1
EXHIBIT 2.1
EPIGENIX, INC.
SERIES A PREFERRED STOCK PURCHASE AGREEMENT
2
TABLE OF CONTENTS
PAGE
----
1. Purchase and Sale of Series A Preferred Stock.........................1
1.1 Sale and Issuance of Series A Preferred......................1
1.2 Closing......................................................1
1.3 Second Closing...............................................2
2. Definitions...........................................................2
2.1 "Material Adverse Event......................................2
2.2 "Subsidiary..................................................2
3. Representations and Warranties of the Company to the Investors........2
3.1 Corporate Organization and Authority.........................2
3.2 Capitalization...............................................2
3.3 Subsidiaries.................................................3
3.4 Authorization................................................3
3.5 Validity of Series A Preferred...............................3
3.6 No Conflict with Other Instruments; Compliance with Laws.....4
3.7 Agreements; Actions..........................................4
3.8 Litigation...................................................5
3.9 Title to Properties; Liens and Encumbrances..................5
3.10 Patents and Other Proprietary Rights.........................5
3.11 No Defaults; Violations or Conflicts.........................6
3.12 Private Offering.............................................6
3.13 Registration Rights..........................................6
3.14 Brokers and Finders..........................................6
3.15 Governmental Consents........................................6
3.16 Corporate Documents..........................................6
3.17 Minute Books.................................................6
3.18 Financial Statements.........................................7
4. Representations and Warranties of the Investor........................7
4.1 Authorization................................................7
4.2 Brokers and Finders..........................................7
5. Securities Laws.......................................................7
5.1 Securities Laws Representations and Covenants of Investor....7
5.2 Legends......................................................9
-i-
3
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
6. Conditions of Investor's Obligations at the Initial Closing...........9
6.1 Representations and Warranties...............................9
6.2 Performance..................................................9
6.3 Blue Sky Compliance..........................................9
6.4 Information and Registration Rights..........................9
6.5 First Refusal Agreement......................................9
6.6 Proceedings Satisfactory: Compliance Certificate.............9
6.7 Opinion of Counsel..........................................10
6.8 Certified Charter Documents.................................10
6.9 Amended and Restated Certificate of Incorporation...........10
6.10 Voting Agreement............................................10
7. Conditions of the Company's Obligations at Initial Closing...........10
7.1 Representations and Warranties..............................10
7.2 Blue Sky Compliance.........................................10
7.3 Information and Registration Rights.........................10
7.4 First Refusal Agreement.....................................10
7.5 Amended and Restated Certificate of Incorporation...........10
7.6 Voting Agreement............................................11
8. Post-Closing Covenant of the Company.................................11
8.1 Securities Laws Compliance..................................11
9. Miscellaneous........................................................11
9.1 Entire Agreement; Successors and Assigns....................11
9.2 Governing Law...............................................11
9.3 Counterparts................................................11
9.4 Headings....................................................11
9.5 Notices.....................................................11
9.6 Survival of Warranties......................................11
9.7 Amendment of Agreement......................................12
9.8 Finders Fees................................................12
9.9 Expenses....................................................12
9.10 Aggregation of Stock........................................12
9.11 Severability................................................12
9.12 Delays or Omissions.........................................12
9.13 Corporate Securities Law....................................13
-ii-
4
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
EXHIBITS
--------
Exhibit A Schedule of Investors
Exhibit B Amended and Restated Certificate of Incorporation
Exhibit C Schedule of Exceptions
Exhibit D Form of Information and Registration Rights Agreement
Exhibit E Form of Right of First Refusal Agreement
Exhibit F Legal Opinion of Company Counsel
Exhibit G Form of Voting Agreement
-iii-
5
SERIES A PREFERRED
STOCK PURCHASE AGREEMENT
THIS SERIES A PREFERRED STOCK PURCHASE AGREEMENT (the "Agreement") is
made as of January , 1998 by and among EpiGenix, Inc., a Delaware corporation
(the "Company"), and Microcide Pharmaceuticals, Inc. ("Microcide" or the
"Investor").
R E C I T A L S:
A. The Board of Directors of the Company has adopted the Amended and
Restated Certificate of Incorporation (the "Certificate") in the form attached
hereto as Exhibit B which, among other matters, establishes the rights,
preferences and privileges of the Company's Series A Preferred Stock ("Series A
Preferred"), Series B Preferred Stock (the "Series B Preferred") and Series C
Preferred Stock (the "Series C Preferred").
B. The Company desires to sell shares of Series A Preferred to the
Investor and the Investor desires to purchase shares of Series A Preferred, on
the terms and subject to the conditions set forth in this Agreement.
THE PARTIES AGREE AS FOLLOWS:
1. Purchase and Sale of Series A Preferred Stock.
1.1 Sale and Issuance of Series A Preferred. The Company shall
sell to the Investor and the Investor shall purchase from the Company the number
of shares of Series A Preferred as set forth opposite the name of such Investor
on Exhibit A in exchange for the assignment and license of certain technology
from Microcide to the Company as set forth in the Core Technology Development
and License Agreement between Microcide and the Company of even date herewith
(the "License Agreement"). The shares of Series A Preferred sold to the Investor
are referred to as the "Shares."
1.2 Closing. The initial purchase and sale of the Shares shall
take place on the initial closing date of the sale by the Company to certain
investors of the Series B Preferred Stock pursuant to that certain Series B and
Series C Preferred Stock Purchase Agreement of even date herewith (the "Series B
and C Purchase Agreement"), or on such other date as the Company and the
Investor mutually agree (the dates of the purchase and sale of the Series A
Preferred are designated the "Closings"). At the initial closing ("Initial
Closing"), the Company shall deliver to the Investor a certificate representing
the Shares of Series A Preferred to be purchased by the Investor at the Initial
Closing as set forth on Exhibit A against delivery to the Company by such
Investor at the Initial Closing of (a) an executed counterpart of this
Agreement, and (b) an executed counterpart of the License Agreement.
6
1.3 Second Closing. On the earliest to occur of (i) the
closing of the sale of the Series C Preferred on the second closing date under
the Series B and C Purchase Agreement, (ii) June 30, 1998 or (iii) thirty (30)
days prior to the closing of a proposed acquisition of the Company, whether by
way or merger, sale of assets or sale of stock, the Company agrees to issue at a
second Closing (the "Second Closing"), that number of Shares of the Series A
Preferred Stock set forth opposite the Investor's name on Exhibit A attached
hereto. At the Second Closing, the Company shall deliver to the Investor a
certificate representing the Shares of Series A Preferred Stock to be issued at
the Second Closing as set Forth on Exhibit A.
2. Definitions. For purposes of this Agreement:
2.1 "Material Adverse Event" shall mean an occurrence having a
consequence that either (a) is materially adverse as to the business,
properties, prospects or financial condition of the Company.
2.2 "Subsidiary" constitutes any corporation more than 50% of
whose stock (measured by virtue of voting rights) in the aggregate is owned by
the Company.
3. Representations and Warranties of the Company to the Investors.
Except as set forth on the Schedule of Exceptions attached hereto as Exhibit C,
the Company hereby represents and warrants to the Investor that:
3.1 Corporate Organization and Authority. The Company:
(a) is a corporation duly organized, validly
existing, authorized to exercise all its corporate powers, rights and
privileges, and is in good standing in the State of Delaware;
(b) has the corporate power and corporate
authority to execute this Agreement and the Information and Registration Rights
Agreement (the "Rights Agreement") attached hereto as Exhibit D, the Right of
First Refusal Agreement (the "First Refusal Agreement") attached hereto as
Exhibit E and the Voting Agreement (the "Voting Agreement") attached hereto as
Exhibit G (this Agreement, the Rights Agreement, the First Refusal Agreement and
the Voting Agreement are collectively referred to as the "Agreements") and carry
out the transactions contemplated hereby and thereby and to own and operate its
properties and to carry on its business as now conducted and as proposed to be
conducted; and
(c) is qualified as a foreign corporation in all
jurisdictions in which such qualification is required, except jurisdictions
where the failure to be qualified would not be a Material Adverse Event.
3.2 Capitalization. Immediately prior to the Closing, the
authorized capital of the Company shall consist of:
-2-
7
(a) Preferred Stock. 21,803,334 shares of
Preferred Stock par value $0.001 per share, 8,750,000 shares of which are
designated Series A Preferred Stock and of which none are outstanding prior to
the Closing, 4,303,334 shares of which are designated Series B Preferred Stock
and of which none are outstanding prior to the Closing, and 8,750,000 shares of
Series C Preferred Stock, and of which none are outstanding prior to the
Closing.
(b) Common Stock. 50,000,000 shares of Common
Stock par value $0.001 per share, of which 3,134,750 shares are issued and
outstanding. All outstanding shares of Common Stock are duly and validly issued
(including without limitation, issued in compliance with applicable federal and
state securities laws), fully-paid, and non-assessable
(c) Other. Except as set forth in the Schedule
of Exceptions and as contemplated by this Agreement and the Rights Agreement,
there are no outstanding warrants, options, conversion privileges, preemptive
rights, or other rights or agreements to purchase or otherwise acquire or issue
any equity securities of the Company.
3.3 Subsidiaries. The Company does not presently own, have any
investment in, or control, directly or indirectly, any Subsidiaries,
associations or other business entities. The Company is not a participant in any
joint venture or partnership.
3.4 Authorization. All corporate action on the part of the
Company, its officers, directors and stockholders necessary for the
authorization, execution, delivery and performance of all obligations under the
Agreements, and for the issuance and delivery of the Shares, and of the Common
Stock issuable upon conversion of the Shares, has been taken. The Agreements
constitute legally binding valid obligations of the Company enforceable against
the Company in accordance with their terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws of general
application affecting enforcement of creditors' rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief, or other equitable remedies, and (iii) to the extent the indemnification
provisions contained in the Rights Agreement may be limited by applicable
federal or state securities laws.
3.5 Validity of Series A Preferred. The Shares, when issued,
sold and delivered in accordance with the terms and for the consideration
expressed in this Agreement, shall be duly and validly issued (including,
without limitation, issued in compliance with applicable federal and state
securities laws), fully-paid and non-assessable, and free from any liens or
encumbrances other than those accepted or imposed by the holders thereof, and
the applicable state and federal securities laws restrictions on transfer to
which such Shares are subject. The Common Stock issuable upon conversion of the
Shares, assuming such Common Stock is issued to the Investors or qualified
transferees, upon issuance in accordance with the Certificate shall be duly and
validly issued (including, without limitation, issued in compliance with all
applicable federal and state securities laws), fully paid and non-assessable,
and free from any liens or encumbrances other than those accepted or imposed by
the holders thereof and the applicable state and federal securities laws
restrictions on transfer to which such Shares are subject.
-3-
8
3.6 No Conflict with Other Instruments; Compliance with Laws.
The execution, delivery and performance of the Agreements will not result in any
violation of, be in conflict with, or constitute a default under, with or
without the passage of time or the giving of notice: (i) any provision of the
Company's Certificate or Bylaws; (ii) any provision of any judgment, decree or
order to which the Company is a party or by which it is bound; (iii) any
material contract, obligation or commitment to which the Company is a party or
by which it is bound; or (iv) to the best of Company's knowledge, any statute,
rule or governmental regulation applicable to the Company. To the best of
Company's knowledge, the Company is conducting its business in compliance with
all statutes, rules, and governmental regulations applicable to the Company
where the failure to do so would constitute a Material Adverse Event.
3.7 Agreements; Actions.
(a) Except for the agreements explicitly contemplated
hereby, as set forth in the Schedule of Exceptions, there are no agreements,
understandings or proposed transactions between the Company and any of its
officers, directors, affiliates or any affiliate thereof.
(b) There are no agreements, understandings,
instruments, contracts or proposed transactions to which the Company is a party
or by which it is bound which involve (i) obligations of, or payments to, the
Company in excess of $10,000, (ii) the license of any patent, copyright, trade
secret or other proprietary right of the Company or (iii) any other material
agreement.
(c) The Company has not (i) declared or paid any
dividends, or authorized or made any distribution upon or with respect to any
class or series of its capital stock, (ii) incurred any indebtedness for money
borrowed, (iii) incurred any other liabilities individually in excess of $10,000
or in excess of $25,000 in the aggregate, other than obligations or liabilities
of the Company for compensation under employment, advisor or consulting
agreements, (iv) made any loans or advances to any person, other than ordinary
advances for travel expenses, (v) sold, exchanged or otherwise disposed of any
of its material assets or rights or (vi) agreed to any of the foregoing.
(d) The Company is not a party to and is not bound by
any contract, agreement or instrument, or subject to any restriction under its
Certificate or Bylaws, which to the knowledge of the Company adversely affects
in any material respect its business as now conducted or as proposed to be
conducted, its properties or its financial condition.
(e) Except with respect to Microcide in connection
with the purchase and sale of Series A Preferred, the Company has not engaged in
the past six months in any discussion (i) with any representative of any
corporation or corporations regarding the consolidation or merger of the Company
with or into any such corporation or corporations, (ii) with any corporation,
partnership, association or other business entity or any individual regarding
the sale, conveyance or disposition of all or substantially all of the assets of
the Company or a transaction or series of related transactions in which more
than 50 percent of the voting power of the Company is disposed of, other than as
-4-
9
contemplated by this Agreement, or (iii) regarding any other form of
liquidation, dissolution or winding up of the Company.
(f) The Company was incorporated on December 11, 1997
and has not yet commenced operations other than in connection with and as
contemplated by this Agreement and the Agreements or in connection with its
initial organization, recruitment of employees and consultants, licensing
patents and technology, leasing a facility, and other similar activities.
3.8 Litigation. There is no action, proceeding or
investigation pending or to the best of the Company's knowledge, threatened,
that questions the validity of this Agreement, or the Rights Agreement or the
right of the Company to enter into this Agreement or the Rights Agreement or to
consummate the transactions contemplated hereby and thereby, or that would
result, either individually or in the aggregate, in any Material Adverse Event,
nor is the Company aware that there is any basis for the foregoing. There is no
judgment, decree or order of any court in effect against the Company and the
Company is not in default with respect to any order of any governmental
authority to which the Company is a party or by which it is bound. The Company
has no present intention to commence litigation against any other party.
3.9 Title to Properties; Liens and Encumbrances. Excluding for
purposes of this section 3.9 the assets transferred to the Company pursuant to
the License Agreement, the Company has good and marketable title to all of its
tangible properties and assets, both real and personal, all of which is in good
operating and usable condition (subject to normal wear and tear), and has good
title to all its leasehold interests and is in compliance with such leases, in
each case subject to no mortgage, pledge, lien, security interest, conditional
sale agreement, encumbrance or charge which would constitute a Material Adverse
Event.
3.10 Patents and Other Proprietary Rights. To the best of the
Company's knowledge, and excluding for purposes of this section 3.10 the
intellectual property rights assigned or licensed to the Company pursuant to the
License Agreement, the Company has sufficient title and ownership of all
material patents, trademarks, service marks, trade names, copyrights, trade
secrets, information, proprietary rights and processes necessary for its
business as now conducted, and as proposed to be conducted, without conflict
with or infringement of the rights of others. There are no outstanding options,
licenses or agreements of any kind relating to the foregoing, nor is the Company
bound by or a party to any options, licenses or agreements of any kind with
respect to the patents, trademarks, service marks, trade names, copyrights,
trade secrets, licenses, information, proprietary rights and processes of any
other person or entity, which would be material to the Company's business as
conducted or, to the best of the Company's knowledge, as proposed to be
conducted. The Company has not received any communications alleging, nor is the
Company aware of any basis for such allegation, that the Company has violated
or, by conducting its business as proposed, would violate any of the patents,
trademarks, service marks, trade names, copyrights or trade secrets or other
proprietary rights of any other person or entity. The Company is not aware that
any of its employees is obligated under any contract (including licenses,
covenants or commitments of any nature) or other agreement, or subject to any
judgment, decree or order of any court or administrative agency, that would
interfere with the use of such
-5-
10
employee's best efforts to promote the interests of the Company or that would
conflict with the Company's business as proposed to be conducted. Neither the
execution nor delivery of this Agreement, nor the carrying on of the Company's
business by the employees of the Company, nor the conduct of the Company's
business as now conducted and as proposed to be conducted, will, to the best of
the Company's knowledge, conflict with or result in a breach of the terms,
conditions or provisions of, or constitute a default under, any contract,
covenant or instrument under which any of such employees is now obligated. Each
employee of and consultant to the Company with access to confidential or
proprietary information has executed a proprietary information agreement
obligating such employee or consultant to hold all such information in
confidence. The Company does not believe it is or will be necessary to utilize
any inventions of any of its employees (or people it currently intends to hire)
made prior to their employment by the Company which have not been assigned or
licensed to the Company.
3.11 No Defaults; Violations or Conflicts. The Company is not
in violation of any term or provision of its Certificate, Bylaws, or any term or
provision of any indebtedness, mortgage, indenture, contract, agreement, or
judgment which would constitute a Material Adverse Event.
3.12 Private Offering. The Company agrees that neither the
Company nor anyone acting on its behalf will offer any of the Shares or any
similar securities for issuance or sale to, or solicit any offer to acquire any
of the same from, anyone so as to make the issuance and sale of the Shares
subject to the registration requirements of Section 5 of the Securities Act of
1933, as amended (the "Securities Act").
3.13 Registration Rights. Except as provided in the Rights
Agreement attached as Exhibit C, the Company is under no contractual obligation
to register under the Securities Act any of its presently outstanding securities
or any of its securities that may subsequently be issued.
3.14 Brokers and Finders. The Company has not retained any
investment banker, broker or finder in connection with the sale of the Shares.
3.15 Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state, local or provincial governmental authority on
the part of the Company is required in connection with the consummation of the
transactions contemplated by this Agreement, except for qualification (or taking
such action as may be necessary to secure an exemption from qualification) under
the California Corporate Securities Laws and other applicable blue sky laws of
the Shares (and the Common Stock issuable upon conversion thereof) and the
modification of rights of stockholders contemplated by this Agreement and the
Rights Agreement.
3.16 Corporate Documents. The Certificate and Bylaws of the
Company as presently in effect are in the form previously provided to special
counsel to the Investor.
3.17 Minute Books. The minute books of the Company made
available to special counsel to the Investor contain a complete summary of all
meetings of directors and stockholders since
-6-
11
the time of incorporation and reflect all transactions referred to in such
minutes accurately in all material respects.
3.18 Financial Statements. Consistent with having conducted no
operations as set forth in Section 3.7(f) hereof, the Company has no financial
statements (balance sheet, income statement and cash flow statement).
4. Representations and Warranties of the Investor. The Investor
represents and warrants to the Company as follows:
4.1 Authorization. When executed and delivered by the
Investor, and assuming execution and delivery by the Company, the Agreements
will constitute valid obligations of such Investor, enforceable in accordance
with their terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors' rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief, or other equitable
remedies, and (iii) to the extent the indemnification provisions contained in
the Rights Agreement may be limited by applicable federal or state securities
laws.
4.2 Brokers and Finders. The Investor has not retained any
investment banker, broker, or finder in connection with the transactions
contemplated by this Agreement.
5. Securities Laws.
5.1 Securities Laws Representations and Covenants of Investor.
(a) This Agreement is made with the Investor in
reliance upon such Investor's representation to the Company, which by such
Investor's execution of this Agreement such Investor hereby confirms, that the
Shares and the Common Stock issuable upon conversion thereof (collectively, the
"Securities") to be received by such Investor will be acquired for investment
for such Investor's own account, not as a nominee or agent, and not with a view
to the sale or distribution of any part thereof, and that such Investor has no
present intention of selling, granting any participation in, or otherwise
distributing the same. By executing this Agreement, such Investor further
represents that such Investor has no contract, undertaking, agreement or
arrangement with any person to sell, transfer, or grant participations to such
person or to any third person, with respect to any of the Securities.
(b) The Investor understands and acknowledges that
the offering of the Securities pursuant to this Agreement will not be registered
under the Securities Act on the grounds that the offering and sale of securities
contemplated by this Agreement are exempt from registration pursuant to Section
4(2) of the Securities Act, and that the Company's reliance upon such exemption
is predicated upon such Investor's representations set forth in this Agreement.
(c) The Investor covenants that in no event will it
dispose of any of the Securities (other than if a Registration Statement is in
effect with respect to such shares of the Securities
-7-
12
or a disposition pursuant to Rule 144 promulgated by the Securities and Exchange
Commission ("Commission") under the Securities Act ("Rule 144") or any similar
or analogous rule) unless and until (i) the Investor shall have notified the
Company of the proposed disposition and shall have furnished the Company with a
statement of the circumstances surrounding the proposed disposition that are
necessary to the availability of an exemption under the Securities Act other
than Rule 144, and (ii) if requested by the Company, the Investor shall have
furnished the Company with an opinion of counsel satisfactory in form and
substance to the Company and the Company's counsel to the effect that (x) such
disposition will not require registration under the Securities Act and (y)
appropriate action necessary for compliance with the Securities Act and any
applicable state, local or foreign law has been taken. Notwithstanding the
limitations set forth in the foregoing sentence, the Investor which is a
partnership may transfer Series A Preferred to its constituent partners or a
retired partner of such partnership who retires after the date hereof, or to the
estate of any such partner or retired partner or transfer by gift, will or
intestate succession to any such partner's spouse or lineal descendants or
ancestors without the necessity of registration or opinion of counsel if the
transferee agrees in writing to be subject to the terms of this Agreement, the
Rights Agreement and the First Refusal Agreement to the same extent as if such
transferee were an Investor; provided, however, that each Investor hereby
covenants not to effect such transfer if such transfer either would invalidate
the securities laws exemptions pursuant to which the Securities were originally
offered and sold or would itself require registration under the Securities Act
or applicable state securities laws. Any certificate evidencing the Securities
transferred as above provided shall bear the appropriate restrictive legend set
forth in Section 5.2 below, provided, however, that any legend endorsed on a
certificate pursuant to Section 5.2(a) hereof shall be removed (i) if the
Securities represented by such certificate shall have been effectively
registered under the Securities Act or otherwise lawfully sold in a public
transaction, or (ii) if such Securities may be transferred in compliance with
Rule 144(k) promulgated under the Securities Act. Any legend endorsed on a
certificate pursuant to Section 5.2(b) hereof shall be removed if the Company
receives an order of the appropriate state authority authorizing such removal.
(d) The Investor represents that: (i) it has such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of such Investor's prospective investment in the
Securities and is an accredited investor as defined in Rule 501(a) of Regulation
D under the Act; (ii) it has received all the information it has requested from
the Company and considers necessary or appropriate for deciding whether to
purchase the Securities; (iii) it has the ability to bear the economic risks of
such Investor's prospective investment; (iv) the Investor understands that no
public market currently exists for any of the Company's securities, and that the
Company has made no assurances that a public market will ever exist for the
Securities and (v) such Investor is able, without materially impairing its
financial condition, to hold the Securities for an indefinite period of time and
to suffer complete loss on its investment.
-8-
13
5.2 Legends.
(a) All certificates for the Securities shall bear
the following legend:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED ("ACT"). SUCH SECURITIES MAY NOT BE
TRANSFERRED UNLESS A REGISTRATION STATEMENT UNDER THE
ACT IS IN EFFECT AS TO SUCH TRANSFER OR SUCH TRANSFER
MAY BE MADE PURSUANT TO RULE 144 OR IN THE OPINION OF
COUNSEL FOR THE COMPANY, REGISTRATION UNDER THE ACT
IS UNNECESSARY IN ORDER FOR SUCH TRANSFER TO COMPLY
WITH THE ACT."
(b) Any certificates evidencing the Securities shall
also bear any legend required by the Commissioner of Corporations of the State
of Delaware or required pursuant to any state, local or foreign law governing
such securities.
6. Conditions of Investor's Obligations at the Initial Closing. The
obligations of the Investor under Sections 1.1 and 1.2 of this Agreement are
subject to the fulfillment at or before the Initial Closing of each of the
following conditions, any of which may be waived in writing by the Investor:
6.1 Representations and Warranties. The representations and
warranties of the Company contained in Section 3 shall be true on and as of the
date of the Initial Closing with the same effect as if made on and as of the
Initial Closing.
6.2 Performance. The Company shall have performed or fulfilled
in all material respects all agreements, obligations and conditions contained
herein required to be performed or fulfilled by the Company before the Initial
Closing.
6.3 Blue Sky Compliance. The Company shall have complied with
and be effective under all state securities or Blue Sky laws applicable to the
offer and sale of the Shares to the Investor at the Initial Closing.
6.4 Information and Registration Rights. The Company, the
purchasers of the Series B Preferred and the Investor shall have entered into
the Rights Agreement in substantially the form attached hereto as Exhibit D.
6.5 First Refusal Agreement. The Company, the Investor, other
investors and Xxxxx Xxxxxxx shall have entered into a First Refusal Agreement in
substantially the form attached hereto as Exhibit E.
6.6 Proceedings Satisfactory: Compliance Certificate. All
corporate and legal proceedings taken by the Company in connection with the
transactions contemplated by this Agreement
-9-
14
and all documents and papers relating to such transactions shall be satisfactory
to the Investors and their counsel, and the Investor shall have received all
such counterpart original and certified or other copies of such documents as it
may reasonably request. The Company shall have delivered to the Investor a
certificate dated as of the Initial Closing, signed by the Company's President,
certifying that the conditions set forth in Sections 6.1, 6.2, and 6.8 have been
satisfied.
6.7 Opinion of Counsel. There shall have been delivered to the
Investor an opinion of legal counsel to the Company, in substantially the form
of Exhibit F attached hereto, dated as of the date of the Initial Closing.
6.8 Certified Charter Documents. There shall have been
delivered to the Investor a copy of the Certificate and Bylaws of the Company
(as amended and restated through the date of the Closing), certified by the
Secretary of the Company as true and correct copies thereof as of the date of
the Initial Closing.
6.9 Amended and Restated Certificate of Incorporation. The
Amended and Restated Certificate of Incorporation shall have been filed with and
accepted by the Delaware Secretary of State.
6.10 Voting Agreement. The Company, the purchasers of the
Series B Preferred, the Investor and Xxxxx Xxxxxxx shall have entered into a
Voting Agreement in substantially the form of Exhibit G attached hereto.
7. Conditions of the Company's Obligations at Initial Closing. The
obligations of the Company under Sections 1.1 and 1.2 of this Agreement are
subject to the fulfillment at or before the Initial Closing of each of the
following conditions, any of which may be waived in writing by the Company:
7.1 Representations and Warranties. The representations and
warranties of the Investor contained in Sections 4 and 5 shall be true on and as
of the Initial Closing with the same effect as though said representations and
warranties had been made on and as of the Initial Closing.
7.2 Blue Sky Compliance. The Company shall have complied with
and be effective under all state securities or Blue Sky laws applicable to the
offer and sale of the Shares to the Investor.
7.3 Information and Registration Rights. The Company and the
Investor shall have entered into the Rights Agreement in substantially the form
of Exhibit D attached hereto.
7.4 First Refusal Agreement. The Company, the purchasers of
the Series B Preferred, the Investor and Xxxxx Xxxxxxx shall have entered into a
First Refusal Agreement attached hereto as Exhibit E.
7.5 Amended and Restated Certificate of Incorporation. The
Amended and Restated Certificate of Incorporation shall have been filed with and
accepted by the Delaware Secretary of State.
-10-
15
7.6 Voting Agreement. The Company, the purchasers of the
Series B Preferred, the Investor and Xxxxx Xxxxxxx shall have entered into a
Voting Agreement in substantially the form of Exhibit G attached hereto.
8. Post-Closing Covenant of the Company.
8.1 Securities Laws Compliance. The Company shall within
fifteen (15) days of the Closings file a notice of the sale of the Shares to the
Investors pursuant to Section 25102(f) of the California Corporations Code and
shall make any other filings required by the securities or Blue Sky laws of any
other applicable jurisdiction.
9. Miscellaneous.
9.1 Entire Agreement; Successors and Assigns. The Agreements
constitute the entire agreement between the Company and the Investors relative
to the subject matter hereof. Any previous agreement between the Company and the
Investors is superseded by this Agreement. Subject to the exceptions
specifically set forth in this Agreement, the terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
executors, administrators, heirs, successors and assigns of the parties.
9.2 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California applicable to
contracts entered into and wholly to be performed within the State of California
by California residents.
9.3 Counterparts. This Agreement may be executed in two (2) or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.4 Headings. The headings of the sections of this Agreement
are for convenience and shall not by themselves determine the interpretation of
this Agreement.
9.5 Notices. Any notice required or permitted hereunder shall
be given in writing and shall be conclusively deemed effectively given (i) five
(5) days after sending by first class U.S. mail postage prepaid, (ii) upon
personal delivery, or (iii) on the date of sending if sent by commercial
overnight courier addressed to the Company as set forth below the Company's name
on the signature page of this Agreement, and to an Investor, at the Investor's
address as set forth on Exhibit A or at such other address as the Company or the
Investor may designate.
9.6 Survival of Warranties. The warranties, representations
and covenants of the parties contained in or made pursuant to this Agreement
shall survive the execution and delivery of this Agreement and the Closing, and
such warranties, representations and covenants of the Company shall in no way be
affected by any investigation of the subject matter thereof made by or on behalf
of the
-11-
16
Investors; provided, however, that such representations and warranties need only
be accurate as of the date of such execution and delivery and as of the Closing.
9.7 Amendment of Agreement. Any provision of this Agreement
may be amended, waived or terminated by a written instrument signed by the
Company and by persons holding more than fifty percent (50%) of the aggregate of
(i) the then outstanding shares of Series A Preferred Stock (assuming conversion
to Common Stock at the conversion rate then in effect) and (ii) the then
outstanding shares of Common Stock into which the shares of Series A Preferred
Stock have been converted, other than shares of Common Stock which have been
sold to the public.
9.8 Finders Fees. Each of the Company and the Investor will
indemnify the other against all liabilities incurred by the indemnifying party
with respect to claims related to investment banking or finders fees in
connection with the transactions contemplated by this Agreement, arising out of
arrangements between the party asserting such claims and the indemnifying party,
and all costs and expenses (including reasonable fees of counsel) of
investigating and defending such claims.
9.9 Expenses. The Company and the Investor will each bear
their respective legal and other fees and expenses in connection with the
transactions contemplated in this Agreement and the Series B and C Preferred
Stock Purchase Agreement; provided, however, if the sale of any of the Shares is
consummated, the Company shall pay at the Closing the reasonable fees and
expenses of counsel to the Investor, up to a maximum of $10,000.
9.10 Aggregation of Stock. All Shares held or acquired by
affiliated entities or persons shall be aggregated together for the purpose of
determining the availability of any rights under this Agreement.
9.11 Severability. If any provision of this Agreement is held
to be unenforceable for any reason, it shall be adjusted rather than voided, if
possible, in order to achieve the intent of the parties to the extent possible.
In any event, all other provisions of this Agreement shall be deemed valid and
enforceable to the full extent possible.
9.12 Delays or Omissions. No delay or omission to exercise any
right, power or remedy accruing to any party under this Agreement, upon any
breach or default of any other party under this Agreement, shall impair any such
right, power or remedy of such non-breaching or non-defaulting party nor shall
it be construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any party of any
breach or default under this Agreement, or any waiver on the part of any party
of any provisions or conditions of this Agreement, must be in writing and shall
be effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
party, shall be cumulative and not alternative.
-12-
17
9.13 Corporate Securities Law. THE SALE OF THE SECURITIES
WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE
COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF THE
SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR
PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT
FROM THE QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA
CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
CONDITIONED UPON THE QUALIFICATION BEING OBTAINED UNLESS THE SALE IS SO EXEMPT.
[THIS SPACE INTENTIONALLY LEFT BLANK]
-13-
18
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
THE COMPANY: EPIGENIX, INC.
a Delaware corporation
By: [SIG]
-------------------------------
Title:
----------------------------
Address: 000 Xxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
[SIGNATURE PAGE TO SERIES A PREFERRED STOCK PURCHASE AGREEMENT]
19
THE INVESTOR: MICROCIDE PHARMACEUTICALS, INC.,
a Delaware corporation
By: [SIG]
-------------------------------
Title:
----------------------------
Address: 000 Xxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
[SIGNATURE PAGE TO SERIES A PREFERRED STOCK PURCHASE AGREEMENT]
20
EXHIBIT A
SCHEDULE OF INVESTORS
Initial Closing Second Closing
---------------- -----------------
Number of Shares Number of Shares
Name and Address of Investor Series A Series A
---------------------------- ---------------- -----------------
Microcide Pharmaceuticals, Inc. 5,250,000 3,500,000
000 Xxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
21
\ EXHIBIT B PAGE 1
State of Delaware
Office of the Secretary of State
------------
I, XXXXXX X. XXXXX, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE RESTATED
CERTIFICATE OF "MOLECULAR MEDICINE, INC.", FILED IN THIS OFFICE ON THE
THIRTEENTH DAY OF JANUARY, A.D. 1998 AT 9 O'CLOCK A.M.
/s/ Xxxxxx X. Xxxxx
[SEAL] -------------------------------
Xxxxxx X. Xxxxx, Secretary of State
2828026 8100 AUTHENTICATION: 8865993
981015118 DATE: 01-14-98
00
XXXXX XX XXXXXXXX
XXXXXXXXX XX XXXXX
DIVISION OF CORPORATIONS
FILED 09:00 AM 01/13/1998
981015118 - 2828026
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
MOLECULAR MEDICINE, INC.
Xxxxx Xxxxxxx and Xxxxxx X. Xxxxx certify that:
1. They are the President and Secretary, respectively, of Molecular
Medicine, Inc., a corporation organized and existing under the laws of the State
of Delaware (the "Corporation").
2. The date of filing of this Corporation's original Certificate of
Incorporation with the Secretary of State of Delaware is December 11, 1997.
3. The text of the Amended and Restated Certificate of Incorporation of
this Corporation as heretofore amended or supplemented is restated to read in
its entirety as follows:
ONE. The name of the Corporation is EpiGenix, Inc. (the "Corporation"
or the "Company").
TWO. The name and address of the registered office of the Corporation
in the State of Delaware is 1013 Centre Road, in the City of Wilmington, County
of New Castle, Zip Code 19805. The name of the registered agent at such address
is the Corporation Service Company.
THREE. The purpose of the Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of the State of Delaware.
FOUR. This Corporation is authorized to issue two classes of shares to
be designated respectively Common Stock and Preferred Stock. The total number of
shares of Common Stock this Corporation shall have authority to issue is
50,000,000, and the total number of shares of Preferred Stock this Corporation
shall have authority to issue is 21,803,334, each with a par value of $0.001 per
share. The Preferred Stock may be issued from time to time in one or more
series, subject to the covenants contained in this Amended and Restated
Certificate of Incorporation. The Board of Directors is authorized to fix the
number of shares of any series of Preferred Stock and to determine or alter the
rights, preferences, privileges, and restrictions granted to or imposed upon any
wholly unissued series of Preferred Stock and, within the limits and
restrictions stated in any resolution or resolutions of the Board of Directors
originally fixing the number of shares constituting any series of Preferred
Stock, to increase or decrease (but not below the number of shares of any such
series then outstanding) the number of shares of any such series subsequent to
the issue of shares of that series. The Preferred Stock shall consist of three
series, designated (i) Series A Preferred Stock ("Series A Preferred")
consisting of 8,750,000 shares (ii) Series B Preferred Stock ("Series B
Preferred") consisting of 4,303,334 shares and (iii) Series C Preferred Stock
("Series C Preferred") consisting of
23
8,750,000 shares. The Series A Preferred, Series B Preferred and Series C are
collectively referred to as the "Preferred".
The relative rights, preferences, privileges and restrictions granted
to or imposed on the respective classes of the shares of capital stock or the
holders thereof are as follows:
1. Dividends. The holders of the Preferred shall be entitled to receive
dividends out of funds legally available therefor, at the annual rate of (i)
$0.0675 per share of Series A Preferred, (ii) $0.0675 per share of Series B
Preferred, and (iii) $0.1008 per share of Series C Preferred, held by them, as
adjusted for stock splits, stock dividends, recapitalizations, and similar
events, prior and in preference to the declaration or payment of any dividend or
other distribution (payable other than in Common Stock) with respect to the
Common Stock, when, as and if declared by the Board of Directors. Such dividends
shall not be cumulative and no right to such dividends shall accrue to holders
of Preferred unless declared by the Board of Directors. No dividends or other
distributions shall be made with respect to the Common Stock, other than
dividends payable solely in Common Stock, unless (i) dividends shall have been
paid or declared and set apart for payment, on account of all shares of
Preferred then issued and outstanding, at the aforesaid rate for such calendar
year, and (ii) at the same time an equivalent dividend with respect to the
Preferred has been paid or declared and set apart for payment.
2. Liquidation Preference. In the event of any liquidation,
dissolution, or winding up of the Corporation, either voluntary or involuntary,
distributions to the stockholders of the Corporation shall be made in the
following manner:
(a) The holders of the Series B Preferred and Series C
Preferred shall be entitled to receive, prior and in preference to any
distribution of any of the assets or surplus funds of the Corporation to the
holders of the Series A Preferred and the Common Stock by reason of their
ownership of such stock, the amount equal to the greater of (i) the Original
Purchase Price per share for each share of Series B Preferred and Series C
Preferred Stock then held by them, adjusted for any combinations,
consolidations, or stock splits with respect to such shares and, in addition, an
amount equal to all declared but unpaid dividends on such series Preferred and
(ii) the amount such holders would receive upon conversion of the shares of
Series B Preferred and Series C Preferred held by them into shares of Common
Stock immediately prior to such liquidation, dissolution or winding up of the
Corporation and assuming all shares of Preferred Stock convert into shares of
Common Stock at their respective Conversion Rates. If the assets and funds thus
distributed among the holders of the Series B Preferred and Series C Preferred
shall be insufficient to permit the payment to such holders of the full
aforesaid preferential amount, then the entire assets and funds of the
Corporation legally available for distribution shall be distributed among the
holders of Series B Preferred and Series C Preferred in proportion to the full
preferential amount each such holder is otherwise entitled to receive.
(b) After payment has been made to the holders of the Series B
Preferred and Series C Preferred of the full amounts to which they shall be
entitled as provided in paragraph (a), the holders of the Series A Preferred
shall be entitled to receive prior and in preference to any
-2-
24
distribution of any of the assets or surplus funds of the Corporation to the
holders of Common Stock by reason of their ownership of such stock, the amount
equal to the greater of (i) the Original Purchase Price per share for each share
of Series A Preferred then held by them, adjusted for any combinations,
consolidations, or stock splits with respect to such shares and, in addition, an
amount equal to all declared but unpaid dividends on such series of Preferred
and (ii) the amount such holders would receive upon conversion of shares of
Series A Preferred held by them into shares of Common Stock immediately prior to
such liquidation, dissolution or winding up of the Corporation and assuming all
shares of Preferred Stock convert into shares of Common Stock at their
respective Conversion Rates. If the assets and funds thus distributed among the
holders of the Series A Preferred shall be insufficient to permit the payment to
such holders of the full aforesaid preferential amount, then the remaining
assets and funds of the Corporation legally available for distribution shall be
distributed among the holders of Series A Preferred in proportion to the full
preferential amount each such holder is otherwise entitled to receive.
(c) After payment has been made to the holders of the Series A
Preferred, Series B Preferred and Series C Preferred of the full amounts to
which they shall be entitled as provided in paragraphs (a) and (b) above, the
holders of the Common Stock shall be entitled to receive ratably on a per-share
basis all the remaining assets of the Corporation. For the purposes of this
Section 2 and Section 4, the "Original Purchase Price" (i) for the Series A
Preferred shall be $0.75, (ii) for the Series B Preferred shall be $0.75, and
(iii) for the Series C Preferred shall be $1.117647.
(d) For purposes of this Section 2, a merger or consolidation
of the Corporation with or into any other corporation or corporations, or the
merger of any other corporation or corporations into the Corporation, in which
consolidation or merger the stockholders of the Corporation receive
distributions in cash or securities of another corporation or corporations as a
result of such consolidation or merger, a sale of all or substantially all of
the assets of the Corporation, or a transaction or series of related
transactions in which a person or group of persons (as defined in Rule
13d-5(b)(1) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) acquires beneficial ownership (as determined in accordance with Rule
13d-3 of the Exchange Act) of more than 50% of the voting power of the Company
shall be treated as a liquidation, dissolution or winding up of the Corporation.
The Corporation shall provide written notice of any such liquidation,
dissolution, winding up, merger, consolidation, sale of assets, or acquisition
of beneficial ownership of the Corporation as provided in Section 4(g) hereof.
Notwithstanding anything else contained herein to the contrary, each holder of
Preferred shall have the right to convert the shares of Preferred held into
Common Stock as provided in Section 4(a) hereof. Notwithstanding anything else
contained herein to the contrary, a consolidation, merger or sale of all or
substantially all assets will not be treated as a liquidation, dissolution or
winding up of this Corporation unless the Corporation's stockholders of record
as constituted immediately prior to such transaction will, immediately after
such transaction hold less than 50% of the voting power of the surviving or
acquiring entity.
-3-
25
3. Voting Rights.
(a) General Voting Rights. Except as otherwise required by law
or Section 5 below, the holder of each share of Common Stock issued and
outstanding shall have one vote and the holder of each share of Preferred issued
and outstanding shall be entitled to the number of votes equal to the number of
shares of Common Stock into which such share of Preferred could be converted at
the record date for determination of the stockholders entitled to vote on such
matters, or, if no such record date is established, at the date such vote is
taken or any written consent of stockholders is solicited, such votes to be
counted together with all other shares of stock of the Corporation having
general voting power and not separately as a class. Fractional votes by the
holders of Preferred shall not, however, be permitted and any fractional voting
rights shall (after aggregating all shares into which shares of Preferred held
by each holder could be converted) be rounded to the nearest whole number.
Holders of Common Stock and Preferred shall be entitled to notice of any
stockholders' meeting in accordance with the Bylaws of the Corporation.
(b) Board of Directors. The holders of the issued and
outstanding shares, if any, of Series B Preferred and Series C Preferred will be
entitled, voting together as a single, separate class, to elect three directors;
the holders of the issued and outstanding shares, if any, of Series A Preferred
voting as a single, separate class, will be entitled to elect two directors; the
holders of issued and outstanding shares, if any, of Common Stock, voting as a
single, separate class, will be entitled to elect one director; and the holders
of the issued and outstanding shares, if any, of Preferred and Common Stock
voting as single, separate classes, will be entitled to elect one director
(which director shall have received a plurality of the votes of both the
Preferred, including a plurality of the votes of the issued and outstanding
shares, if any, of the Series B and Series C Preferred, and the Common Stock,
each voting as a separate class).
(c) Vacancies. In the case of any vacancy in the office of a
director elected by any class or series of the Company's capital stock voting
(together if applicable) as a single, separate class pursuant to Section 3(b)
hereof, then either (A) the holders of such series or class may elect a
successor or successors to hold office for the unexpired term of the director or
directors whose office or offices shall be vacant or (B) the remaining
directors, if any, so elected by that class or series separately may, by
affirmative vote of a majority thereof (or the remaining director so elected if
there be but one (1)), may elect a successor or successors to hold office for
the unexpired term of the director or directors whose office or offices shall be
vacant. Any director who shall have been elected by the holders of any class or
series of the Company's capital stock voting (together if applicable) as a
single, separate class, or by any directors so elected a provided in the
preceding sentence hereof, may be removed during the aforesaid term of office,
either for or without cause, by, and only by, the vote of the holders such class
or series of the Company's capital stock who elected such director or directors
taken at a meeting of such stockholders duly called for that purpose, and any
vacancy thereby created may be filled by the holders of such class or series of
the Company's capital stock.
4. Conversion. The holders of the Preferred have conversion rights as
follows (the "Conversion Rights"):
-4-
26
(a) Right to Convert. Subject to Section 4(d), each share of
Preferred shall be convertible, at the option of the holder thereof, at any time
after the date of issuance of such share at the office of the Corporation or any
transfer agent for the Preferred into that number of fully paid and
non-assessable shares of Common Stock which shall result from dividing the
Conversion Price for the such series of Preferred in effect at the time of
conversion into the Original Purchase Price (the "Conversion Rate"). For the
purposes of this Section 4, the "Conversion Price" (i) for the Series A
Preferred shall be $0.75, as adjusted herein, (ii) for the Series B Preferred
shall be $0.75, as adjusted herein, and (iii) for the Series C Preferred shall
be $1.117647, as adjusted herein.
(b) Automatic Conversion. Each share of Preferred shall
automatically be converted into shares of Common Stock at the then effective
Conversion Rate for such series upon the closing of a firm commitment
underwritten public offering pursuant to an effective registration statement
under the Securities Act of 1933, as amended, covering the offer and sale of
Common Stock for the account of the Corporation to the public at a price per
share (prior to underwriter commissions and offering expenses) of not less than
$3.00 per share (appropriately adjusted for any stock splits, stock dividends,
recapitalizations or similar events) and an aggregate offering price to the
public (prior to deduction of underwriter commissions and offering expenses) of
not less than $15,000,000.
(c) Mechanics of Conversion. No fractional shares of Common
Stock shall be issued upon conversion of Preferred. In lieu of any fractional
shares to which the holder would otherwise be entitled, the Corporation shall
pay cash equal to such fraction multiplied by the then effective Conversion
Price for such series of Preferred. Before any holder of Preferred shall be
entitled to convert the same into full shares of Common Stock and to receive
certificates therefor, such holder shall surrender the certificate or
certificates therefor, duly endorsed, at the office of the Corporation or of any
transfer agent for the Preferred, and shall give written notice to the
Corporation at such office that such holder elects to convert the same;
provided, however, that in the event of an automatic conversion pursuant to
Section 4(b), the outstanding shares of Preferred shall be converted
automatically without any further action by the holders of such shares and
whether or not the certificates representing such shares are surrendered to the
Corporation or its transfer agent; and provided, further, that the Corporation
shall not be obligated to issue certificates evidencing the shares of Common
Stock issuable upon such automatic conversion unless the certificates evidencing
such shares of Preferred are either delivered to the Corporation or its transfer
agent as provided above, or the holder notifies the Corporation or its transfer
agent that such certificates have been lost, stolen or destroyed and executes an
agreement satisfactory to the Corporation to indemnify the Corporation from any
loss incurred by it in connection with such certificates. The Corporation shall,
as soon as practicable after such delivery, or such agreement and
indemnification in the case of a lost certificate, issue and deliver at such
office to such holder of Preferred, a certificate or certificates for the number
of shares of Common Stock to which such holder shall be entitled as aforesaid
and a check payable to the holder in the amount of any cash amounts payable as
the result of a conversion into fractional shares of Common Stock. Such
conversion shall be deemed to have been made immediately prior to the close of
business on the date of such surrender of the shares of Preferred to be
converted, or in the case of automatic conversion on the date of closing of the
offering or the effective date of such written consent, and the person or
persons entitled to receive the shares of
-5-
27
Common Stock issuable upon such conversion shall be treated for all purposes as
the record holder or holders of such shares of Common Stock on such date.
(d)Adjustments to Conversion Price.
(i) Adjustments for Stock Dividends. Subdivisions,
Combinations or Consolidation of Common Stock. In the event the outstanding
shares of Common Stock shall be subdivided (by stock split, or otherwise), into
a greater number of shares of Common Stock, or the Corporation at any time or
from time to time after the Original Issue Date for any series of Preferred
shall declare or pay any dividend on the Common Stock payable in Common Stock,
the Conversion Price then in effect for such series shall, concurrently with the
effectiveness of such subdivision or stock dividend, be proportionately
decreased. In the event the outstanding shares of Common Stock shall be combined
or consolidated, by reverse stock split, reclassification or otherwise, into a
lesser number of shares of Common Stock, the Conversion Rate then in effect for
such series shall, concurrently with the effectiveness of such combination or
consolidation, be proportionately increased. The "Original Issue Date" for any
series of Preferred shall be the first date on which the shares of such series
are first issued and sold by the Corporation.
(ii) Adjustments for Other Distributions. In the
event the Corporation at any time or from time to time makes, or fixes a record
date for the determination of holders of Common Stock entitled to receive any
distribution payable in securities of the Corporation other than shares of
Common Stock and other than as otherwise adjusted in this Section 4, then and in
each such event provision shall be made so that the holders of the Preferred
shall receive upon conversion thereof, in addition to the number of shares of
Common Stock receivable thereupon, the amount of securities of the Corporation
which they would have received had their Preferred been converted into Common
Stock on the date of such event and had they thereafter, during the period from
the date of such event to and including the date of conversion, retained such
securities receivable by them as aforesaid during such period, subject to all
other adjustments called for during such period under this Section 4 with
respect to the rights of the holders of the Preferred.
(iii) Adjustments for Reorganization or
Reclassification. If the Common Stock issuable upon conversion of the Preferred
shall be changed into the same or a different number of shares of any other
class or classes of stock, whether by capital reorganization, reclassification
or otherwise (other than a subdivision or combination of shares provided for
above), each share of Preferred shall, concurrently with the effectiveness of
such reorganization or reclassification, be convertible into, in lieu of the
number of shares of Common Stock which the holders of Preferred would otherwise
have been entitled to receive, a number of shares of such other class or classes
of stock equivalent to the number of shares of Common Stock that would have been
subject to receipt by the holders upon conversion of the Preferred immediately
before that change. In any such case, appropriate adjustment shall be made in
the application of the provisions of this Section 4 with respect to the rights
of the holders of such series of Preferred after the reorganization or
reclassification, to the end that the provisions of this Section 4 (including
adjustment of the Conversion Price then in effect and the number of shares
purchasable upon conversion of such series of Preferred) shall be applicable
after that event as nearly equivalent as may be practicable.
-6-
28
(e) No Impairment. Except as provided in Section 5, the
Corporation will not, by amendment of its Certificate of Incorporation or
through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms to be observed
or performed hereunder by the Corporation but will at all times in good faith
assist in the carrying out of all the provisions of this Section 4 and in the
taking of all such action as may be necessary or appropriate in order to protect
the conversion rights of the holders of the Preferred against impairment.
(f) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Price pursuant to this Section 4,
the Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each holder of
Preferred a certificate setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or readjustment is based.
The Corporation shall promptly furnish or cause to be furnished to such holder a
like certificate setting forth (i) such adjustments and readjustments, (ii) the
Conversion Rate and the Conversion Price at the time in effect, and (iii) the
number of shares of Common Stock and the amount, if any, of other property which
at the time would be received upon the conversion of each series of Preferred.
(g) Notices of Record Date. In the event that this Corporation
shall propose at any time:
(i) to declare any dividend or distribution upon its
Common Stock, whether in cash, property, stock or other securities, whether or
not a regular cash dividend and whether or not out of earnings or earned
surplus;
(ii) to effect any reclassification or
recapitalization of its Common Stock outstanding involving a change in the
Common Stock; or
(iii) to merge or consolidate with or into any other
corporation, or sell, lease or convey all or substantially all its property or
business, or to liquidate, dissolve or wind up; then, in connection with each
such event, this Corporation shall send to the holders of the Preferred:
(iv) at least 20 days' prior written notice of the
date on which a record shall be taken for such dividend, distribution or
subscription rights (and specifying the date on which the holders of Common
Stock shall be entitled thereto) or for determining rights to vote in respect of
the matters referred to in (ii) and (iii) above; and
(v) in the case of the matters referred to in (ii)
and (iii) above, at least 20 days' prior written notice of the date when the
same shall take place (and specifying the date on which the holders of Common
Stock shall be entitled to exchange their Common Stock for securities or other
property deliverable upon the occurrence of such event or the record date for
the determination of such holders if such record date is earlier).
-7-
29
Each such written notice shall be delivered personally or given by
first class mail, postage prepaid, addressed to the holders of the Preferred at
the address for each such holder as shown on the books of this Corporation;
provided, that any such written notice to an address outside the United States
shall additionally be given by telecopy and confirmed in writing sent by two day
guaranteed international courier.
5. Covenants.
(a) In addition to any other rights provided by law, so long
as shares of Preferred are outstanding, this Corporation shall not, without
first obtaining the affirmative vote or written consent of the holders of a
majority of the outstanding shares of the Preferred (which, prior to the
issuance of any shares of Series C Preferred, shall include a majority of the
outstanding shares of Series B Preferred):
(i) amend or repeal any provision of, or add any
provision to, the Corporation's Certificate of Incorporation or the
Corporation's Bylaws if such action would adversely alter or change the
preferences, rights, privileges or powers of, or the restrictions provided for
the benefit of, the Preferred;
(ii) create (by reclassification or otherwise) or
issue shares of any class or series of stock having a preference over, or being
on a parity with, the Preferred with respect to voting, dividends or upon
liquidation;
(iii) sell, convey, or otherwise dispose of or
encumber all or substantially all of its property or business or merge into or
consolidate with any other corporation immediately after which merger or
consolidation (including any series of related transactions) the shareholders of
the Corporation shall hold less than 50% of the voting power of the surviving
corporation;
(iv) dissolve, liquidate or wind up the Corporation;
(v) declare any dividends on or make any
distribution on account of the Preferred or the Common Stock; or
(vi) repurchase any outstanding shares of Common
Stock, except for repurchases of Common Stock from directors, employees and
consultants;
(vii) do any act or thing which would result in
taxation of the holders of shares of Preferred under Section 305 of the Internal
Revenue Code of 1986, as amended, or any comparable provision of the Internal
Revenue Code as hereafter from time to time amended;
(viii) file a petition in voluntary bankruptcy, seek
relief under any provision of any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution, liquidation or other similar law
of any jurisdiction or consent to the filing of any such petition against it
under any such law; or
-8-
30
(ix) make any assignment for the benefit of
creditors, admit in writing the inability of the Corporation to pay its debts
generally as they become due or consent to the appointment of a receiver,
trustee, liquidator of the Corporation or of its property.
(b) If any amendment or action referred to in (i) or (ii)
above would adversely affect the holders of the Series A Preferred or the
holders of the Series B Preferred or holders of Series C Preferred, but not all
other series of the Preferred Stock, then such amendment or action shall also
require the consent of the holders of a majority of such series of Preferred
Stock which would be adversely affected.
6. Consent for Certain Repurchases of Common Stock Deemed to be
Distributions. Each holder of Preferred Stock shall be deemed to have consented
to distributions made by the Corporation in connection with the repurchase of
shares of Common Stock issued to or held by employees or consultants upon
termination of their employment or services pursuant to agreements providing for
such right of repurchase between the Corporation and such persons.
FIVE. The corporation is to have perpetual existence.
SIX. In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to make, alter, amend or
repeal the Bylaws of the Corporation.
SEVEN. The number of directors which will constitute the whole Board of
Directors of the Corporation shall be as specified in the Bylaws of the
Corporation.
EIGHT. The election of directors need not be by written ballot unless
the Bylaws of the Corporation shall so provide.
NINE. Meetings of stockholders may be held within or without the State
of Delaware, as the Bylaws may provide. The books of the Corporation may be kept
(subject to any provisions contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the Bylaws of the Corporation.
TEN. To the fullest extent permitted by the Delaware General
Corporation Law as the same exists or as may hereafter be amended, a director of
the Corporation shall not be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director.
The Corporation may indemnify to the fullest extent permitted by law any person
made or threatened to be made a party to an action or proceeding, whether
criminal, civil, administrative or investigative, by reason of the fact that
such person or his or her testator or intestate is or was a director, officer or
employee of the Corporation, or any predecessor of the Corporation, or serves or
served at any other enterprise as a director, officer or employee at the request
of the Corporation or any predecessor to the Corporation. Neither any amendment
nor repeal of this Article, nor the adoption of any provision of this
Certificate of Incorporation inconsistent with this Article, shall eliminate or
reduce the effect of this Article in respect of any matter occurring, or any
cause of
-9-
31
action, suit or claim that, but for this Article, would accrue or arise, prior
to such amendment, repeal or adoption of an inconsistent provision.
ELEVEN. Advance notice of new business and stockholder nomination for
the election of directors shall be given in the manner and to the extent
provided in the Bylaws of the Corporation.
TWELVE. Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them and/or between the
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of the Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for the Corporation under the
provisions of Section 291 of Title 8 of the Delaware Code or on the application
of trustees in dissolution or of any receiver or receivers appointed for the
Corporation under the provisions of Section 279 of Title 8 of the Delaware Code,
order a meeting of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of the Corporation, as the case may be, to
be summoned in such manner as the said court directs. If a majority in number
representing three-fourths in value of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of the Corporation, as the
case may be, agree to any compromise or arrangement and to any reorganization of
the Corporation as consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of the Corporation, as the case may be, and also on the
Corporation.
THIRTEEN. Subject to the General Corporation Law of the State of
Delaware and Section 5 hereof, the Corporation reserves the right to amend,
alter, change or repeal any provision contained in this Certificate of
Incorporation, in the manner now or hereafter prescribed by statute, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
1. This Amended and Restated Certificate of Incorporation has been duly
approved by the Board of Directors of this Corporation.
2. The foregoing Amended and Restated Certificate of Incorporation has
been duly adopted in accordance with Sections 228 and 245 of the General
Corporation Law of the State of Delaware by the Board of Directors and the
stockholders of the Corporation. The total number of outstanding shares of
Common Stock of the Corporation is 2,841,000. The number of shares voting in
favor of the amendment and restatement equaled or exceeded the vote required.
The percentage vote required was more than 50% of the outstanding shares of
Common Stock.
-10-
32
IN WITNESS WHEREOF, Molecular Medicine, Inc. has caused this Amended
and Restated Certificate of Incorporation to be signed by the President and
Secretary in Mountain View, California this 13th day of January, 1998.
/S/ Xxxxx Xxxxxxx, President
-------------------------------
Xxxxx Xxxxxxx, President
/S/ Xxxxxx X. Xxxxx, Secretary
-------------------------------
Xxxxxx X. Xxxxx, Secretary
-11-
33
EXHIBIT D
EPIGENIX, INC.
INFORMATION AND REGISTRATION RIGHTS AGREEMENT
34
INFORMATION AND REGISTRATION RIGHTS AGREEMENT
THIS INFORMATION AND REGISTRATION RIGHTS AGREEMENT (the "Agreement") is
made as of January___, 1998, by and among EpiGenix, Inc., a Delaware corporation
(the "Company"), the persons listed on the attached Schedule A who become
signatories to this Agreement (collectively, the "Investors and individually an
"Investor"), and Xxxxx Xxxxxxx (the "Founder").
R E C I T A L S
WHEREAS, the Company and the Investors have entered into agreements
(each, a "Purchase Agreement") for sale by the Company and purchase by the
Investors of the Company's Series A, Series B, and Series C Preferred Stock (the
"Preferred Stock");
WHEREAS, in connection with the purchase and sale of the Company's
Preferred Stock, the Company and the Investors desire to provide for (i) the
rights of the Investors with respect to information about the Company (ii) the
rights of the Investors and the Founder with respect to the registration of the
Common Stock, issued upon conversion of the shares of Preferred Stock held by
the Investors, and the Common Stock held by the Founder, according to the terms
of this Agreement, (iii) a right of first refusal for the Investors with respect
to certain future stock issuances by the Company, and (iv) certain other
provisions as set forth below;
WHEREAS, it is a condition of the closing of the sale of the Preferred
Stock to the Investors that the Company enter into this Agreement;
NOW THEREFORE, in consideration of the promises set forth above and for
other good and valuable consideration, receipt of which is hereby acknowledged,
the parties agree as follows:
1. Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
(a) "Commission" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
(b) "Convertible Securities" shall mean securities of the
Company convertible into or exchangeable for Registrable Securities, including
the Series A Preferred Stock, Series B Preferred Stock and Series C Preferred
Stock and any other securities of the Company convertible into or exchangeable
for Registrable Securities included in this Agreement pursuant to Section 12.
(c) "Form S-3" shall mean Form S-3 issued by the Commission or
any substantially similar form then in effect.
35
(d) "Founder's Stock" shall mean all Common Stock of the
Company currently held by the Founder, any Common Stock subsequently acquired by
such person, and any Common Stock issued or issuable with respect to such Common
Stock upon any stock splits, stock dividends or similar distributions.
(e) "Holder" shall mean any holder of outstanding Registrable
Securities which have not been sold to the public, but only if such holder is an
Investor or an assignee or transferee of Registration rights as permitted by
Section 17.
(f) "Initiating Holders" shall mean Holders who in the
aggregate hold at least forty percent (40%) of the Common Stock issued or
issuable upon conversion of the Series B Preferred Stock and Series C Preferred
Stock.
(g) "Material Adverse Event" shall mean an occurrence having a
consequence that either (a) is materially adverse as to the business,
properties, prospects or financial condition of the Company or (b) is reasonably
foreseeable, has a reasonable likelihood of occurring, and if it were to occur
would materially adversely affect the business, properties, prospects or
financial condition of the Company.
(h) The terms "Register", "Registered" and "Registration"
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act ("Registration Statement"), and
the declaration or ordering of the effectiveness of such Registration Statement.
(i) "Registrable Securities" shall mean all Common Stock of
the Company issued or issuable upon conversion of the Company's Series A
Preferred Stock, Series B Preferred Stock and/or Series C Preferred Stock
purchased by or issued to the Investors and the Founder, including Common Stock
issued pursuant to stock splits, stock dividends and similar distributions with
respect to such shares, and any securities of the Company granted registration
rights pursuant to Section 12 of this Agreement, provided that such shares have
not previously been sold to the public. For purposes of the registration rights
granted to holders of Company securities pursuant to Section 7 hereof, and for
purposes of the obligations imposed upon holders of Registrable Securities under
Sections 11 and 14, but not for the definition of Initiating Holders,
"Registrable Securities" shall include Founder's Stock.
(j) "Registration Expenses" shall mean all expenses incurred
in complying with Sections 6 or 7 of this Agreement, including, without
limitation, all federal and state registration, qualification and filing fees,
printing expenses, fees and disbursements of counsel for the Company, blue sky
fees and expenses, reasonable fees and disbursements of one counsel for the
selling Holders not in excess of $10,000 in the aggregate, and the expense of
any special audits incident to or required by any such registration, other than
Selling Expenses.
(k) "Reserved Shares" shall mean the 3,750,000 shares of
Common Stock reserved for issuance to directors, officers, employees and
consultants upon the sale of stock or
-2-
36
exercise of options to be granted under the Company's stock option and purchase
plan (together with any additional shares of Common Stock authorized by the
Board of Directors for issuance under such plan).
(l) "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
(m) "Selling Expenses" shall mean all underwriting discounts
and selling commissions applicable to the sale of Registrable Securities
pursuant to this Agreement.
2. Information Rights. The Company hereby covenants and agrees that,
for so long as any of the Preferred Stock is outstanding and Investor is a
holder of at least 100,000 shares of Preferred Stock (as adjusted for any stock
split, stock dividend, stock combination or other recapitalization) it will mail
the following reports to such Investor:
2.1 Financial Statements.
(a) The Company shall deliver to the Investors as
soon as practicable after the end of each fiscal year of the Company, commencing
on December 31, 1998, and in any event within ninety (90) days thereafter,
audited consolidated balance sheets of the Company and its subsidiaries, if any,
as of the end of such year and audited consolidated statements of income,
shareholders' equity and cash flows for such year, which year-end financial
reports shall be in reasonable detail and shall be prepared in accordance with
generally accepted accounting principles and be accompanied by the opinion of
independent public accountants of recognized standing selected by the Board of
Directors of the Company.
(b) As soon as practicable after the end of each
month, and in any event within 30 days thereafter, consolidated balance sheets
of the Company and its subsidiaries, if any, as of the end of such month, and
consolidated statements of income and cash flow for such month and for the
current fiscal year to date, including a comparison between the actual monthly
financial statements and the projected figures for such monthly periods.
(c) As soon as practicable following submission to
and approval by the Board of Directors of the Company, but in no event later
than thirty (30) days prior to the beginning of each fiscal year, an operating
budget and plan for the Company respecting the next fiscal year containing a
monthly breakdown of income and cash flow.
(d) As soon as practicable after the end of the
first, second and third quarterly accounting periods in each fiscal year, and in
any event within forty-five (45) days thereafter, consolidated balance sheets of
the Company and its subsidiaries, if any, as of the end of such quarter,
consolidated statements of income, shareholders' equity and cash flow for such
quarter, and a statement showing the number of shares of each class and series
of capital stock and securities convertible into or exercisable for shares of
capital stock outstanding at the end of the period, the
-3-
37
number of shares of Common Stock issuable upon conversion or exercise of any
outstanding securities convertible or exercisable for shares of Common Stock and
the exchange ratio or exercise price applicable thereto, all in sufficient
detail as to permit the Investor to calculate its percentage equity ownership in
the Company.
3. Inspection. The Company shall permit each Investor holding the
number of shares set forth in Section 2 hereof, at such Investor's expense, to
visit and inspect the Company's properties, to examine its books of account and
records and to discuss the Company's affairs, finances and accounts with its
officers, all at such reasonable times as may be requested by each such
Investor; provided, however, that the Company shall not be obligated pursuant to
this Section 3 to provide any information which it reasonably considers to be a
trade secret or confidential information. The rights of an Investor under this
Section 3 may not be assigned as part of such Investor's sale of Preferred Stock
except with the consent of the Company, which consent shall not be unreasonably
withheld.
4. Right of First Refusal. For so long as any of the Preferred Stock is
outstanding, the Company hereby grants to each Investor the right of first
refusal to purchase its Pro Rata Amount (as defined below) of any New Securities
(as defined in this Section 4) which the Company may, from time to time, propose
to sell and issue. An "Investor's Pro Rata Amount", for purposes of this right
of first refusal, shall be the ratio of (i) the number of shares (on an
as-converted basis) of Common Stock held by such Investor (which shall be deemed
to include the shares of Common Stock issuable on the conversion of any shares
of Preferred Stock that such Investor, pursuant to a Purchase Agreement, has the
right to receive from the Company or the obligation to purchase from the Company
subject to the satisfaction of certain conditions by the Company) to (ii) the
total number of shares (on an as-converted basis) of Common Stock of the Company
outstanding (which shall be deemed to include the shares of Common Stock
issuable on the conversion of any shares of Preferred Stock that such Investor,
pursuant to a Purchase Agreement, has the right to receive from the Company or
the obligation to purchase from the Company subject to the satisfaction of
certain conditions by the Company), including all outstanding securities
convertible into or exchangeable for Common Stock on an as-converted or
exercised basis. This right of first refusal shall be subject to the following
provisions:
(a) "New Securities" shall mean any capital stock of the
Company whether or not now authorized, the rights, options or warrants to
purchase capital stock and securities of any type whatsoever that are, or may
become, convertible into capital stock; provided that the term "New Securities"
does not include (i) securities issuable upon exercise or conversion of
currently outstanding securities; (ii) the Series A Preferred Stock, Series B
Preferred Stock and Series C Preferred Stock sold pursuant to the Purchase
Agreements; (iii) securities issued pursuant to a public offering pursuant to an
effective Registration Statement; (iv) securities issued pursuant to the
Company's acquisition of another entity by merger, purchase of substantially all
assets or other reorganization; (v) the Reserved Shares; (vi) securities issued
in connection with equipment lease financing arrangements, credit agreements or
other non-equity raising, commercial transactions approved by the Board of
Directors; (vii) securities issued pursuant to a corporate strategic partner
transaction involving the license of technology, establishment of a joint
venture or alliance, a research and development agreement, product development
or marketing agreement, or other similar
-4-
38
arrangement approved by the Board of Directors; and (viii) securities issued in
connection with any stock split, stock dividend or recapitalization of the
Company.
(b) In the event the Company proposes to undertake an issuance
of New Securities, it shall give each Investor written notice of its intention,
describing the type of New Securities, the price and number of shares and the
general terms upon which the Company proposes to issue the same. Each Investor
shall have twenty (20) days from the date of receipt of any such notice to agree
to purchase up to the amount of New Securities equal to the Investor's Pro Rata
Amount of such New Securities for the price and upon the general terms specified
in the notice by giving written notice to the Company.
(c) In the event an Investor fails to exercise in full the
right of first refusal within said twenty (20) day period, the Company shall
have ninety (90) days thereafter to sell the New Securities respecting which the
Investor's option was not exercised, at the price and upon the terms specified
in the Company's notice. In the event the Company has not sold the New
Securities within said ninety (90) day period, the Company shall not thereafter
issue or sell any New Securities, without first offering such securities to the
Investors in the manner provided above.
5. Termination of Covenants. Except as otherwise provided herein, the
covenants of the Company set forth in Sections 2, 3 and 4 shall be terminated
and be of no further force or effect upon the closing of the Company's initial
public offering of its Common Stock at a price per share (prior to underwriter
commissions and offering expenses) of not less than $3.00 per share
(appropriately adjusted for any stock splits, stock dividends, recapitalizations
and similar events) and an aggregate offering price to the public of not less
than $15,000,000 (prior to deduction of underwriter commissions and offering
expenses) pursuant to a Registration Statement filed by the Company under the
Securities Act ("IPO").
6. Demand Registration.
6.1 Request for Registration on Form Other Than Form S-3.
Subject to the terms of this Agreement, in the event that the Company shall
receive from the Initiating Holders at any time after the earlier of (i)
December 31, 2001, and (ii) six (6) months after the effective date of the
registration statement filed in connection with a public offering of securities
by the Company, a written request that the Company effect any Registration with
respect to all or a part of the Registrable Securities on a form other than Form
S-3 for an offering of at least twenty percent (20%) of the then outstanding
Registrable Securities (or any lesser percent if the reasonably anticipated
aggregate offering price to the public would exceed $5,000,000), the Company
shall (i) promptly give written notice of the proposed Registration to all other
Holders and shall (ii) use its best efforts to effect, as soon as practicable,
Registration of the Registrable Securities specified in such request, together
with any Registrable Securities of any Holder joining in such request as are
specified in a written request given within twenty (20) days after written
notice from the Company.
-5-
39
6.2 Request for Registration on Form S-3. Subject to the terms
of this Agreement, in the event that the Company receives from Holders a written
request that the Company effect any Registration on Form S-3 (or any successor
form to Form S-3 regardless of its designation) at a time when the Company is
eligible to register securities on Form S-3 (or any successor form to Form S-3
regardless of its designation) for an offering of Registrable Securities the
reasonably anticipated aggregate offering price to the public of which would
exceed $1,000,000, the Company will promptly give written notice of the proposed
Registration to all the Holders and will use its best efforts to effect, as soon
as practicable, Registration of the Registrable Securities specified in such
request, together with all or such portion of the Registrable Securities of any
Holder joining in such request as are specified in a written request delivered
to the Company within twenty (20) days after written notice from the Company of
the proposed Registration.
6.3 Limitations on Registrations. Notwithstanding the
foregoing, the Company shall not be obligated to take any action pursuant to
this Section 6.3: (i) in any particular jurisdiction in which the Company would
be required to execute a general consent to service of process in effecting such
registration, qualification or compliance unless the Company is already subject
to service in such jurisdiction and except as may be required by the Securities
Act; (ii) if the Company, within ten (10) days after such receipt gives notice
of its bona fide intention to effect the filing of a Registration Statement with
the Commission within sixty (60) days of receipt of such request (other than
with respect to a Registration Statement relating to a Rule 145 transaction, an
offering solely to employees or any other Registration which is not appropriate
for the Registration of Registrable Securities) and the Company shall promptly
notify the initiating Holders in the event it abandons its intention to effect
such Registration Statement; (iii) during the period starting with the date
sixty (60) days prior to the Company's estimated date of filing of, and ending
on the date three (3) months immediately following, the effective date of any
Registration Statement pertaining to securities of the Company (other than a
Registration of securities in a Rule 145 transaction or with respect to an
employee benefit plan), provided that the Company is actively employing in good
faith all reasonable efforts to cause such Registration Statement to become
effective; (iv) after the Company has effected two (2) Registrations pursuant to
Section 6.1 and four (4) Registrations pursuant to Section 6.2, respectively,
and such Registrations have been declared or ordered effective, provided that
all Registrable Securities requested to be included in each such Registration
were in fact included in the Registration; or (v) if the Company shall furnish
to such Holder a certificate signed by the President of the Company stating that
in the good faith judgment of the Board of Directors it would be seriously
detrimental to the Company or its stockholders as a whole for Registration
Statements to be filed in the near future, then the Company's obligation to use
its best efforts to file a Registration Statement shall be deferred for a period
not to exceed one hundred twenty (120) days from the receipt of the request to
file such Registration by such Holder, provided, however, that the Company shall
not utilize this right more than once in any twelve (12) month period.
6.4 Registration of Other Securities in Demand Registration.
Any Registration Statement filed pursuant to the request of the Initiating
Holders under this Section 6 may, subject to the provisions of Section 6.6,
include securities of the Company other than the Registrable Securities.
-6-
40
6.5 Underwriting in Demand Registration.
6.5.1 Notice of Underwriting. If the Initiating
Holders intend to distribute the Registrable Securities covered by their request
by means of an underwriting, they shall so advise the Company as a part of their
request made pursuant to this Section 6, and the Company shall include such
information in the written notice referred to in Section 6.1 or 6.3. The right
of any Holder to Registration pursuant to Section 6.1 shall be conditioned upon
such Holder's agreement to participate in such underwriting and the inclusion of
such Holder's Registrable Securities in the underwriting (unless otherwise
mutually agreed by a majority in interest of the Initiating Holders and such
Holder with respect to such participation and inclusion).
6.5.2 Inclusion of Other Holders in Demand
Registration. If the Company, officers or directors of the Company holding
Common Stock other than Registrable Securities or holders of securities other
than Registrable Securities request inclusion in such Registration, the
Initiating Holders, to the extent they deem advisable and consistent with the
goals of such Registration and subject to the allocation provisions of Section
6.5.4 below, shall, on behalf of all Holders, offer to include any or all of the
Company, such officers or directors and such holders of securities other than
Registrable Securities that such securities other than Registrable Securities in
the underwriting and may condition such offer on the acceptance by such persons
of the terms of this Section 6.
6.5.3 Selection of Underwriter in Demand
Registration. The Company shall (together with all Holders proposing to
distribute their securities through such underwriting) enter into and perform
its obligations under an underwriting agreement in usual and customary form with
the representative ("Underwriter's Representative") of the underwriter or
underwriters selected for such underwriting by the Company and consented to by
the Holders of a majority of the Registrable Securities being registered by the
Initiating Holders (which consent shall not be unreasonably withheld).
6.5.4 Marketing Limitation in Demand Registration. In
the event the Underwriter's Representative advises the Company in writing that
market factors (including, without limitation, the aggregate number of shares of
Common Stock requested to be Registered, the general condition of the market,
and the status of the persons proposing to sell securities pursuant to the
Registration) require a limitation of the number of shares to be underwritten,
then the Company shall so advise all Holders, and the number of shares of
Registrable Securities that may be included in the Registration and underwriting
shall be allocated among all Holders in proportion, as nearly as practicable, to
the number of shares proposed to be included in such Registration by such
Holder; provided, however, that the number of shares of Registrable Securities
to be included in such underwriting shall not be reduced unless all other
securities (including those proposed to be included by the Company and the
officers and directors of the Company) are first entirely excluded from the
underwriting. No Registrable Securities or other securities excluded from the
underwriting by reason of this Section 6.5.4 shall be included in such
Registration Statement.
-7-
41
6.5.5 Right of Withdrawal in Demand Registration. If any
Holder of Registrable Securities, or a holder of other securities entitled (upon
request) to be included in such Registration, disapproves of the terms of the
underwriting, such person may elect to withdraw therefrom by written notice to
the Company, the underwriter and the Initiating Holders delivered at least seven
(7) days prior to the effective date of the Registration Statement. The
securities so withdrawn shall also be withdrawn from the Registration Statement.
6.6 Blue Sky in Demand Registration. In the event of any
Registration pursuant to Section 6, the Company will exercise its best efforts
to register and qualify the securities covered by the Registration Statement
under such other securities or Blue Sky laws of such jurisdictions as the
Holders shall reasonably request and as shall be reasonably appropriate for the
distribution of such securities; provided, however, that the Company shall not
be required to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions.
7. Piggyback Registration.
7.1 Notice of Piggyback Registration and Inclusion of
Registrable Securities. Subject to the terms of this Agreement, in the event the
Company decides to Register any of its Common Stock (either for its own account
or the account of a security holder or holders exercising their respective
demand registration rights) on a form that would be suitable for a registration
involving solely Registrable Securities, the Company will: (i) promptly give
each Holder written notice thereof (which shall include a list of the
jurisdictions in which the Company intends to attempt to qualify such securities
under the applicable Blue Sky or other state securities laws) and (ii) include
in such Registration (and any related qualification under Blue Sky laws or other
compliance), and in any underwriting involved therein, all the Registrable
Securities specified in a written request delivered to the Company by any Holder
within twenty (20) days after delivery of such written notice from the Company.
7.2 Underwriting in Piggyback Registration.
7.2.1 Notice of Underwriting in Piggyback
Registration. If the Registration of which the Company gives notice is for a
Registered public offering involving an underwriting, the Company shall so
advise the Holders as a part of the written notice given pursuant to Section
7.1. In such event the right of any Holder to Registration shall be conditioned
upon such underwriting and the inclusion of such Holder's Registrable Securities
in such underwriting to the extent provided in this Section 7. All Holders
proposing to distribute their securities through such underwriting shall
(together with the Company and the other holders distributing their securities
through such underwriting) enter into an underwriting agreement with the
Underwriter's Representative for such offering. The Holders shall have no right
to participate in the selection of the underwriters for an offering pursuant to
this Section 7.
7.2.2 Marketing Limitation in Piggyback Registration.
In the event the Underwriter's Representative advises the Company seeking
registration of Registrable Securities pursuant to Section 7 in writing that
market factors (including, without limitation, the aggregate
-8-
42
number of shares of Common Stock requested to be Registered, the general
condition of the market, and the status of the persons proposing to sell
securities pursuant to the Registration) require a limitation of the number of
shares to be underwritten, the Underwriter's Representative may:
(a) in the case of the Company's initial
public offering, exclude some or all Registrable Securities from such
registration and underwriting; and
(b) in the case of any Registered public
offering subsequent to the Company's initial public offering, limit the number
of shares of Registrable Securities to be included in such Registration and
underwriting to not less than ten percent (10%) of the total number of shares
included in such Registration. In such event, the Underwriters Representative
shall so advise all Holders and the number of shares of Registrable Securities
that may be included in the Registration and underwriting (if any) shall be
allocated as follows: first, among all Holders of Registrable Securities
(excluding Holders who solely hold Founder's Stock) in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities (excluding
Founder's Stock) held by such Holders at the time of filing of the registration
statement, and second, among all Holders of Founder's Stock, in proportion, as
nearly as practicable, to the respective amounts of Founder's Stock held by such
Holders at the time of filing of the registration statement, and third, to the
chief executive officer of the Company, in proportion, as nearly as practicable,
to the respective amount of Registrable Securities held by the chief executive
officer at the time of filing of the registration statement. The number of
shares of Registrable Securities to be included in such underwriting shall not
be reduced unless all other securities (other than those to be sold by the
Company) are first entirely excluded from the underwriting. No Registrable
Securities or other securities excluded from the underwriting by reason of this
Section 7.2.2 shall be included in such Registration Statement.
7.2.3 Withdrawal in Piggyback Registration. If any
Holder, or a holder of other securities entitled (upon request) to be included
in such Registration, disapproves of the terms of any such underwriting, such
Holder may elect to withdraw therefrom by written notice to the Company and the
underwriter delivered at least seven (7) days prior to the effective date of the
Registration Statement. Any Registrable Securities or other securities excluded
or withdrawn from such underwriting shall be withdrawn from such Registration.
7.3 Blue Sky in Piggyback Registration. In the event of any
Registration of Registrable Securities pursuant to Section 7, the Company will
exercise its best efforts to Register and qualify the securities covered by the
Registration Statement under such other securities or Blue Sky laws of such
jurisdictions as the Holders shall reasonably request and as shall be reasonably
appropriate for the distribution of such securities; provided, however, that the
Company shall not be required to qualify to do business or to file a general
consent to service of process in any such states or jurisdictions.
8. Expenses of Registration. All Registration Expenses incurred in
connection with the two (2) Registrations pursuant to Section 6.1, up to the
four (4) Registrations on Form S-3 pursuant to Section 6.2, all Registrations
pursuant to Section 7 and all Registrations of the Registrable Securities in
connection with a waiver by the Holders of such Registrable Securities of the
-9-
43
Company's obligations pursuant to Section 6 or Section 7 shall be borne by the
Company, All Registration Expenses incurred in connection with any other
registration, qualification or compliance shall be apportioned among the Holders
and other holders of the securities so registered on the basis of the number of
shares so registered. Notwithstanding the above, the Company shall not be
required to pay for any expenses of Holders in connection with any registration
proceeding begun pursuant to Section 6.1 if the registration request is
subsequently withdrawn at the request of the Holders of a majority of the
Registrable Securities to be registered (which Holders shall bear such
expenses), unless the Holders of a majority of the Registrable Securities agree
to forfeit their right to one (1) demand registration pursuant to Section 6.1;
provided further, however, that (i) if at the time of such withdrawal, the
Holders have learned of a Material Adverse Event not known to the Holders at the
time of their request or (ii) such withdrawal is made after a deferral of such
registration by the Company pursuant to Section 6.2, then the Holders shall not
be required to pay any of such expenses and shall retain their rights pursuant
to Section 6.1. All Selling Expenses shall be borne by the holders of the
securities registered pro rata on the basis of the number of shares registered.
9. Registration Procedures. The Company will keep each Holder whose
Registrable Securities are included in any registration pursuant to this
Agreement advised as to the initiation and completion of such Registration. At
its expense the Company will: (a) use its best efforts to keep such Registration
effective for a period of one hundred eighty (180) days or until the Holder or
Holders have completed the distribution described in the Registration Statement
relating thereto, whichever first occurs; (b) furnish such number of
prospectuses (including preliminary prospectuses) and other documents as a
Holder from time to time may reasonably request; (c) prepare and file with the
Commission such amendments and supplements to such registration statement and
the prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Securities Act with respect to
the disposition of all securities covered by such registration statement; and
(d) notify each Holder of Registrable Securities covered by such Registration
Statement at any time when a prospectus relating thereto is required to be
delivered under the Securities Act of the happening of any event as a result of
which the prospectus included in such Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing.
10. Information Furnished by Holder. It shall be a condition precedent
of the Company's obligations under this Agreement that each Holder of
Registrable Securities included in any Registration furnish to the Company such
information regarding such Holder and the distribution proposed by such Holder
or Holders as the Company may reasonably request.
11. Indemnification.
11.1 Company's Indemnification of Holders. To the extent
permitted by law, the Company will indemnify each Holder, each of its officers,
directors and constituent partners, legal counsel and accountants for the
Holders, and each person controlling such Holder, with respect to which
Registration, qualification or compliance of Registrable Securities has been
effected pursuant to this Agreement or in connection with a waiver by the
Holders of such Registrable Securities of the
-10-
44
Company's obligations pursuant to Section 6 or Section 7 of this Agreement, and
each underwriter, if any, and each person who controls any underwriter against
all claims, losses, damages or liabilities (or actions in respect thereof) to
the extent such claims, losses, damages or liabilities arise out of or are based
upon any untrue statement (or alleged untrue statement) of a material fact
contained in any registration statement, preliminary or final prospectus,
offering circular or any amendment or supplement thereto, or are based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
any violation by the Company of the Securities Act, the Securities Exchange Act
of 1934, as amended (the "1934 Act"), or any state securities law, or any rule
or regulation promulgated under the Securities Act, the 1934 Act or any state
securities law, applicable to the Company and relating to action or inaction
required of the Company in connection with any such Registration, qualification
or compliance; and the Company will reimburse each such Holder, each of its
officers, directors and constituent partners, legal counsel and accountants,
each such underwriter, and each person who controls any such Holder or
underwriter, for any legal and any other expenses reasonably incurred, as
incurred, in connection with investigating or defending any such claim, loss,
damage, liability or action; provided, however, that the indemnity contained in
this Section 11.1 shall not apply to amounts paid in settlement of any such
claim, loss, damage, liability or action if settlement is effected without the
consent of the Company (which consent shall not unreasonably be withheld); and
provided, further, that the Company will not be liable in any such case to the
extent that any such claim, loss, damage, liability or expense arises out of or
is based upon any untrue statement or omission based upon written information
furnished to the Company by such Holder, its officers, directors, constituent
partners, legal counsel, accountants, underwriter or controlling person and
stated to be for use in connection with the offering of securities of the
Company.
11.2 Holder's Indemnification of Company. To the extent
permitted by law, each Holder will, if Registrable Securities held by such
Holder are included in the securities as to which such Registration,
qualification or compliance is being effected pursuant to this Agreement,
severally and not jointly, indemnify the Company, each of its directors and
officers, each legal counsel and independent accountant of the Company, each
underwriter, if any, of the Company's securities covered by such a Registration
Statement, each person who controls the Company or such underwriter within the
meaning of the Securities Act, and each other such Holder, each of its officers,
directors, constituent partners, legal counsel and accountants and each person
controlling such other Holder, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based upon any
untrue statement (or alleged untrue statement) of a material fact contained in
any such Registration Statement, preliminary or final prospectus, offering
circular or any amendment or supplement thereto, or any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by
such Holder of the Securities Act, the 1934 Act or any state securities law, or
any rule or regulation promulgated under the Securities Act, the 1934 Act or any
state securities law, applicable to such Holder and relating to action or
inaction required of such Holder in connection with any such Registration,
qualification or compliance; and will reimburse the Company, such Holders, such
directors, officers, partners, persons, law and accounting firms, underwriters
or control persons for any legal and any other expenses reasonably incurred, as
incurred, in connection with investigating or defending any such claim, loss,
damage, liability or action, in each case to the
-11-
45
extent, but only to the extent, that such untrue statement (or alleged untrue
statement), omission (or alleged omission) or violation (or alleged violation)
is made in such Registration Statement, preliminary or final prospectus,
offering circular or any amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by such Holder and
stated to be specifically for use in connection with the offering of securities
of the Company, provided, however, that each Holder's liability under this
Section 11.2 shall be limited to the proportion of any such claim, loss, damage,
liability or expense which is equal to the proportion that the public offering
price of the securities sold by such Holder in the offering made in connection
with such Registration bears to the total public offering price of all
securities sold in connection therewith, but shall not exceed such Holder's net
proceeds from the offering of securities made in connection with such
Registration; and provided, further, that the indemnity contained in this
Section 11.2 shall not apply to amounts paid in settlement of any such claim,
loss, damage, liability or action if settlement is effected without the consent
of the Holder (which consent shall not unreasonably be withheld).
11.3 Indemnification Procedure. Promptly after receipt by an
indemnified party under this Section 11 of notice of the commencement of any
action, such indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party under this Section 11, notify the indemnifying
party in writing of the commencement thereof and generally summarize such
action. The indemnifying party shall have the right to participate in and to
assume the defense of such claim, jointly with any other indemnifying party
similarly noticed; provided, however, that the indemnifying party shall be
entitled to select counsel for the defense of such claim with the approval of
any parties entitled to indemnification, which approval shall not be
unreasonably withheld; provided further, however, that if either party
reasonably determines that there may be a conflict between the position of the
Company and the Investors in conducting the defense of such action, suit or
proceeding by reason of recognized claims for indemnity under this Section 11,
then counsel for such party shall be entitled to conduct the defense to the
extent reasonably determined by such counsel to be necessary to protect the
interest of such party. The failure to notify an indemnifying party promptly of
the commencement of any such action, if prejudicial to the ability of the
indemnifying party to defend such action, shall relieve such indemnifying party,
to the extent so prejudiced, of any liability to the indemnified party under
this Section 11, but the omission so to notify the indemnifying party will not
relieve such party of any liability that such party may have to any indemnified
party otherwise other than under this Section 11.
12. Limitations on Registration Rights Granted to Other Securities.
From and after the date of this Agreement, the Company shall not enter into any
agreement with any holder or prospective holder of any securities of the Company
providing for the granting to such holder of any Registration rights unless such
rights are subordinate to the Registration rights set forth herein, except that,
with the consent of the Holders of fifty percent (50%) of the aggregate of the
Convertible Securities and Registrable Securities then outstanding, additional
holders may be added as parties to this Agreement with regard to any or all
securities of the Company held by them. Any such additional parties shall
execute a counterpart of this Agreement, and upon execution by such additional
parties and by the Company, shall be considered an Investor for all purposes of
this
-12-
46
Agreement. The additional parties and the additional Registrable Securities
shall be identified in an amendment to Schedule A hereto.
13. Reports Under Securities Exchange Act of 1934. With a view to
making available to the Investors the benefits of Rule 144 and any other rule or
regulation of the Commission that may at any time permit an Investor to sell
securities of the Company to the public without Registration or pursuant to a
Registration Statement on Form S-3, the Company agrees to:
(a) make and keep public information available, as those terms
are defined in Rule 144, at all times after ninety (90) days after the effective
date of the first Registration Statement filed by the Company for the offering
of its securities to the general public;
(b) file with the Commission in a timely manner all reports
and other documents required of the Company under the Securities Act and the
1934 Act; and
(c) furnish to any Investor, so long as such Investor owns any
Convertible Securities or Registrable Securities, forthwith upon request (i) a
written statement by the Company that it has complied with the reporting
requirements of Rule 144 (at any time after ninety (90) days after the effective
date of the first Registration Statement filed by the Company), the Securities
Act and the 1934 Act (at any time after it has become subject to such reporting
requirements), or that it qualifies as a registrant whose securities may be
resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy of
the most recent annual or quarterly report of the Company and such other reports
and documents so filed by the Company, and (iii) such other information as may
be reasonably supplied by the Company to enable an Investor to avail itself of
any rule or regulation of the Commission which permits the selling of any such
securities without Registration.
14. Market Stand-off. Each Holder hereby agrees that, if so requested
by the Company and the Underwriter's Representative (if any), such Holder shall
not sell or otherwise transfer (other than to donees who agree to be similarly
bound) any Registrable Securities or other securities of the Company during the
one hundred eighty (180)-day period following the effective date of a
Registration Statement of the Company filed under the Securities Act; provided
that such restriction shall only apply to the first Registration Statement of
the Company to become effective which include securities to be sold on behalf of
the Company to the public in an underwritten offering; and provided, further,
that all officers and directors of the Company and all other persons with
registration rights (whether or not pursuant to this Agreement) enter into
similar agreements.
15. Conversion of Preferred Stock. The Registration rights of the
Holders of the Shares set forth in this Agreement are conditioned upon the
conversion of the Shares with respect to which registration is sought into
Common Stock prior to the effective date of the Registration Statement.
16. Termination of Registration Rights. The right to cause the Company
to Register securities granted by the Company to the Investors under the
Agreement shall terminate five (5) years after the date of the closing of the
Company's initial public offering of its securities or at and after such time
following the Company's initial public offering of its securities as all the
Registrable
-13-
47
Securities held by such Holder requesting the right to cause the Company to
register securities may be immediately sold under Rule 144 under the Securities
Act during any 90-day period.
17. Transfer of Rights. The rights to information under Sections 2 and
3, the right of first refusal set forth in Section 4 and the Registration rights
of the Investors set forth in Sections 6, 7, 8 and 9 may be assigned by any
Holder to a transferee or assignee of any Convertible Securities or Registrable
Securities not sold to the public acquiring at least twenty percent (20%) of the
shares of such Holder's Convertible Securities or Registrable Securities
(equitably adjusted for any recapitalizations, stock splits, combinations, and
the like) or acquiring all of the Convertible Securities and Registrable
Securities held by such Holder if transferred to a single entity; provided,
however, that (i) the Company must receive written notice prior to the time of
said transfer, stating the name and address of said transferee or assignee and
identifying the securities with respect to which such information and
Registration rights are being assigned, and (ii) the transferee or assignee of
such rights must not be a person deemed in good faith by the Board of Directors
of the Company to be a competitor or potential competitor of the Company.
Notwithstanding the limitation set forth in the foregoing sentence respecting
the minimum number of shares which must be transferred, any Holder which is a
partnership may transfer such Holder's Registration rights to such Holder's
constituent partners (or may transfer to their heirs in the case of individuals)
without restriction as to the number or percentage of shares acquired by any
such constituent partner (or heirs).
18. Miscellaneous.
18.1 Entire Agreement; Successors and Assigns. This Agreement
constitutes the entire contract between the Company, the Investors and the
Founder relative to the subject matter hereof. Any previous agreement between
the Company and the Investors or the Founder concerning information rights,
rights of first refusal or Registration rights is superseded by this Agreement.
Subject to the exceptions specifically set forth in this Agreement, the terms
and conditions of this Agreement shall inure to the benefit of and be binding
upon the respective executors, administrators, heirs, successors and assigns of
the parties.
18.2 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California applicable to
contracts entered into and wholly to be performed within the State of California
by California residents.
18.3 Counterparts. This Agreement may be executed in two (2)
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
18.4 Headings. The headings of the Sections of this Agreement
are for convenience and shall not by themselves determine the interpretation of
this Agreement.
18.5 Notices. Any notice required or permitted hereunder shall
be given in writing and shall be conclusively deemed effectively given upon
personal delivery, or five (5) days after deposit in the United States mail, by
first class mail, postage prepaid, or upon sending if sent by
-14-
48
commercial overnight delivery service addressed (i) if to the Company, as set
forth below the Company's name on the signature page of this Agreement, and (ii)
if to an Investor or the Founder, at such Investor's or Founder's address as set
forth on the attached Schedule A, or at such other address as the Company or
such Investor or Founder may designate by ten (10) days' advance written notice
to the Investors and Founders or to the Company, respectively. Notwithstanding
the foregoing sentence, any notice or communication to an address outside the
United States shall additionally be given by telecopy and confirmed in writing
sent by two (2) day guaranteed international courier.
18.6 Amendment of Agreement. Except as otherwise specifically
provided herein, any provision of this Agreement may be amended by a written
instrument signed by the Company and by persons holding more than fifty percent
(50%) of the then outstanding Convertible Securities and Registrable Securities
(calculated on an as converted basis); provided, that no amendment to Section
1(d) or Section 7.2.2 which adversely affects the rights of the holders of
Founder's Stock shall be enforceable against the holders of Founder's Stock
unless approved by persons holding more than fifty percent (50%) of the
Founder's Stock.
18.7 Aggregation of Stock. All Convertible Securities and
Registrable Securities held or acquired by affiliated entities or persons shall
be aggregated together for the purpose of determining the availability of any
rights under this Agreement.
18.8 Severability. If any provision of this Agreement is held
to be unenforceable for any reason, it shall be adjusted rather than voided, if
possible, in order to achieve the intent of the parties to the extent possible.
In any event, all other provisions of this Agreement shall be deemed valid and
enforceable to the full extent possible.
-15-
49
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
THE COMPANY: EPIGENIX, INC.
a Delaware corporation
By: [SIG]
-------------------------------
Title:
---------------------------
Address:
--------------------------
THE FOUNDER:
-------------------------------
Xxxxx Xxxxxxx
Address:
[SIGNATURE PAGE OF INFORMATION AND REGISTRATION RIGHTS AGREEMENT]
50
THE INVESTORS: MICROCIDE PHARMACEUTICALS, INC.
a Delaware corporation
By:[SIG]
-------------------------------
Title:
----------------------------
XXXXXXX XXXXXXX XXXXXXXX & XXXXX VIII
By: KPCB VIII Associates, its general partner
By:[SIG]
-------------------------------
General Partner
KPCB VIII FOUNDERS FUND
By: KPCB VIII Associates, its general partner
By:[SIG]
-------------------------------
General Partner
KPCB LIFE SCIENCES ZAIBATSU FUND II
By: KPCB VII Associates, its general partner
By:[SIG]
-------------------------------
General Partner
INSTITUTIONAL VENTURE PARTNERS VII, L.P.
By: Institutional Venture
Management VII, L.P., its general partner
By:
-------------------------------
Title: General Partner
[SIGNATURE PAGE OF INFORMATION AND REGISTRATION RIGHTS AGREEMENT]
51
INSTITUTIONAL VENTURE MANAGEMENT VII, L.P.
By:[SIG]
-------------------------------
Title: General Partner
IVP FOUNDERS FUND I, L.P.
By: Institutional Venture Management VI, L.P.,
its general partner
By:[SIG]
-------------------------------
Title: General Partner
ABINGWORTH BIOVENTURES II SICAV
By:
-------------------------------
Title:
----------------------------
[SIGNATURE PAGE OF INFORMATION AND REGISTRATION RIGHTS AGREEMENT]
52
INSTITUTIONAL VENTURE MANAGEMENT VII, L.P.
By:
-------------------------------
Title: General Partner
IVP FOUNDERS FUND I, L.P.
By: Institutional Venture Management VI, L.P.,
its general partner
By:
-------------------------------
Title: General Partner
ABINGWORTH BIOVENTURES II SICAV
By:[SIG]
-------------------------------
Title: Attorney-in-fact
----------------------------
[SIGNATURE PAGE OF INFORMATION AND REGISTRATION RIGHTS AGREEMENT]
53
EXHIBIT A
SCHEDULE OF INVESTORS
Name and Address of Investors
-----------------------------
Microcide Pharmaceuticals, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
Xxxxx Xxxxxxx, Ph.D.
000 Xxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
Xxxxxxx Xxxxxxx Xxxxxxxxx & Xxxxx VIII
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
KPCB VIII Founders Fund
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
KPCB Life Sciences Zaibatsu Fund II
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
Institutional Venture Partners VII, L.P.
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attn: L. Xxxxx Xxxxxx, M.D.
Institutional Venture Management VII, L.P.
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attn: L. Xxxxx Xxxxxx, M.D.
IVP Founders Fund I, L.P.
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attn: L. Xxxxx Xxxxxx, M.D.
Abingworth Bioventures II SICAV
Xxxxx Xxxxxx 000
X-0000 Xxxxxxxxx
Attn: Xxxx Xxxxx
with copies to:
--------------
Abingworth Management Limited
00 Xx. Xxxxx'x Xxxxxx
Xxxxxx XX0X 0XX Xxxxxxx
Attn: Xxxxxxx Xxxxxxx, Ph.D.
Abingworth Venture Management Incorporated
000 Xxxx Xxxxx Xxxxxx, Xxx. 0000
Xxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx, Xx., M.D.
54
EXHIBIT E
EPIGENIX, INC.
RIGHT OF FIRST REFUSAL AGREEMENT
THIS RIGHT OF FIRST REFUSAL AGREEMENT is made as of January ___, 1998
(the "Agreement") by and among EpiGenix, Inc., a Delaware corporation (the
"Company"), the persons listed on the attached Schedule A who become signatories
to this Agreement (the "Investors"), and Xxxxx Xxxxxxx (the "Key Employee").
RECITALS
WHEREAS, the Company and the Investors have entered into agreements
(each, a "Purchase Agreement") for sale by the Company and purchase by the
Investors of the Company's Series A, Series B and Series C Preferred Stock;
WHEREAS, the Investors have entered into the Purchase Agreements in
reliance on the ability of the Key Employee to manage, operate and guide the
business affairs of the Company; and
WHEREAS, it is a condition to the obligations of the Investors under
the Purchase Agreements that this Agreement be executed by the parties hereto,
and the parties hereto and thereto are willing to execute this Agreement and to
be bound by the provisions hereof and thereof;
NOW, THEREFORE, in consideration of the premise set forth above and for
other good and valuable consideration, receipt of which is hereby acknowledged,
the parties agree as follows:
SECTION 1
Certain Definitions
As used in this Agreement the following terms shall have the following
respective meanings:
1.1 "Affiliate" shall mean any entity who is controlled by, controls or
is under common control with any of the parties hereto.
1.2 "Common Stock" shall mean shares of the Company's Common Stock now
owned or subsequently acquired by the Holders.
1.3 "Holder" shall mean the Key Employee and the holders of the
Preferred Stock.
1.4 "Preferred Stock" shall mean the Company's outstanding Series A,
Series B and Series C Preferred Stock.
55
SECTION 2
Restrictions on and Notices of Sales
2.1 Company's Right of First Refusal. Before any shares of Common Stock
or Preferred Stock may be sold or otherwise transferred by a Holder (including
transfer by gift, operation of law or other involuntary transfer, such as
divorce or death, but excluding on death a transfer to a Key Employee's
Immediate Family as set forth in Section 2.8 below, but except in the event
there is a registration statement covering the proposed transfer), the Company
shall have a right of first refusal to purchase the shares (the "Right of First
Refusal").
2.2 Notice of Proposed Transfer. Before the transfer of any shares of
Common Stock or Preferred Stock, the Holder shall deliver to the Company and the
Investors a written notice (the "Transfer Notice") stating: (i) the Holder's
bona fide intention to sell or otherwise transfer such shares; (ii) the name of
each proposed purchaser or other transferee (a "Proposed Transferee"); (iii) the
number of shares to be transferred to each Proposed Transferee; and (iv) the
bona fide cash price or other consideration for which the Holder proposes to
transfer the shares (the "Offered Price"), and the Holder shall offer the shares
at the Offered Price first to the Company and then to the Investors.
2.3 Exercise of Right of First Refusal. At any time within 20 days
after receipt of the Transfer Notice, the Company may, by giving written notice
to the Holder, elect to purchase all, but not less than all, of the shares
proposed to be transferred to any one or more of the Proposed Transferees, at
the purchase price determined in accordance with subsection 2.4 below. Failure
of the Company to give such a notice within such time period will be deemed an
election by it not to exercise its option.
2.4 Purchase Price. The purchase price for the shares purchased by the
Company shall be the Offered Price, or such other amount agreed to in writing by
the Company and the Holder (the "Company Purchase Price"). If the Offered Price
includes consideration other than cash, the cash equivalent value of the
non-cash consideration shall be determined in good faith by the Board of
Directors of the Company, but if challenged by the Holder, then as determined by
an independent appraiser mutually acceptable to the Board of Directors of the
Company and the Holder, the cost of such appraisal to be borne equally by the
Holder and the Company.
2.5 Payment. Payment of the Company Purchase Price shall be made in
cash (or such other form of consideration mutually agreed to by the Company and
the Holder) within 30 days after such Company Purchase Price was agreed upon
between the Company and the Holder.
2.6 Investor's Right to Purchase.
(a) In the event or to the extent the Company does not
exercise its Right of First Refusal, as the case may be, each Investor shall
have the right, upon notice to the Holder at any time
-2-
56
within 30 days after receipt of the Transfer Notice, to purchase its Pro Rata
Share of all, but not less than all, of such shares not purchased by the Company
at the Offered Price and upon the same terms (or terms as similar as reasonably
possible) upon which the Holder is proposing or is to dispose of such shares
(the "Purchase Right"), and the Holder shall sell such shares to the Investors
pursuant to such terms. "Pro Rata Share" for the purposes of this Section 2.6
shall mean the ratio the number of shares of Common Stock (on an as-converted
basis) held by such Investor (which shall be deemed to include, for purposes of
this Section 2.6, the shares of Common Stock issuable on the conversion of any
shares of Preferred Stock that such Investors, pursuant to a Purchase Agreement,
has the right to receive from the Company or obligation to purchase from the
Company, subject to the satisfaction of certain conditions by the Company) bears
to the total number of shares of Common Stock (on an as-converted basis) held by
all Investors; provided, that, if Holder proposing to transfer such shares of
Common Stock or Preferred Stock is an Investor, such Pro Rata Share shall mean
the ratio of the number of shares of Common Stock (on an as-converted basis)
held by such Investor bears to the total number of Common Stock (on an
as-converted basis) held by all Investors other than such Holders.
(b) The Investors shall have a right of oversubscription such
that if any Investors fails to purchase its Pro Rata Share, the other Investors
shall, among them, have the right to purchase up to the balance of the shares
not so purchased. Such right of oversubscription may be exercised by an Investor
by notifying the holder of its desire to purchase more than its Pro Rata Share.
If, as a result thereof, such oversubscriptions exceed the total number of
shares available in respect of such oversubscription privilege, the
oversubscribing Investors shall be cut back with respect to their
oversubscriptions on a pro rata basis in accordance with their respective Pro
Rata Shares or as they may otherwise agree among themselves.
2.7 Holder's Right to Transfer. If all of the shares proposed in the
Transfer Notice to be transferred are not purchased by the Company and the
Investors, then the Holder may sell or otherwise transfer all shares originally
covered in the Transfer Notice to the Proposed Transferee(s) at the Offered
Price or at a higher price, provided that such sale or other transfer is
consummated within 90 days after the date of the Transfer Notice and provided
further that any such sale or other transfer is effected in accordance with any
applicable securities laws and the Proposed Transferee agrees in writing that
the provisions of this Section shall continue to apply to the shares that are
transferred to such Proposed Transferee. If the shares described in the Transfer
Notice are not transferred to the Proposed Transferee(s) within such 90-day
period, the Holder will not transfer any shares unless first re-offered to the
Company and the Investors in accordance herewith.
2.8 Exception for Certain Transfers. Anything to the contrary contained
in this Section 2 notwithstanding, the following transactions shall be exempt
from the provisions of this Section 2: (i) the transfer of shares currently held
by any Key Employee to another Key Employee that was approved by the Company's
Board of Directors, which approval shall not be unreasonably withheld, (ii) the
transfer of any or all of the shares during Key Employee's lifetime or on the
Key Employee's death by will or intestacy to Key Employee's Immediate Family or
a trust for the benefit of Key Employee or Key Employee's immediate family,
(iii) the transfer by a Holder that is a corporation to
-3-
57
its shareholders or a partnership to its constituent partners, and (iv) the
transfer of up to 10,000 shares (as adjusted for stock splits, stock dividends,
and the like) in any one year period. In such case, the transferee or other
recipient shall receive and hold the shares so transferred subject to the
provisions of this Section 2, and there shall be no further transfer of such
shares except in accordance with the terms of this Section 2.
"Immediate Family" as used herein shall mean spouse, lineal descendant
or (including children, grandchildren, etc.), father, mother, brother or sister.
2.9 Termination of Right of First Refusal and Purchase Right. The Right
of First Refusal and the Purchase Right shall terminate upon the earlier to
occur of (i) the closing of a firm commitment underwritten public offering
pursuant to an effective registration statement under the Securities Act of
1933, as amended, covering the offer and sale of common stock of the Company to
the public at a price per share (prior to underwriter commissions and offering
expenses) of not less than $3.00 per share (appropriately adjusted for any stock
splits, stock dividends, recapitalizations or similar events) and an aggregate
offering price to the public of not less than $15,000,000 (prior to deduction of
underwriter commissions and offering expenses) and (ii) December 31, 2007.
2.10 Legends.
(a) The certificates evidencing shares of the Company held by
parties hereto shall bear, in addition to any other legend required under the
federal or the Delaware securities laws, the following legends, as applicable:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RIGHTS, INCLUDING RESTRICTIONS ON TRANSFER, AS SET FORTH IN A RIGHT OF
FIRST REFUSAL AGREEMENT ENTERED INTO BY THE HOLDER OF THESE SHARES, THE
ISSUER AND CERTAIN SHAREHOLDERS OF THE ISSUER. A COPY OF SUCH AGREEMENT
MAY BE EXAMINED AT THE PRINCIPAL OFFICE OF THE CORPORATION."
(b) The legends referred to in Section 2.10(a) above shall be
removed upon termination of this Agreement in accordance with the provisions of
Section 2.9 above.
SECTION 3
Miscellaneous
3.1 Survival. The representations, warranties, covenants and agreements
made herein shall survive the closing of the transactions contemplated hereby.
-4-
58
3.2 Entire Agreement. This Agreement and the other documents delivered
pursuant hereto constitute the full and entire understanding and agreement
between the parties with regard to the subjects hereof and thereof.
3.3 Notice. All notices and other communications required or permitted
hereunder shall be in writing and shall be mailed by registered or certified
mail, postage prepaid, or otherwise delivered by hand or by messenger, addressed
(a) if to an Investor, at Investor's address set forth on the signature page to
this Agreement, or at such other address as Investor shall have furnished to the
Company in writing, (b) if to a Key Employee, at Key Employee's address set
forth on the signature page to this Agreement or at such other address as Key
Employee shall have furnished to the Company in writing, and (c) if to the
Company, to the address set forth on the signature page to this Agreement and
addressed to the attention of the Corporate Secretary, or to such other address
as the Company shall have furnished to the Investors and the Key Employee.
Notwithstanding the foregoing sentence, any notice or communication required or
permitted hereunder to an address outside the United States shall additionally
be given by telecopy and confirmed in writing sent by two (2) day guaranteed
international courier. If notice is provided by mail, notice shall be deemed to
be given upon proper deposit in the mail (and if outside the United States, sent
by airmail).
3.4 Successors and Assigns. This Agreement and the rights and
obligations of the parties hereunder shall inure to the benefit of, and be
binding upon, their respective successors, assigns and legal representatives.
3.5 Amendments or Waivers. Neither this Agreement nor any term hereof
may be amended, waived, discharged or terminated other than by written
instrument signed by the party against whom enforcement of any such amendment,
waiver, or discharge or termination is sought; provided, however, that the
holders of a majority of the Shares held by the Investors voting together may
waive, discharge, terminate, modify or amend on behalf of all Investors, any
provisions hereof.
3.6 Counterparts. This Agreement may be executed in any number of
counterparts, all of which together shall constitute one instrument, and each of
which may be executed by less than all of the parties to this Agreement.
3.7 Severability. In the event that any provision of this Agreement
becomes or declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided that no such severability shall be effective if
it materially changes the economic benefit of this Agreement to any party.
3.8 Governing Law. The Agreement shall be governed by and construed in
accordance with the laws of the State of California as applied to the agreements
made and performed in California by residents of California.
-5-
59
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and date set forth above.
THE COMPANY: EPIGENIX, INC.
a Delaware corporation
By:_________________________________
Title:______________________________
Address: 000 Xxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
[SIGNATURE PAGE TO RIGHT OF FIRST REFUSAL AGREEMENT]
60
THE INVESTORS: MICROCIDE PHARMACEUTICALS, INC.
a Delaware corporation
By:_______________________________
Title:____________________________
Address: 000 Xxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
XXXXXXX XXXXXXX XXXXXXXX & XXXXX VIII
By: KPCB VIII Associates, its general partner
By:________________________________
General Partner
Address: 0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
KPCB VIII FOUNDERS FUND
By: KPCB VIII Associates, its general partner
By:________________________________
General Partner
Address: 0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
KPCB LIFE SCIENCES ZAIBATSU FUND II
By: KPCB VII Associates, its general partner
By:_________________________________
General Partner
Address: 0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
[SIGNATURE PAGE OF RIGHT OF FIRST REFUSAL AGREEMENT]
61
INSTITUTIONAL VENTURE PARTNERS VII, L.P.
By: Institutional Venture
Management VII, L.P., its general partner,
By:_____________________________________
Title: General Partner
Address: 0000 Xxxx Xxxx Xxxx, Xxxx 0, Xxx. 000
Xxxxx Xxxx, XX 00000
INSTITUTIONAL VENTURE MANAGEMENT VII, L.P.
By:_____________________________________
Title: General Partner
Address: 0000 Xxxx Xxxx Xxxx, Xxxx 0, Xxx. 000
Xxxxx Xxxx, XX 00000
IVP FOUNDERS FUND I, L.P.
By: Institutional Venture
Management VI, L.P., its general partner,
By:_____________________________________
Title: General Partner
Address: 0000 Xxxx Xxxx Xxxx, Xxxx 0, Xxx. 000
Xxxxx Xxxx, XX 00000
ABINGWORTH BIOVENTURES II SICAV
By:_____________________________________
Title:__________________________________
Address: Xxxxx Xxxxxx 000
X-0000 Xxxxxxxxx
Attn: Xxxx Xxxxx
[SIGNATURE PAGE TO RIGHT OF FIRST REFUSAL AGREEMENT]
62
VLG INVESTMENTS 1998
By:_____________________________________
Title:__________________________________
COMMUNITY TRUST UNDER THE GREEN FAMILY TRUST UNDER
AGREEMENT DATED NOVEMBER 6, 1995
----------------------------------------
Xxxxxx X. Xxxxx, Trustee
[SIGNATURE PAGE TO RIGHT OF FIRST REFUSAL AGREEMENT]
-9-
63
THE KEY EMPLOYEE:
----------------------------------------
Xxxxx Xxxxxxx, Ph.D.
Address: 000 Xxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
[SIGNATURE PAGE TO RIGHT OF FIRST REFUSAL AGREEMENT]
-10-
64
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and date set forth above.
THE COMPANY: EPIGENIX, INC.
a Delaware corporation
By:[SIG]
---------------------------------
Title:______________________________
Address: 000 Xxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
[SIGNATURE PAGE TO RIGHT OF FIRST REFUSAL AGREEMENT]
65
INSTITUTIONAL VENTURE PARTNERS VII, L.P.
By: Institutional Venture
Management VII, L.P., its general partner,
By:[SIG]
---------------------------------
Title: General Partner
Address: 0000 Xxxx Xxxx Xxxx, Xxxx 0, Xxx. 000
Xxxxx Xxxx, XX 00000
INSTITUTIONAL VENTURE MANAGEMENT VII, L.P.
By:[SIG]
---------------------------------
Title: General Partner
Address: 0000 Xxxx Xxxx Xxxx, Xxxx 0, Xxx. 000
Xxxxx Xxxx, XX 00000
IVP FOUNDERS FUND I, L.P.
By: Institutional Venture
Management VI, L.P., its general partner,
By:[SIG]
---------------------------------
Title: General Partner
Address: 0000 Xxxx Xxxx Xxxx, Xxxx 0, Xxx. 000
Xxxxx Xxxx, XX 00000
ABINGWORTH BIOVENTURES II SICAV
By:_____________________________________
Title:__________________________________
Address: Xxxxx Xxxxxx 000
X-0000 Xxxxxxxxx
Attn: Xxxx Xxxxx
[SIGNATURE PAGE TO RIGHT OF FIRST REFUSAL AGREEMENT]
66
THE INVESTORS: MICROCIDE PHARMACEUTICALS, INC.
a Delaware corporation
By:[SIG]
---------------------------------
Title:____________________________
Address: 000 Xxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
XXXXXXX XXXXXXX XXXXXXXX & XXXXX VIII
By: KPCB VIII Associates, its general partner
By:[SIG]
---------------------------------
General Partner
Address: 0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
KPCB VIII FOUNDERS FUND
By: KPCB VIII Associates, its general partner
By:[SIG]
---------------------------------
General Partner
Address: 0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
KPCB LIFE SCIENCES ZAIBATSU FUND II
By: KPCB VII Associates, its general partner
By:[SIG]
---------------------------------
General Partner
Address: 0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
[SIGNATURE PAGE OF RIGHT OF FIRST REFUSAL AGREEMENT]
67
THE KEY EMPLOYEE: [SIG]
----------------------------------------
Xxxxx Xxxxxxx, Ph.D.
Address: 000 Xxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
[SIGNATURE PAGE TO RIGHT OF FIRST REFUSAL AGREEMENT]
-10-
68
INSTITUTIONAL VENTURE PARTNERS VII, L.P.
By: Institutional Venture
Management VII, L.P., its general partner,
By:_____________________________________
Title: General Partner
Address: 0000 Xxxx Xxxx Xxxx, Xxxx 0, Xxx. 000
Xxxxx Xxxx, XX 00000
INSTITUTIONAL VENTURE MANAGEMENT VII, L.P.
By:_____________________________________
Title: General Partner
Address: 0000 Xxxx Xxxx Xxxx, Xxxx 0, Xxx. 000
Xxxxx Xxxx, XX 00000
IVP FOUNDERS FUND I, L.P.
By: Institutional Venture
Management VI, L.P., its general partner,
By:_____________________________________
Title: General Partner
Address: 0000 Xxxx Xxxx Xxxx, Xxxx 0, Xxx. 000
Xxxxx Xxxx, XX 00000
ABINGWORTH BIOVENTURES II SICAV
By: [SIG]
-------------------------------------
Title: Attorney-in-fact
----------------------------------
Address: Xxxxx Xxxxxx 000
X-0000 Xxxxxxxxx
Attn: Xxxx Xxxxx
[SIGNATURE PAGE TO RIGHT OF FIRST REFUSAL AGREEMENT]
69
EXHIBIT G
EPIGENIX, INC.
VOTING AGREEMENT
THIS VOTING AGREEMENT (the "Agreement") is made as of January __, 1998
by and among EpiGenix, Inc., a Delaware corporation (the "Company"), Xxxxx X.
Xxxxxxx, Ph.D. (the "Founder"), the holder of shares of Series A Preferred Stock
set forth on the signature page to this Agreement opposite the heading "Series A
Investor" (the "Series A Investor"), and the holders of shares of Series B
Preferred Stock set forth on the signature page to this Agreement opposite or
below the heading "Series B and C Investors" (collectively referred to as the
"Series B and C Investors" and individually as a "Series B and C Investor"). The
Series A Investor and the Series B and C Investors are collectively referred to
as the "Investors."
RECITALS
The Company and the Investors have entered into a Series A Preferred
Stock Purchase Agreement and a Series B Preferred and Series C Preferred Stock
Purchase Agreement (the "Purchase Agreements") of even date herewith pursuant to
which the Company desires to sell to the Investors and the Investors desire to
purchase from the Company shares of the Company's Series A Preferred Stock,
Series B Preferred Stock and Series C Preferred Stock. A condition to the
Investors' obligations under each of the Purchase Agreements is that the
Company, the Founder and the Investors enter into this Agreement for the purpose
of setting forth the terms and conditions pursuant to which the Investors and
the Founder shall vote the shares of the Company's voting securities now or
hereafter owned, whether beneficially or otherwise, by them (the "Shares") in
favor of certain designees to the Company's Board of Directors. The Company, the
Investors and the Founder each desire to facilitate the voting arrangements set
forth in this Agreement, and the sale and purchase of shares of Series A
Preferred Stock, Series B Preferred Stock and Series C Preferred Stock pursuant
to the Purchase Agreements, by agreeing to the terms and conditions set forth
below.
THE PARTIES AGREE AS FOLLOWS:
1. ELECTION OF DIRECTORS
(a) SERIES B AND C DIRECTORS.
(i) The Series B and C Investors hereby agree that
each of Abingworth Bioventures II SICAV or its affiliates ("Abingworth"),
Institutional Venture Partners V or its affiliates ("IVP"), and Xxxxxxx Xxxxxxx
Xxxxxxxx & Xxxxx VI or its affiliates ("KP") (together, the "Nominating Series B
and C Investors" and individually, a "Nominating Series B and C Investors")
shall have the right to designate one (1) nominee for election as a director of
the Company who shall be elected solely by the holders of outstanding shares, if
any, of Series B Preferred Stock and Series C Preferred Stock, voting together
as a single, separate class (together, the "Series B and C Nominees" and
individually, a "Series B and C Nominee"). At least ten (10) days prior to any
meeting (or written action in lieu of a meeting) of stockholders of the Company
at or by which directors are to be elected by the holders of outstanding shares,
if any, of Series B Preferred Stock and Series C Preferred, voting together as a
single, separate class, each Nominating Series B and C Investor shall notify the
other Preferred
70
Investors in writing of each Series B and C Nominee designated by such
Nominating Series B and C Investor for election as a director of the Company. In
the absence of any such notification, it shall be presumed that each of the
Nominating Series B and C Investor's then incumbent Series B and C Nominees has
been redesignated as a Series B and C Nominee. The initial Series B and C
Nominee of Abingworth is Xxxx X. Xxxxxxxx, Xx. The initial Series B and C
Nominee of IVP is L. Xxxxx Xxxxxx. The initial Series B and C Nominee of KP is
Xxxxxx X. Xxxxx.
(ii) At each meeting (or written action in lieu of a
meeting) of stockholders of the Company at or by which directors are to be
elected by the holders of Series B Preferred and Series C Preferred Stock,
voting together as a single, separate class, each Preferred Investor shall vote
all of its Shares (entitled to vote thereon) to elect, as directors of the
Company, the Series B and C Nominees designated in the manner provided in
Section 2(a)(i).
(iii) If a Series B and C Nominee shall cease to
serve as a director for any reason, the Nominating Series B and C Investor which
designated such Series B and C Nominee shall have the right to designate a
successor Series B and C Nominee and each other Preferred Investor shall use its
best efforts to ensure that such successor Series B and C Nominee is duly
elected as a director. If a Nominating Series B and C Investor notifies the
other Preferred Investors that it desires to remove its Series B and C Nominee
as a director, each of the other Preferred Investors shall use its best efforts
to ensure that such Series B and C Nominee is duly removed as a director. If a
Nominating Series B and C Investor notifies the Company that it desires to
remove its Series B and C Nominee as a director and/or designate a successor
Series B and C Nominee, the Company shall, at the request of such Nominating
Series B and C Investor, use its best efforts to ensure that a meeting of
stockholders of the Company is promptly called for such purpose.
(b) SERIES A DIRECTOR.
(i) At each meeting (a written action in lieu of a
meeting) of stockholders of the Company at or by which directors are to be
elected by the holders of Series A Preferred Stock, voting as a single, separate
class, the Series A Investor shall vote all of its Shares (entitled to vote
thereon) to elect two directors nominated by Microcide Pharmaceuticals, Inc.
("Microcide"), one of which shall be an employee, member of the Board of
Directors or other affiliate of Microcide (the "Microcide Nominee"), and the
other of which shall not be an employee, member of the Board of Directors or
other affiliate of Microcide (the "Independent Series A Seat"). The initial
Microcide Nominee is Xxxxx X. Xxxxx, and the Independent Series A Seat shall
initially be vacant.
(ii) If a director designated in the manner provided
in Section 2(b)(i) shall be unable to serve as director for any reason, the
Series A Investor shall use its best efforts to ensure that a successor director
is duly elected to fill such seat.
(c) CEO DIRECTOR.
(i) At each meeting (or written action in lieu of a
meeting) of stockholders of the Company at or by which a director is to be
elected by the holders of Common Stock, voting as a single, separate class, each
Investor and the Founder shall vote all of his, her or its Shares (entitled to
-2-
71
vote thereon) to elect the then current Chief Executive Officer of the Company
(the "CEO Director"). The initial CEO Director is Xxxxx X. Xxxxxxx.
(ii) If a director designated in the manner provided
in Section 2 (c)(i) shall cease to serve as a director for any reason, each
Investor and the Founder shall use his, her or its best efforts to ensure that a
successor director is duly elected to file such seat.
(d) INDEPENDENT DIRECTOR.
(i) At each meeting (or written action in lieu of a
meeting) of stockholders of the Company at or by which a director is to be
elected by the holders of (A) a plurality of the outstanding shares of Preferred
Stock (which must also include the holders of a plurality of the outstanding
shares of Series B Preferred Stock unless and until the Sale of the Series C
Preferred Stock pursuant to the Series B Preferred and Series C Preferred Stock
Purchase Agreement has been consummated), voting as a single, separate class,
and (B) a plurality of the outstanding shares of Common Stock, voting as a
single, separate class, each Investor and the Founder shall vote all of his, her
or its Shares to elect an independent person as the director of the Company to
be elected by the holders of (A) a plurality of the outstanding shares of
Preferred Stock (which must also include the holders of a plurality of the
outstanding shares of Series B Preferred Stock unless and until the Sale of the
Series C Preferred Stock pursuant to the Series B Preferred and Series C
Preferred Stock Purchase Agreement has been consummated), voting as a single,
separate class, and (B) a plurality of the outstanding shares of Common Stock,
voting as a single, separate class (the "Independent Board Seat"). The
Independent Board Seat shall initially be vacant.
(ii) If a director designated in the manner provided
in Section 2(d)(i) shall cease to serve as a director for any reason, each
Investor and the Founder shall use his, her or its best efforts or ensure that a
successor director is duly elected to fill the Independent Board Seat.
2. NO REVOCATION. The voting agreements contained herein are coupled
with an interest and may not be revoked during the term of this Agreement.
3. CHANGE IN NUMBER OF DIRECTORS. The Founder and the Investors will
not vote for any amendment or change to the Certificate of Incorporation or
Bylaws providing for the election of more or less than seven (7) directors, or
any other amendment or change to the Company's Certificate of Incorporation or
Bylaws inconsistent with the terms of this Agreement.
4. LEGENDS. Each certificate representing any Shares held by the
Founder or the Investors or any assignee of the Founder or the Investors shall
bear the following legend:
"THE SHARES EVIDENCED HEREBY ARE SUBJECT TO A VOTING AGREEMENT BY AND
AMONG THE COMPANY AND CERTAIN STOCKHOLDERS OF THE COMPANY (A COPY OF
WHICH MAY BE EXAMINED AT THE PRINCIPAL OFFICE OF THE CORPORATION), AND
BY ACCEPTING ANY INTEREST IN SUCH SHARES THE PERSON ACCEPTING SUCH
INTEREST SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE
PROVISIONS OF SAID VOTING AGREEMENT."
-3-
72
5. TERMINATION. This Agreement shall terminate upon the earlier of (a)
the closing of a firm commitment underwritten public offering pursuant to an
effective registration statement under the Securities Act of 1933, as amended,
covering the offer and sale of the Company's Common Stock to the public at a
price per share (prior to underwriter commissions and offering expenses) of not
less than $3.00 per share (appropriately adjusted for any stock splits, stock
dividends, recapitalizations or similar events) and an aggregate offering price
to the public (prior to deduction of underwriter commissions and offering
expenses) of not less than $15,000,000; (b) the sale, conveyance, disposal, or
encumbrance of all or substantially all of the Company's property or business or
the merger into or consolidation with any other corporation (other than a
wholly-owned subsidiary corporation) or if the Company effects any other
transaction or series of related transactions in which more than fifty percent
(50%) of the voting power of the Company is disposed of, provided that this
Section 5 shall not apply to a merger effected exclusively for the purpose of
changing the domicile of the Company, or (c) the tenth anniversary of this
Agreement.
6. MISCELLANEOUS.
(a) SUCCESSORS IN INTEREST OF THE PARTIES. The provisions of
this Agreement shall be binding upon any successors in interest of the Founder
and the Investors. The Company shall not permit the transfer of any Shares on
its books or issue a new certificate representing any Shares unless and until
the person to whom such security is to be transferred shall have executed a
written agreement pursuant to which such person becomes a party to this
Agreement and agrees to be bound by all the provisions hereof as if such person
was a party hereunder.
(b) ASSIGNEES AND TRANSFEREES. Except as otherwise expressly
provided in this Agreement, the provisions hereof shall inure to the benefit of,
and be binding upon, the assignees and transferees of the parties hereto. The
Founder and the Investors hereby agree, and any transferee or assignee of any
voting securities of the Company that are owned by the Founder or the Investors
is hereby on notice that, any transfer or assignment of such securities of the
Company is conditioned upon such transferee's or assignee's execution and
delivery of this Agreement prior to such transfer or assignment for the purpose
of becoming a party to this Agreement. Any transfer or assignment of any of such
voting securities of the Company in violation of this Section 6(b) shall be void
and be of no force or effect.
(c) GRANT OF PROXY. Should the provisions of this Agreement be
construed to constitute the granting of proxies, such proxies shall be deemed
coupled with an interest and are irrevocable for the term of this Agreement.
(d) SPECIFIC ENFORCEMENT. It is agreed and understood that
monetary damages would not adequately compensate a party to this Agreement for
the breach of this Agreement by any other party, that this Agreement shall be
specifically enforceable, and that any breach or threatened breach of this
Agreement shall be the proper subject of a temporary or permanent injunction or
restraining order. Further, the Founder and each Investor hereto waives any
claim or defense that there is an adequate remedy at law for such breach or
threatened breach.
(e) MANNER OF VOTING. The voting of Shares pursuant to this
Agreement may be effected in person, by proxy, by written consent, or in any
other manner permitted by applicable law.
-4-
73
(f) STOCK SPLITS, STOCK DIVIDENDS, ETC. In the event of any
issuance of shares of the Company's voting securities hereafter to the Founder
or any Investor (including, without limitation, in connection with any stock
split, stock dividend, recapitalization, reorganization or combination) such
shares shall become Shares for purposes of this Agreement and shall be endorsed
with the legend set forth in Section 4 hereof.
(g) AMENDMENTS AND WAIVERS. Any term hereof may be amended or
waived only with the written consent of the Company, the Founder, and holders of
at least a majority (greater than 50%) of the Series A Preferred Stock, the
Series B Preferred Stock and the Series C Preferred Stock, voting together as a
class (which shall be deemed to include any shares of Series A Preferred Stock
which the Series A Investor has the right to receive from the Company pursuant
to the Series A Preferred Stock Purchase Agreement and any shares of Series C
Preferred Stock which the Series B and C Investors have the obligation to
purchase from the Company subject to the satisfaction of certain conditions by
the Company pursuant to the Series B Preferred and Series C Preferred Stock
Purchase Agreement). Any amendment or waiver effected in accordance with this
Section 6(g) shall be binding upon the Company, the Founder, the Investors, and
each of their respective successors and assigns.
(h) NOTICES. Any notice required or permitted by this
Agreement shall be in writing and shall be deemed sufficient on the date of
delivery, when delivered personally or by overnight courier or sent by telegram
or fax, or forty-eight (48) hours after being deposited in the U.S. mail, as
certified or registered mail, with postage prepaid, and addressed to the party
to be notified at such party's address or fax number as set forth on the
signature page hereto, or as subsequently modified by written notice; provided,
that any such written notice to an address outside the United States shall
additionally be given by telecopy and confirmed in writing sent by two day
guaranteed international courier.
(i) SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, the parties agree to
renegotiate such provision in good faith. In the event that the parties cannot
reach a mutually agreeable and enforceable replacement for such provision, then
(i) such provision shall be excluded from this Agreement, (ii) the balance of
the Agreement shall be interpreted as if such provision were so excluded and
(iii) the balance of the Agreement shall be enforceable in accordance with its
terms.
(j) GOVERNING LAW. This Agreement and all acts and
transactions pursuant hereto and the rights and obligations of the parties
hereto shall be governed, construed and interpreted in accordance with the laws
of the State of Delaware, without giving effect to principles of conflicts of
law.
(k). EXECUTION BY THE COMPANY. The Company, by its execution
in the space provided below, agrees that it will cause the certificate(s)
evidencing the shares of Common Stock and Series A Preferred Stock, Series B
Preferred Stock, and Series C Preferred Stock to bear the legend required by
Section 4 herein, and it shall supply, free of charge, a copy of this Agreement
to any holder of a certificate evidencing shares of capital stock of the Company
upon written request from such holder to the Company at its principal office.
The parties hereby agree that the failure to cause the certificates evidencing
the shares of Common Stock, Series A Preferred Stock, Series B Preferred Stock,
and Series C Preferred Stock to bear the legend required by Section 4 herein
and/or failure of
-5-
74
the Company to supply, free of charge, a copy of this Agreement as provided
under this Section 6(k) shall not affect the validity or enforceability of this
Agreement.
(l) COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
(m) TITLES AND SUBTITLES. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
[Signature Page Follows]
-6-
75
IN WITNESS WHEREOF, the parties hereto have executed this Voting
Agreement as of the date first written above.
COMPANY: EPIGENIX, INC.
By: [SIG]
----------------------------------
Title:
-------------------------------
Address: 000 Xxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
THE FOUNDER: [SIG]
-------------------------------------
Xxxxx X. Xxxxxxx, Ph.D.
Address:
-----------------------------
SERIES A INVESTOR: MICROCIDE PHARMACEUTICALS, INC.
By:[SIG]
----------------------------------
Title:
-------------------------------
Address:
-------------------------------
-------------------------------------
SERIES B AND C INVESTORS: XXXXXXX XXXXXXX XXXXXXXX & XXXXX VIII
By: KPCB VIII Associates, Its General Partner
By:
----------------------------------
General Partner
Address:
-------------------------------
-------------------------------------
-7-
76
IN WITNESS WHEREOF, the parties hereto have executed this Voting
Agreement as of the date first written above.
COMPANY: EPIGENIX, INC.
By:
----------------------------------
Title:
-------------------------------
Address: 000 Xxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
THE FOUNDER:
-------------------------------------
Xxxxx X. Xxxxxxx, Ph.D.
Address:
-----------------------------
SERIES A INVESTOR: MICROCIDE PHARMACEUTICALS, INC.
By: [SIG]
----------------------------------
Title:
-------------------------------
Address:
-------------------------------
-------------------------------------
SERIES B AND C INVESTORS: XXXXXXX XXXXXXX XXXXXXXX & XXXXX VIII
By: KPCB VIII Associates, Its General Partner
By: [SIG]
----------------------------------
General Partner
Address: 0000 XXXX XXXX XXXX
-------------------------------
XXXXX XXXX, XX 00000
-------------------------------------
-7-
77
KPCB VIII Founders Fund
By: KPCB VIII Associates, Its General Partner
By: [SIG]
----------------------------------
General Partner
Address: 0000 XXXX XXXX XXXX
-------------------------------
XXXXX XXXX, XX 00000
-------------------------------------
KPCB Life Science Zaibatsu Fund II
By: KPCB VII Associates, Its General Partner
By: [SIG]
----------------------------------
General Partner
Address: 0000 XXXX XXXX XXXX
-------------------------------
XXXXX XXXX, XX 00000
-------------------------------------
INSTITUTIONAL VENTURE PARTNERS VII, L.P.
By: Institutional Venture Management VII,
L.P., its general partner
By:
----------------------------------
General Partner
Address:
-------------------------------
-------------------------------------
INSTITUTIONAL VENTURE
MANAGEMENT VII, L.P.
By:
----------------------------------
General Partner
Address:
-------------------------------
-------------------------------------
IVP FOUNDERS FUND I, L.P.
By: Its General Partner, Institutional Venture
Management VI, L.P.
By:
----------------------------------
General Partner
Address:
-------------------------------
-------------------------------------
-8-
78
KPCB VIII Founders Fund
By: KPCB VIII Associates, Its General Partner
By:
----------------------------------
General Partner
Address:
-------------------------------
-------------------------------------
KPCB Life Science Zaibatsu Fund II
By: KPCB VII Associates, Its General Partner
By:
----------------------------------
General Partner
Address:
-------------------------------
-------------------------------------
INSTITUTIONAL VENTURE PARTNERS VII, L.P.
By:Institutional Venture Management VII, L.P.,
its general partner
By: [SIG]
----------------------------------
General Partner
Address: 0000 XXXX XXXX XXXX
-------------------------------
XXXXX XXXX, XX 00000
-------------------------------------
INSTITUTIONAL VENTURE
MANAGEMENT VII, L.P.
By: [SIG]
----------------------------------
General Partner
Address: 0000 XXXX XXXX XXXX
-------------------------------
XXXXX XXXX, XX 00000
-------------------------------------
IVP FOUNDERS FUND I, L.P.
By: Its General Partner, Institutional Venture
Management VI, L.P.
By: [SIG]
----------------------------------
General Partner
Address: 0000 XXXX XXXX XXXX
-------------------------------
XXXXX XXXX, XX 00000
-------------------------------------
-8-
79
ABINGWORTH BIOVENTURES II SICAV
By:
----------------------------------
Address:
-------------------------------
-------------------------------------
-9-
80
ABINGWORTH BIOVENTURES II SICAV
By:[SIG]
----------------------------------
Address: Attorney-in-fact
-------------------------------
X-0000 Xxxxxxxxx
-------------------------------------
-9-
