Fluidigm Corporation CONVERTIBLE NOTE PURCHASE AGREEMENT (US$15 Million Credit Facility) August 7, 2006
TABLE OF CONTENTS
| Page | ||||||||
| 1. | The First Note | 2 | ||||||
| 1.1 | Authorization; Purchaser’s Obligation to Purchase | 2 | ||||||
| 1.2 | First Note Procedure | 2 | ||||||
| 1.3 | Closing of First Note Purchase | 2 | ||||||
| 1.4 | Effect of Change in Series E Preferred Stock | 2 | ||||||
| 2. | Representations and Warranties of the Company | 2 | ||||||
| 2.1 | Organization, Good Standing and Qualification | 2 | ||||||
| 2.2 | Corporate Power | 3 | ||||||
| 2.3 | Subsidiaries | 3 | ||||||
| 2.4 | Capitalization | 3 | ||||||
| 2.5 | Authorization | 4 | ||||||
| 2.6 | Valid Issuance of Note and Conversion Shares | 4 | ||||||
| 2.7 | Governmental Consents | 4 | ||||||
| 2.8 | Litigation | 5 | ||||||
| 2.9 | Employees | 5 | ||||||
| 2.10 | Patents and Other Intangible Assets | 5 | ||||||
| 2.11 | Compliance with Other Instruments | 7 | ||||||
| 2.12 | Permits | 8 | ||||||
| 2.13 | Environmental and Safety Laws | 8 | ||||||
| 2.14 | Title to Property and Assets | 8 | ||||||
| 2.15 | Agreements; Action | 8 | ||||||
| 2.16 | Financial Statements | 9 | ||||||
| 2.17 | Changes | 9 | ||||||
| 2.18 | Brokers or Finders | 10 | ||||||
| 2.19 | Employee Benefit Plans | 10 | ||||||
| 2.20 | Tax Matters | 10 | ||||||
| 2.21 | Insurance | 10 | ||||||
| 2.22 | Corporate Documents | 11 | ||||||
| 2.23 | Disclosure | 11 | ||||||
| 2.24 | Offering | 11 | ||||||
| 2.25 | Returns and Complaints | 11 | ||||||
| 3. | Representations and Warranties of the Purchasers | 11 | ||||||
| 3.1 | Experience | 11 | ||||||
| 3.2 | Investment | 11 | ||||||
| 3.3 | Rule 144 | 12 | ||||||
| 3.4 | No Public Market | 12 | ||||||
| 3.5 | Access to Data | 12 | ||||||
| 3.6 | Authorization | 12 | ||||||
| 3.7 | Accredited Investor | 12 | ||||||
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TABLE OF CONTENTS
(Continued)
(Continued)
| Page | ||||||||
| 3.8 | Public Solicitation | 12 | ||||||
| 3.9 | Tax Advisors | 12 | ||||||
| 3.10 | Purchaser Counsel | 13 | ||||||
| 3.11 | Brokers or Finders | 13 | ||||||
| 3.12 | Non-United States Persons | 13 | ||||||
| 4. | Covenants of the Company | 13 | ||||||
| 4.1 | Subsidiary Business Plan | 13 | ||||||
| 4.2 | Subsidiary Board of Directors | 14 | ||||||
| 4.3 | Affirmative Covenants | 14 | ||||||
| 4.4 | Preservation of Existence | 14 | ||||||
| 4.5 | Payment of Taxes | 14 | ||||||
| 4.6 | Compliance with Laws | 14 | ||||||
| 4.7 | Maintenance of Properties | 14 | ||||||
| 4.8 | Government Authority | 14 | ||||||
| 4.9 | Opinion of Company Counsel | 15 | ||||||
| 5. | Covenants of the Purchaser | 15 | ||||||
| 5.1 | Transfers | 15 | ||||||
| 5.2 | Additional Convertible Promissory Notes | 15 | ||||||
| 6. | Termination | 17 | ||||||
| 7. | Miscellaneous | 17 | ||||||
| 7.1 | Governing Law | 17 | ||||||
| 7.2 | California Corporate Securities Law | 17 | ||||||
| 7.3 | Survival | 17 | ||||||
| 7.4 | Successors and Assigns | 18 | ||||||
| 7.5 | Entire Agreement; Amendment | 18 | ||||||
| 7.6 | Notices, etc. | 18 | ||||||
| 7.7 | Counterparts; Facsimile | 19 | ||||||
| 7.8 | Severability | 19 | ||||||
| 7.9 | Expenses | 19 | ||||||
| 7.10 | Titles and Subtitles | 19 | ||||||
| 7.11 | Jury Trial | 19 | ||||||
| 7.12 | Jurisdiction; Venue | 19 | ||||||
| 7.13 | Currency | 19 | ||||||
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| EXHIBITS | ||
A
|
Form of Convertible Promissory Note (First Note) | |
B
|
Form of Convertible Promissory Note (Second Note) | |
C
|
Form of Convertible Promissory Note (Third Note) | |
D
|
Compliance Certificate | |
E
|
Investment Representation Statement | |
F
|
Legal Opinion | |
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Fluidigm Corporation
CONVERTIBLE NOTE PURCHASE AGREEMENT
(US$15 Million Credit Facility)
(US$15 Million Credit Facility)
This Convertible Note Purchase Agreement (the “Agreement”) is made as of August 7, 2006, by
and between Fluidigm Corporation, a California corporation (the “Company”), and Biomedical Sciences
Investment Fund Pte Ltd (“Purchaser”).
WHEREAS, the Purchaser has agreed to purchase, pursuant to the terms of this Agreement and
upon the election of the Company, up to US$15,000,000 in aggregate principal of Convertible
Promissory Notes of the Company;
WHEREAS, the Purchaser has agreed that the Company may elect to sell to the Purchaser within
the time periods set forth herein, and the Purchaser has agreed to purchase should the Company so
elect, a Convertible Promissory Note in the principal amount of US$5,000,000 in substantially the
form attached hereto as Exhibit A (the “First Note”), the principal and interest on which
are convertible into shares of Series E Preferred Stock of the Company upon the happening of
certain events described in the First Note;
WHEREAS, provided that the First Note has converted (as set forth in the First Note), the
Purchaser has agreed that the Company may elect to sell to the Purchaser within the time periods
set forth herein, and Purchaser has agreed to purchase should the Company so elect, a second
Convertible Promissory Note of the Company in the principal amount of US$5,000,000, in
substantially the form attached hereto as Exhibit B (the “Second Note”), the principal and
interest on which are convertible into shares of Series E Preferred Stock of the Company upon the
happening of certain events as described in the Second Note; and
WHEREAS, provided that the Second Note has converted (as set forth in the Second Note), the
Purchaser has agreed that the Company may elect to sell to the Purchaser within the time periods
set forth herein, and Purchaser has agreed to purchase should the Company so elect, a third
Convertible Promissory Note of the Company in the principal amount of US$5,000,000, in
substantially the form attached hereto as Exhibit C (the “Third Note,” and together with
the First Note and the Second Note, an “Additional Note” or the “Additional Notes”), the principal
and interest on which are convertible into shares of Series E Preferred Stock of the Company upon
the happening of certain events as described in the Third Note.
NOW, THEREFORE, the parties hereby agree as follows:
1. The First Note.
1.1 Authorization; Purchaser’s Obligation to Purchase. The Purchaser shall, at the
Company’s election and in accordance with the procedures set forth in this Section 1, purchase the
First Note. Such election shall indicate that the Company has authorized the sale and issuance of
the First Note in the principal amount of US$5,000,000, convertible (i) at the election of the
Purchaser, (ii) upon the achievement of certain Milestones (as set forth in the First Note), or
(iii) as otherwise as set forth in the First Note into shares of Series E Preferred Stock of the
Company at a conversion price of US$3.60 per share. Shares of Series E Preferred Stock together
with any other securities which may be issued upon conversion of any of the Additional Notes are
referred to herein as the “Note Shares.” The Additional Notes, the Note Shares and securities of
the Company issued or issuable upon conversion thereof are referred to herein as the “Securities.”
1.2 First Note Procedure. Subject to Section 1.1, the Company may exercise its option to
require the Purchaser to purchase the First Note at any time on or before September 30, 2006 by
giving Purchaser written notice thereof (the “First Note Election Notice”). The First Note
Election Notice shall state that the Company has elected to require the Purchaser to purchase the
First Note and shall indicate the date, time, and location of the closing of the purchase and sale
of the First Note (the “First Note Closing”), which shall occur no sooner than 14 days or later
than 25 days after the date of the First Note Election Notice.
1.3 Closing of First Note Purchase. At the First Note Closing, the Company shall deliver
to the Purchaser the First Note and a duly executed Compliance Certificate in the form attached
hereto as Exhibit D (the “Compliance Certificate”). At the First Note Closing, the
Purchaser shall deliver to the Company (i) the aggregate principal amount of the First Note
totalling US$5,000,000 by check or wire transfer and (ii) the Investment Representation Statement,
duly executed by Purchaser, in the form attached hereto as Exhibit E (the “Investment
Representation Statement”).
1.4 Effect of Change in Series E Preferred Stock. The form of the First Note will be
modified upon the happening of certain events as set forth in Section 5.2(d).
2. Representations and Warranties of the Company. Except as set forth in the Schedule of
Exceptions dated of even date hereof and separately delivered to Purchaser contemporaneously with
the execution and delivery of this Agreement (the
“Schedule of Exceptions”), the Company represents and warrants to Purchaser as of the date
hereof as follows:
2.1 Organization, Good Standing and Qualification. The Company 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. The
Company is duly qualified to transact business and is in good standing in each jurisdiction in
which the failure to so qualify, individually or in the aggregate, would have a material adverse
effect on its business (as now conducted), properties, or financial condition.
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2.2 Corporate Power. The Company has all requisite legal and corporate power and
authority to execute and deliver this Agreement and to carry out and perform its obligations under
the terms of this Agreement. Subject to the corporate authorization of and election to sell and
issue any of the Additional Notes hereunder, the Company will have all requisite legal and
corporate power and authority to (i) sell and issue the Additional Notes hereunder and (ii) issue
the Series E Preferred Stock initially issuable upon conversion of any of the Additional Notes.
2.3 Subsidiaries. The Company does not presently own or control, directly or indirectly,
any interest in any other corporation, association, or other business entity.
2.4 Capitalization. The authorized capital stock of the Company consists of 77,857,144
shares of Common Stock (“Common Stock”), of which 9,422,895 shares are issued and outstanding and
51,687,948 shares of Preferred Stock (“Preferred Stock”), 2,727,273 of which are designated
Series A Preferred Stock of which 2,727,273 are outstanding, 6,460,675 of which are designated
Series B Preferred Stock of which 6,460,675 are outstanding, 17,000,000 of which are designated
Series C Preferred Stock, 16,364,832 of which are issued and outstanding, 15,500,000 of which are
designated Series D Preferred Stock, 12,196,191 of which are issued and outstanding, and 10,000,000
of which are designated Series E Preferred Stock, 1,250,000 of which are issued and outstanding.
All such issued and outstanding shares have been duly authorized and validly issued in compliance
with applicable laws, and are fully paid and nonassessable.
In connection with the sale and issuance of any Additional Notes, the Company will have
reserved 4,166,667 shares of Series E Preferred Stock for issuance upon conversion of such
Additional Note (the “Conversion Shares”) and 4,166,667 shares of Common Stock for issuance upon
conversion of such Conversion Shares. As of the date of this Agreement, the Company has reserved:
(i) 10,000,000 shares of Common Stock for issuance upon conversion of the outstanding shares of
Series E Preferred Stock; (ii) 12,196,191 shares of Common Stock for issuance upon
conversion of the outstanding shares of Series D Preferred Stock; (iii) 408,928 shares of
Series D Preferred Stock for issuance upon exercise of outstanding warrants and 408,928 shares of
Common Stock for issuance upon conversion of such Series D Preferred Stock; (iv) 16,364,832 shares
of Common Stock for issuance upon conversion of the outstanding shares of Series C Preferred Stock;
(v) 294,868 shares of Series C Preferred Stock for issuance upon exercise of outstanding warrants
and 294,868 shares of Common Stock for issuance upon conversion of such Series C Preferred Stock;
(vi) 6,460,675 shares of Common Stock for issuance upon conversion of the outstanding Series B
Preferred Stock; (vii) 2,727,273 shares of Common Stock for issuance upon conversion of the
outstanding Series A Preferred Stock; and (viii) an aggregate of 10,800,000 shares of Common Stock
for issuance to employees and consultants of the Company pursuant to the Company’s 1999 Stock Plan,
pursuant to which options to purchase 5,276,828 shares are granted and outstanding and 1,727,039
shares are available for future grant. Other than with respect to the shares reserved for issuance
in the preceding sentence, or as set forth in this Agreement, the Investor Rights Agreement (as
defined below) or the Voting Agreement (as defined below), there are no outstanding rights,
options, warrants, conversion rights, preemptive rights, rights of first refusal or similar rights
for the purchase or acquisition from the Company of any securities of the Company. There are no
outstanding obligations of the Company to repurchase or redeem any of its securities.
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Except as contemplated in the Eighth Amended and Restated Investor Rights Agreement dated
June 13, 2006 (the “Investor Rights Agreement”), the Company has not granted or agreed to grant any
registration rights, including piggyback rights, to any person or entity. Except as contemplated
in the Second Amended and Restated Voting Agreement dated August 16, 2005 (the “Voting Agreement”),
the Company is not a party or subject to any agreement or understanding, and to the Company’s
knowledge, there is no agreement or understanding between any person or entities, which relates to
the voting or the giving of written consents with respect to any security of the Company or by a
director of the Company.
2.5 Authorization. All corporate action on the part of the Company, its officers,
directors and shareholders necessary for the authorization, execution and delivery of this
Agreement, the performance of all obligations of the Company under this Agreement has been taken,
subject to corporate authorization of any election to require the Purchasers to purchase Additional
Notes pursuant to this Agreement. This Agreement constitutes a valid and legally binding
obligation of the Company, enforceable in accordance with its terms, subject to: (i) judicial
principles limiting the availability of specific performance, injunctive relief, and other
equitable remedies; and (ii) bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect generally relating to or affecting creditors’ rights.
2.6 Valid Issuance of Note and Conversion Shares. Any Additional Note that is purchased
by the Purchaser hereunder, when issued, sold and delivered in accordance with the terms of this
Agreement, will be free of restrictions on transfer other than restrictions on transfer under this
Agreement, such Additional Note, and the Investor
Rights Agreement and under applicable state and federal securities laws as in effect on the
date of issuance of such Additional Note. Any Conversion Shares (and the shares of Common Stock
issuable upon conversion thereof) will have been duly and validly reserved for issuance, and, upon
issuance in accordance with the terms of the applicable Additional Note and the Amended and
Restated Articles of Incorporation of the Company as amended through the date of issuance of such
Additional Note (the “Restated Articles”), will be duly and validly issued, fully paid, and
nonassessable and will be free of restrictions on transfer other than restrictions on transfer
under this Agreement, the terms of the applicable Additional Note, and the Investor Rights
Agreement and under applicable state and federal securities laws as in effect on the date of
issuance of such Additional Note. The Conversion Shares (and the shares of Common Stock issuable
upon conversion thereof) may be issued without any registration or qualification under state and
federal securities laws as such laws are in effect as of the date of this Agreement.
2.7 Governmental Consents. As of the date of this Agreement, 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 the Company would be required in
connection with the offer, sale or issuance of any of the Additional Notes or the Conversion Shares
(and the shares of Common Stock issuable upon conversion thereof) or the consummation of any other
transaction contemplated hereby, except in connection with the sale and issuance of Additional
Notes for filings that may be required pursuant to applicable federal and state securities laws and
blue sky laws, which filings, the Company covenants to complete within the required statutory
period.
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2.8 Litigation. There is no action, suit, proceeding or investigation pending or, to the
Company’s knowledge, currently threatened against the Company before any court, administrative
agency or other governmental body which questions the validity of this Agreement or the Investor
Rights Agreement or the right of the Company to enter into any of them, or to consummate the
transactions contemplated hereby or thereby, or which could result, either individually or in the
aggregate, in any material adverse change in the condition (financial or otherwise), business,
property, assets or liabilities of the Company, nor is the Company aware that there is any basis
for the foregoing. The Company is not a party or subject to, and none of its assets is bound by,
the provisions of any order, writ, injunction, judgment or decree of any court or government agency
or instrumentality. There is no action, suit, proceeding or investigation by or involving the
Company currently pending or that the Company intends to initiate.
2.9 Employees. Each employee of the Company has executed a proprietary information and
invention assignment agreement substantially in the form or forms made available to the Purchaser.
To the Company’s knowledge, no officer or key employee is in violation of any prior employee
contract or proprietary information agreement. No employees of the Company are represented by any
labor union or covered by any collective bargaining agreement. There is no pending or, to the
Company’s
knowledge, threatened labor dispute involving the Company and any group of its employees. The
Company is not aware that any officer or key employee intends to terminate his or her employment
with the Company within the six months after the date of this Agreement. The Company does not have
a present intention to terminate the employment of any officer or key employee. Each officer and
key employee is devoting 100% of his or her business time to the conduct of the business of the
Company. The Company is not aware that any officer or key employee intends to work less than full
time during the six months after the date of this Agreement. Subject to general principles related
to wrongful termination of employees, the employment of each officer and employee of the Company is
terminable at will.
2.10 Patents and Other Intangible Assets.
(a) The Company owns, or is licensed or otherwise has the legally enforceable right to use,
all copyrights, domain names, maskworks, applications for the issuance or registration of any of
the foregoing, trade secrets, confidential or proprietary know-how, data and information, ideas,
inventions, designs, developments, algorithms, processes, schematics, techniques, computer
programs, applications and other software, works of authorship, creative effort and, to the
Company’s knowledge after such investigation as the Company deemed reasonable, patents, patent
applications, trademarks (including service marks and design marks) and applications therefor,
tradenames (all of the foregoing generically, “Intellectual Property Rights”) utilized in, or
necessary for, its business as now conducted (collectively, the “Company Intellectual Property”)
without infringing upon the right of any person, corporation or other entity.
(b) Section 2.10 of the Schedule of Exceptions lists (i) all patents and patent applications
and all registered and unregistered trademarks, trade names, copyrights and maskworks and
registered domain names included in the Company Intellectual Property, including the jurisdictions
in which each such intellectual property right has been issued or registered or in
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which any
application for such issuance or registration has been filed, (ii) all licenses, sublicenses,
collaborations and other agreements (or options for any of the foregoing) to which the Company is a
party and pursuant to which any person, corporation or other entity is authorized to use any of the
Company Intellectual Property, and (iii) all licenses, sublicenses, collaborations and other
agreements (or options for any of the foregoing) to which the Company is a party and pursuant to
which the Company is authorized to use any Intellectual Property Right of any third party (other
than standard licenses for commercially available software). Each of the agreements in (ii) and
(iii) above remain in full force and effect and, to the Company’s knowledge, no party to any such
agreement is in material breach or default under such agreement, and the Company is not aware of
any act or failure to act by a party which would constitute a material breach or default under any
such agreement, give rise to a right of the licensor to terminate any such agreement or otherwise
result in termination of, or suspension or loss of exclusive rights under, any such agreement.
(c) To the Company’s knowledge, the Company has not infringed or misappropriated any
Intellectual Property Right of any other person, corporation or other entity. The Company has not
received any communication or otherwise received any information alleging any
such conduct by the Company or asserting a claim by any third party to the ownership of, or
right to use, any of the Company Intellectual Property, and the Company does not know of any basis
for any such claim. The Company is not aware of any action, suit, proceeding or investigation
pending or currently threatened against the Company (or any third party owner or licensor of rights
to the Company of any of the Company Intellectual Property) which would have a material impact on
the Company’s ownership of or exclusive or co-exclusive rights to use, the Company Intellectual
Property.
(d) The Company is not aware that any of its employees is obligated under any agreement, or
subject to any judgment, decree or order of any court or administrative agency, that would
materially interfere with his or her ability to fully and freely perform their duties to the
Company or that would conflict with the Company’s business. To the Company’s knowledge, neither
the execution and delivery of this Agreement nor the issuance of any of the Additional Notes nor
the carrying on of the Company’s business by the employees of the Company, will conflict with or
result in a material breach of the terms, conditions, or provisions of, or constitute a default
under, any agreement under which any such employee is now obligated. The Company does not utilize,
and will not be required to utilize, any invention, development or work of authorship of any of its
employees (or persons it currently intends to hire) made prior to their employment by the Company.
(e) Except as described in Schedule 2.10, (i) the Company is not obligated, or under any
liability whatsoever to make any payments by way of royalties, fees or otherwise, to any owner or
licensor of, or other claimant to, any Company Intellectual Property, and (ii) the Company is not a
party to any agreement concerning the Company Intellectual Property or any other Intellectual
Property Right used or to be used by the Company in its business as conducted. No founder,
director, officer or employee of the Company, or, to the Company’s knowledge, no shareholder of the
Company has any interest in the Company Intellectual Property.
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(f) Except with respect to any rights granted under the agreements described in Schedule 2.10,
the Company owns exclusively all rights arising from or associated with the research and
development efforts of the Company, its founders, employees and independent contractors relating to
the Company’s business as now conducted, and all such rights form part of the Company Intellectual
Property. The Company has secured valid written assignments from all employees and independent
contractors who contributed to the creation or development of any of the Company Intellectual
Property of the rights to such contributions that the Company does not already own by operation of
law. The Company has not received notice of any claim being asserted by any current or former
employee, independent contractor or other third party to the ownership, of or right to use, any of
the Company Intellectual Property, or challenging or questioning the validity of any of the Company
Intellectual Property, and the Company is not aware of any basis for any such claim.
(g) The Company has taken reasonable steps to protect and preserve the confidentiality of all
material trade secrets included in Company Intellectual Property not otherwise protected by patents
or copyright (“Confidential Information”). All disclosure of Confidential Information to a third
party has been pursuant to the terms of a written confidentiality or non-disclosure agreement
between the Company and such third party.
(h) The Company hereby represents and warrants that the data, written and oral reports and
other representations and information that the Company provided to its investors (or their counsel)
pertaining to the Company Intellectual Property, when taken as a whole, were truthful and, to the
Company’s knowledge, accurate in all material respects, and there was no omission therefrom which
made such information misleading, or incomplete in any material way.
2.11 Compliance with Other Instruments. The Company is not in violation or default of any
provision of its Articles of Incorporation or Bylaws, each as amended and in effect on and as of
the date hereof. The Company is not in violation or default of any material 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 or assets are bound or,
to the best of its knowledge, of any provision of any federal, state or local statute, rule or
governmental regulation. The execution, delivery and performance of and compliance with this
Agreement, the Investor Rights Agreement and the Voting Agreement and the issuance and sale of the
Additional Notes, will not result in any such violation, be in conflict with or constitute, with or
without the passage of time or giving of notice, a default under any such provision, license,
indenture, instrument, mortgage, deed of trust, loan, contract, commitment, judgment, decree, order
or obligation; or require any consent or waiver under any such provision, license, indenture,
instrument, mortgage, deed of trust, loan, contract, commitment, judgment, decree, order or
obligation (other than any consents or waivers that have been obtained); or result in the creation
of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the
Company pursuant to any such provision, license, indenture, instrument, mortgage, deed of trust,
loan, contract, commitment, judgment, decree, order or obligation.
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2.12 Permits. The Company has all franchises, permits, licenses, and any similar authority
necessary for the conduct of its business as now being conducted by it. The Company is not in
default in any material respect under any of such franchises, permits, licenses, or other similar
authority.
2.13 Environmental and Safety Laws. To its knowledge, the Company is not in violation of
any applicable statute, law, or regulation relating to the environment or occupational health and
safety, and to its knowledge, no material expenditures by the Company are or will be required in
order to comply with any such existing statute, law, or regulation.
2.14 Title to Property and Assets. The Company has good and marketable title to all of its
properties and assets free and clear of all pledges, mortgages, liens, security interests, charges
and encumbrances, except liens for current taxes and assessments not yet due and possible minor
liens and encumbrances which do not,
in any case, individually or in the aggregate, materially detract from the value of the
property subject thereto or materially impair the ownership or use of said property or assets, or
the operations of the Company. With respect to the property and assets it leases, the Company is
in compliance with such leases and, to the best of its knowledge, holds a valid leasehold interest
free of all liens, claims or encumbrances. The Company’s properties and assets are in good
condition and repair in all material respects.
2.15 Agreements; Action.
(a) Except for agreements contemplated by this Agreement, there are no agreements,
understandings or proposed transactions between the Company and any of its officers, directors,
affiliates, or any affiliate thereof other than standard option grants and stock purchase
agreements entered into prior to the date of this Agreement.
(b) There are no agreements, understandings, instruments, contracts, proposed transactions,
judgments, orders, writs or decrees to which the Company is a party or by which it is bound that
may involve (i) obligations (contingent or otherwise) of, or payments by the Company in excess of,
US$100,000, other than in the ordinary course of business, (ii) the license of any patent,
copyright, trade secret or other proprietary right to or from the Company other than standard
commercial software licenses, (iii) provisions restricting or adversely affecting the development,
manufacture or distribution of the Company’s products or services, or (iv) indemnification by the
Company with respect to infringements of proprietary rights other than indemnifications entered
into in the ordinary course of business.
(c) For the purposes of subsection (b) above, all indebtedness, liabilities, agreements,
understandings, instruments, contracts and proposed transactions involving the same person or
entity (including persons or entities the Company has reason to believe are affiliated therewith)
shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such
subsection.
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(d) The Company is not a party to and is not bound by any contract, agreement or instrument,
or subject to any restriction under its Restated Articles or its Bylaws that adversely affects its
business as now conducted, its properties or its financial condition.
(e) The Company is not a guarantor or indemnitor of any indebtedness of any other person or
entity.
(f) The Company has not engaged in the past three months in any discussion (i) with any
representative of any entity or entities regarding the merger of the Company with or into any such
entity or entities or any affiliate thereof, (ii) with any representative of any entity or any
individual regarding the sale, conveyance or disposition of all or substantially all of the assets
of the Company or a transaction or series of related transactions in which more than fifty
percent (50%) of the voting power of the Company would be disposed of, or (iii) regarding any
other form of liquidation, dissolution or winding up of the Company.
2.16 Financial Statements. The Company has fully provided the Purchaser with all the
information that the Purchaser has requested for deciding whether to enter into this Agreement and
to acquire the Additional Notes. The Company has made available to Purchaser its audited balance
sheets dated as of December 31, 2005 and the audited statement of operations for the fiscal year
then ended, its unaudited balance sheets as of March 31, 2006, and its unaudited statement of
operations and cash flow statement covering the three month period then ended (collectively, the
“Financial Statements”). The Financial Statements are complete and correct in all material
respects and have been prepared in accordance with generally accepted accounting principles applied
on a consistent basis throughout the periods indicated. The Financial Statements accurately set
out and describe the financial condition and operating results of the Company as of the date, and
during the periods, indicated therein. Except as set forth in the Financial Statements, the
Company has no material liabilities, contingent or otherwise, other than (i) liabilities incurred
in the ordinary course of business subsequent to March 31, 2006 and (ii) obligations under
contracts and commitments incurred in the ordinary course of business and not required under
generally accepted accounting principles to be reflected in the Financial Statements, which, in
both cases, individually or in the aggregate are not material to the financial condition or
operating results of the Company.
2.17 Changes. Since March 31, 2006:
(a) the Company 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, (ii) incurred any
indebtedness for money borrowed or any other liabilities outside the ordinary course of its
business individually in excess of US$100,000 or, in the case of indebtedness and/or liabilities
individually less than US$100,000, in excess of US$200,000 in the aggregate, (iii) made any loans
or advances to any person, other than ordinary advances for reimbursable businesses expenses,
(iv) sold, exchanged, assigned, transferred, licensed or otherwise disposed of any of its assets or
rights (including Company Intellectual Property), other than the sale of its inventory in the
ordinary course of business, (v) waived or compromised a valuable right or a material debt owed to
it, (vi) materially changed any compensation arrangement or agreement with any employee, officer,
-9-
director or shareholder, or (vii) arranged or committed to do any of the things described in this
subsection (a); and
(b) there has not been (i) a loss of, or a material order cancellation by, any major customer
of the Company, (ii) any damage, destruction or loss, whether or not covered by insurance,
materially and adversely affecting the business, properties, or financial condition of the Company,
(iii) any change in the assets, liabilities, financial condition or operating results of the
Company from that reflected in the Financial Statements, except changes in the ordinary course of
business that have not been, in the aggregate, materially adverse, (iv) any resignation or
termination
of any officer or key employee of the Company, and the Company is not aware of the impending
resignation or termination of employment of any such officer, or (v) to the best of the Company’s
knowledge, any other event or condition of any character that would materially and adversely affect
the business, properties, or financial condition of the Company.
2.18 Brokers or Finders. The Company has not agreed to incur, directly or indirectly, any
liability for brokerage or finders’ fees, agents’ commissions or other similar charges in
connection with this Agreement or any of the transactions contemplated hereby.
2.19 Employee Benefit Plans. The Company does not have any Employee Benefit Plan as
defined in the Employee Retirement Income Security Act of 1974 other than the Company’s 401(k)
Plan. The Company is in material compliance with the terms of the Company’s 401(k) Plan and has
not received notice of any material increase in the costs of such plans.
2.20 Tax Matters. The Company has filed all tax returns and reports as required by law.
These returns and reports are true and correct in all material respects. The Company has paid all
taxes and other assessments due. The Company has not elected pursuant to 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 the
Company. None of the Company’s tax returns have ever been audited by any governmental authorities.
The Company 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.
2.21 Insurance. The Company 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. The Company has obtained
term life insurance payable to the Company on the lives of Xxxxxxx Xxxxx and Xxxxx Xxxxxxxxxxx in
the amount of US$500,000. The Company has in full force and effect directors and officers
liability insurance, covering its directors, with aggregate coverage in the amount of US$2,000,000.
-10-
2.22 Corporate Documents. The Restated Articles and By-Laws of the Company are in the form made available to the
Purchaser. The copy of the minute books of the Company made available to Purchaser’s counsel
contains true and correct minutes of all meetings of directors (including any committees thereof)
and shareholders and all actions by written consent taken without a meeting by the directors and
shareholders since December 18, 2003.
2.23 Disclosure. The Company has fully provided Purchaser with all the information which
Purchaser has requested in connection with the purchase of the Additional Notes hereunder, as well
as all information which the Company in its judgment believes is reasonably necessary to enable
Purchaser to make a decision as to whether to enter into this Agreement and to invest in the
Company. Neither this Agreement with the Exhibits hereto, nor any other statements, certificates
or documents made or delivered in connection herewith or therewith, contains any untrue statement
of a material fact or omits to state a material fact necessary to make the statements herein or
therein not misleading in light of the circumstances under which they were made. The financial
projections made available to the Purchaser (the “Projections”) were prepared in good faith and
based upon assumptions that the Company believes are reasonable, and represent the Company’s good
faith estimate of its future plans and results; provided however, that the Company does not
represent or warrant that it will achieve any of the Projections.
2.24 Offering. Subject in part to the truth and accuracy of Purchaser’s representations
set forth in this Agreement, the offer, sale and issuance of the Additional Notes as contemplated
by this Agreement would be, if issued as of this date of this Agreement, exempt from the
registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), and
neither the Company nor any authorized agent acting on its behalf will take any action hereafter
that would cause the loss of such exemption.
2.25 Returns and Complaints. The Company has not received customer complaints concerning
alleged defects in the design of its products that, if true, would have, individually or in the
aggregate, a material adverse effect on its business, properties, or financial condition.
3. Representations and Warranties of the Purchasers. Purchaser hereby represents,
warrants and agrees as follows:
3.1 Experience. Purchaser is experienced in evaluating start-up companies such as the
Company, is able to evaluate and represent its own interests in transactions such as the one
contemplated by this Agreement, has such knowledge and experience in financial and business matters
such that
Purchaser is capable of evaluating the merits and risks of Purchaser’s investment in the
Company, and has the ability to bear the economic risks of its investment.
3.2 Investment. Purchaser is acquiring and will acquire, the Securities, for investment
for Purchaser’s own account and not with the view to, or for resale in connection with, any
distribution thereof. Purchaser understands that the Securities have not been registered under the
Securities Act by reason of a specific exemption from the registration provisions of the Securities
Act, which depends upon, among other things, the bona fide nature of Purchaser’s investment intent
as expressed herein. Purchaser further represents that it does not have any contract, undertaking,
-11-
agreement or arrangement with any person to sell, transfer or grant participation to any third
person with respect to any of the Securities other than a transfer not involving a change of
beneficial ownership. Purchaser understands and acknowledges that the offering of the Securities
pursuant to this Agreement will not be registered under the Securities Act on the ground that the
sale provided for in this Agreement is exempt from the registration requirements of the Securities
Act.
3.3 Rule 144. Purchaser acknowledges that the Securities must be held indefinitely unless
subsequently registered under the Securities Act or an exemption from such registration is
available. Purchaser is aware of the provisions of Rule 144 promulgated under the Securities Act,
which permit limited resale of shares purchased in a private placement subject to the satisfaction
of certain conditions. Purchaser covenants that, in the absence of an effective registration
statement covering the securities in question, Purchaser will sell, transfer, or otherwise dispose
of the Securities only in accordance with applicable securities laws and in a manner consistent
with Purchaser’s representations and covenants set forth in this Agreement and the applicable
Additional Note. In connection therewith, Purchaser acknowledges that the Company will make a
notation on its stock books regarding the restrictions on transfer set forth in this Agreement and
the applicable Additional Note and will transfer securities on the books of the Company only to the
extent not inconsistent therewith.
3.4 No Public Market. Purchaser understands that no public market now exists for any of
the securities issued by the Company, and that the Company has made no assurances that a public
market will ever exist for the Securities.
3.5 Access to Data. Purchaser has received and reviewed information about the Company and
has had an opportunity to discuss the Company’s business, management and financial affairs with its
management and to review the Company’s facilities.
3.6 Authorization. This Agreement when executed and delivered by the Purchaser will constitute a valid and
legally binding obligation of the Purchaser, enforceable against the Purchaser in accordance with
its terms, subject to: (i) judicial principles respecting election of remedies or limiting the
availability of specific performance, injunctive relief, and other equitable remedies; and
(ii) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect generally relating to or affecting creditors’ rights.
3.7 Accredited Investor. Purchaser acknowledges that it is an “accredited investor” as
defined in Rule 501 of Regulation D as promulgated by the United States Securities and Exchange
Commission (the “Commission”) under the Securities Act and shall submit to the Company such further
assurances of such status as may be reasonably requested by the Company. The principal address of
such Purchaser is as set forth on the signature page hereto.
3.8 Public Solicitation. Purchaser knows of no public solicitation or advertisement of an
offer in connection with the proposed issuance and sale of the Securities.
3.9 Tax Advisors. Purchaser has reviewed with its own tax advisors the tax consequences
of the purchase of the Securities and the transactions contemplated by this Agreement.
-12-
Purchaser
is relying solely on such advisors and not on any statements or representations of the Company or
any of its agents and understands that Purchaser (and not the Company) shall be responsible for the
Purchaser’s own tax liability that may arise as a result of the Purchase of the Securities or the
transactions contemplated by this Agreement.
3.10 Purchaser Counsel. Purchaser acknowledges that it has had the opportunity to review
this Agreement and the exhibits hereto and the transactions contemplated by this Agreement with its
own legal counsel. Purchaser is relying solely on such counsel and not on any statements or
representations of the Company or any of its agents for legal advice with respect to this
investment or the transactions contemplated by this Agreement.
3.11 Brokers or Finders. The Company has not incurred and will not incur, directly or
indirectly, as a result of any action taken by such Purchaser, any liability for brokerage or
finders’ fees or agents’ commissions or any similar changes in connection with this Agreement.
3.12 Non-United States Persons. Purchaser hereby represents that Purchaser is satisfied as to the full observance of the
laws of Purchaser’s jurisdiction in connection with any invitation to subscribe for the Securities
and the Additional Notes (and securities issuable upon conversion thereof) or any use of this
Agreement, including (i) the legal requirements within Purchaser’s jurisdiction for the purchase of
the Securities and the Additional Notes (and securities issuable upon conversion thereof), (ii) any
foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents
that may need to be obtained and (iv) the income tax and other tax consequences, if any, that may
be relevant to the purchase, holding, redemption, sale or transfer of such securities. Purchaser’s
subscription and payment for, and Purchaser’s continued beneficial ownership of, the Securities and
the Additional Notes (and securities issuable on conversion thereof) will not violate any
applicable securities or other laws of Purchaser’s jurisdiction.
4. Covenants of the Company. The Company hereby covenants and agrees as follows:
4.1 Subsidiary Business Plan. The Company has incorporated a wholly owned (either
directly or indirectly through another subsidiary of the Company) subsidiary of the Company in
Singapore (the “Subsidiary”). Unless prohibited by applicable law, or unless the Company and the
Purchaser otherwise agree in writing, from and after incorporation of the Subsidiary, the Company
shall cause the Subsidiary to use commercially reasonable efforts to conduct, its activities
materially in accordance with the provisions of the business plan as established by the Board of
Directors of the Subsidiary and described to the Purchaser, including the Subsidiary’s plans with
respect to the BioMark II project, as may be modified as set forth in this Section 4.1 (the
“Subsidiary Business Plan”); provided, however, that the Company and the Subsidiary
shall have no such obligation in the event the Subsidiary does not receive a grant under the
Singapore Research Incentive Scheme for Companies (“RISC”) and tax incentives from the Economic
Development Board of Singapore (the “EDB”) consistent with the application submitted by the Company
to the EDB. Notwithstanding any provision in this Agreement to the contrary, the Company and
Purchaser agree that the Subsidiary Business Plan may only be modified by the Board of Directors of
the Subsidiary.
-13-
4.2 Subsidiary Board of Directors. Unless the Purchaser or its affiliates (as such term
is defined under Rule 12b-2 promulgated by the Commission under the Securities Exchange Act of
1934, as amended) shall fail to hold 500,000 shares of the Company’s Common Stock (on an as
converted basis), the Company agrees that it will vote the voting securities of the Subsidiary now
or hereafter held by the Company in such a manner as may be necessary to elect a nominee of
Purchaser to the Board of Directors of the Subsidiary (the “Nominee”). The Purchaser may notify
the Company in writing of an intention to remove from the Subsidiary’s Board of Directors any
incumbent Nominee or notify the Company in writing of an intention to select a new Nominee. In
such event the Company shall take reasonable actions necessary to facilitate such removal and
election of the new Nominee to the Board of Directors of the Subsidiary.
4.3 Affirmative Covenants. So long as any of the Additional Notes (if issued) shall
remain unpaid or unconverted or the Purchaser shall have any obligation to purchase any of the
Additional Notes hereunder, the Company agrees that:
4.4 Preservation of Existence. It will maintain and preserve, through itself or any
successor to its business, its corporate existence and its rights to transact business and will
maintain and preserve, through itself or any successor to its business, such other rights,
franchises and privileges as it may in good faith determine necessary or desirable in the normal
course of its business and operations and the ownership of its material properties.
4.5 Payment of Taxes. It will pay and discharge all taxes, fees, assessments and
governmental charges or levies imposed upon it or upon its properties or assets prior to the date
on which material penalties attach thereto, and all lawful claims for labor, materials and supplies
which, if unpaid, might become a material lien upon any properties or assets of the Company, except
to the extent such taxes, fees, assessments or governmental charges or levies, or such claims, are
being contested in good faith by appropriate proceedings and are adequately reserved against in
accordance with generally accepted accounting principles.
4.6 Compliance with Laws. It will comply in all material respects with the requirements
of all applicable laws, rules, regulations and orders of any governmental authority and the terms
of any material indenture, contract or other instrument to which it may be a party or under which
it or its properties may be bound, except to the extent failure to so comply would not have a
material adverse effect on the Company’s business.
4.7 Maintenance of Properties. It will use commercially reasonable efforts to maintain
and preserve all of its material properties, as it may in good faith determine to be necessary or
useful in the proper conduct of its business, in good working order and condition in accordance
with the general practice of other corporations of similar character and size, ordinary wear and
tear accepted.
4.8 Government Authority. It will use commercially reasonable efforts to obtain and
maintain all authorizations, consents, filings, exemptions, registrations and other governmental
approvals necessary in connection with the execution, delivery and performance of this Agreement,
the consummation of the transactions contemplated hereby or the operation and conduct of its
-14-
business and ownership of
its properties, except to the extent such failure to obtain or maintain would not have a
material adverse effect on the Company’s business or financial condition or its ability to deliver
or perform under this Agreement or consummate the transactions contemplated hereby.
4.9 Opinion of Company Counsel. Contemporaneously with the execution and delivery of this
Agreement, the Purchaser will receive from Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C., counsel for the
Company, an opinion, dated as of the date of this Agreement, in the form attached hereto as
Exhibit F (the “Legal Opinion”), relating to the sale and issuance of the First Note
pursuant to this Agreement.
5. Covenants of the Purchaser. The Purchaser hereby covenants and agrees as follows:
5.1 Transfers. Purchaser shall be bound by the restrictions on transfer of the Securities
as set forth in the applicable Additional Note. Any permitted purchaser, assignee, transferee or
pledgee of securities issued on conversion of the applicable Additional Note shall agree in writing
to take and hold such securities subject to and upon the conditions set forth in the this
Agreement, the applicable Additional Note, the Investor Rights Agreement, and the Voting Agreement,
as each may be amended from time to time.
5.2 Additional Convertible Promissory Notes.
(a) Purchaser’s Obligation to Purchase. In the event that the First Note is converted
as set forth in the First Note, the Purchaser shall, at the Company’s election, purchase the Second
Note in the principal amount of US$5,000,000 (the “Additional Note Principal”) in accordance with
Section 5.2(b), and in the event the Second Note is converted as set forth in the Second Note, the
Purchaser shall, at the Company’s election, purchase the Third Note in the principal amount equal
to the Additional Note Principal in accordance with Section 5.2(b).
(b) Additional Notes Procedure. Subject to Section 5.2(a), the Company may exercise
its option to require the Purchaser to purchase the (i) Second Note at any time within 45 days
following the conversion of the First Note and (ii) the Third Note at any time within 45 days
following the conversion of the Second Note by giving Purchaser written notice thereof (the
“Election Notice”). The Election Notice shall state that the Company has elected to require the
Purchaser to purchase the Second Note or the Third Note, as the case may require, and shall
indicate the date, time and location of the closing of the purchase and sale of the Second Note or
the Third Note, as the case may require (each, an “Additional Note Closing”), which shall occur no
sooner than 28 days or later than 50 days after the date of the Election Notice.
(c) Closing of Subsequent Purchase. At an Additional Note Closing, the Company shall
deliver to the Purchaser the Second Note, or the Third Note, as the case may require, and a duly
executed Compliance Certificate in substantially the form attached hereto as Exhibit D. At
an Additional Note Closing, the Purchaser shall deliver to the Company (i) the Additional Note
Principal by check or wire transfer and (ii) the Investment Representation Statement, duly executed
by Purchaser.
-15-
(d) Effect of Change in Series E Preferred Stock on Additional Notes. The forms of
any then-unissued Additional Notes attached hereto as Exhibits A, B, and C shall be
modified upon the happening of certain events as follows:
(i) In the event the Company should at any time prior to the First Note Closing or an
Additional Note Closing split or subdivide the outstanding shares of its Series E Preferred Stock
(or other securities that would be issuable upon conversion of any then-unissued Additional Note)
or issue additional shares of Series E Preferred Stock (or other securities that would be issuable
upon conversion of any then-unissued Additional Note) to the holders thereof as a dividend or make
any other distribution payable in additional shares of Series E Preferred Stock (or other
securities that would be issuable upon conversion of any then-unissued Additional Note) to the
holders thereof without payment of any consideration by such holder for the additional shares of
Series E Preferred Stock (or such other securities), then, as of the date of such dividend,
distribution, split or subdivision, the Conversion Price as set forth in the form of Additional
Note shall be appropriately decreased so that the number of shares of Series E Preferred Stock or
other securities issuable upon conversion of the Additional Note shall be increased in proportion
to such increase of outstanding shares of Series E Preferred Stock or other securities issuable
upon conversion of the Additional Note, as applicable. If the number of shares of Series E
Preferred Stock (or other securities that would be issuable upon conversion of any then-unissued
Additional Note) outstanding at any time prior to the First Note Closing or an Additional Note
Closing is decreased by a combination of the outstanding shares of Series E Preferred Stock (or
such other securities), then, following the record date of such combination, the Conversion Price
set forth in the form of Additional Note shall be appropriately increased so that the number of
shares of Series E Preferred Stock or other securities issuable upon conversion of the Additional
Note shall be decreased in proportion to such decrease in outstanding shares of Series E Preferred
Stock or other securities issuable upon conversion of the Additional Note, as applicable.
(ii) In case of any reclassification, capital reorganization, or change in the Series E
Preferred Stock (or other securities that would be issuable upon conversion of any then-unissued
Additional Note) of the Company prior to the First Note Closing or an Additional Note Closing,
including conversion of such shares pursuant to the Company’s Articles of Incorporation then in
effect (other than as a result of a split, subdivision, combination, or stock dividend provided for
in Section 5.2(d)(i)), then appropriate adjustment shall be made to the Conversion Price and kind
of securities or other property issuable upon conversion of the form of Additional Note so that the
Additional Note if purchased shall be convertible upon the terms set forth therein as of the date
of such First Note Closing or Additional Note Closing, as applicable, into the kind and amount of
shares of stock and other securities and property receivable in connection
with such reclassification, reorganization, or change by a holder of the same number of shares
of Series E Preferred Stock or other securities as would be issuable on conversion of the
Additional Note as of the First Note Closing or such Additional Note Closing, as the case may
require.
(iii) If at any time prior to the First Note Closing or an Additional Note Closing, as the
case may require, there shall be an acquisition of the Company by merger, consolidation or
otherwise where the Company is not the surviving corporation or as a result of
-16-
which all of the
outstanding capital stock of the Company is exchanged for capital stock of another corporation,
then, as a part of such acquisition, the Conversion Price and kind of securities issuable upon
conversion of the form of Additional Note shall be appropriately adjusted so that if such
Additional Note is purchased such Additional Note shall initially be convertible into, the number
of shares of stock or other securities or property of the surviving or successor corporation
resulting from such acquisition (or the corporation the capital stock of which is issued in
exchange for the capital stock of the Company), to which a holder of the securities that would be
issuable upon conversion of such Additional Note would have been entitled in such acquisition if
such Additional Note had been converted immediately before such acquisition.
(e) Transfer. In the event that the Company issues any of the Additional Notes to the
Purchaser, each issued Additional Note and any securities issued on conversion thereof (including
securities issued on conversion of such securities) shall be subject to Section 4.1 of this
Agreement, the Investment Representation Statement and the restrictions on transfer set forth in
such Additional Note.
6. Termination. This Agreement shall terminate and shall be of no further force or
effect at such time as (i) the Company has paid to Purchaser in cash, by check or by wire transfer
the principal amount and accrued interest owing under all outstanding Additional Notes or all
outstanding Additional Notes have been converted into Note Shares in accordance with their Terms
and (ii) the Company has no further right to require the Purchaser to purchase any Additional Notes
pursuant to this Agreement; provided, however, that in the event of the conversion
of any of the Additional Notes, Section 12 of each such Additional Note, and Section 3, Section 5.1
and Section 8 hereof shall survive such termination.
7. Miscellaneous.
7.1 Governing Law. This Agreement and the Additional Notes (if issued) shall in all
respects be governed by and construed and enforced in accordance with the laws of the State of
California, without reference to the conflicts of law provisions thereof.
7.2 California Corporate Securities Law. THE SALE OF THE SECURITIES THAT ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED
WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH
SECURITIES OR THE PAYMENT AND RECEIPT OF ANY PART OF THE CONSIDERATION THEREFROM PRIOR TO SUCH
REGISTRATION IS UNLAWFUL UNLESS AN EXEMPTION FROM SUCH QUALIFICATION IS AVAILABLE. THE RIGHTS OF
ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON REGISTRATION BEING OBTAINED, UNLESS
THE SALE IS SO EXEMPT.
7.3 Survival. The representations, warranties, covenants and agreements made in this
Agreement shall survive any investigation made by any party hereto and the closing of the
transactions contemplated hereby.
-17-
7.4 Successors and Assigns. Except as otherwise provided herein, the provisions hereof
shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and
administrators of the parties hereto; provided, however, that the covenants and agreements of the
Company set forth in Section 4 and the obligation of the Purchaser to purchase the Additional Notes
as set forth in Section 1.1 and Section 5.2 shall not be assigned or transferred by Purchaser by
operation of law or otherwise without the prior written consent of the Company.
7.5 Entire Agreement; Amendment. This Agreement (including its exhibits), the Schedule of
Exceptions, the Business Plan, and the Additional Notes constitute the full and entire
understanding and agreement between the parties with regard to the subjects hereof and thereof, and
no party shall be liable or bound to any other party in any manner by any warranties,
representations, or covenants except as specifically set forth herein or therein. Except as
expressly provided herein, neither this Agreement nor any term hereof may be amended, waived,
discharged or terminated other than by a written instrument signed by the party against whom
enforcement of any such amendment, waiver, discharge or termination is sought.
7.6 Notices, etc. Any notice, request, other communication, or payment required or
permitted hereunder shall be in writing and shall be deemed to have been duly given upon delivery,
if delivered personally or by facsimile, or by recognized overnight courier service, or five days
after deposit, if deposited in the United States mail for mailing by registered or certified mail,
postage prepaid, and addressed as follows:
| If to Purchaser: | Biomedical Sciences Investment Fund Pte Ltd | |||
| 00 Xxxxxxxx Xxx | ||||
| #00-00 Xxxxxxx | ||||
| Xxxxxxxxx 000000 | ||||
| Attention: Xxx Xxxx Yeok | ||||
| Tel: 00-0000-0000 | ||||
| Fax: 00-0000-0000 | ||||
| If to the Company: | Fluidigm Corporation | |||
| 0000 Xxxxxxxxx Xxxxx | ||||
| Xxxxx Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 | ||||
| Attention: Chief Executive Officer | ||||
| Tel: (000) 000-0000 | ||||
| Fax: (000) 000-0000 | ||||
| with a copy to: | Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C. | |||
| 000 Xxxx Xxxx Xxxx | ||||
| Xxxx Xxxx, Xxxxxxxxxx 00000-0000 | ||||
| Attention: Xxx Xxxxx and Xxxxxx Xxxxxxxx | ||||
| Tel: (000) 000-0000 | ||||
| Fax: (000) 000-0000 |
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Each of the above addressees may change its address or facsimile number for purposes of this
paragraph by giving to the other addressee notice of such new address in conformity with this
paragraph.
7.7 Counterparts; Facsimile. This Agreement may be executed in counterparts, each of
which shall be enforceable against the party or parties actually executing such counterparts, and
all of which together shall constitute one instrument. This Agreement may be executed by facsimile
signature.
7.8 Severability. In the event that any provision of this Agreement becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement
shall continue in full force and effect without said provision.
7.9 Expenses. Except as set forth in the Purchase Agreement, each party shall pay all
costs and expenses that it incurs with respect to the negotiation, execution and delivery and
performance of this Agreement. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, or any of the Additional Notes, the prevailing party shall
be entitled to reasonable
attorney’s fees, costs and necessary distributions in addition to any other relief to which
such party may be entitled.
7.10 Titles and Subtitles. The titles and subtitles used in this Agreement are used for
convenience only and are not considered in construing or interpreting this Agreement.
7.11 Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING (WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATED TO THIS AGREEMENT.
7.12 Jurisdiction; Venue. The parties hereto agree to submit to the jurisdiction of and
venue in the federal and state courts of San Mateo County, California with respect to the breach or
interpretation of this Agreement or the enforcement of any and all rights, duties, liabilities,
obligations, powers, and other relations between the parties arising under this Agreement.
7.13 Currency. Any reference to “dollars” or “$” in this Agreement shall refer to the
lawful currency of the United States of America.
[Remainder of Page Intentionally Left Blank; Signature Page to Follow]
-19-
IN WITNESS WHEREOF, the parties have caused this Convertible Note Purchase Agreement to be
duly executed and delivered by their proper and duly authorized officers as of the date and year
first written above.
| COMPANY: Fluidigm Corporation |
||||
| By: | /s/ Xxxxx X. Xxxxxxxxxxx | |||
| Xxxxx X. Xxxxxxxxxxx | ||||
| Chief Executive Officer | ||||
| PURCHASER: | ||||||
| Biomedical Sciences Investment Fund Pte Ltd | ||||||
| By: | /s/ Xxx Xxxx Yeok
|
|||||
| Print Name: | Xxx Xxxx Yeok
|
| Title: | Director
|
[SIGNATURE PAGE TO CONVERTIBLE NOTE PURCHASE AGREEMENT]
EXHIBIT A
THIS NOTE AND THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”). SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED OR PLEDGED IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL
(WHICH MAY BE COUNSEL FOR THE COMPANY), OR OTHER EVIDENCE, REASONABLY ACCEPTABLE TO
IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF THE SECURITIES ACT. THIS NOTE MAY ONLY BE TRANSFERRED UPON
THE TERMS AND CONDITIONS CONTAINED IN THE NOTE AND IN AN AGREEMENT BETWEEN HOLDER
AND THE COMPANY
Fluidigm Corporation
a California corporation
CONVERTIBLE PROMISSORY NOTE
NOTE NUMBER E-1
US$5,000,000
|
August ___, 0000 | |
| Xxxxx Xxx Xxxxxxxxx, Xxxxxxxxxx |
1. Principal and Interest. Fluidigm Corporation (the “Company”), a
California corporation, for value received, hereby promises to pay to the order of Biomedical
Sciences Investment Fund Pte Ltd (the “Holder”) in lawful money of the United States of
America, the principal amount of Five Million Dollars (US$5,000,000), or such lesser amount as
shall equal the outstanding principal amount hereof, together with interest from the date of this
Note on the unpaid principal balance at a rate equal to 8.00% per annum, computed on the basis of
the actual number of days elapsed and a year of 365 days, compounded annually.
This Convertible Promissory Note (“Note”) is the first Note issued pursuant to that
certain Convertible Note Purchase Agreement dated August ___, 2006 (as amended, modified or
supplemented, the “Note Purchase Agreement”) between the Company and the Holder. Unless
defined herein, capitalized terms shall have the same meanings ascribed to them in the Note
Purchase Agreement.
Unless converted in accordance with Section 3, this Note shall become due and payable as to
both accrued interest and principal on the Payment Date (as defined in Section 3). This Note may
be prepaid by Company at any time after January 31, 2007, in accordance with the terms of Section 2
of this Note. Upon payment in full of all principal and interest payable hereunder (including upon
any conversion), this Note shall be surrendered to the Company for cancellation. All payments
hereon shall be applied first to accrued interest and second to the reduction of principal.
2. Prepayment of Note. At any time after January 31, 2007, upon five days prior
written notice to Holder (the “Prepayment Notice”), the Company may prepay this Note in
whole or in part; provided that any such prepayment will be applied first to the payment of
expenses due under this Note, second to interest accrued on this Note and third, if the amount of
prepayment exceeds the amount of all such expenses and accrued interest, to the payment of
principal of this Note. In the event that the Holder desires to avoid prepayment of the Note by
the Company, the Holder must within five days of its receipt of the Prepayment Notice deliver to
the Company the Conversion Notice pursuant to Section 3(c)(iii) electing to convert this Note, in
which case this Note will not be prepaid as provided in the Prepayment Notice and will instead be
converted into shares of Series E Preferred Stock of the Company in accordance with Section 3 of
this Note.
3. Conversion.
(a) Conversion Events. Upon the earlier to occur of (i) an Initial Public Offering
(as defined below) or (ii) satisfaction of each of the Milestones (as defined below) (either, a
“Conversion Event”), all of the then outstanding principal and accrued interest owing under
this Note shall convert into that number of shares of Series E Preferred Stock of the Company
determined by dividing (i) the aggregate principal and accrued interest owing under this Note as of
the date of such Conversion Event by (ii) the Conversion Price (as defined below). Notwithstanding
the foregoing, by complying with Section 3(c)(iii) hereof, the Holder may at any time earlier elect
to convert this Note into that number of shares of Series E Preferred Stock determined by dividing
(i) the aggregate principal and accrued interest owing under this Note as of the date of the
Conversion Notice (as defined in Section 3(c)(iii)) by (ii) the Conversion Price (as defined
below).
(b) Definitions. For purposes of this Note, the following terms shall have the
following meanings:
(i) The term “Change of Control Transaction” shall mean (i) the acquisition of the
Company by another entity by means of any transaction or series of related transactions (including,
without limitation, any stock acquisition, reorganization, merger or consolidation but excluding
any merger effected exclusively for the purpose of changing the domicile of the Corporation) other
than a transaction or series of transactions in which the holders of the voting securities of the
Company outstanding immediately prior to such transaction or series of transactions continue to
retain (either by such voting securities remaining outstanding or by such voting securities being
converted into voting securities of the surviving entity), as a result of shares in the Company
held by such holders prior to such transaction, at least fifty percent (50%) of the total voting
power represented by the voting securities of the Company or such surviving entity outstanding
immediately after such transaction or series of transactions; or (ii) a sale, transfer, lease or
other conveyance of all or substantially all of the assets of the Corporation.
(ii) The term “Conversion Price” shall mean US$3.60, subject to adjustment as set
forth in Section 5 below.
(iii) The term “Initial Public Offering” shall mean the first sale of securities of
the Company pursuant to an effective registration statement under the Securities Act of 1933 (the
“Securities Act”) after or in connection with which the outstanding shares of Preferred
Stock of the
-2-
Company have been converted into Common Stock pursuant to the Company’s then existing Articles
of Incorporation or otherwise.
(iv) Unless otherwise agreed in writing between the Company and the Holder, the term
“Milestones” shall mean satisfaction of the following:
(1) The Company will have an approved System Architecture for a BioMark II Chip Loader, as
demonstrated by a System Architecture approval form duly signed-off. The approval is typically
characterized by the completion of the Product Marketing Specifications and the Product Development
Plan (including Budget and Staffing Plans), as well as the development of working breadboards for
critical subsystems;
(2) This approved System Architecture will have been reviewed with at least three prospective
early adopter customers; and
(3) The Subsidiary will have hired four (4) Research and Development Engineers in conjunction
with the BioMark II project. These new employees shall have received training by the Company at
its headquarters (or such other facility as may be necessary or appropriate) in accordance with the
position and job function of each such employee.
(v) The term “Payment Date” shall mean [INSERT DATE TWO YEARS FROM DATE OF NOTE] or
such later date as may be mutually agreed in writing by Holder and the Company.
(c) Conversion Procedure.
(i) Conversion in Connection with Initial Public Offering. Upon the occurrence of an
Initial Public Offering as set forth in Section 3(a), this Note shall convert automatically without
further action on the part of the Holder hereof. Written notice shall be delivered to Holder at
the address last shown on the records of Company for Holder or given by Holder to Company for the
purpose of notice notifying Holder of the conversion effected or to be effected, specifying the
Conversion Price, the date on which such conversion occurred or is expected to occur and calling
upon such Holder to surrender to Company, in the manner and at the place designated, the Note.
(ii) Conversion in Connection with Satisfaction of Milestones. If the Company
reasonably believes that it has satisfied all of the Milestones, it may send written notice thereof
(the “Milestone Completion Notice”) to the Holder (at the address last shown on the records
of the Company for the Holder or given by Holder to Company for the purpose of notice) specifying
the Conversion Price, the date on which the Company reasonably believes all of the Milestones were
satisfied (the “Notified Milestone Completion Date”), together with a duly executed
compliance certificate dated as of the Notified Milestone Completion Date substantially in the form
attached hereto as Exhibit A (the “Compliance Certificate”), and calling upon
Holder to surrender to the Company the Note. In the event that the Holder reasonably believes that
any of (i) the Milestones have not been satisfied or (ii) the representations and warranties made
in the Compliance Certificate are inaccurate in any material respect, the Holder may provide
written notice (the “Milestone
-3-
Response Notice”) to the Company of such disagreement and/or inaccuracy within 30 days
of its receipt of the Milestone Completion Notice. The Milestone Response Notice shall specify in
reasonable detail the reasons for such disagreement and/or basis for belief that any of the
representations and warranties made in the Compliance Certificate are inaccurate and shall be
accompanied by reasonably available support documentation evidencing the basis for such
disagreement or belief. If the Holder shall fail to provide the Milestone Response Notice within
such time period, the Milestones shall be deemed satisfied as of the Notified Milestone Completion
Date and this Note shall be automatically converted as set forth in Section 3(a). If the Holder
shall have timely provided the Milestone Response Notice, the Company and the Holder shall in good
faith attempt to resolve their disagreement as to the satisfaction of the Milestones and/or the
accuracy of the representations and warranties in the Compliance Certificate. If the Company and
Holder are unable to resolve their disagreement within 30 days of the Company’s receipt of the
Milestone Response Notice, the Company may pay to the Holder the principal and interest owing under
this Note as of the Notified Milestone Completion Date (in which case the Note shall be cancelled
and surrendered) or may pursue any other remedy that may be available to it under applicable law.
(iii) Elective Conversion. If the Holder wishes to voluntarily convert this Note as
set forth in Section 3(a) hereof prior to a Conversion Event, the Holder shall surrender this Note
to the Company and provide the Company with a written notice (the “Conversion Notice”) to
that effect.
(iv) Certificate; Time of Conversion. Upon conversion of this Note, the Holder shall
promptly surrender this Note, duly endorsed, at the principal office of Company. At its expense,
the Company shall, as soon as practicable thereafter, issue and deliver to such Holder at such
principal office a certificate or certificates for the number of shares to which Holder shall be
entitled upon such conversion (bearing such legends as are required by this Note and the Note
Purchase Agreement and applicable state and federal securities laws in the opinion of counsel to
Company), together with any other securities and property to which Holder is entitled upon such
conversion under the terms of this Note, including a check payable to Holder for any cash amounts
payable as described in Section 3(d). Any such conversion of this Note shall be deemed to have
been made immediately prior to the Conversion Event as described in Section 3(a) (or in the case of
delivery of the Conversion Notice as set forth in Section 3(c)(iii), upon the Company’s receipt of
such Conversion Notice); provided, however, the Holder shall not be deemed a record
holder of such shares or a purchaser of such shares until the Holder has delivered the Note for
conversion. On and after such date, the Holder shall be treated as a purchaser of such shares
under the Note Purchase Agreement and shall be bound by the applicable terms of this Note and Note
Purchase Agreement.
(d) Fractional Shares. No fractional shares will be issued upon any conversion of
this Note. In lieu of any fractional share to which the Holder would otherwise be entitled, the
Company will pay to the Holder in cash that amount of the unconverted principal and interest
balance of this Note.
(e) Reservation of Shares. The Company will at all times reserve and keep available
out of its authorized but unissued shares or shares held in treasury, sufficient shares of Series E
Preferred Stock or other securities to permit the full conversion of the outstanding principal
-4-
and interest of this Note pursuant to the terms of this Note. In the event the Company shall
have insufficient shares of Series E Preferred Stock or other securities to permit the full
conversion of the outstanding principal and accrued interest of this Note pursuant to the terms
hereof, the Company hereby covenants and agrees that the Company shall use its commercially
reasonable efforts to seek board and shareholder approval of an amendment to the Company’s Articles
of Incorporation in order to authorize an increase in the number of authorized shares of Series E
Preferred Stock or other securities of the Company in a sufficient amount so that the aggregate
number of shares of Series E Preferred Stock or other securities issuable upon conversion of this
Note will then be authorized and available for issuance.
4. Change of Control Transaction. The Company shall provide the Holder with 15 days
written notice of the closing of a Change of Control Transaction, specifying in reasonable detail
the terms of such Change of Control Transaction. If the Holder shall not have voluntarily elected
to convert this Note as set forth in Section 3(c)(iii) within such 15 day period, the Company may
prepay the entire principal amount and interest owing under this Note as of the date of such
prepayment. The Holder shall thereafter promptly return the Note to the Company for cancellation.
5. Change in Series E Preferred Stock.
(a) Split, Subdivision or Combination of Series E Preferred Stock. In the event the
Company should at any time or from time to time after the date of issuance hereof split or
subdivide the outstanding shares of its Series E Preferred Stock (or other securities issuable upon
conversion of this Note) or issue additional shares of Series E Preferred Stock (or other
securities issuable upon conversion of this Note) to the holders thereof as a dividend or make any
other distribution payable in additional shares of Series E Preferred Stock (or other securities
issuable upon conversion of this Note) to the holders thereof without payment of any consideration
by such holder for the additional shares of Series E Preferred Stock (or such other securities),
then, as of the date of such dividend, distribution, split or subdivision, the Conversion Price of
this Note shall be appropriately decreased so that the number of shares of Series E Preferred Stock
or other securities issuable upon conversion of this Note shall be increased in proportion to such
increase of outstanding shares of Series E Preferred Stock or other securities issuable upon
conversion of this Note, as applicable. If the number of shares of Series E Preferred Stock (or
other securities issuable upon conversion of this Note) outstanding at any time after the date
hereof is decreased by a combination of the outstanding shares of Series E Preferred Stock (or
other securities issuable upon conversion of this Note), then, following the record date of such
combination, the Conversion Price for this Note shall be appropriately increased so that the number
of shares of Series E Preferred Stock or other securities issuable on conversion hereof shall be
decreased in proportion to such decrease in outstanding shares of Series E Preferred Stock or other
securities issuable upon conversion of this Note, as applicable.
(b) Reclassification etc. In case of any reclassification, capital reorganization, or
change in the Series E Preferred Stock (or other securities issuable upon conversion of this Note)
of the Company, including conversion of such shares pursuant to the Company’s Articles of
Incorporation then in effect (other than as a result of a split, subdivision, combination, or stock
dividend provided for in Section 5(a) above), then appropriate adjustment shall be made to the
Conversion Price and kind of securities or other property issuable upon conversion of this Note so
-5-
that this Note shall be convertible upon the terms set forth herein into the kind and amount
of shares of stock and other securities and property receivable in connection with such
reclassification, reorganization, or change by a holder of the same number of shares of Series E
Preferred Stock or other securities as are issuable on conversion of this Note.
(c) Merger or Consolidation. Other than a Change of Control Transaction in connection
with which this Note has been converted or prepaid, if at any time there shall be an acquisition of
the Company by merger, consolidation or otherwise where the Company is not the surviving
corporation or as a result of which all of the outstanding capital stock of the Company is
exchanged for capital stock of another corporation, then, as a part of such acquisition, the
Conversion Price and kind of securities issuable upon conversion hereof shall be appropriately
adjusted so that the Holder shall receive upon conversion of this Note, the number of shares of
stock or other securities or property of the surviving or successor corporation resulting from such
acquisition (or the corporation the capital stock of which is issued in exchange for the capital
stock of the Company), to which a holder of the securities issuable upon conversion of this Note
would have been entitled in such acquisition if this Note had been converted immediately before
such acquisition.
6. Payment Due Date. If not previously converted into shares of Series E Preferred
Stock pursuant to Section 3 hereof and if not sooner prepaid by the Company pursuant to Section 2
hereof or accelerated and declared due and owing by the Holder pursuant to Section 7 hereof, the
principal amount and any accrued interest due thereon then outstanding under this Note will become
due and payable on the Payment Date.
7. Default. The Company shall be deemed to be in default under this Note in the event
(i) the Company shall fail to materially perform any covenant or agreement of the Company contained
in Section 4 of the Note Purchase Agreement for a period of 30 days after written notice of such
failure from Holder; (ii) the Company shall have failed to make payment of principal or interest
due on the Note when such principal and interest becomes due; or (iii) the Company shall commence,
whether voluntarily or involuntarily a case or other proceeding seeking liquidation, reorganization
or other relief with respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or consent to any such relief or to the appointment of or
taking possession of its property by any official in an involuntary case or other proceeding
commenced against it. In the case of an event of default, the Holder may, by written notice to the
Company, declare the unpaid principal amount of this Note, all interest accrued and unpaid hereon,
and all other amounts payable hereunder to be immediately due and payable, without presentment,
demand, protest, or further notice of any kind, as well as enforce all other rights and remedies
available to the Holder under applicable law.
8. Notices. Any notice, request, other communication, or payment required or
permitted hereunder shall be in writing and shall be deemed to have been duly given upon delivery,
if delivered personally by facsimile, or by recognized overnight courier service, or five days
after deposit, if deposited in the United States mail for mailing by registered or certified mail,
postage prepaid, and addressed as follows:
-6-
| If to Holder: | Biomedical Sciences Investment Fund Pte Ltd | |||
| 00 Xxxxxxxx Xxx | ||||
| #00-00 Xxxxxxx | ||||
| Xxxxxxxxx 000000 | ||||
| Attention: Xxx Xxxx Yeok | ||||
| Tel: 00-0000-0000 | ||||
| Fax: 00-0000-0000 | ||||
| If to the Company: | Fluidigm Corporation | |||
| 0000 Xxxxxxxxx Xxxxx | ||||
| Xxxxx Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 | ||||
| Attention: Chief Executive Officer | ||||
| Tel: (000) 000-0000 | ||||
| Fax: (000) 000-0000 | ||||
| with a copy to: | ||||
| Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C. | ||||
| 000 Xxxx Xxxx Xxxx | ||||
| Xxxx Xxxx, Xxxxxxxxxx 00000-0000 | ||||
| Attention: Xxx Xxxxx and Xxxxxx Xxxxxxxx | ||||
| Tel: (000) 000-0000 | ||||
| Fax: (000) 000-0000 |
Each of the above addressees may change its address or facsimile number for purposes of this
paragraph by giving to the other addressee notice of such new address in conformity with this
paragraph.
9. Amendments. This Note may be amended and any provision hereof waived with the
consent of the Company and the Holder.
10. No Rights as Shareholder. Nothing in this Note shall be construed as conferring
upon the Holder or any other person the right to vote or to consent or to receive notice as a
shareholder in respect of meetings of shareholders for the election of directors of the Company or
any other matters or any rights whatsoever as a shareholder of the Company until, and only to the
extent that, this Note shall have been converted.
11. Successors and Assigns. Subject to the restrictions on transfer described in
Section 12 and in the Note Purchase Agreement, the rights and obligations of the Company and
Investor shall be binding upon and benefit the successors, assigns, heirs, administrators and
transferees of the parties.
12. Transfer of Note and Securities Issuable on Conversion Hereof. Prior to the
conversion of this Note, this Note (or the underlying securities issuable upon conversion hereof)
may not be sold, assigned, transferred, pledged or otherwise disposed of by the Holder, in whole or
in part, without the prior written consent of the Company. With respect to any sale, assignment,
-7-
transfer, pledge or other disposition of the securities into which this Note may be converted
after conversion of this Note, the Holder may only transfer such securities pursuant to, and on the
conditions set forth in that certain Eighth Amended and Restated Investor Rights Agreement dated
June 13, 2006 between the Company and certain investors in the Company (including Holder), as may
be amended from time to time (the “Rights Agreement”). The Holder shall cause any proposed
purchaser, assignee, transferee or pledgee of such securities to agree in writing to take and hold
such securities subject to and upon the conditions specified in this Note, the Note Purchase
Agreement, and the Rights Agreement, including, without limitation, Sections 1.2, 1.3, 1.4, and
1.14 of the Rights Agreement.
13. Highest Lawful Rate. Anything herein to the contrary notwithstanding, if during
any period for which interest is computed hereunder, the amount of interest computed on the basis
provided for in this Note, together will all fees, charges, and other payments or rights which are
treated as interest under applicable law, as provided for herein or in any other document executed
in connection herewith, would exceed the amount of such interest computed on the basis of the
Highest Lawful Rate, the Company shall not be obligated to pay, and the Holder shall not be
entitled to charge, collect, receive, reserve, or take, interest in excess of the Highest Lawful
Rate, and during any such period the interest payable hereunder shall be computed on the basis of
the Highest Lawful Rate. As used herein, “Highest Lawful Rate” means the maximum
non-usurious rate of interest, as in effect from time to time, which may be charged, contracted
for, reserved, received, or collected by the Holder in connection with this Note under applicable
law. In accordance with this section, any amounts received in excess of the Highest Lawful Rate
shall be applied towards the prepayment of principal then outstanding.
14. Miscellaneous. The Company agrees to pay on demand all of the losses, costs, and
expenses (including, without limitation, attorneys’ fees and disbursements) which the Holder incurs
in connection with enforcement of this Note, or the protection or preservation of the Holder’s
rights under this Note, whether by judicial proceeding or otherwise. Such costs and expenses
include, without limitation, those incurred in connection with any workout or refinancing, or any
bankruptcy, insolvency, liquidation, or similar proceedings. The Company hereby waives
presentment, demand for performance, notice of non-performance, protest, notice of protest, and
notice of dishonor. No delay on the part of the Holder in exercising any right hereunder shall
operate as a waiver of such right or any other right. This Note is being delivered in and shall be
construed in accordance with the laws of the State of California without regard to the conflicts of
law provisions thereof. Any reference to “dollars” or “$” in this Note shall refer to the lawful
money of the United States of America.
[Remainder of Page Left Blank Intentionally]
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IN WITNESS WHEREOF, the Company has caused this Convertible Promissory Note to be executed by
its officer thereunto duly authorized as of the date first above written.
| Dated: August ______, 2006 | Fluidigm Corporation a California corporation |
|||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
Acknowledged and Agreed: |
||||||
| Holder | ||||||
| Biomedical Sciences Investment Fund Pte Ltd | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
[Convertible Promissory Note Signature Page]
EXHIBIT A
FORM OF COMPLIANCE CERTIFICATE
EXHIBIT B
THIS NOTE AND THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”). SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED OR PLEDGED IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL
(WHICH MAY BE COUNSEL FOR THE COMPANY), OR OTHER EVIDENCE, REASONABLY ACCEPTABLE TO
IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF THE SECURITIES ACT. THIS NOTE MAY ONLY BE TRANSFERRED UPON
THE TERMS AND CONDITIONS CONTAINED IN THE NOTE AND IN AN AGREEMENT BETWEEN HOLDER
AND THE COMPANY
Fluidigm Corporation
a California corporation
CONVERTIBLE PROMISSORY NOTE
NOTE
NUMBER E-2
US$5,000,000
|
______ ___, 00___ | |
| Xxxxx Xxx Xxxxxxxxx, Xxxxxxxxxx |
1. Principal and Interest. Fluidigm Corporation (the “Company”), a
California corporation, for value received, hereby promises to pay to the order of Biomedical
Sciences Investment Fund Pte Ltd (the “Holder”) in lawful money of the United States of
America, the principal amount of Five Million Dollars (US$5,000,000), or such lesser amount as
shall equal the outstanding principal amount hereof, together with interest from the date of this
Note on the unpaid principal balance at a rate equal to 8.00% per annum, computed on the basis of
the actual number of days elapsed and a year of 365 days, compounded annually.
This
Convertible Promissory Note (“Note”) is the second Note issued pursuant to that
certain Convertible Note Purchase Agreement dated August ___, 2006 (as amended, modified or
supplemented, the “Note Purchase Agreement”) between the Company and the Holder. Unless
defined herein, capitalized terms shall have the same meanings ascribed to them in the Note
Purchase Agreement.
Unless converted in accordance with Section 3, this Note shall become due and payable as to
both accrued interest and principal on the Payment Date (as defined in Section 3). This Note may
be prepaid by Company at any time, in accordance with the terms of Section 2
of this Note. Upon payment in full of all principal and interest payable hereunder (including upon
any conversion), this Note shall be surrendered to the Company for cancellation. All payments
hereon shall be applied first to accrued interest and second to the reduction of principal.
2. Prepayment of Note. Upon five days prior
written notice to Holder (the “Prepayment Notice”), the Company may prepay this Note in
whole or in part; provided that any such prepayment will be applied first to the payment of
expenses due under this Note, second to interest accrued on this Note and third, if the amount of
prepayment exceeds the amount of all such expenses and accrued interest, to the payment of
principal of this Note. In the event that the Holder desires to avoid prepayment of the Note by
the Company, the Holder must within five days of its receipt of the Prepayment Notice deliver to
the Company the Conversion Notice pursuant to Section 3(c)(iii) electing to convert this Note, in
which case this Note will not be prepaid as provided in the Prepayment Notice and will instead be
converted into shares of Series E Preferred Stock of the Company in accordance with Section 3 of
this Note.
3. Conversion.
(a) Conversion Events. Upon the earlier to occur of (i) an Initial Public Offering
(as defined below) or (ii) satisfaction of each of the Milestones (as defined below) (either, a
“Conversion Event”), all of the then outstanding principal and accrued interest owing under
this Note shall convert into that number of shares of Series E Preferred Stock of the Company
determined by dividing (i) the aggregate principal and accrued interest owing under this Note as of
the date of such Conversion Event by (ii) the Conversion Price (as defined below). Notwithstanding
the foregoing, by complying with Section 3(c)(iii) hereof, the Holder may at any time earlier elect
to convert this Note into that number of shares of Series E Preferred Stock determined by dividing
(i) the aggregate principal and accrued interest owing under this Note as of the date of the
Conversion Notice (as defined in Section 3(c)(iii)) by (ii) the Conversion Price (as defined
below).
(b) Definitions. For purposes of this Note, the following terms shall have the
following meanings:
(i) The term “Change of Control Transaction” shall mean (i) the acquisition of the
Company by another entity by means of any transaction or series of related transactions (including,
without limitation, any stock acquisition, reorganization, merger or consolidation but excluding
any merger effected exclusively for the purpose of changing the domicile of the Corporation) other
than a transaction or series of transactions in which the holders of the voting securities of the
Company outstanding immediately prior to such transaction or series of transactions continue to
retain (either by such voting securities remaining outstanding or by such voting securities being
converted into voting securities of the surviving entity), as a result of shares in the Company
held by such holders prior to such transaction, at least fifty percent (50%) of the total voting
power represented by the voting securities of the Company or such surviving entity outstanding
immediately after such transaction or series of transactions; or (ii) a sale, transfer, lease or
other conveyance of all or substantially all of the assets of the Corporation.
(ii) The term “Conversion Price” shall mean US$3.60, subject to adjustment as set
forth in Section 5 below.
(iii) The term “Initial Public Offering” shall mean the first sale of securities of
the Company pursuant to an effective registration statement under the Securities Act of 1933 (the
“Securities Act”) after or in connection with which the outstanding shares of Preferred
Stock of the
-2-
Company have been converted into Common Stock pursuant to the Company’s then existing Articles
of Incorporation or otherwise.
(iv) Unless otherwise agreed in writing between the Company and the Holder, the term
“Milestones” shall mean satisfaction of the following:
(1) The
Company will have an approved System Architecture for a BioMark II
Endpoint Reader, as
demonstrated by a System Architecture approval form duly signed-off. The approval is typically
characterized by the completion of the Product Marketing Specifications and the Product Development
Plan (including Budget and Staffing Plans), as well as the development of working breadboards for
critical subsystems;
(2) This
approved System Architecture will have been represented to at least
three (3) target customers; and
(3) The
Subsidiary will have hired three (3) more Research and
Development Engineers, with at least one (1) being a Software Engineer, in conjunction
with the BioMark II project (i.e., 7 total hires based on the
satisfaction of the Milestones in the First Note and the Milestones
in this Second Note). These new employees shall have received training by the Company at
its headquarters (or such other facility as may be necessary or appropriate) in accordance with the
position and job function of each such employee.
(v) The term “Payment Date” shall mean [INSERT DATE TWO YEARS FROM DATE OF NOTE] or
such later date as may be mutually agreed in writing by Holder and the Company.
(c) Conversion Procedure.
(i) Conversion in Connection with Initial Public Offering. Upon the occurrence of an
Initial Public Offering as set forth in Section 3(a), this Note shall convert automatically without
further action on the part of the Holder hereof. Written notice shall be delivered to Holder at
the address last shown on the records of Company for Holder or given by Holder to Company for the
purpose of notice notifying Holder of the conversion effected or to be effected, specifying the
Conversion Price, the date on which such conversion occurred or is expected to occur and calling
upon such Holder to surrender to Company, in the manner and at the place designated, the Note.
(ii) Conversion in Connection with Satisfaction of Milestones. If the Company
reasonably believes that it has satisfied all of the Milestones, it may send written notice thereof
(the “Milestone Completion Notice”) to the Holder (at the address last shown on the records
of the Company for the Holder or given by Holder to Company for the purpose of notice) specifying
the Conversion Price, the date on which the Company reasonably believes all of the Milestones were
satisfied (the “Notified Milestone Completion Date”), together with a duly executed
compliance certificate dated as of the Notified Milestone Completion Date substantially in the form
attached hereto as Exhibit A (the “Compliance Certificate”), and calling upon
Holder to surrender to the Company the Note. In the event that the Holder reasonably believes that
any of (i) the Milestones have not been satisfied or (ii) the representations and warranties made
in the Compliance Certificate are inaccurate in any material respect, the Holder may provide
written notice (the “Milestone
-3-
Response Notice”) to the Company of such disagreement and/or inaccuracy within 30 days
of its receipt of the Milestone Completion Notice. The Milestone Response Notice shall specify in
reasonable detail the reasons for such disagreement and/or basis for belief that any of the
representations and warranties made in the Compliance Certificate are inaccurate and shall be
accompanied by reasonably available support documentation evidencing the basis for such
disagreement or belief. If the Holder shall fail to provide the Milestone Response Notice within
such time period, the Milestones shall be deemed satisfied as of the Notified Milestone Completion
Date and this Note shall be automatically converted as set forth in Section 3(a). If the Holder
shall have timely provided the Milestone Response Notice, the Company and the Holder shall in good
faith attempt to resolve their disagreement as to the satisfaction of the Milestones and/or the
accuracy of the representations and warranties in the Compliance Certificate. If the Company and
Holder are unable to resolve their disagreement within 30 days of the Company’s receipt of the
Milestone Response Notice, the Company may pay to the Holder the principal and interest owing under
this Note as of the Notified Milestone Completion Date (in which case the Note shall be cancelled
and surrendered) or may pursue any other remedy that may be available to it under applicable law.
(iii) Elective Conversion. If the Holder wishes to voluntarily convert this Note as
set forth in Section 3(a) hereof prior to a Conversion Event, the Holder shall surrender this Note
to the Company and provide the Company with a written notice (the “Conversion Notice”) to
that effect.
(iv) Certificate; Time of Conversion. Upon conversion of this Note, the Holder shall
promptly surrender this Note, duly endorsed, at the principal office of Company. At its expense,
the Company shall, as soon as practicable thereafter, issue and deliver to such Holder at such
principal office a certificate or certificates for the number of shares to which Holder shall be
entitled upon such conversion (bearing such legends as are required by this Note and the Note
Purchase Agreement and applicable state and federal securities laws in the opinion of counsel to
Company), together with any other securities and property to which Holder is entitled upon such
conversion under the terms of this Note, including a check payable to Holder for any cash amounts
payable as described in Section 3(d). Any such conversion of this Note shall be deemed to have
been made immediately prior to the Conversion Event as described in Section 3(a) (or in the case of
delivery of the Conversion Notice as set forth in Section 3(c)(iii), upon the Company’s receipt of
such Conversion Notice); provided, however, the Holder shall not be deemed a record
holder of such shares or a purchaser of such shares until the Holder has delivered the Note for
conversion. On and after such date, the Holder shall be treated as a purchaser of such shares
under the Note Purchase Agreement and shall be bound by the applicable terms of this Note and Note
Purchase Agreement.
(d) Fractional Shares. No fractional shares will be issued upon any conversion of
this Note. In lieu of any fractional share to which the Holder would otherwise be entitled, the
Company will pay to the Holder in cash that amount of the unconverted principal and interest
balance of this Note.
(e) Reservation of Shares. The Company will at all times reserve and keep available
out of its authorized but unissued shares or shares held in treasury, sufficient shares of Series E
Preferred Stock or other securities to permit the full conversion of the outstanding principal
-4-
and interest of this Note pursuant to the terms of this Note. In the event the Company shall
have insufficient shares of Series E Preferred Stock or other securities to permit the full
conversion of the outstanding principal and accrued interest of this Note pursuant to the terms
hereof, the Company hereby covenants and agrees that the Company shall use its commercially
reasonable efforts to seek board and shareholder approval of an amendment to the Company’s Articles
of Incorporation in order to authorize an increase in the number of authorized shares of Series E
Preferred Stock or other securities of the Company in a sufficient amount so that the aggregate
number of shares of Series E Preferred Stock or other securities issuable upon conversion of this
Note will then be authorized and available for issuance.
4. Change of Control Transaction. The Company shall provide the Holder with 15 days
written notice of the closing of a Change of Control Transaction, specifying in reasonable detail
the terms of such Change of Control Transaction. If the Holder shall not have voluntarily elected
to convert this Note as set forth in Section 3(c)(iii) within such 15 day period, the Company may
prepay the entire principal amount and interest owing under this Note as of the date of such
prepayment. The Holder shall thereafter promptly return the Note to the Company for cancellation.
5. Change in Series E Preferred Stock.
(a) Split, Subdivision or Combination of Series E Preferred Stock. In the event the
Company should at any time or from time to time after the date of issuance hereof split or
subdivide the outstanding shares of its Series E Preferred Stock (or other securities issuable upon
conversion of this Note) or issue additional shares of Series E Preferred Stock (or other
securities issuable upon conversion of this Note) to the holders thereof as a dividend or make any
other distribution payable in additional shares of Series E Preferred Stock (or other securities
issuable upon conversion of this Note) to the holders thereof without payment of any consideration
by such holder for the additional shares of Series E Preferred Stock (or such other securities),
then, as of the date of such dividend, distribution, split or subdivision, the Conversion Price of
this Note shall be appropriately decreased so that the number of shares of Series E Preferred Stock
or other securities issuable upon conversion of this Note shall be increased in proportion to such
increase of outstanding shares of Series E Preferred Stock or other securities issuable upon
conversion of this Note, as applicable. If the number of shares of Series E Preferred Stock (or
other securities issuable upon conversion of this Note) outstanding at any time after the date
hereof is decreased by a combination of the outstanding shares of Series E Preferred Stock (or
other securities issuable upon conversion of this Note), then, following the record date of such
combination, the Conversion Price for this Note shall be appropriately increased so that the number
of shares of Series E Preferred Stock or other securities issuable on conversion hereof shall be
decreased in proportion to such decrease in outstanding shares of Series E Preferred Stock or other
securities issuable upon conversion of this Note, as applicable.
(b) Reclassification etc. In case of any reclassification, capital reorganization, or
change in the Series E Preferred Stock (or other securities issuable upon conversion of this Note)
of the Company, including conversion of such shares pursuant to the Company’s Articles of
Incorporation then in effect (other than as a result of a split, subdivision, combination, or stock
dividend provided for in Section 5(a) above), then appropriate adjustment shall be made to the
Conversion Price and kind of securities or other property issuable upon conversion of this Note so
-5-
that this Note shall be convertible upon the terms set forth herein into the kind and amount
of shares of stock and other securities and property receivable in connection with such
reclassification, reorganization, or change by a holder of the same number of shares of Series E
Preferred Stock or other securities as are issuable on conversion of this Note.
(c) Merger or Consolidation. Other than a Change of Control Transaction in connection
with which this Note has been converted or prepaid, if at any time there shall be an acquisition of
the Company by merger, consolidation or otherwise where the Company is not the surviving
corporation or as a result of which all of the outstanding capital stock of the Company is
exchanged for capital stock of another corporation, then, as a part of such acquisition, the
Conversion Price and kind of securities issuable upon conversion hereof shall be appropriately
adjusted so that the Holder shall receive upon conversion of this Note, the number of shares of
stock or other securities or property of the surviving or successor corporation resulting from such
acquisition (or the corporation the capital stock of which is issued in exchange for the capital
stock of the Company), to which a holder of the securities issuable upon conversion of this Note
would have been entitled in such acquisition if this Note had been converted immediately before
such acquisition.
6. Payment Due Date. If not previously converted into shares of Series E Preferred
Stock pursuant to Section 3 hereof and if not sooner prepaid by the Company pursuant to Section 2
hereof or accelerated and declared due and owing by the Holder pursuant to Section 7 hereof, the
principal amount and any accrued interest due thereon then outstanding under this Note will become
due and payable on the Payment Date.
7. Default. The Company shall be deemed to be in default under this Note in the event
(i) the Company shall fail to materially perform any covenant or agreement of the Company contained
in Section 4 of the Note Purchase Agreement for a period of 30 days after written notice of such
failure from Holder; (ii) the Company shall have failed to make payment of principal or interest
due on the Note when such principal and interest becomes due; or (iii) the Company shall commence,
whether voluntarily or involuntarily a case or other proceeding seeking liquidation, reorganization
or other relief with respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or consent to any such relief or to the appointment of or
taking possession of its property by any official in an involuntary case or other proceeding
commenced against it. In the case of an event of default, the Holder may, by written notice to the
Company, declare the unpaid principal amount of this Note, all interest accrued and unpaid hereon,
and all other amounts payable hereunder to be immediately due and payable, without presentment,
demand, protest, or further notice of any kind, as well as enforce all other rights and remedies
available to the Holder under applicable law.
8. Notices. Any notice, request, other communication, or payment required or
permitted hereunder shall be in writing and shall be deemed to have been duly given upon delivery,
if delivered personally by facsimile, or by recognized overnight courier service, or five days
after deposit, if deposited in the United States mail for mailing by registered or certified mail,
postage prepaid, and addressed as follows:
-6-
| If to Holder: | Biomedical Sciences Investment Fund Pte Ltd | |||
| 00 Xxxxxxxx Xxx | ||||
| #00-00 Xxxxxxx | ||||
| Xxxxxxxxx 000000 | ||||
| Attention: Xxx Xxxx Yeok | ||||
| Tel: 00-0000-0000 | ||||
| Fax: 00-0000-0000 | ||||
| If to the Company: | Fluidigm Corporation | |||
| 0000 Xxxxxxxxx Xxxxx | ||||
| Xxxxx Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 | ||||
| Attention: Chief Executive Officer | ||||
| Tel: (000) 000-0000 | ||||
| Fax: (000) 000-0000 | ||||
| with a copy to: | ||||
| Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C. | ||||
| 000 Xxxx Xxxx Xxxx | ||||
| Xxxx Xxxx, Xxxxxxxxxx 00000-0000 | ||||
| Attention: Xxx Xxxxx and Xxxxxx Xxxxxxxx | ||||
| Tel: (000) 000-0000 | ||||
| Fax: (000) 000-0000 |
Each of the above addressees may change its address or facsimile number for purposes of this
paragraph by giving to the other addressee notice of such new address in conformity with this
paragraph.
9. Amendments. This Note may be amended and any provision hereof waived with the
consent of the Company and the Holder.
10. No Rights as Shareholder. Nothing in this Note shall be construed as conferring
upon the Holder or any other person the right to vote or to consent or to receive notice as a
shareholder in respect of meetings of shareholders for the election of directors of the Company or
any other matters or any rights whatsoever as a shareholder of the Company until, and only to the
extent that, this Note shall have been converted.
11. Successors and Assigns. Subject to the restrictions on transfer described in
Section 12 and in the Note Purchase Agreement, the rights and obligations of the Company and
Investor shall be binding upon and benefit the successors, assigns, heirs, administrators and
transferees of the parties.
12. Transfer of Note and Securities Issuable on Conversion Hereof. Prior to the
conversion of this Note, this Note (or the underlying securities issuable upon conversion hereof)
may not be sold, assigned, transferred, pledged or otherwise disposed of by the Holder, in whole or
in part, without the prior written consent of the Company. With respect to any sale, assignment,
-7-
transfer, pledge or other disposition of the securities into which this Note may be converted
after conversion of this Note, the Holder may only transfer such securities pursuant to, and on the
conditions set forth in that certain Eighth Amended and Restated Investor Rights Agreement dated
June 13, 2006 between the Company and certain investors in the Company (including Holder), as may
be amended from time to time (the “Rights Agreement”). The Holder shall cause any proposed
purchaser, assignee, transferee or pledgee of such securities to agree in writing to take and hold
such securities subject to and upon the conditions specified in this Note, the Note Purchase
Agreement, and the Rights Agreement, including, without limitation, Sections 1.2, 1.3, 1.4, and
1.14 of the Rights Agreement.
13. Highest Lawful Rate. Anything herein to the contrary notwithstanding, if during
any period for which interest is computed hereunder, the amount of interest computed on the basis
provided for in this Note, together will all fees, charges, and other payments or rights which are
treated as interest under applicable law, as provided for herein or in any other document executed
in connection herewith, would exceed the amount of such interest computed on the basis of the
Highest Lawful Rate, the Company shall not be obligated to pay, and the Holder shall not be
entitled to charge, collect, receive, reserve, or take, interest in excess of the Highest Lawful
Rate, and during any such period the interest payable hereunder shall be computed on the basis of
the Highest Lawful Rate. As used herein, “Highest Lawful Rate” means the maximum
non-usurious rate of interest, as in effect from time to time, which may be charged, contracted
for, reserved, received, or collected by the Holder in connection with this Note under applicable
law. In accordance with this section, any amounts received in excess of the Highest Lawful Rate
shall be applied towards the prepayment of principal then outstanding.
14. Miscellaneous. The Company agrees to pay on demand all of the losses, costs, and
expenses (including, without limitation, attorneys’ fees and disbursements) which the Holder incurs
in connection with enforcement of this Note, or the protection or preservation of the Holder’s
rights under this Note, whether by judicial proceeding or otherwise. Such costs and expenses
include, without limitation, those incurred in connection with any workout or refinancing, or any
bankruptcy, insolvency, liquidation, or similar proceedings. The Company hereby waives
presentment, demand for performance, notice of non-performance, protest, notice of protest, and
notice of dishonor. No delay on the part of the Holder in exercising any right hereunder shall
operate as a waiver of such right or any other right. This Note is being delivered in and shall be
construed in accordance with the laws of the State of California without regard to the conflicts of
law provisions thereof. Any reference to “dollars” or “$” in this Note shall refer to the lawful
money of the United States of America.
[Remainder of Page Left Blank Intentionally]
-8-
IN WITNESS WHEREOF, the Company has caused this Convertible Promissory Note to be executed by
its officer thereunto duly authorized as of the date first above written.
| Dated: ______ ___, 20___ | Fluidigm Corporation a California corporation |
|||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
Acknowledged and Agreed: |
||||||
| Holder | ||||||
| Biomedical Sciences Investment Fund Pte Ltd | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
[Convertible Promissory Note Signature Page]
EXHIBIT A
FORM OF COMPLIANCE CERTIFICATE
EXHIBIT C
THIS NOTE AND THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”). SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED OR PLEDGED IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL
(WHICH MAY BE COUNSEL FOR THE COMPANY), OR OTHER EVIDENCE, REASONABLY ACCEPTABLE TO
IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF THE SECURITIES ACT. THIS NOTE MAY ONLY BE TRANSFERRED UPON
THE TERMS AND CONDITIONS CONTAINED IN THE NOTE AND IN AN AGREEMENT BETWEEN HOLDER
AND THE COMPANY
Fluidigm Corporation
a California corporation
CONVERTIBLE PROMISSORY NOTE
NOTE
NUMBER E-3
US$5,000,000
|
_________ ___, 00__ | |
| Xxxxx Xxx Xxxxxxxxx, Xxxxxxxxxx |
1. Principal and Interest. Fluidigm Corporation (the “Company”), a
California corporation, for value received, hereby promises to pay to the order of Biomedical
Sciences Investment Fund Pte Ltd (the “Holder”) in lawful money of the United States of
America, the principal amount of Five Million Dollars (US$5,000,000), or such lesser amount as
shall equal the outstanding principal amount hereof, together with interest from the date of this
Note on the unpaid principal balance at a rate equal to 8.00% per annum, computed on the basis of
the actual number of days elapsed and a year of 365 days, compounded annually.
This
Convertible Promissory Note (“Note”) is the third Note issued pursuant to that
certain Convertible Note Purchase Agreement dated August ___, 2006 (as amended, modified or
supplemented, the “Note Purchase Agreement”) between the Company and the Holder. Unless
defined herein, capitalized terms shall have the same meanings ascribed to them in the Note
Purchase Agreement.
Unless converted in accordance with Section 3, this Note shall become due and payable as to
both accrued interest and principal on the Payment Date (as defined in Section 3). This Note may
be prepaid by Company at any time, in accordance with the terms of Section 2
of this Note. Upon payment in full of all principal and interest payable hereunder (including upon
any conversion), this Note shall be surrendered to the Company for cancellation. All payments
hereon shall be applied first to accrued interest and second to the reduction of principal.
[Convertible
Promissory Note Signature Page]
2. Prepayment of Note. Upon five days prior
written notice to Holder (the “Prepayment Notice”), the Company may prepay this Note in
whole or in part; provided that any such prepayment will be applied first to the payment of
expenses due under this Note, second to interest accrued on this Note and third, if the amount of
prepayment exceeds the amount of all such expenses and accrued interest, to the payment of
principal of this Note. In the event that the Holder desires to avoid prepayment of the Note by
the Company, the Holder must within five days of its receipt of the Prepayment Notice deliver to
the Company the Conversion Notice pursuant to Section 3(c)(iii) electing to convert this Note, in
which case this Note will not be prepaid as provided in the Prepayment Notice and will instead be
converted into shares of Series E Preferred Stock of the Company in accordance with Section 3 of
this Note.
3. Conversion.
(a) Conversion Events. Upon the earlier to occur of (i) an Initial Public Offering
(as defined below) or (ii) satisfaction of each of the Milestones pursuant to Section 3(b)(iv) below (either, a
“Conversion Event”), all of the then outstanding principal and accrued interest owing under
this Note shall convert into that number of shares of Series E Preferred Stock of the Company
determined by dividing (i) the aggregate principal and accrued interest owing under this Note as of
the date of such Conversion Event by (ii) the Conversion Price (as defined below). Notwithstanding
the foregoing, by complying with Section 3(c)(iii) hereof, the Holder may at any time earlier elect
to convert this Note into that number of shares of Series E Preferred Stock determined by dividing
(i) the aggregate principal and accrued interest owing under this Note as of the date of the
Conversion Notice (as defined in Section 3(c)(iii)) by (ii) the Conversion Price (as defined
below).
(b) Definitions. For purposes of this Note, the following terms shall have the
following meanings:
(i) The term “Change of Control Transaction” shall mean (i) the acquisition of the
Company by another entity by means of any transaction or series of related transactions (including,
without limitation, any stock acquisition, reorganization, merger or consolidation but excluding
any merger effected exclusively for the purpose of changing the domicile of the Corporation) other
than a transaction or series of transactions in which the holders of the voting securities of the
Company outstanding immediately prior to such transaction or series of transactions continue to
retain (either by such voting securities remaining outstanding or by such voting securities being
converted into voting securities of the surviving entity), as a result of shares in the Company
held by such holders prior to such transaction, at least fifty percent (50%) of the total voting
power represented by the voting securities of the Company or such surviving entity outstanding
immediately after such transaction or series of transactions; or (ii) a sale, transfer, lease or
other conveyance of all or substantially all of the assets of the Corporation.
(ii) The term “Conversion Price” shall mean US$3.60, subject to adjustment as set
forth in Section 5 below.
(iii) The term “Initial Public Offering” shall mean the first sale of securities of
the Company pursuant to an effective registration statement under the Securities Act of 1933 (the
“Securities Act”) after or in connection with which the outstanding shares of Preferred
Stock of the
-2-
Company have been converted into Common Stock pursuant to the Company’s then existing Articles
of Incorporation or otherwise.
(iv) Unless otherwise agreed in writing between the Company and the Holder, the term
“Milestones” shall mean satisfaction of the
following on or before April 30, 2008:
(1) The
Company will have released the BioMark II Chip Loader to
manufacturing, as
demonstrated by a Manufacturing Release approval form duly signed-off. The approval is typically
characterized by having completed standard prototype development,
including building and testing of suitable prototypes;
(2) The approved BioMark II Chip Loader (or a subsequent version thereof)
will be made generally available to customers,
as demonstrated by a Company product announcement;
(3) The Subsidiary will also have produced prototype BioMark II End Point Readers and made them available to at least three (3) customers;
(4) The Subsidiary will have at least maintained the number of
Research and Development Engineers hired to achieve Milestones in the First
Note and the Milestones in the Second Note; and
(5) The Company will be manufacturing the BioMark II Chip Loader through the
Subsidiary in Singapore, and the Company’s then-current financial and business
plan will provide for the manufacturing of the BioMark II End Point Readers
through the Subsidiary in Singapore; provided that if the Holder provides the Company with a
Milestone Response Notice pursuant to Section 3(c)(ii) below, then the Company shall
have 30 days following the Company’s receipt of the Milestone
Response Notice (the “Milestones Cure Period”) to cure any failure to
satisfy the Milestones identified by the Holder in the Milestone
Response Notice.
(v) The term “Payment Date” shall mean [INSERT DATE TWO YEARS FROM DATE OF NOTE] or
such later date as may be mutually agreed in writing by Holder and the Company.
(c) Conversion Procedure.
(i) Conversion in Connection with Initial Public Offering. Upon the occurrence of an
Initial Public Offering as set forth in Section 3(a), this Note shall convert automatically without
further action on the part of the Holder hereof. Written notice shall be delivered to Holder at
the address last shown on the records of Company for Holder or given by Holder to Company for the
purpose of notice notifying Holder of the conversion effected or to be effected, specifying the
Conversion Price, the date on which such conversion occurred or is expected to occur and calling
upon such Holder to surrender to Company, in the manner and at the place designated, the Note.
(ii) Conversion in Connection with Satisfaction of Milestones. If the Company
reasonably believes that it has satisfied all of the Milestones, it may send written notice thereof
(the “Milestone Completion Notice”) to the Holder (at the address last shown on the records
of the Company for the Holder or given by Holder to Company for the purpose of notice) specifying
the Conversion Price, the date on which the Company reasonably believes all of the Milestones were
satisfied (the “Notified Milestone Completion Date”), together with a duly executed
compliance certificate dated as of the Notified Milestone Completion Date substantially in the form
attached hereto as Exhibit A (the “Compliance Certificate”), and calling upon
Holder to surrender to the Company the Note. In the event that the Holder reasonably believes that
any of (i) the Milestones have not been satisfied or (ii) the representations and warranties made
in the Compliance Certificate are inaccurate in any material respect, the Holder may provide
written notice (the “Milestone
-3-
Response Notice”) to the Company of such disagreement and/or inaccuracy within 30 days
of its receipt of the Milestone Completion Notice. The Milestone Response Notice shall specify in
reasonable detail the reasons for such disagreement and/or basis for belief that any of the
representations and warranties made in the Compliance Certificate are inaccurate and shall be
accompanied by reasonably available support documentation evidencing the basis for such
disagreement or belief. If the Holder shall fail to provide the Milestone Response Notice within
such time period, the Milestones shall be deemed satisfied as of the Notified Milestone Completion
Date and this Note shall be automatically converted as set forth in Section 3(a). If the Holder
shall have timely provided the Milestone Response Notice, the Company and the Holder shall in good
faith attempt to resolve their disagreement as to the satisfaction of the Milestones and/or the
accuracy of the representations and warranties in the Compliance Certificate. If the Company and
Holder are unable to resolve their disagreement within the Milestones Cure Period, the Company may pay to the Holder the principal and interest owing under
this Note as of the Notified Milestone Completion Date (in which case the Note shall be cancelled
and surrendered) or may pursue any other remedy that may be available to it under applicable law.
(iii) Elective Conversion. If the Holder wishes to voluntarily convert this Note as
set forth in Section 3(a) hereof prior to a Conversion Event, the Holder shall surrender this Note
to the Company and provide the Company with a written notice (the “Conversion Notice”) to
that effect.
(iv) Certificate; Time of Conversion. Upon conversion of this Note, the Holder shall
promptly surrender this Note, duly endorsed, at the principal office of Company. At its expense,
the Company shall, as soon as practicable thereafter, issue and deliver to such Holder at such
principal office a certificate or certificates for the number of shares to which Holder shall be
entitled upon such conversion (bearing such legends as are required by this Note and the Note
Purchase Agreement and applicable state and federal securities laws in the opinion of counsel to
Company), together with any other securities and property to which Holder is entitled upon such
conversion under the terms of this Note, including a check payable to Holder for any cash amounts
payable as described in Section 3(d). Any such conversion of this Note shall be deemed to have
been made immediately prior to the Conversion Event as described in Section 3(a) (or in the case of
delivery of the Conversion Notice as set forth in Section 3(c)(iii), upon the Company’s receipt of
such Conversion Notice); provided, however, the Holder shall not be deemed a record
holder of such shares or a purchaser of such shares until the Holder has delivered the Note for
conversion. On and after such date, the Holder shall be treated as a purchaser of such shares
under the Note Purchase Agreement and shall be bound by the applicable terms of this Note and Note
Purchase Agreement.
(d) Fractional Shares. No fractional shares will be issued upon any conversion of
this Note. In lieu of any fractional share to which the Holder would otherwise be entitled, the
Company will pay to the Holder in cash that amount of the unconverted principal and interest
balance of this Note.
(e) Reservation of Shares. The Company will at all times reserve and keep available
out of its authorized but unissued shares or shares held in treasury, sufficient shares of Series E
Preferred Stock or other securities to permit the full conversion of the outstanding principal
-4-
and interest of this Note pursuant to the terms of this Note. In the event the Company shall
have insufficient shares of Series E Preferred Stock or other securities to permit the full
conversion of the outstanding principal and accrued interest of this Note pursuant to the terms
hereof, the Company hereby covenants and agrees that the Company shall use its commercially
reasonable efforts to seek board and shareholder approval of an amendment to the Company’s Articles
of Incorporation in order to authorize an increase in the number of authorized shares of Series E
Preferred Stock or other securities of the Company in a sufficient amount so that the aggregate
number of shares of Series E Preferred Stock or other securities issuable upon conversion of this
Note will then be authorized and available for issuance.
4. Change of Control Transaction. The Company shall provide the Holder with 15 days
written notice of the closing of a Change of Control Transaction, specifying in reasonable detail
the terms of such Change of Control Transaction. If the Holder shall not have voluntarily elected
to convert this Note as set forth in Section 3(c)(iii) within such 15 day period, the Company may
prepay the entire principal amount and interest owing under this Note as of the date of such
prepayment. The Holder shall thereafter promptly return the Note to the Company for cancellation.
5. Change in Series E Preferred Stock.
(a) Split, Subdivision or Combination of Series E Preferred Stock. In the event the
Company should at any time or from time to time after the date of issuance hereof split or
subdivide the outstanding shares of its Series E Preferred Stock (or other securities issuable upon
conversion of this Note) or issue additional shares of Series E Preferred Stock (or other
securities issuable upon conversion of this Note) to the holders thereof as a dividend or make any
other distribution payable in additional shares of Series E Preferred Stock (or other securities
issuable upon conversion of this Note) to the holders thereof without payment of any consideration
by such holder for the additional shares of Series E Preferred Stock (or such other securities),
then, as of the date of such dividend, distribution, split or subdivision, the Conversion Price of
this Note shall be appropriately decreased so that the number of shares of Series E Preferred Stock
or other securities issuable upon conversion of this Note shall be increased in proportion to such
increase of outstanding shares of Series E Preferred Stock or other securities issuable upon
conversion of this Note, as applicable. If the number of shares of Series E Preferred Stock (or
other securities issuable upon conversion of this Note) outstanding at any time after the date
hereof is decreased by a combination of the outstanding shares of Series E Preferred Stock (or
other securities issuable upon conversion of this Note), then, following the record date of such
combination, the Conversion Price for this Note shall be appropriately increased so that the number
of shares of Series E Preferred Stock or other securities issuable on conversion hereof shall be
decreased in proportion to such decrease in outstanding shares of Series E Preferred Stock or other
securities issuable upon conversion of this Note, as applicable.
(b) Reclassification etc. In case of any reclassification, capital reorganization, or
change in the Series E Preferred Stock (or other securities issuable upon conversion of this Note)
of the Company, including conversion of such shares pursuant to the Company’s Articles of
Incorporation then in effect (other than as a result of a split, subdivision, combination, or stock
dividend provided for in Section 5(a) above), then appropriate adjustment shall be made to the
Conversion Price and kind of securities or other property issuable upon conversion of this Note so
-5-
that this Note shall be convertible upon the terms set forth herein into the kind and amount
of shares of stock and other securities and property receivable in connection with such
reclassification, reorganization, or change by a holder of the same number of shares of Series E
Preferred Stock or other securities as are issuable on conversion of this Note.
(c) Merger or Consolidation. Other than a Change of Control Transaction in connection
with which this Note has been converted or prepaid, if at any time there shall be an acquisition of
the Company by merger, consolidation or otherwise where the Company is not the surviving
corporation or as a result of which all of the outstanding capital stock of the Company is
exchanged for capital stock of another corporation, then, as a part of such acquisition, the
Conversion Price and kind of securities issuable upon conversion hereof shall be appropriately
adjusted so that the Holder shall receive upon conversion of this Note, the number of shares of
stock or other securities or property of the surviving or successor corporation resulting from such
acquisition (or the corporation the capital stock of which is issued in exchange for the capital
stock of the Company), to which a holder of the securities issuable upon conversion of this Note
would have been entitled in such acquisition if this Note had been converted immediately before
such acquisition.
6. Payment Due Date. If not previously converted into shares of Series E Preferred
Stock pursuant to Section 3 hereof and if not sooner prepaid by the Company pursuant to Section 2
hereof or accelerated and declared due and owing by the Holder pursuant to Section 7 hereof, the
principal amount and any accrued interest due thereon then outstanding under this Note will become
due and payable on the Payment Date.
7. Default. The Company shall be deemed to be in default under this Note in the event
(i) the Company shall fail to materially perform any covenant or agreement of the Company contained
in Section 4 of the Note Purchase Agreement for a period of 30 days after written notice of such
failure from Holder; (ii) the Company shall have failed to make payment of principal or interest
due on the Note when such principal and interest becomes due; or (iii) the Company shall commence,
whether voluntarily or involuntarily a case or other proceeding seeking liquidation, reorganization
or other relief with respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or consent to any such relief or to the appointment of or
taking possession of its property by any official in an involuntary case or other proceeding
commenced against it. In the case of an event of default, the Holder may, by written notice to the
Company, declare the unpaid principal amount of this Note, all interest accrued and unpaid hereon,
and all other amounts payable hereunder to be immediately due and payable, without presentment,
demand, protest, or further notice of any kind, as well as enforce all other rights and remedies
available to the Holder under applicable law.
8. Notices. Any notice, request, other communication, or payment required or
permitted hereunder shall be in writing and shall be deemed to have been duly given upon delivery,
if delivered personally by facsimile, or by recognized overnight courier service, or five days
after deposit, if deposited in the United States mail for mailing by registered or certified mail,
postage prepaid, and addressed as follows:
-6-
| If to Holder: | Biomedical Sciences Investment Fund Pte Ltd | |||
| 00 Xxxxxxxx Xxx | ||||
| #00-00 Xxxxxxx | ||||
| Xxxxxxxxx 000000 | ||||
| Attention: Xxx Xxxx Yeok | ||||
| Tel: 00-0000-0000 | ||||
| Fax: 00-0000-0000 | ||||
| If to the Company: | Fluidigm Corporation | |||
| 0000 Xxxxxxxxx Xxxxx | ||||
| Xxxxx Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 | ||||
| Attention: Chief Executive Officer | ||||
| Tel: (000) 000-0000 | ||||
| Fax: (000) 000-0000 | ||||
| with a copy to: | ||||
| Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C. | ||||
| 000 Xxxx Xxxx Xxxx | ||||
| Xxxx Xxxx, Xxxxxxxxxx 00000-0000 | ||||
| Attention: Xxx Xxxxx and Xxxxxx Xxxxxxxx | ||||
| Tel: (000) 000-0000 | ||||
| Fax: (000) 000-0000 |
Each of the above addressees may change its address or facsimile number for purposes of this
paragraph by giving to the other addressee notice of such new address in conformity with this
paragraph.
9. Amendments. This Note may be amended and any provision hereof waived with the
consent of the Company and the Holder.
10. No Rights as Shareholder. Nothing in this Note shall be construed as conferring
upon the Holder or any other person the right to vote or to consent or to receive notice as a
shareholder in respect of meetings of shareholders for the election of directors of the Company or
any other matters or any rights whatsoever as a shareholder of the Company until, and only to the
extent that, this Note shall have been converted.
11. Successors and Assigns. Subject to the restrictions on transfer described in
Section 12 and in the Note Purchase Agreement, the rights and obligations of the Company and
Investor shall be binding upon and benefit the successors, assigns, heirs, administrators and
transferees of the parties.
12. Transfer of Note and Securities Issuable on Conversion Hereof. Prior to the
conversion of this Note, this Note (or the underlying securities issuable upon conversion hereof)
may not be sold, assigned, transferred, pledged or otherwise disposed of by the Holder, in whole or
in part, without the prior written consent of the Company. With respect to any sale, assignment,
-7-
transfer, pledge or other disposition of the securities into which this Note may be converted
after conversion of this Note, the Holder may only transfer such securities pursuant to, and on the
conditions set forth in that certain Eighth Amended and Restated Investor Rights Agreement dated
June 13, 2006 between the Company and certain investors in the Company (including Holder), as may
be amended from time to time (the “Rights Agreement”). The Holder shall cause any proposed
purchaser, assignee, transferee or pledgee of such securities to agree in writing to take and hold
such securities subject to and upon the conditions specified in this Note, the Note Purchase
Agreement, and the Rights Agreement, including, without limitation, Sections 1.2, 1.3, 1.4, and
1.14 of the Rights Agreement.
13. Highest Lawful Rate. Anything herein to the contrary notwithstanding, if during
any period for which interest is computed hereunder, the amount of interest computed on the basis
provided for in this Note, together will all fees, charges, and other payments or rights which are
treated as interest under applicable law, as provided for herein or in any other document executed
in connection herewith, would exceed the amount of such interest computed on the basis of the
Highest Lawful Rate, the Company shall not be obligated to pay, and the Holder shall not be
entitled to charge, collect, receive, reserve, or take, interest in excess of the Highest Lawful
Rate, and during any such period the interest payable hereunder shall be computed on the basis of
the Highest Lawful Rate. As used herein, “Highest Lawful Rate” means the maximum
non-usurious rate of interest, as in effect from time to time, which may be charged, contracted
for, reserved, received, or collected by the Holder in connection with this Note under applicable
law. In accordance with this section, any amounts received in excess of the Highest Lawful Rate
shall be applied towards the prepayment of principal then outstanding.
14. Miscellaneous. The Company agrees to pay on demand all of the losses, costs, and
expenses (including, without limitation, attorneys’ fees and disbursements) which the Holder incurs
in connection with enforcement of this Note, or the protection or preservation of the Holder’s
rights under this Note, whether by judicial proceeding or otherwise. Such costs and expenses
include, without limitation, those incurred in connection with any workout or refinancing, or any
bankruptcy, insolvency, liquidation, or similar proceedings. The Company hereby waives
presentment, demand for performance, notice of non-performance, protest, notice of protest, and
notice of dishonor. No delay on the part of the Holder in exercising any right hereunder shall
operate as a waiver of such right or any other right. This Note is being delivered in and shall be
construed in accordance with the laws of the State of California without regard to the conflicts of
law provisions thereof. Any reference to “dollars” or “$” in this Note shall refer to the lawful
money of the United States of America.
-8-
IN WITNESS WHEREOF, the Company has caused this Convertible Promissory Note to be executed by
its officer thereunto duly authorized as of the date first above written.
| Dated: ______ ___, 20___ | Fluidigm Corporation a California corporation |
|||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
Acknowledged and Agreed: |
||||||
| Holder | ||||||
| Biomedical Sciences Investment Fund Pte Ltd | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
[Convertible Promissory Note Signature Page]
EXHIBIT A
FORM OF COMPLIANCE CERTIFICATE
EXHIBIT D
FLUIDIGM CORPORATION
COMPLIANCE CERTIFICATE
(Issuance of First Note)
Fluidigm Corporation, a California corporation (the “Company”), hereby represents and
warrants to Biomedical Sciences Investment Fund Pte Ltd (the “Purchaser”) as follows,
effective as August 7, 2006. This Compliance Certificate is delivered in connection with the sale
and issuance to the Purchaser of the Company’s Convertible Promissory Note dated as of August 7,
2006 in the principal amount of $5,000,000.00 (the “Convertible Note”) and issued pursuant
to the Convertible Note Purchase Agreement dated as of August 7, 2006, (the “Purchase
Agreement”).
1. The Company 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. The Company is duly qualified to transact business and is in
good standing in each jurisdiction in which the failure to so qualify would have a material adverse
effect on its business (as now conducted), properties, or financial condition.
2. The Company has all requisite legal and corporate power and authority to (i) execute and
deliver this Compliance Certificate; (ii) sell and issue the Convertible Note; (iii) issue the
shares of Series E Preferred Stock issuable upon conversion of the Convertible Note (the
“Series E Shares”) and the Common Stock issuable upon conversion of such Series E Shares
(the “Common Conversion Shares”); and (iv) carry out and perform its obligations under the
terms of this Compliance Certificate, the Convertible Note, and the Purchase Agreement.
3. All corporate action on the part of the Company, its officers, directors, and shareholders
necessary for the authorization, execution, and delivery of this Compliance Certificate, the
performance of all obligations of the Company under this Compliance Certificate, the Convertible
Note, and the Purchase Agreement, the sale and delivery of the Convertible Note, and the
authorization and issuance of the Series E Shares and the Common Conversion Shares has been taken.
Each of the Eighth Amended and Restated Investor Rights Agreement dated as of June 13, 2006 among
the Company and certain of its shareholders (as amended to date, the “Rights Agreement”)
and the Second Amended and Restated Voting Agreement dated as of August 16, 2005 (as amended to
date, the “Voting Agreement”) remain effective, subject only to such amendments as to which
the Purchaser has been previously notified in writing and unless earlier terminated in accordance
with their terms (for which the Company has also provided the Purchaser notice in writing). Each
of this Compliance Certificate, the Purchase Agreement, the Convertible Note and to the extent not
terminated in accordance with its terms, each of the Rights Agreement and the Voting Agreement,
constitute valid and legally binding obligations of the Company, enforceable against the Company in
accordance with their terms, subject to (i) judicial principles limiting the availability of
specific performance, injunctive relief, and other equitable remedies; (ii) bankruptcy, insolvency,
reorganization, moratorium and other similar laws now or hereafter in effect generally relating to
or affecting creditors’ rights; and (iii) limitations on the enforceability of the indemnification
provisions of the Rights Agreement.
4. The Convertible Note, when issued, sold and delivered in accordance with the terms of the
Purchase Agreement will be free of restrictions on transfer other than restrictions on transfer
under the Purchase Agreement, the Convertible Note, the Rights Agreement and the Voting Agreement
and under applicable state and federal securities laws. The Series E Shares, when issued upon
conversion of the Convertible Note, in accordance with the Convertible Note and the Purchase
Agreement, will be duly and
validly issued, fully paid, and nonassessable, and will be free of restrictions on transfer
other than restrictions on transfer under the Purchase Agreement, the Rights Agreement, and the
Voting Agreement and under applicable state and federal securities laws. The Common Conversion
Shares, when issued upon conversion of the Series E Shares in accordance with the terms of the
Company’s Articles of Incorporation as currently in effect, will be duly and validly issued, fully
paid, and nonassessable, and will be free of restrictions on transfer other than restrictions on
transfer under the Purchase Agreement, the Rights Agreement, and the Voting Agreement, and under
applicable state and federal securities laws. The Series E Shares and the Common Conversion Shares
may, subject to the continued accuracy of the representations and warranties provided by Purchaser
pursuant to the Purchase Agreement, be issued without any registration or qualification under state
and federal securities laws as such laws are currently in effect.
5. No consent, approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, any federal, state or local governmental authority is
required in connection with the offer and sale of the Convertible Note or the issuance of the
Series E Shares or the Common Conversion Shares or the consummation of any other transaction
contemplated by the Convertible Note or the Purchase Agreement, except for filings required
pursuant to applicable federal and state securities laws and blue sky laws, which filings the
Company covenants to complete within the required statutory period.
6. The Company is not in violation or default of any provision of its Articles of
Incorporation or Bylaws, each as amended and in effect as of the date hereof. The Company is not
in violation or default of 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 or assets is bound or, to the best of its knowledge, of any provision of
any federal, state, or local statute, rule, or governmental regulation, except to the extent such
violations or defaults would not reasonably be expected, individually or in the aggregate, to have
a material adverse effect on the Company’s business (as now conducted), properties, or financial
condition or an adverse effect on the Company’s ability to consummate the transactions contemplated
by this Compliance Certificate, the Convertible Note, and the Purchase Agreement. None of the
execution, delivery, and performance of and compliance with this Compliance Certificate, the
continued performance by the Company under the Purchase Agreement, the Rights Agreement (unless
terminated prior to the date hereof) and the Voting Agreement (unless terminated prior to the date
hereof), the sale and issuance of the Convertible Note, or the issuance of the Series E Shares or
the Common Conversion Shares will (i) result in any violation, be in conflict with, or constitute,
with or without the passage of time, or giving of notice, a default under any such provision,
license, indenture, instrument, mortgage, deed of trust, loan, contract, commitment, judgment,
decree, order, or obligation, except where such violation or conflict would not reasonably be
expected to have a material adverse effect on the Company’s business (as now conducted),
properties, or financial condition or an adverse effect on the Company’s ability to consummate the
transactions contemplated by this Compliance Certificate, the Convertible Note, and the Purchase
Agreement; (ii) require any consent or waiver under any such provision, license, indenture,
instrument, mortgage, deed of trust, loan, contract, commitment, judgment, decree, order, or
obligation (other than such consents or waivers that have been obtained or such consents or waivers
that if not obtained would not reasonably be expected to have a material adverse effect on the
Company’s business (as now conducted), properties, or financial condition or an adverse effect on
the Company’s ability to consummate the transactions contemplated by this Compliance Certificate,
the Convertible Note, and the Purchase Agreement; or (iii) result in the creation of any mortgage,
pledge, lien, encumbrance, or charge upon any of the properties or assets of the Company pursuant
to any such provision, license, indenture, instrument, mortgage, deed of trust, loan, contract,
commitment, judgment, decree, order, or obligation (other than such mortgages, pledges, liens,
encumbrances, or charges as would not reasonably be expected to have a material adverse effect on
the Company’s business (as now conducted), properties, or financial condition or an adverse effect
on the Company’s ability to consummate the transactions contemplated by this Compliance
Certificate, the Convertible Note, and the Purchase Agreement).
-2-
7. The representations and warranties of the Company contained in Section 2 of the Purchase
Agreement were true in all material respects on and as of the Closing (as defined in the Purchase
Agreement) of the sale of the First Note (as defined in the Purchase
Agreement) on August 7, 2006.
8. This Compliance Certificate shall be governed by the laws of the State of California,
without reference to the conflicts of law provisions thereof.
Executed
as of August 7, 2006.
| FLUIDIGM CORPORATION |
||||
| By: | /s/ Xxxxx Xxxxxxxxxxx | |||
| Print Name: | Xxxxx Xxxxxxxxxxx | |||
| Title: | CEO | |||
[Signature Page to Compliance Certificate]
-3-
EXHIBIT E
INVESTMENT REPRESENTATION STATEMENT
PURCHASER:
|
Biomedical Sciences Investment Fund Pte Ltd (the “Purchaser”) | |
COMPANY:
|
Fluidigm Corporation (the “Company”) | |
SECURITY:
|
Convertible Promissory Note (US$5,000,000 in principal amount) (the “Additional Note”) the principal and accrued interest on which are convertible into shares of Series E Preferred Stock of the Company | |
DATE::
|
August 7, 2006 |
This Investment Representation Statement is entered into in connection with the sale by the
Company of an Additional Note to Purchaser as set forth in that certain Convertible Promissory Note
Purchase Agreement between the Company and Purchaser dated August 7, 2006 (the “Note Purchase
Agreement”). Capitalized terms used but not otherwise defined herein have the meanings given
to such terms in the Note Purchase Agreement. In connection with the purchase of the Second Note
and the securities issued or issuable upon conversion thereof (the “Conversion
Securities”), the undersigned Purchaser represents to the Company the following:
1. Experience. Purchaser is experienced in evaluating start-up companies such as the
Company, is able to evaluate and represent its own interests in transactions such as the purchase
of the Additional Note and the Conversion Securities, has such knowledge and experience in
financial and business matters such that Purchaser is capable of evaluating the merits and risks of
Purchaser’s investment in the Company, and has the ability to bear the economic risks of its
investment.
2. Investment. Purchaser is acquiring and will acquire, the Additional Note and the
Conversion Securities, for investment for Purchaser’s own account and not with the view to, or for
resale in connection with, any distribution thereof. Purchaser understands that the Additional
Note and the Conversion Securities have not been registered under the Securities Act of 1933, as
amended (the “Securities Act”) by reason of a specific exemption from the registration
provisions of the Securities Act, which depends upon, among other things, the bona fide nature of
Purchaser’s investment intent as expressed herein. Purchaser further represents that it does not
have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant
participation to any third person with respect to any of the Additional Note or Conversion
Securities other than a transfer not involving a change of beneficial ownership. Purchaser
understands and acknowledges that the offering of the Additional Note and Conversion Securities
will not be registered under the Securities Act on the ground that the sale provided for is exempt
from the registration requirements of the Securities Act.
3. Rule 144. Purchaser acknowledges that the Additional Note and Conversion
Securities must be held indefinitely unless subsequently registered under the Securities Act or an
exemption from such registration is available. Purchaser is aware of the provisions of Rule 144
promulgated under the Securities Act, which permit limited resale of shares purchased in a private
placement subject to the satisfaction of certain conditions. Purchaser covenants that, in the
absence of an effective registration statement covering the securities in question, Purchaser will
sell, transfer,
or otherwise dispose of the Additional Note and the Conversion Securities only in accordance
with applicable securities laws and in a manner consistent with Purchaser’s representations and
covenants set forth herein and in the Note Purchase Agreement between Holder and the Company and
the Additional Note. In connection therewith, Purchaser acknowledges that the Company will make a
notation on its stock books regarding the restrictions on transfer set forth herein, in the Note
Purchase Agreement and the Additional Note and will transfer securities on the books of the Company
only to the extent not inconsistent therewith.
4. No Public Market. Purchaser understands that no public market now exists for any
of the securities issued by the Company, and that the Company has made no assurances that a public
market will ever exist for the Second Note or the Conversion Securities.
5. Access to Data. Purchaser has received and reviewed information about the Company
and has had an opportunity to discuss the Company’s business, management and financial affairs with
its management and to review the Company’s facilities.
6. Authorization. This Investment Representation Statement when executed and
delivered by the Purchaser will constitute a valid and legally binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms, subject to: (i) judicial principles
respecting election of remedies or limiting the availability of specific performance, injunctive
relief, and other equitable remedies; and (ii) bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect generally relating to or affecting creditors’
rights.
7. Accredited Investor. Purchaser acknowledges that it is an “accredited investor” as
defined in Rule 501 of Regulation D as promulgated by the United States Securities and Exchange
Commission (the “Commission”) under the Securities Act and shall submit to the Company such
further assurances of such status as may be reasonably requested by the Company. The principal
address of such Purchaser is as set forth on the signature page hereto.
8. Tax Advisors. Purchaser has reviewed with its own tax advisors the tax
consequences of the purchase of the Additional Note and the Conversion Securities. Purchaser is
relying solely on such advisors and not on any statements or representations of the Company or any
of its agents and understands that Purchaser (and not the Company) shall be responsible for the
Purchaser’s own tax liability that may arise as a result of the Purchase of the Additional Note and
the Conversion Securities.
9. Brokers or Finders. The Company has not incurred and will not incur, directly or
indirectly, as a result of any action taken by such Purchaser, any liability for brokerage or
finders’ fees or agents’ commissions or any similar changes in connection with the Note Purchase
Agreement or the Additional Note.
10. Non-United States Persons. Purchaser hereby represents that Purchaser is
satisfied as to the full observance of the laws of Purchaser’s jurisdiction in connection with any
invitation to subscribe for the Additional Note and the Conversion Securities or any use of the
Note Purchase Agreement, including (i) the legal requirements within Purchaser’s jurisdiction for
the purchase of the Additional Note and the Conversion Securities, (ii) any foreign exchange
restrictions applicable
-2-
to such purchase, (iii) any governmental or other consents that may need to be obtained and
(iv) the income tax and other tax consequences, if any, that may be relevant to the purchase,
holding, redemption, sale or transfer of such securities. Purchaser’s subscription and payment
for, and Purchaser’s continued beneficial ownership of, the Additional Note and the Conversion
Securities will not violate any applicable securities or other laws of Purchaser’s jurisdiction.
11. Other Agreements. Purchaser acknowledges and agrees that Purchaser and the
Additional Note and the Conversion Securities are subject to the Additional Note, and Investor
Rights Agreement and the restrictions on transfer set forth therein and in the Note Purchase
Agreement.
[Remainder of Page Left Blank Intentionally]
-3-
IN WITNESS WHEREOF, the Purchaser has caused this Investment Representation Statement to be
executed by its officer thereunto duly authorized as of the date first above written.
| PURCHASER: Biomedical Sciences Investment Fund Pte Ltd |
||||
| By: | /s/ Xxx Xxxx Yeok | |||
| Name: | Xxx Xxxx Yeok | |||
| Title: | Director | |||
EXHIBIT
F
LEGAL OPINION
LEGAL OPINION
August __, 2006
Biomedical Sciences Investment Fund Pte. Ltd.
00 Xxxxxxxx Xxx
#00-00 Xxxxxxx
Xxxxxxxxx 000000
00 Xxxxxxxx Xxx
#00-00 Xxxxxxx
Xxxxxxxxx 000000
Ladies and Gentlemen:
Reference is made to the Convertible Note Purchase Agreement dated as of August ___, 2006 (the
“Agreement”) by and among Fluidigm Corporation, a California corporation (the “Company”), and
Biomedical Sciences Investment Fund Pte. Ltd. (the “Purchaser”), which provides for the sale and
issuance by the Company to the Purchaser of the First Note, the Second Note and the Third Note
(each as defined in the Agreement). This opinion is rendered to the Purchaser pursuant to Section
4.9 of the Agreement, and all terms used herein have the meanings defined for them in the Agreement
and/or the First Note, unless otherwise defined herein. Reference in this opinion to the Agreement
excludes any schedule or substantive agreement attached as an exhibit to the Agreement, unless
otherwise indicated herein.
We have acted as counsel for the Company in connection with the negotiation of the Agreement
and the issuance of the First Note. As such counsel, we have made such legal and factual
examinations and inquiries as we have deemed advisable or necessary for the purpose of rendering
this opinion. In addition, we have examined originals or copies of such corporate records of the
Company, certificates of public officials and such other documents which we consider necessary or
advisable for the purpose of rendering this opinion. In such examination we have assumed the
genuineness of all signatures on original documents, the authenticity and completeness of all
documents submitted to us as originals, the conformity to original documents of all copies
submitted to us and the due execution and delivery of all documents (except as to due execution and
delivery by the Company) where due execution and delivery are a prerequisite to the effectiveness
thereof.
In our examination of the documents identified above and for purposes of this opinion, we have
relied solely upon and assumed, and express no opinion as to, the current accuracy and completeness
of (i) the information obtained from public officials; (ii) the representations and warranties of
the Company and the Purchaser as to factual and other matters set forth in the
Agreement and in any certificate delivered pursuant thereto or any ancillary agreement
Biomedical Sciences Investment Fund Pte. Ltd.
August ___, 2006
Page 2
August ___, 2006
Page 2
referenced therein; and (iii) the representations and warranties as to factual and other matters
made by representatives of the Company to us, including without limitation, those set forth in a
management certificate executed by an executive of the Company.
As used in this opinion, the expression “to our knowledge,” “known to us” or similar language
with reference to matters of fact means that, after an examination of documents made available to
us by the Company, and after inquiries of officers of the Company, but without any further
independent factual investigation, we find no reason to believe that the opinions expressed herein
are factually incorrect. Further, the expression “to our knowledge,” “known to us” or similar
language with reference to matters of fact refers to the current actual knowledge of the attorneys
of this firm who provided material legal representation to the Company in connection with the
Agreement and the transactions contemplated thereby. Except to the extent expressly set forth
herein or as we otherwise believe to be necessary to our opinion, we have not undertaken any
independent investigation to determine the existence or absence of any fact, and no inference as to
our knowledge of the existence or absence of any fact should be drawn from our representation of
the Company or the rendering of the opinions set forth below.
For purposes of this opinion, we are assuming that the Purchaser has all requisite power and
authority, and has taken any and all necessary corporate or partnership action, to execute and
deliver the Agreement and the First Note and to effect any and all transactions related to or
contemplated thereby. In addition, we are assuming that the representations and warranties made by
the Purchaser in the Agreement and pursuant thereto are true and correct. We are also assuming
that the Purchaser has purchased the First Note (and the Note Shares issuable upon conversion
thereof) for value, in good faith and without notice of any adverse claims within the meaning of
the California Uniform Commercial Code.
We are members of the Bar of the State of California, and we express no opinion as to any
matter relating to the laws of any jurisdiction other than the federal laws of the United States of
America and the laws of the State of California.
The opinions hereinafter expressed are subject to the following additional qualifications:
(a) We express no opinion as to the effect of applicable bankruptcy, insolvency,
reorganization, moratorium or other similar federal or state laws affecting the rights of
creditors.
(b) We express no opinion as to the effect or availability of rules of law governing specific
performance, injunctive relief or other equitable remedies (regardless of whether any such remedy
is considered in a proceeding at law or in equity).
Biomedical Sciences Investment Fund Pte. Ltd.
August ___, 2006
Page 3
August ___, 2006
Page 3
(c) This opinion is qualified by the limitations imposed by statutes and principles of law and
equity that provide that certain covenants and provisions of agreements are unenforceable where
such covenants or provisions are unconscionable or contrary to public policy or where enforcement
of such covenants or provisions under the circumstances would violate the enforcing party’s implied
covenant of good faith and fair dealing.
(d) We express no opinion regarding any of (i) the rights or remedies available to any party
for violations or breaches of any provisions which are immaterial or the enforcement of which would
be unreasonable under the then-existing circumstances; (ii) the rights or remedies available to any
party for material violations or breaches which are the proximate result of actions taken by any
party to the Agreement or the First Note other than the party against whom enforcement is sought,
which actions such other party is not entitled to take pursuant to the Agreement or the First Note
or which otherwise violate applicable laws; (iii) the rights or remedies available to any party
which takes discretionary action which is arbitrary, unreasonable or capricious, or is not taken in
good faith or in a commercially reasonable manner, whether or not the Agreement or the First Note
permits such action; (iv) the effect of the exercise of judicial discretion, whether in a
proceeding in equity or at law; (v) the enforceability of any provision deemed to be
“unconscionable” within the meaning of Section 1670.5 of the California Civil Code; (vi) the
enforceability of any provision authorizing the exercise of any remedy without reasonable notice
and opportunity to cure; or (vii) the effect of any provision of the Agreement or the First Note
purporting to give the Purchaser the right to make any conclusive determination in its sole
discretion.
(e) We express no opinion as to the legality, validity, binding nature or enforceability of
(i) any provisions in the Agreement or the First Note providing for the payment or reimbursement of
costs or expenses or indemnifying a party, to the extent such provisions may be held unenforceable
as contrary to public policy; (ii) any provision of the Agreement or the First Note insofar as it
provides for the payment or reimbursement of costs and expenses or indemnification for claims,
losses or liabilities in excess of a reasonable amount determined by any court or other tribunal;
(iii) any provisions regarding the Purchaser’s (or its agent’s) ability to collect attorneys’ fees
and costs in an action involving the Agreement or the First Note, if the
Purchaser (or such agent) is not the prevailing party in such action (we call your attention
to the effect of Section 1717 of the California Civil Code, which provides that, where a contract
permits one party thereto to recover attorneys’ fees, the prevailing party in any action to enforce
any provision of the contract shall be entitled to recover its reasonable attorneys’ fees); (iv)
any provisions of the Agreement or the First Note imposing penalties or forfeitures, late payment
charges or any increase in interest rate, upon delinquency in payment or the occurrence of a
default to the extent they constitute a penalty or forfeiture or are otherwise contrary to public
policy; (v) any rights of set-off; (vi) any provision of the Agreement or the First Note to the
Biomedical Sciences Investment Fund Pte. Ltd.
August ___, 2006
Page 4
August ___, 2006
Page 4
effect that a statement, certificate, determination or record shall be deemed conclusive absent
manifest error (or similar effect), including, without limitation, that any such statement,
certificate, determination or record shall be prima facie evidence of a fact; or (vii) any
provision of the Agreement or the First Note which provides that notice not actually received may
be binding on any party.
(f) We express no opinion with respect to the legality, validity, binding nature or
enforceability of (i) any vague or broadly stated waiver, including without limitation, the waivers
of diligence, presentment, demand, protest or notice; (ii) any waivers or consents (whether or not
characterized as a waiver or consent in the Agreement or the First Note) relating to the rights of
the Purchaser or duties owing to them existing as a matter of law, including, without limitation,
waivers of the benefits of statutory or constitutional provisions, to the extent such waivers or
consents are found by courts to be against public policy or which are ineffective pursuant to
California statutes and judicial decisions; (iii) any waivers of any statute of limitations; or
(iv) covenants to the extent they are to be enforced as independent requirements as distinguished
from conditions that may trigger an event of default.
(g) We express no opinion with respect to the legality, validity, binding nature or
enforceability of any provision of the Agreement or the First Note to the effect that rights or
remedies are not exclusive, that every right or remedy is cumulative and may be exercised in
addition to any other right or remedy, that the election of some particular remedy or remedies does
not preclude recourse to one or more other remedies or that failure to exercise or delay in
exercising rights or remedies will not operate as a waiver of any such right or remedy.
(h) We note the obligations of the Company under the Agreement and the First Note relating to
the Business Plan and the Milestones and the effects of deemed satisfaction of the Milestones on
the conversion of the First Note. We express no opinion as to the enforceability of these
provisions to the extent that they may be deemed vague or overly broad.
(i) We express no opinion as to any provision of the Agreement or the First Note requiring
written amendments or waivers of such documents insofar as it suggests that oral or other
modifications, amendments or waivers could not be effectively agreed upon by the parties or that
the doctrine of promissory estoppel might not apply.
(j) We express no opinion as to compliance with the anti-fraud provisions of applicable
securities laws.
(k) We express no opinion as to the enforceability of any indemnification or contribution
provision to the extent the provisions thereof may be subject to limitations of public policy and
the effect of applicable statutes and judicial decisions.
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(l) We express no opinion as to the enforceability of choice of law provisions, waivers of
jury trial or provisions relating to venue or jurisdiction.
(m) We have made no inquiry into, and express no opinion with respect to, any federal or state
statute, rule, or regulation relating to any tax, antitrust, land use, safety, environmental,
hazardous material, patent, copyright, trademark or trade name matter, as to the statutes,
regulations, treaties or common laws of any other nation (other than the United States), state or
jurisdiction (other than the State of California), or the effect on the transactions contemplated
in the Agreement or the First Note of noncompliance under any such statues, regulations, treaties,
or common laws. Without limiting the foregoing, we express no opinion as to the effect of, or
compliance with, the Investment Advisors Act of 1940, as amended, the Employee Retirement Income
Security Act of 1974, as amended, or the California Finance Lenders Law. We further disclaim any
opinion as to any statute, rule, regulation, ordinance, order, or other promulgation of any
regional or local governmental body or as to any related judicial or administrative opinion.
(n) Our opinions relate solely to the express written provisions of the Agreement and the
First Note, and we express no opinion as to any other oral or written agreements or understandings
between the Company and the Purchaser.
(o) Our opinion set forth in paragraph 1 below is based solely on the certificates of certain
state authorities and filing officers referenced above as to the legal existence and corporate good
standing of the Company in the State of California.
Based upon and subject to the foregoing, and except as set forth in the Schedule of Exceptions
to the Agreement, we are of the opinion that:
1. The Company is a corporation duly incorporated and validly existing under, and by virtue
of, the laws of the State of California and is in good standing under such laws.
2. The Company has all requisite legal and corporate power to execute and deliver the
Agreement and the First Note, to sell and issue the First Note under the Agreement, to issue the
Note Shares issuable upon conversion of the First Note and the Common Stock issuable upon
conversion of the Note Shares, and to carry out and perform its obligations under the terms of
the Agreement and the First Note.
3. All corporate action on the part of the Company, its directors and shareholders necessary
for the authorization, execution and delivery of the Agreement and the First Note by the Company,
the authorization, sale, issuance and delivery of the First Note (and the Note Shares issuable upon
conversion of the First Note and the Common Stock issuable upon
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conversion thereof) and the
performance by the Company of its obligations under the Agreement and the First Note has been
taken. Each of the Agreement and the First Note has been duly and validly executed and delivered
by the Company and constitutes a valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms.
This opinion is furnished to the Purchaser solely for its benefit in connection with the
purchase of the First Note, and may not be relied upon by any other person or for any other purpose
without our prior written consent. We assume no obligation to inform you of any facts,
circumstances, events or changes in the law that may arise or be brought to our attention after the
date of this opinion that may alter, affect or modify the opinions expressed herein.
| Very truly yours, |
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