Exhibit 10.44
Portions of this document have been redacted pursuant to a Request
for Confidential Treatment filed with the Securities and Exchange Commission.
Redacted portions are indicated with the notation "*****"
STOCK PURCHASE AND VESTING AGREEMENT
THIS STOCK PURCHASE AND VESTING AGREEMENT is made this 21st day
of March, 2002, by and between Spine Wave, Inc., a Delaware corporation (the
"Company"), and Protein Polymer Technologies, Inc., a Delaware corporation
("Purchaser").
NOW THEREFORE, IT IS HEREBY AGREED:
1. Sale of Stock. Subject to the terms hereof, the Company shall
sell to Purchaser and Purchaser shall purchase from the Company Four Hundred
Thousand (400,000) shares of common stock of the Company (the "Stock"). The sale
and purchase shall occur at the offices of the Company on the date set forth
above or at such other place and time as the parties may agree (the "Closing").
2. Consideration. In exchange for and as full consideration for
the Stock, the Purchaser shall (i) enter into that certain Amendment No. 1 to
the Supply and Services Agreement dated April 12, 2001 attached hereto as
Exhibit A (the "Amendment"), (ii) have entered into and delivered to the Company
that certain Certificate of Acknowledgement of Termination by and among the
Company, Purchaser and Windamere Venture Partners, LLC terminating that certain
Voting Agreement dated April 12, 2001, attached hereto as Exhibit B (the
"Certificate of Termination"), (iii) have entered into and delivered to the
Company that certain Letter Agreement attached hereto as Exhibit C (the "Letter
Agreement") and (iv) have previously voted all of the shares of the Company's
capital stock beneficially held by Purchaser in favor of (A) the Company's
merger with VERTx, Inc. (the "Merger") and (B) the Company's sale and issuance
of shares of the Company's Series A Preferred Stock (the "Series A Financing")
to certain investors immediately thereafter and (C) any matter that could
reasonably be expected to facilitate the Merger and Series A Financing as well
as delivered to the Company or its representatives written evidence thereof. In
addition, Purchaser shall deliver two (2) duly executed blank Assignments
Separate from Certificate in the form attached hereto as Exhibit D, which
Assignments Separate from Certificate shall only be used in connection with the
exercise of the Company's Repurchase Option as set forth in Section 5 below. The
Company and the Purchaser agree that the fair market value of each share of
Stock as of the date of this Agreement equals $0.05 per share (the "Purchase
Price").
3. Issuance of Stock. Upon the execution and delivery of the
Amendment, Certificate of Termination and Letter Agreement by the Purchaser and
contingent upon the Company's verification of Purchaser's vote in favor of the
approval of the Merger and the Series A Financing, the Company shall issue a
duly executed certificate evidencing the Stock in the name of Purchaser and
provide Purchaser with a copy of such certificate. The original of such
certificate shall be held in escrow by the Company until the expiration of the
Repurchase Option (as defined below); provided however, upon Purchaser's
request, Company shall release to Purchaser a certificate representing that
number of shares of the Stock which, as of the date of such request, are no
longer subject to the Repurchase Option.
4. Repurchase Option. The Stock shall be subject to a right (but
not an obligation) of repurchase by the Company (the "Repurchase Option"). The
Company shall have the
right to purchase Unvested Shares (as defined below) from the Purchaser at the
Purchase Price as follows.
a. All of the Stock shall initially be considered
"Unvested Shares" subject to the Repurchase Option.
b. The Repurchase Option shall lapse with respect to such
portion of the Stock upon the attainment by Purchaser of each of the performance
milestones as set forth on Exhibit E attached hereto (the "Milestones").
c. The Repurchase Option shall also terminate and cease to
be exercisable with respect to any and all Unvested Shares in the event of (i)
the consummation of a merger or consolidation of the Company ("Merger") with and
into another corporation where the Company's stockholders of record immediately
prior to such merger or consolidation hold less than fifty percent (50%) of the
outstanding voting stock of the successor corporation, (ii) a sale or transfer
of greater than fifty percent (50%) of the outstanding voting stock of the
Company (other than as a result of a transaction or series of transactions the
primary purpose of which is the raising of equity capital) (a "Sale") or (iii)
the completion of a sale of all or substantially all of the Company's assets.
d. The Repurchase Option shall be exercised by written
notice signed by the President or Treasurer of the Company and delivered as
provided in subparagraph 9(b) hereof. The Company shall pay for the shares of
Stock it has elected to repurchase by delivery of a cashier's check or by wire
transfer of immediately available funds in an aggregate amount equal to the
Purchase Price multiplied by the number of shares of Stock being repurchased.
e. Adjustments to Stock. If, from time to time during the
term of the Repurchase Option, there is any change affecting the Company's
outstanding common stock as a class that is effected without the receipt of
consideration by the Company (through merger, consolidation, reorganization,
reincorporation, stock dividend, dividend in property other than cash, stock
split, liquidating, dividend, combination of shares, change in corporation
structure or other transaction not involving the receipt of consideration by the
Company), then any and all new, substituted or additional securities or other
property to which Purchaser is entitled by reason of Purchaser's ownership of
Stock shall be immediately subject to the Repurchase Option and be included in
the word "Stock" for all purposes of the Repurchase Option with the same force
and effect as the shares of the Stock presently subject to the Repurchase
Option, but only to the extent the Stock is, at the time, covered by such
Repurchase Option. While the aggregate Purchase Price shall remain the same
after each such event, the Purchase Price per share of Stock upon exercise of
the Repurchase Option shall be appropriately adjusted.
5. Exercise of Repurchase Option. The Company shall have the
right to exercise its Repurchase Option as follows:
a. The Company shall have the right to exercise its
Repurchase Option to repurchase any Unvested Shares covered by the First
Milestone and the Second
2
Milestone (each as defined and set forth on Exhibit E) from Purchaser at the
Purchase Price at any time on or after*****
b. The Company shall have the right to exercise its
Repurchase Option to repurchase any Unvested Shares covered by the Third
Milestone (as defined and set forth on Exhibit E) from Purchaser at the Purchase
Price at any time on or after*****
6. Right of First Refusal. Stock subject to the Repurchase Option
may not be transferred, except for transfers by operation of law or other
involuntary transfer. Before any shares of Stock registered in the name of
Purchaser, not subject to the Repurchase Option and not otherwise restricted by
applicable federal and state securities laws may be sold or transferred
(excluding transfer by operation of law or other involuntary transfer) such
shares shall first be offered to the Company in the following manner:
a. The Purchaser or its transferee shall deliver a notice
pursuant to subparagraph 10(b) ("Notice") to the principal business office of
the Company stating (i) the bona fide intention to sell or transfer such shares,
(ii) the number of such shares of Stock to be sold or transferred, (iii) the
price and other terms, if any, for which Purchaser or its transferee proposes to
sell or transfer such shares of Stock, and (iv) the name and address of the
proposed purchaser or transferee, if any, and that such identified purchaser or
transferee is committed to acquire the stated number of shares on the stated
price and terms.
b. The Company shall have the right at any time within ten
(10) days of receipt of the Notice to purchase all of the shares to which the
Notice refers at the price per share specified in the Notice. Said right shall
be exercised by written notice signed by the President or any Vice President of
the Company and delivered as provided in subparagraph 10(b) hereof, which notice
shall specify the time, place and date for settlement of such purchase.
c. In the event the Company does not, for any reason,
exercise its right pursuant hereto, the Company may assign such right, provided
such right shall not extend beyond such ten (10) day period. If exercised by the
assignee pursuant hereto, the right to purchase shall be exercised by written
notice signed by the exercising assignee and delivered as provided in
subparagraph 10(b) hereof, which notice shall specify the time, place and date
for settlement of such purchase. Purchaser shall sell the shares to the Company
or such assignees within thirty (30) days after the date of the Notice.
d. If all of the shares to which the Notice refers are not
purchased, as provided in subparagraphs 6(b) or 6(c) above, the Purchaser may
sell such shares to the person named in the Notice at the price and terms
specified in the Notice, provided that such sale or transfer is consummated
within seventy five (75) days of the date of the Notice to the Company, and
provided further that any such sale is in accordance with all the terms and
conditions hereof. If Purchaser does not consummate the sale or transfer within
such seventy five (75) day period, the right provided hereby shall be deemed to
be revived with respect to such shares and no sale or transfer shall be effected
without first offering the shares in accordance herewith.
-----------
***** Material is confidential and has been omitted and filed
separately with the Securities and Exchange Commission.
3
e. Notwithstanding the above, neither the Company nor the
assignees of the Company shall have any right of first refusal under this
Section 6 at any time subsequent to the following: (i) the closing of a bona
fide, firm commitment underwritten public offering of the common stock of the
Company pursuant to a Registration Statement declared effective under the Act,
(ii) the first date on which the Stock is held of record by more than five
hundred (500) persons (ii) a Merger or Sale, other than a Merger or Sale in
which the consideration includes capital stock that is not registered under the
Securities Act of 1933, as amended, and/or is not listed on a national
securities exchange, unless the issuer is subject to a contractual obligation to
register and list such stock within six months of such Merger or Sale. In
addition, the Company's right of first refusal under this Section 6 shall not
apply to the proposed sale or transfer by Purchaser of stock subject to this
Agreement as part of the sale of all or substantially all of Purchaser's assets
("Sale of Assets") except in the event that the Sale of Assets is to a direct
competitor of the Company or to such other entity which directly or indirectly
controls a direct competitor of the Company and provided that in such
circumstance, the time period set forth in subparagraph 6(d) above shall be 180
days.
7. "Market Stand-Off" Agreement. If requested by the Company and
an underwriter of Common Stock (or other securities) of the Company, Purchaser
shall not sell or otherwise transfer or dispose of any Common Stock (or other
securities) of the Company held by such Holder (other than those included in the
registration) for no more than (i) 180 days from the effective date of the first
registration of the Company's securities, including securities to be sold on its
behalf to the public in an underwritten offering and (ii) 90 days for the next
two subsequent registration statement of the Company after the initial public
offering; provided, however, that all executive officers, directors and two
percent (2%) or greater stockholders of the Company must enter into similar
lock-up agreements as well.
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.
8. Representations and Warranties of Purchaser.
a. Due Authorization. Purchaser hereby represents and
warrants to Company that it is duly authorized and empowered to enter into and
perform this Agreement; and the execution and performance of this Agreement by
Purchaser does not and will not conflict with or violate any contract,
agreement, indenture, mortgage, instrument, writ, judgment, or order of any
court, arbiter or governmental or quasi-governmental body to which Purchaser is
a party or by which Purchaser is bound.
b. Investment Intent. This Agreement is made with
Purchaser in reliance upon its representation to the Company, which by
Purchaser's acceptance hereof confirms, that the Stock has been acquired by
Purchaser for investment for an indefinite period for Purchaser'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 Purchaser has no present intention of selling,
granting participation in, or otherwise distributing the same. By executing this
Agreement, Purchaser further represents that Purchaser does not have any
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 Stock.
4
c. Restricted Securities. Purchaser understands that the
Stock has 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 Section 12 or 15 of the
Securities Exchange Act of 1934, as amended, or if a registration statement
covering the Stock (or a filing pursuant to the exemption from registration
under Regulation A of the Act) under the Act is not in effect when Purchaser
desires to sell the Stock, Purchaser may be required to hold the Stock for an
indeterminate period. The Purchaser also acknowledges that Purchaser understands
that any sale of the Stock 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
Stock at the time or in the amount Purchaser so desires. Purchaser is familiar
with Rule 144 and understands that the Stock constitutes "restricted securities"
within the meaning of that Rule.
d. Investment Experience. In connection with the
investment representations made herein Purchaser represents that Purchaser is
either an "Accredited Investor", as that term is defined in Rule 501 of
Regulation D promulgated under the Act, or 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 its 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.
e. Limitations on Disposition. Purchaser agrees that in no
event will Purchaser make a disposition of any of the Stock, unless and until
(i) Purchaser shall have notified the Company of the proposed disposition, and
(ii) Purchaser shall have furnished the Company with an opinion of counsel
satisfactory to the Company to the effect that such disposition will not require
registration of such Stock under the Act or that appropriate action necessary
for compliance with the Act has been taken, or (iii) the Company shall have
waived, expressly and in writing, its rights under clauses (i) and (ii) of this
subparagraph. In addition, prior to any disposition of any of the Stock, the
Company shall require the transferee or assignee to provide in writing
investment representations and such transferee's or assignee's agreement to be
bound by the market stand-off provisions hereof in a form acceptable to the
Company.
The Company shall not be required (i) to transfer on its
books any shares of Stock 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 stockholder of the Company with respect to the Stock
after the issuance, and prior to the repurchase, thereof.
5
f. Legends. All certificates representing any shares of
Stock of the Company subject to the provisions of this Agreement shall have
endorsed thereon the following legends:
(i) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT").
THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO
DISTRIBUTION OR RESALE, AND THEY MAY NOT BE TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SHARES UNDER THE ACT OR PURSUANT TO RULE 144
UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
REGISTRATION IS NOT REQUIRED UNDER THE ACT."
(ii) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN STOCK PURCHASE AND VESTING
AGREEMENT BETWEEN THE COMPANY AND THE HOLDER HEREOF WHICH INCLUDES A MARKET
STAND-OFF AGREEMENT, A RIGHT OF REPURCHASE AND A RIGHT OF FIRST REFUSAL ON THE
SALE OF THE SECURITIES. THESE SECURITIES MAY NOT BE SOLD, ASSIGNED, TRANSFERRED,
ENCUMBERED, OR IN ANY MANNER DISPOSED OF EXCEPT IN CONFORMITY WITH THE TERMS OF
SUCH AGREEMENT. COPIES OF THE AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO
THE SECRETARY OF THE COMPANY."
(iii) Any legend required to be placed thereon by
applicable state laws.
9. Representations and Warranties of Company.
a. Company hereby represents and warrants to Purchaser
that it is duly authorized and empowered to enter into and perform this
Agreement; and the execution and performance of this Agreement by the Company
does not and will not conflict with or violate any contract, agreement,
indenture, mortgage, instrument, writ, judgment, or order of any court, arbiter
or governmental or quasi governmental body to which the Company is a party or by
which the Company is bound.
b. To the best of its knowledge, all business and
financial information that the Company has provided to Purchaser is accurate in
all material respects; provided, however, that Purchaser acknowledges that the
business and financial information provided by the Company to Purchaser includes
certain statements and estimates provided by the Company and its representatives
with respect to the historical, pro forma and anticipated performance of the
Company or that of potential strategic partners. Such statements and estimates
reflect various assumptions by the Company, which may or may not prove to be
accurate, as well as the exercise of a substantial degree of judgement by the
Company as to the scope and presentation of such information.
10. Miscellaneous.
6
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. All notices required or permitted hereunder
shall be in writing and shall be deemed effectively given: (i) upon personal
delivery to the party to be notified, (ii) when sent by confirmed facsimile
transmission if sent during normal business hours of the recipient; if not, then
on the next business day, or (iii) for domestic addresses one (1) business day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt and for international
addresses three (3) business days after deposit with a nationally recognized
overnight courier, specifying next day delivery, with written verification of
receipt. All communications shall be sent to the party to be notified at the
address as set forth on the signature pages hereof or at such other address as
such party may designate by ten (10) days advance written notice to the other
parties 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, its
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 breach hereof and each party shall
accordingly be entitled to specific performance of this Agreement.
d. Entire Agreement; Amendments and Waivers. This
Agreement and the related Amendment, Certificate of Termination and Letter
Agreement, among Purchaser and Company, and all of even date herewith (and any
agreements, exhibits or schedules referenced therein), constitute the entire
agreement and understanding between the parties with respect to the subject
matter contained herein, and there are no promises, representations, conditions,
provisions or terms related thereto other than as set forth in this Agreement
and the related Amendment, Certificate of Termination and Letter Agreement
between the Purchaser and Company all of even date herewith. This Agreement may
only be amended with the written consent of the parties hereto, or their
successors or assigns, 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.
11. California Commissioner of Corporations. 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
SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION
THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL UNLESS THE SALE OF SECURITIES
IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA
CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
CONDITIONED UNLESS THE SALE IS SO EXEMPT.
7
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
SPINE WAVE, INC.
By: /s/ Xxxx XxXxxxxxx,
-------------------------------------
Xxxx XxXxxxxxx,
President and Chief Executive Officer
Address: 00000 Xx Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
PURCHASER
Protein Polymer Technologies, Inc.
/s/ J. Xxxxxx Xxxxxxxx
--------------------------------------------
J. Xxxxxx Xxxxxxxx
President and Chief Executive Officer
Address: 00000 Xxxxxxxx Xxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
[SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT]
EXHIBIT A
---------
[AMENDMENT]
Portions of this document have been redacted pursuant to a Request
for Confidential Treatment filed with the Securities and Exchange Commission.
Redacted portions are indicated with the notation "*****"
AMENDMENT NO. 1 TO SUPPLY AND SERVICES AGREEMENT
THIS AMENDMENT NO. 1 TO SUPPLY AND SERVICES AGREEMENT (this "Amendment")
is made and entered into as of the 12th day of February 2002 (the "Effective
Date") by and between PROTEIN POLYMER TECHNOLOGIES, INC., a Delaware corporation
("PPTI") and SPINE WAVE, INC., a Delaware corporation ("Company") and amends the
terms and conditions of that certain Supply and Services Agreement dated as of
April 12, 2001 by and between the Company and PPTI (the "Original Agreement").
W I T N E S S E T H:
WHEREAS, PPTI and Company are parties to the Original Agreement;
WHEREAS, PPTI and the Company desire to amend certain of the terms of
the Original Agreement;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and for other good and valuable consideration, the receipt, sufficiency
and adequacy of which is hereby acknowledged, the parties hereto agree as
follows:
A. Definitions and Sections. All capitalized terms used but not defined
in this Amendment shall have the meanings ascribed thereto in the Original
Agreement. Section and Schedule references in this Amendment shall be to
Sections of and Schedules to the Original Agreement, as amended hereby.
B. Amendment of Section 2(a) and 2(b). Sections 2(a) and 2(b) are hereby
deleted and amended and restated to read as follows:
(a) During the Initial Term, PPTI shall provide Materials to
Company and Company shall purchase Materials from PPTI for Non-Clinical
Use as set forth in Amended and Restated Schedule 1 attached hereto.
(b) During the Start-Up Term subsequent to the Initial Term, PPTI
shall provide Materials to the Company and Company shall purchase
Materials from PPTI as set forth in the Amended and Restated Schedule 2
attached hereto.
C. Amendment of Section 5.1. The last sentence of Section 5.1 is hereby
deleted and amended and restated to read as follows: PPTI shall provide the
accommodations listed above to the Company at no additional charge to the
Company.
D. Amendment of Sections 6(c) and 6(d). Sections 6(c) and (d) are hereby
deleted and amended and restated to read as follows:
(c) The parties agree that the Additional Term began on February
12, 2002 and will end on February 11, 2003, absent a default or breach
of the Original Agreement as amended hereby. On the first day of March,
2002 (subject to a fifteen (15) business day grace period) and on the
first day of each of the next five (5) consecutive months thereafter
(e.g. April 1, 2002 through August 1, 2002, both inclusive), the Company
shall pay PPTI the sum of*****. On the first day of September, 2002 and
on the first day of each consecutive month thereafter throughout the
remainder of the Additional Term, the Company shall pay PPTI the sum
of*****. PPTI shall throughout the Additional Term continue to apply
project accounting to the work under the Original Agreement and
within***** after the close of each month during the Additional Term and
within***** following the termination of the Original Agreement, PPTI
shall provide the Company with a statement (i) setting forth the
Materials, Additional Services, Design Services and other services
provided to Company by PPTI and the related costs, and (ii) itemizing
any applicable credits due to the Company as set forth below and
additional payments due PPTI pursuant to paragraph (d) below. The
Company shall make any payment due to PPTI within***** after receipt of
the statement. Any credit due to the Company shall be***** during or for
the Additional Term, exclusive of the monthly payments specified above.
(d) Notwithstanding anything else to the contrary contained
herein, the parties agree that:
(i) Upon expiration of the Initial Term, if the Company
has paid the Minimum Payment each month of the Initial Term and
has not received an aggregate of Initial Services and/or
Materials equal to*****, the Company shall receive a credit from
PPTI equal to***** which may be applied toward payments by the
Company to PPTI for Materials, Additional Services, Design
Services and/or other services provided hereunder after the
Additional Term.
(ii) Any credit due the Company upon expiration of the
Additional Term, may be applied to Materials, Additional
Services, Design Services and/or other services provided
hereunder during the***** period following the expiration of the
Additional Term or as the Company may reasonably request
following consultation with PPTI. With respect to the Injectable
Disk Nucleus product, for each***** period subsequent to the
Additional Term, the amount charged by PPTI to the Company for
aggregate actual***** costs per R&D personnel***** costs for each
of the***** set forth in the Amended and Restated Schedule 5,
or***** Cost per each Qualified Lot, shall not exceed***** during
the prior***** period.
(iii) Intentionally omitted.
-----------
***** Material is confidential and has been omitted and filed
separately with the Securities and Exchange Commission.
(iv) During the Additional Term, specific external PPTI
expenses authorized in writing by the Company for special
supplies, services, or equipment in an amount greater than*****
in the aggregate per activity or task shall be paid by the
Company to PPTI within ten (10) days of delivery of an invoice
therefor from or on account of PPTI.
(v) During the Additional Term, the***** cost component of
PPTI's***** Cost for R&D personnel shall be determined***** as
follows: (a) the***** PPTI***** cost*****costs***** costs,*****
by (b) the***** during the*****. However, during the Additional
Term, PPTI shall assess costs incurred by Company using a*****
cost per R&D personnel***** and at the end of the Additional Term
or upon termination of the Original Agreement, PPTI shall
calculate the actual***** cost per R&D personnel***** during the
Additional Term (or applicable portion thereof). To the extent
that the amounts paid by the Company hereunder exceed the
actual***** cost per R&D personnel*****, the Company shall be
entitled to a credit which may be applied as provided above. The
Company shall pay to PPTI within***** of invoice after the close
of the Additional Term (or applicable portion thereof) such
amount, if any by which the aggregate actual***** cost per R&D
personnel***** exceeds the amounts paid by the Company hereunder,
provided, however, that Company shall not be liable for aggregate
actual***** cost per R&D personnel***** that exceeds the amounts
paid by the Company hereunder by more than***** unless the*****
number of R & D personnel during the***** the***** number of R &
D personnel as of*****in which case Company shall not be liable
for aggregate actual***** cost per R&D personnel***** that
exceeds the amounts paid by the Company hereunder by more
than*****.
(vi) During the Additional Term, for each of the***** set
forth in the Amended and Restated Schedule 5, PPTI shall not
charge Company for***** costs that exceed by more than***** costs
for each of such***** as of the*****, unless during the
Additional Term PPTI***** as defined in the***** dated March 21,
2002, in which case PPTI shall not charge Company for***** costs
that exceed by more than***** the***** costs for each of
such***** as of*****
(vii) On or before the first day of August, 2002, PPTI and
the Company shall review the estimated Materials, Additional
Services, Design Services and/or other services to be provided by
PPTI to the Company for the remainder of the
-----------
***** Material is confidential and has been omitted and filed
separately with the Securities and Exchange Commission.
Additional Term. The Company agrees to adjust the monthly payment
as required to cover any material underpayment, taking into
account***** specified in paragraph (c) above***** by the
Company.
E. Schedules. The Amended and Restated Schedules 1, 2, 3, and 5 attached
hereto supercede and replace in their entirety the existing Schedules 1, 2, 3
and 5 to the Original Agreement.
F. Continuing Agreement. Each party hereby acknowledges that there have
occurred no defaults under or breaches of the Original Agreement by the other
party. Except as otherwise provided herein, the Original Agreement continues
unchanged and in full force and effect.
G. Conflicts. This Amendment supersedes all prior or contemporaneous
understandings or agreements, whether written or oral, between the Company and
the PPTI with respect to such amendment. In the event of any conflict between
the terms of this Amendment and the terms of the Original Agreement, the terms
of this Amendment shall govern and control.
H. Further Assurances. The Company and PPTI agree to execute such
further instruments, agreements and document, and to take such further action as
may be reasonably necessary to carry out the intent of this Amendment.
I. Counterparts. This Amendment may be executed by the parties hereto in
one or more counterparts and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
J. Governing Law. This Amendment shall be governed by, and construed in
accordance with, the laws of the State of California.
-----------
***** Material is confidential and has been omitted and filed
separately with the Securities and Exchange Commission.
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed as of the day and year first above written.
SPINE WAVE, INC.
By:/s/ Xxxx XxXxxxxxx
-----------------------------------------
Xxxx XxXxxxxxx
President and Chief Executive Officer
PROTEIN POLYMER TECHNOLOGIES, INC.
By:/s/ J. Xxxxxx Xxxxxxxx
-----------------------------------------
J. Xxxxxx Xxxxxxxx
President and Chief Executive Officer
AMENDED AND RESTATED SCHEDULE 1
MATERIALS DURING THE INITIAL TERM AND FOR NON-CLINICAL USE
----------------------------------------------------------
During the Initial Term, PPTI shall supply Materials to the Company for
Non-Clinical Use at the Company's request as follows:
------------------------------------------------- ------------------------------
Material supplied by PPTI: Cost to Company:
------------------------------------------------- ------------------------------
For each Qualified Lot of Material (except as ***** per each Qualified Lot
set forth below)
------------------------------------------------- ------------------------------
For each Off-the-Shelf Lot of Material *****
------------------------------------------------- ------------------------------
For each Additional Qualified Lot of Material ***** per each Qualified Lot
------------------------------------------------- ------------------------------
"Additional Qualified Lot" shall mean any Qualified Lot of Material ordered by
Company (i) after the Company orders***** Qualified Lots of Material and (ii) in
excess of***** for any***** period; provided that, for purposes of clarity,
orders in any***** shall be counted toward any***** period with either the
immediately preceding or immediately subsequent*****, but not both.
"Off-the-Shelf Lot" shall mean any lot of Material existing in PPTI's inventory
as of the date of the Agreement.
-----------
***** Material is confidential and has been omitted and filed
separately with the Securities and Exchange Commission.
Schedule 1 - 1
AMENDED AND RESTATED SCHEDULE 2
MATERIALS DURING THE START-UP TERM SUBSEQUENT TO THE INITIAL
TERM AND FOR CLINICAL USE
------------------------------------------------------------
During the Start-Up Term subsequent to the Initial Term or for purchases
of Materials made for Clinical Use during the Start-Up Term, PPTI shall provide
Materials to the Company at the Company's request as follows:
------------------------------------------------- -----------------------------------------------
Material: Cost:
------------------------------------------------- -----------------------------------------------
For each Qualified Lot* supplied by PPTI for ***** per each Qualified Lot,*****
non-clinical use (except as set forth below)
------------------------------------------------- -----------------------------------------------
For each Excess Qualified Lot* supplied by PPTI ***** per each Excess Qualified
for non-clinical use Lot,*****
------------------------------------------------- -----------------------------------------------
For each Qualified Lot* supplied by PPTI for ***** per each Qualified Lot,*****
clinical use
------------------------------------------------- -----------------------------------------------
Qualified Lot* supplied by third-party contract ***** per each Qualified Lot
manufacturer
------------------------------------------------- -----------------------------------------------
"Excess Qualified Lot" shall mean any Qualified Lot of Material ordered by
Company when PPTI accepts orders for more than***** of Material in any*****
period during the Additional Term, any such***** determined consecutively from
the start of the Additional Term.
*****
-----------
***** Material is confidential and has been omitted and filed
separately with the Securities and Exchange Commission.
Schedule 2 - 1
AMENDED AND RESTATED SCHEDULE 3
QUALITY CONTROL PROCEDURES
--------------------------
------------------------------------------------------ -------------------------
Procedure/Test ***** Cost* ($)
------------------------------------------------------ -------------------------
*****
------------------------------------------------------ -------------------------
* Current as of the Effective Date of the Original Agreement; to be adjusted
from time to time to reflect changes in PPTI's actual***** Cost or***** Cost, as
applicable.
-----------
***** Material is confidential and has been omitted and filed
separately with the Securities and Exchange Commission.
Schedule 3 - 1
AMENDED AND RESTATED SCHEDULE 5
ADDITIONAL SERVICES
-------------------
During the Additional Term, PPTI shall provide to Company, at Company's
request, the***** set forth below or***** subject to Company's reasonable prior
approval, for the stated***** an IDE to FDA approval for the Injectable Disc
Nucleus product.
----------------------------------------- --------------------------------------
*****
----------------------------------------- --------------------------------------
-----------
***** Material is confidential and has been omitted and filed
separately with the Securities and Exchange Commission.
EXHIBIT B
---------
CERTIFICATE OF ACKNOWLEDGEMENT OF TERMINATION
OF VOTING AGREEMENT
The undersigned parties to that certain Voting Agreement dated as
of April 12, 2001, as amended through the date hereof (the "Voting Agreement"),
by and among Spine Wave, Inc., Protein Polymer Technologies, Inc. and Windamere
Venture Partners, LLC, hereby acknowledge and consent to the following:
Pursuant to Sections 5 and 7 of the Voting Agreement,
effective as of the effective date of this Certificate of
Acknowledgement of Termination of Voting Agreement, the Voting Agreement
is hereby terminated in its entirety for all time, is of no further
force and effect and no party thereto shall have any remaining rights or
obligations thereunder.
This Certificate of Acknowledgement of Termination of Voting
Agreement has been executed and is effective as of March __, 2002 and may be
executed in more than one counterpart, each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.
SPINE WAVE, INC.
By:
----------------------------------------
Xxxx XxXxxxxxx,
President and Chief Executive Officer
PROTEIN POLYMER TECHNOLOGIES, INC.
By:
----------------------------------------
J. Xxxxxx Xxxxxxxx,
President and Chief Executive Officer
WINDAMERE VENTURE PARTNERS, LLC
By:
----------------------------------------
Its:
----------------------------------------
EXHIBIT C
---------
LETTER AGREEMENT
March 21, 2002
Protein Polymer Technologies, Inc.
00000 Xxxxxxxx Xxxxxx Xxxx
Xxx Xxxxx, XX 00000
Attn: J. Xxxxxx Xxxxxxxx, President and Chief Executive Officer
Re: License Agreement.
Dear Xx. Xxxxxxxx:
This letter agreement (the "Letter Agreement") sets forth our
understanding regarding the treatment of a certain termination provision under
that certain License Agreement dated as of April 12, 2001, as amended, by and
between Spine Wave, Inc. ("Spine Wave") and Protein Polymer Technologies, Inc.
("PPTI"). This Letter Agreement is being entered into in connection with and as
consideration under the Stock Purchase and Vesting Agreement of even date
herewith between Spine Wave and PPTI.
1. Termination of License Agreement. Notwithstanding the provisions of
Section 9.2(b) of the License Agreement, and subject to the limitation set forth
in the following sentence, Spine Wave and PPTI hereby agree that if Spine Wave
has not closed its currently contemplated Series A Preferred Stock Financing on
or before April 12, 2002, PPTI shall not, at any time prior to May 12, 2002,
exercise its right to terminate the License Agreement pursuant to Section 9.2(b)
thereof if and provided that Spine Wave has paid to PPTI all payments due and
payable as of April 1, 2002 under that certain Supply and Services Agreement
dated as of April 12, 2001, as amended through the date hereof.
2. License Agreement. Except as otherwise modified in this Letter
Agreement, the License Agreement and the terms and conditions therein remain
unchanged and in full force and effect.
3. Amendments and Waivers. Any term of this Letter Agreement may be
amended and the observance of any term of this Letter Agreement may be waived
only with the written consent of Spine Wave and PPTI.
4. Counterparts. This Letter Agreement may be executed in two
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
5. Governing Law. This Letter Agreement shall be construed and the
rights of the parties shall be determined in accordance with the substantive
laws of the State of California, without regard to its conflict of laws
principles.
Very truly yours,
SPINE WAVE, INC.
By:
-------------------------------------
Xxxx XxXxxxxxx,
President and Chief Executive Officer
AGREED AND ACCEPTED:
PROTEIN POLYMER TECHNOLOGIES, INC.
By:
------------------------------------
J. Xxxxxx Xxxxxxxx,
President and Chief Executive Officer
EXHIBIT D
---------
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, Protein Polymer Technologies, Inc. hereby
sells, assigns and transfers unto _____________________________,
______________________ (______) shares of the Common Stock of Spine Wave, Inc.,
standing in its name on the books of said corporation represented by Certificate
No. __ herewith and does hereby irrevocably constitute and appoint
__________________ attorney to transfer said stock on the books of the
within-named corporation with full power of substitution in the premises.
Dated: _________________, _____.
Protein Polymer Technologies, Inc.
------------------------------------
By:
Its:
This Assignment Separate from Certificate was executed in
conjunction with the terms of a Stock Purchase Agreement between the above
assignor and Spine Wave, Inc. dated March__, 2002.
EXHIBIT E
---------
MILESTONES
Purchaser shall acquire a vested interest in a portion of the Stock and the
Repurchase Option shall lapse with respect to a portion of the Stock upon
Purchaser's attainment of the following Milestones:
1. ***** MILESTONE: Purchaser shall acquire a vested interest in, and the
Repurchase Option shall lapse with respect to, 100,000 shares of the
Stock on such date,***** as Purchaser has accomplished the following:
a. Completion of the***** testing and initiation*****
testing necessary,***** to file a submission for an
investigational device exemption with the United
States Food and Drug Administration (the "FDA")
including the requirement set forth in***** and the
initiation of the tests listed***** on Appendix A
attached hereto.
Purchaser agrees to use commercially reasonable efforts to attain each
element of the***** Milestone before*****
2. ***** MILESTONE: Purchaser shall acquire a vested interest in, and
the Repurchase Option shall lapse with respect to, 150,000 shares of the
Stock on the later of such date,***** as Purchaser has accomplished both
of the following:
a. Completion of***** necessary,***** for the
submission of an investigational device exemption
application for a pilot study of the IDN with the
FDA including the requirements set forth in *****
on Appendix A attached hereto; and
b. Purchaser has provided the Company with an adequate
inventory of***** to complete the pilot clinical
study*****
Purchaser agrees to use commercially reasonable efforts to attain each
element of the***** Milestone before*****
3.***** MILESTONE: Provided that Purchaser has first attained each of
the***** Milestone and the***** Milestone***** Purchaser shall acquire a
vested interest in, and the Repurchase Option shall lapse with respect
to, the remaining 150,000 shares of the Stock on the later of such
date,*****
-----------
***** Material is confidential and has been omitted and filed
separately with the Securities and Exchange Commission.
(provided that if the Company does not notify Purchaser of the Company's
desire for Purchaser to develop***** manufacturing capability and
provide the Company with an adequate supply of***** to complete the
pivotal clinical trials***** as Purchaser has accomplished both of the
following.
a. At the Company's request and expense, Purchaser has
provided the Company with*****, satisfactory in the
Company's reasonable discretion, of a*****
manufacturer for production of*****; and
b. Purchaser has provided the Company with an adequate
inventory***** to complete the pivotal clinical
trial*****
Purchaser agrees to use commercially reasonable efforts to attain each
element of the *****Milestone before*****.
-----------
***** Material is confidential and has been omitted and filed
separately with the Securities and Exchange Commission.
APPENDIX A
----------
1. Completion of all Acute Toxicity testing and reports (see Pre-clinical Tests
below)
2. Completion of all Chronic Testing with ninety (90) day report (see
Pre-clinical Tests below)
3. Characterization of the Master Cell Bank for the protein selected for the IDN
4. Characterization of the protein selected for the IDN
5. Characterization of the specified IDN material
6. Qualification of the protein manufacturing process for submission of an
investigational device exemption application for a pilot clinical study of
the IDN with the FDA
7. Successful results, in the Company's reasonable judgment, from the mechanical
testing
Preclinical Tests*
Acute Tests
------------------------ --------------------- --------------------- -----------
Test Article Form Animal Model Follow up
------------------------ --------------------- --------------------- -----------
Cytotoxicity MEM extract In-vitro L929 48 hours
------------------------ --------------------- --------------------- -----------
Sensitization Saline/CSO extracts Guinea pig 22 days
------------------------ --------------------- --------------------- -----------
Intracutaneous Saline/CSO extracts Rabbit 7 days
reactivity
------------------------ --------------------- --------------------- -----------
Systemic toxicity Saline/CSO extracts Mouse 72 hours
------------------------ --------------------- --------------------- -----------
Pyrogenicity LAL Saline extract In vitro N/A
Endotoxin
------------------------ --------------------- --------------------- -----------
Irritation In-situ cured Rabbit (muscle) 5 days
implant
------------------------ --------------------- --------------------- -----------
Genotoxicity - Saline/DMSO extracts In vitro N/A
Bacterial reverse
mutation
------------------------ --------------------- --------------------- -----------
Genotoxicity Saline/DMSO extracts In vitro N/A
Chromosome aberration
------------------------ --------------------- --------------------- -----------
Genotoxicity Saline/DMSO extracts In vitro N/A
Micronucleus test
------------------------ --------------------- --------------------- -----------
Chronic Tests
------------------------ --------------------- --------------------- -----------
Test Article Form Animal Model Follow up
------------------------ --------------------- --------------------- -----------
Subchronic Neural In-situ cured Rabbit 30 days
toxicity implant (peri-sciatic nerve
injection)
------------------------ --------------------- --------------------- -----------
Implantation In-situ cured Sheep intradiscal 90 day
implant injection interim
1 year
total
------------------------ --------------------- --------------------- -----------
Chronic toxicity In-situ cured Rabbit 7 days
implant
------------------------ --------------------- --------------------- -----------
* The tests required are subject to change based on feedback from the FDA.
