigned by any party without the prior written
consent of the other party.
(f) Entire Agreement. This Agreement (including the documents referred
to herein) constitutes the entire agreement among the Parties and supersedes any
prior understandings, agreements, or representations by or among the Parties,
written or oral, to the extent they related in any way to the subject matter
hereof.
(g) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(h) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(i) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to [Vendor]: Copy to:
[name]
[address]
Attn: [name]
Fax:
with a copy to:
[name]
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[address]
Attn: [name]
Fax:
If to the Company: Copy to:
NeoTherapeutics, Inc.
157 Technology Drive
Irvine, CA 92618
Attn: John McManus
Fax: (949) 788-6706
with a copy to:
Latham & Watkins
650 Town Center Drive, Suite 2000
Costa Mesa, CA 92626
Attn: Alan W. Pettis, Esq.
Fax: (714) 755-8290
Either party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Either
party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other party
notice in the manner herein set forth.
(j) Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
California, without regard to the principles of conflicts of law thereof. The
Company and [Vendor] hereby irrevocably submit to the exclusive jurisdiction of
the state and federal courts sitting in Orange County, California, 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 the Company and [Vendor]
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 the Company at the address 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.
(k) Amendments. No amendment of any provision of this Agreement shall
be valid unless the same shall be in writing and signed by [Vendor] and the
Company.
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(l) Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(m) Expenses. Except as set forth in Section 8 above, each party will bear
his or its own costs and expenses (including legal fees and expenses) incurred
in connection with this Agreement and the transactions contemplated hereby.
(n) Construction. Any reference to any federal, state, local, or foreign
statute or law shall be deemed also to refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise. The word
"including" shall mean including without limitation. The Parties intend that
each representation, warranty, and covenant contained herein shall have
independent significance. If any party has breached any representation,
warranty, or covenant contained herein in any respect, the fact that there
exists another representation, warranty, or covenant relating to the same
subject matter (regardless of the relative levels of specificity) which the
party has not breached shall not detract from or mitigate the fact that the
party is in breach of the first representation, warranty, or covenant.
*****
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
NEOTHERAPEUTICS, INC.
By: ______________________________________
Title: ______________________________________
[VENDOR]
By: ______________________________________
Title: ______________________________________
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SCHEDULE 1
Date of Amount
Vendor Name Agreement of Shares Debt Satisfied
Clinical Pharmaceutical Trials, Inc. 11-15-02 8,500 $ 14,960
GRAM Laboratories, Inc. 10-22-02 198,864 $350,000
NDDO Oncology B.V. 11-18-02 45,944 $ 80,862
NDDO Research Foundation 11-18-02 55,618 $ 97,888
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