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EXHIBIT 10.1
SERIES A PREFERRED STOCK PURCHASE AGREEMENT
MYCO PHARMACEUTICALS INC.
0 Xxxx Xxxx Xxxxx
Xxxx Xxxxxxxxxx, XX 00000
As of February 25, 1992
To the Persons listed on Exhibit 1.01 hereto
Re: Series A Preferred Stock
Ladies and Gentlemen:
Myco Pharmaceuticals Inc. (the "Company"), a Delaware corporation, and,
solely with respect to Article III, Xxxxx Xxxxxxxxx, Ph.D. ("Xxxxxxxxx"), each
agrees with each of you as follows:
ARTICLE I
PURCHASE, SALE AND TERMS OF SHARES
1.01. The Preferred Shares. The Company has authorized the issuance,
sale and exchange of up to 6,000,000 shares (the "Preferred Shares") of its
authorized but unissued shares of Series A Preferred Stock, $.01 par value (the
"Preferred Stock"), at a purchase price of $1.00 per share to the persons
(collectively, the "Purchasers" and, individually, a "Purchaser") and in the
respective amounts set forth in Exhibit 1.01A and Exhibit 1.0lB hereto. The
designation, rights, preferences and other terms and provisions of the Preferred
Stock are set forth in Exhibit A hereto.
1.02. The Conversion Shares. The Company has authorized and has
reserved and covenants to continue to reserve, free of preemptive rights and
other similar contractual rights of shareholders, a sufficient number of its
authorized but unissued shares of Common Stock to satisfy the rights of
conversion of the holders of the Preferred Shares. Any shares of Common Stock
issuable upon conversion of the Preferred Shares (and such shares when issued)
are herein referred to as the "Conversion Shares". The Preferred Shares and
Conversion Shares are sometimes collectively referred to as the "Shares".
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1.03. Purchase Price and Closings.
(a) Initial Closing. The Company agrees to issue, sell and
exchange to the Purchasers and, in consideration of and in express reliance upon
the representations, warranties, covenants, terms and conditions of this
Agreement, the Purchasers, severally but not jointly, agree to purchase, that
number of the Preferred Shares set forth opposite their respective names in
Exhibit 1.01A. The aggregate purchase price of the Preferred Shares being
acquired by each Purchaser is set forth opposite such Purchaser's name in
Exhibit 1.01A. The closing of the purchase, sale and exchange of the Preferred
Shares to be acquired by the Purchasers from the Company under this Agreement
shall take place at the offices of Messrs. Xxxxx, Xxxxxxx & Xxxxxxxxx, 00 Xxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx at 10:00 a.m. on February 25, 1992, or at such
time and date thereafter as the Purchasers and the Company may agree (the
"Initial Closing"). At the Initial Closing, the Company will deliver to each
Purchaser certificates for the number and series of Preferred Shares set forth
opposite its name under the headings "Number of Series A Shares" in Exhibit
1.01A registered in such Purchaser's name (or its nominee), against delivery of
a check or checks payable to the order of the Company, or a transfer of funds to
the account of the Company by wire transfer, representing the net cash
consideration set forth opposite each such Purchaser's name on Exhibit 1.01A,
and the cancellation of an aggregate of $150,000 of principal of indebtedness of
the Company to the Series A Purchasers as so set forth on Exhibit 1.01A, as
payment in full of the purchase price of the Shares. At the Initial Closing, the
Purchasers will deliver to the Company (i) the Term Promissory Notes marked
"paid in full," each dated January 15, 1992, made by the Company to the
respective orders of the Purchasers, in lieu of the payment of $150,000, as
described in Exhibit 1.01A, (ii) the Pledge Agreements dated January 15, 1992
between such Purchaser and the Company and (iii) the collateral, and the Company
will deliver to each Purchaser by check all accrued interest therein through the
date of Closing.
(b) Call Closings. Provided that the Company is in compliance
in all material respects with this Agreement and subject to the provisions set
forth herein, at any time on two occasions and from time to time, on or after
the date which is six months from the Initial Closing and on or before the date
which is 24 months from the date hereof, the Purchasers hereby agree, severally
but not jointly, to purchase up to that number of shares of Series A Preferred
Stock set forth opposite each of their respective names under the heading "Call
Closing Shares" in Exhibit 1.0lB (such shares to be purchased on a pro rata
basis based on their respective percentage of the aggregate amount of Preferred
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Shares purchased at the Initial Closing), at the same price, terms and
conditions of Initial Closing and in increments of not less than 2,000,000
shares of Preferred Stock in the aggregate in any such Call Closing, provided
that, in addition to the other terms and conditions hereof,
A. (i) the performance milestones set forth in
Exhibit 1.03 have been achieved in accordance with the terms
set forth in such exhibit; (ii) the business outlook for
proposed research and development activities and licensing
opportunities and the financial condition of the Company have
not materially adversely changed from the date of the Initial
Closing; (iii) the Company is not subject to any pending or
threatened claim, litigation, governmental proceeding or
investigation which is reasonably likely to materially
adversely affect the Company's business prospects taken as a
whole, its management or key personnel, proposed research and
development activities, joint ventures and licensing
opportunities in the Company; (iv) there has been no material
adverse change in the prospects, affairs, operations,
management or key personnel, licensing rights and other rights
relating to technology, existing or proposed joint ventures,
or the progress of research and development of the Company and
third parties since the Initial Closing; (v) there has been no
material adverse change to the representations and warranties
of Article III as made at the Initial Closing; all to the
reasonable satisfaction of the Purchasers;
B. the Company requests such purchase by written
notice to each of the Purchasers at least fifteen (15) days
prior to the date proposed by the Company to be the date of
any such Call Closing, such notice to contain the date of the
Call Closing, the aggregate number of shares of Preferred
Stock to be purchased by the Purchasers and the number of
shares of Preferred Stock to be purchased by each Purchaser;
and
C. the Company but not Xxxxxxxxx shall update in
writing the representations and warranties of Article III
herein, and shall deliver such update to the Purchasers at
least ten (10) days prior to any Call Closing; and the Company
shall deliver to the Purchasers for their review an opinion of
counsel for the Company substantially similar to Exhibit
2.02(b) with respect to the sale and issuance of the Preferred
Shares purchased at such Call Closing not later than five (5)
business days prior to the Call Closing.
All parties shall consummate any Call Closings within 30 days of
delivery of such notice of a Call Closing. Notwithstanding
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the foregoing, any or all of the conditions may be waived at the sole
discretion of a Purchaser as to such Purchaser's purchase hereunder.
(c) Put Closing. The Purchasers shall have the right (but not
the obligation) at any time on two occasions and from time to time, after the
Initial Closing until on or before the date which is 24 months from the date
hereof, to purchase up to a maximum of that number of shares of Preferred Stock
set forth opposite each of their respective names under the heading "Put
Closing Shares" in Exhibit 1.0lB (such shares to be purchased on a pro rata
basis based on their respective percentage of Preferred Shares purchased at the
Initial Closing), and in increments of not less than 2,000,000 shares of
Preferred Stock in the aggregate in any such Put Closing, at the same price,
terms and conditions as Initial Closing, provided that:
(i) the Purchasers shall inform the Company by written notice
at least forty-five (45) days prior to the date proposed by the
Purchasers to be the date of the closing of such purchase (the "Put
Closing");
(ii) the Company updates in writing the representations and
warranties of Article III herein, and delivers such updated disclosure
to the Purchasers at least ten (10) days prior to the Put Closing; and,
to the Purchaser's satisfaction, there has been no adverse change from
the Initial Closing with respect to such representations and
warranties;
(iii) an opinion of counsel for the Company substantially similar
to Exhibit 2.02(b) hereto is delivered to the Purchasers for their
review with respect to the sale and issuance of the Put Closing Shares
no later than five (5) business days prior to the Put Closing; and
(iv) the notice for the Put Closing pursuant to Section
1.03(c)(ii) shall occur no later than 45 days prior to 24 months from
the date hereof.
All parties shall consummate the Put Closing within 45 days of the
delivery of such notice of a Put Closing. Notwithstanding the foregoing any or
all of these conditions may be waived at the sole discretion of a Purchaser as
to such Purchaser's purchase hereunder.
(d) Upon consummation of one or more Call Closings for the sale
of at least 4,000,000 shares of Preferred Stock (including any shares of
Preferred Stock sold in any Put Closings), the Purchasers' and Company's rights
under Section 1.03(c) shall terminate. Upon consummation of one or more Put
Closings for the sale of at least 4,000,000 shares of
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Preferred Stock (including any shares sold in any Call Closings), the Company's
and Purchasers' rights under Section 1.03(b) shall terminate. Under no
circumstances shall the Purchasers be obligated under this Section 1.03 to
purchase, or have the right to purchase, more than 4,000,000 shares in Preferred
Stock at $1.00 per share (for an aggregate of $4,000,000) from the Company under
any combination of Call Closings or Put Closings.
(e) For purposes of this Agreement, the term "Closing" shall
refer to the Initial Closing and the Call Closing or the Put Closing, as the
case may be. In addition, any shares of Preferred Stock purchased pursuant to a
Call Closing or a Put Closing shall be included in the definition of "Preferred
Shares."
1.04. Use of Proceeds. The Company shall use the cash proceeds from the
sale of the Preferred Shares for working capital and general corporate purposes.
1.05. Representations by the Purchasers.
(a) Investment Representations. Each of the Purchasers
represents severally, but not jointly, that it is its present intention to
acquire the Shares to be acquired by it for its own account (and it will be
the sole beneficial owner thereof) and that the Shares are being and will be
acquired by it for the purpose of investment and not with a view to
distribution or resale thereof except pursuant to registration under the
Securities Act or exemption therefrom. The acquisition by each Purchaser of
the Preferred Shares acquired by it shall constitute a confirmation of this
representation by each such Purchaser. Each Purchaser is purchasing with its
own funds and not with the funds of any pension or employee benefit plan.
Each of the Purchasers further represents that it understands and agrees
that, until registered under the Securities Act or transferred pursuant to
the provisions of Rule 144 or Rule 144A as promulgated by the Commission,
all certificates evidencing any of the Shares, whether upon initial issuance
or upon any transfer thereof, shall bear a legend, prominently stamped or
printed thereon, reading substantially as follows:
"The securities represented by this certificate have not
been registered under the Securities Act of 1933 or applicable
state securities laws. These securities have been acquired
for investment and not with a view to distribution or resale.
These securities may not be offered for sale, sold, delivered
after sale, transferred, pledged or hypothecated in the
absence of an effective registration statement covering such
shares under the Act and any applicable state securities
laws, or
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the availability, in the opinion of counsel satisfactory
to the Company, of an exemption from registration thereunder."
(b) Sophistication and Knowledge. Each Purchaser or his
representative has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of the purchase
of the Preferred Shares. Each Purchaser can bear the economic risks of this
investment and can afford a complete loss of his investment.
(c) Transfer Restrictions Imposed by Securities Laws. Each
Purchaser understands that: no state or governmental authority has made any
finding or determination relating to the fairness of the terms of the investment
in the Company proposed hereunder and the Shares have not been registered under
the Securities Act and applicable state securities laws, and, therefore, cannot
be resold unless they are subsequently registered under the Securities Act and
applicable state securities laws or unless an exemption from such registration
is available; each Purchaser is and must be purchasing the Shares for investment
for the account of such Purchaser and not for the account or benefit of others,
and not with any present view toward resale or other distribution thereof. Each
Purchaser agrees not to resell or otherwise dispose of all or any part of the
Shares purchased by him, except as permitted by law, including, without
limitation, any regulations under the Securities Act and applicable state
securities laws; the Company does not have any present intention and is under no
obligation to register the Shares under the Securities Act and applicable state
securities laws, except as provided in Article V hereof; and Rule 144 or Rule
144A under the Securities Act may not be available as a basis for exemption from
registration of the Shares thereunder.
(d) Lack of Liquidity. Each Purchaser has no present need for
liquidity in connection with his purchase of the Preferred Shares.
(e) Suitability and Investment Objectives. The purchase of the
Preferred Shares by each Purchaser is consistent with the general investment
objectives of the Purchaser. The Purchaser understands that the purchase of the
Preferred Shares involves a high degree of risk in view of the fact that, among
other things, the Company is a start-up enterprise, and there may never be an
established market for the Company's capital stock.
(f) Accredited Investors Status. Each Purchaser except for
those listed on Exhibit 1.05 is an "Accredited Investor" as that term is defined
in Rule 501 of Regulation D promulgated under the Securities Act.
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(g) Access to Information. Each Purchaser has had the
opportunity to ask questions and receive answers from the officers and other
employees of the Company regarding the terms and conditions of this
Agreement, the transactions contemplated hereby (including, without
limitation, its acquisition of Shares), as well as the affairs of the
Company and related matters, and it has obtained such information and has
had the opportunity to obtain additional information necessary to verify the
accuracy of all information so obtained.
(h) Corporate and Partnership Representation. If a
Purchaser is a corporation, partnership, trust or other entity, it
represents and warrants that (i) the individual executing this Agreement on
its behalf has been duly authorized to execute and deliver this Agreement;
(ii) the signature of such individual is binding upon such partnership,
corporation, trust or other entity; (iii) the Purchaser is duly organized,
validly existing and in good standing in its jurisdiction of incorporation
or organization and has all requisite power and authority to execute and
deliver this Agreement; and (iv) the execution and delivery of this
Agreement and the purchase of the Shares hereunder will not result in the
violation of, constitute a breach or default under, or conflict with, any
term or provision of the charter, bylaws or other governing document of the
Purchaser or, to its knowledge, material breach or default under any
material agreement, judgment, decree, order, statute or regulation by which
it is bound or applicable to it.
(i) Additional Representations. Each Purchaser
understands that the Company is a start up enterprise which currently has no
assets or employees. The Company intends to engage in research activities
which will require substantial funds which may not be available. For this
and other reasons, the Company's prospects are highly speculative.
Accordingly, each Purchaser acknowledges that he, she or it may lose her,
his or its entire investment in the Company. Each of the Bessemer Purchasers
is relying on the information provided by Bessemer Venture Partners L.P.
with respect to its investment in the Company. Bessemer Venture Partners
L.P. represents that it has provided to each of such purchasers access to
all of the information which it has regarding the Company.
ARTICLE II
CONDITIONS TO PURCHASERS' OBLIGATION
The obligation of each Purchaser to purchase and pay for the Preferred
Shares to be purchased by it at a Closing is subject to the following conditions
(all of which shall be deemed satisfied or waived by the Purchasers at or prior
to the Closing in the
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event all of the transactions contemplated to be effected at the Closing are
consummated and all or any of which in any case may be waived by the Purchasers
prior to a Closing):
2.01. Representations and Warranties. Each of the representations and
warranties of the Company set forth in Article III hereof shall be true,
accurate and correct on the date of the Closing. Each of the representations and
warranties of Xxxxxxxxx set forth in Article III hereof shall be, to Xxxxxxxxx'x
actual knowledge, true, accurate and correct on the date of the Initial Closing.
2.02. Documentation at Closing. The Purchasers shall have received
prior to or at the Closing all of the following materials, each in form and
substance reasonably satisfactory to the Purchasers and their special counsel,
and each of the following events shall have occurred, or each of the following
documents shall have been delivered, prior to or simultaneous with the Closing:
(a) A copy of the Certificate of Incorporation of the
Company, as amended or restated to date, together with such evidence as is
satisfactory to the Purchasers of the filing thereof; a copy of the
resolutions of the Board of Directors providing for the approval of the
Restated Certificate of Incorporation of the Company in the form attached as
Exhibit A, the approval of this Agreement, the issuance of the Preferred
Shares, such amendment of the By-laws of the Company as may be reasonably
requested by the Purchasers, and all other agreements or matters
contemplated hereby or executed in connection herewith; a copy of a consent
of stockholders of the Company approving the Restated Certificate of
Incorporation of the Company; and a copy of the By-laws of the Company, all
of which have been certified by the Secretary of the Company to be true,
complete and correct in every particular; and certified copies of all
documents evidencing other necessary corporate or other action and
governmental approvals, if any, required to be obtained at or prior to the
Closing with respect to this Agreement and the issuance of the Preferred
Shares.
(b) The favorable opinion of Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C., counsel for the Company, in the form set forth in
Exhibit 2.02(b).
(c) A certificate of the Secretary or an Assistant
Secretary of the Company which shall certify the names of the officers of
the Company authorized to sign this Agreement, the certificates for the
Preferred Shares and the other documents, instruments or certificates to be
delivered pursuant to this Agreement by the Company or any of its officers,
together with the true signatures of such officers.
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(d) A certificate of the President and the Treasurer of the
Company and Xxxxxxxxx stating that the representations and warranties of the
Company contained in Article III hereof are (in the case of Xxxxxxxxx, to his
actual knowledge) true and correct as of the time of the Closing and that all
conditions required to be performed by the Company prior to or at the Closing
have been performed as of the Closing.
(e) The Company shall have obtained any consents or waivers
necessary to be obtained at or prior to the Closing to execute and deliver this
Agreement, the Preferred Shares and the other agreements and instruments
executed and delivered by the Company in connection herewith and to carry out
the transactions contemplated hereby and thereby, and such consents and waivers
shall be in full force and effect at the Closing. All corporate and other action
and governmental filings necessary to effectuate the terms of this Agreement,
the Preferred Shares and the other agreements and instruments executed and
delivered by the Company in connection herewith shall have been made or taken.
(f) The Certificate of Incorporation of the Company shall have
been amended and restated in the form set forth in Exhibit A attached hereto.
(g) A Certificate of the Secretary of State of the State of
Delaware as to the due incorporation and good standing of the Company and a
certificate of the Secretary of State of each jurisdiction in which the Company
is required to qualify to do business as a foreign corporation shall have been
provided to the Purchasers and their special counsel.
(h) Payment for the costs, attorneys' fees, expenses, taxes
and filing fees identified in Section 8.04.
(i) Each of the employees listed on Exhibit 2.02(i) shall have
entered into Nondisclosure and Assignment of Inventions Agreements in the form
attached as Exhibit B1 and Exhibit B2 hereto (the "Nondisclosure Agreement") and
Xxxxxxxxx shall have entered into an Employment and Non-Competition Agreement in
the form attached to Exhibit 2.02 hereto (the "Non-Competition Agreement") and
copies thereof shall have been delivered to counsel for the Purchasers.
(j) Each of the Purchasers, the Company and the other
shareholders thereto shall have entered into a Voting and Co-Sale Agreement in
the form attached as Exhibit C hereto (the "Voting and Co-Sale Agreement").
(k) The members of the Board of Directors of the Company (the
"Board") immediately following the Closing shall consist of four (4) members,
which members shall include
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Xxxx X. Xxxxxxxx, M.D., Xxxxxx Xxxxxxxxxx, Ph.D., Xxxxxxxxxxx Xxxxxxxx, and
Xxxxx Xxxxxxxxx, Ph.D. (for so long as he is an officer, employee or
otherwise materially involved with the Company as determined by the Board of
Directors, including the Investor Directors (including Xxxxxxxxxxx Xxxxxxxx
or his successor)
(1) This Agreement shall have been executed by Purchasers
that are obligated to purchase an aggregate of at least 2,000,000 shares of
Series A Preferred Stock at the Initial Closing in the amounts set forth in
Exhibit 1.01A, such Purchasers shall have delivered to the Company the full
purchase price for such Series A Preferred Stock.
(m) A Scientific Advisory Board of the Company composed of
individuals acceptable to the Purchasers in their sole discretion shall have
been constituted.
(n) Each Purchaser (other than the Bessemer Purchasers)
shall have simultaneously with the other Purchasers (other than the Bessemer
Purchasers) purchased the shares of Series A Preferred Stock at a Closing
that such Purchaser is obligated to purchase hereunder and shall have paid
the full purchase price therefor.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company and Xxxxxxxxx (solely as to the Initial Closing) each, jointly
and severally, represents and warrants (and solely in the case of Xxxxxxxxx on
the Initial Closing, represents and warrants to his actual knowledge) as of each
Closing as follows:
3.01. Organization and Standing of the Company. The Company is a duly
organized and validly existing corporation in good standing under the laws of
the State of Delaware and has all requisite corporate power and authority for
the ownership and operation of its properties and for the carrying on of its
business as now conducted and as now proposed to be conducted and to execute and
deliver this Agreement, the Voting and Co-Sale Agreement and any other agreement
to which it is a party hereunder, to issue, sell and deliver the Preferred
Shares and to issue and deliver the Conversion Shares and to perform its other
obligations pursuant hereto and thereto. The Company is duly licensed or
qualified and in good standing as a foreign corporation authorized to do
business in all jurisdictions wherein the character of the property owned or
leased or the nature of the activities conducted by it makes such licensing or
qualification necessary, except where the failure to be so licensed or qualified
would not have a material adverse effect on the business, operations or
financial condition of the Company.
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3.02. Corporate Action. This Agreement, the Voting and Co-Sale
Agreement and any other agreement to which it is a party hereunder have been
duly authorized, executed and delivered by the Company and constitute the legal,
valid and binding obligations of the Company, enforceable against the Company in
accordance with their respective terms.
3.03. Governmental Approvals. Except for the filing of any notice
prior or subsequent to the Closing that may be required under applicable state
and/or Federal securities laws, and the filing of the Certificate of
Designations, Preferences and Rights of Series A Preferred Stock (which, if
required, shall be filed on a timely basis), no authorization, consent,
approval, license, exemption of or filing or registration with any court or
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, is or will be necessary for, or in connection with, the
execution and delivery by the Company of this Agreement, for the offer, issue,
sale, execution or delivery of the Preferred Shares, or for the performance by
the Company of its obligations under this Agreement.
3.04. Litigation. There is no litigation or governmental proceeding
or investigation pending or, to the knowledge of the Company, threatened against
the Company affecting any of its properties or assets, or, to the knowledge of
the Company, against any officer, Key Employee or the holder of more than ten
percent (10%) of the capital stock of the Company relating to the Company or its
business, nor, to the knowledge of the Company, has there occurred any event or
does there exist any condition on the basis of which it is reasonably likely
that any litigation, proceeding or investigation might properly be instituted.
There are no actions or proceedings pending or, to the Company's knowledge,
threatened (or any basis therefor known to the Company) which might result,
either in any case or in the aggregate, in any material adverse change in the
business, operations, Intellectual Property Rights, affairs or financial
condition of the Company or in any of its properties or assets, or which might
call into question the validity of this Agreement, any of the Preferred Shares,
or any action taken or to be taken pursuant hereto or thereto.
3.05. Certain Agreements of Officers and Employees. To the Company's
knowledge, no officer, employee or consultant of the Company is, or is now or is
expected to be, in violation of any material term of any employment contract,
patent disclosure agreement, proprietary information agreement, noncompetition
agreement, nonsolicitation agreement, confidentiality agreement, or any other
similar contract or agreement or any restrictive covenant, relating to the right
of any such officer, employee, or consultant to be employed or engaged by the
Company because of the nature of the business conducted or to be conducted by
the Company or relating to the use of trade secrets or proprietary information
of others, and to the Company's knowledge and belief,
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the continued employment or engagement of the Company's officers, employees or
consultants does not subject the Company or any Purchaser to any material
liability with respect to any of the foregoing matters.
3.06. Compliance with Other Instruments. The Company is in compliance
in all respects with the terms and provisions of this Agreement and of its
Certificate of Incorporation and By-laws, each as amended and/or restated to
date, and in all respects with the terms and provisions of all mortgages,
indentures, leases, agreements and other instruments by which it is bound or to
which it or any of its properties or assets are subject where noncompliance
would have a material adverse affect on the business, assets, operations, or
financial condition of the Company. The Company is in compliance in all respects
with all judgments, decrees, governmental orders, laws, statutes, rules or
regulations by which it is bound or to which it or any of its properties or
assets are subject where noncompliance with which would have a material adverse
affect on the business, assets, operations, or financial condition of the
Company. Neither the execution, issuance and delivery of this Agreement, the
Voting and Co-Sale Agreement, or the Preferred Shares, nor the consummation of
any transaction contemplated hereby or thereby, has constituted or resulted in
or will constitute or result in a default or violation of any term or provision
of any of the foregoing documents, instruments, judgments, agreements, decrees,
orders, statutes, rules and regulations where noncompliance with which would
have a material adverse affect on the business, assets, operations, or financial
condition of the Company.
3.07. Title to Assets, Patents. The Company has good and marketable
title in fee to such of its fixed assets as are real property and purported to
be owned, and good and merchantable title to all of its other assets, tangible
and intangible, free of any mortgages, pledges, charges, liens, security
interests or other encumbrances, except those indicated in Exhibit 3.07. The
Company enjoys peaceful and undisturbed possession under all leases under which
it is operating, and all said leases are valid and subsisting and in full force
and effect. All of such assets and leases are listed in Exhibit 3.07.
The Company owns or has a valid right to use the Intellectual
Property Rights being used to conduct its business (i) as now operated and (ii)
as now proposed to be operated (a complete list of licenses, contract rights and
registrations of such Intellectual Property Rights is attached hereto as Exhibit
3.07); and the conduct of its business as now operated and as now proposed to be
operated does not and will not conflict with or infringe upon the intellectual
property rights of others. Except as set forth on Exhibit 3.07, no claim is
pending or threatened against the Company and/or, to the Company's knowledge,
its officers, employees and consultants to the effect that any such
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Intellectual Property Right owned or licensed by the Company, or which the
Company otherwise has the right to use, is invalid or unenforceable by the
Company or subject to any claim of infringement. Except pursuant to the terms of
any licenses specified on Exhibit 3.07, the Company has no obligation to
compensate any Person for the use of any such Intellectual Property Rights and
the Company has not granted any Person any license or other right to use any of
the Intellectual Property Rights of the Company or otherwise has licensed from
others the intellectual property rights of third parties, whether requiring the
payment of royalties or not.
The Company has taken reasonable measures in accordance with
industry standards to protect and preserve the security, confidentiality and
value of its Intellectual Property Rights, including its trade secrets and other
confidential information. All employees and consultants of the Company involved
in the design, review, evaluation or development of inventions or Intellectual
Property Rights have executed nondisclosure and assignment of inventions
agreements in the forms attached as Exhibits B1 and B2. To the best knowledge of
the Company, all trade secrets and other confidential information of the Company
are presently valid and protectible and are not part of the public domain or
knowledge, nor, to the best knowledge of the Company, have they been used,
divulged or appropriated for the benefit of any person other than the Company or
otherwise to the detriment of the Company. To the best of the Company's
knowledge, no employee or consultant of the Company has used any trade secrets
or other confidential or proprietary information or techniques of any other
person in the course of their work for the Company or is expected to use such
secrets or information or techniques when conducting the business which the
Company presently intends to conduct. The Company is the exclusive owner of all
right, title and interest in its Intellectual Property Rights as purported to be
owned by the Company, and such Intellectual Property Rights are valid and in
full force and effect. Neither the Company, nor any of its employees or
consultants has received notice of, and to the best of the Company's knowledge
after reasonable investigation, there are no claims that the Company's
Intellectual Property Rights or the use or ownership thereof by the Company
infringes, violates or conflicts with any such right of any third party. No
university, hospital, government agency (whether federal or state) or other
organization which sponsored research and development conducted by the Company
has any claim of right to or ownership of or other encumbrance upon the
Intellectual Property Rights of the Company except as disclosed in Exhibit 3.07.
3.08. Transactions with Affiliates. Except as set forth in Exhibit
3.08 there are no loans, leases, royalty agreements or other continuing
transactions between (a) the Company or, to the Company's best knowledge, any of
its customers or suppliers, and (b) any officer, employee, consultant or
director of the Company
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or any Person owning five percent (5%) or more of the capital stock of the
Company, or to the Company's knowledge, any member of the immediate family of
such officer, employee, consultant, director or stockholder or any corporation
or other entity controlled by such officer, employee, consultant, director or
stockholder, or a member of the immediate family of such officer, employee,
consultant, director or stockholder.
3.09. Indebtedness; Assumptions or Guaranties of Indebtedness of Other
Persons. The Company has no Indebtedness except as set forth in Exhibit 3.09.
The Company has not assumed, guaranteed, endorsed or otherwise become directly
or contingently liable on (including, without limitation, liability by way of
agreement, contingent or otherwise, to purchase, to provide funds for payment,
to supply funds to or otherwise invest in the debtor or otherwise to assure the
creditor against loss), any Indebtedness of any other Person except as set forth
in Exhibit 3.09.
3.10. Investments in Other Persons. Except as set forth in Exhibit
3.10, the Company has not made any loans or advances in excess of $10,000 in the
aggregate to any Person which is outstanding on the date of this Agreement, nor
is it committed or obligated to make any such loan or advance, nor does the
Company own any capital stock, assets comprising the business of, obligations
of, or any interest in, any Person. The Company does not have, and has not since
its incorporation had, any Subsidiaries.
3.11. Securities Act of 1933. The Company has complied and will comply
with all applicable federal and state securities laws in connection with the
offer, issuance and sale of the Preferred Shares hereunder. Neither the Company
nor anyone authorized to act on its behalf has or will sell, offer to sell or
solicit offers to buy the Preferred Shares or similar securities to, or solicit
offers with respect thereto from, or enter into any preliminary conversations or
negotiations relating thereto with, any Person, so as to bring the issuance and
sale of the Preferred Shares under the registration provisions of the Securities
Act and applicable state securities laws.
3.12. Disclosure. Neither this Agreement, nor any other agreement or
statement, whether oral or written, furnished to any of the Purchasers or their
special counsel by or on behalf of the Company in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained herein or therein, in light of the circumstances in which made, not
misleading. Projections made in the Business Plan are not considered to be facts
for the purpose of this Section. Such projections were prepared in good faith on
the basis of reasonable assumptions. There is no fact within the knowledge of
the Company or any of its executive officers which has not been disclosed herein
or in writing by them to the Purchasers and which materially adversely affects,
or in the
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or any Person owning five percent (5%) or more of the capital stock of the
Company, or to the Company's knowledge, any member of the immediate family of
such officer, employee, consultant, director or stockholder or any corporation
or other entity controlled by such officer, employee, consultant, director or
stockholder, or a member of the immediate family of such officer, employee,
consultant, director or stockholder.
3.09. Indebtedness; Assumptions or Guaranties of Indebtedness of Other
Persons. The Company has no Indebtedness except as set forth in Exhibit 3.09.
The Company has not assumed, guaranteed, endorsed or otherwise become directly
or contingently liable on (including, without limitation, liability by way of
agreement, contingent or otherwise, to purchase, to provide funds for payment,
to supply funds to or otherwise invest in the debtor or otherwise to assure the
creditor against loss), any Indebtedness of any other Person except as set forth
in Exhibit 3.09.
3.10. Investments in Other Persons. Except as set forth in Exhibit
3.10, the Company has not made any loans or advances in excess of $10,000 in the
aggregate to any Person which is outstanding on the date of this Agreement, nor
is it committed or obligated to make any such loan or advance, nor does the
Company own any capital stock, assets comprising the business of, obligations
of, or any interest in, any Person. The Company does not have, and has not since
its incorporation had, any Subsidiaries.
3.11. Securities Act of 1933. The Company has complied and will comply
with all applicable federal and state securities laws in connection with the
offer, issuance and sale of the Preferred Shares hereunder. Neither the Company
nor anyone authorized to act on its behalf has or will sell, offer to sell or
solicit offers to buy the Preferred Shares or similar securities to, or solicit
offers with respect thereto from, or enter into any preliminary conversations or
negotiations relating thereto with, any Person, so as to bring the issuance and
sale of the Preferred Shares under the registration provisions of the Securities
Act and applicable state securities laws.
3.12. Disclosure. Neither this Agreement, nor any other agreement or
statement, whether oral or written, furnished to any of the Purchasers or their
special counsel by or on behalf of the Company in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained herein or therein, in light of the circumstances in which made, not
misleading. Projections made in the Business Plan are not considered to be facts
for the purpose of this Section. Such projections were prepared in good faith on
the basis of reasonable assumptions. There is no fact within the knowledge of
the Company or any of its executive officers which has not been disclosed herein
or in writing by them to the Purchasers and which materially adversely affects,
or in the
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future in their opinion may, insofar as they can now foresee, materially
adversely affect the business, operations, properties, Intellectual Property
Rights, assets or condition, financial or other, of the Company. Without
limiting the foregoing, the Company has no knowledge that there exists, or there
is pending or planned, any patent, invention, device, application or principle
or any statute, rule, law, regulation, standard or code which would materially
adversely affect the business, prospects, operations, Intellectual Property
Rights, affairs or financial condition of the Company.
3.13. Capitalization; Status of Capital Stock. As of the Closing,
the Company will have a total authorized capitalization consisting of (i)
11,000,000 shares of Common Stock, $.001 par value, and (ii) 6,200,000 shares of
Preferred Stock, $.01 par value, of which 6,200,000 shares will be designated as
Series A Preferred Stock. As of the Closing, 1,506,000 shares of Common Stock
will be issued and outstanding and/or committed for issuance without giving
effect to the transactions contemplated hereby. A complete list of the capital
stock of the Company which has been previously issued and the names in which
such capital stock is registered on the stock transfer book of the Company is
set forth in Exhibit 3.13 hereto. All the outstanding shares of capital stock of
the Company have been duly authorized, and are validly issued, fully paid and
non-assessable. The Shares when issued and delivered in accordance with the
terms hereof, and the Conversion Shares, when issued and delivered upon
conversion of the Preferred Shares, will be duly authorized, validly issued,
fully-paid and non-assessable. Except for 2,112,000 shares of Common Stock that
will be reserved for issuance upon exercise of stock options, 70,000 shares of
Common Stock that have been reserved for issuance to certain individuals with
the approval of the Board of Directors including a majority of the Investor
Directors (including Xxxxxxxxxxx Xxxxxxxx or his successor), 200,000 shares of
Series A Preferred Stock that have been reserved for issuance to certain
individuals with the approval of the Board of Directors including a
majority of the Investor Directors (including Xxxxxxxxxxx Xxxxxxxx or his
successor), all as further set forth in Exhibit 3.13, no options, warrants,
subscriptions or purchase rights of any nature to acquire from the Company, or
commitments of the Company to issue, shares of capital stock or other securities
are authorized, issued or outstanding, nor is the Company obligated in any other
manner to issue shares or rights to acquire any of its capital stock or other
securities except as contemplated by this Agreement. None of the Company's
outstanding securities or authorized capital stock or the Preferred Stock are
subject to any rights of redemption, repurchase, rights of first refusal,
preemptive rights or other similar rights, whether contractual, statutory or
otherwise, for the benefit of the Company, any stockholder, or any other Person,
except pursuant hereto and the
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Voting and Co-Sale Agreement or as set forth on Exhibit 3.13. Except as set
forth in Exhibit 3.13, there are no restrictions on the transfer of shares of
capital stock of the Company other than those imposed by relevant federal and
state securities laws and as otherwise contemplated by this Agreement. The offer
and sale of all capital stock and other securities of the Company issued before
the Closing complied with or were exempt from all applicable federal and state
securities laws and no stockholder has a right of rescission or damages with
respect thereto.
3.14. Material Agreements. Except as set forth in Exhibit 3.14 the
Company is not a party to any material written or oral contract, instrument,
agreement, commitment, obligation, plan or arrangement, or any other material
agreement which could adversely affect the business, assets, liabilities,
Intellectual Property Rights, financial condition or operations of the Company.
The Company, and to the best of the Company's knowledge, each other party
thereto have in all material respects performed all the obligations required to
be performed by them to date, have received no notice of default and are not in
default in any material respect under any lease, agreement or contract now in
effect to which the Company is a party or by which it or its property may be
bound. Each of the contracts or agreements listed in Exhibit 3.14 is in full
force and effect with no default, anticipated or threatened material default or
material failure of performance or observance of any obligations or conditions
contained therein, and none of the foregoing parties nor the Company has
provided any notice of default or of its intention to terminate these
agreements.
3.15. Absence of Certain Developments. The Company is not a party to any
written or material oral contract or instrument or other corporate restriction
which individually or in the aggregate could adversely affect the business,
prospectus, financial condition, operations, Intellectual Property Rights,
property or affairs of the Company other than the terms of this Agreement. The
Company has no liability or obligation, whether absolute, contingent, or
otherwise as set forth in Exhibit 3.15, except for those incurred in the
ordinary course.
3.16. Environmental and Safety Laws. To the best of the Company's
knowledge after due investigation, it is not in violation of any applicable
statute, law or regulation relating to the environment or occupational safety
and health in any material respect, and to the best of its knowledge after due
investigation, no material expenditures will be required in order to comply with
any such statute, law or regulation except in the ordinary course of doing
business.
3.17. U.S. Real Property Holding Corporation. The Company is not now
and has never been a "United States Real Property Holding Corporation" as
defined in Section 897(c)(2) of the Code and Section 1.897-2(b) of the
Regulations promulgated by the Internal Revenue Service.
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ARTICLE IV
COVENANTS OF THE COMPANY
4.01. Affirmative Covenants of the Company Other Than Reporting
Requirements. Without limiting any other covenants and provisions hereof, and
except to the extent the following covenants and provisions of this Section 4.01
are waived in any instance by either (i) including a majority of the Investor
Directors (including Xxxxxxxxxxx Xxxxxxxx or his successor) or (ii) by the
holders of at least 60% of the outstanding shares of Preferred Stock, the
Company covenants and agrees that until the consummation of a Qualified Public
Offering, it will perform and observe the following covenants and provisions,
and will cause each Subsidiary, if and when such Subsidiary exists, to perform
and observe such of the following covenants and provisions as are applicable to
such Subsidiary:
(a) Maintenance of Key Man Insurance. Within 90 days from the
date hereof, maintain term life insurance on the life of Xxxxx
Xxxxxxxxx in the amount of $1,000,000, in each case for so long as such
person remains an officer or employee of the Company, the proceeds of
which are payable to the Company. The Company will add Technology
Leaders L.P., Technology Leaders Offshore C.V. and Bessemer Venture
Partner II L.P. as a notice party to such policy and will request that
the issuer of such policy provide such party with at least twenty (20)
days' notice before such policy is modified or terminated (for failure
to pay premium or otherwise) or assigned, or before any change is made
in the designation of the beneficiary thereof.
(b) Budgets Approval. At least thirty (30) days prior to the
commencement of each fiscal year, prepare and submit to, and obtain in
respect thereof the approval of two-thirds of the members of the Board
of Directors, a business plan and monthly operating budget in detail
for each fiscal year, monthly operating expenses and profit and loss
projections, quarterly cash flow projections and a capital expenditure
budget for the fiscal year, and including a summary of proposed
research and development activities for the forthcoming year, the
status and proposed activities for any joint venture or other licensing
arrangements with third parties, including pharmaceutical companies,
universities, hospitals and others.
(c) New Developments. Cause all technological developments,
patentable or unpatentable inventions, discoveries or improvements by
the Company's or any Subsidiary's employees or consultants to be
documented in accordance with industry practice and, where possible and
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appropriate, to file and prosecute United States and foreign patent, copyright,
trademark, or other Intellectual Property Right applications relating to and
protecting the Company's inventions, discoveries or developments on behalf of
the Company or any Subsidiary.
(d) Agreements of Officers and Employees. Cause each employee
of the Company or any Subsidiary now or hereafter employed to execute and
deliver a Nondisclosure and Assignment of Inventions Agreement (or agreement
otherwise approved by the Board of Directors of the Company, including
a majority of the Investor Directors (including Xxxxxxxxxxx Xxxxxxxx or his
successor) and cause each Key Employee of the Company or any Subsidiary
hereafter employed to execute and deliver a Non-Competition Agreement,
Nondisclosure and Assignment of Inventions (or an agreement otherwise approved
by the Board of Directors of the Company, including a majority of the Investor
Directors (including Xxxxxxxxxxx Xxxxxxxx or his successor)), and use its best
efforts to cause all consultants of the Company involved in the design, review,
evaluation or development of inventions or Intellectual Property Rights to
execute and deliver a Nondisclosure and Assignment of Inventions Agreement (or
an agreement otherwise approved by the Board of Directors, including a majority
of the Investor Directors (including Xxxxxxxxxxx Xxxxxxxx or his successor)).
The Company shall not amend or waive any of the material provisions of such
Agreements.
(e) By-laws; Meetings and Indemnification. The Company shall
at all times cause its By-laws to provide that, (A) unless otherwise required by
the laws of the state of its incorporation, (i) any two directors or (ii) any
holder or holders of at least 25% of the outstanding shares of Preferred Stock,
voting as a separate class, shall have the right to call a meeting of the Board
of Directors or stockholders, respectively, and (B) a quorum for a meeting of
the Board of Directors or any Committee hereof of which an Investor Director is
a member shall require the attendance of at least two Investor Directors
(including Xxxxxxxxxxx Xxxxxxxx or his successor). The Company shall at all
times maintain provisions in its By-laws or Certificate of Incorporation
indemnifying all directors against liability to the maximum extent permitted
under the laws of the state of its incorporation.
(f) Expenses of Directors. Promptly reimburse in full each
director of the Company for all of his reasonable out-of-pocket expenses
incurred in attending each meeting of the Board of Directors of the Company or
any Committee thereof.
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(g) Size of Board. Fix and maintain the number of Directors on
the Board of Directors of the Company at no more than six (6) members,
including one (1) representative of the holders of Common Stock, Xxxxxxxxx,
three (3) representatives of the Series A Purchasers and one (1) member
designated by the chief executive officer of the Company.
(h) Rule 144A Information. At all times during which the
Company is neither subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act, nor exempt from reporting pursuant to Rule 12g3-2(b) under
the Exchange Act, the Company will provide as promptly as practicable (in any
event not later than twenty (20) days after initial request) in written form,
upon the written request of any Purchaser or a prospective buyer of Shares from
any Purchaser, all information required by Rule 144A(d)(4)(i) of the General
Regulations promulgated by the Commission under the Securities Act ("Rule 144A
Information"). The Company further covenants, upon written request, as promptly
as practicable (in any event not later than twenty (20) days after initial
request) to cooperate with and assist any Purchaser or any member of the
National Association of Securities Dealers, Inc. system for Private Offerings
Resales and Trading through Automated Linkage ("PORTAL") in applying to
designate and thereafter maintain the eligibility of the Shares for trading
through PORTAL. The Company's obligations under this Section 4.01(h) shall at
all times be contingent upon the relevant Purchaser's obtaining from a
prospective purchaser an agreement to take all reasonable precautions to
safeguard the Rule 144A Information from disclosure to anyone other than a
person who will assist such purchaser in evaluating the purchase of the Shares.
(i) Stock Plan. The Company has created a stock option plan
and has reserved an aggregate of 2,112,000 options for the purchase of Common
Stock for issuance to employees, officers and consultants of the Company and to
members of the Company's Scientific Advisory Board. All options to be granted
(or stock issued directly) under any Stock Plan or otherwise shall vest and
become exercisable in equal annual installments over a four-year period and be
subject to a right of refusal of the Company, unless otherwise approved by a
majority of the Board of Directors including a majority of the Investor
Directors (including Xxxxxxxxxxx Xxxxxxxx or his successor).
(j) Meetings of Directors and Committees. Hold meetings of the
Company's Board of Directors not less than on a quarterly basis; if the Company
appoints an Executive Committee of the Board of Directors, such committee shall
be composed of at least three (3) Directors, including at least
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three (3) Investor Directors; and appoint and maintain a Stock
Option/Compensation Committee of the Board of Directors composed of at least
three (3) Directors, including at least three (3) Investor Directors.
4.02. Negative Covenants of the Company. The Company covenants and
agrees that until the consummation of a Qualified Public Offering, it will
comply with and observe the following negative covenants and provisions, and
will cause each Subsidiary to comply with and observe such of the following
covenants and provisions as are applicable to such Subsidiary, if and when such
Subsidiary exists, and will not without (i) the written consent or written
waiver of the holders of at least 60% of the outstanding shares of the Series A
Preferred Stock or (ii) a majority of the members of the Board of Directors
including a majority of the Investor Directors (including Xxxxxxxxxxx Xxxxxxxx
or his successor):
(a) Dealings with Affiliates. Enter into any transaction,
including, without limitation, any loans or extensions of credit or other
agreements with any employee, consultant, officer or director of the Company
or any Subsidiary or holder of five percent (5%) of any class of capital
stock of the Company or any Subsidiary, or any member of their respective
immediate families or any corporation or other entity directly or indirectly
controlled by one or more of such employees, consultants, officers,
directors or 5% stockholders or members of their immediate families, on
terms less favorable to the Company or any Subsidiary than it would obtain
in a transaction between unrelated parties except in the case of any
transaction or series of transactions entered into in the ordinary course of
business, so long as these are approved by the disinterested members of
Board of Directors (including a majority of the Investor Directors
(including Xxxxxxxxxxx Xxxxxxxx or his successor). The Company has entered
into certain agreements with Xxxxxxxxx set forth on Exhibit 4.02; which are
hereby ratified.
(b) Issuance of Equity Securities. Authorize or issue, or
obligate itself to issue, any additional shares or capital stock of the
Company of any class (including any options, warrants or other rights to
purchase capital stock), provided, however, that the provisions of this
Section 4.02(b) shall not apply to the issuance of: (i) the Conversion
Shares; or (ii) up to 2,112,000 shares of Common Stock or options, warrants
or other rights exercisable therefor, issued on or after the date hereof to
directors, officers, employees or consultants of the Company and any
Subsidiary (including members of the Scientific Advisory Board) pursuant to
any qualified or non-qualified stock option plan or agreement, employee
stock ownership plan, employee benefit plan, stock purchase agreement, stock
plan, stock restriction agreement, or consulting agreement or such
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other options, equity arrangements, agreements or plans approved by
two-thirds of the members of the Board of Directors of the Company
(including a majority of the Investor Directors (including Xxxxxxxxxxx
Xxxxxxxx or his successor)); or (iii) up to 70,000 shares of Common Stock to
certain individuals with the approval of the Board of Directors, including a
majority of the Investor Directors (including Xxxxxxxxxxx Xxxxxxxx or his
successor); or (iv) up to 200,000 shares of Series A Preferred Stock at
$1.00 per share to certain individuals with the approval of the Board of
Directors, including a majority of the Investor Directors (including
Xxxxxxxxxxx Xxxxxxxx or his successor); or (v) issuing the shares identified
on Exhibit 3.13.
(c) Transfers of Technology. Transfer, sell, dispose of,
encumber, pledge, xxxxx x xxxx on or security interest in, assign, lease,
license or donate any ownership or interest in, or material rights relating
to, any of its technology, or other Intellectual Property Rights to any
person or entity which is not a member of the "consolidated group" of the
Company and its Subsidiaries; provided, however, that this Section shall not
apply to licenses of technology or Intellectual Property Rights accomplished
in the ordinary course of business as proposed to be conducted in the
Company's Business Plan.
(d) Restrictions on Indebtedness. The Company covenants
that it will not, and will not permit any of its Subsidiaries to, incur,
create, or assume any Indebtedness other than trade debt, loans to employees
in an annual aggregate amount not to exceed $50,000 and property leases, all
as approved by the Board of Directors, including a majority of the Investor
Directors (including Xxxxxxxxxxx Xxxxxxxx or his successor).
(e) Assumptions or Guaranties of Indebtedness of Other
Persons. Assume, guarantee, endorse or otherwise become directly or
contingently liable on, or permit any Subsidiary to assume, guarantee,
endorse or otherwise become directly or contingently liable on (including,
without limitation, liability by way of agreement, contingent or otherwise,
to purchase, to provide funds for payment, to supply funds to or otherwise
invest in the debtor or otherwise to assure the creditor against loss) any
Indebtedness of any other Person, except for guaranties by endorsement of
negotiable instruments for deposit or collection in the ordinary course of
business.
(f) Amendments. Amend the Certificate of Incorporation or
By-laws of the Company.
4.03. Reporting Requirements. Until the consummation of the Initial Public
Offering, the Company will furnish the following to each Person who is the
holder of not less than 5% of the Shares issued pursuant to this Agreement:
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(a) Monthly Reports: as soon as available and in any event
within 45 days after the end of each calendar month, balance sheets,
statements of income and retained earnings and a summary statement of
monthly cash flow and expenses of the Company and its Subsidiaries for such
month and for the period commencing at the end of the previous fiscal year
and ending with the end of such month, setting forth in each case in
comparative form the corresponding figures for the corresponding period of
the preceding fiscal year, and including comparisons to the monthly budget
or business plan and an analysis of the variances from the budget or plan,
prepared in accordance with generally accepted accounting principles
consistently applied;
(b) Annual Reports: as soon as available and in any event
within 120 days after the end of each fiscal year of the Company, a copy of
the annual audit report for such year for the Company and its Subsidiaries,
including therein consolidated and consolidating balance sheets of the
Company and its Subsidiaries as of the end of such fiscal year and
consolidated and consolidating statements of income and retained earnings
and of changes in financial position of the Company and its Subsidiaries for
such fiscal year, setting forth in each case in comparative form the
corresponding figures for the preceding fiscal year, all such consolidated
statements to be duly certified by the chief financial officer of the
Company and an independent public accountant of recognized national standing
approved by the Board of Directors including a majority of the Investor
Directors (including Xxxxxxxxxxx Xxxxxxxx or his successor);
(c) Budgets and Operating Plan: as soon as available and in
any event at least 30 days before the beginning of each fiscal year of the
Company, a business plan and monthly and quarterly operating budgets for the
forthcoming fiscal year, and as soon as available and in any event within 30
days after the end of each calendar month, monthly comparisons against the
business plan and monthly operating budgets (including a summary of proposed
research and development activities, and the status and proposed activities
for any joint venture or other licensing arrangements with any third party).
(d) Notice of Adverse Changes: promptly after the
occurrence thereof and in any event within five (5) business days after it
becomes aware of each occurrence, notice of any material adverse change in
the business, assets, Intellectual Property Rights, management, licensing
activities, operations or financial condition of the Company; and
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(e) Reports and Other Information: promptly upon receipt,
publication, commencement or occurrence provide to each Purchaser copies of
all material consulting reports, notices of all material actions, suits or
proceedings, copies of all accountant's reviews, and reports to management,
and such other information as the Company shall make available to its
directors or stockholders or the Purchasers shall reasonably request.
ARTICLE V
REGISTRATION RIGHTS
5.01. "Piggy-Back" Registrations. If at any time the Company shall
determine to register for its own account or the account of others under the
Securities Act (including pursuant to the Qualified Public Offering, the Initial
Public Offering or a demand for registration of any stockholder of the Company
other than the Purchasers) any of its equity securities, other than on Form S-8
or Form S-4 or their then equivalents or otherwise relating to shares of Common
Stock to be issued solely in connection with any acquisition of any entity or
business or shares of Common Stock issuable in connection with stock option or
other employee benefit plans, it shall send to each holder of Registrable
Shares, including each holder who has the right to acquire Registrable Shares,
written notice of such determination and, if within ten (10) business days after
receipt of such notice, such holder shall so request in writing, the Company
shall use its best efforts to include in such registration statement all or any
part of the Registrable Shares such holder requests to be registered.
If, in connection with any offering involving an underwriting, the
managing underwriter shall impose a limitation on the number of shares of such
Common Stock which may be included in the registration statement because, in its
judgment, such limitation is necessary to effect an orderly public distribution,
then the Company shall be obligated to include in such registration statement
only such limited portion (which may be none) of the Registrable Shares with
respect to which such holder has requested inclusion pursuant hereto as may
reasonably be determined by the managing underwriters; provided, however, as
between the Company, other stockholders holding contractual registration rights,
and the holders of Registrable Shares, in no event shall the Registrable Shares
included in such offering be limited to less than twenty-five percent (25%) of
the aggregate shares offered. Any inclusion of Registrable Shares in the
offering, when the managing underwriter has so limited the number of Registrable
Shares that may be included in the offering, shall be allocated pro rata among
the holders of Registrable Shares (or their permitted assigns) seeking to
include such shares and the
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holders of other registration rights seeking to include their shares, in
proportion to the number of Registrable Shares (whether or not such shares are
sought to be included in such offering) held by such persons. No incidental
right under this Section 5.01 shall be construed to limit any registration
required under Section 5.02. The obligations of the Company under this Section
5.01 may be waived at any time upon the written consent of holders of sixty
percent (60%) in interest of the Conversion Shares who are participating in the
offering and shall expire on the seventh anniversary following the consummation
of an Initial Public Offering or, if earlier, as set forth in Section 5.15. The
Company shall have the right to withdraw any registration initiated by it
pursuant to Section 5.01.
5.02. Required Registrations. If on any one occasion (providing the
offering is consummated) one or more holders of at least 60% of the Shares shall
notify the Company in writing that it or they desire to offer or cause to be
offered for public sale at least thirty percent (30%) of the Registrable Shares,
the Company will so notify all holders of Registrable Shares, including all
holders who have a right to acquire Registrable Shares. Upon written request of
any holder given within fifteen (15) days after the receipt by such holder from
the Company of such notification, the Company will use its best efforts to cause
such of the Registrable Shares as may be requested by any holder thereof
(including the holder or holders giving the initial notice of intent to offer)
to be registered under the Securities Act as expeditiously as possible on Form
S-1 or Form S-18 or their respective successor registration statement forms
(providing the offering is consummated). The Company shall not be required to
effect more than one registration pursuant to this Section 5.02. If the Company
determines to include shares to be sold by it or by other selling shareholders
in any registration request pursuant to this Section 5.02, such registration
shall be deemed to have been a "piggy back" registration under Section 5.01, and
not a "demand" registration under this Section 5.02 if the holders of
Registrable Shares are unable to include in any such registration statement
eighty-five percent (85%) of the Registrable Shares initially requested for
inclusion in such registration statement. The Company shall not be required to
effect a registration pursuant to this Section 5.02 unless the minimum market
value of any offering and registration of Registrable Shares made pursuant
thereto is at least $3,000,000, before calculation of underwriting discounts and
commissions. The holders of Registrable Shares may not exercise their rights
under this Section 5.02 until the earlier to occur of (i) forty-eight (48)
months following the date of the Closing or (ii) 180 days after the
effectiveness of any registration statement covering the Initial Public
Offering. No request for registration under this Section 5.02 may be made within
the one hundred and eighty day period after the effective date of a registration
statement filed by the Company or while the Company
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is in the process of preparing a registration statement. The Company shall have
the right to delay any registration under this section for up to 90 days if the
Company's Board of Directors reasonably determines such delay is necessary in
view of the Company's current circumstances.
5.03. Registrations on Forms S-2 or S-3. In addition to the rights
provided the holder of Registrable Shares in Sections 5.01 and 5.02 above, if
the registration of Registrable Shares under the Securities Act can be effected
on Forms S-2 or S-3 (or any similar form promulgated by the Commission), then
upon the written request of one or more holders of a majority of the Registrable
Shares, the Company will so notify each holder of Registrable Shares, including
each holder who has a right to acquire Registrable Shares, and then will, as
expeditiously as possible, use its best efforts to effect qualification and
registration under the Securities Act on Forms S-2 or S-3 of all or such portion
of the Registrable Shares as the holder or holders shall specify; provided,
however, the Company shall not be required to effect a registration pursuant to
this Section 5.03 unless the market value of the Registrable Shares to be sold
in any such registration shall be estimated to be at least $1,000,000 at the
time of filing such registration statement, and further provided that the
Company shall not be required to effect more than two (2) registrations during
any twelve (12) month period pursuant to this Section 5.03 and four (4)
registrations in the aggregate under this Section 5.03. No request for
registration under this Section 5.03 may be made within the one hundred and
eighty day period after the effective date of a registration statement filed by
the Company or while the Company is in the process of preparing a registration
statement.
5.04. Effectiveness. The Company will use its best efforts to maintain
the effectiveness for up to 90 days (or such shorter period of time as the
underwriters need to complete the distribution of the registered offering, or
six months in the case of any registration relating to Registrable Shares) of
any registration statement pursuant to which any of the Registrable Shares are
being offered, and from time to time will amend or supplement such registration
statement and the prospectus contained therein to the extent necessary to comply
with the Securities Act and any applicable state securities statute or
regulation. The Company will also provide each holder of Registrable Shares with
as many copies of the prospectus contained in any such registration statement as
it may reasonably request. For a period not to exceed 60 days, the Company shall
not be obligated to prepare and file, or be prevented from delaying or
abandoning, a registration statement pursuant to this Agreement at any time when
the Company, in its good faith judgment with advice of counsel, reasonably
believes
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(a) that the filing thereof at the time requested, or the
offering of Registrable Shares pursuant thereto, would materially and
adversely affect (a) a pending or scheduled public offering of the Company's
securities, (b) an acquisition, merger, recapitalization, consolidation,
reorganization or similar transaction by or of the Company, (c) pre-existing
and continuing negotiations, discussions or pending proposals with respect
to any of the foregoing transactions, or (d) the financial condition of the
Company in view of the disclosure of any pending or threatened litigation,
claim, assessment or governmental investigation which may be required
thereby; and
(b) that the failure to disclose any material information
with respect to the foregoing would cause a violation of the Securities Act
or the Exchange Act.
5.05. Indemnification of Holder of Registrable Shares. In the event
that the Company registers any of the Registrable Shares under the Securities
Act, the Company will indemnify and hold harmless each holder and each
underwriter of Registrable Shares (including their officers, directors,
affiliates and partners and including any broker or dealer through whom
Registrable Shares may be sold in such registration) and each Person, if any,
who controls such holder or any such underwriter within the meaning of Section
15 of the Securities Act from and against any and all losses, claims, damages,
expenses or liabilities, joint or several, to which they or any of them become
subject under the Securities Act, applicable state securities laws or under any
other statute or at common law or otherwise, as incurred, and, except as
hereinafter provided, will reimburse each such holder, each such underwriter and
each such controlling Person, if any, for any legal or other expenses reasonably
incurred by them or any of them in connection with investigating or defending
any actions whether or not resulting in any liability, as incurred, insofar as
such losses, claims, damages, expenses, liabilities or actions arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the registration statement, in any preliminary or amended
preliminary prospectus or in the final prospectus (or the registration statement
or prospectus as from time to time amended or supplemented by the Company) or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading, or any violation by the Company of any rule
or regulation promulgated under the Securities Act or any state securities laws
applicable to the Company and relating to action or inaction required of the
Company in connection with such registration, unless (i) such untrue statement
or alleged untrue statement or omission or alleged omission was made in such
registration statement, preliminary or amended preliminary prospectus or final
prospectus in reliance upon and in conformity with information
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furnished in writing to the Company in connection therewith by any such holder
of Registrable Shares (in the case of indemnification of such holder), any such
underwriter (in the case of indemnification of such underwriter) or any such
controlling Person (in the case of indemnification of such controlling person)
expressly for use therein, or unless (ii) in the case of a sale directly by such
holder of Registrable Shares (including a sale of such Registrable Shares
through any underwriter retained by such holder of Registrable Shares to engage
in a distribution solely on behalf of such holder of Registrable Shares), such
untrue statement or alleged untrue statement or omission or alleged omission was
contained in a preliminary prospectus and corrected in a final or amended
prospectus copies of which were delivered to such holder of Registrable Shares
or such underwriter on a timely basis, and such holder of Registrable Shares
failed to deliver a copy of the final or amended prospectus at or prior to the
confirmation of the sale of the Registrable Shares to the person asserting any
such loss, claim, damage or liability in any case where such delivery is
required by the Securities Act.
Promptly after receipt by any holder of Registrable Shares, any
underwriter or any controlling Person of notice of the commencement of any
action in respect of which indemnity may be sought against the Company, such
holder of Registrable Shares, or such underwriter or such controlling person, as
the case may be, shall notify the Company in writing of the commencement thereof
(provided, that failure to so notify the Company shall not relieve the Company
from any liability it may have hereunder, except to the extent prejudiced by
such failure) and, subject to the provisions hereinafter stated, the Company
shall be entitled to assume the defense of such action (including the employment
of counsel, who shall be counsel reasonably satisfactory to such holder of
Registrable Shares, such underwriter or such controlling Person, as the case may
be) and the payment of expenses insofar as such action shall relate to any
alleged liability in respect of which indemnity may be sought against the
Company.
Such holder of Registrable Shares, any such underwriter or any
such controlling Person shall have the right to employ separate counsel in any
such action and to participate in the defense thereof but the fees and expenses
of such counsel subsequent to any assumption of the defense by the Company shall
not be at the expense of the Company unless the employment of such counsel has
been specifically authorized in writing by the Company; provided, however, that,
if the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be reasonable defenses available to it which are different from
or additional to those available to the indemnifying party or if the interests
of the indemnified party reasonably may be deemed to conflict with the interests
of the
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indemnifying party, the indemnified party shall have the right to select a
separate counsel and to assume such legal defenses and otherwise to participate
in the defense of such action, with the expenses and fees of such separate
counsel and other expenses related to such participation to be reimbursed by the
indemnifying party as incurred. At any time, any holder of Registrable Shares
may select separate counsel and assume its own legal defense with the expenses
and fees of such separate counsel and other expenses related to such separate
counsel to be borne by such holder electing separate counsel. The Company shall
not be liable to indemnify any Person for any settlement of any such action
effected without the Company's written consent. The Company shall not, except
with the approval of each party being indemnified under this Section 5.05,
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to the parties being so indemnified of a release from all liability in respect
to such claim or litigation.
In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which any holder of
Registrable Shares exercising rights under this Article V, or any controlling
person of any such holder, makes a claim for indemnification pursuant to this
Section 5.05 but it is judicially determined (by the entry of a final judgment
or decree by a court of competent jurisdiction and the expiration of time to
appeal or the denial of the last right of appeal) that such indemnification may
not be enforced in such case notwithstanding the fact that this Section 5.05
provides for indemnification in such case, then, the Company and such holder
will contribute to the aggregate losses, claims, damages or liabilities to which
they may be subject (after contribution from others) in such proportion as is
appropriate to reflect the relative fault of the Company on the one hand and of
the holder of Registrable Shares on the other in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative fault of the
Company on the one hand and of the holder of Registrable Shares on the other
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company on the one
hand or by the holder of Registrable Shares on the other, and each party's
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission; provided, however, that, in any such case,
(A) no such holder will be required to contribute any amount in excess of the
public offering price of all such Registrable Shares offered by it pursuant to
such registration statement; and (B) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
will be entitled to contribution from any person or entity who was not guilty of
such fraudulent misrepresentation.
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The indemnities provided in this Section 5.05 shall survive the transfer
of any Registrable Shares by such holder.
5.06. Indemnification of Company. In the event that the Company
registers any of the Registrable Shares under the Securities Act, each holder of
the Registrable Shares so registered will indemnify and hold harmless the
Company, each of its directors, each of its officers who have signed or
otherwise participated in the preparation of the registration statement, each
underwriter of the Registrable Shares so registered (including any broker or
dealer through whom such of the shares may be sold) and each Person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act from
and against any and all losses, claims, damages, expenses or liabilities, joint
or several, to which they or any of them may become subject under the Securities
Act, applicable state securities laws or under any other statute or at common
law or otherwise, and, except as hereinafter provided, will reimburse the
Company and each such director, officer, underwriter or controlling Person for
any legal or other expenses reasonably incurred by them or any of them in
connection with investigating or defending any actions whether or not resulting
in any liability, insofar as such losses, claims, damages, expenses, liabilities
or actions arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the registration statement, in any
preliminary or amended preliminary prospectus or in the final prospectus (or in
the registration statement or prospectus as from time to time amended or
supplemented) or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary in
order to make the statements therein not misleading, but only insofar as any
such statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Company in connection therewith by such
holder of Registrable shares expressly for use therein; provided, however, that
such holder's obligations hereunder shall be limited to an amount equal to the
proceeds received by such holder of Registrable Shares sold in such
registration.
Promptly after receipt of notice of the commencement of any
action in respect of which indemnity may be sought against such holder of
Registrable Shares, the Company shall notify such holder of Registrable Shares
in writing of the commencement thereof (provided, that failure to so notify such
holder shall not relieve such holder from any liability it may have hereunder,
except to the extent prejudiced by such failure), and such holder of Registrable
Shares shall, subject to the provisions hereinafter stated, be entitled to
assume the defense of such action (including the employment of counsel, who
shall be counsel reasonably satisfactory to the Company) and the payment of
expenses insofar as such action shall relate to the alleged
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liability in respect of which indemnity may be sought against such holder of
Registrable Shares. The Company and each such director, officer, underwriter or
controlling Person shall have the right to employ separate counsel in any such
action and to participate in the defense thereof, but the fees and expenses of
such counsel subsequent to any assumption of the defense by such holder of
Registrable Shares shall not be at the expense of such holder of Registrable
Shares unless employment of such counsel has been specifically authorized in
writing by such holder of Registrable Shares. Such holder of Registrable Shares
shall not be liable to indemnify any Person for any settlement of any such
action effected without such holder's written consent.
In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which the Company exercising
its rights under this Article V, makes a claim for indemnification pursuant to
this Section 5.06, but it is judicially determined (by the entry of a final
judgment or decree by a court of competent jurisdiction and the expiration of
time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding that this
Section 5.06 provides for indemnification, in such case, then, the Company and
such holder will contribute to the aggregate losses, claims, damages or
liabilities to which they may be subject (after contribution from others) in
such proportion as is appropriate to reflect the relative fault of the Company
on the one hand and of the holder of Registrable Shares on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand and of the
holder of Registrable Shares on the other shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or by the holder of
Registrable Shares on the other, and each party's relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission; provided, however, that, in any such case, (A) no such holder will be
required to contribute any amount in excess of the public offering price of all
such Registrable Shares offered by it pursuant to such registration statement;
and (B) no person or entity guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) will be entitled to contribution
from any person or entity who was not guilty of such fraudulent
misrepresentation.
5.07. Exchange Act Registration. If the Company at any time shall
list any class of equity securities of the type which may be issued upon the
conversion of the Preferred Stock on any national securities exchange and shall
register such class of equity securities under the Exchange Act, the Company
will, at
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its expense, simultaneously list on such exchange and maintain such listing of,
the Common Stock. If the Company becomes subject to the reporting requirements
of either Section 13 or Section 15(d) of the Exchange Act, the Company will use
its best efforts to timely file with the Commission such information as the
Commission may require under either of said Sections; and in such event, the
Company shall use its best efforts to take all action as may be required as a
condition to the availability of Rule 144 or Rule 144A under the Securities Act
(or any successor exemptive rule hereinafter in effect) with respect to such
Common Stock. The Company shall furnish to any holder of Registrable Shares
forthwith upon request (i) a written statement by the Company as to its
compliance with the reporting requirements of Rule 144, (ii) a copy of the most
recent annual or quarterly report of the Company as filed with the Commission,
and (iii) such other reports and documents as a holder may reasonably request in
availing itself of any rule or regulation of the Commission allowing a holder to
sell any such Registrable Securities without registration. After the occurrence
of the Initial Public Offering, the Company agrees to use its best efforts to
facilitate and expedite transfers of the Shares pursuant to Rule 144 under the
Securities Act, which efforts shall include timely notice to its transfer agent
to expedite such transfers of Shares.
5.08. Damages. The Company recognizes and agrees that the holder of
Registrable Shares will not have an adequate remedy if the Company fails to
comply with this Article V and that damages may not be readily ascertainable,
and the Company expressly agrees that, in the event of such failure, it shall
not oppose an application by the holder of Registrable Shares or any other
Person entitled to the benefits of this Article V requiring specific performance
of any and all provisions hereof or enjoining the Company from continuing to
commit any such breach of this Article V.
5.09. Further Obligations of the Company. Whenever under the
preceding Sections of this Article V, the Company is required hereunder to
register Registrable Shares, it agrees that it shall also do the following:
(a) Furnish to each selling holder such copies of each
preliminary and final prospectus and such other documents as said holder may
reasonably request to facilitate the public offering of its Registrable
Shares;
(b) Use its best efforts to register or qualify the
Registrable Shares covered by said registration statement under the
applicable securities or "blue sky" laws of such jurisdictions as any
selling holder may reasonably request; provided, however, that the Company
shall not be obligated to qualify to do business in any jurisdictions where
it is not then so qualified or to take any action which would subject it to
the service of process in suits other than those arising out of the offer or
sale of the securities covered by the registration statement in any
jurisdiction where it is not then so subject;
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(c) Furnish to each selling holder a signed counterpart,
addressed to the selling holders, of
(i) opinions of counsel for the Company, dated the
effective date of the registration statement, and covering such matters as
are required by the Securities Act and such matters as may reasonably be
requested by the underwriters, and
(ii) "comfort" letters signed by the Company's
independent public accountants who have examined and reported on the
Company's financial statements included in the registration statement, to
the extent permitted by the standards of the American Institute of Certified
Public Accountants, as the Company is required to deliver or cause the
delivery of to the underwriters in an underwritten public offering of
securities;
(d) Permit each selling holder of Registrable Shares who
holds not less than 5% of the Registrable Shares or his counsel or other
representatives to inspect and copy such corporate documents and records as
may reasonably be requested by them, after reasonable advance notice and
without undue interference with the operation of the Company's business;
(e) Furnish to each selling holder of Registrable Shares a
copy of all documents filed with and all correspondence from or to the
Commission in connection with any such offering of securities;
(f) Use its best efforts to insure the obtaining of all
necessary approvals from the National Association of Securities Dealers,
Inc; and
(g) Otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available to
its security holders, as soon as reasonably practicable, an earning
statement covering the period of at least twelve months, but not more than
eighteen months, beginning with the first month after the effective date of
the registration statement covering the Initial Public Offering, which
earning statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder.
Whenever under the preceding Sections of this Article V the
holders of Registrable Shares are registering such shares pursuant to any
registration statement, each such holder agrees to (i) timely provide to the
Company, at its request, such information and materials as it may reasonably
request in order
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to effect the registration of such Registrable Shares, (ii) convert all shares
of Preferred Stock included in any registration statement to shares of Common
Stock, such conversion to be effective at the closing of such offering pursuant
to such registration statement, and (iii) if the offering is underwritten,
execute an underwriting agreement containing customary conditions.
5.10. Expenses. In the case of each registration effected under
Section 5.01, 5.02 or 5.03, the Company shall bear all reasonable costs and
expenses of each such registration on behalf of the selling holders of
Registrable Shares, including, but not limited to, the Company's printing, legal
and accounting fees and expenses, Commission and NASD filing fees and "Blue Sky"
fees and expenses and the reasonable fees and disbursements (such fees not to
exceed $25,000 for any registration) of one counsel for the selling holders of
Registrable Shares in connection with the registration of their Registrable
Shares; provided, however, that the Company shall have no obligation to pay or
otherwise bear any portion of the underwriters' commissions or discounts or
transfer taxes attributable to the Registrable Shares being offered and sold by
the holders of Registrable Shares, or the fees and expenses of more than one
counsel for the selling holders of Registrable Shares in connection with the
registration of the Registrable Shares. The Company shall pay all expenses of
the holders of the Registrable Shares in connection with any registration
initiated pursuant to this Article V which is withdrawn, delayed or abandoned by
the Company, except if such withdrawal, delay or abandonment is caused by the
fraud, material misstatement or omission of a material fact by a holder of
Registrable Shares to be included in such registration.
5.11. Approval of Underwriter. Any managing underwriter engaged in
any registration made pursuant to Section 5.02 shall be a nationally recognized
firm requiring the approval in writing of the holders of 60% of the Registrable
Shares requesting such registration.
5.12. Transferability. For all purposes of Article V of this
Agreement, the holder of Registrable Shares shall include not only the
Purchasers named in Exhibit 1.01 hereof but (i) any assignee or transferee of
the Registrable Shares who acquires at least ten percent (10%) of the
Registrable Shares and who is not a competitor of the Company, or (ii) any
general or limited partner or any officer or director of any Purchaser or their
affiliates, including, but not limited to, their immediate family, irrevocable
trusts for estate planning purposes and personal representatives; provided,
however, that such assignee or transferee agrees in writing at the time it
acquires such shares to be bound by all of the provisions of this Agreement,
including, without limitation, Section 5.13 hereof.
00
- 00 -
0.00. "Xxxx-Xx" Xxxxxxxxx.
(x) Each holder of Registrable Shares agrees, if so
requested by the Company and an underwriter of Common Stock or other
securities of the Company, not to sell, grant any option or right to buy or
sell, or otherwise transfer or dispose of in any manner, whether in
privately-negotiated or open-market transactions, any Common Stock or other
securities of the Company held by it during the 90-day period following the
effective date of a registration statement filed pursuant to the Initial
Public Offering, provided that:
(i) Such agreement shall apply only to the Initial
Public Offering; and
(ii) All holders of Registrable Shares, any other
security holders whose securities are included in such registration
statement, and all officers, directors and Key Employees of the Company
shall also enter into similar agreements.
Such "lock-up" agreement shall be in writing and in form and
substance satisfactory to the Company and such underwriter. The Company may
impose stop-transfer instructions with respect to the shares subject to the
foregoing restrictions until the end of said 90-day period. No holder of
Registrable Shares shall be so restricted unless all holders are similarly and
proportionately restricted.
5.14. Mergers, Etc. The Company shall not, directly or indirectly, enter
into any merger, consolidation or reorganization in which the Company shall not
be the surviving corporation unless the proposed surviving corporation shall,
prior to such merger, consolidation or reorganization, agree in writing to
assume the obligations of the Company under Article V of this Agreement, and for
that purpose references hereunder to Registrable Shares shall be deemed to be
references to the securities which the Purchasers would be entitled to receive
in exchange for Registrable Shares under any such merger, consolidation or
reorganization; provided, however, that the provisions of this Section 5.14
shall not apply in the event of any merger, consolidation, or reorganization in
which the Company is not the surviving corporation if all stockholders are
entitled to receive in exchange for their Registrable Shares consideration
consisting solely of (i) cash, (ii) securities of the acquiring corporation
which may be immediately sold to the public without registration under the
Securities Act, or (iii) securities of the acquiring corporation which the
acquiring corporation has agreed to register within 90 days of completion of the
transaction for resale to the public pursuant to the Securities Act.
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5.15. Termination; Further Registration Rights. Notwithstanding any other
term or provision of this Article V, at such time as any Purchaser or transferee
owning less than 2% of the outstanding Common Stock of the Company (on an
as-converted basis) is free to sell the Registrable Shares without registration
pursuant to Rule 144(k) of the Securities Act, all rights of such Purchaser as
to such Registrable Shares under Sections 5.01, 5.02 and 5.03 of this Article V
shall terminate. The Company shall not grant to any third party any registration
rights so long as any of the registration rights under this Agreement remains in
effect without the consent of the holders of 60% of the then outstanding
Registrable Shares.
ARTICLE VI
RIGHT OF FIRST REFUSAL
6.01. Right of First Refusal. Before the Company shall issue, sell or
exchange, agree or obligate itself to issue, sell or exchange, or reserve or set
aside for issuance, sale or exchange, any (i) shares of Common Stock, (ii) any
other equity security of the Company, including without limitation, shares of
Preferred Stock, (iii) any convertible debt security of the Company, including
without limitation, any debt security which by its terms is convertible into or
exchangeable for any equity security of the Company, (iv) any security of the
Company that is a combination of debt and equity, or (v) any option, warrant or
other right to subscribe for, purchase or otherwise acquire any interest
relating to such equity or debt security of the Company, the Company shall, in
each case, first offer to sell such securities (the "Offered Securities") to
those Purchasers then holding capital stock of the Company as follows: The
Company shall offer to sell to each Purchaser (a) that portion of the Offered
Securities as the number of shares of Preferred Stock (on an as-converted basis)
and Conversion Shares then held by a Purchaser bears to the total number of
outstanding shares of capital stock of the Company including the shares issuable
upon conversion of the Preferred Stock (the "Basic Amount"), and (b) such
additional portion of the Offered Securities as such Purchaser shall indicate it
will purchase should the other Purchasers subscribe for less than their Basic
Amounts (the "Undersubscription Amount"), at a price and on such other terms as
shall have been specified by the Company in writing delivered to the Purchasers
(the "Offer"), which Offer by its terms shall remain open and irrevocable for a
period of twenty (20) days from receipt of the Offer. This right of first
refusal shall only apply to Purchasers who hold at least 5% of the then total
outstanding shares of Series A Preferred Stock or Conversion Shares and to the
Bessemer Purchasers holding in the aggregate at least 5% of the then outstanding
shares of Series A Preferred Stock or Conversion Shares.
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6.02. Notice of Acceptance. Notice of each Purchaser's intention to
accept, in whole or in part, any Offer made pursuant to Section 6.01 shall be
evidenced by a writing signed by such Purchaser and delivered to the Company
prior to the end of the 20-day period of such offer, setting forth such of the
Purchaser's Basic Amount as such Purchaser elects to purchase and, if such
Purchaser shall elect to purchase all of its Basic Amount, such
Undersubscription Amount as such Purchaser shall elect to purchase (the "Notice
of Acceptance"). If the Basic Amounts subscribed for by all Purchasers are less
than the total Offered Securities, then each Purchaser who has set forth
Undersubscription Amounts in its Notice of Acceptance shall purchase, in
addition to the Basic Amounts subscribed for, all Undersubscription Amounts it
has subscribed for; provided, however, that should the Undersubscription Amounts
subscribed for exceed the difference between the Offered Securities and the
Basic Amounts subscribed for (the "Available Undersubscription Amount"), each
Purchaser who has subscribed for any Undersubscription Amount shall purchase
only that portion of the Available Undersubscription Amount as the
Undersubscription Amount subscribed for by such Purchaser bears to the total
Undersubscription Amounts subscribed for by all Purchasers, subject to rounding
by the Board of Directors to the extent it reasonably deems necessary.
6.03. Conditions to Acceptances and Purchase.
(a) Permitted Sales of Refused Securities. In the
event that Notices of Acceptance are not given by the Purchasers in respect
of all the Offered Securities, the Company shall have ninety (90) days from
the end of said 20-day period to sell any such Offered Securities as to
which a Notice of Acceptance has not been given by the Purchasers (the
"Refused Securities") to the Person or Persons specified in the Offer, but
only for cash and otherwise in all respects upon terms and conditions,
including, without limitation, unit price and interest rates, which are no
more favorable, in the aggregate, to such other Person or Persons or less
favorable to the Company than those set forth in the Offer.
(b) Reduction in Amount of Offered Securities. In
the event the Company shall propose to sell less than all of the Refused
Securities (any such sale to be in the manner and on the terms specified in
Section 6.03(a) above), then each Purchaser shall reduce the number of
shares or other units of the Offered Securities specified in its respective
Notices of Acceptance to an amount which shall be not less than the amount
of the Offered Securities which the Purchaser elected to purchase pursuant
to Section 6.02 multiplied by a fraction, (i) the numerator of which shall
be the amount of Offered Securities which the Company actually proposes to
sell, and (ii) the denominator of which shall be the amount
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of all Offered Securities. In the event that any Purchaser so elects to
reduce the number or amount of Offered Securities specified in its
respective Notices of Acceptance, the Company may not sell or otherwise
dispose of more than the reduced amount of the Offered Securities until such
securities have again been offered to the Purchasers in accordance with
Section 6.01.
(c) Closing. Upon the closing, which shall include
full payment to the Company, of the sale to such other Person or Persons of
all or less than all the Refused Securities, the Purchasers shall purchase
from the Company, and the Company shall sell to the Purchasers, the number
of Offered Securities specified in the Notices of Acceptance, as reduced
pursuant to Section 6.03(b) if the Purchasers have so elected, upon the
terms and conditions specified in the Offer. The purchase by the Purchasers
of any Offered Securities is subject in all cases to the preparation,
execution and delivery by the Company and the Purchasers of a purchase
agreement relating to such Offered Securities reasonably satisfactory in
form and substance to the Purchasers and their respective counsel.
6.04. Further Sale. In each case, any Offered Securities not
purchased by the Purchasers or other Person or Persons in accordance with
Section 6.03 may not be sold or otherwise disposed of until they are again
offered to the Purchasers under the procedures specified in Sections 6.01, 6.02
and 6.03.
6.05. Termination and Waiver of Right of First Refusal. The rights of
the Purchasers under this Article VI may be waived only upon the prior written
consent of the holders of 60% of the outstanding shares of Preferred Stock and
shall terminate immediately prior to the effectiveness of the registration
statement with respect to the Initial Public Offering, but expressly conditioned
on the consummation of the Initial Public Offering.
6.06. Exception. The rights of the Purchasers under this Article VI
shall not apply to:
(a) Common Stock issued as a stock dividend to
holders of Common Stock or upon any subdivision or combination of shares of
Common Stock;
(b) Preferred Stock issued as a dividend to holders
of Preferred Stock upon any subdivision or combination of shares of
Preferred Stock;
(c) the Conversion Shares;
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(d) up to 2,112,000 shares of Common Stock, or
options or warrants exercisable therefor, issued on or after the date hereof
to directors, officers, employees or consultants of the Company and any
Subsidiary (including members of the Scientific Advisory Board) pursuant to
any qualified or non-qualified stock option plan or agreement, employee
stock ownership plan, employee benefit plan, stock purchase agreement, stock
plan, stock restriction agreement, or consulting agreement or such other
options, warrants, equity arrangements, agreements or plans approved by
two-thirds of the members of the Board of Directors of the Company
(including a majority of the Investor Directors (including Xxxxxxxxxxx
Xxxxxxxx or his successor);
(e) up to 70,000 shares of Common Stock and up to
200,000 shares of Series A Preferred Stock to certain individuals with the
approval of the Board of Directors including a majority of the Investor
Directors (including Xxxxxxxxxxx Xxxxxxxx or his successor);
(f) shares of capital stock or options or warrants
therefor, to be issued to equipment leasing organizations in connection with
any equipment leasing arrangements to which the Company is a party and which
have been approved by the Board of Directors including a majority of the
Investor Directors (including Xxxxxxxxxxx Xxxxxxxx or his successor); or
(g) shares of capital stock issued in connection
with a merger or acquisition approved by the Board of Directors including a
majority of the Investor Directors (including Xxxxxxxxxxx Xxxxxxxx or his
successor); or
(h) shares of capital stock set forth on Exhibit
3.13.
Each of the foregoing numbers shall be subject to equitable
adjustment in the event of any stock dividend, stock split, combination,
reorganization, recapitalization, reclassification or other similar event.
In addition to amendments pursuant to Section 8.02, the
provisions regarding Notice of Offer, Notice of Acceptance and all other
provisions provided for in Section 6.01 through 6.03 and 6.06 may be waived or
amended by those Purchasers holding at least 60% of the Shares who have elected
to exercise their rights under this Article VI to participate in any financing
with respect to a transaction effected under this Article for the purpose of
effecting a transaction on a more expeditious basis.
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ARTICLE VII
DEFINITIONS AND ACCOUNTING TERMS
7.01. Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"Accredited Investor" shall have the meaning assigned to that
term in Rule 501 under the Securities Act.
"Agreement" means this Preferred Stock Purchase Agreement as
from time to time amended and in effect between the parties, including all
Exhibits hereto.
"Basic Amount" shall have the meaning assigned to that term in
Section 6.01.
"Bessemer Purchasers" shall mean those Purchasers other than
Technology Leaders L.P., Technology Leaders Offshore C.V. and Bessemer Venture
Partners II L.P.
"Board of Directors" means the board of directors of the
Company as constituted from time to time.
"Closing" shall have the meaning assigned to that term in
Section 1.03.
"Commission" shall mean the Securities and Exchange Commission
or any other federal agency then administering the Securities Act or Exchange
Act.
"Common Stock" includes (a) the Company's Common Stock, $.001
par value, as authorized on the date of this Agreement, (b) any other capital
stock of any class or classes (however designated) (except for Preferred Stock)
of the Company, authorized on or after the date hereof, the holders of which
shall have the right, without limitation as to amount, either to all or to a
share of the balance of current dividends and liquidating dividends after the
payment of dividends and distributions on any shares entitled to preference, and
the holders of which shall ordinarily, in the absence of contingencies or in the
absence of any provision to the contrary in the Company's Certificate of
Incorporation, be entitled to vote for the election of directors of the Company
(even though the right so to vote has been suspended by the happening of such a
contingency or provision), and (c) any other securities into which or for which
any of the securities described in (a) or (b) may be converted or exchanged
pursuant to a plan of recapitalization, reorganization, merger, sale of assets
or otherwise.
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"Company" means Myco Pharmaceuticals Inc., a Delaware
corporation, and its successors and assigns.
"Consolidated" and "consolidating" when used with reference to
any term defined herein mean that term as applied to the accounts of the Company
and its Subsidiaries consolidated in accordance with generally accepted
accounting principles consistently applied throughout reporting periods.
"Conversion Shares" shall have the meaning assigned to that
term in Section 1.02 of this Agreement.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of the
Commission (or of any other Federal agency then administering the Exchange Act)
thereunder, all as the same shall be in effect at the time.
"Indebtedness" means (i) any liability for borrowed money or
evidenced by a note or similar obligation given in connection with the
acquisition of any property or other assets (other than trade accounts payable
incurred in the ordinary course of business); (ii) all guaranties, endorsements
and other contingent obligations, in respect of Indebtedness of others, whether
or not the same are or should be reflected in the Company's balance sheet (or
the notes thereto), except guaranties by endorsement of negotiable instruments
for deposit or collection or similar transactions in the ordinary course of
business; and (iii) the present value of any lease payments due under leases
required to be capitalized in accordance with applicable Statements of Financial
Accounting Standards, determined by discounting all such payments at the
interest rate determined in accordance with applicable Statements of Financial
Accounting Standards.
"Initial Public Offering" means the first underwritten public
offering of Common Stock of the Company and offered on a "firm commitment" basis
pursuant to an offering registered under the Securities Act with the Commission
on Form S-l, Form S-18 or their then equivalents.
"Intellectual Property Rights" means any and all, whether
domestic or foreign, patents, patent applications, patent rights, trade secrets,
confidential business information, formula, biological or chemical processes,
compounds, cell lines, fungi, yeast, laboratory notebooks, algorithms,
copyrights, mask works, claims of infringement against third parties, licenses,
permits, license rights to or of technologies, contract rights with employees,
consultants or third parties, trademarks,
42
-41-
trademark rights, inventions and discoveries, and other such rights generally
classified as intangible, intellectual property assets in accordance with
generally accepted accounting principles.
"Investor Directors" mean those directors of the Company who
are representatives of the Purchasers, initially Xx. Xxxxxx Xxxxxxxxxx,
Xxxxxxxxxxx Xxxxxxxx and Xx. Xxxx X. Xxxxxxxx.
"Key Employee" means and includes the Chairman, President;
Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, any
Vice President or Director of any functional area such as research and
development, engineering, technology, sales and marketing, finance and
administration or any other individual so designated by the Board of Directors
of the Company or by including a majority of the Investor Directors (including
Xxxxxxxxxxx Xxxxxxxx or his successor).
"Non-competition Agreement" shall have the meaning assigned to
that term in Section 2.02(i).
"Nondisclosure and Assignment of Inventions Agreement" shall
have the meaning assigned to that term in Section 2.20(j).
"Notice of Acceptance" shall have the meaning assigned to that
term in Section 6.02.
"Offer" shall have the meaning assigned to that term in Section
6.01.
"Offered Securities" shall have the meaning assigned to that
term in Section 6.01.
"Person" means an individual, corporation, partnership, joint
venture, trust, university, or unincorporated organization, or a government or
any agency or political subdivision thereof.
"Preferred Shares" shall have the meaning assigned to that term
in Section 1.01.
"Purchaser" and "Purchasers" shall have the meaning assigned to
that term in Section 1.01 of this Agreement and shall include the original
Purchasers and also any other permitted transferee.
"Qualified Public Offering" means a fully underwritten, firm
commitment public offering pursuant to an effective registration under the
Securities Act covering the offer and sale by the Company of its Common Stock in
which the aggregate gross proceeds to the Company exceed $9,000,000 and in which
the price per share of such Common Stock equals or exceeds $4.50 (such price
subject to equitable adjustment in the event of any stock split, stock dividend,
combination, reorganization, reclassification or other similar event).
43
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"Refused Securities" shall have the meaning assigned to that
term in Section 6.03.
"Registrable Shares" shall mean and include (i) the Conversion
Shares; and (ii) the shares of capital stock of the Company acquired by the
Purchasers pursuant to Article VI hereof or any shares of capital stock of the
Company acquired after the date hereof by any such Purchaser, including shares
of Common Stock issuable on the conversion of other securities acquired by the
Purchasers pursuant to Article VI hereof or otherwise; provided, however, that
shares of Common Stock which are Registrable Shares shall cease to be
Registrable Shares upon the consummation of any sale pursuant to a registration
statement, Section 4(1) of the Securities Act or Rule 144 under the Securities
Act or upon any transfer other than as permitted under Section 5.12 hereof.
Wherever reference is made in this Agreement to a request or consent of holders
of a certain percentage of Registrable Shares, the determination of such
percentage shall include the Conversion Shares even if such conversion has not
yet been effected.
"Securities Act" means the Securities Act of 1933, as amended,
or any similar Federal statute, and the rules and regulations of the Commission
(or of any other Federal agency then administering the Securities Act)
thereunder, all as the same shall be in effect at the time.
"Series A Preferred Stock" means the Series A Preferred Stock
of the Company, $.01 par value, having the rights, powers, privileges and
preferences set forth in Exhibit A2 hereto.
"Series A Shares" shall have the meaning assigned to that term
in Section 1.01 of this Agreement.
"Shares" means, collectively, the Preferred Shares and the
Conversion Shares.
"Subsidiary" or "Subsidiaries" means any Person of which the
Company and/or any of its other Subsidiaries (as herein defined) directly or
indirectly owns at the time at least fifty percent (50%) of the outstanding
voting shares of every class of such corporation or trust other than directors'
qualifying shares.
"Undersubscription Amount" shall have the meaning assigned to
that term in Section 6.01.
7.02. Accounting Terms. All accounting terms not specifically defined
herein shall be construed in accordance with generally accepted accounting
principles consistently applied, and all financial data submitted pursuant to
this Agreement shall be prepared in accordance with such principles.
44
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ARTICLE VIII
MISCELLANEOUS
8.01. No Waiver; Cumulative Remedies. No failure or delay on the part
of any party to this Agreement in exercising any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy hereunder.
The remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
8.02. Amendments, Waivers and Consents. Any provision in the
Agreement to the contrary notwithstanding, and except as hereinafter provided,
changes in, termination or amendments of or additions to this Agreement may be
made, and compliance with any covenant or provision set forth herein may be
omitted or waived, if the Company (i) shall obtain consent thereto in writing
from the holder or holders of at least 60% of the outstanding shares of Series A
Shares and/or Conversion Shares issued upon conversion thereof and (ii) shall
deliver copies of such consent in writing to any holders who did not execute
such consent; provided that no consents shall be effective to reduce the
percentage in interest of the Shares the consent of the holders of which is
required under this Section 8.02. Any waiver or consent may be given subject to
satisfaction of conditions stated therein and any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
8.03. Addresses for Notices. All notices, requests, demands and other
communications provided for hereunder shall be in writing (including telegraphic
communication) and delivered to each applicable party at the address set forth
in Exhibit 1.01 hereto or at such other address as to which such party may
inform the other parties in writing in compliance with the terms of this
Section, it being understood only one notice is required to be provided to the
Bessemer Purchasers at the following address or at such other address as to
which such party may inform the other parties in writing in compliance with the
terms of this Section:
Xx. Xxxxxx X. Xxxxxxxx
Bessemer Venture Partners
0000 Xxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxx Xxxx 00000
with a copy to: Xx. Xxxxxxxxxxx Xxxxxxxx
Bessemer Venture Partners
00 Xxxxxx Xxxxxx
Xxxxxxxxx Xxxxx, XX 00000
45
- 44 -
If to any other holder of the Shares: at such holder's address
for notice as set forth in the register maintained by the Company, or, as to
each of the foregoing, at the addresses set forth in Exhibit 1.01 hereto or at
such other address as shall be designated by such Person in a written notice to
the other parties complying as to delivery with the terms of this Section.
If to the Company: at the address set forth on page 1 hereof, or
at such other address as shall be designated by the Company in a written notice
to the other parties complying as to delivery with the terms of this Section.
All such notices, requests, demands and other communications
shall be considered to be delivered when actually delivered at the foregoing
address of the party to be notified.
8.04. Costs, Expenses and Taxes. As a condition precedent to the
closing, the Company agrees to pay at the Closing in connection with the
preparation, execution and delivery of this Agreement and the issuance of the
Preferred Shares at the Closing, the reasonable legal fees, not to exceed
$15,000 (unless any increase thereto is agreed to by the Company), and other
reasonable out-of-pocket expenses of Messrs. Xxxxx, Xxxxxxx & Xxxxxxxxx, special
counsel for the Purchasers. In addition, the Company shall pay any and all
stamp, or other similar taxes payable or determined to be payable in connection
with the execution and delivery of this Agreement, the issuance of the Preferred
Shares and the other instruments and documents to be delivered hereunder or
thereunder, and agrees to save the Purchasers harmless from and against any and
all liabilities with respect to or resulting from any delay in paying or
omission to pay such taxes.
8.05. Binding Effect; Assignment. Except as provided in Section 5.12,
this Agreement shall be binding upon and inure to the benefit of the Company and
the Purchasers and their respective heirs, successors and assigns, except that
the Company shall not have the right to delegate its obligations hereunder or to
assign its rights hereunder or any interest herein without the prior written
consent of the holders of at least 60% of the outstanding Shares.
8.06. Survival of Representations and Warranties. All representations
and warranties made in this Agreement, the Shares, or any other instrument or
document delivered in connection herewith or therewith, shall survive the
execution and delivery hereof or thereof.
8.07. Prior Agreements. This Agreement, the terms of the Preferred
Stock, and the other agreements executed and delivered herewith constitute the
entire agreement between the parties and supersedes any prior understandings or
agreements concerning the subject matter hereof.
46
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8.08. Severability. The provisions of this Agreement, the Voting and
Co-Sale Agreement and the terms of the Preferred Stock are severable and, in the
event that any court of competent jurisdiction shall determine that any one or
more of the provisions or part of a provision contained in this Agreement, the
Voting and Co-Sale Agreement, or the terms of the Preferred Stock shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
or part of a provision of this Agreement, the Voting and Co-Sale Agreement, or
the terms of the Preferred Stock; but this Agreement, the Voting and Co-Sale
Agreement, and the terms of the Preferred Stock shall be reformed and construed
as if such invalid or illegal or unenforceable provision, or part of a
provision, had never been contained herein, and such provisions or part reformed
so that it would be valid, legal and enforceable to the maximum extent possible.
8.09. Confidentiality. Each Purchaser agrees that it will keep
confidential and will not disclose or divulge any confidential, proprietary or
secret information which such Purchaser may obtain from the Company pursuant to
financial statements, reports and other materials submitted by the Company to
such Purchaser pursuant to this Agreement, or pursuant to visitation or
inspection rights granted hereunder, unless such information is known, or until
such information becomes known through no fault of such Purchaser, to the
public; provided, however, that a Purchaser may disclose such information (i) on
a confidential basis to its attorneys, accountants, consultants and other
professionals to the extent necessary to obtain their services in connection
with its investment in the Company, (ii) to any prospective purchaser of any
Preferred Shares or Conversion Shares from such Purchaser as long as such
prospective purchaser agrees in writing to be bound by the provisions of this
Section 8.09, (iii) to any affiliate or partner of such Purchaser on a "need to
know basis" and (iv) as required by applicable law. If a Purchaser is required
in any legal or administrative or other governmental proceeding to disclose any
of such information, such Purchaser shall give the Company timely notice of the
pending requirement and use its best efforts to provide the Company an
opportunity to obtain protective provisions against further disclosure.
8.10. Governing Law. This Agreement shall be governed by, and
construed in accordance with the General Corporation Law of the State of
Delaware as to matters within the scope thereof and as to all other matters
shall be governed by and construed in accordance with the internal laws of the
Commonwealth of Massachusetts, without giving effect to choice of laws
provisions.
47
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8.11. Headings. Article, section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
8.12. Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
8.13. Further Assurances. From and after the date of this Agreement,
upon the request of any Purchaser or the Company, the Company and the Purchasers
shall execute and deliver such instruments, documents and other writings as may
be reasonably necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of this Agreement and the Shares.
8.14. Additional Preferred Stock. If the Company issues after the
date hereof any other class or series of Preferred Stock, such class or series
may, upon the written consent of 60% of the outstanding Shares, become entitled
to the rights and preferences and be bound by the obligations under this
Agreement, and all references to Series A Preferred Stock shall be expressly
modified to include within the meaning of the term Series A Preferred Stock, the
class or series of Preferred Stock so issued in any financing.
*********************
[Remainder of Page Intentionally Left Blank]
[Signature Pages Immediately Follow]
48
IN WITNESS WHEREOF, the parties hereto have caused this Series A
Preferred Stock Purchase Agreement to be executed as of the date first above
written.
MYCO PHARMACEUTICALS INC.
/s/ Xxxxx Xxxxxxxxx
------------------------
Xxxxx Xxxxxxxxx
By:
/s/ Xxxxx Xxxxxxxxx
--------------------------
President
TECHNOLOGY LEADERS L.P.
By: Technology Leaders Management,
Inc. (General Partner)
By: /s/ Xxxx X. Xxxxxxxx
--------------------------
Title: Managing Director
TECHNOLOGY LEADERS OFFSHORE C.V.
By: Technology Leaders Management,
Inc. (General Partner)
By: /s/ Xxxx X. Xxxxxxxx
--------------------------
Title: Managing Director
--------------------------
BESSEMER VENTURE PARTNERS II L.P.
By: /s/
--------------------------
General Partner
---------------------------------
* Xxxxxxx X. Xxxxxx
BRIMSTONE ISLAND CO., L.P.
By:*
--------------------------
Title:
--------------------------
---------------------------------
* Neill X. Xxxxxxxxxx
49
/s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxxx
---------------------------------
* G. Xxxxx Xxxxxxxx
---------------------------------
* Xxxxxxxxxxx Xxxxxxxx
---------------------------------
* Xxxxxxx X. Xxxxxx
---------------------------------
* Xxxxxx X. Xxxxxx
---------------------------------
* Xxxxxxx X. Xxxxx
---------------------------------
* Xxxxxxx X. Xxxxxxx
---------------------------------
* Xxxxxx X. Xxxx
---------------------------------
* Xxxx X. Xxxxx, Xx.
---------------------------------
* Xxxxxxxx X. Xxxxxx
---------------------------------
* Xxxxxx X. Xxxxxxx
---------------------------------
* Xxxxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxxx, signing
as Attorney-in-Fact for each
of the individuals beside whose
name an asterisk appears
50
Exhibit B1
CONFIDENTIALITY AGREEMENT
This confidentiality agreement is made as of this ___ day of _____________
19__, by and between Myco Pharmaceuticals Inc., a Delaware corporation
("Company") , and _________________________("Consultant").
WITNESSETH:
WHEREAS, the Company desires to retain Consultant as a consultant to
the Company and Consultant wishes to be retained by the Company as a consultant
to the Company (the written arrangement of such consultancy to be referred to as
the "Consulting Agreement");
WHEREAS, the Company has developed, and the Company and/or Consultant
may continue to develop during the period Consultant is so retained by the
Company, certain Proprietary Information, Inventions and Intellectual Property
(as those terms are hereinafter defined), that the Company wishes to protect and
maintain as confidential;
WHEREAS, the Company from time to time has received, and may continue
to receive during the period Consultant is so retained by the Company, the
Proprietary Information of others, and the Company wishes to maintain the
confidentiality of such Proprietary Information; and
WHEREAS, the Company has developed, and will continue to develop during
the period Consultant is so retained by the Company, goodwill by, among other
things, substantial expenditure of money and effort;
NOW, THEREFORE, in consideration of the premises set forth below and
the mutual covenants and undertakings contained in this agreement, and for other
good and valuable consideration, receipt and sufficiency of which are hereby
mutually acknowledged, IT IS AGREED:
1. Definitions. As used in this Agreement, the following terms shall
have the following meanings:
(a) Agreement means this confidentiality agreement, including
all exhibits, schedules and annexations, as all may be amended from time to time
in the manner provided in this Agreement.
(b) Consultancy means the current or anticipated or
subsequent retention of Consultant by the Company as a part-time consultant or
otherwise, or any other period during which
51
Consultant receives compensation from the Company in any capacity.
(c) Intellectual Property means any Invention, writing, trade
name, trademark, service xxxx or any other material registered or otherwise
protected or protectible under state, federal, or foreign patent, trademark,
copyright, or similar laws.
(d) Inventions includes ideas, discoveries, inventions,
developments and improvements, whether or not reduced to practice and whether or
not patentable or otherwise within the definition of Intellectual Property.
(e) Proprietary Information includes any scientific,
technical, trade or business secrets of the Company and any scientific,
technical, trade or business materials that are treated by the Company as
confidential or proprietary, including, but not limited to, Inventions belonging
to the Company and confidential information obtained by or given to the Company
about or belonging to its suppliers, licensors, licensees, partners, affiliates,
customers, potential customers or others.
The definition of "Proprietary Information" herein shall not include
Proprietary Information which (i) was known by Consultant prior to its
disclosure by the Company; (ii) is publicly known through publication or
otherwise through no wrongful act of Consultant; (iii) is received from a third
party who rightfully discloses it to Consultant without restriction on its
subsequent disclosure; or (iv) is disclosed pursuant to the lawful requirement
of a governmental agency or by order of court of competent jurisdiction,
provided that such disclosure is subject to all applicable governmental or
judicial protection available for like material.
2. Consultant Acknowledgements. The Company has developed and will
develop its Proprietary Information and Intellectual Property over a substantial
period of time and at a substantial expense, and its Proprietary Information and
Intellectual Property are integral to the goodwill of the Company. During the
course of consultancy to the Company, Consultant may develop or become aware of
Proprietary Information and/or Intellectual Property. Protection of the
Proprietary Information and Intellectual Property is necessary to conduct the
Company's business, and the Company is and shall at all times remain the sole
owner of the Company's Proprietary Information and Intellectual Property.
3. Confidentiality. Consultant shall at all times, both during and
after any termination of Consultant's consultancy to the Company by either the
Company or Consultant, maintain in confidence and not utilize the Proprietary
Information or the
- 2 -
52
Intellectual Property of the Company, and/or technology or proprietary
information of others under confidential evaluation by the Company except in
performing services for the Company under the Consulting Agreement. Maintaining
such Proprietary Information and Intellectual Property in confidence shall
include refraining from disclosing such Proprietary Information or Intellectual
Property to any third party (except when duly and specifically authorized in
writing to do so for purpose of furthering the business of the Company), and
refraining from using such Proprietary Information or Intellectual Property for
the account of Consultant or for any other person or business entity. Consultant
will not file patents based on the Company's technology or confidential
information, nor seek to make improvements thereon, without the Company's
written approval. Consultant agrees not to make any copies of the Proprietary
Information or Intellectual Property of the Company (except when appropriate for
the furtherance of the business of the Company or duly and specifically
authorized to do so) and promptly upon request, whether during or after the
period of consultancy to the Company, to return to the Company any and all
documentary, machine-readable or other elements or evidence of such Proprietary
Information, Intellectual Property, and any copies of either that may be in
Consultant's possession or under Consultant's control.
4. Rights to Inventions and Intellectual Property. In connection with
Consultant's consultancy to the Company, or by use of the resources of the
Company, whether or not Consultant is then retained by the Company, Consultant
may produce, develop, create, invent, conceive or reduce to practice Inventions
and Intellectual Property related to the business of the Company. Consultant
shall maintain and furnish to the Company complete and current records of all
such Inventions and Intellectual Property and disclose to the Company in writing
any such Inventions and Intellectual Property. Consultant agrees that all such
Inventions and Intellectual Property are and shall be the exclusive property of
the Company, and that the Company may use or pursue them without restriction or
additional compensation. Consultant: (i) hereby assigns, sets over and transfers
to the Company all of his right, title and interest in and to such Inventions
and Intellectual Property; (ii) agrees that Consultant and his agents shall,
during and after the period Consultant is retained by the Company, cooperate
fully in obtaining patent, trademark, service xxxx, copyright or other
proprietary protection for such Inventions and Intellectual Property, all in the
name of the Company (but only at Company expense), and, without limitation,
shall execute all requested applications, assignments and other documents in
furtherance of obtaining such protection or registration and confirming full
ownership by the Company of such Inventions and Intellectual Property; and (iii)
shall, upon leaving the Company, provide to the Company in writing a full,
signed statement of all Inventions and
53
Intellectual Property in which Consultant participated prior to termination of
the consultancy to the Company. Consultant hereby designates the Company as its
agent, and grants to the Company a power of attorney with full substitution,
which power of attorney shall be deemed coupled with an interest, for the
purposes of effecting the foregoing assignments from the Consultant to the
Company.
5. Non-Solicitation. Consultant shall not during the term of the
Consulting Agreement or at any time during the five (5) years following
termination of the Consulting Agreement solicit any person who is employed by or
a consultant to the Company or any affiliate or subsidiary of the Company either
during Consultant's period of consultancy or during such five (5) year period,
to terminate such person's employment by or consultancy to the Company, such
affiliate or subsidiary. As used herein, the term "solicit" shall include,
without limitation, requesting, encouraging, assisting or causing, directly or
indirectly, any such employee or consultant to terminate such person's
employment by or consultancy to the Company, affiliate or subsidiary.
6. Continued Obligations. Consultant's obligations under this Agreement
shall not be affected: (i) by any termination of Consultant's consultancy,
including termination upon the Company's initiative; nor (ii) by any change in
Consultant's position, title or function with the Company; nor (iii) by any
interruption in consultancy during which Consultant leaves and then rejoins the
Company for any period within a period of one year and for any reason. Nothing
herein shall be construed as constituting an employment agreement or an
undertaking by the Company to retain Consultant's services for any stated period
of time.
7. No Conflicting Agreements. Consultant represents and warrants that
execution and performance of this Agreement does not and will not violate,
conflict with, or constitute a default under any contract, commitment,
agreement, understanding, arrangement, or restriction, or any adjudication,
order, injunction or finding of any kind by any court or agency to which
Consultant may be a party or by which Consultant may be bound.
8. Remedies. In the event of any breach by Consultant of any of the
provisions of this Agreement, the Company shall be entitled, in addition to
monetary damages and to any other remedies available to the Company under this
Agreement and at law, to equitable relief, including injunctive relief, and to
payment by Consultant of all costs incurred by the Company in enforcement
against Consultant of the provisions of this Agreement, including reasonable
attorneys' fees.
9. General Provisions.
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(a) No Waiver. Waiver of any provision of this Agreement, in
whole or in part, in any one instance shall not constitute a waiver of any other
provision in the same instance, nor any waiver of the same provision in another
instance, but each provision shall continue in full force and effect with
respect to any other then-existing or subsequent breach.
(b) Notice. For purposes of this Agreement, notices and all
other communications provided for herein shall be in writing and shall be deemed
to have been duly given when delivered personally or by overnight courier with a
receipt obtained therefor or when mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to Consultant, to:
----------------------------
----------------------------
If to the Company, to: Xx. Xxxxx Xxxxxxxxx
Myco Pharmaceuticals Inc.
0 Xxxxxxxx Xxxxx
Xxxx Xxxxxxxxxx, XX 00000
or to such other address as either party may furnish to the other in writing in
accordance with this Section, except that notices of changes of address shall be
effective upon receipt.
(c) Severability. If any provision of this Agreement shall be
found to be invalid, inoperative or unenforceable in law or equity, such finding
shall not affect the validity of any other provisions of this Agreement, which
shall be construed, reformed and enforced to effect the purposes of this
Agreement to the fullest extent permitted by law.
(d) Miscellaneous. This Agreement: (i) may be executed in any
number of counterparts, each of which, when executed by both parties to this
Agreement shall be deemed to be an original, and all of which counterparts
together shall constitute one and the same instrument; (ii) shall be governed by
and construed under the law of the Commonwealth of Massachusetts, without
application of principles of conflicts of laws; (iii) along with the Consulting
Agreement, constitute the entire agreement of the parties with respect to the
subject matter hereof, superseding all prior oral and written communications,
proposals, negotiations, representations, understandings, courses of dealing,
agreements, contracts, and the like between the parties in such respect; (iv)
may be amended, modified, or terminated, and any right under this Agreement may
be waived in whole or in part, only by a writing signed by both parties; (v)
contains headings only for convenience, which headings do not
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55
form part, and shall not be used in construction, of this Agreement; (vi) shall
bind and inure to the benefit of the parties and their respective legal
representatives, successors and assigns, except that no party may delegate any
of its or his obligations under this Agreement, or assign this Agreement,
without the prior written consent of the other party, except the Company may
assign this Agreement in connection with the merger, consolidation, or sale of
all or substantially all assets of the Company; and (vii) be enforced only in
courts located within the Commonwealth of Massachusetts and the parties hereby
agree that such courts shall have venue and exclusive subject matter and
personal jurisdiction, and consent to service of process by registered mail,
return receipt requested, or by any other manner provided by law.
Executed under seal as of the date first above written.
COMPANY:
By:
----------------------------------
Title
CONSULTANT
-------------------------------------
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Exhibit B2
FORM OF NONCOMPETITION AGREEMENT
MYCO PHARMACEUTICALS INC.
0 Xxxxxxxx Xxxxx
Xxxx Xxxxxxxxxx, XX 00000
[Date], 1992
[Name of Consultant or Employee]
-----------------------------
-----------------------------
Dear [Name of Consultant or Employee]:
This letter is to confirm our understanding with respect to (i) your
agreement not to compete with the Company and (ii) your agreement to protect and
preserve information and property which is confidential and proprietary to the
Company or other third parties with whom the Company does business (the terms
and conditions agreed to in this letter shall hereinafter be referred to as the
"Agreement"). In consideration of the mutual promises and covenants contained in
this Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, we have agreed as follows:
1. Prohibited Competition. We have discussed, and you recognize and
acknowledge the competitive and proprietary nature of the Company's business
operations.
You acknowledge and agree that a business will be deemed competitive
with the Company if it performs any of the services, manufactures or sells any
of the products provided or offered by the Company or is involved in the
research, or development of processes, products or techniques in the Company's
Field of Interest (such business to be referred to as a "competitive business").
The term Company's "Field of Interest" currently means the development of
products or processes as anti-infective therapeutics or diagnostics with an
initial emphasis on anti- fungals and commercial use of fungis or yeasts in drug
screening, production, development or testing. The Company may modify the
definition of its Field of Interest by written notice to you based on the
activities in which the Company is then engaged or in which the Company then
proposes to be engaged.
57
You further acknowledge and agree that during the course of performing
services for the Company as a [consultant/employee], the Company will furnish,
disclose or make available to you confidential and proprietary information
related to the Company's business and that the Company may provide you with
unique and specialized training. You also acknowledge that such confidential
information and the training to be provided by the Company have been developed
and will be developed by the Company and others with whom the Company has a
relationship through the expenditure by the Company and others of substantial
time, effort and money and that all such confidential information and training
could be used by you to compete with the Company.
Accordingly, you hereby agree in consideration of the Company's
agreement to engage you as a [consultant/employee] and your compensation thereof
and in view of the confidential position to be held by you, the unique and
specialized training which the Company may provide you and the confidential
nature and proprietary value of the information which the Company may share with
you, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, as follows:
During the period during which you perform services for or at the
request of the Company (the "Term") and for a period of one year following the
expiration or termination of the Term (the "Restricted Term"), whether such
termination is voluntary or involuntary, you shall not, without the prior
written consent of the Company:
(i) For yourself or on behalf of any other, directly or
indirectly, either as principal, agent, stockholder, employee, consultant,
representative or in any other capacity, own, manage, operate or control,
or be concerned, connected or employed by, or otherwise associate in any
manner with, engage in or have a financial interest in any business which
is directly or indirectly competitive with the business of the Company
within the World (the "Restricted Territory"), except that nothing
contained herein shall preclude you from purchasing or owning stock in any
such business if such stock is publicly traded, and provided that your
holdings do not exceed three (3%) percent of the issued and outstanding
capital stock of such business.
(ii) Either individually or on behalf of or through any third
party, solicit, divert or appropriate or attempt to solicit, divert or
appropriate, for the purpose of competing with the Company or any present
or future parent, subsidiary or other affiliate of the Company which is
engaged in a similar business as the Company, any customers or patrons of
the Company, or any prospective customers or patrons with
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58
respect to which the Company has developed or made a sales presentation (or
similar offering of services), located within the Restricted Territory.
(iii) Either individually or on behalf of or through any third
party, directly or indirectly, solicit, entice or persuade or attempt to
solicit, entice or persuade any other employees of or consultants to the
Company or any parent or future parent or affiliate of the Company to leave
the services of the Company or any parent or future parent or affiliate for
any reason.
[IF APPLICABLE - NOTWITHSTANDING THE ABOVE, WE ACKNOWLEDGE AND AGREE
THAT THIS AGREEMENT SHALL NOT PROHIBIT YOU FROM_______________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________.]
You further recognize and acknowledge that (i) the types of employment
which are prohibited by this paragraph are narrow and reasonable in relation to
the skills which represent your principal salable asset both to the Company and
to your other prospective employers, and (ii) the specific but broad
geographical scope of the provisions of this paragraph is reasonable, legitimate
and fair to you in light of the Company's need to market its services and sell
its products in a large geographic area in order to have a sufficient customer
base to make the Company's business profitable and in light of the limited
restrictions on the type of employment prohibited herein compared to the types
of employment for which you are qualified to earn your livelihood.
If any part of this section should be determined by a court of
competent jurisdiction to be unreasonable in duration, geographic area, or
scope, then this section is intended to and shall extend only for such period of
time, in such area and with respect to such activity as is determined to be
reasonable.
2. Protected Information. Upon execution of this Agreement, you shall
execute and deliver a Confidentiality Agreement in the form attached hereto as
Annex A.
3. Continuing Obligations. Your obligations under this Agreement other
than the provisions of this Agreement shall not be affected: (i) by any
termination of your consulting or employment arrangement, including termination
upon the Company's initiative; nor (ii) by any change in your position, title or
function with the Company; nor (iii) by any interruption in the consulting or
employment arrangement during which you leave and rejoin the Company.
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59
4. Records. Upon termination of your relationship with the Company, you
shall deliver to the Company any property of the Company which may be in your
possession including products, materials, memoranda, notes, records, reports, or
other documents or photocopies of the same.
5. No Conflicting Agreements. You hereby represent and warrant that you
have no commitments or obligations inconsistent with this Agreement and you
hereby agree to indemnify and hold the Company harmless against any claim based
upon circumstances alleged to be inconsistent with such representation and
warranty.
6. No Employment Created. This Agreement does not constitute, and shall
not be construed as constituting, an undertaking by the Company to hire you as
an employee or consultant of the Company.
7. Waiver of Provisions. Failure of any party to insist, in one or more
instances, on performance by the other in strict accordance with the terms and
conditions of this Agreement shall not be deemed a waiver or relinquishment of
any right granted hereunder or of the future performance of any such term or
condition or of any other term or condition of this Agreement, unless such
waiver is contained in a writing signed by or on behalf of the waiving party.
8. Notices. Any notice or other communication required or permitted
hereunder shall be deemed sufficiently given if sent by registered or certified
mail, postage and fees prepaid, addressed to the party to be notified as
follows: if to the Company to its address set forth above, with a copy to Xxxxx
X. Xxxxxx, Esquire, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., Xxx
Xxxxxxxxx Xxxxxx, Xxxxxx, XX 00000 and if to you to your address set forth
above, or in each case to such other address as either party may from time to
time designate in writing to the other. Such notice or communication shall be
deemed to have been given as of the date deposited with the United States Postal
Service.
9. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the Commonwealth of Massachusetts,
without application of the conflicts of law provisions thereof.
10. Entire Agreement. This Agreement, together with Annex A hereto,
embodies the entire agreement and understanding between the parties hereto and
supersedes all prior oral or written agreements and understandings relating to
the subject matter hereof. No statement, representation, warranty, covenant or
agreement of any kind not set forth in this Agreement shall affect, or be used
to interpret, change or restrict, the express terms and provisions of this
Agreement.
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60
11. Invalidity. This Agreement is intended to be performed in
accordance with, and only to the extent permitted by, all applicable laws,
ordinances, rules and regulations. If any provision of this Agreement, or the
application thereof to any person or circumstance, shall, for any reason and to
any extent, be invalid or unenforceable, the remainder of this Agreement and the
application of such provisions to other persons or circumstances shall not be
affected thereby, but rather shall be construed, reformed and enforced to the
greatest extent permitted by law.
12. Injunctive Relief. You hereby expressly acknowledge that any breach
or threatened breach of any of the terms and/or conditions set forth in this
Agreement will result in substantial, continuing and irreparable injury to the
Company. Therefore, you hereby agree that, in addition to any other remedy that
may be available to the Company, the Company shall be entitled to injunctive or
other equitable relief by a court of appropriate jurisdiction in the event of
any breach or threatened breach of the terms of this Agreement.
13. Assignment. The Company may assign its rights and obligations
hereunder to any person or entity who succeeds to all or substantially all of
the Company's business or that aspect of the Company's business in which you are
principally involved. Your rights and obligations under this Agreement may not
be assigned without the prior written consent of the Company.
14. Expenses. Should any party breach this Agreement, in addition to
all other remedies available at law or in equity, such party shall pay all of
any other party's costs and expenses resulting therefrom and/or incurred in
enforcing this Agreement, including legal fees and expenses.
15. Modification and Amendment. This Agreement shall not be modified or
amended except by an instrument in writing signed by or on behalf of the parties
hereto.
16. Parties Benefitted. Subject to the foregoing, this Agreement shall
be binding upon and inure to the benefit of the Company and any parent,
subsidiary or other affiliate of the Company, and their respective successors
and assigns, and shall be binding upon and inure to the benefit of you and your
heirs, executors and administrators.
17. Headings. Section and other headings contained in this Agreement
are for reference purposes only and are in no way intended to define, interpret,
describe or otherwise limit the scope, extent or intent of this Agreement or any
of its provisions each of which shall be deemed an original, but all of which
together shall constitute one and the same document.
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61
18. Counterparts. This Agreement may be executed in one or more
counterparts each of which will be deemed an original, but all of which together
shall constitute one and the same instrument.
If the foregoing accurately sets forth our agreement, please so
indicate by signing and returning to us the enclosed copy of this letter.
Very truly yours,
MYCO Pharmaceuticals Inc.
_______________________________
Accepted and Approved
_____________________________
[Name of Consultant/Employee]
Dated: ______________________
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62
ANNEX A
CONFIDENTIALITY AGREEMENT
This confidentiality agreement is made as of this ______ day of
_______________________________________ 19__, by and between Myco
Pharmaceuticals Inc., a Delaware corporation ("Company"), and _______________
___________________ ("Consultant" ).
W I T N E S S E T H:
WHEREAS, the Company desires to retain Consultant as a consultant to
the Company and Consultant wishes to be retained by the Company as a consultant
to the Company (the written arrangement of such consultancy to be referred to as
the "Consulting Agreement");
WHEREAS, the Company has developed, and the Company and/or Consultant
may continue to develop during the period Consultant is so retained by the
Company, certain Proprietary Information, Inventions and Intellectual Property
(as those terms are hereinafter defined), that the Company wishes to protect and
maintain as confidential;
WHEREAS, the Company from time to time has received, and may continue
to receive during the period Consultant is so retained by the Company, the
Proprietary Information of others, and the Company wishes to maintain the
confidentiality of such Proprietary Information; and
WHEREAS, the Company has developed, and will continue to develop during
the period Consultant is so retained by the Company, goodwill by, among other
things, substantial expenditure of money and effort;
NOW, THEREFORE, in consideration of the premises set forth below and
the mutual covenants and undertakings contained in this agreement, and for other
good and valuable consideration, receipt and sufficiency of which are hereby
mutually acknowledged, IT IS AGREED:
1. Definitions. As used in this Agreement, the following terms shall
have the following meanings:
(a) Agreement means this confidentiality agreement, including
all exhibits, schedules and annexations, as all may be amended from time to time
in the manner provided in this Agreement.
(b) Consultancy means the current or anticipated or
subsequent retention of Consultant by the Company as a part-time consultant or
otherwise, or any other period during which
63
Consultant receives compensation from the Company in any capacity.
(c) Intellectual Property means any Invention, writing, trade
name, trademark, service xxxx or any other material registered or otherwise
protected or protectable under state, federal, or foreign patent, trademark,
copyright, or similar laws.
(d) Inventions includes ideas, discoveries, inventions,
developments and improvements, whether or not reduced to practice and whether or
not patentable or otherwise within the definition of Intellectual Property.
(e) Proprietary Information includes any scientific,
technical, trade or business secrets of the Company and any scientific,
technical, trade or business materials that are treated by the Company as
confidential or proprietary, including, but not limited to, Inventions belonging
to the Company and confidential information obtained by or given to the Company
about or belonging to its suppliers, licensors, licensees, partners, affiliates,
customers, potential customers or others.
The definition of "Proprietary Information" herein shall not include
Proprietary Information which (i) was known by Consultant prior to its
disclosure by the Company; (ii) is publicly known through publication or
otherwise through no wrongful act of Consultant; (iii) is received from a third
party who rightfully discloses it to Consultant without restriction on its
subsequent disclosure; or (iv) is disclosed pursuant to the lawful requirement
of a governmental agency or by order of court of competent jurisdiction,
provided that such disclosure is subject to all applicable governmental or
judicial protection available for like material.
2. Consultant Acknowledgements. The Company has developed and will
develop its Proprietary Information and Intellectual Property over a substantial
period of time and at a substantial expense, and its Proprietary Information and
Intellectual Property are integral to the goodwill of the Company. During the
course of consultancy to the Company, Consultant may develop or become aware of
Proprietary Information and/or Intellectual Property. Protection of the
Proprietary Information and Intellectual Property is necessary to conduct the
Company's business, and the Company is and shall at all times remain the sole
owner of the Company's Proprietary Information and Intellectual Property.
3. Confidentiality. Consultant shall at all times, both during and
after any termination of Consultant's consultancy to the Company by either the
Company or Consultant, maintain in confidence and not utilize the Proprietary
Information or the
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64
Intellectual Property of the Company, and/or technology or proprietary
information of others under confidential evaluation by the Company except in
performing services for the Company under the Consulting Agreement. Maintaining
such Proprietary Information and Intellectual Property in confidence shall
include refraining from disclosing such Proprietary Information or Intellectual
Property to any third party (except when duly and specifically authorized in
writing to do so for purpose of furthering the business of the Company), and
refraining from using such Proprietary Information or Intellectual Property for
the account of Consultant or for any other person or business entity. Consultant
will not file patents based on the Company's technology or confidential
information, nor seek to make improvements thereon, without the Company's
written approval. Consultant agrees not to make any copies of the Proprietary
Information or Intellectual Property of the Company (except when appropriate for
the furtherance of the business of the Company or duly and specifically
authorized to do so) and promptly upon request, whether during or after the
period of consultancy to the Company, to return to the Company any and all
documentary, machine-readable or other elements or evidence of such Proprietary
Information, Intellectual Property, and any copies of either that may be in
Consultant's possession or under Consultant's control.
4. Rights to Inventions and Intellectual Property. In connection with
Consultant's consultancy to the Company, or by use of the resources of the
Company, whether or not Consultant is then retained by the Company, Consultant
may produce, develop, create, invent, conceive or reduce to practice Inventions
and Intellectual Property related to the business of the Company. Consultant
shall maintain and furnish to the Company complete and current records of all
such Inventions and Intellectual Property and disclose to the Company in writing
any such Inventions and Intellectual Property. Consultant agrees that all such
Inventions and Intellectual Property are and shall be the exclusive property of
the Company, and that the Company may use or pursue them without restriction or
additional compensation. Consultant: (i) hereby assigns, sets over and transfers
to the Company all of his right, title and interest in and to such Inventions
and Intellectual Property; (ii) agrees that Consultant and his agents shall,
during and after the period Consultant is retained by the Company, cooperate
fully in obtaining patent, trademark, service xxxx, copyright or other
proprietary protection for such Inventions and Intellectual Property, all in the
name of the Company (but only at Company expense), and, without limitation,
shall execute all requested applications, assignments and other documents in
furtherance of obtaining such protection or registration and confirming full
ownership by the Company of such Inventions and Intellectual Property; and (iii)
shall, upon leaving the Company, provide to the Company in writing a full,
signed statement of all Inventions and
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65
Intellectual Property in which Consultant participated prior to termination of
the consultancy to the Company. Consultant hereby designates the Company as its
agent, and grants to the Company a power of attorney with full substitution,
which power of attorney shall be deemed coupled with an interest, for the
purposes of effecting the foregoing assignments from the Consultant to the
Company.
5. Non-Solicitation. Consultant shall not during the term of the
Consulting Agreement or at any time during the five (5) years following
termination of the Consulting Agreement solicit any person who is employed by or
a consultant to the Company or any affiliate or subsidiary of the Company either
during Consultant's period of consultancy or during such five (5) year period,
to terminate such person's employment by or consultancy to the Company, such
affiliate or subsidiary. As used herein, the term "solicit" shall include,
without limitation, requesting, encouraging, assisting or causing, directly or
indirectly, any such employee or consultant to terminate such person's
employment by or consultancy to the Company, affiliate or subsidiary.
6. Continued Obligations. Consultant's obligations under this Agreement
shall not be affected: (i) by any termination of Consultant's consultancy,
including termination upon the Company's initiative; nor (ii) by any change in
Consultant's position, title or function with the Company; nor (iii) by any
interruption in consultancy during which Consultant leaves and then rejoins the
Company for any period within a period of one year and for any reason. Nothing
herein shall be construed as constituting an employment agreement or an
undertaking by the Company to retain Consultant's services for any stated period
of time.
7. No Conflicting Agreements. Consultant represents and warrants that
execution and performance of this Agreement does not and will not violate,
conflict with, or constitute a default under any contract, commitment,
agreement, understanding, arrangement, or restriction, or any adjudication,
order, injunction or finding of any kind by any court or agency to which
Consultant may be a party or by which Consultant may be bound.
8. Remedies. In the event of any breach by Consultant of any of the
provisions of this Agreement, the Company shall be entitled, in addition to
monetary damages and to any other remedies available to the Company under this
Agreement and at law, to equitable relief, including injunctive relief, and to
payment by Consultant of all costs incurred by the Company in enforcement
against Consultant of the provisions of this Agreement, including reasonable
attorneys' fees.
9. General Provisions.
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66
(a) No Waiver. Waiver of any provision of this Agreement, in
whole or in part, in any one instance shall not constitute a waiver of any other
provision in the same instance, nor any waiver of the same provision in another
instance, but each provision shall continue in full force and effect with
respect to any other then-existing or subsequent breach.
(b) Notice. For purposes of this Agreement, notices and all
other communications provided for herein shall be in writing and shall be deemed
to have been duly given when delivered personally or by overnight courier with a
receipt obtained therefor or when mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to Consultant, to:
______________________________
______________________________
If to the Company, to: Xx. Xxxxx Xxxxxxxxx
Myco Pharmaceuticals Inc.
0 Xxxxxxxx Xxxxx
Xxxx Xxxxxxxxxx, XX 00000
or to such other address as either party may furnish to the other in writing in
accordance with this Section, except that notices of changes of address shall
be effective upon receipt.
(c) Severability. If any provision of this Agreement shall be
found to be invalid, inoperative or unenforceable in law or equity, such finding
shall not affect the validity of any other provisions of this Agreement, which
shall be construed, reformed and enforced to effect the purposes of this
Agreement to the fullest extent permitted by law.
(d) Miscellaneous. This Agreement: (i) may be executed in any
number of counterparts, each of which, when executed by both parties to this
Agreement shall be deemed to be an original, and all of which counterparts
together shall constitute one and the same instrument; (ii) shall be governed by
and construed under the law of the Commonwealth of Massachusetts, without
application of principles of conflicts of laws; (iii) along with the Consulting
Agreement, constitute the entire agreement of the parties with respect to the
subject matter hereof, superseding all prior oral and written communications,
proposals, negotiations, representations, understandings, courses of dealing,
agreements, contracts, and the like between the parties in such respect; (iv)
may be amended, modified, or terminated, and any right under this Agreement may
be waived in whole or in part, only by a writing signed by both parties; (v)
contains headings only for convenience, which headings do not
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67
form part, and shall not be used in construction, of this Agreement; (vi) shall
bind and inure to the benefit of the parties and their respective legal
representatives, successors and assigns, except that no party may delegate any
of its or his obligations under this Agreement, or assign this Agreement,
without the prior written consent of the other party, except the Company may
assign this Agreement in connection with the merger, consolidation, or sale of
all or substantially all assets of the Company; and (vii) be enforced only in
courts located within the Commonwealth of Massachusetts and the parties hereby
agree that such courts shall have venue and exclusive subject matter and
personal jurisdiction, and consent to service of process by registered mail,
return receipt requested, or by any other manner provided by law.
Executed under seal as of the date first above written.
COMPANY:
By: __________________________
Title
CONSULTANT
______________________________
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EXHIBIT 1.01A
Schedule of Purchasers - Preferred Stock
Aggregate
Purchase Indebtedness
Price of of Company Number of
Series A to be Net Series A
Shares Cancelled Cash Due Shares
Name and Address at Initial at Initial at Initial at Initial
of Purchaser Closing Closing Closing Closing
------------ ---------- ------------ ---------- ----------
Technology Leaders L.P. $370,000 $ 27,750 $342,250 370,000
800 The Safeguard Building
000 Xxxxx Xxxx Xxxxx
Xxxxx, XX 00000
Technology Leaders Offshore $630,000 $ 47,250 $582,750 630,000
C.V
x/x XXX Xxxxx Xxxxxxx
00 Xxxxxxxxxx
Xxxxxxx, Xxxxxxxxxxx Antilles
Bessemer Venture Partners II $893,916 $ 75,000 $818,916 893,916
L.P.
00 Xxxxxx Xxxxxx
Xxxxxxxxx Xxxxx, XX 00000
Xxxxxxx X. Xxxxxx $ 15,000 0 $ 15,000 15,000
00 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Brimstone Island Co. L.P. $ 15,000 0 $ 15,000 15,000
00 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Neill X. Xxxxxxxxxx $ 10,000 0 $ 10,000 10,000
c/o Xxxxxx X. Xxxxxxxx
Bessemer Venture Partners
0000 Xxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Xxxxxx X. Xxxxxxxx $ 3,000 0 $ 3,000 3,000
Bessemer Venture Partners
0000 Xxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
69
- 2 -
G. Xxxxx Xxxxxxxx $10,000 0 $10,000 10,000
00 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Xxxxxxxxxxx Xxxxxxxx $32,000 0 $32,000 32,000
c/o Xxxxxx X. Xxxxxxxx
Bessemer Venture Partners
0000 Xxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Xxxxxxx X. Xxxxxx $ 2,500 0 $ 2,500 2,500
00 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Xxxxxx X. Xxxxxx $ 2,000 0 $ 2,000 2,000
c/o Xxxxxx X. Xxxxxxxx
Bessemer Venture Partners
0000 Xxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Xxxxxxx X. Xxxxx $ 3,334 0 $ 3,334 3,334
c/o Xxxxxx X. Xxxxxxxx
Bessemer Venture Partners
0000 Xxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Xxxxxx X. Xxxx $ 750 0 $ 750 750
c/o Xxxxxx X. Xxxxxxxx
Bessemer Venture Partners
0000 Xxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Xxxx X. Xxxxx, Xx $ 5,000 0 $ 5,000 5,000
c/o Xxxxxx X. Xxxxxxxx
Bessemer Venture Partners
0000 Xxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
70
- 3 -
Xxxxxxxx X. Xxxxxx $ 500 0 $ 500 500
c/o Xxxxxx X. Xxxxxxxx
Bessemer Venture Partners
0000 Xxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Xxxxxx X. Xxxxxxx $ 2,000 0 $ 2,000 2,000
c/o Xxxxxx X. Xxxxxxxx
Bessemer Venture Partners
0000 Xxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Xxxxxxx X. Xxxxxxx $ 2,000 0 $ 2,000 2,000
c/o Xxxxxx X. Xxxxxxxx
Bessemer Venture Partners
0000 Xxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Xxxxxxx X. Xxxxxxx $ 3,000 0 $ 3,000 3,000
c/o Xxxxxx X. Xxxxxxxx
Bessemer Venture Partners
0000 Xxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
========== ========== ========== =========
$2,000,000 $ 150,000 $1,850,000 2,000,000
71
Exhibit 1.0lB
Maximum Maximum
Aggregate Aggregate
Purchase Maximum Purchase Maximum
Price of Number of Price of Number of
Series A Series A Series A Series A
Name and Address Shares at Shares at Shares at Shares at
of Purchasers Call Closing Call Closing Put Closing Put Closing
------------- ------------ ------------ ----------- -----------
Technology Leaders, L.P. $ 740,000 740,000 $ 740,000 740,000
800 The Safeguard Building
000 Xxxxx Xxxx Xxxxx
Xxxxx, XX 00000
Technology Leaders Offshore, $1,260,000 1,260,000 $1,260,000 1,260,000
C.V
x/x XXX Xxxxx Xxxxxxx
00 Xxxxxxxxxx
Xxxxxxx, Xxxxxxxxxxx
Antilles
Bessemer Venture $1,787,832 1,787,832 $1,787,832 1,787,832
Partners II L.P.
00 Xxxxxx Xxxxxx
Xxxxxxxxx Xxxxx, XX 00000
Xxxxxxx X. Xxxxxx $ 30,000 30,000 $ 30,000 30,000
00 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Brimstone Island Co. L.P. $ 30,000 30,000 $ 30,000 30,000
00 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Neill X. Xxxxxxxxxx $ 20,000 20,000 $ 20,000 20,000
c/o Xxxxxx X. Xxxxxxxx
Bessemer Venture Partners
0000 Xxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Xxxxxx X. Xxxxxxxx $ 6,000 6,000 $ 6,000 6,000
Bessemer Venture Partners
0000 Xxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
72
- 2 -
G. Xxxxx Xxxxxxxx $20,000 20,000 $20,000 20,000
00 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Xxxxxxxxxxx Xxxxxxxx $64,000 64,000 $64,000 64,000
c/o Xxxxxx X. Xxxxxxxx
Bessemer Venture Partners
0000 Xxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Xxxxxxx X. Xxxxxx $ 5,000 5,000 $ 5,000 5,000
00 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Xxxxxx X. Xxxxxx $ 4,000 4,000 $ 4,000 4,000
c/o Xxxxxx X. Xxxxxxxx
Bessemer Venture Partners
0000 Xxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Xxxxxxx X. Xxxxx $ 6,668 6,668 $ 6,668 6,668
c/o Xxxxxx X. Xxxxxxxx
Bessemer Venture Partners
0000 Xxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Xxxxxx X. Xxxx $ 1,500 1,500 $ 1,500 1,500
c/o Xxxxxx X. Xxxxxxxx
Bessemer Venture Partners
0000 Xxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Xxxx X. Xxxxx, Xx $10,000 10,000 $10,000 10,000
c/o Xxxxxx X. Xxxxxxxx
Bessemer Venture Partners
0000 Xxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
73
- 3 -
Xxxxxxxx X. Xxxxxx $ 1,000 1,000 $ 1,000 1,000
c/o Xxxxxx X. Xxxxxxxx
Bessemer Venture Partners
0000 Xxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Xxxxxx X. Xxxxxxx $ 4,000 4,000 $ 4,000 4,000
c/o Xxxxxx X. Xxxxxxxx
Bessemer Venture Partners
0000 Xxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Xxxxxxx X. Xxxxxxx $ 4,000 4,000 $ 4,000 4,000
c/o Xxxxxx X. Xxxxxxxx
Bessemer Venture Partners
0000 Xxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Xxxxxxx X. Xxxxxxx $ 6,000 0 $ 6,000 6,000
c/o Xxxxxx X. Xxxxxxxx
Bessemer Venture Partners
0000 Xxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
$4,000,000 4,000,000 $4,000,000 4,000,000
74
EXHIBIT 1.03
The specific performance milestones are attached. The progress of these
milestones and/or the majority of the milestones for good performance shall have
been met or shall be proceeding satisfactorily, all in the reasonable judgment
of the Purchasers.
75
MYCO PHARMACEUTICALS INC. MILESTONES: NEXT 12 MONTHS
GOOD EXCELLENT
MILESTONE PERFORMANCE PERFORMANCE
Begin research Launch contract Launch contract
operations research - 6 months; research - 4 months
2 approaches 3 approaches
(feasibility studies) (feasibility studies)
Hire VP R & D Accomplished - Accomplished -
6 months 3 months
Complete Accomplished - Accomplished -
agreements 5 months 2 months
with SAB and
begin regular
meetings
Academic (a) Accomplished - (a) Accomplished -
collaborations 6 months 3 months
(a) reviewed and (b) Accomplished - (b) Accomplished -
prioritized; (b) 9 months 4 months
1-3 collaborations
in place
Lead compounds Screens in place; Screening of compounds
first potential underway - 12 months;
product profile 1 project plan
profile defined - presented to board
12 months
Acquisitions Review opportunities Acquire compound/
(In license) and decide go/no go - advanced project -
6 months 12 months
Strategic Strategy set/agreed. 1st corporate strategic
alliances Initial discussions alliance in place -
underway with 12 months
potential partners -
12 months
Private placement decide go/no go - Assets in place to
9 months allow go decision -
12 months
VP business Begin search/identify VP in place - 6 months
development candidates - 6 months
Enabling Begin operations - Begin operations -
technologies 9 months 5 months; 2 smart
(smart screens) screen developed -
business unit 12 months
76
Natural products Begins operations - begins operations -
(drug discovery) 12 months 9 months; lead broths
business unit under study -
12 months
Drug development strategy set/agreed - begins operations -
business unit 12 months 12 months
Patents 2 patents in prepara- 2 patents filed; 2
tion; disclosures patents in preparation
made
facility lab plans complete - lab plans complete -
12 months 9 months; ready to
occupy - 12 months
77
EXHIBIT 1.05
Non-Accredited Investors
Xxxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
78
Exhibit 2.02(i)
Employees/Nondisclosure Agreements
None
**********
As of the date hereof the only employee of the Company is Xx.
Xxxxx Xxxxxxxxx, who has entered into an Employment and Noncompetition
Agreement in the form attached hereto.
The Company has engaged or is in the process of engaging the
persons listed on the attachment to Exhibit 3.13 hereto as consultants to
the Company, each of whom has or will be required to execute an Agreement
in substantially the form attached hereto.
Exhibit 3.07
Title to Assets, Patents
The Company owns a facsimile machine, the purchase price of which
was approximately $1,400 and a personal computer, the purchase price of
which was approximately $5,000.
Exhibit 3.08
Transactions with Affiliates
The Company has entered into the following agreements
with Xxxxx Xxxxxxxxx: (i) Employment and Noncompetition
Agreement; (ii) Confidentiality Agreement, and (iii) Stock
Purchase and Repurchase Agreement.
Exhibit 3.09
Guaranties of Indebtedness
None
Exhibit 3.10
Investments
None
79
Exhibit 3.13
Capitalization/Restrictions on Transfer
COMMON STOCK
The Company has issued and/or committed for issuance (i) 336,000 shares
of Common Stock to Xxxxx X. Xxxxxxxxx, Ph.D, which are owned outright by him,
(ii) 860,000 shares of Common Stock to Xxxxx X. Xxxxxxxxx, Ph.D, which are
subject to a four-year vesting arrangement and (iii) 310,000 shares of Common
Stock pursuant to one-year vesting arrangements, in the amounts and to the
persons listed on the Attachment to this Exhibit 3.13.
OPTIONS TO PURCHASE COMMON STOCK
The Company has granted and/or committed to grant options to purchase
Common Stock of the Company for $0.20 per share pursuant to four year vesting
arrangements in the amounts and to the persons listed in the Attachment to this
Exhibit 3.13. In addition, the Company has agreed with Xxxxxx Xxxxxx that he
will receive options to purchase Common Stock of the Company as part of his
compensation package, the terms of which will be submitted for approval to the
Board of Directors of the Company.
PREFERRED STOCK
The Company has committed for issuance 200,000 shares of the Company's
Series A Preferred Stock to be issued to persons chosen by the Company's Chief
Executive Officer at a purchase price of $1.00 per share.
80
Attachment to Exhibit 3.13
SAB/CONSULTANTS COMPENSATION
NUMBER OF
SHARES OPTIONS
----------- -------------
CASH (ONE YEAR (FOUR YEAR
NAME POSITION COMPENSATION VESTING) VESTING)
Xx. Xxxxx SAB $40,000 (up 100,000 200,000
Fink Chairman/ to 50,000 if
Founder leaves Merck
Dr. Yigal EC/Founder $40,000 60,000 120,000
Koltin
Dr. Xxxx EC/Founder $30,000 60,000 120,000
Xxxxxx
Dr. Xxxxx EC Founder $24,000 30,000 60,000
Xxxxxxxx,
Ph.D.
Dr. Xxxx EC $20,000 20,000 40,000
Timberlake
Dr. EC $20,000 20,000 40,000
Xxxxxxxx
Xxxxxxx
N. Xxx Member $ 6,000 5,000 10,000
Xxxxxx
Xx. Xxxx X. Member $ 6,000 5,000 10,000
Xxxxxxx
Xx. Xxxxxxx Member $ 6,000 5,000 10,000
Diamond
Dr. Koji Member $ 6,000 5,000 10,000
Nakanishi 310,000 620,000
X. Xxxxxx Consultant $ 3,000 N/A N/A
X. Xxxxxx Consultant $ 3,000 N/A N/A
X. Xxxxxxx Consultant $ 3,000 N/A N/A
D. Cane Consultant $ 3,000 N/A N/A
X. Xxxxx Consultant $ 3,000 N/A N/A
X. XxxXxxxx Consultant $ 3,000 N/A N/A
81
Exhibit 3.14
Material Agreements
See Exhibit 3.08
