Exhibit 10.10
MITOKOR
SERIES F-1 PREFERRED STOCK PURCHASE AGREEMENT
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November 9, 2001
TABLE OF CONTENTS
PAGE
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1. Authorization and Sale of Preferred Shares................................1
1.1 Authorization; Amended and Restated Articles of Incorporation.......1
1.2 Sale and Issuance of the Preferred Shares...........................1
2. Closing Date; Delivery....................................................1
2.1 Closing Dates.......................................................1
2.2 Delivery............................................................2
3. Representations and Warranties of the Company.............................2
3.1 Organization and Standing; Articles and By-Laws.....................2
3.2 Corporate Power.....................................................2
3.3 Subsidiaries........................................................2
3.4 Capitalization......................................................2
3.5 Authorization.......................................................3
3.6 Patents and Other Proprietary Rights................................4
3.7 Compliance with Other Instruments, None Burdensome, etc.............5
3.8 Proprietary Agreements; Employees...................................5
3.9 Condition of Properties.............................................6
3.10 Litigation, etc.....................................................6
3.11 Governmental Consent, etc...........................................6
3.12 Offering............................................................6
3.13 Taxes...............................................................7
3.14 Title...............................................................7
3.15 Material Contracts and Commitments..................................7
3.16 Financial Statements................................................7
3.17 Absence of Changes..................................................8
3.18 Outstanding Indebtedness............................................8
3.19 Registration Rights.................................................9
3.20 Certain Transactions................................................9
3.21 Corporate Documents; Minute Books...................................9
3.22 Employee Benefit Plans..............................................9
3.23 Labor Agreements....................................................9
3.24 Real Property Holding Corporation...................................9
3.25 Disclosure..........................................................9
3.26 Insurance...........................................................9
3.27 Shareholder Agreements.............................................10
3.28 Environmental Matters..............................................10
3.29 Manufacturing Rights...............................................11
3.30 Assumptions, Guaranties, Etc. of Indebtedness of Other Persons.....11
3.31 Material Customers and Suppliers...................................11
4. Representations and Warranties of Purchaser and Restrictions on Transfer
Imposed by the Securities Act............................................11
4.1 Representations and Warranties by the Purchaser....................11
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TABLE OF CONTENTS
(continued)
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4.2 Legends............................................................12
4.3 Removal of Legend and Transfer Restrictions........................13
4.4 Rule 144...........................................................13
5. Conditions to Closing....................................................13
5.1 Conditions to Purchasers' Obligations..............................13
5.2 Conditions to Obligations of the Company...........................14
6. Affirmative Covenants of the Company.....................................14
6.1 Financial Information..............................................14
6.2 Conflicts of Interests.............................................15
6.3 Key Man Insurance..................................................15
6.4 Proprietary Agreements.............................................16
6.5 Future Stock Issuances.............................................16
6.6 Rule 144...........................................................16
6.7 Transactions with Affiliates.......................................16
6.8 Inspection Rights..................................................16
6.9 Additional Benefits to Subsequent Investors........................16
7. Miscellaneous............................................................17
7.1 Waivers and Amendments.............................................17
7.2 Governing Law......................................................17
7.3 Survival...........................................................17
7.4 Successors and Assigns.............................................17
7.5 Entire Agreement...................................................17
7.6 Notices, etc.......................................................17
7.7 Severability.......................................................18
7.8 Titles and Subtitles...............................................18
7.9 Counterparts.......................................................18
7.10 Delays or Omissions................................................18
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LIST OF EXHIBITS
EXHIBIT A - Amended and Restated Articles of Incorporation
EXHIBIT B - Schedule of Exceptions
EXHIBIT C - Investors' Rights Agreement
EXHIBIT D - Shareholders of the Company
EXHIBIT E - Holders of Outstanding Options and Warrants of the Company
EXHIBIT F - Patents and Trademarks
EXHIBIT G - Material Contracts
EXHIBIT H - Financial Statements
EXHIBIT I - Opinion of Counsel for the Company
MITOKOR
SERIES F-1 PREFERRED STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made as of November 9, 2001, by and among MITOKOR, a
California corporation (the "Company"), and the individuals and entities that
are signatories to this Agreement (the "Purchasers" and each a "Purchaser").
RECITALS
WHEREAS, the Company desires to sell and the Purchasers desire to
purchase shares of Series F-1 Preferred Stock to the Purchasers.
NOW, THEREFORE, the parties hereby agree as follows:
1. AUTHORIZATION AND SALE OF PREFERRED SHARES.
1.1 AUTHORIZATION; AMENDED AND RESTATED ARTICLES OF
INCORPORATION. The Company has authorized the issuance and sale to the
Purchasers, pursuant to the terms and conditions hereof, of up to 4,000,000
shares of its Series F-1 Preferred Stock (the "Preferred Shares") at a purchase
price of $7.50 per share. The Preferred Shares have the rights, preferences and
provisions as set forth in the Company's Amended and Restated Articles of
Incorporation (the "Articles") attached hereto as EXHIBIT A.
1.2 SALE AND ISSUANCE OF THE PREFERRED SHARES. Subject to the
terms and conditions hereof, the Company will issue and sell to the Purchasers
and Purchasers will purchase the Preferred Shares at the purchase price per
Preferred Share as indicated in Section 1.1.
2. CLOSING DATE; DELIVERY.
2.1 CLOSING DATES.
(a) CLOSING. The closing of the purchase and sale of the
Preferred Shares shall be held at the offices of Xxxx Xxxx Xxxx & Freidenrich,
0000 Xxxxxxxxx Xxxxx, Xxxxx 0000, Xxx Xxxxx, Xxxxxxxxxx 00000-0000, at 10:00
a.m. on November 9, 2001, or at such other time and place as the Company and the
Purchasers may mutually agree upon orally or in writing.
(b) SUBSEQUENT CLOSINGS. Additional closings of the purchase
and sale of up to all of the Preferred Shares remaining after the first Closing
(the "Subsequent Closings") may take place at the discretion of the Company at
the offices of Xxxx Xxxx Xxxx & Freidenrich within 120 days of the first Closing
and shall be subject to the terms and conditions of this Agreement and Exhibits
attached hereto.
(c) DEFINITIONS. The closings are sometimes referred to
hereinafter as the "Closings" or individually as a "Closing." The dates of the
Closings are hereinafter referred to collectively as the "Closing Dates" or
individually as a "Closing Date."
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2.2 DELIVERY. Subject to the terms of this Agreement, at the
Closings the Company will deliver to each Purchaser a certificate representing
the Preferred Shares to be purchased by such Purchaser from the Company, against
payment of the purchase price therefor by a check or wire transfer made payable
to the order of the Company.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to the Purchasers that except as set forth on the
Schedule of Exceptions attached hereto as EXHIBIT B, which exceptions shall be
deemed to be representations and warranties as if made hereunder:
3.1 ORGANIZATION AND STANDING; ARTICLES AND BY-LAWS. The Company
is a corporation duly organized, validly existing and in good standing under the
laws of the State of California and has all requisite corporate power and
authority to carry on its businesses as now conducted and as proposed to be
conducted. The Company is qualified or licensed to do business as a foreign
corporation in all jurisdictions where such qualification or licensing is
required, except where the failure to so qualify would not have a material
adverse effect upon the Company. Copies of the Company's Articles of
Incorporation, Bylaws, minutes and consents of shareholders and of the Board of
Directors are available for inspection at the Company's offices or have been
previously provided to the Purchaser.
3.2 CORPORATE POWER. The Company has now, or will have at the
Closing Dates, all requisite corporate power to enter into this Agreement and
the Investors' Rights Agreement (the "Rights Agreement") in substantially the
form attached hereto as EXHIBIT C and to sell and issue the Preferred Shares and
to issue the Common Stock upon conversion of the Preferred Shares. This
Agreement and the Rights Agreement are valid and binding obligations of the
Company enforceable in accordance with their respective terms, except as the
same may be limited by bankruptcy, insolvency, moratorium, and other laws of
general application affecting the enforcement of creditors' rights.
3.3 SUBSIDIARIES. The Company does not control, directly or
indirectly, any other corporation, association or business entity.
3.4 CAPITALIZATION. The authorized capital stock of the Company
is 25,000,000 shares of Common Stock, of which 255,071 shares are issued and
outstanding and 20,000,000 shares of Preferred Stock issuable in series, of
which (i) 52,000 shares are designated Series A-1 Preferred Stock, 52,000 shares
of which are issued and outstanding; (ii) 7,200 shares are designated Series B
Preferred Stock, 7,200 shares of which are issued and outstanding; (iii) 90,000
shares are designated Series B-1 Preferred Stock, 90,000 of which are issued and
outstanding; (iv) 30,000 shares are designated Series B-2 Preferred Stock,
30,000 of which are issued and outstanding; (v) 30,000 shares are designated
Series B-3 Preferred Stock, 30,000 of which are issued and outstanding; (vi)
3,600 shares are designated Series B-4 Preferred Stock, 3,600 of which are
issued and outstanding; (vii) 3,308,431 shares are designated Series C Preferred
Stock, 3,292,431 of which are issued and outstanding; (viii) 3,358,042 shares
are designated Series D Preferred Stock, 3,351,042 of which are issued and
outstanding; (ix) 3,358,042 shares are designated Series D-1 Preferred Stock,
none of which are issued and outstanding; (x) 853,167 shares are designated
Series E Preferred Stock, 833,334 of which are issued and outstanding; (xi)
2,519,681 shares are designated Series F Preferred Stock, 2,511,681
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of which are issued and outstanding; (xii) 4,000,000 shares are designated
Series F-1 Preferred Stock, none of which are issued and outstanding; and (xii)
2,200,000 shares are designated Series G Preferred Stock, 1,511,685 of which are
issued and outstanding. The holders of record of the presently issued and
outstanding Common Stock and Preferred Stock immediately prior to the Closings
are as set forth on EXHIBIT D. All such issued and outstanding shares have been
duly authorized and validly issued, are fully paid and nonassessable, and were
issued in compliance with all applicable state and federal laws concerning the
issuance of securities. The Company has reserved 113,043 shares of Common Stock
for issuance upon the conversion of Series A-1 Preferred Stock, 574,295 shares
of Common Stock for issuance upon the conversion of Series B Preferred Stock,
Series B-1 Preferred Stock, Series B-2 Preferred Stock, Series B-3 Preferred
Stock and Series B-4 Preferred Stock, 3,308,431 shares of Common Stock for
issuance upon the conversion of Series C Preferred Stock, 3,358,042 shares of
Common Stock for issuance upon the conversion of Series D Preferred Stock,
3,358,042 shares of Common Stock for issuance upon the conversion of Series D-1
Preferred Stock, 853,167 shares of Common Stock for issuance upon the conversion
of Series E Preferred Stock, 2,519,681 shares of Common Stock for issuance upon
the conversion of Series F Preferred Stock, 4,000,000 shares of Common Stock for
issuance upon the conversion of Series F-1 Preferred Stock, 2,200,000 shares of
Common Stock for issuance upon the conversion of Series G Preferred Stock,
67,042 shares of Common Stock for issuance pursuant to the exercise of
outstanding Common Stock purchase warrants, 16,000 shares of Series C Preferred
Stock for issuance pursuant to the exercise of Series C Preferred Stock purchase
warrants, 7,000 shares of Series D Preferred Stock for issuance pursuant to the
exercise of Series D Preferred Stock purchase warrants, 19,833 shares of Series
E Preferred Stock for issuance pursuant to the exercise of Series E Preferred
Stock purchase warrants, 8,000 shares of Series F Preferred Stock for issuance
pursuant to the exercise of Series F Preferred Stock Purchase warrants, 279,397
shares of Series G Preferred Stock for issuance pursuant to the exercise of
Series G Preferred Stock Purchase warrants, 2,340,969 shares of Common Stock for
issuance to employees, directors, and consultants pursuant to its Amended and
Restated 1993 Stock Option Plan, 230,000 shares of Common Stock for issuance
pursuant to the exercise of options granted to nonemployee directors under its
2000 Outside Director Stock Option Plan and 1,720 shares of Common Stock for
issuance upon exercise of nonstatutory options granted by the Company in 1991
and 1992. The holders of any and all rights, warrants or conversion rights to
purchase or acquire from the Company any of its capital stock, along with the
number of shares of capital stock issuable upon exercise of such rights, are set
forth on EXHIBIT E attached hereto. Except for such rights, there are no
outstanding rights, warrants, conversion rights or agreements for the purchase
or acquisition from the Company of any shares of its capital stock. The rights,
privileges and preferences of the Series F-1 Preferred Stock are as set forth in
the Articles attached hereto as EXHIBIT A.
3.5 AUTHORIZATION.
(a) CORPORATE ACTION. All corporate action on the part of
the Company, its officers, directors and shareholders necessary for the sale and
issuance of the Preferred Shares and the issuance of the Common Stock issuable
upon conversion of the Preferred Shares and the performance of the Company's
obligations hereunder and under the Rights Agreement has been taken or will be
taken prior to the Closings.
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(b) VALID ISSUANCE. The Preferred Shares, when issued in
compliance with the provisions of this Agreement and the shares of Common Stock
issuable upon conversion of the Preferred Shares when issued in accordance with
the provisions of the Articles, will be duly authorized, validly issued, fully
paid and nonassessable and will be free of any liens or encumbrances caused or
created by the Company; provided, however, that all such shares may be subject
to restrictions on transfer under state and/or federal securities laws as set
forth herein, and as may be required by future changes in such laws.
(c) NO PREEMPTIVE RIGHTS. Except as set forth in the Rights
Agreement, no person has any right of first refusal or any preemptive rights in
connection with the issuance of the Preferred Shares, the issuance of the Common
Stock upon conversion of the Preferred Shares or any future issuances of
securities by the Company.
3.6 PATENTS AND OTHER PROPRIETARY RIGHTS. EXHIBIT F attached
hereto contains a full and complete list, as of September 15, 2001, of all
patents and patent applications, trademarks and trademark applications, trade
names, service marks and service xxxx applications and copyrights owned or used
by the Company and its subsidiaries or in which the Company and its subsidiaries
have any rights or licenses. The Company and its subsidiaries have entered into
agreements with each of their respective officers, employees and consultants
providing the Company and its subsidiaries, to the extent permitted by law, with
title and ownership to patents, patent applications, trade secrets and
inventions conceived, developed, reduced to practice by or at the direction of
such person, solely or jointly, during the period of employment by the Company
or its subsidiaries. Except as described in EXHIBIT F:
(a) The Company and its subsidiaries own or possess adequate
licenses or other rights (or are able to obtain adequate licenses, rights or
purchase options on terms that will not materially and adversely affect their
respective businesses) to use all patents, patent applications, trademarks,
trademark applications, trade secrets, service marks, service xxxx applications,
trade names, copyrights, inventions, drawings, designs, customer lists,
proprietary know-how or information, or other rights with respect thereto
(collectively referred to as "MitoKor Proprietary Rights"), used in the
businesses of the Company and its subsidiaries, and the same are sufficient to
conduct their respective businesses as they has been conducted, are now being
conducted and are currently proposed to be conducted. The operation of the
businesses of the Company and its subsidiaries as now conducted and as currently
proposed to be conducted does not and will not conflict with or infringe, and no
one has asserted to the Company or its subsidiaries that such operation
conflicts with or infringes, any proprietary rights claimed, owned, possessed or
used by any third party.
(b) There are no claims, disputes, actions, proceedings,
suits or appeals pending against the Company or its subsidiaries with respect to
any MitoKor Proprietary Rights (other than those, if any, with respect to which
service of process or similar notice has not yet been made on the Company or its
subsidiaries), and, to the knowledge of the Company and its subsidiaries, none
has been threatened against the Company or its subsidiaries. To the knowledge of
the Company and its subsidiaries, there are no facts or alleged facts which
would reasonably serve as a basis for any claim that the Company or its
subsidiaries does not have the unrestricted right to use, free of any rights or
claims of others, all MitoKor Proprietary Rights in the development,
manufacture, use, sale or other disposition of any or all products or services
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presently being used, furnished or sold in the conduct of the businesses of the
Company and its subsidiaries or currently contemplated to be used, furnished or
sold in the businesses of the Company and its subsidiaries.
(c) To the knowledge of the Company and its subsidiaries,
the MitoKor Proprietary Rights have not been infringed by others.
(d) There are no outstanding options, licenses or agreements
of any kind relating to the MitoKor Proprietary Rights, nor is the Company or
its subsidiaries 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.
(e) Neither the execution nor delivery of this Agreement,
nor the carrying out of the businesses of the Company and its subsidiaries by
the employees of the Company and its subsidiaries, nor the conduct of the
businesses of the Company and its subsidiaries as currently proposed, will, to
the knowledge of the Company or its subsidiaries, 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.
3.7 COMPLIANCE WITH OTHER INSTRUMENTS, NONE BURDENSOME, ETC. The
Company is not in violation of any term of the Articles or Bylaws, nor is the
Company in violation of or in default in any material respect under the terms of
any mortgage, indenture, contract, agreement, instrument, judgment or decree,
the violation of which would have a material adverse effect on the Company as a
whole, and to the knowledge of the Company, is not in violation of any order,
statute, rule or regulation applicable to the Company, the violation of which
would have a material adverse effect on the Company. The execution, delivery and
performance of and compliance with this Agreement or the Rights Agreement, and
the issuance and sale of the Preferred Shares will not (a) result in any such
violation, or (b) be in conflict with or constitute a default under any such
term, or (c) result in the creation of any mortgage, pledge, lien, encumbrance
or charge upon any of the properties or assets of the Company pursuant to any
such term. To the knowledge of the Company, there is no such term which
materially adversely affects, or, so far as the Company may now foresee, in the
future may materially adversely affect, the business, condition, affairs or
operations of the Company or any of its properties or assets.
3.8 PROPRIETARY AGREEMENTS; EMPLOYEES. All technical and
management personnel presently employed by the Company have executed an
agreement regarding confidentiality and proprietary information, the form of
which has been made available to the Purchaser. The Company is not aware that
any of its employees is in violation thereof and will use reasonable efforts to
prevent any such violation. 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 his or
her best efforts to promote the interests of the Company or that would conflict
with the Company's business as conducted or as proposed to be conducted or that
would prevent any such employee from assigning inventions to
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the Company. The Company does not believe that it is or will be necessary for
the Company to utilize any inventions of any of its employees (or people it
currently intends to hire) made prior to their employment by the Company.
3.9 CONDITION OF PROPERTIES. All buildings, facilities,
machinery, equipment, fixtures, vehicles and other properties owned, leased or
used by the Company (a) are in good operating condition and repair (reasonable
wear and tear excepted), (b) to the best of the Company's knowledge, are being
operated in conformity with all applicable building, safety, zoning,
environmental, waste and other applicable ordinances, laws and regulations, and
(c) are adequate and sufficient for the Company's business as presently
conducted.
3.10 LITIGATION, ETC. There is no action, proceeding or
investigation pending against the Company or, to the Company's knowledge, its
officers, directors or shareholders, or to the Company's knowledge, against
employees or consultants of the Company (or, to the Company's knowledge, any
basis therefor or threat thereof): (1) which might result, either individually
or in the aggregate, in (a) any material adverse change in the business,
conditions, affairs or operations of the Company or in any of its properties or
assets, or (b) any material adverse impairment of the right or ability of the
Company to carry on its business as now conducted or as proposed to be
conducted, or (c) any material liability on the part of the Company; or (2)
which questions the validity of this Agreement, the Rights Agreement or any
action taken or to be taken in connection herewith or therewith, including in
each case, without limitation, actions pending or threatened involving the prior
employment of any of the Company's employees, the use in connection with the
Company's business of any information or techniques allegedly proprietary to any
of its former employees, or their obligations under any agreements with prior
employers. The Company is not a party to or subject to the provisions of any
order, writ, injunction, judgment or decree of any court or government agency or
instrumentality. There is no action, suit, proceeding or investigation by the
Company currently pending or which the Company currently intends to initiate.
3.11 GOVERNMENTAL CONSENT, ETC. Based in part upon the
representations and warranties of the Purchasers in Section 4 hereof, no
consent, approval or authorization of or designation, declaration or filing with
any governmental authority on the part of the Company is required in connection
with: (a) the valid execution and delivery of this Agreement or the Rights
Agreement; or (b) the offer, sale or issuance of the Preferred Shares or the
issuance of the shares of Common Stock issuable upon conversion of the Preferred
Shares or (c) the obtaining of the consents, permits and waivers specified in
subsection 5.1(b) hereof, except the filing of the Articles and, if required,
filings or qualifications under applicable blue sky laws, which filings or
qualifications, if required, will have been timely filed or obtained after the
sale of the Preferred Shares.
3.12 OFFERING. In reliance on the representations and warranties
of the Purchasers in Section 4 hereof, the offer, sale and issuance of the
Preferred Shares in conformity with the terms of this Agreement will not result
in a violation of the requirements of Section 5 of the Securities Act of 1933,
as amended (the "Securities Act") or the qualification or registration
requirements of the California Corporate Securities Law of 1968, as amended (the
"Law") or other applicable blue sky laws, and neither the Company nor any
authorized agent acting on its behalf will take any action hereafter that would
cause the loss of such exemption.
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3.13 TAXES. The Company has filed all tax returns that are
required to have been filed with appropriate federal, state, county and local
governmental agencies or instrumentalities, except where the failure to do so
would not have a material adverse effect upon the Company, taken as a whole. The
Company has paid or established reserves for all material income, franchise and
other taxes, assessments, governmental charges, penalties, interest and fines
due and payable by them on or before the Closings. There is no pending dispute
with any taxing authority relating to any of such returns and the Company has no
knowledge of any proposed liability for any tax to be imposed upon the
properties or assets of the Company for which there is not an adequate reserve
reflected in the Financial Statements (as defined below) or, if adversely
determined against the Company, would have a material adverse effect. The
Company has not elected pursuant to the Internal Revenue Code of 1986, as
amended (the "Code"), to be treated as a Subchapter S corporation nor has it
made any other elections pursuant to the Code (other than elections that relate
solely to methods of accounting, depreciation or amortization) that would have a
material effect on the Company, its financial condition, its business as
presently conducted or proposed to be conducted or any of its properties or
material assets.
3.14 TITLE. The Company owns its properties and assets, including
the properties and assets reflected in the Financial Statements (as defined in
Section 3.16), free and clear of all liens, mortgages, loans or encumbrances
except liens for current taxes, and such encumbrances and liens which arise in
the ordinary course of business and do not materially impair the Company's
ownership or use of such property or assets. With respect to the property and
assets leased by the Company, the Company is in compliance with such leases and
holds valid leasehold interests free and clear of any liens, claims or
encumbrances.
3.15 MATERIAL CONTRACTS AND COMMITMENTS. All of the contracts,
mortgages, indentures, agreements, instruments and transactions to which the
Company is a party or by which it is bound (including purchase orders to the
Company or placed by the Company) which involve obligations of, or payments to,
the Company in excess of One Hundred Thousand Dollars ($100,000) and all
agreements between the Company and its officers, directors, consultants and
employees are either (i) attached as exhibits to this Agreement, or (ii) set
forth on the list attached hereto as EXHIBIT G (the "Contracts"), copies of
which have been made available to the Purchasers. All of the Contracts are
valid, binding and in full force and effect in all material respects and
enforceable by the Company in accordance with their respective terms in all
material respects, subject to the effect of applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application relating to or
affecting enforcement of creditors' rights and rules or laws concerning
equitable remedies. The Company is not in material default under any of such
Contracts. To the Company's knowledge, no other party to any of the Contracts is
in material default thereunder.
3.16 FINANCIAL STATEMENTS. Attached hereto as EXHIBIT H are
audited financial statements for the fiscal year ended December 31, 2000 and
unaudited financial statements for the nine (9) month period ended September 30,
2001 (the "Financial Statements"). The Financial Statements are complete and
correct in all material respects and have been prepared in accordance with
generally accepted accounting principles on a consistent basis throughout the
relevant periods. The Financial Statements accurately set out and describe the
financial condition and operating results of the Company as of the dates, and
during the periods, indicated
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therein. Except as set forth in the Financial Statements, as of the Closing
Dates the Company has no material liabilities of any nature (matured or
unmatured, fixed or contingent). The Company maintains and will continue to
maintain a standard system of accounting established and administered in
accordance with generally accepted accounting principles.
3.17 ABSENCE OF CHANGES. Except as contemplated by this Agreement
since September 30, 2001: (a) the Company has not entered into any transaction
which was not in the ordinary course of business, (b) there has been no material
adverse change in the condition (financial or otherwise) of the business,
property, assets or liabilities of the Company other than changes in the
ordinary course of business, none of which, individually or in the aggregate,
has been materially adverse, (c) there has been no damage to, destruction of or
loss of physical property (whether or not covered by insurance) materially
adversely affecting the assets, financial condition, operating results, business
or operations of the Company, (d) the Company has not declared or paid any
dividend or made any distribution on its stock, or redeemed, purchased or
otherwise acquired any of its stock, (e) the Company has not materially changed
any compensation arrangement or agreement with any of its key employees or
executive officers, or materially changed the rate of pay of its employees as a
group, (f) the Company has not received notice that there has been a
cancellation of an order for the Company's products or a loss of a customer of
the Company, the cancellation or loss of which would materially adversely affect
the business of the Company, (g) the Company has not changed or amended any
material contract by which the Company or any of its assets are bound or
subject, (h) there has been no resignation or termination of employment of any
key officer or employee of the Company and the Company does not know of any
impending resignation or termination of employment of any such key officer or
employee, (i) there has been no labor dispute involving the Company or its
employees and none is pending or, to the best of the Company's knowledge,
threatened, (j) there has been no change, except in the ordinary course of
business, in the material contingent obligations of the Company (nor in any
contingent obligation of the Company regarding any director, shareholder or key
employee or officer of the Company) by way of guaranty, endorsement, indemnity,
warranty or otherwise, (k) there have been no loans made by the Company to any
of its employees, officers or directors other than travel advances and other
advances made in the ordinary course of business, (l) there has been no waiver
by the Company of a valuable right or of a material debt owing to it, (m) there
has not been any satisfaction or discharge of any lien, claims or encumbrance or
any payment of any obligation by the Company, except in the ordinary course of
business and which is not material to the assets, properties, financial
condition, operating results or business of the Company, and (n) to the
Company's knowledge, there has been no other event or condition of any character
pertaining to and materially adversely affecting the assets or business of the
Company.
3.18 OUTSTANDING INDEBTEDNESS. Except as disclosed in the
Financial Statements, the Company has no indebtedness for borrowed money which
it has directly or indirectly created, incurred, assumed or guaranteed, or with
respect to which it has otherwise become liable, directly or indirectly. The
Company has no material liability or obligation in excess of $50,000, absolute
or contingent, which is not shown or provided for in the latest Financial
Statements, except obligations under purchase orders, sales contracts, real
property leases, equipment leases or similar obligations incurred in the
ordinary course of business.
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3.19 REGISTRATION RIGHTS. The Company has not granted or agreed to
grant any rights to register as that term is defined in the Rights Agreement,
including piggyback registration rights, to any person or entity.
3.20 CERTAIN TRANSACTIONS. The Company is not indebted, directly
or indirectly, to any of its officers, directors or shareholders or to their
spouses or children, in any amount whatsoever; and none of said officers,
directors or, to the Company's knowledge, shareholders, or any member of their
immediate families, are indebted to the Company or have any direct or indirect
ownership interest in any firm or corporation with which the Company is
affiliated or with which the Company has a business relationship (except as a
holder of securities of a corporation whose securities are publicly traded and
which is subject to the reporting requirements of the Securities Exchange Act of
1934, to the extent of owning not more than two percent (2%) of the issued and
outstanding securities of such corporation). No such officer, director or
shareholder, or any member of their immediate families, is, directly or
indirectly, interested in any material contract with the Company. The Company is
not guarantor or indemnitor of any indebtedness of any other person, firm or
corporation.
3.21 CORPORATE DOCUMENTS; MINUTE BOOKS. The minute books of the
Company have been made available to the Purchasers and contain a complete
summary of all meetings of directors and shareholders since the time of
incorporation of the Company.
3.22 EMPLOYEE BENEFIT PLANS. The Company does not have any
"employee benefit plan" as defined in the Employee Retirement Income Security
Act of 1974, as amended.
3.23 LABOR AGREEMENTS. The Company is not bound by or subject to
(and none of its assets or properties is bound by or subject to) any written or
oral, express or implied, contract, commitment or arrangement with any labor
union, and no labor union has requested or, to the Company's knowledge, has
sought to represent any of the employees, representatives or agents of the
Company. There is no strike or other labor dispute involving the Company
pending, or to the Company's knowledge, threatened, that could have a material
adverse effect on the assets, properties, financial condition, operating
results, or business of the Company (as such business is presently conducted and
as it is proposed to be conducted), nor is the Company aware of any labor
organization activity involving its employees.
3.24 REAL PROPERTY HOLDING CORPORATION. The Company is not a "real
property holding corporation" within the meaning of Section 897(c)(2) of the
United States Internal Revenue Code of 1986, as amended.
3.25 DISCLOSURE. No representation or warranty by the Company in
this Agreement, or in any document or certificate furnished or to be furnished
to the Purchaser pursuant hereto or in connection with the transactions
contemplated hereby, when taken together, contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary to make the statements made herein and therein, in the light of the
circumstances under which they were made, not misleading.
3.26 INSURANCE. The Company maintains insurance covering property
damage and liability reasonably prudent under commercially reasonable practices.
-9-
3.27 SHAREHOLDER AGREEMENTS. Except as otherwise contemplated by
this Agreement, (a) there are no agreements or arrangements between the Company
and any of the Company's shareholders or to the Company's knowledge, between any
of the Company's shareholders which materially and adversely affect any
shareholder's ability or right freely to alienate or vote such shares and (b) to
the Company's knowledge, none of the Company's shareholders is affiliated with
or has any agreements or arrangements with any customer of, or supplier to, the
Company.
3.28 ENVIRONMENTAL MATTERS.
(a) The Company has not caused or allowed, nor has the
Company contracted with any party for, the generation, use, transportation,
treatment, storage or disposal of any Hazardous Substances (as defined below) in
connection with the operations of its business or otherwise.
(b) The Company, the operations of its business, and any
real property that the Company owns, leases, or otherwise occupies or uses (the
"Premises") are in compliance with all applicable Environmental Laws (as defined
below) and orders or directives of any governmental authorities having
jurisdiction under such Environmental Laws including, without limitation, any
Environmental Laws or orders or directives with respect to any cleanup or
remediation of any release or threat of release of Hazardous Substances.
(c) The Company has not received any citation, directive,
letter or other communication, written or oral, or any notice of any
proceedings, claims or lawsuits, from any person, entity or governmental
authority arising out of the ownership or occupation of the Premises, or the
conduct of its operations, nor is it aware of any basis thereof.
(d) The Company has obtained and is maintaining in full
force and effect all necessary permits, licenses and approvals required by any
Environmental Laws applicable to the Premises and the business operations
conducted thereon (including operations conducted by tenants on the Premises)
and is in compliance with all such permits, licenses and approvals.
(e) The Company has not caused, or allowed a release, or a
threat of release, of any Hazardous Substance unto, nor to the Company's
knowledge has the Premises or any property at or near the Premises ever been
subject to a release, or a threat of a release, of any Hazardous Substance.
The term, "Environmental Laws" shall mean any federal, state or local law,
ordinance or regulation pertaining to the protection of human health or the
environment including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Sections 9601, et seq.,
Emergency Planning and Community Right-to-Know Act, 42 U.S.C. Sections 11001, et
seq., and the Resource Conservation and Recovery Act, 42 U.S.C. Sections 6901,
et seq.
The term, "Hazardous Substance" includes oil and petroleum products, asbestos,
polychlorinated biphenyls and urea formaldehyde, and any other materials
classified as hazardous or toxic under any Environmental Laws.
-10-
3.29 MANUFACTURING RIGHTS. The Company has not granted rights to
manufacture, produce, license or sell its products to any other person and is
not bound by any agreement which affects the Company's exclusive right to
manufacture or sell its products.
3.30 ASSUMPTIONS, GUARANTIES, ETC. OF INDEBTEDNESS OF OTHER
PERSONS. The Company has not assumed, guaranteed, endorsed or otherwise become
directly or contingently liable on any indebtedness of any other person
(including, without limitation, liability by way of agreement, contingent or
otherwise, to purchase, to provide funds for payment, to supply funds to or
otherwise invest in the debtor, or otherwise to assure the creditor against
loss), except for guaranties by endorsement of negotiable instruments for
deposit or collection in the ordinary course of business.
3.31 MATERIAL CUSTOMERS AND SUPPLIERS. No material customer of, or
material supplier to, the Company has terminated, materially reduced or
threatened to terminate or materially reduce its purchases from or provision of
products or services to the Company, as the case may be.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER AND RESTRICTIONS ON
TRANSFER IMPOSED BY THE SECURITIES ACT.
4.1 REPRESENTATIONS AND WARRANTIES BY THE PURCHASER. Each of the
Purchasers, severally and not jointly, represents, warrants, acknowledges and
covenants to the Company as of the date hereof and as of the Closing Dates as
follows:
(a) INVESTMENT INTENT. This Agreement is made with the
Purchaser in reliance upon the Purchaser's representations to the Company,
evidenced by the Purchaser's execution of this Agreement, that the Purchaser is
acquiring the Preferred Shares and the Common Stock issuable upon conversion of
the Preferred Shares (collectively the "Securities") for investment for the
Purchaser's own account, not as nominee or agent, and not with a view to, or for
resale in connection with, any distribution or public offering thereof within
the meaning of the Securities Act and the Law. The Purchaser has the full right,
power and authority to enter into and perform this Agreement and the Rights
Agreement, and this Agreement and the Rights Agreement constitute valid and
binding obligations upon it.
(b) PREFERRED SHARES NOT REGISTERED. The Purchaser
understands and acknowledges that the offering of the Preferred Shares pursuant
to this Agreement will not be registered under the Securities Act or qualified
under any blue sky laws on the grounds that the offering and sale of securities
contemplated by this Agreement are exempt from registration under the Securities
Act pursuant to Section 4(2) thereof and exempt from registration pursuant to
Section 25102(f) of the Law, and other applicable state securities or blue sky
laws, and that the Company's reliance upon such exemptions is predicated upon
the Purchaser's representations set forth in this Agreement. The Purchaser
acknowledges and understands that the Securities must be held indefinitely
unless the Securities are subsequently registered under the Securities Act and
qualified under applicable blue sky laws or an exemption from such registration
and such qualification is available.
(c) NO TRANSFER. The Purchaser covenants that in no event
will it dispose of any of the Securities (other than in conjunction with an
effective registration statement
-11-
for the Securities under the Securities Act or in compliance with Rule 144
promulgated under the Securities Act) unless and until (i) the Purchaser 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, and (ii) if reasonably requested by the Company, the Purchaser
shall have furnished the Company with an opinion of counsel satisfactory in form
and substance to the Company 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, the Law and any other
applicable state, local or foreign law has been taken.
(d) KNOWLEDGE AND EXPERIENCE. The Purchaser is an investor
in securities of companies in the development stage and acknowledges that it is
able to fend for itself, can bear the economic risk of its investment and has
such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment in the Preferred
Shares. The Purchaser has been furnished with and has had access to such
information as the Purchaser considered necessary to make a determination as to
the purchase of the securities.
(e) NOT ORGANIZED TO PURCHASE. The Purchaser has not been
organized for the purpose of purchasing the Securities.
(f) HOLDING REQUIREMENTS. The Purchaser understands that if
the Company does not (i) register its Common Stock with the Securities and
Exchange Commission ("SEC") pursuant to Section 12 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), (ii) become subject to Section
15(d) of the Exchange Act, (iii) supply information pursuant to Rule 15c2-11
thereunder, or (iv) have a registration statement covering the Securities (or a
filing pursuant to the exemption from registration under Regulation A of the
Securities Act covering the Securities) under the Securities Act in effect when
it desires to sell the Securities, such Purchaser may be required to hold the
Securities for an indeterminate period. Such Purchaser also understands that any
sale of the Securities that might be made by the Purchaser in reliance upon Rule
144 under the Securities Act may be made only in limited amounts in accordance
with the terms and conditions of that rule.
4.2 LEGENDS. Each certificate representing the Securities may be
endorsed with the following legends:
(a) FEDERAL LEGEND. THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT") AND ARE "RESTRICTED SECURITIES" AS DEFINED IN RULE 144
PROMULGATED UNDER THE ACT. THE SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE OR
OTHERWISE DISTRIBUTED EXCEPT (i) IN CONJUNCTION WITH AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SHARES UNDER THE ACT OR (ii) IN COMPLIANCE WITH RULE 144, OR
(iii) PURSUANT TO AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY, THAT SUCH
REGISTRATION OR COMPLIANCE IS NOT REQUIRED AS TO SAID SALE, OFFER OR
DISTRIBUTION.
-12-
(b) OTHER LEGENDS. Any other legends required by the Law or
other applicable state blue sky laws.
The Company need not register a transfer of legended Securities, and may also
instruct its transfer agent not to register the transfer of the Securities,
unless the conditions specified in each of the foregoing legends are satisfied.
4.3 REMOVAL OF LEGEND AND TRANSFER RESTRICTIONS. Any legend
endorsed on a certificate pursuant to subsection 4.2(a) and the stop transfer
instructions with respect to such legended Securities shall be removed, and the
Company shall issue a certificate without such legend to the holder of such
Securities if such Securities are registered and sold under the Securities Act
and a prospectus meeting the requirements of Section 10 of the Securities Act is
available or if such holder satisfies the requirements of Rule 144(k) and, where
reasonably deemed necessary by the Company, provides the Company with an opinion
of counsel for such holder of the Securities, reasonably satisfactory to the
Company, to the effect that (i) such holder, meets the requirements of Rule
144(k) or (ii) a public sale, transfer or assignment of such Securities may be
made without registration.
4.4 RULE 144. The Purchaser is aware of the adoption of Rule 144
by the SEC promulgated under the Securities Act, which permits limited public
resales of securities acquired in a nonpublic offering, subject to the
satisfaction of certain conditions. The Purchaser understands that under Rule
144, the conditions include, among other things: the availability of certain
current public information about the issuer and the resale occurring not less
than one year after the party has purchased and paid for the securities to be
sold.
5. CONDITIONS TO CLOSING.
5.1 CONDITIONS TO PURCHASERS' OBLIGATIONS. The obligations of the
Purchasers to purchase the Preferred Shares at the Closings are subject to the
fulfillment to its satisfaction, on or prior to the Closing Dates, of the
following conditions, any of which may be waived in accordance with the
provisions of subsection 7.1 hereof:
(a) REPRESENTATIONS AND WARRANTIES CORRECT; PERFORMANCE OF
OBLIGATIONS. The representations and warranties made by the Company in Section 3
hereof shall be true and correct when made, and shall be true and correct on the
Closing Dates with the same force and effect as if they had been made on and as
of said date. The Company's business and assets shall not have been adversely
affected in any material way prior to the Closing Dates. The Company shall have
performed all obligations and conditions herein required to be performed or
observed by it on or prior to the Closing Dates.
(b) CONSENTS AND WAIVERS. The Company shall have obtained in
a timely fashion any and all consents, permits and waivers necessary or
appropriate for consummation of the transactions contemplated by this Agreement.
(c) FILING OF THE ARTICLES. The Articles shall have been
filed with the Secretary of State of California.
-13-
(d) RIGHTS AGREEMENT. The Company and the Purchasers shall
have executed and delivered the Rights Agreement in the form attached as EXHIBIT
C hereto.
(e) COMPLIANCE CERTIFICATE. The Company shall have delivered
a Certificate, executed by the President of the Company, dated the Closing
Dates, certifying to the fulfillment of the conditions specified in subsections
(a), (b), (c) and (e) of this section 5.1.
(f) STATE SECURITIES LAW. The sale of the Preferred Shares
shall have been qualified with (a) the Commissioner of Corporations of the State
of California or an exemption from such qualification shall have been obtained
and (b) any other applicable state's securities law.
(g) OPINION OF COUNSEL. The Purchasers shall have received
an opinion from the Company's counsel, in substantially the form attached hereto
as EXHIBIT I.
(h) PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings in connection with the transactions contemplated at the Closings
hereby and all documents and instruments incident to such transactions shall be
reasonably satisfactory in substance and form to the Purchasers, and the
Purchasers shall have received all such counterpart originals or certified or
other copies of such documents as they may reasonably request.
(i) RESERVATION OF COMMON STOCK. The shares of Common Stock
issuable upon conversion of the Preferred Shares shall have been duly authorized
and reserved for issuance upon such conversion.
5.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The Company's
obligation to sell and issue the Preferred Shares at the Closings is subject to
the condition that the representations and warranties made by the Purchasers in
Section 4 hereof shall be true and correct when made, and shall be true and
correct on the Closing Dates with the same force and effect as if they had been
made on and as of said date.
6. AFFIRMATIVE COVENANTS OF THE COMPANY. The Company hereby covenants
and agrees as follows:
6.1 FINANCIAL INFORMATION. Until the first to occur of (a) the
date on which the Company is required to file a report with the SEC pursuant to
Section 13(a) of the Exchange Act, by reason of the Company having registered
any of its securities pursuant to Section 12(g) of the Exchange Act or (b)
quotations for the Common Stock of the Company are reported by the automated
quotations system operated by the National Association of Securities Dealers,
Inc. or by an equivalent quotations system or (c) shares of the Common Stock of
the Company are listed on a national securities exchange registered under
Section 6 of the Exchange Act, the Company will furnish to each Purchaser:
(i) as soon as practicable after the end of each
fiscal year, and in any event within 120 days thereafter, consolidated balance
sheets of the Company and its subsidiaries, if any, as of the end of such fiscal
year, and consolidated statements of operations and consolidated statements of
changes in financial position (or equivalent cash flow statements if required by
the Financial Accounting Standards Board) of the Company and its subsidiaries,
if
-14-
any, for such year, prepared in accordance with generally accepted accounting
principles, all in reasonable detail and, certified by independent public
accountants of recognized national standing selected by the Company, and
(ii) so long as the Purchasers own an aggregate of at
least thirty percent (30%) of the Preferred Shares acquired at the Closings
(including any Common Stock issued upon conversion of any Preferred Shares) as
soon as practicable after the end of each month and each quarter (except the
last month and last quarter of the fiscal year), and in any event within 30 and
45 days, respectively, thereafter, consolidated balance sheets of the Company
and its subsidiaries, if any, as of the end of such month or quarter; and
consolidated statements of operations and consolidated statements of changes in
financial position (or equivalent cash flow statements if required by the
Financial Accounting Standards Board), of the Company and its subsidiaries, if
any, for such month or quarter and for the current fiscal year to date, prepared
in accordance with generally accepted accounting principles (except for required
footnotes), all in reasonable detail and signed, subject to changes resulting
from year-end audit adjustments, by the principal financial officer or chief
executive officer of the Company, and
(iii) so long as the Purchasers own an aggregate of at
least thirty percent (30%) of the Preferred Shares acquired at the Closings
(including any Common Stock issued upon conversion of any Preferred Shares) as
soon as practicable after its adoption or approval by the Company's Board of
Directors, but not later than the commencement of such fiscal year, an annual
plan for each fiscal year which shall include monthly capital and operating
expense budgets, cash flow statements, projected balance sheets and profit and
loss projections for each such month and for the end of the year, itemized in
such detail as the Board of Directors may reasonably determine. In addition,
within 30 days after the end of each calendar year, the Company will provide the
Purchasers with a capitalization table showing (i) all stock of the Company
issued and outstanding for each class and series of stock and (ii) all options
and warrants outstanding.
6.2 CONFLICTS OF INTERESTS. The Company shall use its best
efforts to ensure that the Company's employees, during the term of their
employment with the Company, do not engage in activities which would result in a
conflict of interest with the Company. The Company's obligations hereunder
include, but are not limited to, requiring that the Company's employees devote
their primary productive time, ability and attention to the business of the
Company (provided, however, the Company's employees may engage in other business
activity if such activity does not materially interfere with their obligations
to the Company), requiring that the Company's employees enter into agreements
regarding proprietary information and confidentiality and preventing the
Company's employees from engaging or participating in any business that is in
competition with the business of the Company.
6.3 KEY MAN INSURANCE. The Company shall use reasonable efforts
to maintain in force, until canceled or modified with the approval of the
Company's Board of Directors, an insurance policy on the life of Xxxxxx X. Xxxx
naming the Company as holder and beneficiary.
-15-
6.4 PROPRIETARY AGREEMENTS. The Company will use reasonable
efforts to prevent any employee from violating the confidentiality and
proprietary information agreement entered into between the Company and each of
its employees.
6.5 FUTURE STOCK ISSUANCES. The Company agrees that after the
Closings it will not issue any shares of Common Stock (or grant any options,
warrants or other rights to purchase the same) to any employee, officer, or
director except pursuant to written agreements which provide for vesting over a
period of at least forty-eight (48) months (with the initial vesting date to
occur at least after twelve (12) months) and a right of first refusal in favor
of the Company in the event of any proposed transfer unless such issuance or
grant is approved by the Company's Board of Directors and provided that no such
agreement will require the Company to repurchase or redeem any of such shares.
This Section 6.5 will terminate upon the termination of Section 6.1.
6.6 RULE 144. The Company covenants that (i) at all times after
the Company first becomes subject to the reporting requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, the Company will use its best
efforts to comply with the current public information requirements of Rule
144(c)(1) under the Securities Act; and (ii) at all such times as Rule 144 is
available for use by the Purchasers, the Company will furnish the Purchasers
upon request with all information within the possession of the Company required
for the preparation and filing of Form 144.
6.7 TRANSACTIONS WITH AFFILIATES. Except for transactions
contemplated by this Agreement or as otherwise approved by the Board of
Directors, the Company shall not enter into any transaction with any director,
officer, employee or holder of more than 5% of the outstanding capital stock of
any class or series of capital stock of the Company, member of the immediate
family (as defined in the instructions to Regulation S-K item 404(a) under the
Securities Act of 1933, as amended) of any such person, or any corporation,
partnership, trust or other entity in which any such person, or member of the
immediate family of any such person, is a director, officer, trustee, partner or
holder of more than 5% of the outstanding capital stock thereof, except for
transactions on customary terms related to such person's employment.
6.8 INSPECTION RIGHTS. So long as the Purchasers own an aggregate
of at least thirty percent (30%) of the Preferred Shares acquired by the
Purchasers at the Closings upon five (5) days' written notice provided to the
Company, any Purchaser shall have the right to visit and inspect any of the
properties of the Company, and to discuss its affairs, finances and accounts
with its officers, provided that the Company shall not be required at any time
to disclose any trade secrets or secret or other proprietary data, know-how or
other information, the disclosure of which the Company believes may adversely
affect its business, or any information or data that is classified by the United
States government or any agency or authority thereof. All inspection rights
granted by the Company to the Purchasers shall immediately terminate upon the
closing of the Company's initial registered underwritten public offering.
6.9 ADDITIONAL BENEFITS TO SUBSEQUENT INVESTORS. If Purchasers
participating in Subsequent Closings receive additional benefits or incentives
in consideration of their purchase
-16-
of Preferred Shares which have not been made available to Purchasers in any
prior Closing, then all Purchasers shall be entitled to such benefits or
incentives on the same terms.
7. MISCELLANEOUS.
7.1 WAIVERS AND AMENDMENTS. With the written consent of the
record holders of at least sixty-six and two-thirds percent (66 2/3%) of the
Preferred Shares, the obligations of the Company and the rights of the holders
of the Preferred Shares under this Agreement may be waived or amended (either
generally or in a particular instance); provided, however, that no such waiver
or amendment shall reduce the aforesaid proportion of Preferred Shares, the
holders of which are required to consent to any waiver or supplemental
agreement, without the consent of the record holders of all of the Preferred
Shares. Upon the effectuation of each such waiver or amendment, the Company
shall promptly give written notice thereof to the record holders of the
Preferred Shares who have not previously consented thereto in writing. Except to
the extent provided in this subsection 7.1, this Agreement or any provision
hereof may be amended, waived, discharged or terminated only by a statement in
writing signed by the party against which enforcement of the amendment, waiver,
discharge or termination is sought.
7.2 GOVERNING LAW. This Agreement shall be governed in all
respects by the laws of the State of California as such laws are applied to
agreements between California residents entered into and to be performed
entirely within California.
7.3 SURVIVAL. The representations, warranties, covenants and
agreements made herein shall survive the Closings of the transactions
contemplated hereby, notwithstanding any investigation made by the Purchaser.
All statements as to factual matters contained in any certificate or other
instrument delivered by or on behalf of the Company pursuant hereto or in
connection with the transactions contemplated hereby shall be deemed to be
representations and warranties by the Company hereunder as of the date of such
certificate or instrument.
7.4 SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
the parties hereto.
7.5 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 and
they supersede, merge and render void every other prior written and/or oral
understanding or agreement among or between the parties hereto.
7.6 NOTICES, ETC. All notices and other communications required
or permitted hereunder shall be in writing and shall be delivered personally,
mailed by first class mail, postage prepaid, or delivered by courier or
overnight delivery, addressed (a) if to the Purchaser, at the Purchaser's
address set forth on the signature page hereto, or at such other address as the
Purchaser shall have furnished to the Company in writing or (b) if to the
Company, at its address set forth at the beginning of this Agreement, or at such
other address as the Company shall have furnished to the Purchaser in writing.
Notices that are mailed shall be deemed received five (5) days after deposit in
the United States mail. Notices sent by courier or overnight delivery shall be
deemed received two (days) after they have been so sent.
-17-
7.7 SEVERABILITY. In case any provision of this Agreement shall
be found by a court of law to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions of this
Agreement shall not in any way be affected or impaired thereby.
7.8 TITLES AND SUBTITLES. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.
7.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
7.10 DELAYS OR OMISSIONS. No delay or omission to exercise any
right, power or remedy accruing to the Company or to any holder of any
securities issued or to be issued hereunder shall impair any such right, power
or remedy of the Company or such holder, nor shall it be construed to be a
waiver of any breach or default under this Agreement, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any delay or omission to exercise any right, power or remedy or any waiver
of any single breach or default be deemed a waiver of any other right, power or
remedy or breach or default theretofore or thereafter occurring. All remedies,
either under this Agreement, or by law otherwise afforded to the Company or any
holder, shall be cumulative and not alternative.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-18-
IN WITNESS WHEREOF, the parties hereby have executed this Stock
Purchase Agreement on the date first above written.
"COMPANY"
MITOKOR
By: /s/ Xxxxxx X. Xxxx
---------------------------------
Xxxxxx X. Xxxx
------------------------------------
(print name)
Title: Chairman & CEO
------------------------------
-19-
COUNTERPART SIGNATURE PAGE TO
SERIES F-1 PREFERRED STOCK PURCHASE AGREEMENT
Alta California Partners, L.P.
By: Alta California Management Partners, L.P.
By: /s/ Xxxx Xxxxxxx
-----------------------------------
Xxxx Xxxxxxx
General Partner
Address: Xxx Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
-20-
COUNTERPART SIGNATURE PAGE TO
SERIES F-1 PREFERRED STOCK PURCHASE AGREEMENT
Alta Embarcadero Partners, LLC
By: /s/ Xxxxxx Xxxxxx
-----------------------------------
Under Power of Attorney
Xxxxxx Xxxxxx
Address: Xxx Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
-21-
COUNTERPART SIGNATURE PAGE TO
SERIES F-1 PREFERRED STOCK PURCHASE AGREEMENT
S.R. One, Limited
-----------------------------------------
(Name of Purchaser)
/s/ X.X. Xxxxxxxx
-----------------------------------------
(Signature)
By: X.X. Xxxxxxxx
--------------------------------------
(Printed Name of Signatory)
Title: Vice President
----------------------------------
Address: Four Tower Bridge
----------------------------------
000 Xxxx Xxxxxx Xxxxx, Xxxxx 000
----------------------------------
X. Xxxxxxxxxxxx, XX 00000-0000
-22-
COUNTERPART SIGNATURE PAGE TO
SERIES F-1 PREFERRED STOCK PURCHASE AGREEMENT
DOMAIN PARTNERS III, LP.
By: One Xxxxxx Square
Associates III, LP.
-----------------------------------------
(Name of Purchaser)
/s/ Xxxxx X. Xxxxx
-----------------------------------------
(Signature)
By: Xxxxx X. Xxxxx
--------------------------------------
(Printed Name of Signatory)
Title: General Partner
----------------------------------
Address: Xxx Xxxxxx Xxxxxx Xxxxx 000
----------------------------------
Xxxxxxxxx, XX 00000
----------------------------------
-23-
COUNTERPART SIGNATURE PAGE TO
SERIES F-1 PREFERRED STOCK PURCHASE AGREEMENT
MDS HEALTH VENTURES (TC) INC.
------------------------------------------
(Name of Purchaser)
By: /s/ Xxxxx Xxxxxxx By: /s/ Graysanne Xxxxxx
------------------------------------------
(Signature)
By: Xxxxx Xxxxxxx / Graysanne Xxxxxx
---------------------------------------
(Printed Name of Signatory)
Title:
-----------------------------------
Address:
-----------------------------------
-----------------------------------
-24-
COUNTERPART SIGNATURE PAGE TO
SERIES F-1 PREFERRED STOCK PURCHASE AGREEMENT
MDS HEALTH VENTURES (PC) INC.
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(Name of Purchaser)
By: /s/ Xxxxxxx Xxxxxxxxx By: /s/ Graysanne Xxxxxx
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(Signature)
By: Xxxxxxx Xxxxxxxxx / Graysanne Xxxxxx
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(Printed Name of Signatory)
Title: Vice-President / Assistant Secretary
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Address:
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-25-
COUNTERPART SIGNATURE PAGE TO
SERIES F-1 PREFERRED STOCK PURCHASE AGREEMENT
Palladian Opportunity Fund LLC
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(Name of Purchaser)
/s/ Xxxxxx X. Xxxxxxx
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(Signature)
By: Xxxxxx X. Xxxxxxx
-----------------------------------------
(Printed Name of Signatory)
Title: Managing Director
-------------------------------------
Address: 000 Xxxxxxxxx Xxx
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Xxxxxxxxx, XX 00000
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-26-
COUNTERPART SIGNATURE PAGE TO
SERIES F-1 PREFERRED STOCK PURCHASE AGREEMENT
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FEDERATED INVESTMENT COMPANY,
AS ATTORNEY-IN-FACT FOR:
FEDERATED XXXXXXXX FUND
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(Signature)
By: /s/ J. Xxxxxxxxxxx Xxxxxxx
-----------------------------------------
J. Xxxxxxxxxxx Xxxxxxx
Title: President, CEO/COO
Address: Federated Investors, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
-27-
COUNTERPART SIGNATURE PAGE TO
SERIES F-1 PREFERRED STOCK PURCHASE AGREEMENT
Xxxxxxx Xxxxxx
Managing Director
Sofinnova Ventures, Inc.
Phone (000) 000-0000
Fax (000) 000-0000
xxxxxx@xxxxxxxxx.xxx
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(Name of Purchaser)
/s/ Xxxxxxx Xxxxxx
--------------------------------------------
(Signature)
By:
-----------------------------------------
(Printed Name of Signatory)
Title:
-------------------------------------
Address:
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-28-
COUNTERPART SIGNATURE PAGE TO
SERIES F-1 PREFERRED STOCK PURCHASE AGREEMENT
XXXXXXX VENTURES
--------------------------------------------
(Name of Purchaser)
/s/ XXX XXXXXXX
--------------------------------------------
(Signature)
By: XXX XXXXXXX
-----------------------------------------
(Printed Name of Signatory)
Title: Managing General Partner
-------------------------------------
Address: 00 Xxxxx Xxx, Xxxxxxxxx, XX 00000
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-29-
COUNTERPART SIGNATURE PAGE TO
SERIES F-1 PREFERRED STOCK PURCHASE AGREEMENT
RBC Xxxx Xxxxxxx, Inc.
--------------------------------------------
(Name of Purchaser)
/s/ Xxxx Xxxxxx
--------------------------------------------
(Signature)
By: Xxxx Xxxxxx
-----------------------------------------
(Printed Name of Signatory)
Title: Director of Finance and Administration,
--------------------------------------
RBC Capital Markets,
--------------------
A division of Royal Bank of Canada and an
-----------------------------------------
affiliate of RBC Xxxx Xxxxxxxx, Inc.
------------------------------------
Address: 00 Xxxxx 0xx Xxxxxx, Xxxxxxxxxxx,
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XX 00000; 17th Floor
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-30-
COUNTERPART SIGNATURE PAGE TO
SERIES F-1 PREFERRED STOCK PURCHASE AGREEMENT
DRW Venture Partners LP
--------------------------------------------
(Name of Purchaser)
/s/ Xxxx Xxxxxx
--------------------------------------------
(Signature)
By: Xxxx Xxxxxx
-----------------------------------------
(Printed Name of Signatory)
Title: Director of Finance and Administration,
--------------------------------------
Xxxx Xxxxxxxx Xxxxxxx, a division of Dain
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Xxxxxxxx, Inc.
--------------
Address: 00 Xxxxx 0xx Xxxxxx, Xxxxxxxxxxx,
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XX 00000; 17th Floor
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-31-
COUNTERPART SIGNATURE PAGE TO
SERIES F-1 PREFERRED STOCK PURCHASE AGREEMENT
GCWF INVESTMENT PARTNERS II
By: GCWF Investments LLC
Its: Managing Partner
By: /s/ Xxxxxx Xxxxxx
-----------------------------------------
Xxxxxx Xxxxxx, Vice President
Address: 000 X Xxxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000-0000
-32-
