EXECUTION COPY
SERIES A PREFERRED STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made this 28th day of October, 1996, by and
between ACUTE THERAPEUTICS, INC., a Delaware corporation (the "Company"),
and DISCOVERY LABORATORIES, INC., a Delaware corporation ("Purchaser").
WHEREAS, Purchaser desires to purchase shares of Series A Preferred
Stock of the Company (the "Series A Stock"), par value $0.001 per share, for
a purchase price of $7,500,000;
NOW, THEREFORE, in consideration of the mutual promises hereinafter
set forth and other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereby agree as follows:
1. Purchase of Shares. Subject to the terms hereof, the Company
shall sell to Purchaser and Purchaser shall purchase from the Company, subject
to Section 4 hereof, 600,000 shares of Series A Stock of the Company (the
"Shares") for a purchase price of $7,500,000 ("Purchase Price").
2. Payment of Purchase Price. The Purchaser shall pay the Purchase
Price by delivering to the Company at the time of execution of this Agreement
a check or wire transfer for $7,500,000.
3. Issuance of Shares. Upon receipt by the Company of the Purchase
Price, the Company shall issue a duly executed certificate evidencing the
Shares in the name of Purchaser.
4. "Market Stand-Off" Agreement. Purchaser hereby agrees that, during
the period specified by the Company and the underwriter or underwriters of
common stock (or other securities) of the Company, following the effective date
of a registration statement of the Company filed under the Securities Act
of 1933, as amended ( the "Act"), Purchaser shall not, to the extent requested
by the Company and such underwriter, but in any case for a period not to exceed
180 days, directly or indirectly, sell, offer or contract to sell (including,
without limitation, any short sale), grant any option to purchase or otherwise
transfer or dispose of (other than to donees who agree to be similarly bound)
any securities of the Company at any time during such period except common
stock included in such registration, provided, however, that (a) such agreement
shall be applicable only to the first such
registration statement of the Company which covers common stock (or other
securities) to be sold on its behalf to the public in an underwritten offering
and (b) all other shareholders of the Company holding securities of the Company
enter into similar agreements.
In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to common stock held by Purchaser until
the end of such period.
5. Representations and Warranties of Purchaser.
a. Investment Intent. This Agreement is made with Purchaser in
reliance upon its representation to the Company, which by acceptance hereof
Purchaser confirms, that the Shares have been acquired with Purchaser's
own funds for investment for its account, not as a nominee or agent, and not
with a view to the sale or distribution of any part thereof, and that Purchaser
has no present intention of selling, granting participation in, or otherwise
distributing the same. By executing this Agreement, Purchaser further
represents that it does not have any contract, undertaking, agreement or
arrangement with any person or entity to sell, transfer, or grant
participations, to such person or entity or to any third person or entity,
with respect to any of the Shares.
b. Restricted Securities. Purchaser understands that the Shares
have not been registered under the Act, on the ground that the sale provided
for in this Agreement is exempt from the registration requirements of the Act,
and that the Company's reliance on such exemption is predicated on Purchaser's
representations set forth herein.
Purchaser understands that if the Company does not register with
the Securities and Exchange Commission pursuant to sections 12 or 15 of the
Securities Exchange Act of 1934 or if a registration statement covering the
Shares (or a filing pursuant to the exemption from registration under
Regulation A of the Act) under the Act is not in effect when he or she
desires to sell the Shares, Purchaser may be required to hold the Shares for
an indeterminate period. Purchaser also acknowledges that it understands that
any sale of the Securities that might be made by Purchaser in reliance upon
Rule 144 under the Act may be made only in limited amounts in accordance with
the terms and conditions of that rule and that Purchaser may not be able to
sell the Shares at the time or in the amount Purchaser so desires. Purchaser
is familiar with Rule 144 and understands that the Shares constitute
"restricted securities" within the meaning of that Rule.
c. Investment Experience. In connection with the investment
representations made herein Purchaser represents that it is able to fend
for itself in the transactions contemplated by this Agreement, has such
knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of his or her investment, has the ability
to bear the economic risks of its investment and has been furnished with
and has had access to such information as Purchaser has requested and
deems appropriate to its investment decision.
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d. Limitations on Disposition. Purchaser agrees that in no
event will it make a disposition of any of the Shares, unless and until (a)
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 (b) Purchaser shall have furnished
the Company with an opinion of counsel reasonably satisfactory to the Company
to the effect that (i) such disposition will not require registration of such
Shares under the Act, or (ii) that appropriate action necessary for compliance
with the Act has been taken, or (c) the Company shall have waived, expressly
and in writing, its rights under clauses (a) and (b) of this subparagraph. In
addition, prior to any disposition of any of the Shares, the Company may
require the transferee or assignee to provide in writing investment
representations and its agreement to the market stand-off provisions hereof
in a form acceptable to the Company. The restrictions on disposition imposed
by this Section 5(d) shall cease and terminate as to the Shares when: (i) such
securities shall have been effectively registered under the Act and sold by the
holder thereof in accordance with such registration, or (ii) an opinion of
the kind described in the second preceding sentence states that all future
transfers of such securities by the holder thereof would be exempt from
registration under the 0000 Xxx.
The Company shall not be required (i) to transfer on its books any
Shares of the Company which shall have been sold or transferred in violation
of any of the provisions set forth in this Agreement, or (ii) to treat as
owner of such shares or to accord the right to vote as such owner or to pay
dividends to any transferee to whom such shares shall have been so transferred.
Purchaser shall, during the term of this Agreement, exercise all rights and
privileges of a shareholder of the Company with respect to the Shares after
the issuance, and prior to the repurchase, thereof.
e. Legends. All certificates representing any Shares of the
Company subject to the provisions of this Agreement shall have endorsed
thereon the following legends (except that such certificates shall not
be required to bear such legend after a transfer thereof if the transfer
was made in compliance with Rule 144 or pursuant to a registration statement
or, if the opinion of counsel referred to above is issued and provides
that such legend is not required in order to establish compliance with
any provisions of the 1933 Act):
(i) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE
ARE SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN SERIES A STOCK PURCHASE
AGREEMENT WHICH INCLUDES A MARKET STAND-OFF AGREEMENT ON THE SALE OF THE
SECURITIES. COPIES OF THE AGREEMENTS MAY BE OBTAINED UPON WRITTEN REQUEST
TO THE SECRETARY OF THE CORPORATION."
(ii) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THESE SECURITIES
HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT
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WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH SHARES UNDER THE SECURITIES ACT
OF 1933, OR PURSUANT TO RULE 144 UNDER THE ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT."
(iii) Any legend required to be placed thereon by
applicable state laws.
6. Miscellaneous.
a. Further Instruments and Actions. The parties agree to execute
such further instruments and to take such further action as may reasonably
be necessary to carry out the intent of this Agreement.
b. Notices. Any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given upon personal delivery
or upon deposit in the United States Post Office, by registered or certified
mail with postage and fees prepaid, addressed to the other party hereto at his
or her address hereinafter shown below his or her signature or at such other
address as such party may designate by ten (10) days' advance written notice
to the other party hereto.
c. Governing Law, Assignment and Enforcement. This Agreement is
governed by the internal law of California and shall inure to the benefit of
the successors and assigns of the Company and, subject to the restrictions
on transfer herein set forth, be binding upon Purchaser, his or her heirs,
executors, administrators, guardians, successors and assigns. The prevailing
party in any action to enforce this Agreement shall be entitled to attorneys'
fees and costs. The parties agree that damages are not an adequate remedy for
Purchaser's breach hereof and the Company shall accordingly be entitled to
specific performance of this Agreement.
d. Amendments and Waivers. This Agreement represents the entire
understanding of the parties with respect to the subject matter hereof and
supersedes all previous understandings, written or oral. This Agreement may
only be amended with the written consent of the parties hereto and the
Company's assignees pursuant to subsection 4(c) and Section 5 hereof, or the
successors or assigns of the foregoing, and no oral waiver or amendment
shall be effective under any circumstances whatsoever.
e. Cooperation. Purchaser agrees to cooperate affirmatively with
the Company, to the extent reasonably requested by the Company, to enforce
rights and obligations pursuant to this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
ACUTE THERAPEUTICS, INC.
By: (Sig of Xxxxxx X. Xxxxxxxx, Ph.D.)
Xxxxxx X. Xxxxxxxx, Ph.D.
President
Purchaser:
DISCOVERY LABORATORIES, INC.
By: (Sig of Xxxxx X. Xxx, M.D.)
Xxxxx X. Xxx, M.D.
President
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