AND THE
ISSUANCE OF COMPANY COMMON STOCK PURSUANT TO ANY PROVISION OF THIS AGREEMENT
WILL NOT GIVE RISE TO ANY PREEMPTIVE RIGHTS OR RIGHTS OF FIRST REFUSAL ON BEHALF
OF ANY PERSON, OTHER THAN AS SET FORTH IN SECTION 4.05 OF THE COMPANY DISCLOSURE
STATEMENT.
EACH OF THE OUTSTANDING CAPITAL STOCK OF EACH OF THE COMPANY'S
SUBSIDIARIES IS DULY AUTHORIZED, VALIDLY ISSUED, FULLY PAID AND NONASSESSABLE,
AND SUCH SHARES OF THE SUBSIDIARIES AS ARE OWNED BY THE COMPANY OR BY A WHOLLY
OWNED SUBSIDIARY ARE FREE AND CLEAR OF ANY LIEN, CLAIM, OPTION, CHARGE, SECURITY
INTEREST, LIMITATION, ENCUMBRANCE AND RESTRICTION OF ANY KIND (ANY OF THE
FOREGOING BEING A "LIEN"), EXCEPT FOR PERMITTED ENCUMBRANCES.
SECTION 4.06.
SEC REPORTS AND FINANCIAL STATEMENTS.
(A)
THE COMPANY HAS FILED
WITH THE SEC ALL FORMS, REPORTS, SCHEDULES, REGISTRATION STATEMENTS AND
DEFINITIVE PROXY STATEMENTS REQUIRED TO BE FILED BY THE COMPANY WITH THE SEC
THROUGH THE DATE HEREOF (THE "SEC REPORTS").
AS OF THEIR RESPECTIVE DATES AND
EXCEPT AS SUBSEQUENTLY AMENDED PRIOR TO THE DATE HEREOF, THE SEC REPORTS
COMPLIED IN ALL MATERIAL RESPECTS WITH THE REQUIREMENTS OF THE EXCHANGE ACT OR
THE SECURITIES ACT AND THE RULES AND REGULATIONS OF THE SEC PROMULGATED
THEREUNDER APPLICABLE, AS THE CASE MAY BE, TO SUCH SEC REPORTS, AND NONE OF THE
SEC REPORTS CONTAINED ANY UNTRUE STATEMENT OF A MATERIAL FACT OR OMITTED TO
STATE A MATERIAL FACT REQUIRED TO BE STATED THEREIN OR NECESSARY TO MAKE THE
STATEMENTS MADE THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE
MADE, NOT MISLEADING.
(B) (I)
THE BALANCE SHEETS AS OF DECEMBER 31, 2000 AND 2001 AND THE RELATED
STATEMENTS OF OPERATIONS, SHAREHOLDERS' EQUITY AND CASH FLOWS (INCLUDING THE
NOTES THERETO) FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2001
AND FOR THE PERIOD FROM INCEPTION (AUGUST 7, 1995) TO
-20-
DECEMBER 31, 2001 (INCLUDING THE RELATED NOTES AND SCHEDULES THERETO) OF THE
COMPANY CONTAINED IN THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL
YEAR ENDED DECEMBER 31, 2001 (THE "FORM 10-K") INCLUDED IN THE SEC REPORTS
PRESENT FAIRLY THE FINANCIAL POSITION AND THE RESULTS OF OPERATIONS AND CASH
FLOWS OF THE COMPANY AS OF THE DATES OR FOR THE PERIODS PRESENTED THEREIN IN
CONFORMITY WITH UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES APPLIED
ON A CONSISTENT BASIS AS OF AND DURING THE PERIODS INVOLVED ("GAAP").
(II)
THE BALANCE SHEET AS OF DECEMBER 31, 2001 AND THE
RELATED STATEMENTS OF OPERATIONS, SHAREHOLDERS' DEFICIT AND CASH FLOWS
(INCLUDING THE NOTES THERETO) FOR THE PERIOD FROM FORMATION (NOVEMBER 30, 1999)
TO DECEMBER 31, 2001 OF DEPOMED DEVELOPMENT, LTD. CONTAINED IN THE FORM 10-K
INCLUDED IN THE SEC REPORTS PRESENT FAIRLY THE FINANCIAL POSITION AND THE
RESULTS OF OPERATIONS AND CASH FLOWS OF DEPOMED DEVELOPMENT, LTD. AS OF THE
DATES OR FOR THE PERIODS PRESENTED THEREIN IN CONFORMITY WITH GAAP.
(C)
THE COMPANY AND THE SUBSIDIARIES HAVE NO LIABILITIES OR
OBLIGATIONS OF ANY NATURE (WHETHER ABSOLUTE, ACCRUED, CONTINGENT, UNLIQUIDATED,
CONDITIONAL OR OTHERWISE) EXCEPT FOR LIABILITIES