Exhibit 10.27
NOTE PURCHASE AGREEMENT
Agreement, dated November 12, 2004, among National Patent
Development
Corporation, a Delaware
corporation ("NPDC"), MXL Industries, Inc., a Delaware
corporation ("MXL"), and the
purchasers set forth on the signature pages hereto
(the
"Purchasers").
The Purchasers desire to acquire NPDC's 6% Secured Notes due 2009
from
NPDC in exchange for cash as
hereinafter provided, and NPDC desires to sell such
Notes to the
Purchasers.
I. The Purchase
1.1. Authorization of Notes.
NPDC has authorized the issue and sale of
$1,590,000 aggregate
principal amount of its 6% Secured Notes due 2009. Such
6%
Secured Notes due 2009 shall
be substantially in the form set forth in Exhibit A
(references to a "Schedule"
or an "Exhibit" are, unless otherwise specified, to
a Schedule or an Exhibit
attached to this Agreement) and are herein referred to
individually as a "Note" and
collectively as the "Notes," which terms shall also
include any notes delivered
in exchange or replacement therefor.
1.2. Terms of the Purchase(a)
. On the basis of the representations, warranties,
covenants, and agreements
contained in this Agreement and subject to the terms
and conditions of this
Agreement, at the Closing (as defined below), NPDC shall
issue and sell to each of the
Purchasers, and each of the Purchasers will
purchase from NPDC, a Note in
the principal amount specified opposite such
Purchaser's name in Schedule
1.2, at a purchase price for such Note equal to
100% of the principal amount
of such Note. The obligations of each Purchaser
hereunder are several and not
joint obligations and no Purchaser shall have any
obligation or liability to
any person for the performance or non-performance by
any other Purchaser
hereunder.
1.3. Closing.
(a) The closing of the
transactions contemplated by Section 1.2 (the "Closing")
shall take place at the
offices of Duane Morris LLP, 380 Lexington Avenue, New
York, New York, at 10:00 a.m.
local time on the date hereof (the "Closing
Date"). The Closing may occur
at such different place, different time, or
different date as NPDC, MXL,
and the Purchasers agree in writing.
(b) At the Closing, (i) NPDC
shall deliver to each Purchaser, against delivery
by such Purchaser to NPDC or
its order, by wire transfer of immediately
available funds, of payment
of the full purchase price for the Note to be
purchased by such Purchaser,
a Note in the principal amount to be purchased by
such Purchaser, dated the
Closing Date, and registered in the name of such
Purchaser, and (ii) MXL shall
deliver a Pledge Agreement (the "Pledge"),
substantially in the form set
forth in Exhibit B.
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1.4. Use of Proceeds;
Transfer of Shares. NPDC shall use the proceeds of the
issue and sale of the Notes
to exercise its option to purchase 2,068,966 Series
B Convertible Preferred
Shares (the "Shares") of Valera Pharmaceuticals, Inc.
("Valera"). Immediately upon
exercise of such option, NPDC shall contribute the
Shares to MXL. If MXL shall
sell or otherwise transfer any or all of the Shares,
MXL shall pay to the
Purchasers or their respective assignees, pro rata in
accordance with the amounts
of the Notes they are purchasing hereunder, an
aggregate amount equal to 50%
of the excess, if any, of (i) the proceeds of such
sale or other transfer of
such Shares over (ii) the aggregate exercise price
paid by NPDC for such
Shares.
II. Representations and
Warranties of NPDC
NPDC represents and warrants to the Purchasers as
follows:
2.1. Organization and
Qualification. NPDC is a corporation duly organized,
validly existing, and in good
standing under the laws of the State of Delaware,
with all requisite power and
authority to own, lease, license, and use its
properties and assets and to
carry on the business in which it is engaged. NPDC
is duly qualified to transact
the business in which it is engaged and is in good
standing as a foreign
corporation in every jurisdiction in which its
ownership,
leasing, licensing, or use of
property or assets or the conduct of its business
makes such qualification
necessary.
2.2. Authority to Sell;
Enforceability. NPDC has all requisite power and
authority to execute,
deliver, and perform this Agreement and the Notes. All
necessary corporate
proceedings of NPDC have been duly taken to authorize
the
execution, delivery, and
performance by NPDC of this Agreement and the Notes.
Each of this Agreement and
the Notes has been duly authorized by NPDC and this
Agreement has been, and at
the Closing the Notes will be, duly executed and
delivered by NPDC. Each of
this Agreement and the Notes constitutes or will
constitute the legal, valid,
and binding obligation of NPDC and is or will be
enforceable as to NPDC in
accordance with its terms, except as limited by
applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization,
moratorium, or other laws of
general application affecting enforcement of
creditors' rights, and for
general principles of equity that restrict the
availability of equitable
remedies.
2.3. No Conflicts. No
consent, authorization, approval, order, license,
certificate, or permit of or
from, or declaration or filing with, any federal,
state, local, or other
governmental authority or any court or other tribunal is
required by NPDC for the
execution, delivery, or performance by NPDC of this
Agreement or the Notes,
except as may be required under securities laws. No
consent of any party to any
contract, agreement, instrument, lease, or license
(collectively, "Contracts")
to which NPDC or any of its subsidiaries (each, an
"NPDC Subsidiary") is a
party, or to which it or any of its businesses,
properties, or assets are
subject, is required for the execution, delivery, or
performance of this Agreement
or the Notes; and the execution, delivery, and
performance by NPDC of this
Agreement and the Notes will not violate, result in
a breach of, conflict with,
or (with or without the giving of notice or the
passage of time or both)
entitle any party to terminate or call a default under,
entitle any party to rights
and privileges that such party was not receiving or
2
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entitled to receive
immediately before this Agreement was executed under, or
create any obligation on the
part of NPDC or any NPDC Subsidiary that it was not
paying or obligated to pay
immediately before this Agreement was executed under,
any term of any such Contract
or violate or result in a breach of any term of
the certificate of
incorporation (or other charter document) or by-laws of
NPDC
or any NPDC Subsidiary, or
violate, result in a breach of, or conflict with any
law, rule, regulation, order,
judgment, or decree binding on NPDC or any NPDC
Subsidiary or to which it or
any of its businesses, properties, or assets are
subject, in each case except
as would not be reasonably likely to have a
material adverse effect on
NPDC and its NPDC Subsidiaries taken as a whole.
2.4. No Registration
Required. Assuming the continuing accuracy of the
representations and
warranties of the Purchasers contained in Article IV
hereof,
the offer, sale and issuance
of the Not
