STOCK PURCHASE
AND LOAN AGREEMENT
THIS STOCK PURCHASE AND LOAN AGREEMENT (this "
Agreement "), entered into this the 30th day of January,
2009, is by and between SURGIVISION, INC. , a Delaware
corporation (" SVI "), and DARA BIOSCIENCES, INC. , a
Delaware corporation (" DARA "). SVI and DARA are referred
to herein individually as a " Party " and collectively as
the " Parties . "
W I T N E S S E T H:
WHEREAS , DARA owns two million seven hundred forty nine
thousand nine hundred seventy (2,749,970) shares of Common Stock
(as defined below);
WHEREAS , DARA desires to sell to SVI, and SVI desires to
purchase from DARA, five hundred thousand (500,000) shares of
Common Stock;
WHEREAS , DARA desires to borrow from SVI, and SVI
desires to lend to DARA, the principal sum of Five Hundred Thousand
Dollars ($500,000) to fund DARA's working capital and general
corporate needs;
WHEREAS , as collateral security for DARA's indebtedness
to SVI, DARA desires to pledge to SVI five hundred thousand
(500,000) shares of Common Stock; and
WHEREAS , the Parties desire to set forth in writing the
terms and conditions under which said transactions will be
consummated;
NOW, THEREFORE , in consideration of the foregoing and of
the representations, warranties, covenants and agreements set forth
herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the Parties, the
Parties hereby agree as follows:
ARTICLE I
Definitions
" Affiliate " means, with respect to any Person,
(a) any Person who, directly or indirectly, is in control of,
is controlled by or is under common control with, such Person, and
(b) any person who is a director or officer of such Person or
of any Person described in the preceding clause (a).
" Agreement " has the meaning set forth in the preface
above.
" Closing " has the meaning set forth in
Section 4.1 below.
" Closing Date " means January 30, 2009.
" Common Stock " means SVI's common stock, par value $.01
per share.
" Consent " means any approval, consent, ratification,
waiver or other authorization.
" Contemplated Transactions " means all of the
transactions contemplated by this Agreement, including, without
limitation, (a) the sale of the Purchase Shares by DARA to SVI; (b)
the Loan from SVI to DARA; (c) the execution and delivery by DARA
and SVI, as applicable, of this Agreement, the Loan Documents and
all other agreements, certificates and documents to be entered into
in connection herewith; and (d) the performance by DARA and SVI, as
applicable, of their respective covenants and obligations under
this Agreement, the Loan Documents and all other agreements,
certificates and documents to be entered into in connection
herewith.
" DARA " has the meaning set
forth in the preface above.
" DARA Distribution " means that certain prior distribution
by DARA of shares of Common Stock to Persons that were holders of
DARA securities at the time of such distribution.
" Encumbrance " means any pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security
interest, encumbrance, preference, priority option, right of first
refusal or restriction of any kind or nature whatsoever.
" Indemnified Persons " shall have the meaning set forth in
Section 11.2 below.
" Loan " shall have the meaning set forth in Section
3.1 below.
" Loan Amount " means the aggregate principal face amount of
Five Hundred Thousand Dollars ($500,000).
" Loan Documents " means the Note and the Pledge
Agreement.
" Losses " shall have the meaning set forth in Section
11.2 below.
" New Stockholder Agreement " shall have the meaning set
forth in Section 8.1(e) below.
" Note " shall have the meaning set forth in Section
3.1 below.
" Old Stockholder Agreement " means that certain First
Amended and Restated Stockholders' Agreement dated as of April 30,
2004 to which SVI and DARA, among others, are parties, as amended
by that certain Amendment No. 1 to First Amended and Restated
Stockholders' Agreement made effective as of February 17, 2006.
" Organizational Documents " means, with respect to a
corporation, the corporation's certificate of incorporation (or the
equivalent thereof) and bylaws.
" Parties " has the meaning set forth in the preface
above.
" Person " means any individual, sole proprietorship,
partnership, limited liability company, joint venture, trust,
incorporated organization, association, corporation, institution,
public benefit corporation, entity or government (whether federal,
state, county, city, municipal or otherwise, including, without
limitation, any instrumentality, division, agency or department
thereof).
" Pledge Agreement " shall have the meaning set forth in
Section 8.1(d) below.
" Pledge Shares " means five hundred thousand (500,000)
shares of Common Stock held of record and beneficially owned by
DARA. For the avoidance of any doubt whatsoever, the Pledge Shares
are not the Purchase Shares.
" Purchase Shares " means five hundred thousand (500,000)
shares of Common Stock held of record and beneficially owned by
DARA. For the avoidance of any doubt whatsoever, the Purchase
Shares are not the Pledge Shares.
" Stock Purchase Price " shall have the meaning set forth
in Section 2.1 below.
" SVI " has the meaning set
forth in the preface above.
" SVI Share " means any share of the capital stock of
SVI.
" Voting Agreements " means any and all agreements, proxies
and understandings that authorize or entitle, or purport to
authorize or entitle, DARA to vote SVI Shares that are not held of
record and beneficially owned by DARA. The term "Voting Agreements"
specifically includes, but is not limited to, every "Voting
Agreement and Irrevocable Proxy" entered into in connection with
the DARA Distribution.
ARTICLE II
Purchase and Sale of Shares
Section 2.1 Basic
Transaction . At the Closing, on and subject to the terms
and conditions of this Agreement, SVI agrees to purchase from DARA,
and DARA agrees to sell, transfer, convey and deliver to SVI, all
of the Purchase Shares for an aggregate purchase price of Five
Hundred Thousand Dollars ($500,000) (the " Stock Purchase
Price " ).
ARTICLE III
Loan
Section 3.1 Basic
Transaction . At the Closing, on and subject to the terms
and conditions of this Agreement, SVI agrees to make a loan to DARA
for the Loan Amount (the " Loan "). DARA's obligation to
repay such Loan shall be evidenced by a promissory note (such
promissory note, together with any and all renewals, extensions or
rearrangements thereof, the " Note ") having a maturity
date, repayment terms and interest rate as set forth in such Note.
DARA shall use the proceeds from the Loan for working capital and
other general corporate purposes.
ARTICLE IV
Closing
Section 4.1
Closing . The closing of the Contemplated
Transactions (the " Closing ") shall take place on the
Closing Date at such place as the Parties may mutually
determine.
Section 4.2
Deliveries at the Closing . At the Closing, (a) DARA
shall deliver to SVI the various agreements, certificates and other
documents referred to in Section 8.1 below, and
(b) SVI shall deliver to DARA the Stock Purchase Price, the Loan
Amount and the various agreements, certificates and other documents
referred to in Section 8.2 below.
ARTICLE V
Representations and Warranties of DARA
DARA represents and warrants to SVI that the statements
contained in this Article V are correct and
complete as of the date of this Agreement and will be correct and
complete as of the Closing Date.
Section 5.1
Corporate Organization and Power . DARA is a
corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware, with full
corporate power and authority to conduct its business as now being
conducted.
Section 5.2
Authorization of Transaction . DARA has the full
corporate power and authority (a) to execute and deliver this
Agreement, the Loan Documents and all other agreements,
certificates and documents to be entered into by DARA in connection
herewith, (b) to perform DARA's obligations under this Agreement,
the Loan Documents and all other agreements, certificates and
documents to be entered into by DARA in connection herewith, and
(c) to consummate the Contemplated Transactions. This Agreement
constitutes the valid and legally binding obligation of DARA,
enforceable against DARA in accordance with its terms and
conditions. Upon execution and delivery by DARA of the Loan
Documents and the other agreements, certificates and documents
referred to in Section 8.1 , the Loan Documents and
such other agreements, certificates and documents will constitute
the legal, valid, and binding obligations of DARA, enforceable
against DARA in accordance with their respective terms and
conditions. DARA is not required to give any notice to, make any
filing with, or obtain any Consent from, any Person in order for
DARA to consummate the Contemplated Transactions.
Section 5.3 Purchase
Shares . DARA holds of record and owns beneficially the
Purchase Shares, free and clear of any Encumbrance. DARA is not a
party to any option, warrant, purchase right or other contract or
commitment that could require DARA to sell, transfer or otherwise
dispose of any Purchase Shares, other than this Agreement. DARA is
not a party to any voting trust, proxy or other agreement or
understanding with respect to the voting of any Purchase Shares,
other than the Old Stockholder Agreement.
Section 5.4 Pledge
Shares . DARA holds of record and owns beneficially the
Pledge Shares, free and clear of any Encumbrance (other than as
created in favor of SVI by the Pledge Agreement). DARA is not a
party to any option, warrant, purchase right or other contract or
commitment that could require DARA to sell, transfer or otherwise
dispose of any Pledge Shares, other than the Pledge Agreement. DARA
is not a party to any voting trust, proxy or other agreement or
understanding with respect to the voting of any Pledge Shares,
other than the Old Stockholder Agreement.
Section 5.5 Voting
Arrangements . DARA is not a party to (and DARA does not
otherwise have any rights or powers pursuant to) any agreement,
proxy or understanding with respect to the voting of SVI Shares,
other than the Old Stockholder Agreement and the Voting Agreements.
In connection with its exercise of any powers and rights under the
Voting Agreements, DARA has not appointed any agent, nominee, proxy
or substitute to act on behalf of DARA. As set forth in
Article IX below, effective immediately upon the
Closing, (a) DARA's rights under all Voting Agreements will
terminate, and (b) all of DARA's rights under the Old Stockholder
Agreement will terminate and be irrevocably waived.
Section 5.6
Noncontravention . Neither the execution and delivery
of this Agreement and the Loan Documents by DARA, nor the
consummation by DARA of the Contemplated Transactions, will
directly or indirectly (with or without notice of lapse of
time):
(a) contravene, conflict
with, or result in a violation of (i) any provision of DARA's
Organizational Documents or (ii) any resolution adopted by the
board of directors or the stockholders of DARA;
(b) contravene, conflict
with, result in a violation of, or give any Person the right to
challenge any of the Contemplated Transactions or to exercise any
remedy or obtain any relief under, any applicable law or any order
to which DARA or any of its assets may be subject; or
(c) contravene, conflict
with, result in a violation or breach of any provision of, or give
any Person the right to declare a default or exercise any remedy
under or to accelerate the maturity or performance of or to cancel,
terminate or modify, any agreement to which DARA is a party or by
which it is bound (other than as expressly provided in
Article IX below).
Section 5.7
Litigation . There is no proceeding involving DARA
pending or, to the knowledge of DARA, threatened before any court,
other governmental body or arbitration authority, except as
disclosed to SVI in writing and acknowledged by SVI prior to the
execution of this Agreement.
Section 5.8
Taxes . All taxes and assessments due and payable by
DARA have been paid or are being contested in good faith by
appropriate proceedings, and DARA has filed all tax returns which
it is required to file.
Section 5.10 Brokers'
Fees . DARA has no liability or obligation to pay any fees
or commissions to any broker, finder or agent with respect to the
Contemplated Transactions for which SVI could become liable or
obligated.
Section 5.11 Sophisticated
Seller .
(a) DARA has the
knowledge and experience in financial and business matters to be
capable of making an informed decision with respect to the sale of
the Purchase Shares to SVI for the Stock Purchase Price. DARA has
all information and materials relating to SVI's operations,
business and properties that DARA deems necessary or appropriate to
evaluate its sale of the Purchase Shares to SVI.
(b) DARA understands and
acknowledges that SVI makes no representations or warranties other
than those representations and warranties expressly made by SVI in
Article VI below. Without limiting the generality of
the foregoing, DARA understands and acknowledges that SVI makes no
representation or warranty and gives no assurance to DARA with
respect to the value of SVI or any SVI Shares. The Stock Purchase
Price represents a privately negotiated price for the Purchase
Shares, and DARA has determined that the Stock Purchase Price
represents fair consideration for the sale of the Purchase Shares
to SVI.
(c) In determining to
enter into this Agreement and to consummate the Contemplated
Transactions, DARA has not relied upon (i) any representation or
warranty of SVI or any of SVI's directors, officers, employees,
agents or representatives, other than those representations and
warranties expressly made by SVI in Article VI below,
or (ii) any non-disclosure of information by SVI or any of SVI's
directors, officers, employees, agents or representatives. DARA
hereby irrevocably waives and releases SVI and SVI's directors,
officers, employees, agents and representatives from any and all
actions and claims whatsoever, whether in law or equity, relating
to the determination of the amount of the Stock Purchase Price.
Section 5.12 Solvency . The
fair salable value of DARA's assets exceeds, and immediately
following the Closing will exceed, the fair value of its
liabilities (including contingent liabilities, but excluding any
deferred revenue). DARA is able, and following the Closing DARA
will be able, to pay its debts (including trade debts) as they
mature. DARA's capital is not unreasonably small in relation to its
business, and, as a result of the Contemplated Transactions, DARA
will not be left with unreasonably small capital. DARA has not
incurred and does not intend to incur, or believe that it will
incur, debts beyond its ability to pay as such debts become
due.
Section 5.13 No Investment
Company . DARA is not an "investment company" or a company
"controlled" by an "investment company" under the Investment
Company Act of 1940, as amended.
ARTICLE VI
Representations and Warranties of SVI
SVI represents and warrants to DARA that the statements
contained in this Article VI are correct and
complete as of the date of this Agreement and will be correct and
complete as of the Closing Date.
Section 6.1
Corporate Organization and Power . SVI is a
corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware,
